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Bitcoin => Bitcoin Discussion => Topic started by: AnonyMint on February 08, 2014, 11:18:27 AM



Title: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 08, 2014, 11:18:27 AM
Update: please read this post (https://bitcointalk.org/index.php?topic=455141.msg5292632#msg5292632) for a clarification of the meaning of this "OP" (opening post).


(Doug) Casey Research's Alex Daley (a former high ranked executive at Microsoft) penned a myopic rebuttal (http://www.caseyresearch.com/cdd/failure-to-understand-bitcoin-could-cost-investors-billions) to internet pioneer, now venture capitalist Marc Andreessen's myopic fanboy regurgitation of the often repeated incorrect theories about Bitcoin's key innovation and future. It is important to read Alex's article first. These two and most of the Bitcoin community are far from understanding what is really going on. Thus expect the majority to vote "No" here, to reaffirm their myopia.

Daley essentially incorrectly argues that money can't exist without top-down corporate and government control (although he admits it could in a "wild west" mad max world which I think is to some extent where we are headed after 2016), yet correctly argues that Bitcoin has insurmountable (https://bitcointalk.org/index.php?topic=279650.msg3522750#msg3522750) (also (https://bitcointalk.org/index.php?topic=279650.msg3512888#msg3512888)) flaws for consumer payment without top-down take over while he failed to enumerate many of the reasons Bitcoin is vulnerable to top-down take over. Copying the myopia of most of the Bitcoin community, Andreessen fails to understand the reasons Bitcoin is doomed to a future of top-down control analogous to the top-down global money solutions being patented recently (http://www.zerohedge.com/news/2013-12-10/chasing-bitcoin-jpm-preparing-unveil-its-own-electronic-currency) by the major banks.

Before enumerating the specifics, I want to first address the factors driving interest and adoption of Bitcoin. Foremost is the desire to end the mismatch of the fact that the internet enables bottom-up, decentralized freedom (of speech and enterprise) yet payment being top-down controlled by a few large corporations which also translates to control by the various governments, e.g. AML and KYC laws since the false-flag farce of terrorism was foisted (https://bitcointalk.org/index.php?topic=365141.msg4810251#msg4810251) on the world to fool the sheep. Not only does this mean more layers of tsuris and parasites when starting up and maintaining enterprise on the internet and a fractured global internet payment system, e.g. many sellers in third world countries can't accept Paypal nor credit card payments or have severe limits, it also means we fundamentally don't have any individual freedom without relying on governments and society remaining functional and sane. Unfortunately history has shown that periodically throughout all recorded history since Mesopotamia ALL governments and society eventually go insane (https://bitcointalk.org/index.php?topic=365141.msg4245914#msg4245914) (more on that later).

Secondly, given this breathtaking potential to fundamentally bring payment into coherence with the decentralized freedom of the internet, there is immense investment demand for the killer crypto-currency. This sustains an investment boom until everyone that is going to use or be involved with that ecosystem is already fully invested. During that investment boom, the payment system doesn't need to be superior in every way to existing fiat solutions that Daley mentioned, because the investment demand along with the myopic dream of that breathtaking potential creates demand and interest. Daley is correct in another way which he did not mention. If the underlying payment capabilities are not superior (nor have a killer feature such as anonymity [2] to make them more compelling) thus not scaling with the investment demand (https://bitcointalk.org/index.php?topic=351712.msg3831758#msg3831758) then when that investment demand is saturated, there is a bubble that will burst (https://bitcointalk.org/index.php?topic=341594.0). Even CoinCube, Gary North (Ron Paul adviser), Henry Blodget, Peter Schiff, and others agree (https://bitcointalk.org/index.php?topic=341594.msg3671414#msg3671414).

Bitcoin Take Over Threats

  • Coming $Trillion(s) bubble burst will demand world government intervention & cooperation [1] (Bernie Madoff is so much smaller)
  • Selfish mining attack confirmed by skeptics (http://hackingdistributed.com/2014/01/15/detecting-selfish-mining/#related)
  • Those who were anonymous lose it ex post facto, when tax & law enforcement attack a.k.a. "coin taint" the numerous non-anonymous [2]
  • 51% attack because mining is concentrated in a few pools
  • 51% attack because mining is ASICs concentrated and ASICs foundries could be purchased with unlimited fiat. Note also ASICs can't be re-purposed as PCs can (https://bitcointalk.org/index.php?topic=354573.msg3808112#msg3808112), i.e. each ASIC only works for a specific coin design.
  • 51% attack because mining is not funded with perpetual debasement (new coins) to remain proportional to market value, instead transaction fees can not scale to market cap because even debit cards & ACH charge a flat-fee not a percentage of transaction value. Thus the world's rich (denominated in coin) grow more wealthy relative to the income of the miners.
  • Non-zero transaction fees allows cartel take over via Transactions Withholding Attack (https://bitcointalk.org/index.php?topic=336350.0) and Spiraling Transaction Fees (https://bitcointalk.org/index.php?topic=340686.msg3681159#msg3681159) tragedy of the commons.
  • Lack of perpetual debasement means 51% attack gets less expensive (proportional to market cap) over time (https://bitcointalk.org/index.php?topic=455141.msg5075137#msg5075137).
  • Pools can be attacked with Share Withholding Attack fixable with oblivious shares (http://arxiv.org/pdf/1112.4980v1.pdf#page=29)
  • Blockchain requires increasingly powerful full clients as scale to billions of transaction, thus more centralization and vulnerability to 51% attack.
  • Superior altcoin

Bitcoin Killer Altcoin

The Bitcoin killer will thus have at least the following features.

  • provably cpu-only mining with botnet resistance (current proof-of-stake can't redistribute new coins to masses & I posit it isn't secure)
  • built-in anonymity (to minimize non-anonymous users)
  • small, reasonable perpetual debasement
  • zero transaction fees (with economic transaction spam resistance)
  • economically limited pool sizes
  • oblivious shares
  • selfish-mining fix
  • mini block-chain design
  • faster 1-confirmation block chain, e.g. 1 minute instead of Bitcoin's 10 min delay, if the orphan rate can be contained

Note the argument of an absolute network effect advantage for Bitcoin is illogical (https://bitcointalk.org/index.php?topic=279650.msg3495695#msg3495695). The network effect can lead to more mass for Bitcoin but it can't entirely shut out altcoins, not in the way that for example an internet standard shuts out alternatives due to the inertia of modifying millions of servers (https://bitcointalk.org/index.php?topic=279650.msg3515394#msg3515394). For example, my coolpage.com was first in 1998 with a million users by 2001 (https://bitcointalk.org/index.php?topic=455141.0) (roughly 1% of the internet at the time), Friendster followed 2002 later peaking with 100+ million, Myspace 2006, and then Facebook 2008. Last year Bitcoin was only at an estimated 350,000 users. We have a long way to go to 7 billion.

Since the Knowledge Age is rising [3], socialism is peaking into an economic collapse soon (https://bitcointalk.org/index.php?topic=365141.msg4941493#msg4941493) (maybe to rise even higher in future), thus we headed into a crazy period where the governments will try to fund the $150 trillion global debt bubble [4] by hunting down all private capital (https://bitcointalk.org/index.php?topic=365141.0) (G20 announced a database (http://armstrongeconomics.com/2014/02/07/g20-to-cordinate-to-hunt-down-taxes-worldwide/) for this today, NSA will contribute (http://armstrongeconomics.com/2013/09/07/g20-agrees-on-worldwide-access-to-all-information-on-the-wealth-of-the-citizens-for-global-taxation/) and note this is the bankster business model (http://www.silverbearcafe.com/private/01.10/thinklikeabanker.html) for them to own everything (http://www.silverbearcafe.com/private/06.11/owntheearth.html)), then as Bitcoin is taken over top-down then the alternative coin with the above features will take over and become the surviving private sector (https://bitcointalk.org/index.php?topic=365141.msg4943871#msg4943871). For this new virtual economy, e.g. downloaded 3D printing designs which we print at home instead of going to store (and 3D printers can print numerous materials on the same object), there are many cases that don't need the consumer protection charge backs. You won't likely be paying a high enough price for a download to justify the hassle of charging it back any way. A 7 billion person market is huge, prices will decrease while profits for individual designers will rise! Prosperity!

Also Alex Daley apparently isn't aware of the scripting capability in Bitcoin which enables multi-party contracts, off-chain activity a.k.a. colored coins, and thus escrows and other forms of consumer protection are also possible.

Near-term it pays to hold the crypto-currency as a store-of-value as investment demand rises over perhaps the next decade or more, and after that as I explained [3] that Knowledge Age workers will prefer to store their capital in knowledge, e.g. offering bounties to more developers than storing in money, so money will shift more to a unit-of-exchange and away from a store-of-value (because new knowledge can't be driven in large-scale by usury finance of large, dumb capital) and in fact only Dark Ages have been associated with non-debased, hard, money as a store-of-value, thus the crypto-currency can be our unit-of-account and we won't need to exchange it in real-time to the dollar or SDR socialism world currency (as many merchants currently do with Bitpay for Bitcoin to get paid in fiat instead of bitcoins). The Knowledge Age economy can find sufficient scale to keep commerce denominated in the crypto-currency and rarely exchange out to fiat for those rarer physical purchases as the physical industrial economy fades away.

Footnotes

[1] https://bitcointalk.org/index.php?topic=365141.msg4869474#msg4869474

4. What other solution can you propose for Europeans to hide their wealth from the coming IMF suggestion "financial repression" of confiscating money from Euro bank accounts? Sure they are busy buying land in the USA and else where to hide this money, but of course the G20 is planning to cooperate to track down all of this and confiscate it together (the formation of world governance).

[2] https://bitcointalk.org/index.php?topic=351712.msg3837816#msg3837816
https://bitcointalk.org/index.php?topic=351712.msg3845771#msg3845771
http://hackingdistributed.com/2013/11/19/why-da-man-loves-bitcoin/#untraceability-versus-anonymity
https://bitcointalk.org/index.php?topic=195275.msg3385368#msg3385368
https://bitcointalk.org/index.php?topic=365141.msg3944395#msg3944395
https://bitcointalk.org/index.php?topic=279650.msg3525312#msg3525312

Gonzalo Lira explains (http://www.blacklistednews.com/Guest_Post_-_Bitcoin%3A_Get_Out_While_The_Getting%27s_Good_/30803/0/0/0/Y/M.html) why anonymity is so important but Bitcoin doesn't make most users anonymous.

Quote
Also, actually acquiring bitcoins is remarkably complex—and completely negates the supposed anonymity of bitcoin. Here’s a Reddit editor discussing how tough it was for him to get bitcoins, which is fairly typical of retail customers: A whole lot of hassles, and he still couldn’t buy any. And for all the talk of “bitcoin’s anonymity”, you need a whole truckload of verifiable documents making clear who you are in order to buy your first bitcoin. So the bitcoin-anonymity argument is a chimera.

The failure to meet that condition—“buy or sell exclusively and necessarily with bitcoin”—is what makes bitcoin essentially useless.

[3] https://bitcointalk.org/index.php?topic=365141.msg4926212#msg4926212
https://bitcointalk.org/index.php?topic=355212.0
https://www.google.com.ph/search?q=oxford+university+predicts+47%25+technological+unemployment
https://bitcointalk.org/index.php?topic=365141.msg4165741#msg4165741
https://bitcointalk.org/index.php?topic=365141.msg4192799#msg4192799

[4] https://bitcointalk.org/index.php?topic=365141.msg3902083#msg3902083

Errata

I am in the process of gathering links to my prior explanations of and math on why the people lose and wealth is concentrated under both deflation and inflation, and that debasement is not correlated to whether the people attain greater or less prosperity. Check back in this section later, as I will add them below.

https://bitcointalk.org/index.php?topic=365141.msg4379076#msg4379076
https://bitcointalk.org/index.php?topic=222998.msg3615848#msg3615848 (math)
https://bitcointalk.org/index.php?topic=195275.msg3357270#msg3357270
http://armstrongeconomics.com/2013/01/10/why-hyperinflation-is-nonsense/

It is centralized control over debasement that is very detrimental to the people (because for example the Fed can make a hockey stick of the money supply chart at-will), whereas decentralized debasement is a boon to the people as explained in the above links. Unlike in the 1800s when we had more frequent bank runs and depressions, central banking has enabled delaying the debt defaults and write-downs so now even the IMF admits (https://bitcointalk.org/index.php?topic=365141.msg4291789#msg4291789) we are at a 200 year debt peak and thus is recommending that massive confiscation of wealth is required. Most people don't realize we had a depression in the USA in 1919, but we recovered in 2 years because the government did not delay the defaults. Whereas, the 1929 Great Depression lingered for decades and required a World War to resolve, because of FDR's New Deal and preventing the defaults and chaotic correction. Frequent defaults correct the economy before it gets "too big to fail" (TBTF). Now we potentially face an Apocalyptic or Mad Max outcome (https://bitcointalk.org/index.php?topic=365141.0) because we grew our debt to a 200 year high. My hope is that the better crypto-currency could help protect private capital from "socialism gone insane" so that the worst outcome can be avoided.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: CoinCube on February 08, 2014, 06:02:37 PM
Yes votes are in the lead?

Bet that wont last long 8)


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: zeroday on February 08, 2014, 08:04:38 PM
My answer: NO

Bitcoin is the the first cryptocurrency ever and it will continue to expand as long as its protocol is not compromised (which is very unlikely even in a distant future).

Do not underestimate the importance of network effect.
It's like VISA, which launched in 1950s as revolutionary payment service. Although now it's too primitive comparing to hundreds of new electronic payment systems, it still covers the most of the market.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: RAJSALLIN on February 08, 2014, 08:15:05 PM
Nice post.

Now I'd really like to get a discussion going on this alt crypto coin saver. Could it be zerocoin? What about Anonymint's own coin, how's that going? The sooner this coin hits the market the better.

Another question, couldn't precious metals be a good alternative for saving wealth anonymously out of reach from confiscation?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 08, 2014, 09:17:25 PM
I have not yet read a competent technical rebuttal to the threats of Bitcoin becoming more centralized and losing coherence with the decentralized internet or perhaps even someone will argue that the internet giants will also succeed in centralizing the internet and we lose the freedoms that empowered the individual.

I am an engineer, programmer, mathematician, and logician. I want to see concrete technical arguments at the level of my OP. Frankly I am disappointed with the quality of the (rebuttal) posts thus far.

Update on Feb 20: Note I apparently deleted blablahblah's upthread rebuttal (or he deleted it, I can't remember), which I have quoted and replied to below.


Bitcoin is the the first cryptocurrency ever and it will continue to expand as long as its protocol is not compromised (which is very unlikely even in a distant future).

I provided specific technical attack threats. You have not refuted them.

Do not underestimate the importance of network effect.
It's like VISA, which launched in 1950s as revolutionary payment service. Although now it's too primitive comparing to hundreds of new electronic payment systems, it still covers the most of the market.

The government regulation that must be hurdled to compete with VISA is why we don't see global competition. Any one who has tried to compete has been raided and shutdown by the government, e.g. e-gold, the Liberty Dollar, and other one in Panama I forget the name.

As far as I know, we don't need to break any law to create the alternative coin design outlined in the OP. The legalities will fall on the exchanges, but with a cpu-only proof-of-work coin with built-in anonymity, one can mine the coins if they want to anonymous. Imagine you are a European trapped behind the coming capital controls iron curtain and so you go buy some PCs and mine your way out. Unlike specialized ASICs, you are likely to find PCs for sale person-to-person locally.


Now I'd really like to get a discussion going on this alt crypto coin saver. Could it be zerocoin?

No.

  • Validation is too slow, thus can't work technically.
  • Might be back-doored (although this might be fixable)
  • Unproven, very complex new crypto. Needs many years to become trusted and stable.
  • Storage size needed for full clients is impractical if it is mandatory for all users
  • Mixers, laundries, and exchanging between coins which are not mandatory fail for the ex post facto reason I provided in the 3rd item in the Threats section and footnote [2] of the OP
  • Subject to timing attacks, i.e. timing when inputs go in and outputs come out
  • Doesn't obscure the IP address of the participants, and Tor + VPN are inadequate, this will be explained further at the appropriate time

What about Anonymint's own coin, how's that going?

I hope you can appreciate why I would never want to be provably the KEY developer of a such an anonymous coin. One doesn't need to break any law to be a target for assasination (http://en.wikipedia.org/wiki/Poisoning_of_Alexander_Litvinenko). The USA and Europe are not far behind in terms of having laws and executive orders to assassinate citizens (http://www.telegraph.co.uk/news/worldnews/barackobama/9913615/Barack-Obama-has-authority-to-use-drone-strikes-to-kill-Americans-on-US-soil.html) without a trial if they are categorized as a "terrorist". I could see myself publicly contributing in a minor refinement bounty work role on such an altcoin, for as long as I am not the creator.

Another question, couldn't precious metals be a good alternative for saving wealth anonymously out of reach from confiscation?

Yes I expect them to locally, but more risky if you need to move them stealthy across a border or checkpoint.

And you can't send them as payment over the internet. Given my expectation of the Knowledge Age taking over the economy, then the global economy would implode if we can only use physical gold. This is what caused prior Dark Ages, the velocity of money plummets (already has fallen 50% since 2008) and gold coins get buried. We are still finding buried stashes from prior Dark Ages today.


Your prejudice against all things centralised or structured "top down" (aka: weasel words for social structures that you emotionally dislike),

I shouldn't need to point out the blatantly obvious...

The premise of the OP is the internet is decentralized and their is a huge demand for a decentralized money to enable internet enterprise to be as freedom-oriented as the decentralized publishing of web pages and other internet activity.

If you prefer a centralized internet, then please feel free to continue to using Paypal, VISA and other centralized payment systems.

fits right in with the 'myopic' Libertarian euphoria surrounding Bitcoin... in 2011 - 2012.

You conflate orthogonal issues. The premise of the OP has nothing to do with the irrational exuberance which caused the early Bitcoin price bubble to $30s then crash. This was due to the fact that early adopter geeks are not experienced investment speculators (technical analysis traders). They didn't understand the maturation and adoption cycle of new technologies.


In defence of the Libertarians here, most seem to have quite moderate views in advocating "small" governments and seeing their ideology as a "guiding principle" rather than a hard set of rules.

I am not a wishy-washy, fence-straddling Libertarian who accomplishes nothing. I am an anarchist, who makes it happen by releasing software that enables individual freedom.

Specifically I am some what near to being a polymath (although I am a poor writer and communicator), e.g. I probably connect to all clusters on the Dark Enlightenment (http://esr.ibiblio.org/?p=5227&cpage=1#comment-423313) map (if following image doesn't display, then click that link to see it at top of page). Note for example I've exchanged communications on his blog with James A. Donald (who was the first person to communicate publicly with Satoshi! (https://bitcointalk.org/index.php?topic=354713.msg3796155#msg3796155)).

http://habitableworlds.files.wordpress.com/2013/04/darkenlightenment1.png

Bitcoin is doomed to a future of top-down control and thus can't compete with the top-down global money solutions

That's BS. Central control implies a cohesive group of vested interests -- much more dangerous to legacy financial systems than a disorganised collective of FOSS enthusiasts.

You have not technically refuted the Threats section of the OP which drive Bitcoin to a centralized control. If Bitcoin can be taken over by vested interests, then we are back in the same predicament, just a different set of slave masters.

Decentralized means the vested interests can't take control, only contribute in a decentralized competition. Centralized means it gets swept into the power vacuum of democracy (https://bitcointalk.org/index.php?topic=365141.msg4065040#msg4065040).

Re: the $150T bubble collapsing?
Not gonna happen unless levels of mutual distrust in society reach a crisis point.

Eventually you run out of other people's money and productive lifespans. Then comes the outcome that has repeated throughout recorded human history, as linked (https://bitcointalk.org/index.php?topic=365141.msg4245914#msg4245914) in the OP.

That most people believe it is impossible for history to repeat, is why we are nearly doomed to an Apocalyptic or Mad Max outcome (https://bitcointalk.org/index.php?topic=365141.0) outcome. The people expect the government and the collective system can take care of them, but in fact it turns on itself like a cancer and eats itself because the money has to come from some where to continue to pay for all the entitled expectations of the people.

Look up the causes of hyperinflation. There doesn't even need to be an increase in the money supply -- hyperinflation is fundamentally a runaway collapse in the amount of trust the average person has in the underlying system.

We are headed into massive deflation, and perhaps you fundamentally don't understand that hyperinflation only occurs in peripheral economics (https://www.google.com.ph/search?q=site:armstrongeconomics.com+hyperinflation), not in the core of the global economy.

http://armstrongeconomics.com/2013/01/28/here-we-go-again-hypreinflation/
http://armstrongeconomics.com/2014/01/14/hyperinflation-is-it-even-possible/
http://armstrongeconomics.com/2013/11/20/hyperinflation-all-just-hype/
http://armstrongeconomics.com/2014/01/14/hyperinflation-impossibility-in-private-sector/
http://armstrongeconomics.com/2013/08/11/defining-hyperinflation-the-coming-new-currency/
http://armstrongeconomics.com/2012/07/04/hyperinflation/
http://armstrongeconomics.com/2013/02/24/the-untold-truth-about-the-german-hyperinflation/
http://armstrongeconomics.com/2013/06/24/12703/
http://armstrongeconomics.com/2013/12/29/law-of-unintended-consequences/
http://armstrongeconomics.com/the-taxman-cometh/
http://armstrongeconomics.com/2013/10/30/world-trade-turning-negative-same-as-protectionism/
http://armstrongeconomics.com/2013/11/14/the-coming-deflation/
http://armstrongeconomics.com/2013/11/09/deflation-the-great-equalizer-now-greece-was-there-a-different-tested-response-in-history-yes/

My point in the Errata section of the OP about centralized control over debasement isn't that hyperinflation results. I never wrote the word hyperinflation. Rather my point is those who have captured the government gain the fruits of that debasement, or it is wasted by the poor fitness of top-down allocation of resources.

Mining is a temporary bootstrapping thing.

No other proof system (i.e. only proof-of-work a.k.a. "PoW") solves the Byzantine Generals Problem (http://dealbook.nytimes.com/2014/01/21/why-bitcoin-matters/) which is necessary for decentralized trust over an untrusted network like the Internet. No other proof system distributes new coins to users to both avoid exchange AML and KYC laws, and redistribute capital from the wealthy (dumb, usury parasitic capital) to the masses which is the role socialism was formerly doing (https://bitcointalk.org/index.php?topic=365141.msg4906694#msg4906694).
 
As a feature of money, the 'costliness' of the tokens has near zero utility. Calling that cost "intrinsic value" is just a distraction for people who haven't quite wrapped their heads around more advanced ideas that cash is a symbolic pointer to a web of trust (https://bitcointalk.org/index.php?topic=449213.msg4941723#msg4941723). :)
Mining is a (maybe) necessary evil so that trust can be built on immature networks where no naturally trustworthy leaders have emerged yet. Bitcoin allows proof-of-stake to be added. Whereas perpetual POW crappyness is implausible.

I strongly posit proof-of-stake will be proven insecure. It lacks the expanding entropy of proof-of-work.

Trust via reputation (https://bitcointalk.org/index.php?topic=283513.msg3034710#msg3034710) (i.e. social capital) or stake (i.e. capital share) inherently degrades to centralization and low entropy outcomes.

I had written in more detail about this. I will try to find my old post, but it is getting extraordinarily difficult for me to find such posts as they are buried in 1000s of posts I have written.

Remember that in March 2013, I was researching the possibility of a proof-of-diskspace alternative, and did some discussion in the Decrits thread to learn more about the issues of how entropy relates (https://bitcointalk.org/index.php?topic=189239.msg2454969#msg2454969) to proof of trust in an untrusted network. That is when I had the epiphany that entropy is a critical factor. And I abandoned proof-of-diskspace.

Quote
built-in anonymity (to minimize non-anonymous users)
meh.

You didn't comprehend thoroughly the 3rd item in the Threats section of the OP. Without widespread anonymity, the entire coin can be forced to be non-anonymous and thus take over by the government and right back to fiat again.

Quote
zero transaction fees (with economic transaction spam resistance)
So you want to reinvent hashcash? How? Perhaps a small fee to prevent ddos? Maybe all the miners get together and vote to determine fee levels?... You haven't thought this through, have you?

You are blind, see in the OP where I wrote "with economic transaction spam resistance".

And you ignored the other Threats that derive from non-zero transaction fees and declining debasement coin rewards.

Quote
faster 1-confirmation block chain, e.g. 1 minute instead of Bitcoin's 10 min delay, if the orphan rate can be contained
2nd gen cryptos like Ethereum could make that issue completely irrelevant. E.g.: Ethereum would allow you to set up any centralised cash or share system inside a contract, and the "decentralised cloud server mining" nonsense is outsourced and non-intrusive. Your server just runs seamlessly until it runs out of funds.

Off-chain solutions don't entirely replace all on-chain use cases. (Novice readers, we are referring to transactions that occur on the coin's decentralized block chain which requires trusting no one i.e. Satoshi's new technology of proof-of-work, versus those that are done by "trusted" third parties i.e. right back to the fractional reserve private banking model of the 1800s)

Btw, that name Ethereum is not going to work. It is extremely difficult to select a name for the next currency of the world. I understand "it lives in the ether" but that isn't going to work for most people. It needs to sound like money, but not "coin".


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: rpietila on February 08, 2014, 09:28:25 PM
Following.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: UltraPleb on February 08, 2014, 10:32:29 PM
Agreed with OP, too many people have invested not knowing of the many risks. It won't be long before a more comprehensive coin is released.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: RAJSALLIN on February 09, 2014, 11:02:22 AM
Anonymint, I'm disapointed you are letting the work with your coin go, although i understand you.

Couldn't you try to work together with a team (like zerocoin) and together work towards your goals?

I personally think you were just to active in these forums and should just have released your coin anonymously. As is now I see the problem in doing that.

Too bad nonetheless since it seems like not many appreciate what you are saying. We might never see a coin that has your requirements..


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 09, 2014, 11:07:30 AM
I personally think you were just to active in these forums and should just have released your coin anonymously. As is now I see the problem in doing that.

Indeed.  :(

However I am not as pessimistic on the possibility of the market need being fulfilled soon.   :)

Listen to this audio (http://armstrongeconomics.com/2014/02/06/us-state-department-says-fuck-eu-over-ukraine/) to see in their own words how totalitarian the US government has become behind the curtain. Wikipedia says (http://en.wikipedia.org/w/index.php?title=Victoria_Nuland&oldid=594712089#2012_Benghazi_attack) she was the prime suspect in the Benghazi fiasco which is part of (http://armstrongeconomics.com/2013/09/06/dirty-dealing-on-syria-in-washington/) this push Middle East towards the world currency (https://bitcointalk.org/index.php?topic=365141.msg5042295#msg5042295).

http://armstrongeconomics.com/2013/09/04/syria-benghazi-connection/


I see no need to reply to blablahblah's latest (naive or intentional?) post. He has a preference for centralized outcomes. I am sure readers have enough information already to formulate an accurate appraisal.

Your prejudice against all things centralised or structured "top down" (aka: weasel words for social structures that you emotionally dislike),

I shouldn't need to point out the blatantly obvious...

The premise of the OP is the internet is decentralized

It's geographically distributed and that's what makes the Internet useful.

Because no nation controls it, i.e. decentralized. And there are other freedoms that come from it being decentralized, e.g. free speech of self-publishing such as blogs. And many other decentralized freedoms. The rest of your post shows you still don't understand how centralization destroys freedom, fitness, and leads to horrific failure. We already had that debate in the Mad Max thread. I will not tolerate the redundancy (thus noise) of unnecessarily repeating the same debate in this thread.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: BldSwtTrs on February 09, 2014, 11:18:18 AM
Bitcoin Take Over Threats

  • Coming $Trillion(s) bubble burst will demand world government intervention & cooperation [1] (Bernie Madoff is so much smaller)
  • Selfish mining attack confirmed by skeptics (http://hackingdistributed.com/2014/01/15/detecting-selfish-mining/#related)
  • Those who were anonymous lose it ex post facto, when tax & law enforcement attack a.k.a. "coin taint" the numerous non-anonymous [2]
  • 51% attack because mining is concentrated in a few pools
  • 51% attack because mining is ASICs concentrated and ASICs foundries could be purchased with unlimited fiat. Note also ASICs can't be re-purposed as PCs can, i.e. each ASIC only works for a specific coin design.
  • 51% attack because mining is not funded with perpetual debasement (new coins) to remain proportional to market value, instead transaction fees can not scale to market cap because even debit cards & ACH charge a flat-fee not a percentage of transaction value. Thus the world's rich (denominated in coin) grow more wealthy relative to the income of the miners.
  • Non-zero transaction fees allows cartel take over via Transactions Withholding Attack (https://bitcointalk.org/index.php?topic=336350.0)
  • Pools can be attacked with Share Withholding Attack fixable with oblivious shares (http://arxiv.org/pdf/1112.4980v1.pdf#page=29)
  • Blockchain requires increasingly powerful full clients as scale to billions of transaction, thus more centralization and vulnerability to 51% attack.
  • Superior altcoin
So basically barring the first and the last, all the threats you are listing are related to the Proof of Work mining. Despiste what you are saying, I think Proof of Stake mining address these problems.

The first threat - government cooperation - is highly speculative and I prefer put my money on Bitcoin rather than on this eventually.

So it's boils down to: will Proof of Stake overtake Proof of Work. The market will decide. The only thing investors have to do is hedging by capturing the same portion of the PoS coin supply that they have in Bitcoin (Bitshares and NXT being the most serious PoS coins from my point of view)


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 09, 2014, 11:25:59 AM
Bitcoin Take Over Threats

  • Coming $Trillion(s) bubble burst will demand world government intervention & cooperation [1] (Bernie Madoff is so much smaller)
  • Selfish mining attack confirmed by skeptics (http://hackingdistributed.com/2014/01/15/detecting-selfish-mining/#related)
  • Those who were anonymous lose it ex post facto, when tax & law enforcement attack a.k.a. "coin taint" the numerous non-anonymous [2]
  • 51% attack because mining is concentrated in a few pools
  • 51% attack because mining is ASICs concentrated and ASICs foundries could be purchased with unlimited fiat. Note also ASICs can't be re-purposed as PCs can, i.e. each ASIC only works for a specific coin design.
  • 51% attack because mining is not funded with perpetual debasement (new coins) to remain proportional to market value, instead transaction fees can not scale to market cap because even debit cards & ACH charge a flat-fee not a percentage of transaction value. Thus the world's rich (denominated in coin) grow more wealthy relative to the income of the miners.
  • Non-zero transaction fees allows cartel take over via Transactions Withholding Attack (https://bitcointalk.org/index.php?topic=336350.0)
  • Pools can be attacked with Share Withholding Attack fixable with oblivious shares (http://arxiv.org/pdf/1112.4980v1.pdf#page=29)
  • Blockchain requires increasingly powerful full clients as scale to billions of transaction, thus more centralization and vulnerability to 51% attack.
  • Superior altcoin
So basically barring the first and the last, all the threats you are listing are related to the Proof of Work mining. Despiste what you are saying, I think Proof of Stake mining address these problems.

The first threat - government cooperation - is highly speculative and I prefer put my money on Bitcoin rather than on this eventually.

So it's boils down to: will Proof of Stake overtake Proof of Work. The market will decide. The only thing investors have to do is hedging by capturing the same portion of the PoS coin supply that they have in Bitcoin (Bitshares and NXT being the most serious PoS coins from my point of view)

I refuted (https://bitcointalk.org/index.php?topic=354573.msg3805394#msg3805394) the security of Bitshares.

PoS and proof-of-primes (e.g. Primecoin) do not solve the anonymity take over Threat. See the 3rd item.

Proof-of-primes can not be mathematically as secure (https://bitcointalk.org/index.php?topic=367965.msg4383462#msg4383462) as PoW. The entropy security issue (https://bitcointalk.org/index.php?topic=354573.msg3805632#msg3805632) always applies to all the non-PoW systems.

Proof systems which attempt to do useful computational work can not be secure (https://bitcointalk.org/index.php?topic=285701.msg3061431#msg3061431).

PoS can not redistribute new (https://bitcointalk.org/index.php?topic=354573.msg3805522#msg3805522) coin in way that rewards individual effort and ingenuity as proof-of-work can (https://bitcointalk.org/index.php?topic=285701.msg3061146#msg3061146). For example, I've explained that stream microhydropower (https://bitcointalk.org/index.php?topic=285701.msg3090924#msg3090924) is the least expensive electricity on the planet. Of course any non-PoW coin can redistribute coins equally or based on share, but that is just Communism (a very failed economic concept of course!). Thus we are right back to needing socialism to redistribute coin from slow large capital to faster smaller capital for us. Otherwise the wealthy accumulate all of the wealth. I covered this in great detail in the MadMax thread. See the links in Errata section of the OP and my first rebuttal to blablahblah.

Proof-of-stake requires no significant computation thus runs on any PC, but it can't be (https://bitcointalk.org/index.php?topic=455141.msg5033780#msg5033780) a coin of the masses because it can't distribute new coin in any competitive manner accessible to those only with a PC. Wealth is power law distributed¹ thus transactions will never do the job that socialism does to redistribute wealth to the masses and prevent the wealthiest 1% from owning everything. For money to not end up fiat where it can be debased top-down by socialism, the decentralized crypto-currency must be able to do the redistribution job that socialism is doing.

¹Dragulescu & Yakovenko. Exponential and power-law probability distributions of wealth and income in the United Kingdom and the United States

PoS means the elite control the transaction processing, i.e. the 51% attack is built-in by design. We are right back to same problem again. Only proof-of-work solves the Byzantine Generals Problem. See my first rebuttal to blablahblah.

Sorry.

P.S. I am confident PoS is not secure (https://bitcointalk.org/index.php?topic=273197.msg2954801#msg2954801). If I put some time on that, I bet I can write down a proof. Will do at some point in future.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 09, 2014, 11:42:37 AM
Note the following quoted posts were deleted only because I have retained all their comments in my reply. Keeping the thread concise as possible.

I think your concerns about the distribution and the anonymity are your own concerns - that honors you - but not those of the market.

The market doesn't care what is fair, if that wase the case the world would be fair. And anonymity is a secondary need (see how Facebook was thriving). If that need is not fullfill by Bitcoin the market will just say "so be it". And the truth is that with mixing services this need can still be address.

I already explained that if mixing is not mandatory for all, then all anonymity is destroyed. See footnote [2] in the OP. Please you are not knowledgeable enough and you need to do some reading first.

Most people don't realize what is coming, i.e. the market is currently wrong. Once they realize, they will run for the hills to save themselves.

=================AnonyMint==================
Since the Knowledge Age is rising [3], socialism is peaking into an economic collapse soon (https://bitcointalk.org/index.php?topic=365141.msg4941493#msg4941493) (maybe to rise even higher in future), thus we headed into a crazy period where the governments will try to fund the $150 trillion global debt bubble by hunting down all private capital (https://bitcointalk.org/index.php?topic=365141.0) (G20 announced a database (http://armstrongeconomics.com/2014/02/07/g20-to-cordinate-to-hunt-down-taxes-worldwide/) for this today, NSA will contribute (http://armstrongeconomics.com/2013/09/07/g20-agrees-on-worldwide-access-to-all-information-on-the-wealth-of-the-citizens-for-global-taxation/), and note this is the bankster business model (http://www.silverbearcafe.com/private/01.10/thinklikeabanker.html) for them to own everything (http://www.silverbearcafe.com/private/06.11/owntheearth.html)), then as Bitcoin is taken over top-down then the alternative coin with the above features will take over and become the surviving private sector (https://bitcointalk.org/index.php?topic=365141.msg4943871#msg4943871).

Most people don't realize we had a depression in the USA in 1919, but we recovered in 2 years because the government did not delay the defaults. Whereas, the 1929 Great Depression lingered for decades and required a World War to resolve, because of FDR's New Deal and preventing the defaults and chaotic correction. Frequent defaults correct the economy before it gets "too big to fail" (TBTF). Now we potentially face an Apocalyptic or Mad Max outcome (https://bitcointalk.org/index.php?topic=365141.0) because we grew our debt to a 200 year high. My hope is that the better crypto-currency could help protect private capital from "socialism gone insane" so that the worst outcome can be avoided.
=================AnonyMint==================

For those who didn't click all the links in my OP, you probably missing this chart on what happened to the population of Rome:

http://i2.wp.com/armstrongeconomics.com/wp-content/uploads/2012/06/populationofrome.jpg?resize=584%2C542

Note that collapse was slower then because the government confiscation and citizenry fleeing was physical (http://armstrongeconomics.com/2014/01/15/civil-forefeiture-laws-are-funding-pensions/). Whereas now the G20 is planning digital confiscation of wealth, they will just zap your bank account. So the fleeing will be also nearly instantaneous digital actions.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 09, 2014, 03:33:55 PM
Note the following quoted posts were deleted only because I have retained all their comments in my reply. Keeping the thread concise as possible.

I am not technical person and I don't know how PoS is secure but at first glance it seems to remove the 51% attack problem. If the viability of the coin depends on people which have the most of it, then it's very secure (fairness concerns put aside).

PoS means the elite control the transaction processing, i.e. the 51% attack is built-in by design. We are right back to same problem again.

No, "Proof of Stake" is a synonym for "trusted central entity". Security is only a concern to the extent that you can't trust the rich guy to competently manage money.

If blablahblah makes me repeat this again, I will delete his post and not reply to it. You are repeating the same claim that we don't need decentralization. I already replied to you twice upthread as follows. Trust in centralization is precisely the power vacuum that leads to abuse of power that causes the individuals to lose their freedom, money, and lives. Thus it is synonymous with no (false sense of) security. I provided enough examples already in the Max Mad thread which is linked from the OP. We don't need to redo that debate you and I already did in the Mad Max thread. You like centralization. Understood. So you go that way, and those of us who want to bet on decentralization will go the other direction. We will see in a few years when we are on the rim of the cliff staring at you down in the abyss (if you are still discernible down there).

=================AnonyMint==================
...blablahblah ... has a preference for centralized outcomes.

Your prejudice against all things centralised or structured "top down" (aka: weasel words for social structures that you emotionally dislike),

I shouldn't need to point out the blatantly obvious...

The premise of the OP is the internet is decentralized and their is a huge demand for a decentralized money to enable internet enterprise to be as freedom-oriented as the decentralized publishing of web pages and other internet activity.

If you prefer a centralized internet, then please feel free to continue to using Paypal, VISA and other centralized payment systems.
=================AnonyMint==================

A "51% attack" is a theatrical assault on the public ledger. I.e.: actual damage is caused, and it appears to be caused by some evil elite, so that people panic and are herded into other markets.

2 completely different things.

When the sheep are asleep, a 51% attack could also be insidious similar to the horrific power vacuum with "trusted" centralization outcome. The attack would be noticed by experts (https://bitcointalk.org/index.php?topic=285701.msg3074349#msg3074349), but the sheep might not care.

Only proof-of-work solves the Byzantine Generals Problem. See my first rebuttal to blablahblah.

Proof of work does not solve the Byzantine Generals Problem. You still have to trust that the majority chain is honest. Hence the so-called 51% attack vectors.
But if you disagree, be a good sport and tell us how the Generals would:
a) agree on which Bitcoin-like system they should all use,
b) be sure that the majority coordinator is honest.

In decentralized PoW the majority chain has no coordinator. There is absolutely no trust. Any participant who doesn't follow the protocol is rejected by the protocol. All participants are competing for highly random entropy to be the chosen winner of the next block confirmation. Perhaps you need to read Satoshi's seminal Bitcoin whitepaper (https://bitcoin.org/bitcoin.pdf#page=3) again.


Too much 'not so useful text', a simple answer would be no. Bitcoin won't be replaced by a random altcoin regardless of its features.

This sounds marvellous. Will it also do my shopping and change the wheel on my car when it gets a puncture?

This will be the only warning.

Posts such as the above which add no substantive reasoning, will be deleted. We can probably assume and attribute 2 of the "No" votes came from these two. This is not a thread for lazy "because we want it to be so regardless of logic and technical understanding" spammers and fanboys.

As usual, LaudaM's post have 0 information content (its usually more a feeling of empathy than angst, at least in a self-moderated thread where I can block him). I can assume that davidgdg is implying that anonymity should be up to each individual user and not mandatory, which I already explained in footnote [2] in the OP causes all anonymous users of and thus Bitcoin to be subject to easy control by the government (taxation and law enforcement). If he has another implied meaning, he needs to write it. I will not tolerate posts which are not a sincere attempt to convey information clearly.

Update davidgdg replied:

Sure I will spell it out. Your argument seems to be that Bitcoin will be replaced by some hypothetical Perfectcoin. But Perfectcoin does not exist. So your argument really amounts to "bitcoin will fail because it will be replaced by something much better". Well maybe. But that depends when, how much better, whether bitcoin can evolve, so on and so forth.  You don't address any of these points.

The "how much better", why Bitcoin can't "evolve" were specifically addressed in the OP (c.f. the links where it says "insurmountable (also) flaws" in the OP). Read again more carefully, read the linked threads, read and read and think. Sorry the OP has a very high information content and it is not for the lazy readers.

Those who vote "No" are going to miss an opportunity to attain massive fortunes. I am very happy if 99% vote "No". Leave more wealth for me  :-*


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 09, 2014, 06:13:25 PM
Note the following quoted post was deleted only because I have retained all the comments in my reply. Keeping the thread concise as possible.

Concretely how do you think governements would take control over Bitcoin?

That would necessite to take control of the Internet and totalitarian measures. In this apocalyptic context altcoins would have the same fate than Bitcoin.

I already explained in the linked threads in OP. Doesn't require takeover of internet. Totalitarian measures have already started. I proposed an altcoin that would not face the same doom.

I am not going to repeat all the discussion that is linked from the OP. Lazy readers are not important to me. And if I had to repeat every discussion I already did for every new reader that can't read the prior discussion, I would be a slave to lazy readers. I would never get any other productive work done. I would spend my entire life re-writing over and over again for each new lazy reader, because there are billions of them.

No single government controls all of the internet. The protocols of the internet are highly decentralized and self-repairing (https://bitcointalk.org/index.php?topic=285701.msg3141082#msg3141082). The government can not shut down the entire internet, because for one reason they rely on it to function. Not only their daily functions, but it is also the greatest data collection system on citizens they ever had. One week with the internet shutdown would result in total chaos for the western governments. They could try to filter certain traffic, but we can hide our traffic in HTTPS and SSL such that they can not discern which traffic should be filtered. If the governments push too hard, the youth will simply create a new internet and say "F U" to the boomers who are running the governments. The youth are addicted to internet and there is no way they will tolerate even a week without their connectivity.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 10, 2014, 08:13:15 AM
From the Mad Max thread (https://bitcointalk.org/index.php?topic=365141.msg5050397#msg5050397)...

Anonymint - your last post contained 46 links.

That just shows how motivated and enthusiastic he is...

The "Yes" votes on this thread and the other one (https://bitcointalk.org/index.php?topic=455141.0) are surprisingly high.  :P

I did not expect such a high percentage of the readers would agree with me. I am accustomed to being far ahead of the crowd, and my views don't become mainstream until a decade after I start to capitalize on them.

So this could mean I have a found a filter (topic of Bitcoin and decentralization) for people more like me, and/or it could mean I've been much too slow to capitalize on these sort of macro-economic, geopolitical insights that I started contemplating after 9/11 and researching seriously since 2005.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: moolaching on February 10, 2014, 02:34:06 PM
However I am not as pessimistic on the possibility of the market need being fulfilled soon.   :)

Sir kindly check your Messages. Our group is working on a similar design.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 10, 2014, 03:59:26 PM
To show I am fair, I acknowledge that blahbermouth created an alternative noise thread (https://bitcointalk.org/index.php?topic=457105.msg5041054#msg5041054).

Self moderated threads are for pansies.

Should I waste my time replying, just to serve his attention-whoring needs?

One last set of rebuttals from me to this jealous idiot. While he is masturbating with useless noise, self-moderated threads can be all about filtering spam to focus on serious discussion and work to actually release new software.

