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Re: Bitcoin, I most strongly agree with the following:

Displaying poll results.
I strongly dislike/distrust Bitcoin as a store of value.
  6177 votes / 21%
I mildly dislike/distrust Bitcoin as a store of value.
  3323 votes / 11%
I am aware of bitcoin, but don't have a strong opinion.
  9330 votes / 32%
I mildly favor/trust Bitcoin as a store of value.
  2607 votes / 9%
I strongly favor/trust Bitcoin as a store of value.
  1378 votes / 4%
My opinion's more complicated than these options allow.
  2313 votes / 8%
What's Bitcoin?
  3450 votes / 12%
28578 total votes.
[ Voting Booth | Other Polls | Back Home ]
  • Don't complain about lack of options. You've got to pick a few when you do multiple choice. Those are the breaks.
  • Feel free to suggest poll ideas if you're feeling creative. I'd strongly suggest reading the past polls first.
  • This whole thing is wildly inaccurate. Rounding errors, ballot stuffers, dynamic IPs, firewalls. If you're using these numbers to do anything important, you're insane.
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Re: Bitcoin, I most strongly agree with the following:

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  • by Anonymous Coward on Tuesday March 26, 2013 @08:19AM (#43279845)

    Like all currencies, it's main use is as a medium of exchange. It's pretty decent as that, but sucks for storing value.

  • Re:The End-Game (Score:4, Informative)

    by Enry (630) <enry AT wayga DOT net> on Tuesday March 26, 2013 @09:02AM (#43280095) Journal

    Yes, which is the exact same problem as using the gold standard - there's only so much gold out there (and it has way more uses than sitting in a vault backing currency).

  • Crypto, value, etc. (Score:3, Informative)

    by Noryungi (70322) on Tuesday March 26, 2013 @09:27AM (#43280259) Homepage Journal

    I have a very conflicting view of Bitcoin. Here are a few of my thoughts on the subject:

    1- Crypto: how do we know the bitcoin crypto is really good/really secure? Who has done an audit of the code?

    Implications: Cryptography is a very hard subject to tackle. Many an encryption scheme has been cracked and left in tatters, that seemed formidable enough at first sight. If the bitcoin cryptography is cracked, then fake bitcoins can be ''mined'' (meaning: created out of thin air) and the whole currency disappears in a puff of smoke (so to speak).

    2- Security: how do we know the bitcoin P2P client is really secure? Who had done an audit of the code? What about the currency transmission protocol?

    Implications: if you can't "fake" bitcoins, at least you can intercept them out of thin air between Alice and Bob. What then? The same bitcoin exists twice and that cannot be good for bitcoins.

    3- Obscurity: who is *really* the creator of Bitcoin? Why is he hiding behind a pseudonym?

    Implications: Yes, being paranoid here - but, really, who is this "Satoshi Nakamoto"? Please read more here: https://en.bitcoin.it/wiki/Satoshi_Nakamoto [bitcoin.it] before criticizing this position. Essentially, and as long as we do not know who "he" is, the whole bitcoin-is-a-secure-digital-currency could be some very elaborate scam... Also, see point #1 and #2 above: I would feel a lot more confident in Bitcoin if the currency had been created by a recognized researcher in cryptography and digital currencies.

    4- Economics: Bitcoin is essentially a ''fixed size'' currency... As someone has already pointed out, this has ''interesting'' properties, for various values of ''interesting''. If all bitcoins are mined then what?

    Implications: once all bitcoins have been "mined", the only result can be a very serious "inflation" in the value of bitcoins if demand for this currency helds up - the only way to maintain a sustainable level of economic activity would be to raise the price of bitcoins by using it sub-division properties (yes, you can split a Bitcoin into smaller values). So right now 1 BT is, say = US$ 1. But what happens when 0.1 BT = US$1? This would imply staggering inflation in the implied value of Bitcoins and a Ponzi-like scheme, where the very first "miners" of BT would reap a staggering reward, leaving everyone else holding the bag. This could potentially bring a crisis of confidence in Bitcoin, and crash the entire currency, tulip-mania style.

    You think I am going too far? There is now a cottage industry dedicated to selling you computing platforms (usually using Nvidia/ATI and OpenCL) to mine more Bitcoins. This, to me, smells of a ''mania'' phase, since, lest we forget, Bitcoins are completely immaterial and are not recognized anywhere except within circles of a dubious nature (Silk Road, anyone?).

