Bitcoin Forum

It's dead obvious, but most people seem to persistently neglect it:

Silk Road.


The general public is not interested in Bitcoins because it exists.

They don't care about

- a technological toy you can tinker with

- hacker ethics

- buy and hold

- gold parity

- purchasing trivialities with a new currency while they can do that with what the system offers already


A currency isn't just money. It isn't successful only because now it's there. A currency represents something. An entity or a philosophy. The Dollar represents the US government, the Euro represents the European Union, others represent kings, queens, dictators or religions. Bitcoin might do well representing nothing but itself, because that's what money should do, and it does this better than any other currency. But individuals and businesses dealing in this new currency must make up their mind as to what they stand for. Because action doesn't go without a philosophy.


In most respects Bitcoin just doesn't offer anything new, so what's the incentive to switch allegiance?

The development community has made a great effort to distance itself from 'criminal' activity, for understandable reasons. But one has to understand the correlation between the price development earlier this year and the public's perception of Bitcoins.

To date, Silk Road has been the single most daring and unconventional business idea related to Bitcoins and it has given people hope that fundamental change was possible. I'm convinced, it was the boldness and openness with which the business was conducted that excited and elevated people's spirits and drew them to buy. It defeated fear (for as long as the party lasted) and the people thought they had -through a technological breakthrough- reached sovereignty over the state, its laws and the threat of legal prosecution. And consequentially, be able to avoid having to go criminal by definition. In one word: Freedom. It could be observed even with those who obviously weren't customers to that particular service.

People choose to take sides with daredevils and winner attitudes. Silk Road clearly offered that and it gave Bitcoins a kickstart more than anything. The 'bad news' and opposition from authorities only made newly aware people understand that Bitcoins were to be taken seriously.

With Silk Road going into hiding, prices plummeted.

There may be many reasons for why prices rise or decline but it's good general practice to look at the biggest possible picture.

With the lead currencies going down, naturally, a competing new currency should be going up. But it isn't right now. It's declining in unison with the rest, slowly and gradually.

And the reason for this may be that it isn't actually competing anymore.

Reading the news and public statements by key figures within the Bitcoin community I have found that, since Silk Road, a lot of energy was put into making Bitcoins look acceptable and harmless. Into making it conform to what's already there so that established entities would 'adopt' it. Be it government, Amazon.com or the banking world.

And this goes contrary to what initially made the value skyrocket, namely, that it was going by itself and offering a radical alternative as a whole. There is nothing more sad than a powerful force that pleads to its enemies for adoption and help whom it vowed to challenge.

One doesn't even have to read between the lines of what Satoshi has written to understand competition is what he intended. If he had seen any need for Bitcoins to comply with rules and regulations to be successful he wouldn't have written it in the first place.

A price development graph shows many things, but in its essence, it indicates direction.

When Bitcoin gives people what they want, the curve goes up, when it gives the opposite, it goes down.

It becomes evident, the people want something new. Something that contradicts the current state of affairs.


Upshot:

Bitcoins are revolutionary in themselves, so they should cater to revolution. That's the target audience. That's where the money comes from.

The people want a revolution because it's that time again. And they will support that which gives it to them.

Before 1933, there wasn't a competitor. This time, Bitcoin is the competitor.

Developers and entrepreneurs will have to put their khakis and insurance plans into the closet and get out the war dress.

You can easily find drug dealers all over the internet, if you look at the right places. Hint: look where the users congregate. You'll find the dealers there. There's nothing new, daring or unconventional about that.

The line continued to read "related to Bitcoin".

I had seen it done before, too. But this time it felt different.

I'm asking myself what the reason for that could be.

I agree completely that the initial hype was due to Silk Road. But I do think that bitcoin can still become a widely used currency simply because the general public is using the internet for commerce at an increasing rate. Once more people begin to understand bitcoin, the uses for it will grow and that will determine how widespread it becomes.

I agree. Regular use of Bitcoins will pick up pace, it's inevitable.

But there's more in the box.

The silk road is 'efficient' at bitcoin because it takes very little to set up.  Legitimate merchants on the other hand need time to set up secure infrastructure.  It doesn't have to do anything with a philosophy or a revolution.  The only thing Bitcoin represents to merchants is an alternative stream of digital revenue, with little to no overhead.  No keeping/verifying customer records, no spending hundreds of thousands protecting that database of records from hackers and fraud. the conference in NYC this weekend, Mozilla is looking at how to integrate Bitcoin(type) services as micropayment. No one will have to switch allegience, they'll just buy 'standardized internet points' instead of Microsoft Points, Facebook credits, or the dozens of others that consumers have to keep up with.

