Bitcoin Forum

#Bitcoin: The Myth of Compromisable #Anonymity. - http://www.twitlonger.com/show/eli5dg

In face of The People's Bank of China statement (http://bit.ly/uO2Nlu), people are beginning to claim mass mining of the Bitcoin currency by governments and central banks--such as China's--will inhibit anonymity of its purchasers and transactions. This is based on the folly assumption that the market for Bitcoin is zero-sum: The distributors of Bitcoin can become centralized and people will not be able to purchase Bitcoins without displaying ID to authorities.

This is easily refuted: Almost anybody can purchase and manufacturer computing power capable of producing Bitcoin, given proper market incentive. Bitcoin-capable hardware, whether it be GPUs or otherwise, will not be regulated and limited by states any time soon. In turn, people outside of government and banking cartels can still sell currency anonymously without requiring valid identification.

Even in the face of restrictions on Bitcoin-capable computer hardware, where one can only purchase Bitcoin and Bitcoin-hardware with a valid government-issued ID, people can still effectively launder Bitcoins through randomized protocols. This means transactions can still be anonymous in the face of a centralized cartel on computing power. This stands under the assumption that people can still act within modern internet protocols with little restriction.

So it stands that if the internet doesn't remain as the decentralized communication protocol today, yes, Bitcoin would be reasonably threatened.

The real question is such a situation feasible? I'll ponder on that and answer it all in good time.

Now, let's say governments and banks acquire numerous amounts of Bitcoin computing power through illicit funds acquired through taxation and monetary inflation; they outprice every small Bitcoin retailer on the block. This will not eliminate anonymity either considering that if anonymity is still highly desirable, people will still pay a higher price for anonymous transactions through the smaller Bitcoin resellers. Easy money won't achieve the centralized fantasy either.

The rational fact is if our current internet freedom is maintained, Bitcoin anonymity and its core virtues are not going anywhere. It will likely remain as the decentralized, anonymous currency it is today.

Harvey Alpha | 1MJFSyQyn9JuT8bUdpfb2XPfoQ9pQv9Tep | This work is licensed under the WTFPL - http://sam.zoy.org/wtfpl/COPYING.

Since about 1996, the powers that be have been trying to suppress the general-purpose computer. That was when the Internet+MP3 files+Napster were revolutionizing music distribution. World governments got together and wrote updated Copyright (http://www.wipo.int/treaties/en/ip/wct/trtdocs_wo033.html) and Perfomance and Phonograms (http://www.wipo.int/treaties/en/ip/wppt/trtdocs_wo034.html) treaties. More recently, world leaders aggreed to the Anti-Counterfieting Trade Agreement (http://www.ustr.gov/webfm_send/2379) that was negotiated in secret.

The point is the general purpose computer is being phased out. Windows Vista was a major step in that direction with the Protected Media Path (http://en.wikipedia.org/wiki/Protected_Media_Path). When Vista was first released, no video drivers worked properly because manufacturerers were required by contract to make the drivers hard to debug (to prevent reverse-engineering by the end-user). Windows 8 will continue the phase-out by requiring hardware support for Secure Boot (http://lwn.net/Articles/447381/) for logo certification. Whether the big computer companies lock out GNU/Linux remains to be seen.

The point is that after 15 years of pressure, your computer now works against you if it suspects you are guilty of copyright infingement. Do you really think world governments will hesitate to try to have computers computing consoles automatically block bitcoin by 2026?

Once the pressure increases more and more people will slip through their fingers unless they stop Linux and all the BSDs and all the various pet project operating systems.  The future is a drastic move away from the present software monoculture.  The sooner we embrace this future by operating on common protocols and formats the sooner we can ensure the freedom of the internet.  At present, the ubiquity of certain configurations allow those configurations to be attacked to great effect.  This is what gives the Telecom's argument of needing to protect the network teeth.  The sooner we diversify to different software systems and different architectures the better.

Scott Charney, Microsoft Vice President of Trustworthy Computing has the opposite vision (http://www.microsoft.com/mscorp/twc/endtoendtrust/). The secure Internet of the future will require Trusted (Intel) hardware and (Microsoft) software for doing such things as voting or e-mailing aunt Tille.

Nah, identity will be a peripheral.

Very interesting discussion here.

In my opinion we don´t need the fully anonymity and I don´t have a problem if some banks oder governments want to mine Bitcoins because I must not buy the "government" Bitcoins ;-)

And the next interesting thing is the fight between closed-source (Windows, Apple) and open-source (Linux).
It is a similar fight between Banks (centralized, closed transactions) and Bitcoin (decentralized and open transactions).

I mean the winner will be open-source and decentralized money because it is needful for the evaluation because the people need more freedom and transparency to become more creative and can work more effectivly in this high complex world.