I received a PM earlier explaining the quotes were kept, just the original deleted to keep things concise...

Indeed you did.

So I made my own thread. Problem solved! :D

Oh the irony of you using decentralized freedom to circumvent my top-down managed thread. (don't you think I am smart enough to have done this on purpose so you would prove my point!) Yet upthread you claimed the internet is not about decentralization (i.e. individual independence) and you didn't understand why individual control is "freedom-oriented". Sigh.  ::)

Finally, regarding the topic at hand:
Where did I say that I 'like' centralisation? I didn't.

For the love of Christy, just read what you wrote upthread.  ;)

I already explained that trust is a fundamental issue concerning the design of money...

And I explained upthread why only PoW allows decentralized trust of the protocol without needing to trust the reputation of the participants.

You are so fucking slow minded! Stay away from my threads. I am tired of your tiny brain wasting my time.

Who in their right mind would even download the source code, if they can't even be sure they're getting the right software because NONE of the participants can be trusted?

Don't conflate the trust of open source due to the Linus Law "given enough eyeballs, every bug is shallow", with the type of proof scheme chosen to remove the need to trust reputations of individual participants.

You fucking conflate everything. Your IQ is too low. I don't want your posts, and take your low IQ cohorts with you. Don't let the door hit you in the arse on the way out.

P.S. Your low IQ cohorts can repost their deleted spam posts in your thread. I have already provided a link to it above. Readers can follow that link to read posts which I deemed to be political grandstanding noise and not sincere discussion. Or repeating debates that were already made in other threads which are linked from the OP. If they want to continue those orthogonal debates, they can put their posts in those orthogonal threads which are already linked in the OP. For example, I deleted Rassah's political grandstanding re-posting his interpretation of the Transactions Withholding Attack (https://bitcointalk.org/index.php?topic=336350.0) here, because I would have to repost all my comments from that thread in this thread too which would be an inane duplication of effort and burying this thread. He already posted in that thread and I refuted him already in that linked thread. Readers can go read the entire thread if they want to see the debate.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 10, 2014, 04:12:45 PM
However I am not as pessimistic on the possibility of the market need being fulfilled soon.   :)

Sir kindly check your Messages. Our group is working on a similar design.

I noticed before your name choice poll (https://bitcointalk.org/index.php?topic=458443.0), but I didn't like the choices much except perhaps silicoin. I like unigit because it isn't lost in the dozens of "coin" altcoins, but it is not obvious that it means money.

Btw, that name Ethereum is not going to work. It is extremely difficult to select a name for the next currency of the world. I understand "it lives in the ether" but that isn't going to work for most people. It needs to sound like money, but not "coin".

Ethereum is too difficult to pronounce and spell.

Another problem is the units of the currency, i.e. "I own 3 ethereums" because it is not clear that an etheruem is a unit, i.e. 3 ethers. Whereas "I own 3 bitcoins" is clearly 3 coins.

Some people might be tempted to pronounce it as "uni-get" instead of "uni-jet", yet that isn't the phonetics of the spelling in english words so they would be clearly in error except that I think people mispronounce github as "get-hub" instead of "jet-hub"?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 11, 2014, 10:52:18 AM
https://bitcointalk.org/index.php?topic=365141.msg5075050#msg5075050

B) Technical critique of Bitcoins flaws:
Undecided: I don't have sufficient technical knowledge of bitcoin to judge for myself. All those who do have said knowledge have either an agenda or a vested interest.

It doesn't matter if they think the Transactions Withholding Attack won't happen, because 0 transaction fees are more popular.  :P

They think there is a problem with transaction spam if transaction fees are 0, but that is because they haven't thought out-of-the-box of how to design a system that is different than Bitcoin in very amazing ways.

One day soon these guys are going to read some whitepapers that are going to make them walk away with their tail between their legs.

Also mining can't be funded from transaction fees proportional to the growth in the market cap of Bitcoin unless transactions grow as fast (and they are not (https://bitcointalk.org/index.php?topic=351712.msg3831758#msg3831758)) and transaction fees are a percentage (and they are not or better not because debit cards and ACH are flat fee), thus it is logically irrefutable that the value of attacking Bitcoin will increase faster than the funding for mining to protect against a 51% attack.

You don't need to be technical to understand that simple math.

C) Need for Anonyminity:
In Agreement (reluctantly): This has some major major downsides but I have been unable to think of a better solution to the power vacuum.

We always had it in the past with cash and gold, it only now we need to add it to digital age because the government is gaining an unfair advantage and can now track everything.

We are just restoring the balance that had always been there before but which is being lost currently and helping socialism to go into an insane peak.

Have you voted in moolaching's naming poll (https://bitcointalk.org/index.php?topic=458443.0)?

Let me expound on that math.

If tx fees increase proportional to the rise in the BTC price, then Bitcoin becomes uncompetitive with debit cards, ACH, Swift, and wire transfers, which all have a flat fee.

If tx fees don't scale porportional the rise in the BTC price, then because the annual rate of new coin rewards diminish over time, then the funding for mining is declining proportional to the rise of the Bitcoin market cap over time.

Thus Bitcoin is becoming less expensive to 51% attack over time relative to the market value of Bitcoin.

For an attacker such as the government, the market value of Bitcoin determines the value of taking control of it.

For miners, the revenue paid out for mining determines the amount of processing power they can apply to the security against a 51% attack.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 11, 2014, 09:58:31 PM
https://bitcointalk.org/index.php?topic=365141.msg5087444#msg5087444

So, who is the benevolent dictator of TCP/IP, HTTP, SMTP, BitTorrent, VOIP? Nice theory, but it doesn't really apply to protocols.

Duh, the point in my prior post and the quoted one below was TCP/IP, HTTP, SMTP have not continued to evolve in drastic ways. They are stuck by vested interests in their original feature set that was set by the original key designers. Just as Bitcoin is.

BitTorrent designs such as Azureus have had the same developer. I was interacting with him (https://web.archive.org/web/20130401040049/http://forum.bittorrent.org/viewtopic.php?id=28) technically in 2008.

VoIP is not one protocol. Skype originally had a key development team, not a committee.

===============================
Note the argument of an absolute network effect advantage for Bitcoin is illogical (https://bitcointalk.org/index.php?topic=279650.msg3495695#msg3495695). The network effect can lead to more mass for Bitcoin but it can't entirely shut out altcoins, not in the way that for example an internet standard shuts out alternatives due to the inertia of modifying millions of servers (https://bitcointalk.org/index.php?topic=279650.msg3515394#msg3515394). For example, my coolpage.com was first in 1998 with a million users by 2001 (https://bitcointalk.org/index.php?topic=455141.0) (roughly 1% of the internet at the time), Friendster followed 2002 later peaking with 100+ million, Myspace 2006, and then Facebook 2008. Last year Bitcoin was only at an estimated 350,000 users. We have a long way to go to 7 billion.
================================

We're not all morons down here.

But you are.


Quite a bit of competition you got now with NXT and Ethereum.

NXT is proof-of-stake which means crap (https://bitcointalk.org/index.php?topic=455141.msg5033780#msg5033780). I told you before that I studied the proof-of-work algorithm for Ethereum and it will not remain cpu-only.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: mek300 on February 11, 2014, 10:27:46 PM


Altcoin and dogecoin alike will be created on weekly basis and will be modified further and further to correct possible anomalies. This is a gradual process which also involves human behavior.

We are not talking about the human behavior of one company and all stock owners/traders trading this company's stock. We are talking about world-wide computer user communities behavior that no genius can model and predict with math, physics, reasoning, explicit explanation, and such.

In worst case scenario, we can go back to 2010 when 10,000 BTC is worth $25 for a pizza.

That was less than 4 years ago.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 12, 2014, 07:34:01 AM
Looks like some of the ideas discussed upthread are making it into the mainstream media.

This guy in Forbes is essentially arguing that cryptocurrency is going to bifurcate into an anonymous coin and a bank coin.

http://www.forbes.com/sites/billfrezza/2014/02/07/why-bitcoin-must-die-long-live-bitcoin-2-0/

Makes me wonder if he is reading this forum.

 8)


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: fairglu on February 12, 2014, 07:51:51 AM
Those who were anonymous lose it ex post facto, when tax & law enforcement attack a.k.a. "coin taint" the numerous non-anonymous

I'll go on a limb there, and say something this community may not be ready to swallow, but the biggest flaw of bitcoin and cryptos so far is to want or aim for anonymity.

We've got enough shady dealings going on with banks, politicians and fiat cash transactions. Let's not fool ourselves: those that benefit from anonymity most are banksters, politicians, crooks and traffickers.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: linusinthesapphire on February 12, 2014, 09:01:20 AM
Proof systems which attempt to do useful computational work can not be secure.

I didn't think about that until now.  Of course.  Like with PrimeCoin you could determine the next prime number after the next prime number and use that to snoop the blockchain and doublespend a million dollars or something ridiculous.  I see it now.  It is necessary to have random meaningless hashing after all.  Which is really disappointing. 


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 12, 2014, 09:04:06 AM
I received a private message from someone who claims to be inside the curtain with central banks, and he says that some inside already know the entire thing is going to come crashing down and they are now focused on what to do after the collapse.


Those who were anonymous lose it ex post facto, when tax & law enforcement attack a.k.a. "coin taint" the numerous non-anonymous

I'll go on a limb there, and say something this community may not be ready to swallow, but the biggest flaw of bitcoin and cryptos so far is to want or aim for anonymity.

We've got enough shady dealings going on with banks, politicians and fiat cash transactions. Let's not fool ourselves: those that benefit from anonymity most are banksters, politicians, crooks and traffickers.

The crooks always own the government due to the power vacuum of democracy, which is explained in detail in my Mad Max thread (find a link to it upthread). So lack of anonymity is not stopping them. Whereas lack of anonymity allows the government to track down all the wealth and tax+confiscate it all to pay the $150 trillion global debt. Of course the global debt will grow larger as they tax+confiscate, because the entire pie of the productive economy will collapse. So this will be a death spiral into a Mad Max Dark Age.

The only way we avoid that horrific outcome is for private and productive capital to find a place to hide from the government. Gold won't work because you can't transact over distance nor internet anonymously. Check points stop that physical movement. Hoarding of gold coincides with an implosion of transactions and thus the velocity of money (which is already down -50% since 2008).

Anonymity of decentralized internet currency is the only solution I see. Or the people suddenly stop demanding socialism and rise up against the government, but that isn't going to happen because too many people suck the tit of socialism now and need it.

One positive thing about anonymity in terms of the crooks, is if it helps them to steal faster from the government, then sooner we can collapse the socialism (i.e. government) which is hunting down all private wealth.

We have to destroy the current system. The only possible option is whether we don't also destroy all private capital in the process of creative destruction of the current egregiously out-of-control socialism and government.

See also what I wrote in the past (https://bitcointalk.org/index.php?topic=342848.msg3789296#msg3789296) about this.


Proof systems which attempt to do useful computational work can not be secure.

I didn't think about that until now.  Of course.  Like with PrimeCoin you could determine the next prime number after the next prime number and use that to snoop the blockchain and doublespend a million dollars or something ridiculous.  I see it now.  It is necessary to have random meaningless hashing after all.  Which is really disappointing.  

True for things that must be known a priori as you say, e.g. solving supercomputing problems such a matrices. However, there is one slight mistake in your epiphany, at least how I interpreted your statement. PrimeCoin is secure until someone figures out a math to relate the way they are forming their prime chains, i.e. how the next prime relates to the prior block's prime. I do believe it can be insecure too because there may be a yet undiscovered mathematical order in primes which applies to the way they chain primes, but it is not a given at the moment until someone finds that ordered relationship and implements an attack. Whereas for Satoshi's proof-of-work, the hash of the next block can't be known until the hash of the current block is calculated, so it can never be known a priori unless you have more hashing power than the network (i.e. 50+% attack). And the next hash relates to the prior one in a cryptographically secure (random) way due to the confusion and diffusion in the design of the hash function. There is no expectation of mathematical order since the design of the cryptographic hash requires breaking linearity over all possible number spaces.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Misesian on February 12, 2014, 09:11:07 AM
Do you not believe a bitcoin black market could be formed? Especially when the state becomes more pervasive perhaps imposing price controls when inflation gets out of control, people may turn to bitcoin because at the moment it's far better than any other cryptocurrency out there at the moment and when the economic situation gets worse dollars or SDRs or whatever we're using in the future just will be hated by the people because inequality will be so great and the poor will be really poor.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 12, 2014, 09:34:45 AM
Do you not believe a bitcoin black market could be formed? Especially when the state becomes more pervasive perhaps imposing price controls when inflation gets out of control, people may turn to bitcoin because at the moment it's far better than any other cryptocurrency out there at the moment and when the economic situation gets worse dollars or SDRs or whatever we're using in the future just will be hated by the people because inequality will be so great and the poor will be really poor.

Black market won't function so well because anonymity is broken for all due to footnote [2] in the OP.  Due to the coin tainting by authorities explained in [2], then it will be very difficult to find someone to transact with you. Most will refuse. If you want the coin to function well, you have to prevent coin taint from fracturing the money system.

Coin taint is perhaps the most serious problem in Bitcoin. A core Bitcoin developer is trying to fix it with CoinJoin, but I explain in [2] why that won't work.

Also we are headed into massive deflation, not inflation. Please see the long list of armstrongeconomics.com links I provided which explain this upthread. As Armstrong has explained how it always happens throughout history, "you will pray they would just hyperinflate away the debts and destroy their governing power. That only happens for fringe a.k.a. peripheral nations or revolutionary governments. Instead what is coming is much more sinister, as the core nations will band together and hunt down all wealth SO THEY RETAIN THEIR POWER".

The way socialism collapses over and over again throughout human history is the people support the government to go tax+confiscate the rich. Eventually this is targeting the middle class, e.g. look at what Obama is doing and IMF is proposing a 10% confiscation of all bank accounts. By the time the system is eating itself, the people don't have any money. Thus they demand the government to do more to tax+confiscate. This is a downward spiral into the Mad Max abyss. It has happened many times in human history, e.g. the Wiemar Germany then Hitler. But that is not the only example, there are 100s.

So yes we need that anonymous cryptocurrency and thus black market. My hope is it becomes as mainstream as possible. Else everyone sinks with the Titantic.

When the IMF confiscation comes, there will be a mad rush into Bitcoin and also (by the more astute) into a more strongly anonymous coin that doesn't have coin taint. When the authorities start tracking down Bitcoins and pushing the coin taint to reality, then a mad rush (of the less astute) out of Bitcoin into the more strongly anonymous coin.



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Jungian on February 12, 2014, 09:55:04 AM

So yes we need that anonymous cryptocurrency and thus black market. My hope is it becomes as mainstream as possible. Else everyone sinks with the Titantic.


Zerocoin is soon to be released. Way better anonoymity than Bitcoin


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Misesian on February 12, 2014, 10:21:43 AM
Do you not believe a bitcoin black market could be formed? Especially when the state becomes more pervasive perhaps imposing price controls when inflation gets out of control, people may turn to bitcoin because at the moment it's far better than any other cryptocurrency out there at the moment and when the economic situation gets worse dollars or SDRs or whatever we're using in the future just will be hated by the people because inequality will be so great and the poor will be really poor.

Black market won't function so well because anonymity is broken for all due to footnote [2] in the OP.  Due to the coin tainting by authorities explained in [2], then it will be very difficult to find someone to transact with you. Most will refuse. If you want the coin to function well, you have to prevent coin taint from fracturing the money system.

Coin taint is perhaps the most serious problem in Bitcoin. A core Bitcoin developer is trying to fix it with CoinJoin, but I explain in [2] why that won't work.

Also we are headed in massive deflation, not inflation. Please see the long list of armstrongeconomics.com links I provided which explain this upthread.

The way socialism collapses over and over again throughout human history is the people support the government to go tax+confiscate the rich. Eventually the rich becomes the middle class, e.g. look at what Obama is doing and IMF is proposing a 10% confiscation of all bank accounts. By the time the system is eating itself, the people don't have any money. Thus they demand the government to do more to tax+confiscate. This is a downward spiral into the Mad Max abyss. It has happened many times in human history, e.g. the Wiemar Germany then Hitler. But that is not the only example, there are 100s.

So yes we need that anonymous cryptocurrency and thus black market. My hope is it becomes as mainstream as possible. Else everyone sinks with the Titantic.

When the IMF confiscation comes, there will be a mad rush into Bitcoin and also (by the more astute) into a more strongly anonymous coin that doesn't have coin taint. When the authorities start tracking down Bitcoins and pushing the coin taint to reality, then a mad rush (of the less astute) out of Bitcoin into the more strongly anonymous coin.



Do you really believe the US government will choose deflation over inflation? Most academic economists want inflation at the moment and are not even worried about hyperinflation due to the low velocity of money, that's what the QE has been about hasn't it? They're trying to reach an escape velocity and increase consumer confidence before dialling back the QE and raising rates. Armstrong says it's impossible to maintain our reserve status and inflate our way out of this problem which is true but why then have they not started the deflationary measures already?


Title: Re: Thoughts on Max Keiser's coin (Maxcoin)
Post by: AnonyMint on February 12, 2014, 10:27:08 AM
https://bitcointalk.org/index.php?topic=455450.msg5097190#msg5097190

6. The coin has inbuilt algorithm changing so if someone was to build an ASIC the devs would simply change the algorithm and they would be rendered useless. Posted by the Maxcoin devs http://www.reddit.com/r/maxcoinproject/comments/1xh1xl/the_maxcoin_advantage/cfba4hy

Which means either he is fooling (possibly himself and) you, or the coin MUST BE controlled top-down and is thus centralized. Thus handed on silver platter for take over by the authorities in the future.

Either you have decentralized protocol or you have top-down control.

If the protocol is decentralized it means no one can decide to change it any more, unless they can convince a majority of the mining hash processing power to switch. Since ASICs have orders-of-magnitude hash processing power advantage, then they won't agree of course. Even if ASICs are just launched, existing GPU or CPU miners will be resistant to changes (https://bitcointalk.org/index.php?topic=279771.msg3033650#msg3033650). So you must then maintain top-down control over pools or somehow force all miners to switch.

I explained this to bytemaster (https://bitcointalk.org/index.php?topic=279771.msg3033650#msg3033650) months ago when he proposed a similar strategy for BitShares.

This is also why you won't see any drastic changes to Bitcoin any more.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 12, 2014, 10:37:58 AM
So yes we need that anonymous cryptocurrency and thus black market. My hope is it becomes as mainstream as possible. Else everyone sinks with the Titantic.

Zerocoin is soon to be released. Way better anonoymity than Bitcoin

I already explained upthread why it can't be Zerocoin. See the following upthread quote of myself:

Now I'd really like to get a discussion going on this alt crypto coin saver. Could it be zerocoin?

No.

  • Validation is too slow, thus can't work technically.
  • Might be back-doored (although this might be fixable)
  • Unproven, very complex new crypto. Needs many years to become trusted and stable.
  • Storage size needed for full clients is impractical if it is mandatory for all users
  • Mixers, laundries, and exchanging between coins which are not mandatory fail for the ex post facto reason I provided in the 3rd item in the Threats section and footnote [2] of the OP
  • Subject to timing attacks, i.e. timing when inputs go in and outputs come out
  • Doesn't obscure the IP address of the participants, and Tor + VPN are inadequate, this will be explained further at the appropriate time


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: RAJSALLIN on February 12, 2014, 10:43:50 AM

  • Unproven, very complex new crypto. Needs many years to become trusted and stable.


Isn't this point going to be a problem with any new crypto? Better get this new coin out soon so there is sufficient time to test and debug it.

Anonymint what is your feeling at the moment. Is there any coin in the pipe that you feel could have the properties you want?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 12, 2014, 10:51:47 AM
Do you not believe a bitcoin black market could be formed? Especially when the state becomes more pervasive perhaps imposing price controls when inflation gets out of control, people may turn to bitcoin because at the moment it's far better than any other cryptocurrency out there at the moment and when the economic situation gets worse dollars or SDRs or whatever we're using in the future just will be hated by the people because inequality will be so great and the poor will be really poor.

Black market won't function so well because anonymity is broken for all due to footnote [2] in the OP.  Due to the coin tainting by authorities explained in [2], then it will be very difficult to find someone to transact with you. Most will refuse. If you want the coin to function well, you have to prevent coin taint from fracturing the money system.

Coin taint is perhaps the most serious problem in Bitcoin. A core Bitcoin developer is trying to fix it with CoinJoin, but I explain in [2] why that won't work.

Also we are headed in massive deflation, not inflation. Please see the long list of armstrongeconomics.com links I provided which explain this upthread.

The way socialism collapses over and over again throughout human history is the people support the government to go tax+confiscate the rich. Eventually the rich becomes the middle class, e.g. look at what Obama is doing and IMF is proposing a 10% confiscation of all bank accounts. By the time the system is eating itself, the people don't have any money. Thus they demand the government to do more to tax+confiscate. This is a downward spiral into the Mad Max abyss. It has happened many times in human history, e.g. the Wiemar Germany then Hitler. But that is not the only example, there are 100s.

So yes we need that anonymous cryptocurrency and thus black market. My hope is it becomes as mainstream as possible. Else everyone sinks with the Titantic.

When the IMF confiscation comes, there will be a mad rush into Bitcoin and also (by the more astute) into a more strongly anonymous coin that doesn't have coin taint. When the authorities start tracking down Bitcoins and pushing the coin taint to reality, then a mad rush (of the less astute) out of Bitcoin into the more strongly anonymous coin.



Do you really believe the US government will choose deflation over inflation? Most academic economists want inflation at the moment and are not even worried about hyperinflation due to the low velocity of money, that's what the QE has been about hasn't it? They're trying to reach an escape velocity and increase consumer confidence before dialling back the QE and raising rates. Armstrong says it's impossible to maintain our reserve status and inflate our way out of this problem which is true but why then have they not started the deflationary measures already?

Don't forget the Quantity Theory of Money, M x V = P x Q. Thus if M increases but V (velocity of money) implodes (and it is already down -50% since 2008 in the USA), then you still have deflation, unless Q falls more than M x V does.

They are already starting the deflation. Don't you see Obama destroying the productive economy with Obamacare. Don't you see the NSA storing everything so they know where all the wealth is, as they prepare to share info with the tax authorities in every G20 nation (see my upthread link to that news story). Don't you see the plan to raise taxes. Don't you see the IMF calling for "financial repression" and confiscation of 10% of all bank accounts. Don't you see the Fed taper. Don't you see the 60% youth unemployment in southern Europe and preparing to spread to France and others, while ECB has no legal right to print:

http://armstrongeconomics.com/2014/02/11/ecb-structural-faults-switzerland-bail-out-of-banks/
http://armstrongeconomics.com/2014/02/08/europe-is-a-basket-case-just-turnout-the-lights-now-save-energy/

All the $trillions in QE ended up as dollar bond issues in the developing world a.k.a. peripheral economies. That is why you see the developing world booming in construction (e.g. the third-world Philippines has 14 of the 36 largest malls in the world [1]). This wasn't hyperinflation, it was inflating the developing world while deflating the western developed world. Note the Fed is tapering, so the developing world has peaked and is headed down (https://bitcointalk.org/index.php?topic=365141.msg5043927#msg5043927).

There is a massive deflationary wave underway. It has started at the periphery and by 2015.75 it will reach the USA when the very strong dollar (from capital fleeing the developing world back into the dollar again) will choke off the USA economy. Coincidentally the US govt is funded to Sept 2015 precisely to the day that Armstrong's computer model predicts the USA to peak and turn down into this massive deflationary wave that will run into the 2020s with final bottom of the global crisis in 2032.

Here follows is the relevant upthread quote of myself:

Look up the causes of hyperinflation. There doesn't even need to be an increase in the money supply -- hyperinflation is fundamentally a runaway collapse in the amount of trust the average person has in the underlying system.

We are headed into massive deflation, and perhaps you fundamentally don't understand that hyperinflation only occurs in peripheral economics (https://www.google.com.ph/search?q=site:armstrongeconomics.com+hyperinflation), not in the core of the global economy.

http://armstrongeconomics.com/2013/01/28/here-we-go-again-hypreinflation/
http://armstrongeconomics.com/2014/01/14/hyperinflation-is-it-even-possible/
http://armstrongeconomics.com/2013/11/20/hyperinflation-all-just-hype/
http://armstrongeconomics.com/2014/01/14/hyperinflation-impossibility-in-private-sector/
http://armstrongeconomics.com/2013/08/11/defining-hyperinflation-the-coming-new-currency/
http://armstrongeconomics.com/2012/07/04/hyperinflation/
http://armstrongeconomics.com/2013/02/24/the-untold-truth-about-the-german-hyperinflation/
http://armstrongeconomics.com/2013/06/24/12703/
http://armstrongeconomics.com/2013/12/29/law-of-unintended-consequences/

http://armstrongeconomics.com/the-taxman-cometh/
http://armstrongeconomics.com/2013/10/30/world-trade-turning-negative-same-as-protectionism/
http://armstrongeconomics.com/2013/11/14/the-coming-deflation/
http://armstrongeconomics.com/2013/11/09/deflation-the-great-equalizer-now-greece-was-there-a-different-tested-response-in-history-yes/

My point in the Errata section of the OP about centralized control over debasement isn't that hyperinflation results. I never wrote the word hyperinflation. Rather my point is those who have captured the government gain the fruits of that debasement, or it is wasted by the poor fitness of top-down allocation of resources.


[1]
My comments on the following pages cover the technological unemployment crisis ahead and I even summarize the 78 year cycle with a chart of the past events:

https://web.archive.org/web/20130629103550/http://www.mpettis.com/2013/02/21/a-brief-history-of-the-chinese-growth-model/#comment-21562
https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18853
https://web.archive.org/web/20130624091541/http://www.mpettis.com/2012/12/28/the-imf-on-overinvestment/#comment-20711
https://web.archive.org/web/20130411201742/http://www.mpettis.com/2012/12/04/three-cheers-for-the-new-data/#comment-20394
https://web.archive.org/web/20130531035050/http://www.mpettis.com/2012/11/17/is-there-an-asian-rmb-bloc/#comment-19226
https://web.archive.org/web/20130531035050/http://www.mpettis.com/2012/11/17/is-there-an-asian-rmb-bloc/#comment-19319
https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18648
https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18795

Outsourcing is peaking:

https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18898
http://www.gartner.com/newsroom/id/2550615 (decline to 2% for 2013 reached as predicted)

Chinese corporate debt is the highest in the world as a percentage of GDP:

https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18916

China's ruling class is checkmated:

https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16624
https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16509
https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16585
https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-17032
https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16951

The death of the industrial age, stored capital, and collectivism:

https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16735

My analysis of the Philippines predated the Forbes article:

https://web.archive.org/web/20130624091508/http://www.mpettis.com/2013/02/14/what-ill-be-watching-in-2013/#comment-21493
http://www.forbes.com/sites/jessecolombo/2013/11/21/heres-why-the-philippines-economic-miracle-is-really-a-bubble-in-disguise/

Brazil:

https://web.archive.org/web/20130217223504/http://www.mpettis.com/2012/10/07/how-to-be-a-china-bull/#comment-17177


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Misesian on February 12, 2014, 11:07:18 AM
Do you not believe a bitcoin black market could be formed? Especially when the state becomes more pervasive perhaps imposing price controls when inflation gets out of control, people may turn to bitcoin because at the moment it's far better than any other cryptocurrency out there at the moment and when the economic situation gets worse dollars or SDRs or whatever we're using in the future just will be hated by the people because inequality will be so great and the poor will be really poor.

Black market won't function so well because anonymity is broken for all due to footnote [2] in the OP.  Due to the coin tainting by authorities explained in [2], then it will be very difficult to find someone to transact with you. Most will refuse. If you want the coin to function well, you have to prevent coin taint from fracturing the money system.

Coin taint is perhaps the most serious problem in Bitcoin. A core Bitcoin developer is trying to fix it with CoinJoin, but I explain in [2] why that won't work.

Also we are headed in massive deflation, not inflation. Please see the long list of armstrongeconomics.com links I provided which explain this upthread.

The way socialism collapses over and over again throughout human history is the people support the government to go tax+confiscate the rich. Eventually the rich becomes the middle class, e.g. look at what Obama is doing and IMF is proposing a 10% confiscation of all bank accounts. By the time the system is eating itself, the people don't have any money. Thus they demand the government to do more to tax+confiscate. This is a downward spiral into the Mad Max abyss. It has happened many times in human history, e.g. the Wiemar Germany then Hitler. But that is not the only example, there are 100s.

So yes we need that anonymous cryptocurrency and thus black market. My hope is it becomes as mainstream as possible. Else everyone sinks with the Titantic.

When the IMF confiscation comes, there will be a mad rush into Bitcoin and also (by the more astute) into a more strongly anonymous coin that doesn't have coin taint. When the authorities start tracking down Bitcoins and pushing the coin taint to reality, then a mad rush (of the less astute) out of Bitcoin into the more strongly anonymous coin.



Do you really believe the US government will choose deflation over inflation? Most academic economists want inflation at the moment and are not even worried about hyperinflation due to the low velocity of money, that's what the QE has been about hasn't it? They're trying to reach an escape velocity and increase consumer confidence before dialling back the QE and raising rates. Armstrong says it's impossible to maintain our reserve status and inflate our way out of this problem which is true but why then have they not started the deflationary measures already?

They are already starting the deflation. Don't you see Obama destroying the productive economy with Obamacare. Don't you see the NSA storing everything so they know where all the wealth is, as they prepare to share info with the tax authorities in every G20 nation (see my upthread link to that news story). Don't you see the plan to raise taxes. Don't you see the IMF calling for "financial repression" and confiscation of 10% of all bank accounts. Don't you see the Fed taper.

All the $trillions in QE ended up as dollar bond issues in the developing world a.k.a. peripheral economies. That is why you see the developing world booming in construction (e.g. the third-world Philippines has 14 of the 36 largest malls in the world [1]). This wasn't hyperinflation, it was inflating the developing world while deflating the western developed world. Not the Fed is tapering, so the developing world has peaked and is headed down (https://bitcointalk.org/index.php?topic=365141.msg5043927#msg5043927).

There is a massive deflationary wave underway. It has started at the periphery and by 2015.75 it will reach the USA when the very strong dollar (from capital fleeing the developing world back into the dollar again) will choke off the USA economy. Coincidentally the US govt is funded to Sept 2015 precisely to the day that Armstrong's computer model predicts the USA to peak and turn down into this massive deflationary wave that will run into the 2020s with final bottom of the global crisis in 2032.

Here follows is the relevant upthread quote of myself:

Look up the causes of hyperinflation. There doesn't even need to be an increase in the money supply -- hyperinflation is fundamentally a runaway collapse in the amount of trust the average person has in the underlying system.

We are headed into massive deflation, and perhaps you fundamentally don't understand that hyperinflation only occurs in peripheral economics (https://www.google.com.ph/search?q=site:armstrongeconomics.com+hyperinflation), not in the core of the global economy.

http://armstrongeconomics.com/2013/01/28/here-we-go-again-hypreinflation/
http://armstrongeconomics.com/2014/01/14/hyperinflation-is-it-even-possible/
http://armstrongeconomics.com/2013/11/20/hyperinflation-all-just-hype/
http://armstrongeconomics.com/2014/01/14/hyperinflation-impossibility-in-private-sector/
http://armstrongeconomics.com/2013/08/11/defining-hyperinflation-the-coming-new-currency/
http://armstrongeconomics.com/2012/07/04/hyperinflation/
http://armstrongeconomics.com/2013/02/24/the-untold-truth-about-the-german-hyperinflation/
http://armstrongeconomics.com/2013/06/24/12703/
http://armstrongeconomics.com/2013/12/29/law-of-unintended-consequences/

http://armstrongeconomics.com/the-taxman-cometh/
http://armstrongeconomics.com/2013/10/30/world-trade-turning-negative-same-as-protectionism/
http://armstrongeconomics.com/2013/11/14/the-coming-deflation/
http://armstrongeconomics.com/2013/11/09/deflation-the-great-equalizer-now-greece-was-there-a-different-tested-response-in-history-yes/

My point in the Errata section of the OP about centralized control over debasement isn't that hyperinflation results. I never wrote the word hyperinflation. Rather my point is those who have captured the government gain the fruits of that debasement, or it is wasted by the poor fitness of top-down allocation of resources.


[1]
My comments on the following pages cover the technological unemployment crisis ahead and I even summarize the 78 year cycle with a chart of the past events:

https://web.archive.org/web/20130629103550/http://www.mpettis.com/2013/02/21/a-brief-history-of-the-chinese-growth-model/#comment-21562
https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18853
https://web.archive.org/web/20130624091541/http://www.mpettis.com/2012/12/28/the-imf-on-overinvestment/#comment-20711
https://web.archive.org/web/20130411201742/http://www.mpettis.com/2012/12/04/three-cheers-for-the-new-data/#comment-20394
https://web.archive.org/web/20130531035050/http://www.mpettis.com/2012/11/17/is-there-an-asian-rmb-bloc/#comment-19226
https://web.archive.org/web/20130531035050/http://www.mpettis.com/2012/11/17/is-there-an-asian-rmb-bloc/#comment-19319
https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18648
https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18795

Outsourcing is peaking:

https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18898
http://www.gartner.com/newsroom/id/2550615 (decline to 2% for 2013 reached as predicted)

Chinese corporate debt is the highest in the world as a percentage of GDP:

https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18916

China's ruling class is checkmated:

https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16624
https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16509
https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16585
https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-17032
https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16951

The death of the industrial age, stored capital, and collectivism:

https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16735

My analysis of the Philippines predated the Forbes article:

https://web.archive.org/web/20130624091508/http://www.mpettis.com/2013/02/14/what-ill-be-watching-in-2013/#comment-21493
http://www.forbes.com/sites/jessecolombo/2013/11/21/heres-why-the-philippines-economic-miracle-is-really-a-bubble-in-disguise/

Brazil:

https://web.archive.org/web/20130217223504/http://www.mpettis.com/2012/10/07/how-to-be-a-china-bull/#comment-17177

The Fed is tapering because they want to keep confidence in the dollar, the markets were expecting a taper because the markets believe the economy is recovering so if the Fed didn't taper the markets would have responded badly, the taper was insignificant as well, they're still pumping money into the economy. The Fed have always maintained their decisions are based on the data and the data will show stunted growth and employment will be terrible, I expect the taper programme will be extended

Also it is suspected that China have been buying massive amounts of gold due to not reporting their gold stock since 2009, they do not want the US dollar as the reserve currency anymore, Russia has publicly stated that the US dollar will be a thing of the past. China does have a high corporate debt but they have real wealth as well, they have a strong manufacturing base and their citizens have a high savings rate, if they allow the Yuan to appreciate against the dollar the wealth of their citizens will increase dramatically and they will be able to import more, if they stop exporting their goods to the US for their worthless dollars they can start consuming what they produce and increase their wealth further.

Yes Obama has been destroying the economy with Obamacare but that doesn't mean we won't have inflation, in fact a contracting supply of real wealth will only make whatever remains more expensive. High tax rates and bail-ins does not mean we will have deflation, they will only destroy what is left of the productive economy, who will want to hold the dollar then if they cannot buy anything with it?



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 12, 2014, 11:17:05 AM
Also it is suspected that China have been buying massive amounts of gold due to not reporting their gold stock since 2009, they do not want the US dollar as the reserve currency anymore, Russia has publicly stated that the US dollar will be a thing of the past. China does have a high corporate debt but they have real wealth as well, they have a strong manufacturing base and their citizens have a high savings rate, if they allow the Yuan to appreciate against the dollar the wealth of their citizens will increase dramatically and they will be able to import more, if they stop exporting their goods to the US for their worthless dollars they can start consuming what they produce and increase their wealth further.

Yes Obama has been destroying the economy with Obamacare but that doesn't mean we won't have inflation, in fact a contracting supply of real wealth will only make whatever remains more expensive. High tax rates and bail-ins does not mean we will have deflation, they will only destroy what is left of the productive economy, who will want to hold the dollar then if they cannot buy anything with it?

You don't understand relative size. The USA is still the driver of the global economy. The Yuan does not have enough size and liquidity to replace the dollar during the cycle. China will first significantly correct because their corporate debts are the highest in the world now, their economy is incredibly unbalanced and dependent on exports and fixed capital investment (no worse example in human history). Later in the 2020s or by 2032 after it has rebalanced towards domestic consumption with a decade long severe correction, then China will start growing again and find that it is becoming the financial center of the world.

But first, we go to a strong dollar and massive global deflation. The USA and the NSA will thus be in the driver's seat of the default of $150 trillion in debt. They will not give up this power (thus they will not hyperinflate away their power). They plan to charge to all of us. This is massive deflation.

No major nation in the world has ever hyperinflated away their power. They always self-destruct by attacking their own citizens. Study Rome. Study Germany, etc....

You don't sniff this yet, but Armstrong and I do. Later when you do finally capitulate and realize, that is when the others have also figured it out and it will be mad rush into the dollar and away from all other economies. Then we move into the peak for the USA Sept. 2015, then the USA goes over the cliff and total chaos will ensue. It will be much worse than 2008 and the central banks will be powerless this time. In fact, the Fed has been warning the banks they will not be bailed out again. This is why all the G7 have official bail-in plans (seen on their government websites) to take the money from the depositors instead.

You also don't understand that $150 trillion global debt means every one has been doing the wrong activities and everything is uneconomic.

You don't understand that debt is not just a ledger item, it also reflects real waste of human years, wrong skills acquired, wrong decisions made, etc.. These real problems are not corrected just by changing a line on the financial ledger.

This frustration is why riots and global unrest (and the war cycle) is increasing all over the world right now (https://bitcointalk.org/index.php?topic=365141.msg5043927#msg5043927). There is no way to avoid the global deflation contagion.

Total hell is about to hits us in 2 years or less.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 12, 2014, 11:39:20 AM

  • Unproven, very complex new crypto. Needs many years to become trusted and stable.


Isn't this point going to be a problem with any new crypto? Better get this new coin out soon so there is sufficient time to test and debug it.

Anonymint what is your feeling at the moment. Is there any coin in the pipe that you feel could have the properties you want?

I'd rather not comment on my backdoor communications with moolaching's group.

I already stated that someone who claims to be connected with central banks has contacted me and I have referred him to moolaching's group.

I don't want to be the primary leader on the development of such an altcoin for the reason I stated to you upthread. I can provide some assistance but I will not allow it to be totally dependent on me.

If anyone raises this question again, I won't answer. I suggest you keep an eye on moolaching's posts too.

I am hopeful that Ethereum's talented group could join forces with moolaching at the appropriate time. I'd prefer not to comment further on that as well. Stay tuned...

ADD: you assume that the altcoin proposed in the OP would use radically new crypto, but that may not necessarily be true.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Misesian on February 12, 2014, 11:42:07 AM
Also it is suspected that China have been buying massive amounts of gold due to not reporting their gold stock since 2009, they do not want the US dollar as the reserve currency anymore, Russia has publicly stated that the US dollar will be a thing of the past. China does have a high corporate debt but they have real wealth as well, they have a strong manufacturing base and their citizens have a high savings rate, if they allow the Yuan to appreciate against the dollar the wealth of their citizens will increase dramatically and they will be able to import more, if they stop exporting their goods to the US for their worthless dollars they can start consuming what they produce and increase their wealth further.

Yes Obama has been destroying the economy with Obamacare but that doesn't mean we won't have inflation, in fact a contracting supply of real wealth will only make whatever remains more expensive. High tax rates and bail-ins does not mean we will have deflation, they will only destroy what is left of the productive economy, who will want to hold the dollar then if they cannot buy anything with it?

You don't understand relative size. The USA is still the driver of the global economy. The Yuan does not have enough size and liquidity to replace the dollar during the cycle. China will first significantly correct because their corporate debts are the highest in the world now, their economy is incredibly unbalanced and dependent on exports and fixed capital investment (no worse example in human history). Later in the 2020s or by 2032 after it has rebalanced towards domestic consumption with a decade long severe correction, then China will start growing again and find that it is becoming the financial center of the world.

But first, we go to a strong dollar and massive global deflation. The USA and the NSA will thus be in the driver's seat of the default of $150 trillion in debt. They will not give up this power. They plan to charge to all of us. This is massive deflation.

You also don't understand that $150 trillion global debt means every one has been doing the wrong activities and everything is uneconomic.

You don't understand that debt is not just a ledger item, it also reflects real waste of human years, wrong skills acquired, wrong decisions made, etc.. These real problems are not corrected just by changing a line on the financial ledger.

This frustration is why riots and global unrest (and the war cycle) is increasing all over the world right now (https://bitcointalk.org/index.php?topic=365141.msg5043927#msg5043927). There is no way to avoid the global deflation contagion.

Can you explain to me though the mechanism by which deflation occurs? Perhaps a hypothetical walkthrough.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: rpietila on February 12, 2014, 11:49:29 AM
The USA and the NSA will thus be in the driver's seat of the default of $150 trillion in debt. They will not give up this power (thus they will not hyperinflate away their power). They plan to charge to all of us. This is massive deflation.

No major nation in the world has ever hyperinflated away their power. They always self-destruct by attacking their own citizens. Study Rome. Study Germany, etc....

You don't sniff this yet, but Armstrong and I do. Later when you do finally capitulate and realize, that is when the others have also figured it out and it will be mad rush into the dollar and away from all other economies. Then we move into the peak for the USA Sept. 2015, then the USA goes over the cliff and total chaos will ensue. It will be much worse than 2008 and the central banks will be powerless this time. In fact, the Fed has been warning the banks they will not be bailed out again. This is why all the G7 have official bail-in plans (seen on their government websites) to take the money from the depositors instead.

You also don't understand that $150 trillion global debt means every one has been doing the wrong activities and everything is uneconomic.

You don't understand that debt is not just a ledger item, it also reflects real waste of human years, wrong skills acquired, wrong decisions made, etc.. These real problems are not corrected just by changing a line on the financial ledger.

This frustration is why riots and global unrest (and the war cycle) is increasing all over the world right now (https://bitcointalk.org/index.php?topic=365141.msg5043927#msg5043927). There is no way to avoid the global deflation contagion.

This is Gold.

Quote
Total hell is about to hits us in 2 years or less.

Just in time with the Bitcoin exponential increase hitting 1-10% of the general population. Cause or effect?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Misesian on February 12, 2014, 12:08:39 PM
Also didn't the Romans suffer from inflation when they diluted the silver content of their coins in 3rd century to fund the wars and bloated Roman government. Wasn't this the reason for the fall of the Roman Empire?

You don't understand relative size. The USA is still the driver of the global economy. The Yuan does not have enough size and liquidity to replace the dollar during the cycle. China will first significantly correct because their corporate debts are the highest in the world now, their economy is incredibly unbalanced and dependent on exports and fixed capital investment (no worse example in human history).

Also I don't believe the US drives the world economy, the US profits at the expense of the other world nations by importing their goods in exchange for their paper. Yes the US has caused many bubbles in foreign markets but the biggest bubble is in Washington and I'm not saying China or any other country will come out of this good but the US are going to suffer the most.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 12, 2014, 03:35:24 PM
Can you explain to me though the mechanism by which deflation occurs? Perhaps a hypothetical walkthrough.

Essentially do you expect the controllers of USA to print away their global reserve hegemony, when instead they can confiscate the wealth and cause a massive dollar short rally? Never had happened the way you expect. It is always the way Armstrong and I are explaining to you.

Why do you think Homelove "hands down your pants" Security will be procuring 2714 tank-like vehicles and 10 billion hollow point bullets (illegal in war by Hague Convention due to being so gruesome), deputized non-federal police as federal, we have FEMA detention camps constructed all over the country, Obama destroying gun rights by executive orders, NSA tracking everything Americans do on the internet and telecommunications, etc..