Excelent point. Really, the only major competitive advantage I see for it now is micropayments on people's YouTube videos and blog posts, but, although it's easy to pay and to collect, people will still have to go through the huge trouble of actually buying the coins for later donation.

A while ago someone had the idea of setting up a Tor style physical goods delivery system, where each person would be able to get paid in Bitcoin as they pass the package along. Think Mirrored Edge game. The central system would let you register your location, possible routes, and delivery fees, and people would be able to set up deliveries with the system automatically calculating the best relay path among the package runners, as well as distribute payment in bitcoin at every confirmed package hand-off. Each person would only know where the package is coming from and whom to take it to, but never the origin or the final destination.
it sounded like an intriguing system, and may have been a nice way to make some extra cash for people who commute long distances to work anyway, but it seems the project just kind of fizzled out before it even got off the ground.

That is the stupidest fucking idea I have ever heard...

...even more-so since regular shipping can be virtually anonymous, and more secure and less suspicious...

I agree, passing on a parcel would be slow, bureaucratic and victim to high levels of theft, why bother passing on a parcel for change if you can claim to have passed it on and just steal it then sell it on ebay or the like?

You don't get paid until you scan the code of the next person in the chain. If you just take the package, all you get is a package and ruined reputation, since the system will know who was the last person to take it.

Tor works because data can be encrypted, and once that's done you can't connect source with destination, you only see an opaque bitstream at each point. Even if you own all three hops you have only managed to match source with destination; you still can't decrypt the traffic.

In contrast physical packages are easily tagged, x-rayed and tampered with, and there's little recourse against it. Multiple hops will not give increased security vs. a single one, quite the contrary it will pass the package through hands of  3rd parties that are free to join the system. If I was law enforcement I would certainly participate in the "Physical Tor" and have interesting packages arrive in my mailbox each day, as opposed to scanning the whole parcel traffic in a given country or region.

True, packages can be opened and inspected, but since you don't know who sent it or where it's going, all you'll be doing is inspecting. You'd also have to pick it up directly from the other person, since the act of you scanning their code on the package is what pays them (they won't just drop it at a mail box). Also, if you open it to inspect it, the next person may report the package as having been tampered with, which may make your reputation drop, and higher reputation means you can charge higher delivery prices (like Silk Road apparently works). And sure, the system isn't perfect. There was a large discussion about the details on a thread that sort of died out, regarding how to protect packages from tampering, or even set up two-tier payments, one for normal packages, and one for "risky" ones.

This parcel delivery system is intriguing but there are so many other applications of bitcoin that are a lot simpler to use.
They will ensure that bitcoin is not a hype.
For instance, e-merchants can accept bitcoins for one-click payments just like they do today with Paypal: bitcoins remove the need to disclose credit card information and to pay high transaction fees.

PCI DSS certification cost merchants a fortune: bitcoin is bound to drive these costs down just by competing against credit card check out.
It wont happen overnight but in a few years it is safe to predict that bitcoins will be used for a substantial portion of e-commerce transactions.
Silk Road may be a precursor but certainly not a convincing representation of the bitcoin future.

Re: a physical package delivery service, there's a company called Matternet that's setting up a decentralized delivery network across Africa using tiny automated quadcopters that can carry 2kg loads.

http://matternet.net/ (http://matternet.net/)

Plain ridiculus.

I know what I would do if I was one of those people who would supposedly depend on these things. Pick them up flip out those lipo batteries and sell them.

Working around the problem never helped for the third world, what those people need is this.
http://opensourceecology.org/wiki/Global_Village_Construction_Set

And lots of it.
Yes it is _hard_ but it is supposed to.

Has bitcoin ever reached phase hype? I can't seem to remember

Yeah, but that problem is obvious.  I'd be more than a little surprised if nobody investing in or working on this has thought of it.

I imagine they might have a security guard/technician hanging out at the problematic recharging stations, and a camera recording package hand-offs.  They might even have figured out how to do the package hand-offs in mid-flight.  Self destruction mechanisms could destroy the incentive to steal the AAVs or their batteries.

It also appears this could double as a surveillance network.  This would be valuable to governments, and would thus provide an incentive for them to protect it, and to deter and punish thieves.  I'm well aware of the potential negative implications of this, just pointing out the reality.