    In other words, yes, Bitcoin is fascinating in many ways... But I am not 100% sure this thing has been thought out in all of its aspects...

  • by Anonymous Coward on Tuesday March 26, 2013 @10:07AM (#43280511)

    I don't like that the current chain is 2GB and rising

    That was last year. It's 6GB now. [blockchain.info]

  • by paulsnx2 (453081) on Tuesday March 26, 2013 @05:07PM (#43285419)

    If Miners leave the system, then the computational complexity goes down for verifying blocks. If the price of Bitcoin goes up (which it must with greater usage), then mining becomes more profitable, and will attract more minors.

    Really the system works pretty well to balance itself, and likely has nothing to do with a possible crash in price.

    If you look over at LiteCoin, a much less popular crypto currency derived from Bitcoin, they just has a large run up, then dropped over half their value. But in the end, they still didn't fall back to their original run up price. They are likely to continue to rise in price as compared to other options.

    Really, I think the fears of Bitcoin crashing are overblown. Right now Bitcoin has a capitalization of almost 800 million. Quite a bit, but nothing like the 68 billion capitalization of eBay (PayPal). At LEAST a billion or two of that can be contributed to PayPal. And people think Bitcoin is over valued at a fraction of that? When Bitcoin arguably better addresses the same problems of facilitating transactions, only better, cheaper, more securely?

  • by maxwell demon (590494) on Tuesday March 26, 2013 @05:21PM (#43285573) Journal

    The only thing that matters to you is what YOU believe.

    No. The most important is what the people I want something from believe. If I believe that maple leafs are worthless, but my baker thinks they are worth a lot, and offers me bread for a few of them, then the maple leafs will get a value for me, namely the value that I can get bread for them. And if I don't have a maple tree, and I'm sure the baker will continue to accept them, I'll even be willing to give some things for maple leaves too, as long as I consider whatever I give worth the bread I get for the leaves, and I can't get the maple leaves for less (because, why should someone give me maple leaves for less, if he can get bread from the baker?). Which means that I effectively pass the value on which the baker gives to the maple leaves.

    That's ultimately how money is made. It doesn't really matter if it is official pieces of paper, gold, or cigarettes.

  • by Anonymous Coward on Tuesday March 26, 2013 @07:39PM (#43286803)

    There is a distinction between money and currency.

    Currencies are usually notes with numbers that represent their legal value. Money is usually a commodity that has an independent use value (industry jewelry, etc.)

    Using this (loose) definition a survey of historical currencies would show you they are absolutely horrid at storing value, but that they do (for a time at least) facilitate exchange.

    The reason currencies are so bad at storing value is that traditionally their value is set by law (known as fiat); not by voluntary exchange. This gives lawmakers the perverse incentive to create more and more of the currency stock to pay for their ambitions, econ 101: increase supply, decrease demand; and thus the demand of the currency falls and so does it's relative purchasing power.

    One new thing that bitcoin brings to the table is an inherently limited supply (among other things). I personally don't think that's enough to make it a long term store of value; but it does prevent non-voluntary devaluation.

    In short I think bitcoin is the best currency in existence, and still not long-term a store of value.

  • Re:Mining (Score:4, Informative)

    by DanielRavenNest (107550) on Tuesday March 26, 2013 @11:24PM (#43288015)

    Since I am mining right now with my graphics card in the background, I will try to explain.

    The bitcoin system has at it's core a database that records transactions between accounts. Transactions are grouped into sets called blocks, and they are chained together by using the hash of the previous block as part of generating the next block. We want the history of transactions to be hard to tamper with, including adding new, possibly spurious, transactions. Therefore to record a new block and have it be accepted by the network, a difficult condition needs to be met. Specifically, a set of new transactions, the hash of the previous block, and an unknown number (nonce) must result in a hash value below a value set by the software

    Here's a recent block: http://blockexplorer.com/b/228196 [blockexplorer.com] You can see the hash value has a bunch of leading zeroes, and the Nonce (834654508) is a fairly high number. The only known way to generate a suitably low hash is to try different nonces till you find one that works. Anyone wanting to include a spurious transaction would have to find the right number faster than the whole rest of the network. This is extremely difficult. You will notice the first transaction listed says "Generation: 25 + 0.37485 total fees". Whoever found the right nonce for this block gets to send 25 newly created bitcoins to themselves, plus whatever transaction fees the other transactions in the block included. This is payment for the work done in maintaining a collectively hard to forge account history for everyone.