Here are links explaining why the world will beg for the dollar, the opposite of discarding it as you would expect in hyperinflation:

http://armstrongeconomics.com/693-2/2013-2/can-the-world-really-abandon-the-dollar-as-a-reserve-currency/
http://armstrongeconomics.com/2013/05/08/dollar-trade-reserves/
http://armstrongeconomics.com/693-2/2012-2/where-do-empires-go-to-die-and-when-they-do-die-how-do-empires-die/
http://armstrongeconomics.com/2013/08/11/defining-hyperinflation-the-coming-new-currency/
http://armstrongeconomics.com/2013/03/05/beware-the-dollar-rally/
http://armstrongeconomics.com/2013/03/29/the-short-dollar-the-debt-bubble/
http://armstrongeconomics.com/2013/03/29/latin-america-dollar-loans/
http://armstrongeconomics.com/2013/03/29/cyprus-confiscation-of-assets-is-global-plan/
http://armstrongeconomics.com/2013/03/28/russia-also-attacking-private-groups/

Also didn't the Romans suffer from inflation when they diluted the silver content of their coins in 3rd century to fund the wars and bloated Roman government.

There was only a very brief hyperinflation (no silver coinage at all!) in Rome in 3rd century as you will see on the silver price chart (http://armstrongeconomics.com/2013/03/27/are-we-head-to-a-mad-max-scenario/). That chart cost Armstrong $21 million to produce. Rather it was a gradual debasement for 100s of years.

Rather major core governments never go willingly to destroy their power. Instead they do what ever is necessary to maintain it. You did not read all the hyperinflation links I already gave you as follows.

http://armstrongeconomics.com/2013/03/17/what-are-the-odds-the-us-defaults/
http://armstrongeconomics.com/2013/01/28/here-we-go-again-hypreinflation/

Quote from: Martin Armstrong
I really do not understand why people insist that HYPERINFLATION must take place. That ASSUMES government will print to meet its unfunded obligations rather than just change laws and fail to meet promises. They are cutting entitlements already. Yes Rome debased its currency to the point that its worth was 1/50th of its former value. However, the system devolved into a TWO-TIER monetary system where they refused to accept their own currency in return for taxes. Taxes were imposed “in kind” so they just came and took stuff. In terms of gold, the tax was by weight not by coin so you have tax-collector gold bars that have survived.

Everything is NOT fair and orderly. One of the reasons there was the invention of paper money in the American Colonies is because there was a shortage of coins. Britain insisted anything Americans purchased they had to pay in silver or gold. But what the British purchased from America they paid in copper.

Wasn't this the reason for the fall of the Roman Empire?

No. It was debt that misallocated all the resources, just as we have now with $150 trillion in global debt, i.e. $25,000 per human including babies, elderly and billions of poor earning less than $10 per day (how can they pay their $25,000 share!).

http://esr.ibiblio.org/?p=4946&cpage=1#comment-402900

Quote from: JustSaying a.k.a. AnonyMint
@Winter:
You attempt to remove blame from the effects of top-down governance. Agriculture in Western Europe declined for numerous reasons all of which can be attributed to mismanagement due to top-down control and the funding of such misallocation. Socialized debt is a future tax. The agricultural sector was suffering under increasing taxes after the hyperinflation of the 3rd century had adversely impacted funding for the military while there were increasing military threats to the east. Pottery records indicate production increased through the 4th, as the rural sector was squeezed for every drop by Rome. As with all debt funding, growth was too rapid, and irrigation was polluted by clearing for too many new settlements. The resultant malnutrition, declining production, localized warlords, and thus disease coincided with the collapse of Western Europe due to the bankruptcy of its top-down militarized, servitude model.

We will likely find the same top-down cause applies to of all Dark Ages– even the famines in Africa.


You don't understand relative size. The USA is still the driver of the global economy. The Yuan does not have enough size and liquidity to replace the dollar during the cycle. China will first significantly correct because their corporate debts are the highest in the world now, their economy is incredibly unbalanced and dependent on exports and fixed capital investment (no worse example in human history).

Also I don't believe the US drives the world economy, the US profits at the expense of the other world nations by importing their goods in exchange for their paper. Yes the US has caused many bubbles in foreign markets but the biggest bubble is in Washington and I'm not saying China or any other country will come out of this good but the US are going to suffer the most.

What you emotionally like to think (bad boy USA will be thwarted) is irrelevant. The core economy is the core because it has the most technology, the strongest military, the most highly developed financial systems and social capital. And I am very sorry that don't have time to argue with you and teach you this macro economics.

China is extremely corrupt with the elite taking out most of the profits, please go read my mpettis.com links. Note I wrote the following recently which somewhat agrees with your caveat above.

Armstrong writes (http://armstrongeconomics.com/2014/01/28/china-trade-misleading/) about misleading China trade data. He says importers are bringing in cash in a carry trade. I had also read that exporters offshore and hide profits in Singapore and Hong Kong, so this understates the trade imbalances and makes it look like Chinese factories are not profitable.

Essentially the elite of China are extracting all some or much (not sure which) of the wealth from the people. And they are exacerbating the debt bubble and misallocation of capital to the wrong activities and oversupply. This is not a sustainable domestic doom, but rather a bubble.

This is why I have written (http://blog.mpettis.com/2014/01/will-the-reforms-speed-growth-in-china/#comment-12371) that China must go through economic implosion chaos and an overthrow of the elite before it can really grow again.

What the non-western countries have in their favor is very low government share of GDP because the social welfare institution is not as perverse. But what they have in their disfavor is they have an elite top-down structure that is standing in the way of bottom-up economic growth. So the developing world must also go through the chaos/riots of the uptick in the war cycle that Armstrong's model predicts.

The developing world has to less to fall because they are already lower economically with less social promises. Yet the fall will still be very painful since they have so many at the poverty line already.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 12, 2014, 04:04:10 PM
I am more pessimistic than you (https://bitcointalk.org/index.php?topic=322058.msg3583996#msg3583996). I wish I wasn't. However one of my main points is the very low entropy of assuming Bitcoin will be more important than the internet (https://bitcointalk.org/index.php?topic=322058.msg3718779#msg3718779), which is actually a very optimistic perspective.

The USA and the NSA will thus be in the driver's seat of the default of $150 trillion in debt. They will not give up this power (thus they will not hyperinflate away their power). They plan to charge to all of us. This is massive deflation.

No major nation in the world has ever hyperinflated away their power. They always self-destruct by attacking their own citizens. Study Rome. Study Germany, etc....

You don't sniff this yet, but Armstrong and I do. Later when you do finally capitulate and realize, that is when the others have also figured it out and it will be mad rush into the dollar and away from all other economies. Then we move into the peak for the USA Sept. 2015, then the USA goes over the cliff and total chaos will ensue. It will be much worse than 2008 and the central banks will be powerless this time. In fact, the Fed has been warning the banks they will not be bailed out again. This is why all the G7 have official bail-in plans (seen on their government websites) to take the money from the depositors instead.

You also don't understand that $150 trillion global debt means every one has been doing the wrong activities and everything is uneconomic.

You don't understand that debt is not just a ledger item, it also reflects real waste of human years, wrong skills acquired, wrong decisions made, etc.. These real problems are not corrected just by changing a line on the financial ledger.

This frustration is why riots and global unrest (and the war cycle) is increasing all over the world right now (https://bitcointalk.org/index.php?topic=365141.msg5043927#msg5043927). There is no way to avoid the global deflation contagion.

This is Gold.

More so the dollar. Gold will go to roughly $5000 - $8000 only, so will only retire about $25 - 40 trillion of the $150 trillion in global debt.

The rest will come from deflating the net worth of western world much via confiscations. I think the G20 will manage to track down most of the offshore real estate purchases too given the NSA listening to everything, etc.. The dollar will become very strong internationally because these confiscations will keep the USA solvent, while the USA is becoming the #1 producer of oil and gas in the world, as well the technology leader with the Knowledge Age upon us and 47% of all existing jobs to be replaced by automation within 19 years (i.e. by 2033) according to Oxford University. The developing world is massively short the dollar by about $10 trillion and there will be a massive capital flight of institutional money from emerging markets in 2015.

Total hell is about to hits us in 2 years or less.

Just in time with the Bitcoin exponential increase hitting 1-10% of the general population. Cause or effect?

Effect. IMO, Bitcoin can not replace the dollar hegemony as I explained in the OP. We might get to roughly $1 - $10 trillion market cap at most, before NSA, G20, and tax authorities step in as I explained in footnote [2] in the OP to effectively take over Bitcoin.

Neither will the altcoin I proposed replace the dollar any time soon, because we don't have enough time to grow it. Rather it is hoped to be a way to protect from confiscation perhaps at most a few $trillion in private capital (hopefully including the smartest technologists who we critically need going forward to avoid a Dark Age and build out the Knowledge Age for maximum employment). Of course I have no qualms if very wealthy want to pile in too. If we can take it to $10s of trillion, that would probably help balance the rabid dollar hegemony that is staring us down into the abyss right now.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Jungian on February 12, 2014, 04:31:11 PM
This is all very interresting and I like the blog you keep referring to. Going to read all the way through it.

May I ask what your own personal strategy for the coming years ahead are?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: barabbas on February 12, 2014, 06:32:54 PM
All of this is quite technical, caustic and full of assumptions that do not have to happen.

For example, there's an implied foregone conclusion that BTC's price is going much, much higher before "being taken over". This is a total fallcy. There's absolutely no reason or even indication price of BTC is going much higher... if higher at all. BTC is a side-show of the present world economy that has no significance or importance at all to the financial powers of the world that quickly dismiss it because, no matter what kind of extrapolations are made, even the totally wild one, BTC will only represent, in best case scenarios, an extremely minimal (insignificant, really), part of that financial system.

Doomsday scenarios for the world economy notwithstanding, which I will not even enter, from a working perspective I see a very imminent threat to the "BTC system" that, in my layman's opinion, forecast it's possible doom WITHIN THE YEAR. And here, probably, I lack a lot of answers that I would like explained, of course.

Here's the conundrum: The new tech, 20nm-based mining rigs will be fully delivered, en masse,  by Summer thus making the block chain more efficient than ever and the rewards more spread than ever... to the point that, using any calculator and assuming a level of increased difficulty of 50% a month, it will not be cost effective to mine for anyone (the new rigs will never make roi, and they will lose money after costs from day one). Therefore, when difficulty reached 30 million roughly by September, who will pay the pied piper? who will do the mining? who will maintain the block chain itself? Oh the answer that more efficient/cheap machines will come out is simply absurd because they will not be -even if technology would allow it- cost effective to manufacture.

Furthermore, there's no guarantee not even a reason for the BTC price to go higher. As a matter of fact, as we have seen the effect of recent developments, reasons abound to justify the price to remain stagnant or go significantly lower. Even before the Gox/Bitstamp debacle, the price had stayed barely above the level of the previous (China) debacle, for almost 3 months at or closely around $800 per BTC, so it is pretty safe to assume that price of BTC itself in the market will not influence any of that scenario that is pretty imminent.

Food for thought?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: tvbcof on February 12, 2014, 06:41:35 PM

Failure to understand Bitcoin ALREADY 'cost Investors Billions'.

But that's cool.  More $$$ for me and I started to capitalize on my 2011 speculation in a relatively big way at the beginning part of 2014.



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Come-from-Beyond on February 12, 2014, 06:50:49 PM
The Bitcoin killer will thus have at least the following features.

  • provably cpu-only mining with botnet resistance (current proof-of-stake can't redistribute new coins to masses & I posit it isn't secure)
  • built-in anonymity (to minimize non-anonymous users)
  • small, reasonable perpetual debasement
  • zero transaction fees (with economic transaction spam resistance)
  • economically limited pool sizes
  • oblivious shares
  • selfish-mining fix
  • mini block-chain design
  • faster 1-confirmation block chain, e.g. 1 minute instead of Bitcoin's 10 min delay, if the orphan rate can be contained

Nice. Nxt needs only anonymity... We r working on that.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 01:00:37 AM
All of this is quite technical, caustic and full of assumptions that do not have to happen.

Note I added two items (Spiraling Transactions Fees tragedy of the commons and 51% attack gets proportionally less expensive over time) to the Threats section of the OP.

All of this is quite technical, caustic and full of assumptions that do not have to happen.

For example, there's an implied foregone conclusion that BTC's price is going much, much higher before "being taken over". This is a total fallcy. There's absolutely no reason or even indication price of BTC is going much higher... if higher at all. BTC is a side-show of the present world economy that has no significance or importance at all to the financial powers of the world that quickly dismiss it because, no matter what kind of extrapolations are made, even the totally wild one, BTC will only represent, in best case scenarios, an extremely minimal (insignificant, really), part of that financial system.

I mentioned (https://bitcointalk.org/index.php?topic=322058.msg3580502#msg3580502) back in November, the shocking disruptive effect of Bitcoin taking over the world's wealth thus being unlikely that society (governments) won't fight back by attacking Bitcoin. If the projections below are correct then the government MUST attack Bitcoin to bring it into taxation (and confiscation) compliance. Bitcoin could continue to grow as a top-down controlled currency with no anonymity and a public ledger of all financial transactions.  :o  :'( Note Bitcoin is essentially top-down controlled now, with a few pools controlling most mining power and tx fees being set top-down to avoid the problems I've mentioned about tx fees in the OP.

A least squares fit projection line (https://bitcointalk.org/index.php?topic=322058.msg3522033#msg3522033) puts the price at $100,000 in 2016, which will be in excess of $1.5 trillion (https://en.bitcoin.it/wiki/Controlled_supply#Projected_Bitcoins_Long_Term) market cap. At 10X price appreciation every 13 months, the projection is $1 million price and $18+ trillion market cap in 2017.

However there are other possible technical interpretations:

https://bitcointalk.org/index.php?topic=322058.msg3469380#msg3469380
https://bitcointalk.org/index.php?topic=322058.msg3560319#msg3560319
https://bitcointalk.org/index.php?topic=322058.msg3584735#msg3584735
https://bitcointalk.org/index.php?topic=322058.msg3916390#msg3916390
https://bitcointalk.org/index.php?topic=322058.msg3932761#msg3932761

Note global net worth is roughly $241 trillion (https://bitcointalk.org/index.php?topic=322058.msg3919517#msg3919517) - $150 trillion debt = $91 trillion actual net worth when the debt is written down, and much of that is concentration in the upper %1 of the wealthy and not liquid, e.g. real estate.

Doomsday scenarios for the world economy notwithstanding, which I will not even enter, from a working perspective I see a very imminent threat to the "BTC system" that, in my layman's opinion, forecast it's possible doom WITHIN THE YEAR. And here, probably, I lack a lot of answers that I would like explained, of course.

Here's the conundrum: The new tech, 20nm-based mining rigs will be fully delivered, en masse,  by Summer thus making the block chain more efficient than ever and the rewards more spread than ever... to the point that, using any calculator and assuming a level of increased difficulty of 50% a month, it will not be cost effective to mine for anyone (the new rigs will never make roi, and they will lose money after costs from day one). Therefore, when difficulty reached 30 million roughly by September, who will pay the pied piper? who will do the mining? who will maintain the block chain itself? Oh the answer that more efficient/cheap machines will come out is simply absurd because they will not be -even if technology would allow it- cost effective to manufacture.

Why would anyone invest in new 20nm rigs that don't make ROI?

Furthermore, there's no guarantee not even a reason for the BTC price to go higher. As a matter of fact, as we have seen the effect of recent developments, reasons abound to justify the price to remain stagnant or go significantly lower. Even before the Gox/Bitstamp debacle, the price had stayed barely above the level of the previous (China) debacle, for almost 3 months at or closely around $800 per BTC, so it is pretty safe to assume that price of BTC itself in the market will not influence any of that scenario that is pretty imminent.

Food for thought?

See the least squares fit chart link above. The price has languished before after corrections, yet it moves up after falling below the trend line after sufficient delay.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: bitfreak! on February 13, 2014, 01:29:47 AM
I think most people would agree with you that we need more anonymity and more ASIC resistance and more scalability. But that's why we have alt coins to solve these problems. All 3 of those problems are already solved and being developed as we speak. But that does not mean the resulting coins which incorporate these ideas will "kill" bitcoin. Bitcoin is the original cryptocurrency designed by Satoshi and will never be killed so long as the network remains secure. It has too big of a foothold in the market to ever be killed by an alt coin regardless of how "perfect" that alt coin is.

There are also some things in your list of suggestions which are subjective "improvements" which conform to specific monetary theories and not purely technical theories. For example these two points:
Quote
small, reasonable perpetual debasement
zero transaction fees (with economic transaction spam resistance)

I don't know how long you're going to argue about this perpetual debasement nonsense. It has to get old at some point. There are already several coins with perpetual debasement built into them, what more do you want? Bitcoin will never change to  match your concept of how money should work. And your suggestion about zero transaction fees is completely socialist imo, there is no reasonable way to separate a spam transaction from a real transaction without fees. People who are willing to pay get what they want faster than those who cannot pay, it's as simple as that and you're concern over spiraling fees is completely irrational imo.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 01:41:19 AM
Nice. Nxt needs only anonymity... We r working on that.

Nxtcoin is proof-of-stake correct? Which means top-down controlled not decentralized. See below...

The problem with your estimate is, is that you forget Bitcoin isn't the best coin.

The other altcoins like Feathercoin and Peercoin use less energy/need less miners/have 30times faster transaction times/have more coins/better in every category. Might take another year or two, but the coins with the most benefits will be the higher echelon coins, specifically not Bitcoin(unless someone completely changes everything about it to make it better in every way shape and form).

Bitcoin is only extremely more popular for it's capitalization on early mover and early promoter in the beginning. Other coins will easily be worth more.

Bitcoin is the best coin in the eyes of rich people like me. The energy and miners need be there (the coin economics do not work without it), the confirmations are not reliable if they are much faster than Bitcoin's. "Have more coins" is a joke.

It is possible that there are fringe uses for other coins in the future, but to me it looks unrealistic that all the other coins combined would reach even 25% of Bitcoin's market cap. Main reason why anyone would think otherwise is that they don't have as many bitcoins as they would like to have, and want to amend that the easy way.

I have already explained upthread that Proof-of-Stake is not secure (https://bitcointalk.org/index.php?topic=455141.msg5033780#msg5033780) because essentially you must trust those with the largest stake (and it can't distribute new coin out to the people through mining in a competitive manner). Yet we also see the design of Bitcoin has pushed it to be top-down controlled also. So essentially Bitcoin and and PoS are moving towards the same endpoint, but Bitcoin has the market lead. So we can expect in the future, the Bitcoin pools will just cartel and do away with paying for PoW and simply add the transactions round-robin in a fully top-down controlled system that is of course fully compliant with G20 edicts. They can then keep flat transaction fees without affecting mining security. Then all the Threats disappear (and we lose anonymity and submit to the G20 control) including the bubble burst threat disappears.

Bitcoin Take Over Threats

  • Coming $Trillion(s) bubble burst will demand world government intervention & cooperation [1] (Bernie Madoff is so much smaller)

As it looks right now, Bitcoin is going to win and it will be the corporate top-down controlled fully compliant government's coin.

The very first thread I started on this forum is looking to be the accurate final outcome. Bitcoin : The Digital Kill Switch (https://bitcointalk.org/index.php?topic=160612.0). The technical details have become more clear to me since that thread, yet the broad premise remains true in my mind.

Bitcoin Killer Altcoin

The Bitcoin killer will thus have at least the following features.

  • provably cpu-only mining with botnet resistance (current proof-of-stake can't redistribute new coins to masses & I posit it isn't secure)
  • built-in anonymity (to minimize non-anonymous users)
  • small, reasonable perpetual debasement
  • zero transaction fees (with economic transaction spam resistance)
  • economically limited pool sizes
  • oblivious shares
  • selfish-mining fix
  • mini block-chain design
  • faster 1-confirmation block chain, e.g. 1 minute instead of Bitcoin's 10 min delay, if the orphan rate can be contained

The proposed altcoin would attempt to remain decentralized (not top-down controlled), anonymous, and keep mining among the people. In other words, congruent with the freedom internet (e.g. self-published websites, running your own server, etc), not the Google, Facebook, Yahoo, NSA, G20, dollar hegemony corporate-fascist top-down controlled internet.

It would not kill Bitcoin (any time soon). It would be the alternative economy. If the alternative economy will play a key role in this coming Knowledge Age with 47% of existing jobs to be replaced by computer automation according to an Oxford study, then over time it might grow to be larger than the mainstream economy which will be diminishing. I assume the Knowledge Age will be significantly decentralized, e.g. 3D printing objects at home instead of going to a store to buy manufactured goods.

In other words, Bitcoin might grow very fast over next several years and become unified with the mainstream economy. Yet there would be this smaller thing growing faster that eventually overtakes the mainstream economy by 2032.

I am becoming more and more convinced of this bifurcated future (https://bitcointalk.org/index.php?topic=355212.0).


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 02:26:25 AM
Any hint as to what PoW you have in mind? Cuckoo Cycle is still unproven.

Refer to all my posts in this thread (https://bitcointalk.org/index.php?topic=355532.msg3803606#msg3803606) and this one (https://bitsharestalk.org/index.php?PHPSESSID=a05a23b97bb5a714196d44b1a872509f&topic=22.msg1250#msg1250) and this one (https://bitcointalk.org/index.php?topic=379601.msg4383473#msg4383473) and this one (https://bitcointalk.org/index.php?topic=64239.msg2944298#msg2944298) (which is not the solution, but lead to my epiphany).

I've replied (https://bitcointalk.org/index.php?topic=355532.msg5112752#msg5112752) about your Cuckoo Cycle. Are you available to work on an altcoin?

Of course I don't reveal the secret.


I think most people would agree with you that we need more anonymity and more ASIC resistance and more scalability. But that's why we have alt coins to solve these problems. All 3 of those problems are already solved and being developed as we speak.

Per my prior post, one way they are solved is Bitcoin will be run by large pools with ASICs. Later the carteled pools can discard the ASICs and process transactions without any proof-of-work. Solution is already occuring in Bitcoin as long as you agree to accept G20 edicts, such as the coming 10% confiscation (net worth tax). Of course that won't be the last confiscation, because each confiscation will further implode the global economy and the G20 will need to come back for sloppy seconds, thirds, etc..

But that does not mean the resulting coins which incorporate these ideas will "kill" bitcoin. Bitcoin is the original cryptocurrency designed by Satoshi and will never be killed so long as the network remains secure. It has too big of a foothold in the market to ever be killed by an alt coin regardless of how "perfect" that alt coin is.

The other way they are solved is if a popular enough truly decentralized altcoin solves all the issues. I have yet to see any such altcoin. And yes per my prior post, this will not kill Bitcoin any time soon. Only if the top-down, mainstream, non-anonymous economy withers relative to the new Knowledge Age economy can such an altcoin kill Bitcoin.

There are also some things in your list of suggestions which are subjective "improvements" which conform to specific monetary theories and not purely technical theories. For example these two points:

Quote
small, reasonable perpetual debasement
zero transaction fees (with economic transaction spam resistance)

I don't know how long you're going to argue about this perpetual debasement nonsense. It has to get old at some point. There are already several coins with perpetual debasement built into them, what more do you want? Bitcoin will never change to  match your concept of how money should work. And your suggestion about zero transaction fees is completely socialist imo, there is no reasonable way to separate a spam transaction from a real transaction without fees. People who are willing to pay get what they want faster than those who cannot pay, it's as simple as that and you're concern over spiraling fees is completely irrational imo.

Decentralized mining can't be funded without perpetual debasement. Period. See this...

Bitcoin Take Over Threats

  • Lack of perpetual debasement means 51% attack gets less expensive (proportional to market cap) over time (https://bitcointalk.org/index.php?topic=455141.msg5075137#msg5075137).

It is possible to stop spam transactions while also having 0 tx fees. I will not tell you how now. It is a secret.


P.S. perpetual debasement also has very important monetary theory benefits. These are explained in the links from the Errata section of the OP. But even if you don't agree, you can not refute the above point that you must have perpetual debasement else you can't have a decentralized PoW that is secure against 51% attack. Thus if you don't like perpetual debasement, then your only choice will be a corporate top-down controlled fully compliant government's coin. Period. I believe that Impaler and myself are philosophically correct (see links below in addition to those in the Errata section) that we can't have freedom without diluting the money supply. Selfish savers want their past efforts to be a perpetual friction on the backs of those new innovators. Rather a small, reasonable debasement (or demurrage) provides a balance to neutralize the parasitic rent that usury has on society.

https://bitcointalk.org/index.php?topic=354573.msg3816209#msg3816209
https://bitcointalk.org/index.php?topic=342848.msg3788809#msg3788809
https://bitcointalk.org/index.php?topic=342007.msg3788782#msg3788782

Errata

I am in the process of gathering links to my prior explanations of and math on why the people lose and wealth is concentrated under both deflation and inflation, and that debasement is not correlated to whether the people attain greater or less prosperity. Check back in this section later, as I will add them below.

https://bitcointalk.org/index.php?topic=365141.msg4379076#msg4379076
https://bitcointalk.org/index.php?topic=222998.msg3615848#msg3615848 (math)
https://bitcointalk.org/index.php?topic=195275.msg3357270#msg3357270
http://armstrongeconomics.com/2013/01/10/why-hyperinflation-is-nonsense/

It is centralized control over debasement that is very detrimental to the people (because for example the Fed can make a hockey stick of the money supply chart at-will), whereas decentralized debasement is a boon to the people as explained in the above links. Unlike in the 1800s when we had more frequent bank runs and depressions, central banking has enabled delaying the debt defaults and write-downs so now even the IMF admits (https://bitcointalk.org/index.php?topic=365141.msg4291789#msg4291789) we are at a 200 year debt peak and thus is recommending that massive confiscation of wealth is required. Most people don't realize we had a depression in the USA in 1919, but we recovered in 2 years because the government did not delay the defaults. Whereas, the 1929 Great Depression lingered for decades and required a World War to resolve, because of FDR's New Deal and preventing the defaults and chaotic correction. Frequent defaults correct the economy before it gets "too big to fail" (TBTF). Now we potentially face an Apocalyptic or Mad Max outcome (https://bitcointalk.org/index.php?topic=365141.0) because we grew our debt to a 200 year high. My hope is that the better crypto-currency could help protect private capital from "socialism gone insane" so that the worst outcome can be avoided.

Why are you so selfish as a saver that you don't want to pay 2.5% - 5% per year to fund the security of mining to keep it decentralized so the government can't come tax + confiscate 50+% of your savings? You know that even gold is debased at 2 - 2.5% per year.

The new coin goes out to the people who are the miners, especially with a provably cpu-only coin.

The increased value of the coin and the increased productivity gains (Q in the Quantity Theory of Money) in the society due to not having the government meddling will far exceed that 2.5% - 5% per year cost.

Selfish people deserve the corporate top-down controlled fully compliant government's coin. ;)


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: CoinCube on February 13, 2014, 03:40:52 AM
In other words, Bitcoin might grow very fast over next several years and become unified with the mainstream economy. Yet there would be this smaller thing growing faster that eventually overtakes the mainstream economy by 2032.

I am becoming more and more convinced of this bifurcated future (https://bitcointalk.org/index.php?topic=355212.0).

I also think a bifurcated future is likely.

One currency for the physical economy (government coin) that is not anonymous (pseudo-anonymity the government can easily breach will be tolerated).
Another currency for the knowledge economy (crypto coin) anonymous and untraceable.

There is likely only to be one big winner in each category. Both of these winners look poised to do incredibly well.  Remember to keep you records in order if you invest in the bank coin. The taxman will be along shortly to take his huge chunk.

My question for any developer of an altcoin (especially one with new and innovative features like anonymity) is why not try to capture both markets? Why not release a government coin version and a crypto coin version. Just because bitcoin is first does not guarantee it status as the official bank coin of the future.

Selfish people deserve the corporate top-down controlled fully compliant government's coin. ;)

I imaging we will all need some government coin.
Government coin may be the better short term play. Crypto coin the superior long term investment.






Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 03:48:44 AM
My question for any any developer of an altcoin (especially one with new and innovative features) is why not try to capture both markets? Why not release a bank coin version and a crypto coin version. Just because bitcoin is first does not guarantee it status as the official bank coin of the future.

I argue in the OP that network effects can not stop a decentralized altcoin, because we don't need to go change all the servers on the internet. The network effects for financial institutions adopting Bitcoin is real and probably already insurmountable. So I think the door is wide open for a decentralized altcoin, but it is already closed for a centralized competitor to Bitcoin. Rpietila has been correct on every point, except that he doesn't appear to acknowledge that Bitcoin will be the centralized coin. I hope we can get his response.

Selfish people deserve the corporate top-down controlled fully compliant government's coin. ;)

I imaging we will all need some government coin.
Government coin will probably be the better short term play. Crypto coin the superior long term investment.

Agree we do. I don't think we can conclude that about investment. The smaller altcoin will be more volatile but probably appreciate faster overall if you invest in the correct altcoin that is the winner yet you could lose it all if it fails or you invest in the wrong one. And the tax you pay on Bitcoin capital gains and net worth could approach 90% if we return the tax rates we saw during the Great Depression. The government and society is $150 trillion in global total debt and I estimated upthread only $241 trillion in global net worth but much of that $91 trillion balance is concentrated among the upper 1% and much illiquid such as real estate.  :'(

In the past one could argue that sticking with the mainstream was the most conservative and safest option. Safety at this point doesn't exist any more. Massive risks on the horizon. Choose your poison. I prefer freedom.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: wishsss on February 13, 2014, 04:07:45 AM
Nice. Nxt needs only anonymity... We r working on that.

Nxtcoin is proof-of-stake correct? Which means top-down controlled not decentralized. See below...

The problem with your estimate is, is that you forget Bitcoin isn't the best coin.

The other altcoins like Feathercoin and Peercoin use less energy/need less miners/have 30times faster transaction times/have more coins/better in every category. Might take another year or two, but the coins with the most benefits will be the higher echelon coins, specifically not Bitcoin(unless someone completely changes everything about it to make it better in every way shape and form).

Bitcoin is only extremely more popular for it's capitalization on early mover and early promoter in the beginning. Other coins will easily be worth more.

Bitcoin is the best coin in the eyes of rich people like me. The energy and miners need be there (the coin economics do not work without it), the confirmations are not reliable if they are much faster than Bitcoin's. "Have more coins" is a joke.

It is possible that there are fringe uses for other coins in the future, but to me it looks unrealistic that all the other coins combined would reach even 25% of Bitcoin's market cap. Main reason why anyone would think otherwise is that they don't have as many bitcoins as they would like to have, and want to amend that the easy way.

I have already explained upthread that Proof-of-Stake is not secure (https://bitcointalk.org/index.php?topic=455141.msg5033780#msg5033780) because essentially you must trust those with the largest stake (and it can't distribute new coin out to the people through mining in a competitive manner). Yet we also see the design of Bitcoin has pushed it to be top-down controlled also. So essentially Bitcoin and and PoS are moving towards the same endpoint, but Bitcoin has the market lead. So we can expect in the future, the Bitcoin pools will just cartel and do away with paying for PoW and simply add the transactions round-robin in a fully top-down controlled system that is of course fully compliant with G20 edicts.

As it looks right now, Bitcoin is going to win and it will be the corporate top-down controlled fully compliant government's coin.

The very first thread I started on this forum is looking to be the accurate final outcome. Bitcoin : The Digital Kill Switch (https://bitcointalk.org/index.php?topic=160612.0). The technical details have become more clear to me since that thread, yet the broad premise remains true in my mind.

Bitcoin Killer Altcoin

The Bitcoin killer will thus have at least the following features.

  • provably cpu-only mining with botnet resistance (current proof-of-stake can't redistribute new coins to masses & I posit it isn't secure)
  • built-in anonymity (to minimize non-anonymous users)
  • small, reasonable perpetual debasement
  • zero transaction fees (with economic transaction spam resistance)
  • economically limited pool sizes
  • oblivious shares
  • selfish-mining fix
  • mini block-chain design
  • faster 1-confirmation block chain, e.g. 1 minute instead of Bitcoin's 10 min delay, if the orphan rate can be contained

The proposed altcoin would attempt to remain decentralized (not top-down controlled), anonymous, and keep mining among the people. In other words, congruent with the freedom internet (e.g. self-published websites, running your own server, etc), not the Google, Facebook, Yahoo, NSA, G20, dollar hegemony corporate-fascist top-down controlled internet.

It would not kill Bitcoin (any time soon). It would be the alternative economy. If the alternative economy will play a key role in this coming Knowledge Age with 47% of existing jobs to be replaced by computer automation according to an Oxford study, then over time it might grow to be larger than the mainstream economy which will be diminishing. I assume the Knowledge Age will be significantly decentralized, e.g. 3D printing objects at home instead of going to a store to buy manufactured goods.

In other words, Bitcoin might grow very fast over next several years and become unified with the mainstream economy. Yet there would be this smaller thing growing faster that eventually overtakes the mainstream economy by 2032.

I am becoming more and more convinced of this bifurcated future (https://bitcointalk.org/index.php?topic=355212.0).


Interesting. Will read.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: CoinCube on February 13, 2014, 04:28:04 AM
I don't think we can conclude that about investment. The smaller altcoin will be more volatile but probably appreciate faster overall if you invest in the correct altcoin that is the winner yet you could lose it all if it fails or you invest in the wrong one. And the tax you pay on Bitcoin capital gains and net worth could approach 90% if we return the tax rates we saw during the Great Depression.


Fair enough. We both agree that both the government coin and the crypto coin should do well. Exactly how well and for how long is not that relevant to the topic at hand.
  
In the past one could argue that sticking with the mainstream was the most conservative and safest option. Safety at this point doesn't exist any more. Massive risks on the horizon. Choose your poison. I prefer freedom.

I choose both. Hard to know exactly how fast the knowledge economy will grow or exactly how hard the crash from the debt bubble will be. Best to hedge and invest in both.

I am not yet convinced that bitcoin's network effects (while real) are insurmountable. Its status as top centralized coin is vulnerable from the ground up, via, a significantly more nimble competitor, (perhaps a CPU only coin without anonymity). It is also vulnerable from top down via a cryptosystem rolled out by the banks/governments/corporations.  Nevertheless, it is definitely a serious contender to take the position of top centralized/government coin. If it become clear that bitcoin will take this role I will buy a few.  


 



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: bitfreak! on February 13, 2014, 04:35:18 AM
Quote
You know that even gold is debased at 2 - 2.5% per year.
You do know that there is a finite amount of gold on the Earth and that eventually all of it will be mined?

I don't necessarily have anything against a coin with perpetual debasement, as long as the cost of creating the new currency is equal to or more than the value of the new currency, and it happens in a decentralized fashion. Like you said, the main problem is centralized debasement, and it's because it costs them very little to generate the new currency and because they hand it out to a small group of banks instead of to the average joe. I don't necessarily care if my savings go up in value or not, what I care about is that my savings HOLD THEIR VALUE. The reason people save their wealth in gold is because they trust gold to be a secure store of value, and the reason they trust it is because they know gold cannot be created out of thin air. The same thing essentially applies to Bitcoin, I know that bitcoins are very difficult to create and it requires a lot of electrical energy to generate them.

The stone money used on the island of Yap is a good example of why it's important for a currency to be hard to create, but it's also an example of why perpetual debasement can work so long as the currency is hard to create. It was extremely difficult for them to create those huge donut shaped stones, so every time a new stone coin was created the market didn't freak out because the market knew a lot of energy was burnt up in their creation. And there was essentially no limit to how many coins they could create, so long as they didn't find an easy and cheap way to craft the stones into a donut shape then they could keep making them and adding new coins into circulation without worrying about price inflation. You can even have an increasing money supply while the value of the currency is increasing at the same time, in fact that's exactly what has been happening with Bitcoin for the last few years.

The problem with government fiat money is not necessarily the fact that they debase it, it's that they can cheaply and easily put new currency into circulation and they don't have to hand it out in a decentralized fashion, they simply hand it out to large member banks. And they create so much that they not only prevent price deflation, they debase the money supply to such an extreme degree that they cause consistent price inflation. That is the type of perpetual debasement I dislike, excessive and stupid debasement used to fund wars and other nonsense that no one wants. Bitcoin was designed precisely to make that sort of thing impossible, it was supposed to be a finite resource in a digital form, like digital gold in other words. That is the fundamental philosophy behind the way Bitcoin is designed.

Fundamentally I agree with you that perpetual debasement can be a good thing, what I don't agree with you about is that a finite money supply is a bad thing. They both have their advantages, gold will always be trusted so long as the amount on this planet always remains finite. Bitcoin will always remain relevant for the same reason. Obviously there are things which make a better currency than gold, just as there may be cryptocurrencies better for use as a currency. But that doesn't mean gold or bitcoin cannot be used to conduct trade, and the finite nature of gold and bitcoin doesn't make them some sort of evil "corporate top-down controlled fully compliant government's money". How you reach such an absurd conclusion is beyond me. The centralized nature of mining could take away some of the decentralization of Bitcoin, but that's just about the limit of it.

But that's not a "flaw", the people with the most resources will always have the most power, that's just a simple rule of the world and it will aways exist. Of course we can attempt to minimize the effectiveness of their resources but they will always have an advantage by having more resources at their disposal. People will always be attracted to Bitcoin because of its features, but there's no reason Bitcoin can't coexist with other cryptocurrencies which improve upon the basic design. You need to learn that there is a place for everything, stop looking at things with such a black and white perspective. Bitcoin is not flawed, it simply is what it is, and if you want something different then build it and prove to us how much better it is.

Edit: added extra paragraph to expand on my explanation.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 05:08:16 AM
Quote
You know that even gold is debased at 2 - 2.5% per year.
You do know that there is a finite amount of gold on the Earth and that eventually all of it will be mined?

Pedantic and irrelevant part of our discussion don't you agree? There is gold throughout the universe. And we are not close to tapping all the gold on earth. Mankind's technology for tapping gold on earth and throughout the universe will continue to improve. Malthusians always annoy me (http://unheresy.com/Information%20Is%20Alive.html#2nd_Law_of_Thermo), because throughout the history of the world they have never been correct.

I don't necessarily have anything against a coin with perpetual debasement, as long as the cost of creating the new currency is equal to or more than the value of the new currency, and it happens in a decentralized fashion. Like you said, the main problem is decCentralized debasement, and it's because it costs them very little to generate the new currency and because they hand it out to a small group of banks instead of to the average joe. I don't necessarily care if my savings go up in value or now, what I care about is that my saving HOLD THEIR VALUE. The reason people save their wealth in gold is because they trust gold to be a secure store of value, and the reason they trust it is because they know gold cannot be created out of thin air.

Then you and I are very much in agreement.

The same thing essentially applies to Bitcoin, I know that bitcoins are very difficult to create and it requires a lot of electrical energy to generate them.

A few pools control more than 51% of the hash processing power. A cartel of them could eliminate the requirement to use Proof-of-Work (PoW) and so then we are right back to fiat again (even if controlled by corporations, those corporations are beholden to the government and can be "nationalized"). I am confident that this is the coming outcome for Bitcoin. How could it go any other way given the facts presented in the OP?

The stone money used on the island of yap is a good example of why it's important for a currency to be hard to create, but it's also an example of why perpetual debasement can work so long as the currency is hard to create. It was extremely difficult for them to create those huge donut shaped stones, so every time a new stone coin was created the market didn't freak out because the market knew a lot of energy was burnt up in their creation. And there was essentially no limit to how many coins they could create, so long as they didn't find an easy and cheap way to craft the stones into a donut shape then they could keep making them and adding new coins into circulation without worrying about price inflation. You can even have an increasing money supply while the value of the currency is increasing at the same time, in fact that's exactly what has been happening with Bitcoin for the last few years.

Great example! And I'm giddy to see you write that, since you were disagreeing a few months ago when we debated in your mini block chain thread. I really admire people can refine their philosophies. Very few people can do that. I expected you might be one, since your mini block design is excellent.

Fundamentally I agree with you that perpetual debasement can be a good thing, what I don't agree with you about is that a finite money supply is a bad thing.

It is impossible to have a finite supply of anything without a top-down controller stealing the thing. Ponder that. You would essentially have to steal human innovation, e.g. to stop technological progress at mining gold.

They both have their advantages, gold will always be trusted so long as the amount on this planet always remains finite.

Gold is not trusted because the total is not finite. It is trusted because it takes real effort to mine it, thus the supply can't be debased egregiously in corrupt ways, i.e. it won't go hockey stick tomorrow as Bernanke did. And the mining of gold is thus competitively available to everyone. Humans want a fair game of competitive opportunities not a corrupt one of top-down slavery. Actually many humans want socialism where they get everything equally without competition, but this is a failed economic system (The government and society is $150 trillion in global total debt and I estimated upthread only $241 trillion in global net worth but much of that $91 trillion balance is concentrated among the upper 1% and much illiquid such as real estate.  :'( )

Bitcoin will always remain relevant for the same reason. Obviously there are things which make a better currency than gold, just as there may be cryptocurrencies better for use as a currency. But that doesn't mean gold or bitcoin cannot be used to conduct trade, and the finite nature of gold and bitcoin doesn't make them some sort of evil "corporate top-down controlled fully compliant government's" money". How you reach such an absurd conclusion is beyond me. The centralized nature of mining could take away some of the decentralization of Bitcoin, but that's just about the limit of it.

Once you centralize the mining, then you centralize which transactions will be blocked (by the full clients), and everything else in the protocol can be changed by the top-down controllers at-will. (perhaps you will next argue that the users running simple clients have the power to vote on which protocol they will support so see below)

You are right back to democracy and fiat again. They can then debase at-will as well.

You have not technically refuted the Threats section of the OP which drive Bitcoin to a centralized control. If Bitcoin can be taken over by vested interests, then we are back in the same predicament, just a different set of slave masters.

Decentralized means the vested interests can't take control, only contribute in a decentralized competition. Centralized means it gets swept into the power vacuum of democracy (https://bitcointalk.org/index.php?topic=365141.msg4065040#msg4065040).

Democracy = the majority force their will on the minority. Or actually all the minorities force their will on the majority. Democracy binds everyone together in a monolithic outcome and a power vacuum.

But that's not a "flaw", the people with the most resources will always have the most power, that's just a simple rule of the world and it will aways exist.

The difference is that with decentralization, the small guy always can compete for part of the pie (no one is bound together in a monolithic outcome). With centralization, the winner takes all.

Rich hate decentralization, because they can't possibly invest in all those small opportunities that can double capital in a month. In decentralization, the small guy grows his capital at a faster percentage rate than the rich guys.

Of course we can attempt to minimize the effectiveness of their resources but they will always have an advantage by having more resources at their disposal.

With the altcoin design proposed in the OP, the rich can not take it over and it will remain decentralized.

People will always be attracted to Bitcoin because of its features, but there's no reason Bitcoin can't coexist with other cryptocurrencies which improve upon the basic design. You need to learn that there is a place for everything, stop looking at things with such a black and white perspective. Bitcoin is not flawed, it simply is what it is, and if you want something different then build it and prove to us how much better it is.

Did I say Bitcoin can't exist also? Please read the entire thread more carefully. I wrote that Bitcoin's decentralized premise is threatened and flawed.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: bitfreak! on February 13, 2014, 05:38:04 AM
Pedantic and irrelevant part of our discussion don't you agree? There is gold throughout the universe. And we are not close to tapping all the gold on earth. Mankind's technology for tapping gold on earth and throughout the universe will continue to improve. Malthusians always annoy me, because throughout the history of the world they have never been correct.
No I think it's very relevant to this discussion. Even if we get the ability to move gold to earth from other planets at a cost less than the worth of the gold, there's still a finite limit to how much we can bring to earth because there's a limit to how much we can increase the mass of the Earth before we risk destabilizing the orbit. It doesn't matter how large that limit is, the fact is there's a limit. Of course there's always a risk that we learn of a method to turn stone into gold, and that is why cryptocurrency is so amazing, we can use mathematics to ensure that the limit will never be undermined.

And yes, I meant to say centralized debasement is is the problem, I have corrected that mistake in my original post.

Quote
A few pools control more than 51% of the hash processing power. A cartel of them could eliminate the requirement to use Proof-of-Work (PoW) and so then we are right back to fiat again
And the moment they attempted to change any such critical aspects of the system would be the moment everyone lost faith in Bitcoin and then those pools would have doomed their entire business to failure. But I don't think that will happen because when ever a pool gets near 50% of the hashing power we always see a rebalancing of power by concerned parties. The network seems to have a natural tendency to ensure that no one entity will ever gain the majority of the hashing power. And now that we have decentralized pool software it's even less likely that one entity will ever gain more than 50% of the hashing power.