I knew about them before they were cool.  And they definitely are.

But how do you figure a cheap package delivery network is "working around the problem"?  Do you feel the same way about telecommunications?  This is a business, not a charity.  And it's based on cheap open-hardware, so it's easily and cheaply emulated.

Let me tell you something..
In my city there was once a new free bike service, everybody talked about it. The plan was to expand them everywhere to reduce ozone pollution. Then a few day after launch people started hoarding the bikes out of laziness at home instead of bringing them back, it was frowned upon though and people started using it on an off. All in all pretty nice. Then some night some people went though town with tucks picking them up one by one, all gone they later were sold as a collectors novelty. Now the service requires you to register and pay a monthly fee to use them they are locked up and gps tracked and the stations are all online along with heuristic data-mining algorithm for your movements.... supposedly to prevent further abuse. Nobody uses them now.

People are selfish and you can bet this is even more apparent where people don't live in abundance. 

My point is: who is gonna pay them? The banana republics? Private citizens? The "clients"... I don't think so.
If they are adamant about it they'd contact the opensource ecology people and possible join them.

Let the people decide what they want.
Doing any business with developing countries basically means further ruining their citizens, wanna know how OLPC is paid for?
World bank loans!  >:(

Lol, I understand the whole 'killing them with kindness' issue, but I think you're taking it a little overboard.

Their business model basically seems to be to sell kits for AAVs and stations to anybody who wants them:

Very, very well said.
I was never comfortable with this idea of trying to make bitcoin "government-friendly". It's not meant to be. It's meant to help bringing change. If you want to play in line with governments and corporations, then you'd better use their money, with their credit cards and so on.

One thing I'd appreciate to see coming from the developers is, for example, ways of rendering bitcoin more anonymous to the average Joe. Like, distributing a preconfigured bundle bitcoin+Tor+I2P would already help. But that would be dangerous to the network if it doesn't come together with a patch that makes the client capable of reaching hidden services, so, yeah, it needs some development.

Was it just silk road, or was it some idiot in gov saying it should be shut down, LOL.

not on the 'beanie babie' level. or even the flooz level.

in general most people have never heard of it.

Maybe bitcoin is helping the government by filtering out people who don't go with their system and then arrest them and put them to death in FEMA holiday camps!!!

At this price they gonna have a hard time selling them.
These costs sound like they use the RC-Store for parts, that's really not efficent.

Take 3 old harddrives, a FDM Printer, some fiber glass rods and a pcb with a few mosfets and 2 MPPAs and your hardware costs are at $100 without the battery and gyros. (And I doubt those cost more than $500)
Maybe I should invent a competing product lol.  ;D

Oh well, forgot the stations,  ::) well... nevertheless I doubt 2 stations cost more than one the AAV and it probably only has acceleration ics.

Wow OP this was very inspiring and kind of kicked me into reality what bitcoins were truly ment for.

I will be adding more products to my www.CheaperInBitcoins.com website just from this inspiring post i will be adding printers,ink, and HD televisions to the mix

Someone needs to get bitcoins debit system going.... then that bit coin curve will sky rocket!

I'm going to bet you've never been to a place where people don't live in abundance. You may be pleasantly surprised.

You're right. But I'm in good company....  ::)

Well you've got it all wrong. 50% of the price jump was due to none other than OCN i.e overclock.net. That was the day I and many others learned about Bitcoin's existence.

The thread got over 150 pages in just under an hour.

Can you expand on the network damage which could result from using Tor?  I am not familiar with the hidden services you're refering to.

It was all Max Keiser's fault, that monkey-man kept hyping things up .

Maybe "damage" is too strong as a word. What happens is that, if you're behind Tor, the IP you show to other nodes is that of your exit-node. If other nodes try to open a connection to an exit-node, they won't find anything. Basically, while you can initiate a connection to normal nodes, the opposite isn't true, they can't find you.
In a hypothetical scenario where everyone is running behind Tor, the network would just die, as nobody would be able to find anybody else. Of course there will always be some publicly known nodes to prevent such a disaster, but if there are too few of them, they might start having too much incoming connections.

So, from a financial privacy ("banking secrecy") point of view, it is highly recommended to use Tor or something alike, but from a technical point of view, it is not that good.