    The Top500 supercomputer list (http://www.top500.org/statistics/perfdevel/) has a combined power of 162 Petaflops. The bitcoin network hash rate (http://bitcoinwatch.com/) is 630 Petaflops, about 4 times more. It's that massive level of computing power that makes the transaction history tamper-proof. The security of the accounts history, in turn, gives people confidence to use the bitcoin network to buy and sell stuff.

    So to answer your questions directly,

    1) They are not "pulled from the air", they are a reward for the difficult task of securing the database, which collectively other people are willing to grant to get the security. The validity of a hash is that it meets a difficult mathematical test, but is easy for anyone to check once found, by simply doing a hash of the raw block data and seeing it matches the announced value. If a block fails that check, it gets rejected by everyone and not added to the copies of the block chain.

    2) It's not cheating, it's payment for useful and necessary work.

  • by Time_Ngler (564671) on Thursday March 28, 2013 @12:29PM (#43303967)

    You're way off. I'll give it a try, but its kind of a complicated system.

    First, let me give you the upshot. Imagine miners as a collective unit. Every 10 minutes or so, 25 bitcoins created out of thin air are competed by all miners and then won by a single one. No matter how many miners there are, the number of bitcoins up for grabs doesn't change. Imagine a wealthy person throwing a scrap of bread into a crowd of beggars below, all competing to try and get the next piece, and you'll get the idea.

    How does this benefit the system? What is this mysterious work that needs to be done?

    The heart of bitcoin is just an electronic order book. It contains every transaction from the beginning of bitcoin written in to it. To find out how many bitcoins you have, you consult the order book which is freely available public information. It's available through P2P sharing, somewhat like bit torrent. Every time someone makes a trade, it's written in this book. (Public key cryptography is used to prevent unauthorized entries. That is, you sign a transaction with a private key of the sender and the public key of the receiver.)

    The problem that mining attempts to prevent is as follows. What if a hacker makes a copy of the existing Bitcoin order book and then buys a Ferrari or something for 10,000 BTC in the real account book, and then uses a botnet to try and pass off his copy as real. If other people don't know which is which and start using his copy he made, then he can re-spend the 10,000 BTC on a Lamborghini in his copy. This is know as the double spend attack.

    You might think that the order book should just be stored at an official place like bitcoin.com or something, and that's that. However, one of the design goals was to prevent a central authority from being needed, because a central authority can be shut down. If the US government decided one day to seize bitcoin.com, then in that case, Bitcoin would no longer exist.

    So, here is how mining works, and prevents the double spend attack. Every time a time a transaction is made, it's given to the miners. Each miner take a number of transactions, and hashes them with the entire order book, the date timestamp, and a random number. (They also add some other information such as the address where the reward goes to). If the final hashcode they get is below a certain value, called the hash target they win. The hash they use is 256 bytes long, and the hash target is very small, ex. 00000000000000000000000000000000000000000000000000007F345334478. If they lose, they have to try again with a different random number. They win very rarely, but since miners have fancy exotic hardware meant to do this operation millions or billion of times a second and there are so many of them, someone does eventually find it. When someone wins, he shares it with everyone in the P2P network who all update their order book and the game starts again. If it took over 10 minutes to find the hash target for the previous block, the hash target is made higher, so it will be easier next time. If it took less, it is made lower. In this way, it balances out, so a miner wins around every 10 minutes, regardless if the total number of miners grow or shrink.

    How does this help prove the order book is not a copy? Imagine that miners worked at the Animal Crackers factory, and the factory wasn't perfect, so % 0.01 of the time it would make an animal where its head was upside down. If a miner found that, he would take a picture of it and show it to everyone would then in turn put then put it into their copy of the order book (and the miner would be paid for doing so). Whenever there was confusion about which order book was real and which was not, you'd take a look at the two copies, and simply count the pictures of animals with its head upside down. Whichever had the most pictures would be considered the official order book.

    So, if some hacker made a copy, the only way they could pass it off as an official order book is if they also found animals with their head's upside down faster than everyone else. Since there are so many other miners looking, this isn't feasible.

    I've left out some details, but that is the general idea. I hope it helps. If you have any questions, I'd be happy to answer them.

Your own mileage may vary.

 



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