Quote
It is impossible to have a finite supply of anything without a top-down controller stealing the thing.
Why, explain to me the exact reason why that would be true.

Quote
And the mining of gold is thus competitively available to everyone.
How so? I surely cannot afford to buy the mining equipment required to mine gold. I might be able to sift out a few flakes of gold worth a few dollars if I spend hours panning down at a river, but I doubt anyone would be willing to buy a few specks of gold from me. Gold mining is a highly centralized industry which requires large and expensive machinery. So why is it ok when gold mining is so centralized but when it happens to Bitcoin its the end of the world? I designed the mini-blockchain scheme because I was worried about the centralized mining og Bitcoin, but that doesn't mean I think it will lead to the downfall of Bitcoin and it doesn't mean I've lost my faith in Bitcoin. I accept Bitcoin for what it is.



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Come-from-Beyond on February 13, 2014, 05:41:06 AM
I have already explained upthread that Proof-of-Stake is not secure (https://bitcointalk.org/index.php?topic=455141.msg5033780#msg5033780) because essentially you must trust those with the largest stake (and it can't distribute new coin out to the people through mining in a competitive manner).

It seems to me that the creator of Nxt fixed PoS by adding Transparent Mining (https://bitcointalk.org/index.php?topic=364218.0). He also invented another "mining" algo that doesn't use "coin-days".


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 05:48:00 AM
I have already explained upthread that Proof-of-Stake is not secure (https://bitcointalk.org/index.php?topic=455141.msg5033780#msg5033780) because essentially you must trust those with the largest stake (and it can't distribute new coin out to the people through mining in a competitive manner).

It seems to me that the creator of Nxt fixed PoS by adding Transparent Mining (https://bitcointalk.org/index.php?topic=364218.0). He also invented another "mining" algo that doesn't use "coin-days".

You see they tried to solve it by invoking trust and reputation "knowing who all the miners are", but I already explained upthread that is just another low entropy (i.e. low security) result:

I strongly posit proof-of-stake will be proven insecure. It lacks the expanding entropy of proof-of-work.

Trust via reputation (https://bitcointalk.org/index.php?topic=283513.msg3034710#msg3034710) (i.e. social capital) or stake (i.e. capital share) inherently degrades to centralization and low entropy outcomes.

Only Satoshi's Proof-of-Work can solve the entropy security issue and remain decentralized. Period. I have thought about this deeply.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Come-from-Beyond on February 13, 2014, 05:49:29 AM
Only Satoshi's Proof-of-Work can solve the entropy security issue. Period. I have thought about this deeply.

Oh, I thought u were an open-minded person. Sorry for disturbing u.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 05:52:28 AM
Only Satoshi's Proof-of-Work can solve the entropy security issue. Period. I have thought about this deeply.

Oh, I thought u were an open-minded person. Sorry for disturbing u.

It is a fundamental mathematical insight. Someday I need to write a whitepaper on this. (Any mathematician readers who have some time to do this now?)

I am open-minded to that which isn't already evidently mathematically irrefutable.

Essentially proof-of-stake requires you to move to trust and reputation and call that "security". But that is not the type of security I want, because it ends up as "winner takes all". It is just democracy and fiat again. I want decentralized security which does not have the power vacuum. Only Satoshi's Proof-of-Work has that.

I sent a private message to Adam Back (https://bitcointalk.org/index.php?action=profile;u=101601) (inventor of Hashcash the precursor to Satoshi's insight) and ask if he can assist.

Adam Back discusses centralization due to pools at 25 min, regulation at 30min, and non-anonymity coin taint fungibility at 49 min:
http://letstalkbitcoin.com/e77-the-adam-back-interview/#.UuK0zWTTnrk

http://en.wikipedia.org/wiki/Adam_Back
http://www.cypherspace.org/adam/


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: lumierre on February 13, 2014, 06:03:26 AM
OP forgot to add one of Bitcoins and almost all cryptocurrencies' flaw. There is no way of incentivising running a full node. With the blockchain growing larger, less people are willing to run a full node and so in the future, we would have a very large market cap but only a few full nodes. This could become a target and a point of failure of Bitcoin. There are 2 originally coded altcoins I know that incentivises running a full node but I'm not going to promote them.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: barabbas on February 13, 2014, 06:19:19 AM

Why would anyone invest in new 20nm rigs that don't make ROI?



That's not a possible scenario it is a reality: They have been ordered and PAID FOR many months in advance (and are sold out) so, from now to mid-June, they all will be mining ... at an incremental loss. It is a FACT from which inevitably derives the consequence that mining will not be profitable any longer and no one will do it after the initial period of realization. What happens then to the block chain and Bitcoin?

As for the projections on that chart, sorry but that just makes no sense other than a line in a "chart". FACT is that the price hasn't moved (except significantly down of late) at all since the rebound from the China debacle. FACT, not absurd projections -in which you obviously choose to believe for absolutely no reason at all-.

As for Bitcoin being anonymous and non-taxable, that simply wouldn't be viable. You cannot have it both ways: Amply accepted as currency and unregulated. You can't. You won't. There are legal requirements for any institution that deals with currency, called reserves. I'm sure you have heard of the "stress tests" bank all over the world are subject to since the big crisis of 2007? You cannot sell or loan "air" as currency (banks have done that long enough and we all know the potential consequences). BTC, like any other currency, will have to comply with those requirements to protect society against insolvency... or worse. So yes, it IS ALREADY regulated AND yes you already have to pay taxes on any gains, just like any other business or investment... and what is this, Bitcoin -or any other cryptocurrency- should be OK to avoid taxes? Taxes are bad? who pays for social security, medicare, infrastructure, government? Is this supposed to advance us towards a more fair, responsible society or is it a wild west, everyone for his own kind of initiative? Boggles the mind, really.



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Come-from-Beyond on February 13, 2014, 06:20:54 AM
I want decentralized security which does not have the power vacuum. Only Satoshi's Proof-of-Work has that.

http://www.links.org/files/decentralised-currencies.pdf states that currencies based on PoW can't be decentralized because
Quote
To match this to the notion of “decentralised” (i.e. lacking central authority), the consensus group must be, at least, all participants in the currency. This does not present any real problem when that group is known. For example, it would be possible to define the group as “all people currently in the United States”– where the currency would be something akin to the US Dollar. Assuming the majority decide to behave honestly (as seems likely, after all, that is what happens now), then they should have no difficulty in forming consensus on who has how much money at what time. However, the most general notion of decentralisation does not admit such re-strictions. After all, in some sense, placing any such restriction simply pushes the central authority back a layer: instead of controlling the currency, the authority controls membership of the consensus group. A system like this must allow any entity to participate, and to join and leave the scheme at will. And here lies the problem. If you can never know who is in the scheme (bear in mind that knowing who is in is also a consensus problem!), then you can never get agreement.

So a whitepaper that proves that "only Satoshi's Proof-of-Work has that" is very welcome. Looking forward to read it...


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 06:32:05 AM
Pedantic and irrelevant part of our discussion don't you agree? There is gold throughout the universe. And we are not close to tapping all the gold on earth. Mankind's technology for tapping gold on earth and throughout the universe will continue to improve. Malthusians always annoy me, because throughout the history of the world they have never been correct.

No I think it's very relevant to this discussion. Even if we get the ability to move gold to earth from other planets at a cost less than the worth of the gold, there's still a finite limit ...

Irrelevant to the trust in gold today. Gold is not trusted because it might be finite someday in the distant future (we will all be dead and we won't be stuck to living on earth, who said we have to store it all on earth). I will quote myself again.

They both have their advantages, gold will always be trusted so long as the amount on this planet always remains finite.

Gold is not trusted because the total is not finite. It is trusted because it takes real effort to mine it, thus the supply can't be debased egregiously in corrupt ways, i.e. it won't go hockey stick tomorrow as Bernanke did. And the mining of gold is thus competitively available to everyone. Humans want a fair game of competitive opportunities not a corrupt one of top-down slavery. Actually many humans want socialism where they get everything equally without competition, but this is a failed economic system (The government and society is $150 trillion in global total debt and I estimated upthread only $241 trillion in global net worth but much of that $91 trillion balance is concentrated among the upper 1% and much illiquid such as real estate.  :'( )

A few pools control more than 51% of the hash processing power. A cartel of them could eliminate the requirement to use Proof-of-Work (PoW) and so then we are right back to fiat again

And the moment they attempted to change any such critical aspects of the system would be the moment everyone lost faith in Bitcoin and then those pools would have doomed their entire business to failure.

Nope. The masses will love the centralized coin, because fees will be more stable and lower, transactions will be approved in seconds instead of 10 minutes, anonymity will gone so they can hunt down all the illegal activities to remove tainted coin threats to users, etc.. Remember the majority loves socialism and the government. And thus the value of Bitcoin will be rising, and no one will want to cause a fracturing of that ecosystem and lose that rising value. So the colluding (carteled) pools can make the changes slowly and the frogs will boil in the pot happily agreeing to these changes.

Welcome to the power vacuum of democracy. The leaders win and take all.

But I don't think that will happen because when ever a pool gets near 50% of the hashing power we always see a rebalancing of power by concerned parties.

Your fantasies aside, that in fact is not what is happening in reality today. It is fact that hashing power is becoming concentrated in a few major pools.

It is impossible to have a finite supply of anything without a top-down controller stealing the thing.

Why, explain to me the exact reason why that would be true.

I already did. Because there is nothing finite. The Second Law of Thermodynamics assures us the trend of entropy is always towards maximum. You just try to find one finite bound of anything in the universe. You won't be able to find it. Even if you count the number of a certain species, you can't guarantee with 100% certainty it will remain less than some bound (e.g. changes that you can't predict such finding another planet which can host).

And the mining of gold is thus competitively available to everyone.

How so? I surely cannot afford to buy the mining equipment required to mine gold. I might be able to sift out a few flakes of gold worth a few dollars if I spend hours panning down at a river, but I doubt anyone would be willing to buy a few specks of gold from me.

Actually there are people making a decent living mining gold individually in Alaska now. Ditto here in Mindanao where I am. I was offered to buy gold that is locally refined from the small miners.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 06:44:21 AM
OP forgot to add one of Bitcoins and almost all cryptocurrencies' flaw. There is no way of incentivising running a full node. With the blockchain growing larger, less people are willing to run a full node and so in the future, we would have a very large market cap but only a few full nodes. This could become a target and a point of failure of Bitcoin. There are 2 originally coded altcoins I know that incentivises running a full node but I'm not going to promote them.

Already mentioned in the OP:

Bitcoin Take Over Threats

  • Blockchain requires increasingly powerful full clients as scale to billions of transaction, thus more centralization and vulnerability to 51% attack.

Thanks for articulating the issue in more detail.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 07:03:37 AM
Why would anyone invest in new 20nm rigs that don't make ROI?

That's not a possible scenario it is a reality: They have been ordered and PAID FOR many months in advance (and are sold out) so, from now to mid-June, they all will be mining ... at an incremental loss. It is a FACT from which inevitably derives the consequence that mining will not be profitable any longer and no one will do it after the initial period of realization. What happens then to the block chain and Bitcoin?

Nonsense. If the new 20nm ASICs are not profitable, then eventually they will quit being used and users will continue mining with the older technology. Either the old or the new will be profitable, because the unprofitable will eventually be forced to quit.

Organize your point better or you may find your next post is deleted. I don't want this thread filled with nonsense posts.

As for the projections on that chart, sorry but that just makes no sense other than a line in a "chart". FACT is that the price hasn't moved (except significantly down of late) at all since the rebound from the China debacle. FACT, not absurd projections -in which you obviously choose to believe for absolutely no reason at all-.

FACT is that the same thing happened twice already and the price continued to stay on the trend line. I am repeating what I already wrote in my prior reply to you. You can't say it makes no sense. You could say that no one knows the future for sure. You are treading very close to getting banned from this thread with such an illogical use of the very ad hominem "no sense". I am trying to be patient with you, because I want to address all view points.

As for Bitcoin being anonymous and non-taxable, that simply wouldn't be viable. You cannot have it both ways: Amply accepted as currency and unregulated. You can't. You won't. There are legal requirements for any institution that deals with currency, called reserves.

You have not read all the linked threads in footnote [2] in the OP.

The virtual economy coming in the Knowledge Age is not physical, e.g. downloading a design and printing it at home on your 3D printer. Just as the government can't tax you when you make copy of something on a DVD. There is no place for the authorities to physically go and find out who bought what from whom.

I'm sure you have heard of the "stress tests" bank all over the world are subject to since the big crisis of 2007? You cannot sell or loan "air" as currency (banks have done that long enough and we all know the potential consequences). BTC, like any other currency, will have to comply with those requirements to protect society against insolvency... or worse. So yes, it IS ALREADY regulated AND yes you already have to pay taxes on any gains, just like any other business or investment... and what is this, Bitcoin -or any other cryptocurrency- should be OK to avoid taxes? Taxes are bad? who pays for social security, medicare, infrastructure, government? Is this supposed to advance us towards a more fair, responsible society or is it a wild west, everyone for his own kind of initiative? Boggles the mind, really.

Yes Bitcoin will be taxed + confiscated because it can't remain even partially anonymous due to for example footnote [2] in the OP.

I already explained in the linked Mad Max thread (https://bitcointalk.org/index.php?topic=365141.0) why socialism can lead to a Mad Max Dark Age. That is bad. Go reply in that thread if you want to argue that point. Don't move that debate over here in this thread.

Also refer to the Economic Devastation (https://bitcointalk.org/index.php?topic=355212.0) thread.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: barabbas on February 13, 2014, 07:37:51 AM

The virtual economy coming in the Knowledge Age is not physical, e.g. downloading a design and printing it at home on your 3D printer. Just as the government can't tax you when you make copy of something on a DVD. There is no place for the authorities to physically go and find out who bought what from whom.

OK, this will surely not see the light because, well, you will delete it, of course, but.... what a load of crap! Of course the government can -and actually DO, have been doing it for years- tax you when you make a copy of something on a DVD. It does already, for example, by taxing the physical DVD. But also the internet providers are and will be watching your activities. And any goods that are transacted will be taxed -just like they are now- whether you choose to sell it for bitcoins, sex, or give them away for free. Knowledge age of whatever. And you do know that everything online leaves a trail, don't you? Or what you mean is that you can break the law and hope the government doesn't catch up with it? Oh well, enough of this crap, really.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 07:43:30 AM

The virtual economy coming in the Knowledge Age is not physical, e.g. downloading a design and printing it at home on your 3D printer. Just as the government can't tax you when you make copy of something on a DVD. There is no place for the authorities to physically go and find out who bought what from whom.

OK, this will surely not see the light because, well, you will delete it, of course, but.... what a load of crap! Of course the government can -and actually DO, have been doing it for years- tax you when you make a copy of something on a DVD. It does already, for example, by taxing the physical DVD.

That is not taxing the value of the content that was put on the DVD. The price of the DVD at a few pennies is only a small fraction of the value of the content, such as a movie which sells for $19 in your local store.

But also the internet providers are and will be watching your activities.

Not when we are anonymous. That is one of the main points of this proposed altcoin to provide stronger, mandatory anonymity that defeats any trail.

Not because we want to cheat, but because without it, we very likely go into a Mad Max Dark Age as the society owes $150 trillion in global total debt and I estimated upthread only $241 trillion in global net worth but much of that $91 trillion balance is concentrated among the upper 1% and much illiquid such as real estate. So the socialism is going to tax + confiscate itself into the abyss.

And there are other legitimate reasons to be anonymous, such as I don't want to be discriminated against for my political views, my eating habits, etc..

There will come a day in a Mad Max world where you have to break the laws in order to survive. Go ask those people in history who survived the repeating failures of socialism.

Disclaimer: I am not advocating any specific activity, nor I am giving tax or law advice. Consult your own professional advisor. I am merely sharing my opinions.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 08:12:58 AM
I want decentralized security which does not have the power vacuum. Only Satoshi's Proof-of-Work has that.

http://www.links.org/files/decentralised-currencies.pdf states that currencies based on PoW can't be decentralized because

I see FUD errors in this whitepaper:

http://www.links.org/files/decentralised-currencies.pdf#page=3

Quote
but in essence all solutions are the same: consensus is
arrived at when some sufficient number of members of the group agree,

In Satoshi's PoW the miners don't have to reach any centralized census. They ALL agree to use the same protocol (else they are not making Bitcoin block chain). But there is no centralized collection of a vote. They are all free to disagree about which block solution was found first. The longest chain wins, but this concensus is completely decentralized.

http://www.links.org/files/decentralised-currencies.pdf#page=4

Quote
It also unknowable: we can never be sure that we actually are burning half of
all the power in existence, because we do not know how much power exists.

We know exactly how much power exists that will mine at the current difficulty and market price, and it is precisely the amount that was mining. To go backwards and rewrite the entire blockchain takes not just 51% of the hash rate, but takes asymptotically 100% of the hashrate as the blockchain goes asymptotically to infinite length.

The author set up this strawman to support the requirement of knowing who all the miners are in his Proof-of-stake (PoS) proposal. Then he commits the entropy error that I said will always occur for non-PoW, in that he requires to randomize the order of the PoS miners ("participants") but of course he can't do it without a centralized vote thus it isn't random at all.

Fail. Sorry.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Ozlanthos on February 13, 2014, 08:14:54 AM
I really wish people would grow up. Liberating ourselves of the onerous obligations and !imitations induced on our economy by our forced participation in the Federal Reserve's monetary monopoly is at hand, and tards want to allow the federal government to regulate it! Ha! The Bitcoin network is the single largest concentration of computing power on Earth. It's "owners" are everyone involved in mining and transacting in Bitcoin. Therefore everyone else (including any governments that think they have a right to regulate it)  can go pound sand as far as I am concerned. Bitcoin has thus far endured at least 3 major similar challenges, and has come back better, stronger, and more secure every time!  It is also worth noting that the detection, assessment and resolution of ALL SUCH PREVIOUS EVENTS, TOOK PLACE SANS ANY INVOLVEMENT OF A FEDERAL OR STATE AGENCY!

The members of the network have a vested interest in the proper function of Bitcoin and other cryptocurrencies. If left to us many of the useless governing bodies we employ just to justify taxing yourselves will lose their meaning and purpose.....Boohoo. I think the private market can figure out better uses for those funds...Don't you?

-Oz


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Come-from-Beyond on February 13, 2014, 08:15:15 AM
Fail. Sorry.

Ok. Waiting for the whitepaper.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 08:23:51 AM
Fail. Sorry.

Ok. Waiting for the whitepaper.

Thank you for prompting me to explain a bit. I am very much overloaded with tasks but it is was important to explain what I meant enough that you have a taste of what I would put in such a white paper.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 08:28:55 AM
I really wish people would grow up. Liberating ourselves of the onerous obligations and !imitations induced on our economy by our forced participation in the Federal Reserve's monetary monopoly is at hand, and tards want to allow the federal government to regulate it! Ha! The Bitcoin network is the single largest concentration of computing power on Earth. It's "owners" are everyone involved in mining and transacting in Bitcoin. Therefore everyone else (including any governments that think they have a right to regulate it)  can go pound sand as far as I am concerned. Bitcoin has thus far endured at least 3 major similar challenges, and has come back better, stronger, and more secure every time!  It is also worth noting that the detection, assessment and resolution of ALL SUCH PREVIOUS EVENTS, TOOK PLACE SANS ANY INVOLVEMENT OF A FEDERAL OR STATE AGENCY!

The members of the network have a vested interest in the proper function of Bitcoin and other cryptocurrencies. If left to us many of the useless governing bodies we employ just to justify taxing yourselves will lose their meaning and purpose.....Boohoo. I think the private market can figure out better uses for those funds...Don't you?

-Oz

I agree except Bitcoin is failing to protect against regulation, taxation, centralization, and thus eventually complete control by the government.

That is why I proposed an altcoin without Bitcoin's flaws.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: User705 on February 13, 2014, 08:35:29 AM
...

There will come a day in a Mad Max world where you have to break the laws in order to survive. Go ask those people in history who survived the repeating failures of socialism.

Disclaimer: I am not advocating any specific activity, nor I am giving tax or law advice. Consult your own professional advisor. I am merely sharing my opinions.
That day is already here.  In the USA it is estimated that a person commits approximately three felonies a day.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Zangelbert Bingledack on February 13, 2014, 10:00:32 AM
Hi again, AnonyMint.

I'd like to reiterate that scattershot is weak strategy: people see the weakest arguments among your volley (51% attack, selfish mining) and assume (rightly or wrongly) that you're in the business of building paper tigers.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 12:14:46 PM
Do you have any idea how exhausting it is to deal with these sort of posts that are not focused on technical facts? Your intentions may or may not be a sincere attempt to raise the point about the way sheep Bitards (don't) think or it may also be a propaganda ploy.

I come from the world of programming and working with enthused co-developers where we spend our time being happy and enjoying our work. Slogging through discussion on this forum really challenges my peace-of-mind and patience. I will relish the day after which I no longer need to speak or write about this.

Hi again, AnonyMint.

I'd like to reiterate that scattershot is weak strategy: people see the weakest arguments among your volley (51% attack, selfish mining) and assume (rightly or wrongly) that you're in the business of building paper tigers.

There is a much easier way for the government to take over Bitcoin than 51% attack and selfish mining. Simply tax the coin and per footnote [2] all coin is tainted regardless if you used Tor or not, so in effect regulate every pool and exchange. Regulation can accomplish much of the same goals as takeover. Then later (ramp up the regulation to drive the independents bankrupt and) the large corporations beholden to the government buyout the pools and exchanges, and then the drift towards cartels and corporate-fascism.

The lack of a feature in Bitcoin to limit the concentration of mining in a few large pools is an egregious flaw. But this was planned from the beginning as Satoshi predicted takeover of mining by large corporates and the core developers also reiterated that in this forum in the past. It is not very hard to gain a picture that Bitcoin was planned from the outset to not be a hacker-like decentralized internet paradigm but rather a mainstream integration into the taxaholic socialism. I used to target my business to that paradigm too. The problem with that socialism is peaking and heading for the cancer death syndrome where it taxes itself to death. We are no longer in 1999, and now is it 2014.

It is very simple. When the governments start confiscating nearly all of the wealth especially targeting millionaires, people will decide they need anonymity. I don't have to convince anybody of anything. Some of those with significant net worth will run scared from Bitcoin.

Those who have big gains in Bitcoin, will instead perhaps comply with the government and give up most of their gains (to tax + confiscation) in return for a nice profit (e.g. give up 90% of the gains and still have 10 bagger).

Yet the easiest marketing advantage is cpu-only mining. There is really nothing that needs to be said. People will mine cpu-only especially the mining client is very easy to run!  ;) Now all the Bitards get off my fucking lawn. You are dealing now with real commercial programmers who have experience in making popular commercial software. All of the underhanded propaganda tactics I am seeing from fanboys are not going to work in this case. You can see the vote on the poll can't you.

P.S. the Bitards who want to think they are smart, much better they miss out on early mining opportunity. Perfect. I hope I read their never ending excuses about security of Java, etc.. Meanwhile the people of the world will be chugging along mining and mining, since the opportunity for the average person to download a client and instantly mine Bitcoin with their PC went "poof its gone" (http://www.youtube.com/watch?v=-DT7bX-B1Mg).


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: BldSwtTrs on February 13, 2014, 12:46:17 PM
There is a much easier way for the government to take over Bitcoin than 51% attack and selfish mining. Simply tax the coin and per footnote [2] all coin is tainted regardless if you used Tor or not, so in effect regulate every pool and exchange. Regulation can accomplish much of the same goals as takeover. Then later the large corporations beholden to the government buyout the pools and exchanges, and then the drift towards cartels and corporate-fascism.
Don't you think that P2P mining pool can solve the problem of regulation or big corporations takeover?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 01:48:46 PM
There is a much easier way for the government to take over Bitcoin than 51% attack and selfish mining. Simply tax the coin and per footnote [2] all coin is tainted regardless if you used Tor or not, so in effect regulate every pool and exchange. Regulation can accomplish much of the same goals as takeover. Then later the large corporations beholden to the government buyout the pools and exchanges, and then the drift towards cartels and corporate-fascism.
Don't you think that P2P mining pool can solve the problem of regulation or big corporations takeover?

Definitely not since it is so easy for the centralized pools to have their miners compute shares for a competing P2Ppool but withhold block solutions from the P2Ppool (and submit them for themselves) thus parasiting the P2Ppools of revenue while not impacting the revenue of the centralized pool. So centralized pools which wanted to eliminate P2Ppools could do so (in theory).

I will quote myself where I answered this in the past.

https://bitcointalk.org/index.php?topic=339902.msg3715641#msg3715641

Why don't you just use P2Pool? Is there any reason?

I was waiting for bytemaster to answer because I wanted to know his thoughts. Seems to me that you have no way to stop the Share Withholding Attack since it is decentralized. And every peer has to run more of a full client if I am not mistake. And there is a lot more overhead I believe. And perhaps also much less resistance against denial-of-service flooding. Frankly I didn't analyze for long enough to be very sure of my initial intuition which is to stay away from it.

I know it is generally impossible to enforce reputation on a 100% decentralized system. So I am intuitively skeptical of P2Pool.

https://en.bitcoin.it/wiki/P2Pool#Payout_logic

Quote
A miner with the aim to harm others could withhold the block, thereby preventing anybody from getting paid.

Incorrect. The miner can still be paid for the shares he generated which were not a block solution, because another peer might generate the block solution after. Thus the share withholding miner can parasite income off the pool while robbing the pool of his major contribution to the revenue. So this brings revenue to the miner, while parasiting on the pool. If enough shares are from attackers, this destroys the economics of the honest miners in the pool and probably destroys the pool.

So if you owned a centralized pool, it would probably be in your interest to attack all the P2Pools.

Whereas centralized pools could (in a redesigned block chain) implement Meni Rosenfeld's oblivious shares to thwart the share withholding attack.

So as I wrote upthread, P2Pool is not a sustainable or reliable solution.

After making those posts, I remember I eventually studied P2Ppool in more detail and don't remember changing my opinion. I think I posted about it again with additional details, but I can't find the latter post.

Let me add the oblivious shares fix I mentioned in the OP can not be applied to a pool which is decentralized. Many readers may not understand well this very technical issue. Try reading the link I provided in the OP to Meni Rosenfeld's white paper. Perhaps at some point in the future I can take some time to write a layman's explanation of this issue.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 04:51:56 PM
Note I have deleted the original post because he continues to write very noisy and illogical sentences. To be fair, I have quoted and responded to the meat of his argument.


That is not taxing the value of the content that was put on the DVD. The price of the DVD at a few pennies is only a small fraction of the value of the content, such as a movie which sells for $19 in your local store.

Nor it should be. Why should anyone have to pay again for using the content they already paid...

Irrelevant. That wasn't my point. I was providing an example of activity at homes (versus store fronts) that the government couldn't tax even if it wanted to. When we download software or coming designs to be printed in our homes on 3D printers, the government can't tax it if the vendors choose to be anonymous with an anonymous currency. Right now that is not an option because there does not exist a reliably anonymous payment option.

Additionally, law enforcement has prosecuted harshly those that perpetrate the intellectual property stealing...

Again that is irrelevant to the point I made. Now you are trying to argue that anonymity is bad because you think prosecution of content theft is more important than preventing the horrifically peaking socialism (200 year debt high, most western nations taxing over the Laffer limit, etc) from taxing us into another Dark Age as has happened numerous times throughout human history.

Fact is that if you provide content at low enough price, people will rarely bother to go out of their way to steal it. They want the official content. And there is a 7 billion person market on the internet, no need to charge $19 for a movie. Make it 50 cents. You will still get rich.

So there's no "anonymity" possible on the internet

Bullshit. You are ignorant of what is technically possible.

nor, up to a point, it is desirable. You are, I'm sure, fully aware of those hackers that encrypt your computer's content and will demand a ransom for the private key, right? They demand the ranson in BTC, of course... "advantages" of anonymity?

There's very limited advantages to anonymous activities -they are mostly illegal- and those that are legitimate are already protected by laws, such as discrimination, etc. that you mention.

Total bullshit. So I guess you hated paper cash too, because it enabled many anonymous activities.

That is freedom dumbass. And when you lose your freedom like they did until Stalin, Mao, Hitler, etc.. then you will learn the hard way not to trust the end game of peaking socialism and collectivism.

I suppose you are not aware that Obama can declare any citizen a terrorist and without proof they can take away all your due process and kill you with a drone. Yet you claim the government will respect my political views, etc.. No way. The Constitution is dead. The socialism has taken over and we are headed into totalitarianism.

It'd be nice, when advocating for anonymity, to come up with ANY reason at all that would justify even its contemplation. There are none not already contemplated by the laws of the western world.

For the love of Christ, you are one clueless example of why we need anonymity. Frogs like you will boil in the pot all the while singing the praises of the next totalitarian (perhaps it is Obama, we need to see how it progresses).

Mandatory???? in a democracy? or are we regressing and going towards dictatorships where things such as laws will be "mandatory"?

Did anyone force you to buy and use that altcoin?

Mandatory only for that altcoin dumbass.

Also 'mandatory' is not entirely accurate. Any user can reveal his identity there is no technological way to stop that. Rather I am proposing the anonymity is automatically on by default.

Oh and those figures of debt and net worth? A fallacy. Total fallacy.

Bullshit. Those figures are accurate. Did you even bother to check my sources?

Just go along your merry way to blissful pot boiling. You are done here in this thread. You made your point. I strongly disagree with you. You don't need this altcoin. It isn't for boiling frogs like you. It is for the 33% who voted yes.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: barabbas on February 13, 2014, 05:15:01 PM
Evidently. And if 1 in 3 (even in this minimal and quite partial environment) makes you happy, count us both as VERY happy... dumb ass.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 05:18:56 PM
Evidently. And if 1 in 3 (even in this minimal and quite partial environment) makes you happy, count us both as VERY happy... dumb ass.

Why are you so scared that some people want their privacy that you must put your FUD spin on the poll results to try to create discouragement?

Because socialists are never satisfied if they don't control everything. Control freaks. People like you scare the shit out of me. And you outnumber us freedom lovers. And that is why the world is headed into totalitarianism. Remember I told you so when it gets really bad in 2017 to 2020.

Yep. It must be the reason why you use words such as "mandatory" and I use words such as democracy... you know the will of the people?

FUD. I already explained you are not required to buy the coin. You can use Bitcoin if you want optional anonymity (which means no anonymity as explained in footnote [2] in the OP, anonymity is a nearly all or nothing proposition).

Also 'mandatory' is not entirely accurate. Any user can reveal his identity there is no technological way to stop that. Rather I am proposing the anonymity is automatically on by default.

And democracy is a lie. So many people are going to have to relearn the painful lesson that democracy always ends up back at totalitarianism. I linked to the power vacuum of democracy (https://bitcointalk.org/index.php?topic=365141.msg4065040#msg4065040) upthread.

You don't scare me, you are just a freak side show in a corner street somewhere. The definition of a nutcase. Have a nice one, "freedom lover".

The bolded text displays your disdain for hackers and people who love freedom. The hacker people who created the internet by lying to the government (http://esr.ibiblio.org/?p=3335) which has provided all the prosperity and advancement you are benefiting from today on the internet. I was one of those people who helped create decentralized publishing on the internet. Yet you disrespect us and piss on us, and that is exactly what socialism does. It destroys itself.

Amazingly FUD way to characterize the vast research and technical acumen I have displayed in this thread.

I don't scare you because I am not a socialist trying to control you. And you believe your government can crush us (but you are subconsciously worried else you wouldn't be wasting your time in this thread). You scare me, because you are not satisfied unless you can FUD everything and have everything your way. You can't just leave us alone and let us make our coin and you use Bitcoin because in democracy everyone has to share and share equally. No person can be allowed to go his own way.

OK, Ill waste a couple more minutes: so democracy is a lie, right? Since there is only a real alternative (totalitarianism) so I gues you are advocating, in your "freedom lover" proposition, for a dictatorship beyond frontiers? Or is it some other 100% utopic proposition.

Democracy leads to totalitarianism at the end game where the debt peaks. You didn't read the power vacuum link I provided to you. If you are not going to do your homework and study, how can I teach you anything new.

We created the internet to function decentralized (i.e. anarchism = freedom) not top-down votes (i.e. democracy = debt slavery).

Analogously see the upthread technical explanation I made comparing Bitcoin's PoW (decentralized) to PoS (top-down control) (https://bitcointalk.org/index.php?topic=455141.msg5115441#msg5115441).

As for your anonymous coin, by all means go ahead and create it using your "vast research and technical acumen" obtained in Nutcaseland. Hey, they already tried Caynecoin, didn't they?

Again you show complete disrespect (and probably due to a lack of understanding) for the people who created the internet.

And you characterize as "nutcases" people who have studied throughout history the repeated failure of socialism and just want their privacy. This is precisely the kind of voracious, pit-bull attitude that prevails in totalitarianism. Look at what former POTUS Bush said, "you are with us, or against us". Look at the way Hitler worked the population into a frenzy to attack those who were "not the same as us".

Have a nice life.

Thank you. Best wishes for you as well.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 06:04:48 PM
Hey "No" voters, what is the point of Bitcoin if it ends up a top-down currency? We could have just used Paypal instead.

Either you disagree with my logic that it is already nearing top-down control (https://bitcointalk.org/index.php?topic=455141.msg5118212#msg5118212), or you ignore reality (forsake the ideals of a decentralized currency) because you want to earn money on Bitcoin's appreciation.

I have a feeling it won't work out well for you because socialism gets very destructive at its end game cycle.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: User705 on February 13, 2014, 07:20:13 PM
There is a much easier way for the government to take over Bitcoin than 51% attack and selfish mining. Simply tax the coin and per footnote [2] all coin is tainted regardless if you used Tor or not, so in effect regulate every pool and exchange. Regulation can accomplish much of the same goals as takeover. Then later the large corporations beholden to the government buyout the pools and exchanges, and then the drift towards cartels and corporate-fascism.
Don't you think that P2P mining pool can solve the problem of regulation or big corporations takeover?

Definitely not since it is so easy for the centralized pools to have their miners compute shares for a competing P2Ppool but withhold block solutions from the P2Ppool (and submit them for themselves) thus parasiting the P2Ppools of revenue while not impacting the revenue of the centralized pool. So centralized pools which wanted to eliminate P2Ppools could do so (in theory).

...
That doesn't sound right at all.  A solution with a different payout address would no longer be valid.  Also they are spending hash power so it's not parasiting.  At most it will cause the pools luck to appear to be bad but since P2P users have altruistic reasons it isn't likely to cause them to switch.  51% attack is an overblown problem anyways.  As you stated yourself government actors have better tools to combat bitcoin  and for private attackers it is simply not economically viable.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 07:42:30 PM
There is a much easier way for the government to take over Bitcoin than 51% attack and selfish mining. Simply tax the coin and per footnote [2] all coin is tainted regardless if you used Tor or not, so in effect regulate every pool and exchange. Regulation can accomplish much of the same goals as takeover. Then later the large corporations beholden to the government buyout the pools and exchanges, and then the drift towards cartels and corporate-fascism.
Don't you think that P2P mining pool can solve the problem of regulation or big corporations takeover?

Definitely not since it is so easy for the centralized pools to have their miners compute shares for a competing P2Ppool but withhold block solutions from the P2Ppool (and submit them for themselves) thus parasiting the P2Ppools of revenue while not impacting the revenue of the centralized pool. So centralized pools which wanted to eliminate P2Ppools could do so (in theory).

...
That doesn't sound right at all.  A solution with a different payout address would no longer be valid.  Also they are spending hash power so it's not parasiting.  At most it will cause the pools luck to appear to be bad but since P2P users have altruistic reasons it isn't likely to cause them to switch.

I appreciate very much the fact checking peer review.

Perhaps you do not understand well the "Share Withholding Attack" which is called Block Withholding (http://arxiv.org/pdf/1112.4980v1.pdf#page=27) in Meni Rosenfeld's whitepaper in the context of the decentralized pool case. And Rosenfeld's says "Sabotage" gives no benefit to the attacker. That is not correct in the decentralized case, because there is no way to hide the transactions and block details from the attacker for a decentralized pool (because there is no centrally trusted entity to hold the secret until the block solution is found), thus the attacker can submit the block solutions as his own (never giving them to the P2Ppool) and receive all the coin rewards instead of sharing them with the P2Ppool. In the decentralized P2Ppool case, each peer must adds its payout address thus the block has being calculated is different for each peer. The attacker will give to the P2Ppool the shares that are not block solutions, thus parasiting by receiving a portion of the coin rewards gained from the hash rate of the other peers in the pool when the block solution is found by other peers, but not reciprocating because the attacker keeps the coin rewards for block solutions he finds all to himself.

Please let me know if that caused you to understand, or if you still disagree?

A very thorough explanation which layman could grasp would take me a day or days to produce. I would need graphical illustrations as well.

51%50+% attack is an overblown problem anyways.  As you stated yourself government actors have better tools to combat bitcoin  and for private attackers it is simply not economically viable.

Perhaps so for Bitcoin because the government has an easier way to attack, yet if Bitcoin's coin taint anonymity is ever fix (see upthread the interview with Adam Back (https://bitcointalk.org/index.php?topic=455141.msg5114084#msg5114084)) the 50+% attack comes back to prominence. And for the proposed altcoin, the 50+% attack needs to be analyzed because the government loses some (most or all?) of its ability to attack with regulation due to the strong anonymity.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 13, 2014, 10:36:36 PM
Adam Back discusses centralization due to pools at 25 min, regulation at 30min, and non-anonymity coin taint fungibility at 49 min:
http://letstalkbitcoin.com/e77-the-adam-back-interview/#.UuK0zWTTnrk

Adam admitted that Bitcoin's fungibility model is fundamentally flawed and broken!

He mentioned some potential forthcoming research on zerocoin improvements but (in agreement with what I wrote upthread) that zerocoin was not practical now and probably not any time soon.

Adam explained that the 'mutable' option of Getblocktemplate (https://en.bitcoin.it/wiki/Getblocktemplate) allows pool miners to configure their own blocks thus claiming this reduces some centralization risk. However, mutable transaction blocks is not compatible with the oblivious shares fix for Share Withholding (Block Withholding) attack. Thus this feature can be defeated by those who want to force centralization. Rather my altcoin proposal is strong IP anonymity on by default which allows including the oblivious shares fix.

Adam claimed blind commits (https://bitcointalk.org/index.php?topic=206303.0) could help reduce centralization risks, but I found his argument to be flawed in several ways, some of which he admitted.

My analysis thus far is that "strong IP anonymity on by default" is a holistic solution with much fewer caveats.

Adam fears a strong altcoin because he said this will destroy the principle of limited supply of coins. I think he should accept a free market result, because a fundamental theorem of Coasian economics is that resisting the free market will only make a worse outcome later. I don't share his fear of an exploding supply of crypto-coins, because there are only a few (or maybe only one) design that can really be serious and overwhelming better. The market will recognize that the supply of truly better designs is limited.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: rarebitproject on February 14, 2014, 12:25:06 AM
I don't see how verifiable CPU-only mining solves the processing power advantage in mining.  Pools, farms, and botnets can still be used get an advantage.

Don't you need to enforce a "one connection per person please" policy somehow?  If there's a mathematically rigorous way to do this of course that's the way to go.

I was thinking that the network might require a user to solve a capcha to connect and timing out the connection after a few hours (probably already has been proposed).  I know, this is terrible idea but it might be effective at keeping the mining egalitarian, which I think is what you are aiming at.






Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: knightmb on February 14, 2014, 12:38:30 AM
Bitcoin Killer Altcoin

The Bitcoin killer will thus have at least the following features.

  • provably cpu-only mining with botnet resistance (current proof-of-stake can't redistribute new coins to masses & I posit it isn't secure)
  • built-in anonymity (to minimize non-anonymous users)
  • small, reasonable perpetual debasement
  • zero transaction fees (with economic transaction spam resistance)
  • economically limited pool sizes
  • oblivious shares
  • selfish-mining fix
  • mini block-chain design
  • faster 1-confirmation block chain, e.g. 1 minute instead of Bitcoin's 10 min delay, if the orphan rate can be contained
It would not even need to an Altcoin because it just a different mutation of the original Bitcoin when you get down to the core. There is already a digital currency that does all this, but you won't hear about it outside the bitcoin bubble unfortunately.  :(


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: rarebitproject on February 14, 2014, 12:46:22 AM
Also, I think you are using the terms 'socialist', 'collectivist', etc. improperly.  There are anarchic forms of these political philosophies, which many believe are the ligit ones.

What you are referring to are the centralized, statist forms.  'State capitalism' is the preferred term for the system practiced in the former soviet union. 

Crony capitalism, what many believe we are now suffering from, is very closely related to state capitalism.  It masquerades as a 'free market', but is composed of what are essentially state-sponsored monopolies.



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 14, 2014, 12:46:46 AM
Bitcoin Killer Altcoin

The Bitcoin killer will thus have at least the following features.

  • provably cpu-only mining with botnet resistance (current proof-of-stake can't redistribute new coins to masses & I posit it isn't secure)
  • built-in anonymity (to minimize non-anonymous users)
  • small, reasonable perpetual debasement
  • zero transaction fees (with economic transaction spam resistance)
  • economically limited pool sizes
  • oblivious shares
  • selfish-mining fix
  • mini block-chain design
  • faster 1-confirmation block chain, e.g. 1 minute instead of Bitcoin's 10 min delay, if the orphan rate can be contained
It would not even need to an Altcoin because it just a different mutation of the original Bitcoin when you get down to the core. There is already a digital currency that does all this, but you won't hear about it outside the bitcoin bubble unfortunately.  :(

I studied Timekoin and concluded that the order of selection of the peers is not secure. It is the same entropy issue that I mentioned upthread for PoS. If you have a better whitepaper now than when I researched it Spring 2013, I will read to see if it deals with that question of randomized ordering in a way that satisfies my concerns?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 14, 2014, 12:56:32 AM
I don't see how verifiable CPU-only mining solves the processing power advantage in mining.  Pools, farms, and botnets can still be used get an advantage.

Botnets can be muted significantly by requiring 16GB of memory. One tradeoff is that makes mining not instantly accessible to users who don't have that much memory installed.

Another strategy is to require say 4GB memory and hope this causes those whose computers are in a botnet to notice their computer is running slow and paging virtual memory to disk.

Botnets become less of a problem as the number of legitimate cpu miners increases, because the botnets are being sourced from the same supply of total PCs in the world. Eventually legitimate cpu miners will far outweigh the botnets, so can gradually relax the memory requirements to fit the average PC.

I wrote in the OP that pool sizes must be limited. I am not going to tell you now the secret way to do it.

Don't you need to enforce a "one connection per person please" policy somehow?  If there's a mathematically rigorous way to do this of course that's the way to go.

I was thinking that the network might require a user to solve a capcha to connect and timing out the connection after a few hours (probably already has been proposed).  I know, this is terrible idea but it might be effective at keeping the mining egalitarian, which I think is what you are aiming at.

Impaler and I discussed that. I decided it is untenable basically because it requires top-down control in order to generate and verify the captchas.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 14, 2014, 01:05:28 AM
Also, I think you are using the terms 'socialist', 'collectivist', etc. improperly.  There are anarchic forms of these political philosophies, which many believe are the ligit ones.

What you are referring to are the centralized, statist forms.  'State capitalism' is the preferred term for the system practiced in the former soviet union.  

Crony capitalism, what many believe we are now suffering from, is very closely related to state capitalism.  It masquerades as a 'free market', but is composed of what are essentially state-sponsored monopolies.

The variations in terminology are attempt by academics to classify different symptoms and manifestations of what I believe to be the same underlying disease. I want to go to root disease which is the power vacuum created by the fact that society demands leaders and can't find an equilibrium that is decentralized and leaderless.