This problem could be solved if bitcoin nodes automatically configured hidden services, and propagated their hidden services URL to other nodes. A hidden service is basically what the name says, some service, accessible only through the Tor network, whose IP cannot be easily guessed. Silk Road is a good example. With such, people could still hide their IPs, protecting their privacy, while accepting incoming connections.
I read somewhere that I2P is more efficient in what concerns hidden services than Tor, while Tor is more efficient than I2P to connect to public IPs, that's why I mentioned I2P as well as Tor. But I don't know how I2P works so I don't know if this is true.

Bitcoin could implement a Tor-like network itself. Any node can encrypt a transaction and send it to any number of nodes. Any node can and should eventually send transactions in plaintext, either their own or from other nodes. No node will know if a transaction comes from the sender, the sender's sender, or numerous hops away.

Although less robust, and risks spamming, the transactions do not need to be onion wrapped. Any node may refuse an onion wrapped transaction from any other node (if it believes the node is a spammer).

Bitcoin will never become Tor. Doing network anonymity in a secure way is very hard, and bitcoin should not take up that responsibility. Just run it over tor or another proven onion-routing network, if you want onion routing.

What I propose could also be run over Tor, but solves the one-way-only issue. Currently all nodes broadcast their own transactions in plaintext. By simply sending 75% of transactions encrypted and rebroadcast 25% in plaintext would drastically reduce the ability to connect addresses to IP address, while still allowing incoming ports. If people need Tor, they'll use Tor. For the rest of us, we just don't want lists of (political contributions, flowers/chocolate/porn/engagement ring purchases, donations, Google tracking) by IP address.

  Thanks for the explanation.  I take it that, say, mining behind a tor exit node is not directly harmful at this stage?

Mining is fine, since mining just uses RPC to the pool server and doesn't directly participate in the BitCoin P2P network.

And in practical terms, performing your transactions through TOR is fine too.  There are plenty of non-TOR nodes to support network stability.  Even if everyone decided to send all transactions through TOR the network would be fine: we'd just need a bunch of non-transacting relay-only public nodes.  There are probably already a lot filling this role, though there's no easy way to measure it.

The one-way-only issue could be easily solved if bitcoin nodes could connect not only to IPs, but to named servers as well. This would allow the use of hidden services and even normal DNS for those wishing to make a public, trusted relay. It's a good and safe improvement.

If find it a better and simpler solution. The bitcoin protocol doesn't need encryption, IMHO.

Excellent, excellent post.

Here are a few thoughts I had on this matter as well.

--

The original nature of Bitcoin is as an underground currency. All of Bitcoin’s strengths reference its capacity for opposing the existing financial infrastructure and, by extension, trading outside of regulation & control. Bitcoin was released into the wild as an appeal to the sensibilities of resistance. And now the lash of governmental oppression vis-a-vis the Federal Reserve, IMF, Worldbank, JPM Chase, Goldman Sachs, etc. are reaching a global tipping point.

Unfortunately, some of the current Bitcoin movement is now frantically moving in the direction of subservience to the existing financial interests and regulatory dictates. Many of the new Bitcoiners want to be financier giants in a new, “legit” Bitcoin economy. That’s fine.

However this ‘government sanctioned’ Bitcoin has a short shelf-life. Powerful people are crazy (in deep psychological bondage) but they are not stupid. They understand how power works. Bitcoin is a head-on assault which strikes at the very core of their power – money. And more specifically, their power to control the creation and flow of money is at stake. Bitcoin is a proof of concept with implications more radical than anything that the money machine operators have previously faced.

http://bitcoinredlight.com/cat/bitcoin/power/ (http://bitcoinredlight.com/cat/bitcoin/power/)

I expected you'd take a different spin.

Few revolutionary ideas are born from established interests. Rather they come from the underground, perhaps from a marginalized minority, outside the box, and if the idea survives and reaches the mainstream, the established interests will stop fighting it and act as though they created it in the first place. This is most obvious in the arts, though I can't think of any culturally significant shift that didn't evolve in this manor.

Margaret Mead-esque: "Never doubt that a small group of dedicated people can change the world. Indeed, nothing else ever has."

Thanks...I'll take that as a compliment.


Well said.

I don't blame guys for trying the various paths that they are trying, because everyone is working out of the state of consciousness at which they exist, function. And, in some sense, we need the guys who are thinking in terms of the status quo because they are helping to make Bitcoin seem vanillla to the masses - which may buy us time. However, in the end, there is just no way I can imagine this approach being allowed to succeed. In the end, Bitcoin will either emerge fully into its nature (radical) or it will be destroyed.