Bitcoin Forum

http://www.youtube.com/watch?v=FPebAr7ST-E#t=24m13s

Funny quote:

"Money can disappear from Bitcoin. It cannot work in the long run."

Funny that bitcoin has a major flaw in this regard?

Because the first sentance is absolutely true, people will lose wallets / hard drives, send to accidental addresses that do not exist etc. Thus money dissapearing forever.

You can burn real money also :-)

Yes, but you can always add more decimal places.

People losing bitcoins will simply be good for everyone else. The value of all other bitcoins go up. This is not a flaw of any sort because bitcoins are very divisible.

It is a problem if the security of Bitcoin clients suck but I think the security is decent and it's getting better all the time. Mostly it's up to how one secures ones bitcoins. Cold storage for savings... simple rule.

He is right. In the long run, the universe will run out of hydrogen. This means Bitcoin is doomed!

So raw eggs would be a perfect currency or at least there would be no problem with them breaking all the time as it makes the raw eggs of others just even more valuable.

Oh come on. Being easy to loose in fact is a problem of bitcoin right now. Reminds me I should refresh my wallet backup :)

Backups do you no good if you're hacked.  Seeing as how most of the population is still stuck on the monoculture of Microsoft's software, this is a serious concern.

Until we have diversity in software, security for the masses will be impossible.

I have used Bitcoin for quite a while now and I've had a lot of different wallets of different types and I have lost exactly 0 satoshis during the entire time. I may be an exception or "lucky" but I don't think bitcoins are easy to lose. They are easy to lose if you're careless but it is sort of idiotic beyond idiotic to not be careful with Internet money.

Internet money, which is used in the realm of hackers and viruses, is something one should be a bit careful with. There are improvements to be made though, one of them would be easy to use implementations of multisig so that wallets could be easily set up that require signatures from multiple devices to send bitcoins.

I'd like to add that what I'm talking about is from the perspective of an individual Bitcoin user, who is not in general a target of a serious hacker. On the other hand the services that hold a lot of bitcoins and are targets, should take extreme measures for security. I think more and more will though, the hacks have been a learning process that will improve Bitcoin security in the long run.

Multisig is the best answer, but we still have yet to see a working system implemented across multiple devices.  Hmmm... if only I wasn't already working on a few things and going back to school in a few weeks...

Until we have widely used, simple multisig I can't feel comfortable suggesting bitcoin to people who don't understand computer security.

I have to agree with this. That is why in a recent poll I actually voted that multisig should be a bigger priority than working on the scaling issues. Both are very important though.

What about android phones? I've been suggesting that n00bs use BitcoinSpinner, because IMHO it's the best combination of ease of use and security.

I don't know bitspinner, but I would be very careful on that platform, especially if the keys aren't stored in an encrypted format.

bitcoins don't get lost, they just become inaccessible (which can be the same for all practical purposes). However, inaccessible bitcoins are like gold treasures on the bottom of the sea. Sometime in the future the incentives to find "lost accounts" will be big enough for people to develop "bitcoin treasure hunting" solutions. The cool thing about lost accounts is that it's kind of a static problem because the funds don't move anymore  ;)

This will only happen after ECDSA is broken and we move to a new addressing system.  Until then, if "bitcoin treasure hunting" is possible, it will be possible to steal bitcoins.

i am working furiously on multisig support for bitcoinJ/android :)
see my work at the clone http://code.google.com/r/andreaspeterssonat-hackathon/source/checkout
its not 100% finished but on a good way

if you have any practial ideas how to handle distributed keys, let me know. as a reference app i will most likely have a http signer service which lets you spend funds from multisig addresses if you supply a pin

:) From a treasure hunter's point of view there will be big and small loots. The biggest unspent address will be the first target no matter if it is "lost" or the cold storage of Gox. As people will know about ECDS being weak when it actually happens (I doubt there will be a zero day exploit), all non-lost funds will get moved. Either split up to decrease the loot/increase the effort per BTC or if it already exists to a more secure key.

My worries is that mining hardware will essentially be the tool to loot those addresses so greedy pools might throw their computing power on where there is the highest profit and therefore maybe big fractions of mining (aka double spend protection) will be lost to looting (aka mining).

The good news is that hashing vs. finding private keys are two very different computational problems. Based on how things develop right now, I doubt that the hardware used for mining will perform well for finding private keys. Also hashing the blockchain is a dynamic problem (input changes every 10 minutes or so). Finding private keys can be done offline. So you can move your equipment next to a really cheap energy source without bothering about network connectivity... Anyway, we're talking about 20 years in the future here...

Also if such a "looting" market develops people may be encouraged to move their funds once in a while, which may benefit the whole mining industry because of additional transaction fees...

There's a simple solution to reduce the risk of getting looted: Just spread your X BTC across X addresses. Then the "incentive" for cracking your address becomes negligible.

Future NOVA documentary:


Lost Treasure of the ECDSA: Inside the Effort To Recover Lost Bitcoin

+1

This. A bit of common sense goes a long way.

I'm an almost-average Windows user. I've lost zero coins over the past two years. In the same period, I've lost $20.

I did intentionally destroy some coins when I reformatted a HD back in 2010, and didn't care to back up the wallet. I don't consider this a problem, on the contrary: burning government-issued cash in most jurisdictions is a crime. With bitcoins I'm free to do whatever I want, including destroying them.

My coins are reasonably safe in multiple copies of paper wallets, and some of them on bitcoinspinner for everyday use.

Is or could become?

It is 8 places now and I wonder how "easy" would it be to change it?

I assume you meant "just," not "jest." Before making a statement, you could actually do the math and some thinking to come up with a sensible statement. Here, I'll do it for you. There will be a total of 21 million coins. With eight decimals on top of it, we have a total of 2.1E15 indivisible units of account. This is a big number, you know. To put it in perspective, the total of all gold ever mined in the history of humankind is about 150,000 tonnes, or 1.5E11 grams, or 1.5E14 mg of gold. Ever mined. There are fourteen times more bitcoin units than milligrams of gold ever mined. In current prices, one mg of gold is worth about four US cents.
I hope you'll agree that "just 8 places" is not a sensible comment.
Also, wondering how "easy" it would be to change the algorithm implies once again that you have already decided to be negative about something without doing proper research.

I'd say easy for some to lose. There is no denying that you'll always be able to find someone who can't understand Bitcoin, someone who is careless, and someone who is in too much of a hurry to think about security.

I wouldn't call it a major problem of Bitcoin, but I wouldn't dismiss it outright. Not many people want money that disappears when their POS computer crashes.

That's a pretty damned cool statistic that I did not know about. Thanks for that information.

You are most welcome. I hope this simple analysis convinces people that eight decimal places are enough. Even in an unlikely event that Bitcoin completely replaces gold in the arenas of store of value and speculation, there is plenty of room even for microtransactions.

While this is true now, once people are more aware of bitcoin, you will need the exact same measures to prevent an intruder from holding a gun to your head and making you type in a password and print out a key.

It's called owning a gun yourself.

That might help unless they catch you off guard.  Of course, if you have children the guns have to be locked up or you can get slapped with "child endangerment".  Good luck getting to your gun cabinet before he gets you in his sights and tells you not to move.

If we always assume our attackers are stronger, we might as well start digging our graves.

Bernanke would be the perfect chicken!

Oh snap! ;D
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