I believe if you take away the ability of leaders to tax, they won't be able to give society what society demands they give them. And I believe this will be check on the power of the power vacuum. The tax will be voluntary, so they can't go exceeding the Laffer limit and voting will be done decentralized opt-out rather than "winner takes all" elections. I believe local communities can be more fair (people know each other personally) and work together on community funded projects.

I am very sleepy so the above is not my best possible prose and explanation.

Also I am running out of time to be sitting always in this thread to answer. Will eventually need to let it go.

Hopefully I've made my main points clear enough.

Here on links on the IMF plans for confiscation:

http://www.globalresearch.ca/the-international-monetary-fund-lays-the-groundwork-for-global-wealth-confiscation/5354553
http://www.zerohedge.com/news/2014-02-12/europe-considers-wholesale-savings-confiscation-enforced-redistribution


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: rarebitproject on February 14, 2014, 01:20:00 AM
I don't see how verifiable CPU-only mining solves the processing power advantage in mining.  Pools, farms, and botnets can still be used get an advantage.

Botnets can be muted significantly by requiring 16GB of memory. One tradeoff is that makes mining not instantly accessible to users who don't have that much memory installed.

Another strategy is to require say 4GB memory and hope this causes those whose computers are in a botnet to notice their computer is running slow and paging virtual memory to disk.

Botnets become less of a problem as the number of legitimate cpu miners increases, because the botnets are being sourced from the same supply of total PCs in the world. Eventually legitimate cpu miners will far outweigh the botnets, so can gradually relax the memory requirements to fit the average PC.

I wrote in the OP that pool sizes must be limited. I am not going to tell you now the secret way to do it.

Don't you need to enforce a "one connection per person please" policy somehow?  If there's a mathematically rigorous way to do this of course that's the way to go.

I was thinking that the network might require a user to solve a capcha to connect and timing out the connection after a few hours (probably already has been proposed).  I know, this is terrible idea but it might be effective at keeping the mining egalitarian, which I think is what you are aiming at.

Impaler and I discussed that. I decided it is untenable.


I hope you can achieve this, it's sorely needed.


Also, I didn't know about TimeKoin.  I was investigating cryptocoins that eliminate mining and was thinking it might be a good idea simply to allow a randomly selected user to create the next block.

There is also Emunie, which works by rewarding prior work with newly minted coins, i.e, it pays wages.  It also attempts to peg the price of the coin to the US$ or basket of commodities.  It's also closed-source, so its not really an option for adoption, but I found it interesting.






Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: User705 on February 14, 2014, 04:35:42 AM
...
Perhaps so for Bitcoin because the government has an easier way to attack, yet if Bitcoin's coin taint anonymity is ever fix (see upthread the interview with Adam Back (https://bitcointalk.org/index.php?topic=455141.msg5114084#msg5114084)) the 50+% attack comes back to prominence. And for the proposed altcoin, the 50+% attack needs to be analyzed because the government loses some (most or all?) of its ability to attack with regulation due to the strong anonymity.
You are likely correct that if an altcoin has stronger anonymity then perhaps governmental actors may want to consider a 50%+ attack.  The solution is PoS.  I'm not sure what you mean by "current proof-of-stake can't redistribute new coins to masses & I posit it isn't secure"  The security aspect seems to be currently working ok for Nxt.  The distribution issue is purely an economics problem and since any crypto is easily copied what's the problem with distribution?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 14, 2014, 10:25:41 AM
proof of stake is the solution to your concerns.

I don't believe PoS (proof-of-stake) is secure and it is inherently top-down control not decentralized crypto-currency. See my upthread explanations linked as follows. I have deleted your post, because you quoted the entire OP and only wrote the one sentence above.

https://bitcointalk.org/index.php?topic=455141.msg5033780#msg5033780
https://bitcointalk.org/index.php?topic=455141.msg5111679#msg5111679
https://bitcointalk.org/index.php?topic=455141.msg5114040#msg5114040
https://bitcointalk.org/index.php?topic=455141.msg5114084#msg5114084
https://bitcointalk.org/index.php?topic=455141.msg5115441#msg5115441
https://bitcointalk.org/index.php?topic=455141.msg5115547#msg5115547


Also, I didn't know about TimeKoin.  I was investigating cryptocoins that eliminate mining and was thinking it might be a good idea simply to allow a randomly selected user to create the next block.

The problem is where does the entropy for the randomness of sequence come from in non-PoW schemes?

In PoW, the decentralized entropy is coming from the DECENTRALIZED hashrate that is randomly selecting nonces to compute as trialed block solutions until one is found. There is no need to invoke trust nor reputation.

Unfortunately non-PoW schemes have no way to generate that randomness, e.g. the seed for the pseudorandom generator will always derive from some top-down vote or reputation factor. The ordering will always be low-entropy, top-down voting, trust, and reputation. This is inherently top-down and centralized. This will put us right back at fiat again.

Sorry.

There is also Emunie, which works by rewarding prior work with newly minted coins, i.e, it pays wages.  It also attempts to peg the price of the coin to the US$ or basket of commodities.  It's also closed-source, so its not really an option for adoption, but I found it interesting.

No matter how much these non-PoW designs obfuscate the lack of entropy in very complex design specifications, they will never solve the fundamental mathematical issue. Because there is no mechanism for the decentralized entropy to be generated.

I thought very deeply about this and it is why I abandoned my own proof-of-diskspace design.

I need some expert mathematicians to work on proving this assertion more formally.

I am very sorry to have to spill the bad news on this. It means many people are going to be angry at me. Sorry.

PoW is the genius of Satoshi's contribution. That is the one aspect we can't discard.


You are likely correct that if an altcoin has stronger anonymity then perhaps governmental actors may want to consider a 50%+ attack.  The solution is PoS.  I'm not sure what you mean by "current proof-of-stake can't redistribute new coins to masses & I posit it isn't secure"  The security aspect seems to be currently working ok for Nxt.  The distribution issue is purely an economics problem and since any crypto is easily copied what's the problem with distribution?

Security by top-down control and reputation is fiat. That isn't the type of security that I want. I want security from decentralized high entropy where no one can take control of the system.

Without competition in mining, there is no way to select who to give new coins (or demurrage in Freicoin) to that isn't inherently controlled top-down, i.e. fiat. Then you still need socialism to take from the rich and give to the poor. Because the fact of life is that wealth is power-law distributed [1] because the wealthy spend only a small fraction on their personal expenses. So eventually with usury the wealthy own 100%. Thus you need a way to redistribute wealth else society fails into a Dark Age. The socialism way of redistribution can be gamed by the wealthy who buy the government. Thus decentralized competition through PoW mining is the only way to fix the problem that has been plaguing society during the entire history of mankind since Mesopotamia.

[1] Dragulescu & Yakovenko. Exponential and power-law probability distributions of wealth and income in the United Kingdom and the United States


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: rpietila on February 14, 2014, 12:44:57 PM
Excellent reply. If someone disagrees, he does not understand the issue.

Is the anything that can be done, except that the value of the liberty-loving people descends to a maze of altcoins, which are constantly changing and whose conversions are trustless with p&p exchanges?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Jungian on February 14, 2014, 01:21:26 PM
How about Zerocoin? Soon to be released

http://spar.isi.jhu.edu/~mgreen/ZerocoinOakland.pdf

Someone way more versed in crypto than me will have to be judge of that


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Spitfire396 on February 14, 2014, 02:39:16 PM
This does not contribute to the topic, but as my first post, I want to say that I'm truly amazed of the quality of this community. In fact, I think many contributers here are more serious than the players of the world economy. It's incredible that people like rpietila puts such an effort into the bitcoin economy, maybe even more than what they really need to earn money. What you are doing here is building the foundation for the future of the whole world economy, which will hopefully be much more fair and legit than what it is today. Bitcoin might not be the right cryptocurrenciy, but it will probably stay in use for a couple of years till this community has settled upon what to do next.

Thank you all for doing what you're doing!


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: BldSwtTrs on February 14, 2014, 02:43:24 PM
I don't believe PoS (proof-of-stake) is secure and it is inherently top-down control not decentralized crypto-currency. See my upthread explanations linked as follows. I have deleted your post, because you quoted the entire OP and only wrote the one sentence above.
When the price increase there is a huge selling pressure on those who have the largest stakes. That can be seen with Bitcoin where there is a 17% dishoarding rate every doubling and also with NXT for instance (https://bitcointalk.org/index.php?topic=345619.msg5098747#msg5098747).

Basically the more adoption, the more the stakes are decentralized, the less trust is needed. Price increase (i.e time) is a force of decentralization.

And I don't see how the fact that you cannot distribute new coins is relevant to the security issue.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 14, 2014, 06:53:36 PM
Open-minded people, feel free to read those responses here: https://bitcointalk.org/index.php?topic=457105.0 (https://bitcointalk.org/index.php?topic=457105.0)

Readers can find my rebuttal to you at your thread (linked above).

The one point he made that I think is worthy of responding to here, is the often heard assertion that PoW wastes electricity for nothing.

(Orders-of-magnitude more electricity will be wasted if I am correct that non-PoW systems such as PoS put us right back at fiat again.)

Even in the worst possible case if the entire value of all new coins was burned as electricity with no profit to miners thus providing no utility for redistribution to deconcentrate wealth, still we need to burn some resources to keep the block chain decentralized. Else someone needs to refute my assertion that non-PoW schemes are not sufficiently decentralized to not end up being fiat again. (and see below how much electricity fiat societies waste because government capture allows debt to run amok)

I wonder if readers have comprehended my upthread posts wherein I explained that democracy = fiat. We can't eliminate fiat if we retain voting (tallied by and to create a top-down authority) and reputation systems of control, because top-down control over money is the definition of fiat. A top-down controlled digital fiat can be technically secure, but the security is vacuous in the sense it is not protecting us from the power vacuum boogeyman that we were trying to eliminate in the first place. We might as well just continue to use Paypal, VISA, and Mastercard.

And even in that improbable worst case where miners earn no profit, we gain the utility of distributing new virgin coins anonymously. This is for example a way that people trapped behind totalitarian borders can generate coin from within. It is a way for individuals to convert fiat cash into anonymous coin, by spending the fiat for PC hardware instead of via an exchange.

If we assume miners are making some profit (i.e. not worst case), then we also gain the utility of deconcentrating wealth. If we don't deconcentrate wealth then wealth will concentrate until the velocity of money collapses (as it has by 50% since 2008 while Gini coefficients are skyrocketing globally), then welcome to potentially another feudal Dark Age.


With cpu-only mining, I envision that economies-of-scale with huge rigs located in cooled data centers will earn less ROI than carting some PCs to a stream and running microhydropower, because I estimate the by-far lowest cost energy (micro-hydropower) will outweigh the very minimal cost-scaling advantages of a tower of PCs. Thus I see the (small, reasonable, annual rate of new coins or Freicoin's demurrage) redistribution of wealth going to the smaller guys with the most initiative, who are driving new technologies for harvesting renewable energy, i.e. the antithesis of waste.

And who says that when I drive an hour to work this is waste. It isn't wasteful if being there instead of here, is more efficient in terms of the face-to-face interaction and production achieved at work.

It is far more wasteful for a human mind to sit idle. The energy that the human mind can devise ways to more efficiently harvest isn't factored in by those who think human activity is wasteful. These (idiot, broken-record, never been correct every in history) Malthusians annoy the fuck out of me (https://bitcointalk.org/index.php?topic=355212.msg5150169#msg5150169). It is as if they can't fathom that the human mind is capable of producing more energy than humans consume. Duh!

http://armstrongeconomics.com/2014/02/13/global-warming-why-it-is-nonsense/

It is impossible to have a finite supply of anything without a top-down controller stealing the thing.

Why, explain to me the exact reason why that would be true.

I already did. Because there is nothing finite. The Second Law of Thermodynamics assures us the trend of entropy is always towards maximum. You just try to find one finite bound of anything in the universe. You won't be able to find it. Even if you count the number of a certain species, you can't guarantee with 100% certainty it will remain less than some bound (e.g. changes that you can't predict such finding another planet which can host).

http://unheresy.com/Information%20Is%20Alive.html#2nd_Law_of_Thermo

Human activity can be egregiously wasteful when it is top-down funded by debt (usury), because the lenders don't care if you default, because there is a central bank to bail out the banksters and socialize the costs of the wasteful investment. We have $150 trillion of debt in this world today. That is the waste Malthusians see (e.g. people who didn't earn it, doing debt-driven strip-mall-mayonnaise conspicuous consumption and adding no productive knowledge) but they misapply that observation to all forms of human activity. What needs to be removed is not all human activity, rather the top-down power vacuum (i.e. lack of decentralization) that enables the socialism and the wealthy to over concentrate wealth with usury backed by socialism.


An economics thought experiment. Lets assume we possessed an oilfield that can pump out new oil for $5 per bbl in total costs including amortization of the capital infrastructure. Lets assume we can pump out at a higher rate than demand. What happens to the price of oil? It drops to $5 so that we stop pumping oil at a faster rate than demand.

You see aggregate (non-debt-driven) demand for energy is never wasteful, because by definition it costs less to produce energy than it is worth. That is unless you believe some (Rothschild-funded top-down generated propaganda) Malthusian nonsense such as Peak Oil or Global Warming which tries to fool you into believing that anything in this universe is finite. Please define the edge of the universe? I did (http://unheresy.com/The%20Universe.html#Edge_of_the_universe).

Widespread debt can cause humans to take on uneconomic activities which are not based on knowledge and maximization of profit. That would then be wasteful, and it would be reflected in demand exhausting supply. This is why Rome collapsed.

Also didn't the Romans suffer from inflation when they diluted the silver content of their coins in 3rd century to fund the wars and bloated Roman government.

There was only a very brief hyperinflation of silver in Rome in 3rd century as you will see on the silver price chart (http://armstrongeconomics.com/2013/03/27/are-we-head-to-a-mad-max-scenario/). That chart cost Armstrong $21 million to produce.

Rather major core governments never go willingly to destroy their power. Instead they do what ever is necessary to maintain it. You did not read all the hyperinflation links I already gave you as follows.

http://armstrongeconomics.com/2013/03/17/what-are-the-odds-the-us-defaults/
http://armstrongeconomics.com/2013/01/28/here-we-go-again-hypreinflation/

Quote from: Martin Armstrong
I really do not understand why people insist that HYPERINFLATION must take place. That ASSUMES government will print to meet its unfunded obligations rather than just change laws and fail to meet promises. They are cutting entitlements already. Yes Rome debased its currency to the point that its worth was 1/50th of its former value. However, the system devolved into a TWO-TIER monetary system where they refused to accept their own currency in return for taxes. Taxes were imposed “in kind” so they just came and took stuff. In terms of gold, the tax was by weight not by coin so you have tax-collector gold bars that have survived.

Everything is NOT fair and orderly. One of the reasons there was the invention of paper money in the American Colonies is because there was a shortage of coins. Britain insisted anything Americans purchased they had to pay in silver or gold. But what the British purchased from America they paid in copper.

Wasn't this the reason for the fall of the Roman Empire?

No. It was debt that misallocated all the resources, just as we have now with $150 trillion in global debt, i.e. $25,000 per human including babies, elderly and billions of poor earning less than $10 per day (how can they pay their $25,000 share!).

http://esr.ibiblio.org/?p=4946&cpage=1#comment-402900

Quote from: JustSaying a.k.a. AnonyMint
@Winter:
You attempt to remove blame from the effects of top-down governance. Agriculture in Western Europe declined for numerous reasons all of which can be attributed to mismanagement due to top-down control and the funding of such misallocation. Socialized debt is a future tax. The agricultural sector was suffering under increasing taxes after the hyperinflation of the 3rd century had adversely impacted funding for the military while there were increasing military threats to the east. Pottery records indicate production increased through the 4th, as the rural sector was squeezed for every drop by Rome. As with all debt funding, growth was too rapid, and irrigation was polluted by clearing for too many new settlements. The resultant malnutrition, declining production, localized warlords, and thus disease coincided with the collapse of Western Europe due to the bankruptcy of its top-down militarized, servitude model.

We will likely find the same top-down cause applies to of all Dark Ages– even the famines in Africa.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 14, 2014, 08:34:14 PM
How about Zerocoin? Soon to be released

http://spar.isi.jhu.edu/~mgreen/ZerocoinOakland.pdf

Someone way more versed in crypto than me will have to be judge of that

I have already explained three times upthread that Zerocoin can not work and unlikely to work efficiently and with sufficient confidence any time soon.

https://bitcointalk.org/index.php?topic=455141.msg5097342#msg5097342
https://bitcointalk.org/index.php?topic=455141.msg5128980#msg5128980

It is not soon to be released. If someone releases in an altcoin as it currently stands, it will have egregious efficiency and confidence issues. Nobody has yet figured out how to make it efficient enough to work.

It doesn't appear to be a trivial problem that will be solved any time soon. And even if so, the crypto is too new and exotic to trust for at least another 5 - 10 years of cryptographers trying to crack it.

Whereas, the always-on-by-default anonymity that I have envisioned is based on a well known information theoretic security model (a hint about my secrets).


Edit: Adam Beck mentioned some related new work coming soon, and I believe it might this yet to be published Zerocash (http://www.scipr-lab.org/). In that linked list of prior publications appear to be work related to CoinWitness (https://bitcointalk.org/index.php?topic=428589.msg5275633#msg5275633).


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 14, 2014, 09:20:46 PM
I don't believe PoS (proof-of-stake) is secure and it is inherently top-down control not decentralized crypto-currency. See my upthread explanations linked as follows. I have deleted your post, because you quoted the entire OP and only wrote the one sentence above.
When the price increase there is a huge selling pressure on those who have the largest stakes. That can be seen with Bitcoin where there is a 17% dishoarding rate every doubling and also with NXT for instance (https://bitcointalk.org/index.php?topic=345619.msg5098747#msg5098747).

Basically the more adoption, the more the stakes are decentralized, the less trust is needed. Price increase (i.e time) is a force of decentralization.

I really appreciate challenges of this quality. Thank you.

A fundamental tenet of investing is buy low, sell high. So if we view these coins as investments, we would expect the larger holders to cash out on price rises, and buy back in on dips. And generally to lighten holdings as price trends higher. Because the wealthy could get trapped in an illiquid investment if they end up owning most of it at a very high valuation.

Also if we view these coins as cash, we would expect the wealthy would not hold most of their wealth in cash.

However, if we view a coin as the money system of society and we view control over the coin akin to control of a central bank, then we can expect the wealthy to obtain the majority of the shares of the central bank. As far as I know, this is in fact what they did in the Bank of England and the creation of the U.S. Federal Reserve.

If there was some profit to be made from processing blocks in PoS, then there would be a profit motive for obtaining more shares in the currency. Otherwise, the interest in monopolizing PoS shares will only come when the currency is a dominant political and economic factor in the real economy. At that point, the wealthy buy up say 50 - 80% of the shares, then the remaining shares become the cash in the economy and the wealthy hold their shares as if they are shares in a central bank. The point is that nobody will sell off the currency at this point because it is the dominant one. At that point, you are right back to a fiat system. Buying up that 50 - 80% share would likely drive the price higher, thus further cementing the dominant role in the economy and the lust to hold it. If they do this as a transfer of dollars to the coin, i.e. hyperinflation of the dollar, then there is no dollar to return to any more.

I rather think they will long before that take control of these PoS systems with the much easier (less drastic) route of tax and regulation. Since I am looking at the design of how anonymity is achieved by integration with PoW mining (and that is a hint about my secrets), I am doubting that PoS anonymity can be made as strong. Thus PoS will be more susceptible to this form of government takeover.

Also I think PoS will be insecure at all times, because the ordering of who is selected to process a block can be gamed, e.g. who selects the initial seed of the pseudo-random generator and who selects the ids of the shares.

And I don't see how the fact that you cannot distribute new coins is relevant to the security issue.

How do you dilute the shares of the wealthy who will otherwise own all wealth due to guaranteed ROI of usury backstopped by their control of government and that they don't spend their wealth on consumption?

Additionally I have explained above how I think PoS devolves to a fiat which I explained is a vacuous form of security if the threat is the boogeyman of fiat (thus Paypal, VISA, and Mastercard), thus only PoW is decentralized. And I also explained upthread why I think funding PoW from transaction fees destroys its decentralization. Thus only perpetual new coins will sustain PoW.

But the really big marketing problem with PoS is how to distribute the new currency in the startup phase to maximize interest and adoption? Adam Beck discussed that towards the end of this interview:

Adam Back discusses centralization due to pools at 25 min, regulation at 30min, and non-anonymity coin taint fungibility at 49 min:
http://letstalkbitcoin.com/e77-the-adam-back-interview/#.UuK0zWTTnrk

By distributing new coins via mining, miners are motivated because they can compete to gain a more competitive ranking in the coin ownership. If the PoW is cpu-only as Bitcoin was when half of its coins were mined, can potentially get the entire population excited about mining.

How can PoS attain similar marketing and adoption?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 14, 2014, 09:52:25 PM
Bitcoin might not be the right cryptocurrenciy, but it will probably stay in use for a couple of years till this community has settled upon what to do next.

Thank you all for doing what you're doing!

Thank you for the appreciation.

It appears to me that Bitcoin will be around and growing for a long time, assuming that all the exchanges and miners can be brought into control of the government, which appears to be what is occurring now. After these controls are in place, then it can be allowed to go out to the masses. I believe this pause in the price rise coincides with the time needed to make this transformation.

For as long as Bitcoin is really just a dollar (http://armstrongeconomics.com/2014/02/14/understanding-the-unit-of-account/) (e.g. most merchants use something like Bitpay instead of receiving Bitcoins they receive fiat), then control over the exchanges (including localbitcoins which I noticed is ramping up KYC compliance) is sufficient control to tax everyone.

How else would you cash out anonymously?

All the anonymity I could add to a coin wouldn't stop the government from knowing if you still cashed out via an exchange which is required to report to the government your identity. There would still be other uses of the anonymity, such as government and others wouldn't necessarily know all the details of your coin spends that were to entities that don't know your identity.

Thus we need to aim for a coin that becomes the unit-of-account for its sub-economy, i.e. I am suggesting the Knowledge Age may produce a bifurcated economy-- the physical and the virtual commerce. If we keep our coins and used them to spend in the virtual economy instead of exchanging them for dollars, then we would create this bifurcated economy with a unit-of-account which is not the dollar.

The coming confiscations in the physical economy will motivate the virtual economy to break away, since it is a much more productive sector and doesn't want to be retarded by the dying industrial age (e.g. massive manufacturing overcapacity in China).

I don't think Bitcoin is best suited to match the needs of this virtual economy. Bitcoin lacks ZERO transaction fees. Why should we pay for transactions in this new virtual economy when we don't need to and it is actually detrimental as I explained upthread. Bitcoin lacks always-on-by-default strong anonymity. Bitcoin doesn't keep pools small to keep transaction processing highly decentralized. Etc...........


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: cAPSLOCK on February 14, 2014, 10:23:20 PM
By distributing new coins via mining, miners are motivated because they can compete to gain a more competitive ranking in the coin ownership. If the PoW is cpu-only as Bitcoin was when half of its coins were mined, can potentially get the entire population excited about mining.

How can PoS attain similar marketing and adoption?

ASIC resistant coins like Protoshares for example just end up with people running server farms of hyperthreaded multicore CPUs.  In the end you end up with the same problem though perhaps not as stark.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 15, 2014, 12:09:55 AM
By distributing new coins via mining, miners are motivated because they can compete to gain a more competitive ranking in the coin ownership. If the PoW is cpu-only as Bitcoin was when half of its coins were mined, can potentially get the entire population excited about mining.

How can PoS attain similar marketing and adoption?

ASIC resistant coins like Protoshares for example just end up with people running server farms of hyperthreaded multicore CPUs.  In the end you end up with the same problem though perhaps not as stark.

I don't agree (https://bitcointalk.org/index.php?topic=379601.msg4383473#msg4383473) that Protoshares is ASIC resistant. It is compute bound and thus it can be implemented to run more efficiently on an ASIC. The cpu-only PoW can not be compute bound (and that is yet another hint of my secrets).

But your point isn't that Protoshares will remain cpu-only, rather you are claiming that while a coin can be mined with a cpu (ASICs not yet developed for it), then server farms will dominate the mining.

I have a solid logic as to why I don't agree.

For the moment the masses are not interested in mining Protoshares because a) it isn't popular enough yet, b) the mining client isn't something Grandma could download and operate, c) Protoshares development was funded by the Chinese so they were ready from way before release to mine it with server farms.

Once the masses are mining they will mine at a loss, because their electricity costs will exceed the value of the coin. They won't care, because the coin value is rising, they won't notice the change to their electric bill, and the virgin anonymous coin is intrinsically worth more (even if sells for same price) than a coin obtained via an exchange. I think it has been established that the cost of mining determines the price of the coin, so this will push the price of the coin higher and higher much faster than Bitcoin (because the hardware is already owned, i.e. the value of all the PCs in the world gets moved into the marketcap of the cpu-only altcoin).

Thus server farms won't be profitable. Perhaps only micro-hydropower stream driven mining will be profitable. This was really a major epiphany when it hit me, I said "A ha!, this is it!".


With cpu-only mining, I envision that economies-of-scale with huge rigs located in cooled data centers will earn less ROI than carting some PCs to a stream and running microhydropower, because I estimate the by-far lowest cost energy (micro-hydropower) will outweigh the very minimal cost-scaling advantages of a tower of PCs. Thus I see the (small, reasonable, annual rate of new coins or Freicoin's demurrage) redistribution of wealth going to the smaller guys with the most initiative, who are driving new technologies for harvesting renewable energy, i.e. the antithesis of waste.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: moolaching on February 15, 2014, 01:40:52 AM
Name new altcoin Digitoin, Masscoin, PCcoin, Silicoin, Ubiqoin, or Unigit ...?

Requesting your vote (https://bitcointalk.org/index.php?topic=458443.0).


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 15, 2014, 02:26:56 AM
Broken fungibility could destroy Bitcoin, as Bitcoin would not longer have just one price.

Adam Back discusses centralization due to pools at 25 min, regulation at 30min, and non-anonymity coin taint fungibility at 49 min:
http://letstalkbitcoin.com/e77-the-adam-back-interview/#.UuK0zWTTnrk

Adam admitted that Bitcoin's fungibility model is fundamentally flawed and broken!

... and the virgin anonymous coin is intrinsically worth more (even if sells for same price) than a coin obtained via an exchange.

mtgox 1btc = $360
coinbase 1btc = $650

Spread is now ~45%. Those assholes at mtgox have a license to print money: buy their own cheap btc from panic sellers, don't allow anyone else to transfer out but themselves, sell on another exchange like coinbase for an instant 100% gain, rinse, and repeat. Maybe that's the plan all along, criminals...


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: coinmuse on February 15, 2014, 02:42:25 AM
So, I am left wondering why this requirement is listed for the killer alt coin in the OP;

"provably cpu-only mining"

It seems to me that now that SHA 256 ASICs exit that are much less electricity hungry, that they would get pointed to the alt coin as BTC becomes too hard to mine.  That hardware can ONLY mine coins.  As BTC gets too difficult, owners of older ASICs will simply point them at other SHA 256 coins.  That is my theory.  Am I missing something?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 15, 2014, 03:39:07 AM
So, I am left wondering why this requirement is listed for the killer alt coin in the OP;

"provably cpu-only mining"

It seems to me that now that SHA 256 ASICs exit that are much less electricity hungry, that they would get pointed to the alt coin as BTC becomes too hard to mine.  That hardware can ONLY mine coins.  As BTC gets too difficult, owners of older ASICs will simply point them at other SHA 256 coins.  That is my theory.  Am I missing something?

Are you thinking that a SHA 256 ASIC could be used to mine the proposed altcoin? The "provably cpu-only mining" means never could any ASIC nor GPU profitably mine the proposed altcoin.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 15, 2014, 10:54:14 AM
From private message (I do speak behind the scenes with those who disagree with me):

Quote
And besides all of that, I have long ago pointed out that Bitcoin is modular by nature.  If any of the alt coins come up with a superior system, Bitcoin could simply adapt to that new feature if there is a general consensus that said feature was truly superior.  Bitcoin isn't static, in short, and your analysis of problems all assume that there isn't an intellectual response by the userbase.  Perhaps it comes down to faith, but if you don't have any, why are you trying so hard?  Peter Schiff has no faith in Bitcoin, but nor is he here.

In the Adam Beck interview he says that drastic changes can not be made to Bitcoin until they've been heavily tested by an altcoin, because the risk to Bitcoin of an error is far too great. But by the time they've been heavily tested in altcoin, it is very possible for that altcoin to have established itself.

And there is one thing that Bitcoin will never implement, and that is always-on-by-default strong IP address anonymity. The vested interests (pools, exchanges, payment providers such as Bitpay) would never allow this, because they would fear government retribution. There is already too much inertia in Bitcoin being non-anonymous and thus amenable to the government KYC and AML laws.

The killer feature is cpu-only PoW, and no one knows how to do it.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 15, 2014, 11:18:24 AM
Bitcoin Killer Altcoin

The Bitcoin killer will thus have at least the following features.

  • faster 1-confirmation block chain, e.g. 1 minute instead of Bitcoin's 10 min delay, if the orphan rate can be contained

A lot of altcoins can confirm in 30 seconds.

So why is bitcoins confirmation at 10 minutes?

Because that is the way it was created.  It is essentially an arbitrary attempt to balance fast confirmations against the costs of orphaned blocks due to network latency.

Is a 10 minute confirmation a good thing or bad?

Yes.

Is it possible for bitcoins confirmation time to be sped up?

Technically possible?  Yes.

Practicially possible?  No.

Anything below 1 min for block confirmation will have like 10 to 30% stall rate.

The reason Bitcoin can't reliably lower the block confirmation time is because the network latency between full nodes can not be known to be below some value. As well the validation delay can be significant for some full clients, because we don't know the hardware they are running.

Here is the discussion (https://bitcointalk.org/index.php?topic=260180) of and the equation (https://bitcointalk.org/index.php?topic=250735.msg2666847#msg2666847) for the orphan (i.e. transactions stall) rate.

This problem is theoretically solved in the holistic altcoin design I have proposed in the OP because fast network propagation and validation is assured by the design of the new hash, mini block chain account balances, mining only in pools to achieve the required anonymity while pools are prevented from being too large. I chose 1 minute to be conservative. I think this design could work reliably at 30 seconds or less. It could be lowered after extensive testing to confirm my calculations.

Also it may not be necessary (https://bitcointalk.org/index.php?topic=88302.msg971693#msg971693) to resend all transactions or separate the send from PoW header.

Edit to insert a followup:

Now, there isn't a snowballs chance in hell of all that happening on the blockchain in realtime.

That is not necessarily true. If the network propagation delay and validation time can be guaranteed to be fast enough, the block time can be lowered to what ever value the values allow for.

The issue is that full nodes would have to commit to having certain levels of connectivity and hardware. Essentially peers would need to talk directly (fully connected mesh network topology) to each other and so peers with low connectivity would suffer, but not the other peers. Thus the number of full nodes would need to be limited.

My insight is that the fully connected mesh connections between pools can be very high quality, while the connections between pools and their miners can be of varying quality. We should not look at pools as bad, rather we only need to limit their sizes so they don't overly centralized the network. Balance.

Payment processors also have to commit to certain high standards of connectivity and hardware.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: BldSwtTrs on February 15, 2014, 02:12:18 PM
I really appreciate challenges of this quality. Thank you.
:)

Quote
A fundamental tenet of investing is buy low, sell high. So if we view these coins as investments, we would expect the larger holders to cash out on price rises, and buy back in on dips. And generally to lighten holdings as price trends higher. Because the wealthy could get trapped in an illiquid investment if they end up owning most of it at a very high valuation.

Also if we view these coins as cash, we would expect the wealthy would not hold most of their wealth in cash.

However, if we view a coin as the money system of society and we view control over the coin akin to control of a central bank, then we can expect the wealthy to obtain the majority of the shares of the central bank. As far as I know, this is in fact what they did in the Bank of England and the creation of the U.S. Federal Reserve.
The important thing here is the stakeholders perception. Empirical observation shows that stakeholders are viewing their stake as an investment, not as a stake of the future money system.

During the ascension of the coin, they don't make theirs decisions as if they had a stake in the money system of the society, they make their decision as if they had a normal investment. So they sell when the price increase. And by the time a cryptocoin will become the money system of society, the bigger stakeholders will be vastly diluted by their own profit taking and risk managing.

Central banking was not instaured because the wealthy has most of the money supply but because of political coercition. The wealthy were not wealthy enough to control the money supply by themselves, so they use coercition to obtain that control.

Quote
If there was some profit to be made from processing blocks in PoS, then there would be a profit motive for obtaining more shares in the currency. Otherwise, the interest in monopolizing PoS shares will only come when the currency is a dominant political and economic factor in the real economy. At that point, the wealthy buy up say 50 - 80% of the shares, then the remaining shares become the cash in the economy and the wealthy hold their shares as if they are shares in a central bank. The point is that nobody will sell off the currency at this point because it is the dominant one. At that point, you are right back to a fiat system. Buying up that 50 - 80% share would likely drive the price higher, thus further cementing the dominant role in the economy and the lust to hold it. If they do this as a transfer of dollars to the coin, i.e. hyperinflation of the dollar, then there is no dollar to return to any more.
Neither NXT or Bitshare will be profitable for miners, see this thread for NXT https://bitcointalk.org/index.php?topic=458036.0. The ROI for NXT "mining" will be something like 0,05% per year, no incentive to hoard here. I don't understand the technical detail but I know Bitshares will implement also something that will make mining unprofitable.

By the time the currency become the dominant one, the wealthy will not be able to acquire a significant stake in it. Again, even the wealthiest aren't wealthy enough to have a significant stake in fiat.
How can PoS attain similar marketing and adoption?
For instance the distribution of PTS is done by POW mining, and PTS give a stake in Bitshares, which is PoS. So with Bitshares you have a PoS coin where coin distribution is done by mining. The best of both world.

Also when Bitcoin was mineable with a CPU, only a tiny fraction of the population was aware of what's going on. I think it's quite possible that today more people have the possibility to have a stake in a PoS coin via an IPO, than people had the possibility to mine Bitcoin in 2009/2010.
Recently roughly 2m$ were burnt for the distribution of XCP. I think a lot less than 2 millions $ were spend in BTC mining materiel in 2009. Furthermore we can except that several dozen m$ will be dedicated for the acquistion of Etherium coins.

Today if more ressources are devoted to coins acquisition than before, it's because there is more awareness among the crowd. More ressources devoted to coin acquisition mean today's coin (included PoS coins) start with a level of marketing/adoption which is way higher that the first PoW coins had.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 15, 2014, 10:31:09 PM
Quote
A fundamental tenet of investing is buy low, sell high. So if we view these coins as investments, we would expect the larger holders to cash out on price rises, and buy back in on dips. And generally to lighten holdings as price trends higher. Because the wealthy could get trapped in an illiquid investment if they end up owning most of it at a very high valuation.

Also if we view these coins as cash, we would expect the wealthy would not hold most of their wealth in cash.

However, if we view a coin as the money system of society and we view control over the coin akin to control of a central bank, then we can expect the wealthy to obtain the majority of the shares of the central bank. As far as I know, this is in fact what they did in the Bank of England and the creation of the U.S. Federal Reserve.

The important thing here is the stakeholders perception. Empirical observation shows that stakeholders are viewing their stake as an investment, not as a stake of the future money system.

During the ascension of the coin, they don't make theirs decisions as if they had a stake in the money system of the society, they make their decision as if they had a normal investment. So they sell when the price increase. And by the time a cryptocoin will become the money system of society, the bigger stakeholders will be vastly diluted by their own profit taking and risk managing.

Central banking was not instaured because the wealthy has most of the money supply but because of political coercition. The wealthy were not wealthy enough to control the money supply by themselves, so they use coercition to obtain that control.

They control all the fiat and credit of the world via the Central Banks. I surmise they can surely buy up a PoS system, transferring their control from existing fiat to this new fiat PoS system.

Quote
If there was some profit to be made from processing blocks in PoS, then there would be a profit motive for obtaining more shares in the currency. Otherwise, the interest in monopolizing PoS shares will only come when the currency is a dominant political and economic factor in the real economy. At that point, the wealthy buy up say 50 - 80% of the shares, then the remaining shares become the cash in the economy and the wealthy hold their shares as if they are shares in a central bank. The point is that nobody will sell off the currency at this point because it is the dominant one. At that point, you are right back to a fiat system. Buying up that 50 - 80% share would likely drive the price higher, thus further cementing the dominant role in the economy and the lust to hold it. If they do this as a transfer of dollars to the coin, i.e. hyperinflation of the dollar, then there is no dollar to return to any more.

Neither NXT or Bitshare will be profitable for miners, see this thread for NXT https://bitcointalk.org/index.php?topic=458036.0. The ROI for NXT "mining" will be something like 0,05% per year, no incentive to hoard here. I don't understand the technical detail but I know Bitshares will implement also something that will make mining unprofitable.

Tragedy of the Commons. These systems won't be secure. Their designers are Communists disguised in Austrian economics facade, i.e. wolves in sheepskin.

How can PoS attain similar marketing and adoption?

For instance the distribution of PTS is done by POW mining, and PTS give a stake in Bitshares, which is PoS. So with Bitshares you have a PoS coin where coin distribution is done by mining. The best of both world.

Sorry this is not the "best of both worlds". This is a Frankenstein combo. The perpetual security of mining and ongoing (small, reasonable, annual percentage akin to gold's debasement rate) redistribution of wealth from the upper 1% to those who apply their ingenuity, risk, and effort to provide the security is replaced with a Tragedy of the Commons which is precisely the power vacuum chaos that will demand a leader step in and take control, i.e. fiat.

Bitcoin has similar Tragedy of the Commons problem, because new coin rewards decline and are replaced by transaction fees. I have explained this exhaustively already, so I won't repeat the argument.

Also when Bitcoin was mineable with a CPU, only a tiny fraction of the population was aware of what's going on. I think it's quite possible that today more people have the possibility to have a stake in a PoS coin via an IPO, than people had the possibility to mine Bitcoin in 2009/2010.

A one time event, like a land rush for money. Brilliant.  ::)  :'(

They have no clue about the Austrian theory of how money comes to be adopted (https://bitcointalk.org/index.php?topic=342007.msg3788271#msg3788271), nor any sane logic about how to make a coin that sustains adoption and security growth ongoing.

Recently roughly 2m$ were burnt for the distribution of XCP. I think a lot less than 2 millions $ were spend in BTC mining materiel in 2009.

Scams abound now.

Furthermore we can except that several dozen m$ will be dedicated for the acquistion of Etherium coins.

I thought it was a PoW coin. Are they doing a land rush sale of a pre-mine? Or do you mean invested in mining it at launch?

Today if more ressources are devoted to coins acquisition than before, it's because there is more awareness among the crowd. More ressources devoted to coin acquisition mean today's coin (included PoS coins) start with a level of marketing/adoption which is way higher that the first PoW coins had.

Agreed. But this should be done through competitive mining, as this is a decentralized security and money model ongoing.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on February 16, 2014, 03:40:05 AM
From private message (I do speak behind the scenes with those who disagree with me):

Quote
And besides all of that, I have long ago pointed out that Bitcoin is modular by nature.  If any of the alt coins come up with a superior system, Bitcoin could simply adapt to that new feature if there is a general consensus that said feature was truly superior.  Bitcoin isn't static, in short, and your analysis of problems all assume that there isn't an intellectual response by the userbase.  Perhaps it comes down to faith, but if you don't have any, why are you trying so hard?  Peter Schiff has no faith in Bitcoin, but nor is he here.

In the Adam Beck interview he says that drastic changes can not be made to Bitcoin until they've been heavily tested by an altcoin, because the risk to Bitcoin of an error is far too great. But by the time they've been heavily tested in altcoin, it is very possible for that altcoin to have established itself.


Addressing only this point.  This is Adam Beck's perspective on this only.  He is likely correct, but if the alt-coin killer feature is obvious after implementation, Bitcoiners will quickly choose to either migrate to the new coin (selling their stake in Bitcoin, and therefore losing interest in the outcome) or advocate for the change to be completed quickly.  Or both at the same time.  In the long run, it doesn't really matter which is true, or whether or not Bitcoin remains the cryptocurrency of choice.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 16, 2014, 03:13:41 PM
I wrote upthread (https://bitcointalk.org/index.php?topic=455141.msg5128980#msg5128980) that I am not that fearful of hyperinflation due to a proliferation of altcoins. To expound a bit, I doubt very much the market will choose to give equal weighting to numerous xerox coins. I think the market will focus in on one winner, or possibly two for example if one coin needs to be 90+% anonymous and the other needs to be compliant with government oversight. Perhaps someone can think of another market segmentation for why we might need 3 dominant coins. And the market may invest in a few best alternatives at lower market caps to keep the leading coin(s) honest, e.g. analogous to the bimetallic gold and silver standard. This should stabilize and not spiral off into hyperinflation, due the value of network effects, the market cost of changing brands (a.k.a. good will ... see how much difficulty moolaching has in finding a good alternative brand name (https://bitcointalk.org/index.php?topic=458443.0)), and the fact that the variables for a better design are limited (eventually we will stabilize and not be able to find a much better design any more). I agree with Adam Beck that we should try to find the minimum set of features that need to be in the coin protocol, so that extra features can be built orthogonally on top of that base protocol.

Also currency is not a store-of-value. It never has been due to Gresham's Law. The purpose of the dominant currency is unit-of-exchange. If you make the currency too finite (Impaler uses the word too "hard"), the bad (more debased) currency drives it out-of-circulation. Just look what happened to silver coinage in the 1960s all over the world it disappeared into private hoards. Note Gresham's Law requires the force of legal tender, i.e. the bad currency must be the one sanctioned by society.

So if we really want to build a dominant currency, we need perpetual debasement (or Impaler's Freicoin demurrage). And Bitcoin is never going to change to that because there are people who don't understand what I have written in this thread about perpetual debasement, and they will not change their (I assert is incorrect) logic any time soon. To change that in Bitcoin would fork the coin.


Edit: https://bitcointalk.org/index.php?topic=483989.msg5346113#msg5346113

I wonder what the future holds since there's always going to be new altcoins. Will any one coin really benefit? If one becomes too popular, then a new one is launched to try and recreate it and make some money.

The market will not take seriously copycat altcoins, because the vast amount of development resources will be in the serious coin that was first and done right.

Markets demand a winner, because otherwise there is no value and the entire crypto-currency concept dies.

Although the barrier to entry for a new innovative altcoin is not insurmountable as I explained (https://bitcointalk.org/index.php?topic=455141.0), the network efforts are (https://bitcointalk.org/index.php?topic=455141.msg5178824#msg5178824) such that an exact copycat is not a replacement good.

Thus most (but not all) of these altcoins are just pump-n-dump schemes and (possibly ephemeral) marketing manias analogous to Beanie Babies (http://en.wikipedia.org/wiki/Beanie_Babies).


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: CoinCube on February 16, 2014, 04:38:57 PM
This does not contribute to the topic, but as my first post, I want to say that I'm truly amazed of the quality of this community. In fact, I think many contributers here are more serious than the players of the world economy.

I have likewise been very impressed by the community.

I first came across some of the concepts discussed up-thread in a few months back.
https://bitcointalk.org/index.php?topic=342007.0

Since then the OP has managed to convert about a third of the audience to his point of view.
That is impressive considering that the initial reception was so poor and he was battling against entrenched views.

Regardless of the OP plans for his own alt coin. I think a critical mass has been obtained and market has is now primed. I know that I personally will be taking a very close look all upcoming alt-coins with strong built in anonymity.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 16, 2014, 04:47:18 PM
Regardless of the OP plans for his own alt coin. I think a critical mass has been obtained and market has is now primed. I know that I personally will be taking a very close look all upcoming alt-coins with strong built in anonymity.

I too am interested if any group can implement some or all of the proposed ideas. Also I am interested to study some of the orthogonal ideas (not mining security design nor anonymity) coming out of the Etherium project.

I too appreciate the quality of the community and especially that you did not get put-off by our discussion about AGW in the other thread to emotionally change your views on this issue.

Note cpu-only may be as or more important than stronger anonymity, as well the economic implications of the design to fund mining security not from transaction fees.

I am very appreciative of the rationality of the debate thus far in this thread. For example, rationally there was no falsifiable proof made on PoW vs. PoS, rather readers will have to form their own opinion from the debate. For non-falsifiable issues, the market must decide.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: CoinCube on February 16, 2014, 04:58:06 PM
I appreciate it and especially that you did not get put-off by our discussion about AGW in the other thread to change your views on this issue.

Completely separate issues it would not be rational to conflate them.
In fact one could even argue that to do so would have made me a myopic dimwit and insane.

 :D





Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 16, 2014, 04:58:40 PM
thanks :-[

(I am so tired of hearing from self-important, do-gooders who want to stomp on the free market. I was in California too long I guess. Now they want to tax breathing, i.e. carbon, so they can protect their perfect suburban habitat of manicured lawns. Spain even taxes sunlight. Efficiency and conservation? It is always the other guy. I program from a Nipa Hut and there is no lawn nor sidewalk rather chaotic natural weeds and mud. So please don't tell me about conservation. Do it. Instead they always want to spend other people's money. Guard your wallet! That is what this thread is about accomplishing.)

P.S. I further refuted (https://bitcointalk.org/index.php?topic=355212.msg5175958#msg5175958) the myopia that says electricity consumption with PoW is a problem.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: BldSwtTrs on February 16, 2014, 05:22:53 PM
They control all the fiat and credit of the world via the Central Banks. I surmise they can surely buy up a PoS system, transferring their control from existing fiat to this new fiat PoS system.
I think by the time a PoS system become big, it will be too expansive to buy it, even for the wealthiest. Therefore they will need to buy it somewhere in its ascent, and that will deter the market to use it and another PoS system will win the adoption race.

And all of that is assuming there will be only one dominant currency. Which will probably not be the case. A lot of the socialist thinking come from the false premise that free market lead to monopolies. In the same manner that there is not one corporation which address each human wish, there will be no unique money. And if the wealthiest will not be able to even capture one succesful PoS system, a fortiori they won't be able to capture all the succesful PoS system.

Quote
Tragedy of the Commons. These systems won't be secure. Their designers are Communists disguised in Austrian economics facade, i.e. wolves in sheepskin.
I need to do some research to see what incentives are planned fo "miners". I would be surprised if there were not.
Quote
A one time event, like a land rush for money. Brilliant.  ::)  :'(
It was not a rush for money, it was a rush for a highly speculative investment.

There is no money here and now in the cryptos landscape, only speculative investments. In your reasoning you can't treat something that is only a speculative investment as if it was already the money system of the society. It's a logical fallacy.
Quote
They have no clue about the Austrian theory of how money comes to be adopted (https://bitcointalk.org/index.php?topic=342007.msg3788271#msg3788271), nor any sane logic about how to make a coin that sustains adoption and security growth ongoing.
A lot of Austrian economists have no clue either. How many of them disdain Bitcoin because it doesn't fit Mises' regression theorem?

See Hayek for the competition in money. He did understand Austrian economics and his views on money are more relevant than the all of the Austrian crowd together imo.
Quote
Scams abound now.
XCP is the antithesis of a scam. It was distributed by proof of burn, even the developpers had to burn their BTC to get some. It's arguably the fairest coin distribution since Bitcoin.
Quote
I thought it was a PoW coin. Are they doing a land rush sale of a pre-mine? Or do you mean invested in mining it at launch?
They are doing both. They will issue X ether via an IPO and then 0.4*X ether will be distributed each year via PoW.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 16, 2014, 06:51:41 PM
On this issue of having accounts to pay with instead of use BTC base money (i.e. cash), I already pointed out upthread that if I must have a zillion separate accounts, it is going to drive me crazy. I already have too many accounts on the internet to keep track of.

Instead a dominant set of providers would take over and we are right back to VISA, Mastercard, and Paypal again. Nothing gained. Why did we waste our fucking time inventing Bitcoin then.

So I entirely disagree that we need accounts for most things. We can build services that operate on the block chain without needing store funds in an account for those services. We can pay as we go, utilizing the block chain. This is the future.

We need less overhead in our lives, not more. Accounts are proliferated overhead and/or centralizing. We need decentralized freedom.

Also if accounts are holding our balances then they will naturally end up leveraged, i.e. fractional reserves. This is a repeating phenomenon throughout the history of man. We needed accounts when base money was gold, but we don't need them now. Our technology has improved. Money is no longer physical.

To backup our keys without giving a masterkey to a coinbase, we need to have physical copies of backups. Use a Print key or copy to removable memory card. Your software should tell you when to print/copy and store in your physical safe. If you find it more convenient and safe to have coinbase hold your masterkey, then you are giving up your anonymity because they will need to identify you if ever you lose your password.

In practice using 5 minutes or even 1 minute doesn't help as much as you'd expect, because it's still too long to wait in retail. It has a downside in that it leads to more resources wasted on discarded blocks.

As I explained upthread, a design is possible to bring each block chain confirmation down to 30 seconds or less and avoid the orphaned blocks.

Please don't be disingenuous to imply it is not possible. If you are merely stating that no altcoin has yet done such a holistic design, then I agree with you.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 17, 2014, 01:49:21 AM
I don't claim to be omniscient, so everyone should proceed with what they want to experiment with. Let's see how it ends up.

They control all the fiat and credit of the world via the Central Banks. I surmise they can surely buy up a PoS system, transferring their control from existing fiat to this new fiat PoS system.

I think by the time a PoS system become big, it will be too expansive to buy it, even for the wealthiest. Therefore they will need to buy it somewhere in its ascent, and that will deter the market to use it and another PoS system will win the adoption race.

I am confident that if it reached 10% of the dollar's reach, the USA government would act to protect the dollar's hegemony well before it had destroyed the dollar.

Besides they can tax it at will, especially since there is no strong anonymity in these PoS systems. I believe they can't build in the anonymity, because the only way I could contemplate to do this was via the pool mining (and PoS doesn't have pool mining).  ;)

Thus they can drain value from it back to dollar.

The NSA is tasked to pay attention to security threats to the hegemony. I doubt they are oblivious.

And all of that is assuming there will be only one dominant currency. Which will probably not be the case. A lot of the socialist thinking come from the false premise that free market lead to monopolies. In the same manner that there is not one corporation which address each human wish, there will be no unique money. And if the wealthiest will not be able to even capture one succesful PoS system, a fortiori they won't be able to capture all the succesful PoS system.

The current plan of the globalist elite is for a single global base currency, tentatively called "SDR", then the regional and national currencies will float against.

W.r.t. to the physical economy which government will always be able to tax and thus control, they will make sure the crypto-currencies float against this global reserve unit.

I don't propose to challenge that plan. I don't think anyone can.

Rather I propose that if we successfully make a crypto-currency strongly anonymous that can withstand the NSA, then we also have to protect the other means to controlling it, because (I assume) the government's plan is to control the cryto-currencies through taxation, giving them an unfavorable tax rate relative to the SDR. So if they are faced with a currency they can't tax in the virtual economy, I think they would attack it any other way, such as 51% attack for PoW or buying up a majority shares for PoS.

Thus I conclude PoS is unworkable as the strongly anonymous coin. If I have a failure in my logic or have stated something subjective, please point it out.

Quote
Tragedy of the Commons. These systems won't be secure. Their designers are Communists disguised in Austrian economics facade, i.e. wolves in sheepskin.

I need to do some research to see what incentives are planned fo "miners". I would be surprised if there were not.

They will try to obfuscate and confuse you (and themselves) on this issue by employing much complex discussion and design, but in the end they can't avoid this because this was the genius of the PoW invention.

Quote
A one time event, like a land rush for money. Brilliant.  ::)  :'(

It was not a rush for money, it was a rush for a highly speculative investment.

There is no money here and now in the cryptos landscape, only speculative investments. In your reasoning you can't treat something that is only a speculative investment as if it was already the money system of the society. It's a logical fallacy.
Quote
They have no clue about the Austrian theory of how money comes to be adopted (https://bitcointalk.org/index.php?topic=342007.msg3788271#msg3788271), nor any sane logic about how to make a coin that sustains adoption and security growth ongoing.
A lot of Austrian economists have no clue either. How many of them disdain Bitcoin because it doesn't fit Mises' regression theorem?

See Hayek for the competition in money. He did understand Austrian economics and his views on money are more relevant than the all of the Austrian crowd together imo.

My (and the Austrian) point is that money has to gain adoption over a period of time, so we need a system that provides continuous competitive distribution, not a one-shot affair.

The PoS IPO is the antithesis of currency distribution, because the wealthy spend a fraction of their wealth on consumption. So you won't be distributing this coin from wealthy to merchants, rather from wealthy to the greater fool investor. The mechanism isn't there to create a currency. The greater fool investor isn't buying it to spend as a currency, rather buying in frenzy, then a collapse in price. There is no mechanism to adopt the use as a currency. Whereas with cpu-only PoW, the currency gets pushed out via home-scale mining to anyone with PC. The home-scale miner is selling it to the wealthy. This is night and day in terms of currency distribution.

Whereas with cpu-only PoW, we are continuously diluting the wealthy (at a small, reasonable annual debasement) to get the coin into consumer's hands.

Do the wealthy play an important role? Yes indeed. They invest after the early adopters (another reason you don't want the IPO at the very start). Balance. Balance. Balance. PoS doesn't have it.

Quote
Scams abound now.

XCP is the antithesis of a scam. It was distributed by proof of burn, even the developpers had to burn their BTC to get some. It's arguably the fairest coin distribution since Bitcoin.

Ditto logic I wrote above. Thus they are not currency distributions. It appears they are some genre of pyramid scheme (for a lack of a better term to describe greater fool selling of what can't be a currency to people who think it can be).

Quote
I thought it was a PoW coin. Are they doing a land rush sale of a pre-mine? Or do you mean invested in mining it at launch?

They are doing both. They will issue X ether via an IPO and then 0.4*X ether will be distributed each year via PoW.

Maybe they should read this post of mine.

Any way, I think there comes a time for me to stop arguing with words (https://bitcointalk.org/index.php?topic=465474.msg5188103#msg5188103).


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: rpietila on February 17, 2014, 10:03:05 AM
Auroracoin (http://auroracoin.org/) is an interesting approach of provably giving most of the the coins away equitably for free in a non-wasteful procedure.

Last time I checked it was trading at $40M post-airdrop marketcap.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 17, 2014, 07:18:01 PM
Auroracoin (http://auroracoin.org/) is an interesting approach of provably giving most of the the coins away equitably for free in a non-wasteful procedure.

Last time I checked it was trading at $40M post-airdrop marketcap.

I have never agreed with giving coins away for free. Jason Hommel ingrained into my mind (https://web.archive.org/web/20130401040049/http://forum.bittorrent.org/viewtopic.php?id=28), "you can't give away something for free which isn't free". I am writing about distribution efficiency for currency.

Perhaps you are writing this in support of my argument and not still thinking that I am proposing giving anything away for free? I don't think you are arguing Auroracoin will be a positive outcome, because you explained to me in the past how when the former Soviets distributed formerly collectively owned land back to the individuals, the recipients promptly sold it and consumed the revenues (on Vodka, etc). The poorest of the Icelanders will promptly sell the Auroracoin driving the price down or retarding its price growth! I have no qualms about home-PC miners spending their recently mined coins at a net-loss[1] if they so desire, as this increases the velocity of money and is totally different as they have recent electric bill cost to factor in.

Miners compete to earn a profit. The only socialist aspect is the perpetual coin rewards (debasement). As I have explained upthread, this is necessary (and it is why socialism exists), because otherwise the wealthy will destroy themselves (and society) because usury (backstopped by purchasing the government) eventually accumulates 100% of the wealth and then we collapse the velocity of money[2] (because wealthy consume very small % of their wealth) into another feudal (lords) Dark Age.

Those (hard-on money tin foil hats) who advocate no debasement at all will actually force socialism to create a central bank. It is unavoidable that we have to dilute the usurists. It is how we go about it that is new. Now we can do it decentralized so the usurists are not in the driver's seat of the attempts to rebalance their overconcentrated wealth. And the rate of debasement is very subtle, perhaps 2 - 5% per year which is insignificant to the fast-moving entrepreneurs who are increasing their wealth much faster.

Essentially this redistributes wealth away from usurists who (inject very little new knowledge (https://bitcointalk.org/index.php?topic=355212.0) and) are a drag on the economy to fast-moving entrepreneurs who are a boon to capitalist risk and prosperity. Usurists don't take any risk at all, they buy the government backstop[3]. Thus they don't care who they loan to.

An argument which claims we can just stop the usurists from capturing the government is unrealistic. The power vacuum of democracy can't be eliminated entirely. Thus view the perpetual coin rewards more in terms of their importance for mining security, i.e. anarchistic-leaning-contentionism (https://bitcointalk.org/index.php?topic=355212.msg5202870#msg5202870) (click that link!), than for the impossible dream of eliminating all centralized wealth redistribution a.k.a. socialism.

[1] I posited upthread that the home miners will be mining at a loss (electricity will cost more than the value of the coin), and that this will drive the price of the coin higher faster than Bitcoin. I pointed out this will move the value of the existing PCs into the value of Bitcoin. Unlike with ASICs, there is nothing to buy, that capital is already idle and being wasted every night when they sleep. Thus this will skyrocket past Bitcoin! ;)

[2] V in the Quantity Theory of Money

[3] Even long-term private insurance, e.g. life or bank deposit insurance (but not insuring a package delivery), is ultimately backstopped at the government because it forces capital to be managed by a central fund manager, thus the fund manager can't lose for some and gain for others and all are locked into a single outcome, i.e. no risk allowed. Thus insurance is usury, i.e. invested in bonds.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: rpietila on February 17, 2014, 09:26:52 PM
You are right to point out that it was me who showed that such has never worked in the past. But now we have much improved technology, so I am interested to see what happens this time.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 17, 2014, 11:04:16 PM
You are right to point out that it was me who showed that such has never worked in the past. But now we have much improved technology, so I am interested to see what happens this time.

If the society of Iceland is homogeneous in its appreciation of the importance of crypto-currency, nationalism, and replacing their central bank, perhaps we could see a different outcome. But I am extremely skeptical that the distribution concept of Auroracoin would work where the population is not so aware, for the reason I stated in my prior post.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 17, 2014, 11:48:12 PM
The big picture. Where we are headed. Why this is important. Why only PoW is decentralized, positive-scaling, enforceable structure.

https://bitcointalk.org/index.php?topic=355212.msg5208846#msg5208846

Adios forum. I need a break.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 18, 2014, 11:40:35 AM
-   August 1st, 2014 could be the day they release a bitcoin killer altcoin, obviously by no means does any voodoo guesses I do have any effect on what the market ultimately does


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: vn on February 18, 2014, 11:35:51 PM
I disagree with your premise that flaws will cost investors "billions".

The bitcoins aren't going to disappear, and in order for governments (really the people behind them) to want to have them they have a vested interest in making sure they have value.

You are missing the point that the only reason governments would want bitcoin is because it has value. No value = no interest from the government.

If your argument is that some investors will lose a lot of money, then congratulations you've described just about every investment instrument that there is.

Some will lose a lot, others will gain a lot.  This isn't anything new.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 18, 2014, 11:42:42 PM
Quote from the OP:

Note the argument of an absolute network effect advantage for Bitcoin is illogical (https://bitcointalk.org/index.php?topic=279650.msg3495695#msg3495695). The network effect can lead to more mass for Bitcoin but it can't entirely shut out altcoins, not in the way that for example an internet standard shuts out alternatives due to the inertia of modifying millions of servers (https://bitcointalk.org/index.php?topic=279650.msg3515394#msg3515394) ... Friendster followed 2002 later peaking with 100+ million, Myspace 2006, and then Facebook 2008. Last year Bitcoin was only at an estimated 350,000 users. We have a long way to go to 7 billion.

Appears the number of Bitcoin users is still below 1 million (https://bitcointalk.org/index.php?topic=316297.msg5226879#msg5226879).



I disagree with your premise that flaws will cost investors "billions".

That wasn't my premise in the OP. That was the premise of Alex Daley (this thread's title quotes his article's title), and I stated his understanding is myopic and incomplete.

I suppose that was you that just voted "No" increasing the total votes from 106 to 107.

The bitcoins aren't going to disappear, and in order for governments (really the people behind them) to want to have them they have a vested interest in making sure they have value.

You are missing the point that the only reason governments would want bitcoin is because it has value. No value = no interest from the government.

No where in this thread did I assert that Bitcoin will have no value any time soon.

I have argued that if Bitcoin can't scale its transactions as fast as its price growth, then it will have a collapse in price when the investors leave and it collapses to its currency use value (https://bitcointalk.org/index.php?topic=316297.msg5227481#msg5227481). But that won't happen soon and it is not certain that transactions might start scaling faster than price. I linked to a chart which shows transactions are currently growing much slower (and much of that might be SatoshiDice dust then much of the rest investment trading, coin mixers, etc).


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 19, 2014, 10:45:56 PM
I am uber excited. I owe my gratitude to rpietila, for it is he who woke me up out of my slumber about Bitcoin March 2013. He had mentioned a couple of times before that going back I think to 2011, but it was early 2013 when he pounded the table to me in a private chat session. This demonstrates the value of the Supernodes.

I had noticed Bitcoin early on, like many of us I ignored it.

I had been working from 2008 onwards on trying to figure out how payment systems could work backed by gold and silver. I eventually came to the conclusion that they couldn't work because the physical gold and silver always has to be stored some where, and thus it is a centralized paradigm. I tried to think of ways to decentralize it, but the problem was always the transfer of the physical metal for transactions.

For some reason I didn't connect this problem to the solution of Satoshi's proof-of-work. (I think the reason was primarily emotional) I didn't have the epiphany until mid-2013 when I realized the key insight that only PoW had this expansive entropy which I have explained upthread.

When I started to look at Bitcoin in March, I realized immediately that the declining coin rewards was a fundamental weakness, that had been marketed as a strength.

As I dug deeper, I realized all the issues which culminated in the OP.

So now, it is time to sign off.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on February 20, 2014, 02:47:52 AM

Appears the number of Bitcoin users is still below 1 million (https://bitcointalk.org/index.php?topic=316297.msg5226879#msg5226879).


Funny how no one metions that you referenced your own opinions about the numbers of users.  Coinbase alone has almost 1 million accounts, not addresses.  Truthfully, we can't know how many users there are, which is kinda the point.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: tromp on February 20, 2014, 02:19:08 PM
You just try to find one finite bound of anything in the universe. You won't be able to find it. Even if you count the number of a certain species, you can't guarantee with 100% certainty it will remain less than some bound

This quote is attributed to Einstein:

"“Two things are infinite, the universe and human stupidity, and I am not yet completely sure about the universe.”"


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 21, 2014, 02:22:31 AM

Appears the number of Bitcoin users is still below 1 million (https://bitcointalk.org/index.php?topic=316297.msg5226879#msg5226879).


Funny how no one metions that you referenced your own opinions about the numbers of users.  Coinbase alone has almost 1 million accounts, not addresses.  Truthfully, we can't know how many users there are, which is kinda the point.

No I referenced and clarified the logic and data of others from the thread and clarified that there is less basis for concluding with great confidence that the number of users is greater than 1 million (an account is not a user for the reasons I stated in the linked post).

The likely number of users was 1 million or below based on the data I quoted in the linked post. The original figure used was 488,000 Coinbase accounts. I have posted (https://bitcointalk.org/index.php?topic=316297.msg5273076#msg5273076) your claim and some analysis to that thread.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on February 21, 2014, 04:59:12 AM

Appears the number of Bitcoin users is still below 1 million (https://bitcointalk.org/index.php?topic=316297.msg5226879#msg5226879).


Funny how no one metions that you referenced your own opinions about the numbers of users.  Coinbase alone has almost 1 million accounts, not addresses.  Truthfully, we can't know how many users there are, which is kinda the point.

No I referenced and clarified the logic and data of others from the thread and clarified that there is less basis for concluding with great confidence that the number of users is greater than 1 million (an account is not a user for the reasons I stated in the linked post).

The likely number of users was 1 million or below based on the data I quoted in the linked post. The original figure used was 488,000 Coinbase accounts. I have posted (https://bitcointalk.org/index.php?topic=316297.msg5273076#msg5273076) your claim and some analysis to that thread.

Unlike yourself, I didn't claim to know of any relationship between any particular claims and the real number of bitcoin users.  I honestly don't know if there are more or less than 1 Million users.  I mentioned it to highlight your lack of evidence.  Referencing the logic and "data" of others, who don't have any evidience of their own, doesn't constitute evidence either.  You do this a lot, make grand arguments that you cannot support.  I'm surprised you're not either a lawyer, a politician or a preacher.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 21, 2014, 06:11:32 AM
I have sent a post (https://bitcointalk.org/index.php?topic=428589.msg5275633#msg5275633) to Ethereum (not Etherium the game) summarizing my concerns with their technical design, and praising their vision.

MoonShadow, precisely my point is we don't know if there are 2 million "Bitcoin users"[1] and so we shouldn't cite that as a certain fact. Note your claim about a doubling in Coinbase accounts has been added to that thread so that could alter the speculation.

[1] What is a Bitcoin user? A Facebook user is someone who creates an account and returns to use it 1x per day, per month, per year, or never?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: rpietila on February 21, 2014, 08:36:38 AM
Unlike yourself, I didn't claim to know of any relationship between any particular claims and the real number of bitcoin users.  I honestly don't know if there are more or less than 1 Million users.  I mentioned it to highlight your lack of evidence.  Referencing the logic and "data" of others, who don't have any evidience of their own, doesn't constitute evidence either.  You do this a lot, make grand arguments that you cannot support.  I'm surprised you're not either a lawyer, a politician or a preacher.

The thread which I started in October, includes most of the data and reasoning behind the 2.0 million number. As perhaps the person who has put the most energy and talent to finding this out (over the last 4 months anyway), I am open to answer your questions for example if you want to define "user" in a different way, how it would affect the total.

Definition used there is "Person who directly or knowingly beneficially owns at least BTC0.001 at the time of census."

If Mt.Gox never pays out, there will be a dent in # of owners...


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: CoinMode on February 21, 2014, 09:03:54 AM
Is this guy serious? He sets up a pattern of facebook succeeding all the other social websites before it, and then blasts bitcoin with the assignment of "We have a long way to go to 7 billion." So we need to go to 7 billion? What currency is used by 7 billion people, and why do we have to exceed that number in order to be the next standard? Bitcoin will surpass a billion users within five years, and something tells me the value might go up during that time.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 21, 2014, 09:31:57 AM
Is this guy serious? He sets up a pattern of facebook succeeding all the other social websites before it, and then blasts bitcoin with the assignment of "We have a long way to go to 7 billion." So we need to go to 7 billion? What currency is used by 7 billion people, and why do we have to exceed that number in order to be the next standard? Bitcoin will surpass a billion users within five years, and something tells me the value might go up during that time.

You've attributed accusations to me which I did not state. My position is that the number of serious (i.e. frequent use or maintaining a level of balance worth remembering) Bitcoin users may still be below 1 million, i.e. 1 in 7000 people, which lends some credence to the notion that it is still (if only remotely) possible for an alternative to overtake Bitcoin or at least establish a lower but significant market share, and notwithstanding yet especially if the market bifurcates to a government-compliant coin (i.e. trending towards fiat) and an anonymous darknet coin (i.e. maintaining decentralized currency).

No where did I state that Bitcoin had to reach 7 billion users in order to succeed or go up in price. And no where have I stated—in fact I emphatically warned the opposite last year—that Bitcoin's adoption curve allows a lot of time for altcoins to catch up. I doubt altcoins even have 5 years to make their move.

I enumerated Bitcoin flaws which did not include "a lack of users".


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Pentax on February 21, 2014, 11:23:08 AM
Yes:  There is a lot of improvement that needs to be done to the protocol and the ability to use it that will allow for increased use.

No:  The op-ed piece's fundamental underpinning seems to be based on the supposition that government simply won't allow it.  While I can see the logic behind that, it is a far from settled issue.  We'll see regulation, yes, but outright quashing?  I doubt it, except for a handful of places like China, Russia, where you'd kind of expect it in the first place.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 22, 2014, 02:43:53 AM
No:  The op-ed piece's fundamental underpinning seems to be based on the supposition that government simply won't allow it.  While I can see the logic behind that, it is a far from settled issue.  We'll see regulation, yes, but outright quashing?  I doubt it, except for a handful of places like China, Russia, where you'd kind of expect it in the first place.

Perhaps this OP did not make my position clear enough. I am not arguing that Bitcoin will be shut down.

Daley essentially incorrectly argues that money can't exist without top-down corporate and government control (although he admits it could in a "wild west" mad max world which I think is to some extent where we are headed after 2016), yet correctly argues that Bitcoin has insurmountable (https://bitcointalk.org/index.php?topic=279650.msg3522750#msg3522750) (also (https://bitcointalk.org/index.php?topic=279650.msg3512888#msg3512888)) flaws for consumer payment without top-down take over while he failed to enumerate many of the reasons Bitcoin is vulnerable to top-down take over. Copying the myopia of most of the Bitcoin community, Andreessen fails to understand the reasons Bitcoin is doomed to a future of top-down control analogous to the top-down global money solutions being patented recently (http://www.zerohedge.com/news/2013-12-10/chasing-bitcoin-jpm-preparing-unveil-its-own-electronic-currency) by the major banks.
...

Bitcoin Take Over Threats

  • Those who were anonymous lose it ex post facto, when tax & law enforcement attack a.k.a. "coin taint" the numerous non-anonymous [2]

The government and the financial powers-that-be (who own the government) are not going to allow any decentralized crypto-currency that they can't tax and effectively control.

The powers-that-be will allow Bitcoin because they are already taking control of it (and some of us speculate they even created it). I explained in the OP that they can take control with regulations such as AML and KYC laws, which enable them to identify all (even formerly anonymous) users and tax them. The mining is centralized in a few mining pools thus the financial powers-that-be can eventually take control of the mining.

The point of my OP is that Bitcoin will end up essentially analogous to another VISA, i.e. a fiat compatible system that is top-down controlled a.k.a. centralized.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Pentax on February 22, 2014, 03:19:38 AM
No:  The op-ed piece's fundamental underpinning seems to be based on the supposition that government simply won't allow it.  While I can see the logic behind that, it is a far from settled issue.  We'll see regulation, yes, but outright quashing?  I doubt it, except for a handful of places like China, Russia, where you'd kind of expect it in the first place.

Perhaps this OP did not make my position clear enough. I am not arguing that Bitcoin will be shut down.

Daley essentially incorrectly argues that money can't exist without top-down corporate and government control (although he admits it could in a "wild west" mad max world which I think is to some extent where we are headed after 2016), yet correctly argues that Bitcoin has insurmountable (https://bitcointalk.org/index.php?topic=279650.msg3522750#msg3522750) (also (https://bitcointalk.org/index.php?topic=279650.msg3512888#msg3512888)) flaws for consumer payment without top-down take over while he failed to enumerate many of the reasons Bitcoin is vulnerable to top-down take over. Copying the myopia of most of the Bitcoin community, Andreessen fails to understand the reasons Bitcoin is doomed to a future of top-down control analogous to the top-down global money solutions being patented recently (http://www.zerohedge.com/news/2013-12-10/chasing-bitcoin-jpm-preparing-unveil-its-own-electronic-currency) by the major banks.
...

Bitcoin Take Over Threats

  • Those who were anonymous lose it ex post facto, when tax & law enforcement attack a.k.a. "coin taint" the numerous non-anonymous [2]

The government and the financial powers-that-be (who own the government) are not going to allow any decentralized crypto-currency that they can't tax and effectively control.

The powers-that-be will allow Bitcoin because they are already taking control of it (and some of us speculate they even created it). I explained in the OP that they can take control with regulations such as AML and KYC laws, which enable them to identify all (even formerly anonymous) users and tax them. The mining is centralized in a few mining pools thus the financial powers-that-be can eventually take control of the mining.

The point of my OP is that Bitcoin will end up essentially analogous to another VISA, i.e. a fiat compatible system that is top-down controlled a.k.a. centralized.


Ok, I'm not going to debate what the powers that be may do or not do, but Visa is still worth something, yes? 

If Bitcoin, in any form, effects the sort of large scale change on the financial system that it is capable of, even to the point of grabbing  any substantial market share whatsoever from traditional payments people, Visa, PayPal et al, that is still going to be worth a good pile of cabbage.



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: keithers on February 22, 2014, 03:35:25 AM
https://bitcointalk.org/index.php?topic=365141.msg5075050#msg5075050

B) Technical critique of Bitcoins flaws:
Undecided: I don't have sufficient technical knowledge of bitcoin to judge for myself. All those who do have said knowledge have either an agenda or a vested interest.

It doesn't matter if they think the Transactions Withholding Attack won't happen, because 0 transaction fees are more popular.  :P

They think there is a problem with transaction spam if transaction fees are 0, but that is because they haven't thought out-of-the-box of how to design a system that is different than Bitcoin in very amazing ways.

One day soon these guys are going to read some whitepapers that are going to make them walk away with their tail between their legs.

Also mining can't be funded from transaction fees proportional to the growth in the market cap of Bitcoin unless transactions grow as fast (and they are not (https://bitcointalk.org/index.php?topic=351712.msg3831758#msg3831758)) and transaction fees are a percentage (and they are not or better not because debit cards and ACH are flat fee), thus it is logically irrefutable that the value of attacking Bitcoin will increase faster than the funding for mining to protect against a 51% attack.

You don't need to be technical to understand that simple math.

C) Need for Anonyminity:
In Agreement (reluctantly): This has some major major downsides but I have been unable to think of a better solution to the power vacuum.

We always had it in the past with cash and gold, it only now we need to add it to digital age because the government is gaining an unfair advantage and can now track everything.

We are just restoring the balance that had always been there before but which is being lost currently and helping socialism to go into an insane peak.

Have you voted in moolaching's naming poll (https://bitcointalk.org/index.php?topic=458443.0)?

Let me expound on that math.

If tx fees increase proportional to the rise in the BTC price, then Bitcoin becomes uncompetitive with debit cards, ACH, Swift, and wire transfers, which all have a flat fee.

If tx fees don't scale porportional the rise in the BTC price, then because the annual rate of new coin rewards diminish over time, then the funding for mining is declining proportional to the rise of the Bitcoin market cap over time.

Thus Bitcoin is becoming less expensive to 51% attack over time relative to the market value of Bitcoin.

For an attacker such as the government, the market value of Bitcoin determines the value of taking control of it.

For miners, the revenue paid out for mining determines the amount of processing power they can apply to the security against a 51% attack.


The above is what I have been sort of thinking about.  If bitcoin reaches astronomical prices (which I assume most of us hope), so does the incentive for the 51% attack.   I believe I heard Andreas talking about when the market cap goes up, so does the cost of the equipment and networking power needed to actually accomplish the attack.   I guess in theory, it would be idiotic to spend that kind of money just to disrupt a network and squash their own investment.  Wouldn't put it past the US government to throw away tax payer dollars like that...


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 22, 2014, 05:52:28 AM
Ok, I'm not going to debate what the powers that be may do or not do, but Visa is still worth something, yes?  

If Bitcoin, in any form, effects the sort of large scale change on the financial system that it is capable of, even to the point of grabbing  any substantial market share whatsoever from traditional payments people, Visa, PayPal et al, that is still going to be worth a good pile of cabbage.

I am not arguing that Bitcoin won't go up in price (although it is remotely possible it could be entirely defeated by an altcoin, the more likely future is Bitcoin prospers while an altcoin might also due to a bifurcation on the principle of strong anonymity).

I am arguing that we will lose our decentralized currency and anonymity.

Bitcoin : The Digital Kill Switch (https://bitcointalk.org/index.php?topic=160612.0)

You might accrue large capital gains, but I am also arguing the government is going to confiscate our gains any way. See this post (https://bitcointalk.org/index.php?topic=195275.msg3385368#msg3385368), the Mad Max (https://bitcointalk.org/index.php?topic=365141.0) and the Economic Devastation (https://bitcointalk.org/index.php?topic=355212.0) threads.

In my opinion our biggest problem is financial survival going into a coming horrific global sovereign debt implosion (2016ish running for a decade or more of hell) that will force the governments to confiscate everything they can get their hands on.

And we need decentralized currency and payment in order to prevent (https://bitcointalk.org/index.php?topic=349028.msg3737847#msg3737847) the internet from being dominated by an advertising funding paradigm and few large corporations. See the MtGox demise as a prime example (https://bitcointalk.org/index.php?topic=470154.msg5294657#msg5294657) of how centralization leads to failure and/or government control.

In short, I argue we are threatened with losing freedoms we gained with the internet and worse...

And I am not going to let that happen.

For example did you know there is a government push towards mandatory (https://bitcointalk.org/index.php?topic=316297.msg3818219#msg3818219) Facebook accounts, and that Facebook is even recording your pattern of typing (https://bitcointalk.org/index.php?topic=363852.msg3889591#msg3889591) so they can identify you even when you are not logged in!


The above is what I have been sort of thinking about.  If bitcoin reaches astronomical prices (which I assume most of us hope), so does the incentive for the 51% attack.   I believe I heard Andreas talking about when the market cap goes up, so does the cost of the equipment and networking power needed to actually accomplish the attack.   I guess in theory, it would be idiotic to spend that kind of money just to disrupt a network and squash their own investment.  Wouldn't put it past the US government to throw away tax payer dollars like that...

We concluded in upthread discussion that for Bitcoin the easier attack vectors are regulation (since anonymity can easily be universally broken ex post facto with coin taint) and taking control over the few large pools.

Designing defenses against the 51% attacks is more relevant to the proposed altcoin that would be more impervious to regulation and pool centralization.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 22, 2014, 08:03:55 PM
Bitards either don't understand or wish to sweep under the rug how grave the threat from centralization is.

https://bitcointalk.org/index.php?topic=470154.msg5305055#msg5305055

It is not unreasonable to speculate that MtGox could be using their apparently intentional manipulations (http://cryto.net/~joepie91/blog/2014/02/10/why-mtgox-is-full-of-shit/) to buy coins cheaply from their own trapped users and then selling them on external markets to generate huge profits. Or just to obtain more coins cheaply to recover losses due to seizures. This could be their strategy to try to become solvent again.

There is potentially insider trading fraud brewing at exchanges. Another attack vector for government regulators in the future ex post facto. Coin taint becomes a serious issue down the road ex post facto.

What users should (but the masses will always be blissfully gullible) be learning from this is that any centralized balances are evil (https://news.ycombinator.com/item?id=7211522). Placing your balances in the hands of third parties means effectively government has complete control and can destroy the apple-cart with regulation and seizures at-will.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Pentax on February 22, 2014, 10:07:21 PM
Ok, I'm not going to debate what the powers that be may do or not do, but Visa is still worth something, yes?  

If Bitcoin, in any form, effects the sort of large scale change on the financial system that it is capable of, even to the point of grabbing  any substantial market share whatsoever from traditional payments people, Visa, PayPal et al, that is still going to be worth a good pile of cabbage.

I am not arguing that Bitcoin won't go up in price (although it is remotely possible it could be entirely defeated by an altcoin, the more likely future is Bitcoin prospers while an altcoin might also due to a bifurcation on the principle of strong anonymity).

I am arguing that we will lose our decentralized currency and anonymity.


Well I can't disagree.  They have the tools, and they'll use them, no doubt.

And I agree it's utter bullshit, although I do not see anything whatsoever that can be done about it.

Not adhering to laws results in bitcoin going underground.  If that happens, people may think it will still retain value/use, but I am not one of them.  If it is not an accepted medium of exchange now it is no more likely to be so after some financial meltdown or Mad Max situation.

If bitcoin is not widely adopted, and the financial system melts down, it isn't worth anything.  Then it's gold, silver, the normal things.  Stuff.  If it is widely adopted it may well be a great hedge against exactly that sort of thing; and on a financial level and with enough ease of access, that a lot of people could afford to squirrel away some amount, but only if they know it exists, know how to use it and have a realistic expectation that it will have value that will be portable and insulated from fiat meltdown.

Widespread adoption is basic to use in any future scenario, including a global meltdown, which I'm not going to argue isn't going to happen, as I'm as amazed as anyone with what I see going on in that department.  To allow for adoption that you have to follow the law, even if it sucks because you know damn well half of it was written so governments can stick their noses in places it doesn't belong, behind the guise of the greater good, whatever the hell that means anyhow. 

It's not a matter of not understanding anything, I don't think, it's a difference of opinion on what actually has the better chance at any sort of real success. 


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 22, 2014, 10:51:05 PM
Ok, I'm not going to debate what the powers that be may do or not do, but Visa is still worth something, yes?  

If Bitcoin, in any form, effects the sort of large scale change on the financial system that it is capable of, even to the point of grabbing  any substantial market share whatsoever from traditional payments people, Visa, PayPal et al, that is still going to be worth a good pile of cabbage.

I am not arguing that Bitcoin won't go up in price (although it is remotely possible it could be entirely defeated by an altcoin, the more likely future is Bitcoin prospers while an altcoin might also due to a bifurcation on the principle of strong anonymity).

I am arguing that we will lose our decentralized currency and anonymity.


Well I can't disagree.  They have the tools, and they'll use them, no doubt.

And I agree it's utter bullshit, although I do not see anything whatsoever that can be done about it.

Not adhering to laws results in bitcoin going underground.  If that happens, people may think it will still retain value/use, but I am not one of them.  If it is not an accepted medium of exchange now it is no more likely to be so after some financial meltdown or Mad Max situation.

If bitcoin is not widely adopted, and the financial system melts down, it isn't worth anything.  Then it's gold, silver, the normal things.  Stuff.  If it is widely adopted it may well be a great hedge against exactly that sort of thing; and on a financial level and with enough ease of access, that a lot of people could afford to squirrel away some amount, but only if they know it exists, know how to use it and have a realistic expectation that it will have value that will be portable and insulated from fiat meltdown.

Widespread adoption is basic to use in any future scenario, including a global meltdown, which I'm not going to argue isn't going to happen, as I'm as amazed as anyone with what I see going on in that department.  To allow for adoption that you have to follow the law, even if it sucks because you know damn well half of it was written so governments can stick their noses in places it doesn't belong, behind the guise of the greater good, whatever the hell that means anyhow.  

It's not a matter of not understanding anything, I don't think, it's a difference of opinion on what actually has the better chance at any sort of real success.  

Why The Only Solution is Technological

By the time you realize I am correct, you will be behind the others who realized earlier. Most people are still on the Titantic rearranging the deck chairs (see quote of Hoover (http://armstrongeconomics.com/2013/11/21/capital-flows-the-key-to-everything/)). This is why the USA is actually booming until 2015.75, because capital is now fleeing into the USA (https://www.google.com/search?q=site%3Aarmstrongeconomics.com+capital+moving+to+USA) from the emerging (peripheral) markets where the riots first manifest. But this ends up at the core reserve currency at the end game 2016ish. We can see how regulation appears to be a very loving and correct direction (https://bitcointalk.org/index.php?topic=481213.0) (listen to her charming speach). She is head of the IMF that is proposing 10% confiscation (termed "financial repression") of bank account balances across the EU to bring debt back to 2007 levels (i.e. not a solution and they will have to come back for more and more).

My opinion is that anything that does not circumvent law (which can be a legal activity, e.g. see the "Don't follow me, I'm the 5th car" (http://armstrongeconomics.com/2014/02/21/ukrainian-govt-is-fracturing-the-debt-default-contagion-is-likely-to-unfold/)) is going to end up destroyed just like that dramatic upthread chart (https://bitcointalk.org/index.php?topic=455141.msg5033950#msg5033950) of the population of Rome falling from 1.3 million to 30,000 (because everyone fled the government). Apparently the-powers-that-be in the USA government are moving towards totalitarian allegiance (http://armstrongeconomics.com/2014/02/22/ukraine-the-need-to-always-blame-someone-govts-are-all-the-same-wake-up/) analogous to recent events in the Ukraine. The entire premise of the Economic Devastation (https://bitcointalk.org/index.php?topic=355212.0) thread is that the Ineptacracy (https://bitcointalk.org/index.php?topic=355212.msg5246253#msg5246253) of socialism can't stop (https://bitcointalk.org/index.php?topic=355212.msg5274282#msg5274282) until it kills everything or until one of the following occurs:

  • A new technology renders the government impotent.
  • A Benevolent dictator like Caesar crosses the Rubicon (https://www.google.com/search?q=site%3Aarmstrongeconomics.com+Caesar+crossed+the+rubicon) to restore sanity

Note the people rising up as in Ukraine (http://armstrongeconomics.com/2014/02/22/ukraine-the-need-to-always-blame-someone-govts-are-all-the-same-wake-up/) is not a solution, because they have no economically viable technology to remain decentralized. They will fall right back into the power vacuum of democracy with escalating chaos with Egypt as a recent example, because the fundamental problem is economic bankruptcy due to peaking socialism and debt (the people are not ready to embrace the decentralized Knowledge Age and the end of a public welfare and retirements system). Only a dictator or a technological solution to the power vacuum is a solution at this time (the contentionism has swung to anarchy because the time to make new social constitutions is not now for reasons stated).

And the benevolent dictator is also not sustainable, e.g. Rome continued to destroy itself after the vested interests of socialism killed Caesar. This is why only technology is responsible for sustainable gains in the lives of the people. Note CoinCube and I have postulated that in the theory of contentionism (a new term we invented) the top-down order (with socialism being one form) plays a role in the organization necessary to spawn new entropy, e.g. decentralizing technology.

Thus the only popular thing left standing will be the one that is impervious to government.

Gold and silver hoarding leads to a feudal Dark Age (which historically typically have long durations, e.g. 600 years), because the velocity-of-money (V in the Quantity Theory of Money) collapses. V is already down -50% since 2008. Capital is already running and disappearing into hoards. This will accelerate (as more frogs wake up from their blissful ignorance of what is going on and jump out of the boiling pot) if we don't have technological solution very soon.

And I have good news for you. I've had an additional epiphany recently that I have not written about publicly. I am becoming uber confident that Bitcoin is not the future of commerce, finance, and business. And become more confident I see (all the economic and algorithmic details of) the future technology in my mind's eye. Stay tuned, it won't be too long now. Commerce, finance, and business will never go back to centralized again. This changes the order that had existed since Mesopotamia.

So this isn't about crossing a crisis and coming back to the same notions of the way things are today. This is leaving the old ways behind forever.

P.S. Three prominent forecasters (with not such stellar prediction performance as Martin Armstrong who predicts the same (http://armstrongeconomics.com/armstrong_economics_blog/), yet all with a correct model) are predicting "economic devastation" ahead (http://usatoday30.usatoday.com/money/perfi/stocks/story/2012-02-26/stock-market-bears-doomsayers/53259742/1). CoinCube do you think they read your thread (https://bitcointalk.org/index.php?topic=355212.0) and got that quoted term from you? (your thread in in the top 3 listings at Google for that quoted term)

P.S.S. W.r.t. to Bitcoin becoming government compliant, there is this problem that there isn't just one global government (yet), so its global fungibility will be pecked away by the discordant nation-state vultures. And as the recent Mt.Gox fiasco (https://bitcointalk.org/index.php?topic=455141.msg5305367#msg5305367) exemplifies, there isn't anything the government touches that doesn't get bloated and less efficient.

"An elephant is a mouse built to government specifications." - Lazarus Long.


Disclaimer: I am not providing legal nor tax advice. I am not a professional adviser, please consult your own. I am merely sharing my thoughts and anything you do after reading my thoughts is your own responsibility.


Update: there is a new thread on anonymity (https://bitcointalk.org/index.php?topic=475574.msg5308941#msg5308941) which is quite astute and exemplifies the evolving improvement in the knowledge of the community.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Pentax on February 23, 2014, 01:42:02 AM
Ok, I'm not going to debate what the powers that be may do or not do, but Visa is still worth something, yes?  

If Bitcoin, in any form, effects the sort of large scale change on the financial system that it is capable of, even to the point of grabbing  any substantial market share whatsoever from traditional payments people, Visa, PayPal et al, that is still going to be worth a good pile of cabbage.

I am not arguing that Bitcoin won't go up in price (although it is remotely possible it could be entirely defeated by an altcoin, the more likely future is Bitcoin prospers while an altcoin might also due to a bifurcation on the principle of strong anonymity).

I am arguing that we will lose our decentralized currency and anonymity.


Well I can't disagree.  They have the tools, and they'll use them, no doubt.

And I agree it's utter bullshit, although I do not see anything whatsoever that can be done about it.

Not adhering to laws results in bitcoin going underground.  If that happens, people may think it will still retain value/use, but I am not one of them.  If it is not an accepted medium of exchange now it is no more likely to be so after some financial meltdown or Mad Max situation.

If bitcoin is not widely adopted, and the financial system melts down, it isn't worth anything.  Then it's gold, silver, the normal things.  Stuff.  If it is widely adopted it may well be a great hedge against exactly that sort of thing; and on a financial level and with enough ease of access, that a lot of people could afford to squirrel away some amount, but only if they know it exists, know how to use it and have a realistic expectation that it will have value that will be portable and insulated from fiat meltdown.

Widespread adoption is basic to use in any future scenario, including a global meltdown, which I'm not going to argue isn't going to happen, as I'm as amazed as anyone with what I see going on in that department.  To allow for adoption that you have to follow the law, even if it sucks because you know damn well half of it was written so governments can stick their noses in places it doesn't belong, behind the guise of the greater good, whatever the hell that means anyhow.  

It's not a matter of not understanding anything, I don't think, it's a difference of opinion on what actually has the better chance at any sort of real success.  

Why The Only Solution is Technological

By the time you realize I am correct, you will be behind the others who realized earlier. Most people are still on the Titantic rearranging the deck chairs

My opinion is that anything that does not circumvent law

and that's where we part ways.  nothing that circumvents the law, or makes any attempt to do so will survive.  period.

the answer is not to circumvent, the answer is to change the law or to see that the laws we want to protect bitcoin are passed.  to change the system, you have to work within it, like it or not.

we need lobbies and lawyers just like any other interest group if we want to do that, otherwise, you're right, this will be defanged, beaten down and ultimately destroyed.







Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 23, 2014, 01:59:08 AM
This is the bifurcation mentioned upthread and Pentax is on the losing side where no finance survives.

and that's where we part ways.  nothing that circumvents the law, or makes any attempt to do so will survive.  period.

the answer is not to circumvent, the answer is to change the law or to see that the laws we want to protect bitcoin are passed.  to change the system, you have to work within it, like it or not.

we need lobbies and lawyers just like any other interest group if we want to do that, otherwise, you're right, this will be defanged, beaten down and ultimately destroyed.

I think people fail to comprehend that the $150 trillion debt, means $25,000 for every living human, including babies, elderly, and those billions who live in countries where the average person doesn't generate even $5000 income per year (not to mention basic needs such as food comprising a large portion of their income). When the IMF says this is a 200-year debt high, that doesn't seem to register in the mind of people can only think in terms of life in western nations during their and their parents lifetime.

The law and the system behind it is entirely bankrupt and it will be confiscating everything. Finances will not survive. Changing the law won't make it not bankrupt because the people are unable to accept a non-corrupt system because they themselves are already corrupted by the system as explained below.

Whether you like it or not, the only way to survive is anarchy. Peaking (collapsing) socialism will devolve to every man for himself either in total Mad Max chaos or in a decentralized trust system of organized anarchy, i.e. mutually agreeable rules for freedom that don't devolve into centralization (socialism).

You better pray I succeed in the latter outcome, otherwise there is only megadeath and destruction ahead.

CoinCube this genre of post is another evidence that socialism can't abort. You see my theories in action. The people can't comprehend that their system is bankrupt and that there is no possible top-down solution. Laws can't turn 60-year old people into 20-year expert computer programmers, biotech experts, nanotech experts, etc.. The socialism destroyed (appropriate to the Knowledge Age) education, reproduction, and has set up a massive failure. You've got a society with mostly the wrong skills, the wrong understanding of what is possible, etc.. Instead the people have been busy creating that $150 trillion global debt by learning and doing vocations that are useless in the coming Knowledge Age. This is what debt does. It misallocates human capital (lifespans) by allowing them to do uneconomic activities.

We can see how regulation appears to be a very loving and correct direction (https://bitcointalk.org/index.php?topic=481213.0) (listen to her charming speach). She is head of the IMF that is proposing 10% confiscation (termed "financial repression") of bank account balances across the EU to bring debt back to 2007 levels (i.e. not a solution and they will have to come back for more and more).

To see why the peaking socialism will tax itself into megadeath as it has repeatedly done throughout all human history since Mesopotamia...

Just look at the glossy eyes of the women in this Q&A debate on man-made, global warming (AGW) (https://bitcointalk.org/index.php?topic=374873.msg5309216#msg5309216). You can see they really believe (the "good salesman vs. bad salesman" Hegelian dialectic that has been programmed into their brains by TV and the state-school system) there are "carbon bullies" and totally fail to comprehend the truth (https://bitcointalk.org/index.php?topic=355212.msg5228609#msg5228609).

And you can see practicaldreamer over there in the Anonymity thread (https://bitcointalk.org/index.php?topic=475574.0), continuing to conflate orthogonal concepts (https://bitcointalk.org/index.php?topic=355212.msg5274282#msg5274282).


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Pentax on February 23, 2014, 02:51:52 PM
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please repost without quoting
« Sent to: Pentax on: Today at 02:27:47 AM »
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Repost your reply without quoting my entire message. For one thing, I edited my message significantly since you quoted it.

Secondly, it is making the thread hard to read when you only write one sentence below my very long quote. No need to quote me, just kindly repost your one sentence reply.



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A reply of yours, quoted below, was deleted by the starter of a self-moderated topic. There are no rules of self-moderation, so this deletion cannot be appealed. Do not continue posting in this topic if the topic-starter has requested that you leave.

You can create a new topic if you are unsatisfied with this one. If the topic-starter is scamming, post about it in Scam Accusations.


----------------------------------------------------------



You do realize that you are asking people to adhere to a narrow set of rules while running a self moderated thread proposing anarchy.  Quoting what one is replying to is pretty standard.

Anyway, no big deal.

We can agree to disagree on the basic fundamental arguments of the thread.  While the debate is interesting, and I don't totally disagree with you about some of this, I'm not going to be handed a rule card and asked to toe the line as you see fit, or have posts deleted if you don't like my formatting, of all things, so I'll thank you for some interesting debate and move on out of here.



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: CoinCube on February 23, 2014, 03:10:10 PM
P.S. Three prominent forecasters (with not such stellar prediction performance as Martin Armstrong who predicts the same (http://armstrongeconomics.com/armstrong_economics_blog/), yet all with a correct model) are predicting "economic devastation" ahead (http://usatoday30.usatoday.com/money/perfi/stocks/story/2012-02-26/stock-market-bears-doomsayers/53259742/1). CoinCube do you think they read your thread (https://bitcointalk.org/index.php?topic=355212.0) and got that quoted term from you? (your thread in in the top 3 listings at Google for that quoted term)

Ha ha that is funny. I never expected to make the first page of Google when I started that thread.

From what I can tell from the article those forecasters have correctly identified the proximate cause of the coming Economic Devastation (https://bitcointalk.org/index.php?topic=355212.0) but have not yet seen past that to the more ultimate cause.  

As far as I am aware the insights of Contentionism (https://bitcointalk.org/index.php?topic=355212.msg5210378#msg5210378) are unique. Google has spent considerable effort developing algorithms to sort filter and identify unique content. Perhaps that is why it has made the first page.

  

 


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: CoinCube on February 23, 2014, 03:23:27 PM
You do realize that you are asking people to adhere to a narrow set of rules while running a self moderated thread proposing anarchy.  Quoting what one is replying to is pretty standard.

Contentionism posits that some top down control is needed to restrain anarchy. It also posits that all such top down control has a tendency to grow without restraint.
When top-down control becomes problematic (limits free discourse or prosperity) a counter-force is needed to circumvent (https://bitcointalk.org/index.php?topic=457105.0) the top down control.  

It is the existence of the counter-force that is important. It provides an outlet or escape hatch which acts as a soft restraint on the top-down controller. The top-down controller knows that if the authority is abused people with circumvent and undermine the control.

This is also why a truly anonymous decentralized currency is needed despite the fact that such a currency can be used to circumvent laws and be used for criminal behavior. Its very existence will act as a check on government and may allow for more efficient but less secure non-anonymous cryptocurrency to escape government capture. For the physical economy cryptocurrency can never be truly anonymous. Thus it will never be completely safe from a government gone insane. The ability of individuals to flee from government control acts as a needed sanity check and (hopefully) will keep the top-down controller from acting irrationally.  ;D    




 


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Pentax on February 23, 2014, 04:40:13 PM
You do realize that you are asking people to adhere to a narrow set of rules while running a self moderated thread proposing anarchy.  Quoting what one is replying to is pretty standard.

Contentionism posits that some top down control is needed to restrain anarchy. It also posits that all such top down control has a tendency to grow without restraint.
When top-down control becomes problematic (limits free discourse or prosperity) a counter-force is needed to circumvent (https://bitcointalk.org/index.php?topic=457105.0) the top down control.  

It is the existence of the counter-force that is important. It provides an outlet or escape hatch which acts as a soft restraint on the top-down controller. The top-down controller knows that if the authority is abused people with circumvent and undermine the control.

This is also why a truly anonymous decentralized currency is needed despite the fact that such a currency can be used to circumvent laws and be used for criminal behavior. Its very existence will act as a check on government and may allow for more efficient but less secure non-anonymous cryptocurrency to escape government capture. For the physical economy cryptocurrency can never be truly anonymous. Thus it will never be completely safe from a government gone insane. The ability of individuals to flee from government control acts as a needed sanity check and (hopefully) will keep the top-down controller from acting irrationally.  ;D    


 

Who decides when it has become problematic?  Then they institute control and become the thing they so despise. and so it goes.

all of this is theoretical.  I think it falls apart early on in that there is no way anything is simply going to circumvent the law.  Unless you're the current president of the US, of course, but that's another argument.

It dies in the crib if it is intentionally set up for government circumvention.  I just don't think it's practical to base an ideological argument for an eventuality such as an operational financial system in lieu of current fiat systems, on a foundation that is so critically flawed.  

The amount of time and effort put into circumventing would be better spent trying to work within the system.  We'll disagree, I know, but that is the only practical mechanism I see, while any attempt at circumvention that drifts outside the law, or espouses that in any way, is most likely wasted energy.



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 23, 2014, 11:23:17 PM
Pentax, (I appreciate your points and) the problem is precisely that everyone is trying to work within the system. Thus there is no check & balance on the system. Have you forgotten the Boston Tea Party (http://en.wikipedia.org/wiki/Boston_Tea_Party) (which was about circumventing England's Tea Act and the colonists had fled England to circumvent the severe oppression there (http://www.bbc.co.uk/history/british/tudors/human_reformation_01.shtml)) from your high school U.S. History class or are you not from U.S.A. This freedom lead to the U.S.A. becoming the most productive economy in the world.

Today it is very difficult to physically escape to a physical place where there will be no "financial repression" (term proposed recently by the IMF) because the G20 has laid out plans to cooperate to track down all wealth (with the NSA agreeing to provide the information, this is documented by a link in my Mad Max thread). The developing countries are dependent on the G20 and are implementing its edicts such as compliance with the FATCA law (http://www.nestmann.com/finally-some-good-news-about-fatca).

By implication you argue that the system can be braked by working within it to maintain some sanity, but you apparently ignore the Iron Law of Political Economics (http://esr.ibiblio.org/?p=984), which insures that the system will spend more than it can produce until it has destroyed all production. The only way to destroy all production is to kill the people. Thus megadeath is always the end game of unbraked governance a.k.a. socialism or collectivism. This is not just a philosophical ideology. It has happened over and over again throughout human history. It is science, because it is measured fact. Even God warns about it (http://www.biblegateway.com/passage/?search=1+Samuel+8%3A6-21&version=CEV) in the Bible and even the megadeath outcomes (http://www.biblegateway.com/passage/?search=1+Samuel+15%3A1-3&version=CEV) we've seen repeat throughout history, so obviously man knew about this phenomenon for over two millennia.

Some think that the $150 trillion in debt can be restructured (i.e. longer payout terms for the lenders and bond holders, some debt forgiven), but the problem with this is that it is essentially taking away money from the lenders thus there will be less lending and thus the global economy will implode. The amount of debt is simply too large to do a restructuring as the world did with the $billions of Latin American debt in the 1990s. If we instead take money (bail-ins, raising taxes) from the savers and producers (which is the currently announced plan of the IMF, Obama, Merkel, etc), then again the global economy will implode. But only the part of the global economy which requires capital, i.e. the industrial economy. The Knowledge Age doesn't require stored monetary capital (https://www.google.com/search?q=site%3Abitcointalk.org+AnonyMint+knowledge+fungible).

This is why the governments had decided to borrow more and double the global debt from $75 trillion since 2008, because there is no way out.

What that additional borrowing did was delay the adjustment and pumped up the developing countries (http://www.forbes.com/sites/jessecolombo/2014/01/23/why-southeast-asias-economy-is-a-giant-bubble-waiting-to-pop/) with dollar bonds debt. Thus now the developing countries are short the dollar (owe dollars) and thus we will see a massive dollar rally as the USA economy will boom as capital rushes out of the developing world into the dollar from 2014 to 2015.75. Then the strong dollar and loss of developing export markets will strangle the USA economy.

So what does the required (unavoidable) adjustment look like? All those whose incomes in some way derive from that ever expanding debt will become destitute. This basically means everyone except the high-tech workers who are forming the new Knowledge Age economy which is very profitable and doesn't depend on the debt (because the way to become more efficient as the debt implosion proceeds is to utilize more high-tech and remember the Knowledge Age doesn't require stored monetary capital).

Thus most all future profit will be earned in the high-tech economy. The industrial economy will die even more rapidly once the debt bubble stops growing (which is must because we've already saturated the developing world with debt,, e.g. the third-world country of the Philippines has 9 of the 38 (http://www.forbes.com/sites/jessecolombo/2013/11/21/heres-why-the-philippines-economic-miracle-is-really-a-bubble-in-disguise/2/) largest shopping malls in the world and the 11th largest mall in the world (http://en.wikipedia.org/wiki/SM_Mall_of_Asia) at more than 100 football fields in size, but SM North Edsa is even larger (http://prudentinvestornewsletters.blogspot.com/2013/01/philippine-economys-achilles-heels.html)!). For example, there is probably an order-of-magnitude of oversupply of industrial manufacturing capacity in Asia (mostly China). And the 3D printer will within 20 years render most of the factories useless.

The government will not be able to tax this high-tech economy. There won't be any physical location to go investigate or monitor. It will be very distributed, not large corporations rather dominated by small companies often of 1 individual. So the future will be the anonymous crypto-currency. This is where all the future economic activity will be.

As this accelerates, you will see the top-down G20 system implode with all pensions nationalized into worthless, healthcare systems that kill you, etc.. You will see people scamper to try to find a way to be part of this new decentralized economy. Approximately 50% of the global population will be unemployed. It is going to massive upheaval. But as we come out the other side by 2032, the world will be a much different place where the decentralized economy has won and taken over.

If not, we will be in a Dark Age with megadeath.

There is no other possibility due to the fact that the $150 trillion debt is not just some accounting ledger entry. Rather as I explained above, it is a reality of (the current vocations of) most people being not needed, i.e. uneconomic and not profitable. The accumulated size of the unprofitable vocations is $150 trillion. That is a huge 200 year high. We are headed for massive train wreck.

P.S. Here you can see why cpu-only mining clearly subverts (https://bitcointalk.org/index.php?topic=470154.msg5326347#msg5326347) the government.


Disclaimer: I am not advocating any one do any illegal activities. My use of the word "circumvent" means avoid a law's applicability and/or jurisdiction, not commit a crime. I am not providing legal nor tax advice. I am not a professional adviser, please consult your own. I am merely sharing my thoughts and anything you do after reading my thoughts is your own responsibility.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 24, 2014, 12:06:35 AM
This post is to pre-empt those who are sending me private messages asking which projects do I recommend.

I like the conceptual directions that are exemplified in anoncoin, ethereum, memorycoin, but so far no one has put it all together in one. And IMO the economics design, algorithms, and some technical details of those 3 efforts are lacking.

Thus at this time, I can't recommend a project. I am hopeful that the right project will appear soon.

Ethereum is doing some important foundation experimentation on decentralized contracts. I think it is important to pay attention to that as well as the features I enumerated in the OP. I think everyone knows by now that I had been in contact with Charles Hoskinson about my altcoin efforts before and during when he decided to join Ethereum. My problem (especially as a U.S.A. citizen in an Obama+NSA world) is I don't want to be the known lead developer on a coin that builds the new economy that replaces the government to a large extent. So I am looking to play a side role and donate the algorithms I have developed at this point. Unfortunately I don't like the priorities at the Ethereum (and I have not shared my thoughts on this with them), so I've decided not to give them my algorithms at this time. I am observing first. I will not detail further as it would reveal strategy that I wish to keep secret. So please don't ask me. My suggestion is observe the market place of altcoins over 2014. Hopefully I will have passed on my algorithms to a capable project, and it is possible it could end up being Ethereum at some point. But I am not in any discussions with them at this time. They need to first prove their scripting design is the correct one. I don't like project development arguments. In that case, the market is quickly the decider.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: CoinCube on February 24, 2014, 02:21:49 AM
In The Future of Cryptocurrency (https://bitcointalk.org/index.php?topic=483989.0) I posit that the existence of decentralized anonymous cryptocurrency is needed to protect weaker forms of non-anonymous cryptocurrency from government capture and centralization.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 24, 2014, 11:00:00 PM
Armstrong admits we need to eliminate taxation at the nation-state level, but he doesn't provide a way to accomplish that!

http://armstrongeconomics.com/2014/02/24/the-fourth-branch-deep-state-in-plaint-sight/

Quote from: Armstrong
(2) eliminate taxes at the federal level.

Readers must listen to Bill Moyer's interview (http://billmoyers.com/episode/the-deep-state-hiding-in-plain-sight/) about the DEEP STATE that has taken over the U.S.A. government.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 25, 2014, 12:01:38 AM
To all those who say that anonymity will enable illegal activities, I remind them that so did cash. So should we eliminate physical cash and move to a state controlled digital currency in order to eliminate all crime? But my prior post about the DEEP STATE (https://bitcointalk.org/index.php?topic=455141.msg5347903#msg5347903), shows that the criminals control the state! Ukraine is another evidence (http://armstrongeconomics.com/2014/02/23/yanukovych-captured/) that all nation-states are corrupt. Come on Statistards, admit you are wrong!

I am pleased to see how the forum responded to the idiotic OP about "How do we prevent money laundering and assasinations? (https://bitcointalk.org/index.php?topic=6413.0)".

The bigger the cheese, the more mice who come to feed on it. If we put control of all the money in the hands of the state, the incentive is much larger for the criminals to go capture the state. This is why we have a DEEP STATE. There is no way to legislate or make a democracy that prevents this. You have to eliminate the cheese using a decentralized technology, so there is nothing for the criminals to go after.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 25, 2014, 07:31:11 AM
https://bitcointalk.org/index.php?topic=439357.msg5355485#msg5355485

...

In reality, Bitcoin only gives you a degree of anonymity.  It gets you out of the scope of the NSA casually fishing through bank records to find likely names/addresses of people, but if somebody REALLY wants to find you, sooner or later, they will.  The more you interact with or trade with people, the more traces you leave.

In short, don't depend on bitcoin to keep you out of jail if you're breaking the law.  It isn't designed for that.  It is meant to keep you out of reach of "fishing expeditions", not a concerted law enforcement effort.

Coint taint is the biggest flaw to Bitcoin fungibility.

Now imagine the government tax and law enforcement authorities crack down in the coming years (and the G20+NSA are announcing this intent) wherein they say if you can't provide the identity of whom your purchased your coins from and sold your coins to, then all tax and criminal liability from the time of mining until the future is all yours. Because there is no way for you to otherwise prove that you didn't buy the coin from yourself and sell it to yourself.

So with that very simple ruling, the governments can at-will force all anonymous coin holders (past and present) to be revealed, because nobody is going to accept a coin without identity history any more.

You could still try to find someone to accept your anonymous coins, but since most users are not anonymous, your effort to find such vendors and market for your anonymous coins will become untenable.

This is why the only way I can see to keep fungibility (without losing anonymity entirely) is to make most of the users anonymous, and that includes all their IP addresses when they transact.

CoinJoin and Dark Wallet won't do this.

And Tor is not strong enough, as it can be foiled with timing analysis by an entity that can see all packets, such as the NSA.

So the reality is that Bitcoin will be the government coin. You see how easily the U.S.A. government effectively controlled the outcome of Mt.Gox (https://bitcointalk.org/index.php?topic=470154.msg5326347#msg5326347).


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 25, 2014, 02:50:48 PM
https://bitcointalk.org/index.php?topic=453984.msg5363483#msg5363483

Bitcoin Take Over Threats

  • 51% attack because mining is ASICs concentrated and ASICs foundries could be purchased with unlimited fiat. Note also ASICs can't be re-purposed as PCs can (https://bitcointalk.org/index.php?topic=354573.msg3808112#msg3808112), i.e. each ASIC only works for a specific coin design.

Meaning the CPU-only coins are a more flexible investment. Your hardware is resalable to the general PC market too.

Note Scrypt is not cpu-only.

Cuckoo is also not cpu-only, it is memory-only.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 26, 2014, 12:50:39 AM
https://bitcointalk.org/index.php?topic=316297.msg5374142#msg5374142

Yes Ethereum is one of the possible serious challengers to Bitcoin, and I've been aware of it for months (https://bitcointalk.org/index.php?topic=455141.msg5326583#msg5326583) behind the scenes. I am doubting (https://bitcointalk.org/index.php?topic=455141.msg5275684#msg5275684) the economics of how they tied their scripting into the mining. I fear it may be a fundamental flaw that could cause it to fail over time. Other than that, I think contracts changes everything in the crypto-currency paradigm.

Also IMHO Ethereum's planned IPO model for starting a currency is flawed (https://bitcointalk.org/index.php?topic=455141.msg5166928#msg5166928).

In the meantime, I expect something better than Ethereum will come out. Hopefully with a better name too (Etherium.com is a game, what the heck does ether mean to the average person).

I hope I am wrong about Bitcoin crashing to $300 or below, because it would be much more positive for the ecosystem of serious altcoins. I guess rpietila moved his predicted bottom up because so much time has passed and the trendline is higher now?

We don't know how the manipulators of Mt.Gox want to play this. If they were satisfied with $400 or if they sense that is the most damage they can do in face of exponential demand, then its the bottom. Do they want coins or are they trying to create desire within the community for more regulation (thus willing to dump 750,000 coins warchest to create a panic)? Or perhaps the manipulation is chaotic and no party is in control, but that seems less likely given Mt.Gox is a centralized target.

Appears there is a "massive coverup" (http://www.cryptocoinsnews.com/2014/02/26/irc-chat-with-mark-karpeles-confirms-leaked-documents-authenticity-mt-gox-currently-seeking-bail-out/), thus potentially dejection in the community once the truth finally comes out. It might turn out that government and banks have been in control over the past year or something really sinister.

What happens to Bitcoin price when the headlines for weeks or months are all about the massive fraud that was going on for over a year at the largest exchange and how until there is regulation we don't know if the other exchanges are also doing similarly (https://bitcointalk.org/index.php?topic=487504.0). The masses are not going to want to buy this until there is FDIC insurance on deposits. This could cause projections to get downscaled.

Any way I will let the market tell me.

This government and bank inflicted fiasco (https://bitcointalk.org/index.php?topic=470154.msg5326347#msg5326347) has shown with strong likelihood (https://bitcointalk.org/index.php?topic=455141.msg5305367#msg5305367) that Bitcoin is not going to remain a decentralized currency. However that doesn't necessarily imply a lower price (https://bitcointalk.org/index.php?topic=455141.msg5294274#msg5294274). Might grow faster with regulation and centralized control, especially until at least 2015 or so (https://bitcointalk.org/index.php?topic=365141.msg5357269#msg5357269) when the bail-ins (confiscations) start (https://bitcointalk.org/index.php?topic=455141.msg5325962#msg5325962) and regulation is instead seen more and more as a trap. For the moment, the masses are blissful frogs boiling in the pot.

On avoiding centralization:

https://bitcointalk.org/index.php?topic=355532.msg5248863#msg5248863


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 26, 2014, 04:10:08 AM
https://bitcointalk.org/index.php?topic=439357.msg5377702#msg5377702

Come on Bitards, wake up from your stupor. There is no anonymity in Bitcoin. Bitcoin is the ledger from hell that will destroy all your freedom. Everything can now be tracked. Zillions times worse than cash for mankind's freedom.

I can't even find a Bitcoin mixer, tumbler, or laundry which provides anonymity for mixing smaller amounts.

For example, Bitcoinfog does not make the deposit and withdrawal amount constant, e.g. 0.5 BTC, thus one can correlate the amounts sent in and the amounts withdrawn. It is very unlikely that there is a large pool of users who are splitting their up their withdrawals in a similar level of chunk sizes as you are, unless you are mixing 10 - 100+ BTC and can employ chunk sizes over many ranges, e.g. 0.1 BTC, 0.5BTC, 1BTC, 2BTC, 4BTC, etc..

And we don't even know if the operators of the mixing service are not already compromised by a national security gag order letter. We can probably assume they are, even if they deny it (gag order can force them to deny it). Since the service centralized, they are easy prey for the NSA to track down, hack, and serve with a order.

Also the legal liability for using a mixing service is potentially severe:

https://en.bitcoin.it/wiki/Mixing_service


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 26, 2014, 06:50:17 AM
https://bitcointalk.org/index.php?topic=316297.msg5379359#msg5379359

Several more thoughts. If the TPTB have accumulated millions of coins (probably are Satoshi as well and thus own his 1 million coins), they control a poison pill. Just in case they can't destroy the anonymity and make it the ledger from hell (https://bitcointalk.org/index.php?topic=439357.msg5377702#msg5377702), they control several means to kill it (law, majority of the float, etc).

The very wealthy are always controlled by the government, for they can't do anything without being tracked, due to their large size. The Winklevoss twin's stash is also effectively under the control of the government. For example, Warren Buffet has to toe the line because for one reason his insurance businesses need licenses from the governments.

What is excruciating ironic is that Bitcoin may actually grow stronger from more centralization of mining, exchanges, and coin ownership. Excruciating because there is no way to resolve the $150 trillion debt bubble that doesn't result in confiscating all traceable wealth (https://bitcointalk.org/index.php?topic=455141.msg5325962#msg5325962) (and I think that will include yours rpietila and especially your very traceable castle, sorry to say). And these charts show the model for this outcome is already underway (https://bitcointalk.org/index.php?topic=365141.msg5357269#msg5357269). Trusting the government and the rule of collective law (a.k.a. socialism) is going to result in horrific failure. And this is not a decade from now. The financial and physical violence is breaking out now in Thailand, Ukraine, Libya, Egypt, Syria, Saudi Arabia, Bulgaria, Spain, Greece, Turkey, Brazil, Venezuela, etc.. By 2016ish, this will come to the core countries, such as the USA, France, etc..

This is a time where leaders such as Patrick Henry need to be bold. Rpietila as an astute, full-time trader lead me to Bitcoin (https://bitcointalk.org/index.php?topic=455141.msg5246438#msg5246438). I am not focused on trading, rather am the thinker, the highly detailed technologist, the programmer, the conceptual iconoclast genius. He did his part to lead me here. Now will he know when to follow?

I explained why (https://bitcointalk.org/index.php?topic=483989.msg5374758#msg5374758) anarchy can never be as horrible as the end game outcomes of socialism.

Hey what happened to all the ignores on my name. Remember it was glowing in color a couple of months ago.  :P


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: mechanikalk on February 26, 2014, 07:43:53 AM
I wonder if the current system that we have for innovating in the cryptocurrency space is the most efficient if we are going to address the concerns the OP has about Bitcoin.  Instead of starting a new altcoin everytime their is an idea for a new feature it would be interesting to have an alt-coin evolve new features over time.  An alt-coin would be more able to do this than Bitcoin because the market cap would be lower and so would the overall risk of screwing it up.  It could be called EvoCoin.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: CoinCube on February 26, 2014, 01:52:36 PM
Failure to understand Bitcoin will indeed cost investors billions. 744,408 BTC stolen (http://www.scribd.com/doc/209050732/MtGox-Situation-Crisis-Strategy-Draft) (nearly 7% of total mined coins to date) and some people seem to be cheering like this is a good thing because they don’t like (long despised) MtGox. This is far far from over.  Where did those stolen coins go? Well check your wallet because they were likely fed back to the markets. If you have been buying bitcoins on any exchange chances are you have some of the stolen loot yourself. These stolen coins can be traced back to their true owner in a direct chain of title thanks to the block chain. If you don’t think this matters you don’t understand the legal system and the principle of Nemo dat quod non habet (http://en.wikipedia.org/wiki/Nemo_dat_quod_non_habet)

Under both American and English law the original owner of stolen property can demand ownership be returned to him if he can prove a chain of title (something the blockchain conveniently provides). The only recourse for an innocent buyer of stolen goods (and only in some jurisdictions) is to argue the exchange it was bought from had an implied warranty and he can try to sue the exchange after returning the coins to the true owner. MtGox is insolvent good luck there. BTC-e is run by anonymous folks think they will stick around in the face of massive lawsuits?

But cheer up there is still a chance most MtGox victims will get their coins back. The threat of massive unending lawsuits targeting innocent bitcoin buyers is an existential one for bitcoin. The 10-15 early adopters stand (by far) to lose the most if bitcoin goes down in flames. They might actually decide to buy out MtGox for the 744,408 bitcoins (an amount grossly exceeding the worth of the company) not because they are altruistic people, but because the chain of lawsuits that would follow if they don't act may hurt their holdings more than the loss of 744,408 bitcoins. It’s a lot of money, however, so its likely a difficult call for them. Regardless expect all future exchanges to require both rigorous identity checks prior to buying and selling as well as fine print stating that anyone who supplies coins to a market is ultimately responsible in the event those coins are determined to be “black” or stolen goods in the future.

Still think there is no need for truly anonymous cryptocurrency?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 26, 2014, 03:50:31 PM
:-* This isn't my sockpuppet.

How Bitcoin could become its antithesis

https://bitcointalk.org/index.php?topic=488682.msg5384562#msg5384562

First off let me say right away that I’m a newbie. I’ve known about Bitcoin for a few years, and have been watching from afar, but only recently decided to immerse myself in the technical details  — and equally important, the culture. I stayed away out of a suspicion that one of Bitcoin’s main claimed virtues (privacy) was oversold, and because I knew that it would hard for me to get into Bitcoin in a casual way.

What I’ve found so far is a an environment that’s far more complex and captivating then I’d imagined. It could help liberate the world from the chains of fait currency and the banking establishment, but it could also become a powerful tool for statist control. I’m sure this latter possibility is inconceivable to many within the space, but it would’t be the first time a vehicle of liberation spun around 180 degrees.

From what I can tell, the early adopters of Bitcoin skewed heavily libertarian, anarcho-capitalist, Rothbardian. As use of Bitcoin spreads to the general public, the culture surrounding it changes, becomes more mainstream. There’s a long history of online communities which, over time, became hostile to the original crowd and their laissez-faire ideals. Slashdot, Wired, Reddit. You can see the transition happening right now in the comments section at Zerohedge.

The reaction to the fall of MtGox shows that many Bitcoiners are now muggles (or matrix dwellers, if you prefer). These new users were raised on an intellectual diet of “market failure” and “much needed government regulation.” Their first instinct when things go wrong is to look for government to fix it. They’re comfortable with filing requirements, identity verification, withdrawal limits. They’re shocked to find out the BTC exchanges don’t have deposit insurance.

Here we get to an essential weakness of the protocol, at least so far as how it compares to the promised benefits. As a pseudonymous currency with a full public ledger of transactions, the privacy of everyone depends on the privacy of everyone else. Every single input and output from the real world to Bitcoin (every wire transfer you send to an exchange, every purchase of items shipped to your home), is a potential crack in the veil of privacy not just for you, but for everyone else.

I can see that developers are working on interesting technologies, like CoinJoin, which could be baked into the the protocol to enhance privacy. But right now, securing your privacy within Bitcoin requires additional, complicated steps (using tumblers, creating a new address for each transaction). The lessons from PGP email could not be more clear: if it’s a hassle, the vast majority of users won’t do it, which means that users of these privacy measures will be the ones who *really* need it. But because the defining feature of our new age is data interconnectivity, true privacy in can only come from increasing the amount of noise in the system, not decreasing the amount of signal. When the privacy of the network as a whole depends on individual users taking steps that make their lives more complicated, this privacy won’t survive.

Even if changes to the protocol make tracking harder by default, political changes could allow governments to view a nearly complete record of every BTC purchase and movement of funds. What’s going to happen if the IRS adds an addendum to the FBAR that requires you to list all of your public keys? What will happen when thousands of law-abiding citizens report their capital gains (and losses) from Bitcoin on their returns?

If your Bitcoin profits are turned into fiat and taxed to support the continued bailout of Wall Street, then nothing’s really changed. Bitcoin trading becomes one more acceptable way for people to make money that can be funneled back to the state and its favored groups.

Meanwhile, Bitcoin’s virtues compared to dealing with credit cards, in terms of lower transaction costs and reduced counter-party risk, could speed adoption among merchants, which in turn generates more data to connect buyers and sellers with public BTC addresses.  

Volatility, transaction malleability, exchanges gone bad… to me these seem like minor issues, taking the long view. They’re not why I’m still looking in from the outside, without a single satoshi to my name. These aren’t the reasons I decided to write this open letter to the Bitcoin developers and community at large.

I’m writing this because I’m worried that Bitcoin could become a far greater threat to fiscal independence than anything that’s come before. The history of the United States itself should serve as a warning. What began with a constitution to strictly restrain the government’s role, and a Bill of Rights as safeguard, is now a leviathan with effectively unlimited power. The massive economic surplus, fostered by the country’s laissez-faire roots, is now used to fund the largest welfare-warfare state the world has ever known.



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 26, 2014, 04:42:21 PM
In addition to following advantages of small, reasonable perpetual rate of annual debasement of the base money supply (M0) explained in detail upthread:

  • Mining isn't securely funded with transaction fees
  • Wealth is power-law distributed, upper 1% will aggregate all wealth via usury if we don't redistribute some to competitive mining.
  • Small capital can seek ROI that doubles investment in short-time, e.g. a guy selling mineral water on a hot day can get 300% daily ROI, whereas the upper 1% can't double their wealth in 5 years via usury (only if they steal by capturing the government and the central bank).
  • Small debasement rate doesn't impact appreciation of the coin price, because it is also dependent on velocity of (thus demand for) money V in the Quantity Theory of Money.
  • Means of obtaining virgin (untainted) coin.
  • Increase the velocity of money V.

I add that:

  • Also raises the minimum level of profitable interest rate in the economy, thus discouraging the kind of easy money, debt bubble we have now.


Edit: add another:

  • Provides virgin coins free from coin taint clawback and prevents all coins from being stolen multiple times eventually (https://bitcointalk.org/index.php?topic=491181.msg5415520#msg5415520).


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 26, 2014, 05:01:41 PM
https://bitcointalk.org/index.php?topic=316297.msg5388395#msg5388395

There is no way BTC goes to $1 million such that the holders of 100+ BTC go to $100 millionaires and maintain control over their wealth.

Society controls large wealth. This is why large wealth colludes to control government. Thus if that $1 million/BTC comes true, you BTC100 holders either become corrupt (join in the capture of the government) or you give up control of your wealth to the socialism.

Thus the goal of a more anonymous altcoin (since Bitcoin isn't anonymous at all (https://bitcointalk.org/index.php?topic=439357.msg5355485#msg5355485)) is not to make large holders anonymous, rather to make the small and medium holders anonymous. And thus large holders also can keep a small portion anonymous. This is their diversification, get of tax hell plan.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: BADecker on February 26, 2014, 06:01:01 PM
It takes a very alert person to combine all the points of OP, and come out with a correct picture. There are other things that might come about that will completely throw this whole scenario out the window. One of these things might be MaidSafe, or something like it. There are, also, acts of nature - it seems that portions of the world (Brazil) are in deep drought right now. Even U.S. crops are failing somewhat.

:)


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 27, 2014, 05:47:17 AM
It takes a very alert person to combine all the points of OP, and come out with a correct picture. There are other things that might come about that will completely throw this whole scenario out the window. One of these things might be MaidSafe, or something like it. There are, also, acts of nature - it seems that portions of the world (Brazil) are in deep drought right now. Even U.S. crops are failing somewhat.

:)

Thank you for the compliment and for raising my awareness of MaidSafe.

I don't know how you expect climate drought to lessen the severity of the implosion from the $150 trillion debt bubble.

MaidSafe is charging a 1% royalty-fee thus it can never become the next internet. If they were really serious, they would make it free then develop applications on top of it to generate their ROI.

I see no white paper on their website. I was working on DHT and distributed file serving back in 2006 through 2008.


BitTorrent designs such as Azureus have had the same developer. I was interacting with him (https://web.archive.org/web/20130401040049/http://forum.bittorrent.org/viewtopic.php?id=28) technically in 2008.

I started getting into P2P around the time of Bittorrent:

http://web.archive.org/web/20130401040049/http://forum.bittorrent.org/viewtopic.php?id=28


I thought of these ideas too and am aware of the issues such as denial-of-service resistance lowers performance (http://maidsafe.net/faqs#compromise-or-disruption) and the problem of who pays for the asymmetric bandwidth & uptime case where the client is slower and more intermittent than the server (which apparently MaidSafe doesn't solve, it just forces the client to get slow service (http://maidsafe.net/faqs#connection) which is entirely unaccepted for popular websites). There isn't absolute anonymity because just like Tor, it can be analyzed with timing analysis for an entity such as the NSA which can see all traffic (even if it is encrypted). To get absolute anonymity requires drastically lowering the performance, thus it can't be applied to file serving where performance is very important to end users who are browsing websites. This will be explained in my coming white paper.

I posted the following comment at MaidSafe's blog:

http://blog.maidsafe.net/2014/02/18/token-on-maidsafe-network/comment-page-1/#comment-35

Quote from: Shelby a.k.a. AnonyMint
The "3. Exchanging" section appears to be hand waving. A DHT (space) resource has no concept of time-ordering, thus there is no way to create a secure time-based ledger of balances. Only Satoshi's proof-of-work solves the Byzantine Generals problem in the time domain. I covered this in greater detail at bitcointalk.org under my pseudonym AnonyMint. I had originally considered the concept of proof-of-space and then dismissed it.

I'd be interested to see DHT running on long-lived servers to strive for some of the benefits MaidSafe mentions in the video on their homepage. This is something I'd want to explore after fixing this current problem with Bitcoin.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 27, 2014, 10:24:15 AM
https://bitcointalk.org/index.php?topic=316297.msg5402853#msg5402853

I hope this post finally makes it go "Bingo!" in your minds.


The real reason I don't worry too much about Bitcoin the brand, is because the tech is there. Decentralize all the things. Trustless money, trustless contracts, trustless, decentralized, disintermediated *everything*.

Unfortunately Bitcoin doesn't do any of those things.

Mining and exchanges are already highly centralized.

We can see with the Mt.Gox outcome that the coin supply is shrinking and centralized into ownership by probably some head of the same "DEEP STATE" monster that controls the NSA (https://bitcointalk.org/index.php?topic=455141.msg5347903#msg5347903) (very reputable Bill Moyers interview at the linked post).

Bitcoin can't even handle real-time transactions so then we need VISA (Mastercoin) again and we are right back to centralization.

And trustless contracts are opcodes that the centralized developers have to enable one-by-one and most haven't been turned on.



https://bitcointalk.org/index.php?topic=490073.msg5401309#msg5401309

Hey all,

Posted just a few hours ago at The Hub. Jaws dropped when we received this for publication.

Article here: http://hub.playerauctions.com/bitcoin-mtgox-ryanstraus/ (http://hub.playerauctions.com/bitcoin-mtgox-ryanstraus/)

Content:
The Mt. Gox situation is troublesome for the bitcoin industry as it exists today. However, the situation presents a bigger problem for the bitcoin industry than it does for bitcoin itself.  After all, this story is not about the squandering of trust by one party or the need to restore the community’s trust in other parties.  Rather, this story is about the continued bastardization of Bitcoin through the injection of the question of trust into a protocol that was designed to function without it.

...


If Bitcoin becomes NWOCoin (or whatever) we will still create our own future with other options. Oppression won't work. By 2030 or whenever, if a 1WG is being made, and it seems to be an oppressive one, people will leave this rock behind, too.

We can't just expect those options to happen. We must actually make them happen.

50% of the population is not ready for the disruption of decentralization, as they will be unemployed (as predicted by Oxford that 47% will be replaced by computer automation). Thus a majority of the society will fighting for centralization and "we are the 99%, take it from the 1%" with Obama, Merkel, Hollande, etc leading the charge! Remember Obama said, "you didn't earn that without the government and society".



Quote
Google "life of the nobility in 1800s England" for example. The social structure had places for all, and this is being reintroduced. Any breach means [you lose your job].

A rich person without cooks and lawn keepers is the oddity, it's normal to have them.

You picked the wrong time period. Try again from 500 A.D. for about 600 years hence. The nobility had to live in heavily guarded castles to fend off the Robin Hoods.

That model works well after the chaos of the debt implosion when the social order can restabilize.

The problem right now is most of the population will be rendered unemployable, because there won't be enough rich to provide enough jobs for maids. And the computer automation will render the rest unemployed. Look at this (https://bitcointalk.org/index.php?topic=374873.msg5361107#msg5361107) for visual proof of what is coming at McDonalds (100% automation)!



Quote
Your IQ is too high to understand these things of simple life, you are 100% focused in your abstract concepts.

Somewhat true at times, but actually I lived in the Philippines during the Asian Crisis and saw what really happens during economic implosions. Even my eye was gouged out by one of those pissed off jobless. I saw kidnapping every where, even I had to be careful when driving my car outside the city boundary.


The fascists and the immoral will always lag behind. While the real world isn't a Disney film, and there are no good guys or bad guys, just people that are mixtures of both to varying degrees... the world *is* like a Disney film in that, in the end, the good(er) guys win. There's nothing man can do that either surprises me, or makes me afraid. As I watch the slow triumph of good actors, though, I do occasionally get twinges of excitement.

During debt collapse, they can do a lot of damage before they are wiped out. You have grown up in period of no chaos and world war, because we were borrowing $150 trillion to keep everyone appeased.

Now you will learn about reality. The history you refuse to believe existed or you don't think can ever happen again. You will learn the hard way I guess.


My own mother, a devout Baptist, had the initial concern that Bitcoin will be part of the end-of-the-world regime prophesied in Revelations. I don't believe in that kind of thing, but my answer is the same regardless. If somehow, in a way I cannot immediately foresee, Bitcoin is appropriated by bad actors and becomes the thing she fears, it won't be by us; free men will trade whatever they please. We'll use another cryptocurrency, or several; a zerocoin or an anoncoin or whatever we need to be free. For now, Bitcoin looks like a good option. That can change, and so can the users. In the meantime, even assuming that outcome, a controlled Bitcoin is probably still freer and fairer and more transparent to all participants, than the existing system. So it's progress either way.

My mother now saves using Bitcoin, btw.

We have to actually make the better Bitcoin. It won't just come by being closed-minded to the reality at-hand.


There is no way BTC goes to $1 million such that the holders of 100+ BTC go to $100 millionaires and maintain control over their wealth.

Society controls large wealth. This is why large wealth colludes to control government. Thus if that $1 million/BTC comes true, you BTC100 holders either become corrupt (join in the capture of the government) or you give up control of your wealth to the socialism.

Thus the goal of a more anonymous altcoin (since Bitcoin isn't anonymous at all (https://bitcointalk.org/index.php?topic=439357.msg5355485#msg5355485)) is not to make large holders anonymous, rather to make the small and medium holders anonymous. And thus large holders also can keep a small portion anonymous. This is their diversification, get of tax hell plan.

Had the same mistaken belief a while ago.  Then saw how quickly most large holders were spending coins when price broke $1000 on all kinds of stuff.  Manors, Gold, Lambos.  If you own 100 XBT and the price becomes 100,000 per XBT you will not be holding it all in the hopes of $1million.  You will sell.

My point is that the society will be dysfunctional due to debt collapse contagion with 50% technological unemployment. Thus being wealthy will mean the larger wealthy eat the smaller wealthy by employing the "99% versus 1%" political uprising.

Let's say I am wrong. Have you hedged just in case I am correct? Gold buried in the ground (http://armstrongeconomics.com/2014/02/25/us-gold-hoard-1847-1894-discovered-buried-with-the-panic-of-1893/) to collapse the velocity of money to help intensify a Dark Age?

How about an anonymous altcoin with superior features for decentralized everything in order to increase the velocity of money inspite of he dysfunctional social collapse?



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 27, 2014, 03:27:25 PM
Failure to understand Bitcoin will indeed cost investors billions. 744,408 BTC stolen (http://www.scribd.com/doc/209050732/MtGox-Situation-Crisis-Strategy-Draft) (nearly 7% of total mined coins to date) and some people seem to be cheering like this is a good thing because they don’t like (long despised) MtGox. This is far far from over.  Where did those stolen coins go? Well check your wallet because they were likely fed back to the markets. If you have been buying bitcoins on any exchange chances are you have some of the stolen loot yourself. These stolen coins can be traced back to their true owner in a direct chain of title thanks to the block chain. If you don’t think this matters you don’t understand the legal system and the principle of Nemo dat quod non habet (http://en.wikipedia.org/wiki/Nemo_dat_quod_non_habet)

Under both American and English law the original owner of stolen property can demand ownership be returned to him if he can prove a chain of title (something the blockchain conveniently provides). The only recourse for an innocent buyer of stolen goods (and only in some jurisdictions) is to argue the exchange it was bought from had an implied warranty and he can try to sue the exchange after returning the coins to the true owner. MtGox is insolvent good luck there. BTC-e is run by anonymous folks think they will stick around in the face of massive lawsuits?

But cheer up there is still a chance most MtGox victims will get their coins back. The threat of massive unending lawsuits targeting innocent bitcoin buyers is an existential one for bitcoin. The 10-15 early adopters stand (by far) to lose the most if bitcoin goes down in flames. They might actually decide to buy out MtGox for the 744,408 bitcoins (an amount grossly exceeding the worth of the company) not because they are altruistic people, but because the chain of lawsuits that would follow if they don't act may hurt their holdings more than the loss of 744,408 bitcoins. It’s a lot of money, however, so its likely a difficult call for them. Regardless expect all future exchanges to require both rigorous identity checks prior to buying and selling as well as fine print stating that anyone who supplies coins to a market is ultimately responsible in the event those coins are determined to be “black” or stolen goods in the future.

Still think there is no need for truly anonymous cryptocurrency?

Serious problem for Bitcoin now:

https://bitcointalk.org/index.php?topic=486872.msg5407521#msg5407521


More:

https://bitcointalk.org/index.php?topic=486872.msg5408045#msg5408045

I hope readers can start to comprehend why coin taint is the most serious Achilles heel of Bitcoin.

On Friday, 2 BTC were stolen from me. I am considering reporting this to law enforcement. This means that anyone who receives BTC which derives from my stolen 2 BTC will be liable to return them back to me.

Perhaps the thief pushed them through a mixer such as Bigcoinfog.com

Thus that mixer will be liable to provide records. If it can't, then it will be liable for the 2 BTC.

So you can't you see you are playing with fire by mixing your coins through a centralized mixer.

And can't you see that without widespread anonymity (and decentralized mixers!), then crypto-currency is absolutely useless except to a government which wants a ledger from hell to track everything (https://bitcointalk.org/index.php?topic=439357.msg5377702#msg5377702).


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 27, 2014, 09:34:35 PM
Most Bitcoin will be clawed back due to widespread theft (https://bitcointalk.org/index.php?topic=491181.0)

Only a person who wants to end up destitute would obtain Bitcoins. Sending Bitcoin to someone is the antithesis of love, it is a kiss of trouble and woe in the future.

I am very sad about this. I had high hopes for decentralized currency. Unfortunately, unless we can perfect widespread anonymity then this entire decentralized currency concept is dead in the future.

https://bitcointalk.org/index.php?topic=486872.msg5413937#msg5413937

You should realize that this means all BTC you own and all the gains you accrue can be clawed back from you in the future.

Theft of BTC is very widespread even without the exchanges and with the Mt.Gox fiasco (and more to come because the government + banks can bankrupt all the exchanges with regulations, fines, placing holds on funds, etc, or even send in secret agencies to steal the keys).

For those readers trying to rationalize away the contract between accounts holders and Mt.Gox (https://bitcointalk.org/index.php?topic=486872.msg5407521#msg5407521), you have no legal standing. Bitcoin is not legal tender. So many governments have spoken on this already and declared it to be a commodity. Clearly we are looking at a big legal mess with Bitcoin which the government is going to have to solve holistically. Now you see I was correct from the very beginning in Bitcoin : The Digital Kill Switch (https://bitcointalk.org/index.php?topic=160612.0).


All you Bitcoin millionaires are going to be Bitcoin jailbirds and destitute.

For those who are rationalizing away the chain of ownership (I explained upthread (https://bitcointalk.org/index.php?topic=486872.msg5408045#msg5408045)) due to that the lack of physical nature to Bitcoin, you don't have any chance of winning that argument. If it wasn't owned, it wouldn't have value that can be exchanged. Even if we are trading fungible tokens in a pool, the tokens are still owned. Cripes, are you guys totally ingenuous or ignorant.


https://bitcointalk.org/index.php?topic=486872.msg5414095#msg5414095

Oh, bold and red font.. Must be legit.

Continue to ignore it please. I will be watching all Bitards fall into the abyss together when the mess comes to the point that you can't find any one to buy your coins, yet you are liable for all the clawback amount.

Mansions will be confiscated. Paddy rides to debtors prison will be ensue when you can't pay.



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Vlad2Vlad on February 27, 2014, 11:30:18 PM


How can the masses be so clueless?

The Bitcoin Foundation board controls and regulates Bitcoin, every little aspect of the protocol, even the hardcap which is a joke to call hard or permanent cause it's nothing more than the carrot in this entire scheme.

In under 30 days 2 of the board seats have been vacated through outside force and influence.

How many more seats would need to be replaced to completely take control of Bitcoin and the entire protocol?

Did all these Bitcoin millionaire clowns really think the NSA, the Fed and everyone else with power were just gonna let them run the next global monetary system?  Lol, what clueless clowns - watch the next board seat come up for "vote" in little time - 30-60 days, like dominoes.

No need for a 51% attack, no need for even massive legislation, the Fed will own Bitcoin from the inside out before Christmas and none of these idiot techies will even realize it until it's way too late and the great currency swap of 2015 is underway.

Is anybody getting this?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on February 28, 2014, 12:17:15 AM


How can the masses be so clueless?

The Bitcoin Foundation board controls and regulates Bitcoin, every little aspect of the protocol, even the hardcap which is a joke to call hard or permanent cause it's nothing more than the carrot in this entire scheme.

No, they don't.  They have almost as much say in the protocol as you do.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Vlad2Vlad on February 28, 2014, 12:34:25 AM


How can the masses be so clueless?

The Bitcoin Foundation board controls and regulates Bitcoin, every little aspect of the protocol, even the hardcap which is a joke to call hard or permanent cause it's nothing more than the carrot in this entire scheme.

No, they don't.  They have almost as much say in the protocol as you do.


Ahahaaaa.  This is what I mean by totally clueless.


You haven't read the SEC filing from the Winklevoss ETF application, have you?

I have and that's exactly the case and it is printed in black and white in the application for the ETF.  But you have to actually think for yourself and do research to understand anything not being spoon-fed to you by the mainstream media.  

And who wants to do all that hard work, eh?

Unless of course, you think you know more about the Bitcoin rules and protocol than the Winklevoss twins and their lawyers and the Board members they worked with and helped fund (ie. Charlie Shrem).

This is why this diabolical plan will work so well and why I'm invested in cryptos, not even the morons who have been here since day one have any idea what's really going on.

It actually makes me wanna laugh even though I know the tragedy that is to follow.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: tvbcof on February 28, 2014, 01:09:06 AM

How can the masses be so clueless?

The Bitcoin Foundation board controls and regulates Bitcoin, every little aspect of the protocol, even the hardcap which is a joke to call hard or permanent cause it's nothing more than the carrot in this entire scheme.

No, they don't.  They have almost as much say in the protocol as you do.

Ahahaaaa.  This is what I mean by totally clueless.

You haven't read the SEC filing from the Winklevoss ETF application, have you?

I have and that's exactly the case and it is printed in black and white in the application for the ETF.  But you have to actually think for yourself and do research to understand anything not being spoon-fed to you by the mainstream media.  

And who wants to do all that hard work, eh?

Unless of course, you think you know more about the Bitcoin rules and protocol than the Winklevoss twins and their lawyers and the Board members they worked with and helped fund (ie. Charlie Shrem).

This is why this diabolical plan will work so well and why I'm invested in cryptos, not even the morons who have been here since day one have any idea what's really going on.

It actually makes me wanna laugh even though I know the tragedy that is to follow.

LOL!  Ya, one would have to be a world-class simp to believe that TBF writes Gavin's checks and have no influence on what he does.  Moonshadow may very well be 'patient zero' here.

At this point the people who want centralization to facilitate surveillance and control include:

 - The regulators
 - Law enforcement
 - The Bitcoin Foundation
 - The VC's
 - The exchange type businesses
 - Half the core developers
 - A rapidly increasing percentage of users.

It seems pretty unlikely that the motley crew who is left are going to be able to achieve much in terms of decentralization and privacy.  Certainly that is not where my money is (though they otherwise have my 'spiritual' support), and I'm planning to try to find a 'sweet spot' where the values are high before people realize how worthless the solution has become.

The VC money is green and abundant and I've already started putting a good bit of it into my own pocket.  They can have my BTC but they have to blow me to get it such is my reward for being one of the earlier people in the hood.



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 28, 2014, 01:18:39 AM
It seems pretty unlikely that the motley crew who is left are going to be able to achieve much in terms of decentralization and privacy.  Certainly that is not where my money is (though they otherwise have my 'spiritual' support), and I'm planning to try to find a 'sweet spot' where the values are high before people realize how worthless the solution has become.

Thanks for the spiritual love bro,  :-*

I agree the deck appears to be stacked against us. Did the Colonists lose against Great Britain.

Now get ready for the concrete solution to materialize in front of your eyes.  :-X


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on February 28, 2014, 01:22:47 AM


How can the masses be so clueless?

The Bitcoin Foundation board controls and regulates Bitcoin, every little aspect of the protocol, even the hardcap which is a joke to call hard or permanent cause it's nothing more than the carrot in this entire scheme.

No, they don't.  They have almost as much say in the protocol as you do.


Ahahaaaa.  This is what I mean by totally clueless.


You haven't read the SEC filing from the Winklevoss ETF application, have you?

I have and that's exactly the case and it is printed in black and white in the application for the ETF.  But you have to actually think for yourself and do research to understand anything not being spoon-fed to you by the mainstream media.  

The Winklevi are trying very hard to convince the feds that Bitcoin is as controlable as they wish it to be, and that they can help them do it.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Vlad2Vlad on February 28, 2014, 01:23:34 AM
It seems pretty unlikely that the motley crew who is left are going to be able to achieve much in terms of decentralization and privacy.  Certainly that is not where my money is (though they otherwise have my 'spiritual' support), and I'm planning to try to find a 'sweet spot' where the values are high before people realize how worthless the solution has become.

Thanks for the spiritual love bro,  :-*

Now get ready for the concrete solution to materialize in front of your eyes.  :-X



You've got my vote as well but a new coin or protocol is not the real challenge, getting people to see it and embrace it is the real challenge.

And if the powers that be are behind BTC then you're facing much more than sheer mass ignorance, which in and of itself, is the Everest of probabilities.


Expect mass sabotage and make sure your taxes are all up to code.  No Joke; Shrem and Karpeles were just the beginning.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 28, 2014, 01:26:32 AM
Too easy.  :-X

Really these Bitcoin developers suck (not in technical ability but in terms of knowing which features and third party apps to create). It is like taking candy from a baby to compete with them.

Agreed on getting one's taxes in order. And trading all your Bitcoin for newly mined coins is probably another good precaution.

Oh but you need an ASIC. Now you start to see the wisdom of my OP, e.g. cpu-only mining, perpetual debasement, etc..


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on February 28, 2014, 01:27:50 AM

LOL!  Ya, one would have to be a world-class simp to believe that TBF writes Gavin's checks and have no influence on what he does.  Moonshadow may very well be 'patient zero' here.


Count me as one of those world class simps.  Gavin doesn't have any more influence than we give him.  Just ask MtGOX, who chose to ignore Gavin's rational pleas to fix the mallibility bug in 2011.  As that inicident should point out; even when it's a good idea, and the fix is available, no one must comply.

For good for for bad, Gavin does not control Bitcoin.  He can only make recommendations, and he must justify those recommendations.  Granted, he has more sway with the base than you or I, but if he's not convincing changes don't occur.  Even if he's willing to make those changes himself.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Vlad2Vlad on February 28, 2014, 01:28:47 AM


How can the masses be so clueless?

The Bitcoin Foundation board controls and regulates Bitcoin, every little aspect of the protocol, even the hardcap which is a joke to call hard or permanent cause it's nothing more than the carrot in this entire scheme.

No, they don't.  They have almost as much say in the protocol as you do.


Ahahaaaa.  This is what I mean by totally clueless.


You haven't read the SEC filing from the Winklevoss ETF application, have you?

I have and that's exactly the case and it is printed in black and white in the application for the ETF.  But you have to actually think for yourself and do research to understand anything not being spoon-fed to you by the mainstream media.  

The Winklevi are trying very hard to convince the feds that Bitcoin is as controlable as they wish it to be, and that they can help them do it.

Regardless, the winklevii lawyers have, by law, stated facts about the bitcoin rules and protocol which include the FACT that the board controls every aspect of the protocol INCLUDING the hard cap.  If fact this is written as a potential RISK to the future of the ETF and not a benefit as it lends uncertainty.

Unless you really think the Winklevoss twins and their lawyers just made that up and the SEC and their team of lawyers are just too stupid to see it.  Let's get real here - the Bitcoin protocol and all its clones were designed from the ground up to be taken over and controlled by banks, govts and Multinationals.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Vlad2Vlad on February 28, 2014, 01:32:42 AM
Too easy.  :-X

Really these Bitcoin developers suck (not in technical ability but in terms of knowing which features and third party apps to create). It is like taking candy from a baby to compete with them.

Agreed on getting one's taxes in order. And trading all your Bitcoin for newly mined coins is probably another good precaution.

Well, I hope your confidence isn't unfounded.  I look forward to seeing what coin you come up with and what kind of traction it receives.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on February 28, 2014, 01:35:16 AM
Quote

The Winklevi are trying very hard to convince the feds that Bitcoin is as controlable as they wish it to be, and that they can help them do it.

Regardless, the winklevii lawyers have, by law, stated facts about the bitcoin rules and protocol which include the FACT that the board controls every aspect of the protocol INCLUDING the hard cap.  If fact this is written as a potential RISK to the future of the ETF and not a benefit as it lends uncertainty.

Unless you really think the Winklevoss twins and their lawyers just made that up and the SEC and their team of lawyers are just too stupid to see it.  Let's get real here - the Bitcoin protocol and all its clones were designed from the ground up to be taken over and controlled by banks, govts and Multinationals.

They stated things they claim are facts.  That doesn't change the reality of the matter at all.  Yes, I really think the Winklevi lawyers made that up and that the SEC & their own lawyers are too stupid to see it.  They very much want to believe that Bitcoin can be regulated.  They know nothing of merit about cryptography, programming, decentralization or (for that matter) even economics.  They are lawyers; nothing more, nothing less.  If the Winklevi can make up convincing bullshit, let them.  It might work or it might not.  I don't care.  Unlike the both of you, I actually DO understand cryptography, economics and the Bitcoin protocol.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on February 28, 2014, 01:36:36 AM
Too easy.  :-X

Really these Bitcoin developers suck (not in technical ability but in terms of knowing which features and third party apps to create). It is like taking candy from a baby to compete with them.

Agreed on getting one's taxes in order. And trading all your Bitcoin for newly mined coins is probably another good precaution.

Well, I hope your confidence isn't unfounded.  I look forward to seeing what coin you come up with and what kind of traction it receives.

Honestly, so am I.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: tvbcof on February 28, 2014, 01:47:30 AM
...
Agreed on getting one's taxes in order. And trading all your Bitcoin for newly mined coins is probably another good precaution.
...

Another agreement vis-a-vis taxes.  I've been suggesting this for a while, and of course I personally am dotting all my 'i's and crossing all my 't's.  Beyond that, I think it might be advisable to be prepared to declare and document one's BTC holdings.  Do these simple things (while holding one's nose) and one might walk away quite well off.  A bit disappointed perhaps, but tempered with the thought that Bitcoin is mostly an important early proof-of-concept and has already achieved way more than it could have.

I think that if one can document buying BTC from an exchange that will be sufficient to un-taint them.  This because if coins that were legally acquired in this manner were tainted it would be to obvious to early how useless the solution is.

I, for one, am not about to go swapping out my holdings, which are deep in the blockchain, for newly mined BTC.  It could well be that miners who don't 'register', 'certify', get a 'bitcoin license', or whatever, and play along with the tainting protocol and transaction discrimination will have their own mined coins tainted from the start anyway.



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on February 28, 2014, 01:53:11 AM
...
Agreed on getting one's taxes in order. And trading all your Bitcoin for newly mined coins is probably another good precaution.
...

Another agreement vis-a-vis taxes.  I've been suggesting this for a while, and of course I personally am dotting all my 'i's and crossing all my 't's.  Beyond that, I think it might be advisable to be prepared to declare and document one's BTC holdings.  Do these simple things (while holding one's nose) and one might walk away quite well off.  A bit disappointed perhaps, but tempered with the thought that Bitcoin is mostly an important early proof-of-concept and has already achieved way more than it could have.

I think that if one can document buying BTC from an exchange that will be sufficient to un-taint them.  This because if coins that were legally acquired in this manner were tainted it would be to obvious to early how useless the solution is.

I, for one, am not about to go swapping out my holdings, which are deep in the blockchain, for newly mined BTC.  It could well be that miners who don't 'register', 'certify', get a 'bitcoin license', or whatever, and play along with the tainting protocol and transaction discrimination will have their own mined coins tainted from the start anyway.



I'm missing something.  Why is it wise to trade out for new coins?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 28, 2014, 02:03:26 AM
...
Agreed on getting one's taxes in order. And trading all your Bitcoin for newly mined coins is probably another good precaution.
...

Another agreement vis-a-vis taxes.  I've been suggesting this for a while, and of course I personally am dotting all my 'i's and crossing all my 't's.  Beyond that, I think it might be advisable to be prepared to declare and document one's BTC holdings.  Do these simple things (while holding one's nose) and one might walk away quite well off.  A bit disappointed perhaps, but tempered with the thought that Bitcoin is mostly an important early proof-of-concept and has already achieved way more than it could have.

I think that if one can document buying BTC from an exchange that will be sufficient to un-taint them.  This because if coins that were legally acquired in this manner were tainted it would be to obvious to early how useless the solution is.

I, for one, am not about to go swapping out my holdings, which are deep in the blockchain, for newly mined BTC.  It could well be that miners who don't 'register', 'certify', get a 'bitcoin license', or whatever, and play along with the tainting protocol and transaction discrimination will have their own mined coins tainted from the start anyway.

I'm missing something.  Why is it wise to trade out for new coins?

Because in theory only new minted coins can't have been stolen in the past (https://bitcointalk.org/index.php?topic=491181.0).

As for tvbcof's theory that AML, KYC exchange sourced coins are more amenable to the authorities than self-mined coins, as far as I can see there is nothing tainted about mining your own coins for as long as you declare and can document the activity to the authorities, e.g. on your tax return when you create a taxable event.

I don't see how purchasing on an exchange stops the law from trying to obtain the stolen coins for the victim. As I covered in detail at the link above (dig to find my quotes of the Mt.Gox Terms of Service (https://bitcointalk.org/index.php?topic=486872.msg5407521#msg5407521)), an exchange is not a bank and your coin ownership was not transferred to the exchange when you deposited them.

So sorry I have to strongly disagree with you on that point. Sorry to give you bad news and cause you to have a headache. Better you face reality now and trade now for self-mined coins. Thus you would need a cpu-only coin probably.

You can clearly see the feature set for a new altcoin will drive its adoption in spades.

P.S. The Yes has risen from 33% to 38%.

Disclaimer: my usual disclaimer (seen upthread) applies to all my posts.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on February 28, 2014, 02:15:22 AM

I'm missing something.  Why is it wise to trade out for new coins?

Because in theory only new minted coins can't have been stolen in the past (https://bitcointalk.org/index.php?topic=491181.0).

As for tvbcof's theory that AML, KYC exchange sourced coins are more amenable to the authorities than self-mined coins, as far as I can see there is nothing tainted about mining your own coins for as long as you declare and can document the activity to the authorities, e.g. on your tax return when you create a taxable event.


Ah, I see.

Quote

I don't see how purchasing on an exchange stops the law from trying to obtain the stolen coins for the victim. As I covered in detail at the link above (dig to find my quotes of the Mt.Gox Terms of Service (https://bitcointalk.org/index.php?topic=486872.msg5407521#msg5407521)), an exchange is not a bank and your coin ownership was not transferred to the exchange when you deposited them.

So sorry I have to strongly disagree with you on that point. Sorry to give you bad news and cause you to have a headache. Better you face reality now and trade now for self-mined coins. Thus you would need a cpu-only coin probably.


I've never made the claim that courts won't attempt to recover stolen value.  I also know, for a fact, that my own coins have never touched any exchange since at least October of 2010.

Quote
You can clearly see the feature set for a new altcoin will drive its adoption in spades.


It might, actually, but that won't be because of some inherent flaw of bitcoin or it's protocol.  Bad image isssues are more difficult to argue against.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: tvbcof on February 28, 2014, 04:38:07 AM
...
As for tvbcof's theory that AML, KYC exchange sourced coins are more amenable to the authorities than self-mined coins, as far as I can see there is nothing tainted about mining your own coins for as long as you declare and can document the activity to the authorities, e.g. on your tax return when you create a taxable event.

I don't see how purchasing on an exchange stops the law from trying to obtain the stolen coins for the victim. As I covered in detail at the link above (dig to find my quotes of the Mt.Gox Terms of Service (https://bitcointalk.org/index.php?topic=486872.msg5407521#msg5407521)), an exchange is not a bank and your coin ownership was not transferred to the exchange when you deposited them.

So sorry I have to strongly disagree with you on that point. Sorry to give you bad news and cause you to have a headache. Better you face reality now and trade now for self-mined coins. Thus you would need a cpu-only coin probably.
...

My argument that AML/KYC coins won't be tainted is not that it cannot be done.  It's that it won't because it would destroy an otherwise very useful system (and spur on the development of others which are not so convenient.)

I honestly don't know what you are talking about vis-a-vis 'self-mined coins'.  'self-mined coins' are ancient history.  A handful of pools mine most coins and get the block reward at this point.

I cannot take credit for the theory as Mike Hearn anticipated it way back in 2011, but a method to control Bitcoin would be to discriminate transactions at the mining level.  He theorized that mining would become so specialized and expensive, and thus centralized, that it would be practical to discriminate 'bad' transactions (from political enemies like the Persians to use an example) that it would be a practical choke-point.  Mike was dead right in this, and as best I can tell he considered it a good thing.

I expand this theory slightly based on the very real threat of tainting, or {color}listing if one prefers.  That is to say, induce not only transacting parties to honor a taint authority's output, but also mining pools and do so by simply tainting their newly minted coins.  As I anticipated years ago, no sovereign nation is going to welcome Bitcoin since it is a universal threat to all but failed states.  A trans-national effort to control Bitcoin is very likely which will leave pool operators nowhere to rest in peace unless they choose to cooperate (and hell, in that case they might even get free power!)

Once taint is established (initially for 'terrorists' and such) it will also be fairly easy to simply ratchet it up and taint coins for anything desired.  A good example would be coins which are not registered to a known owner in addition to ones which are not mined by a 'licensed' and cooperative miner.

===

Anything resembling Bitcoin and it's persistent ledger is stupid for exchange currencies for scalability and privacy reasons.  Some sort of a limited life tokens system makes the most sense here.

As for the niche which can be served by a Bitcoin-like system (reserved storage and account balancing) a system which pays more attention to the transfer nodes makes a lot more sense.  The thought I had was to l had was to link transfer and mining such that mining rewards are proportional to the degree of demonstrable decentralization an individual brings to the game.  It should be blindingly obvious to all at this point that either CPU mining or non-predictable algorithm shifting regime (or both) are the way to go.

I would not rule out the use of sha256 hashing to periodically (say, once per quarter or once per version release) optimize a block-chain.  This would put the existing ASIC gear to work.  We'd just choose the winner as whoever had the best result when a re-org was needed for instance.



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 28, 2014, 05:14:52 AM
...
As for tvbcof's theory that AML, KYC exchange sourced coins are more amenable to the authorities than self-mined coins, as far as I can see there is nothing tainted about mining your own coins for as long as you declare and can document the activity to the authorities, e.g. on your tax return when you create a taxable event.

I don't see how purchasing on an exchange stops the law from trying to obtain the stolen coins for the victim. As I covered in detail at the link above (dig to find my quotes of the Mt.Gox Terms of Service (https://bitcointalk.org/index.php?topic=486872.msg5407521#msg5407521)), an exchange is not a bank and your coin ownership was not transferred to the exchange when you deposited them.

So sorry I have to strongly disagree with you on that point. Sorry to give you bad news and cause you to have a headache. Better you face reality now and trade now for self-mined coins. Thus you would need a cpu-only coin probably.
...

My argument that AML/KYC coins won't be tainted is not that it cannot be done.  It's that it won't because it would destroy an otherwise very useful system (and spur on the development of others which are not so convenient.)

Oh I agreed. See where I posted in that related thread that it would be most economical to go after the Bitcoin millionaires to recover some value in a class action by the government (or G20 in concerted effort...the beginnings of the world government cooperation), so the gubermint can appear to be protecting the public-at-large and they can keep their NWO coin going.

Basically I see the Bitcoin millionaires and billionaires playing ball with the gubermint in order to keep some portion of their gains. Those who resist will lose it all and possibly thrown into debtor's prison when they can pay obligations after the confiscation of stolen property and very high taxes on the wealthy (capital gains, VAT, and a wealth tax in addition to bail-ins and other forms of crazy IMF "financial repression"). Take this in the context of a Mad Max $150 trillion global debt implosion wealth hunt from the G20,which I expect to start ratcheting up 2016ish.

So the Bitcoin paupers will be cheering on this outcome! Jealousy, greed, and self-preservation at-any-cost are root qualities of human nature.

I honestly don't know what you are talking about vis-a-vis 'self-mined coins'.  'self-mined coins' are ancient history.  A handful of pools mine most coins and get the block reward at this point.

Yeah I know as I stated upthread.

Thus I was implying we would need to mine and hold an altcoin ;)

I cannot take credit for the theory as Mike Hearn anticipated it way back in 2011, but a method to control Bitcoin would be to discriminate transactions at the mining level.  He theorized that mining would become so specialized and expensive, and thus centralized, that it would be practical to discriminate 'bad' transactions (from political enemies like the Persians to use an example) that it would be a practical choke-point.  Mike was dead right in this, and as best I can tell he considered it a good thing.

I wrote similarly in my March 2013, Bitcoin : The Digital Kill Switch, and I think it is a bad thing.

Transactions are not coin base rewards. Are we talking about the same thing?

I expand this theory slightly based on the very real threat of tainting, or {color}listing if one prefers.  That is to say, induce not only transacting parties to honor a taint authority's output, but also mining pools and do so by simply tainting their newly minted coins.

Well if you are saying that newly minted coins don't pass the AML, KYC regulation and thus will tainted by default unless they were mined by the "approved" pools, then simply mine for an approved pool. Or buy from an approved pool.

Are you saying no minted coins will be untainted? Then all coins are tainted. Obviously you don't mean that.

As I anticipated years ago, no sovereign nation is going to welcome Bitcoin since it is a universal threat to all but failed states.  A trans-national effort to control Bitcoin is very likely which will leave pool operators nowhere to rest in peace unless they choose to cooperate (and hell, in that case they might even get free power!)

Agreed on the G20 concerted effort. They are already announcing edicts on cooperation against tax avoidance.

Put your pool in a failed state or behind an anonymous proxy (that you control) in one ;)

One of the key design points from my OP is the better altcoin needs to limit the size of pools, so there will be 1000s of them.

One of the key points of my design is the pools don't have to be trusted at all!

Once taint is established (initially for 'terrorists' and such) it will also be fairly easy to simply ratchet it up and taint coins for anything desired.  A good example would be coins which are not registered to a known owner in addition to ones which are not mined by a 'licensed' and cooperative miner.

This only works if the gubermint can control the pools or otherwise destroy anonymity of users. That is a critical point.

Anything resembling Bitcoin and it's persistent ledger is stupid for exchange currencies for scalability and privacy reasons.  Some sort of a limited life tokens system makes the most sense here.

There is no problem with scalability given a correct design. See the mini block chain design for example.

Limited life tokens have no value.

Have you ever seen money that goes poof become widely accepted?

As for the niche which can be served by a Bitcoin-like system (reserved storage and account balancing) a system which pays more attention to the transfer nodes makes a lot more sense.  The thought I had was to l had was to link transfer and mining such that mining rewards are proportional to the degree of demonstrable decentralization an individual brings to the game.  It should be blindingly obvious to all at this point that either CPU mining or non-predictable algorithm shifting regime (or both) are the way to go.

You haven't seen my design yet.  :-X


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: tvbcof on February 28, 2014, 05:32:29 AM
...
Anything resembling Bitcoin and it's persistent ledger is stupid for exchange currencies for scalability and privacy reasons.  Some sort of a limited life tokens system makes the most sense here.

There is no problem with scalability given a correct design. See the mini block chain design for example.

Limited life tokens have no value.

Have you ever seen money that goes poof become widely accepted?

Yes.  Ever been to a laundromat or an arcade?

Things which someone will exchange for something else have value by definition.  I'd actually be delighted to buy a months worth of tokens using a part of my BTC hoard and a single transaction as long as it was reasonably easy and cheap to recycle the balance if I didn't use them all.  This would be especially the case if it assisted in maintaining some degree of financial privacy and the mild inconvenience contributed to facilitating a durable solution.

It pains me to admit it, but I'm looking forward to critiquing your design.  I expect that I'll see the same neglect toward persistent and growing data management issues that I see from about 98% of the developers I've worked with over the year (and even some damn good ones!)  But I'm always happy to be pleasantly surprised.



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 28, 2014, 05:39:48 AM
...
Anything resembling Bitcoin and it's persistent ledger is stupid for exchange currencies for scalability and privacy reasons.  Some sort of a limited life tokens system makes the most sense here.

There is no problem with scalability given a correct design. See the mini block chain design for example.

Limited life tokens have no value.

Have you ever seen money that goes poof become widely accepted?

Yes.  Ever been to a laundromat or an arcade?

Those are not widely accepted. Because they don't have the economy-of-scale of not timing out.

Things which someone will exchange for something else have value by definition.  I'd actually be delighted to buy a months worth of tokens using a part of my BTC hoard and a single transaction as long as it was reasonably easy and cheap to recycle the balance if I didn't use them all.  This would be especially the case if it assisted in maintaining some degree of financial privacy and the mild inconvenience contributed to facilitating a durable solution.

But if they can be recycled, then you've accomplished nothing for privacy.

All you've done is given your privacy to the issuer of the token, who doesn't care if it expires because he has already been paid for the tokens.

It pains me to admit it, but I'm looking forward to critiquing your design.  I expect that I'll see the same neglect toward persistent and growing data management issues that I see from about 98% of the developers I've worked with over the year (and even some damn good ones!)  But I'm always happy to be pleasantly surprised.

I assume you mean transaction data and not source code control?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 28, 2014, 06:09:20 AM
https://bitcointalk.org/index.php?topic=491452.msg5420480#msg5420480

Well maybe because BTC is the only one that is actually being used as a currency  ;)

True. And there is not yet compelling reason to use any altcoin as a currency, because none offer any big advantage for doing so.

I can think of at least three features for an altcoin that would make it more desirable to use for use as a currency than Bitcoin:

  • Rock solid anonymity always (batteries included)
  • No transaction fees
  • 15 or 30 second transactions

Bitcoin is sh8t.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Vlad2Vlad on February 28, 2014, 06:35:53 AM


AnonyMint,

You sound so confident about your programming skills and I have no reason to doubt you but would you share your background so we can have an idea what we can expect as far as quality and depth of your upcoming coin design?  I for one appreciate such things.

Thanks!


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Vlad2Vlad on February 28, 2014, 06:48:36 AM
Well maybe because BTC is the only one that is actually being used as a currency  ;)

True. And there is not yet compelling reason to use any altcoin as a currency, because none offer any big advantage for doing so.

I can think of at least three features for an altcoin that would make it more desirable to use for use as a currency than Bitcoin:

  • Rock solid anonymity always (batteries included)
  • No transaction fees
  • 15 or 30 second transactions

Bitcoin is sh8t.


No TX fees would be ok if you're going to add some inflation but there would be no mass adoption as banks, Multinationals and the govt would get behind a different coin [and kill yours] which was designed for massive fees (i.e. Bitcoin) so they can charge 7 billion sheep ridiculous fees and not just the 3 billion they're currently raping.  

Rock solid anonymity would be a dream but it's naive to think that would ever leave the crib for the same reasons listed above.  Banks, Multinationals and governments are not into giving up power and control over the information they gather about their citizens/customers, they're in the business of growing that power and control.

So once again, it would be you alone against the powers of the world with 7 billion sheep not understanding what you're really trying to do and not even caring - parroting instead what the media says while mocking your efforts.

This is why ZeroCoin, Ethereum, etc., will never see any real adoption - and will only ever be used by the CIA to anonymously transfer billions of dollars to their drug cartels cause it's cheaper and more efficient than using 18 wheelers and airplanes for transferring all those tons of cash.

As for the 15-30 second confirmations - I don't think there's issue there for BTC.  I've read that once BTC goes mainstream it can have instant transactions although I'm not a techie and don't know the details enough to properly explain it.

But let's say a 30 second block time is better than 10 minutes, that's an easy fix for Bitcoin (Easy Fork -Client/Protocol update) which would leave your coin with no real competitive advantages.

So the only advantages your coin will have are the first 2 which would make your coin a true people's coin and we all know the people forfeited control over their lives and destiny some 10 years ago and hence, such a coin would never gain any traction as the media and all the power and manipulation behind it would kill it quick and perhaps even expose you to some real personal risks.

Other than that your heart and mind are in the right place, brother!


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: tvbcof on February 28, 2014, 07:06:17 AM

Yes.  Ever been to a laundromat or an arcade?

Those are not widely accepted. Because they don't have the economy-of-scale of not timing out.

If the tokens were widely used they would be widely accepted.  The time-out thing (among others) makes this an imperfect analog, I admit, but generally speaking there is no economic reason why tokens won't work.  In fact that is all that cash is and arguably even gold in a way.  Or even Bitcoin for that matter.  It's all just an accounting system to me, and like many things in nature they all just seek their natural (low energy) state which makes pure systems self-adjusting.

Things which someone will exchange for something else have value by definition.  I'd actually be delighted to buy a months worth of tokens using a part of my BTC hoard and a single transaction as long as it was reasonably easy and cheap to recycle the balance if I didn't use them all.  This would be especially the case if it assisted in maintaining some degree of financial privacy and the mild inconvenience contributed to facilitating a durable solution.

But if they can be recycled, then you've accomplished nothing for privacy.

All you've done is given your privacy to the issuer of the token, who doesn't care if it expires because he has already been paid for the tokens.

I've not even described the system so you cannot make a judgement on how privacy is or is not accomplished.  The reason I've not described it is because I've not thought about it much.  Exchange currencies are not as interesting to me as reserve systems (the former needs a solid implementation of the latter to act as a foundation.)

In fact a situation with numerous limited life tokens which are fungible and only trivially distinct, and of which a fraction need to be renewed occasionally to preserve usability is kind of cries out 'mixing service' which is an important element of many anonymity schemes.

Just now I conceived of scalability in terms of budding as many 'mints' as needed such that each would have a nice ratio of overall load which kept it manageable by enthusiasts while being able to scale simply by forming more.  Tokens from the wrong mint could be passed to the right one through the network, and that in itself speaks to a ready-made proxy system.  Another feature of a privacy enhancing solution.

I'm probably dredging up some of my limited understanding of Chaum token stuff here.  Or at least that is how I'm conceiving of the actual token units insofar as they consist of data wrapped in routing/responsibility layers.

It pains me to admit it, but I'm looking forward to critiquing your design.  I expect that I'll see the same neglect toward persistent and growing data management issues that I see from about 98% of the developers I've worked with over the year (and even some damn good ones!)  But I'm always happy to be pleasantly surprised.

I assume you mean transaction data and not source code control?

Ha!  Both actually :)  More the former is what I meant though.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 28, 2014, 09:59:50 PM
Essentially my stance is that as Bitcoin becomes more popular, the will of the increasing number of naive users will be supersede the idealism of the early adopters. The way a representative democracy (as opposed to direct voting on each issue which is impractical except for perhaps a townhall format) functions is that the government regulators (and a whole other echelon at the covert agencies level) have an obligation to appease that majority will.

Bitcoin being global provides a majority will demand for the governments to cooperate globally.

Although idealistic early adopters would like for Bitcoin to be a system which lacks repudiation the way credit cards and even wire transfers do in the case of theft, this would mean all liability falls on the shoulders of naive users. The will of the majority will demand consumer protection. The government has the power to force this on Bitcoin, because it is not anonymous and the users have a physical presence and identity. Now it is just a matter of time for the will of the majority to dominate and the governments to get organized on doing their obligation.

Idealistic users may prefer to use a different system. We will see.

Then some naive users may realize that different system is the one they need too. In short, some people learn, especially when they are being oppressed by the fall of society into the $150 trillion debt collapse coming.

With 7 billion people in this world, an alternative system only needs 1 in 7,000 people to use it in order to be widely accepted.

Let the majority have their NWO coin. Let's make the coin we want for ourselves.

No need to discuss my programming career. It is already on the forum any way if you want to dig for it. And in any case, there are many talented programmers if they are offered bounties and provided white papers with some oversight on design.

I think I've said enough, actually too much.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Jungian on February 28, 2014, 10:04:06 PM
Let the majority have their NWO coin. Let's make the coin we want for ourselves.

I'll support any and all serious efforts to make a secure and totaly anonymous coin. Now, I'm not a programmer by any stretch of the imagination, nor do I know enugh of the ins and outs and pitfalls to know what to ask for in a coin.

How can I help?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 28, 2014, 11:12:46 PM
Mine it and may I suggest don't trade it for Bitcoin, otherwise you taint yourself (with potentially dire ramifications for claw-backs).

Instead exchange to fiat as needed via a decentralized exchange. I already know the design of a decentralized exchange. Thus there will be no AML nor KYC applied.

Essentially blacklist Bitcoin entirely, otherwise you taint yourself. Use fiat where you need to use Bitcoin. And push for merchants to accept your new coin. If enough people do this, then it will happen. You need to be passionate about it, just as the Bitcoiners were/are.

If you need to pay and only Bitcoin is accepted, then feel free to send your payment to an entity takes ownership of your coin, converts it to Bitcoin, and pays your intended merchant. Make sure the Terms of Service clearly state they take ownership of your coins, so that you are not tainted with liability of holding Bitcoins even for a millisecond.

If you have Bitcoin you would like to trade for this new coin, may I suggest you convert first to fiat. Then untaint that fiat (https://bitcointalk.org/index.php?topic=491181.msg5422422#msg5422422) somehow (e.g. get cash from an ATM), then use a decentralized exchange to trade for the new coin, i.e. in the USA mail a money order or do a meet up or deposit a (post office or convenience store, not a bank) money order (not the cash) to a bank account. Or better go buy more computers to mine it with but please untaint the fiat first, because claw-backs from Bitcoin will trace through to fiat (https://bitcointalk.org/index.php?topic=491181.msg5422422#msg5422422)!

By decentralized exchange, I do not mean localbitcoins, because they keep centralized records. I mean a peer-to-peer system that will be built in by default in the mining and transaction client!

Actively educate users to blacklist centralized exchanges and any coins that were processed through them. Support development of tools to do blockchain analysis and list coins which have become tainted by centralized exchange.


Edit: tvbcof, on your "many currencies" idea, the problem is economy-of-scale to get merchants to accept them all. It seems like a last ditch futile sort of experiment. Might be willing to go there if all else fails. I'd rather fight first on a unified alternative to Bitcoin.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Jungian on February 28, 2014, 11:36:34 PM
Are you in the process of making this coin a reality? If so, any expected timeline?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on February 28, 2014, 11:58:21 PM
"No" (http://www.youtube.com/watch?v=dGMPDBITApQ).


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: sidhujag on March 01, 2014, 05:21:47 AM
Bitshares is supposed to be like a decenrralized bank via BitUSD or Bitxxx is this similar to your understanding of a decentralized exchange?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Vlad2Vlad on March 01, 2014, 05:39:57 AM
"No" (http://www.youtube.com/watch?v=dGMPDBITApQ).



I not understand your link.  So when do you plan work on your coin?


Here's an idea.  Lots of new coins pop up everyday and most are burried in the process so it's getting harder to launch a new coin and have it noticed.  This is why I launched Nuggets when I didn't even know what a blockchain was.

So maybe it's a better idea for you to take over an existing coin, preferably and older coin with an already time tested protocol and an already secure network and then update the code to make it just like you want.

This would give you some advantages over launching a new coin.  I suggest i0Coin, it's an abandoned coin,  it it's been around almost 3 years, has a strong network and has been updated to work well via merge mining.

You can easily change the 21 million hardcap to reflect the slight inflation of gold and get rod of fees and you'd pretty much have your coin.

Also, I'd change the name, i0Coin has never sounded like a good name.

And it's already listed on good exchanges like Vircurex and Cryptsy I believe.

Good luck!


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 01, 2014, 09:09:54 AM
Lots of new coins pop up everyday and most are burried in the process so it's getting harder to launch a new coin and have it noticed.

Perfect.

Bitshares is supposed to be like a decenrralized bank via BitUSD or Bitxxx is this similar to your understanding of a decentralized exchange?

No because it attempts to do market clearing of bids and asks at the miner. And it has no mechanism to move fiat in the system and depends on their unproven faith that BitUSD will track the value of fiat (which I think I refuted in the thread of discussion on that, yet they are welcome to try it and see what happens).

I am thinking something like a P2P decentralized localbitcoins, with decentralized 3rd parties (with multi-signature) chosen for escrow when escrow is needed. Third parties would compete to gain reputation, but need not be their true identity. If you are not doing meetups where no third party is needed for escrow (maybe only a timeout lockup on the coins), then identity of the holder of the bank account isn't anonymous any way. And the depositor of the fiat need not provide identity, only bank receipt that deposit was made.  Apparently others are working on a similar concept for Bitcoin (https://bitcointalk.org/index.php?topic=488934.msg5415307#msg5415307), but not built-in by default in the official wallet and mining client (note those are the same in a cpu-only coin).

Add:

https://bitcointalk.org/index.php?topic=488148.msg5378912#msg5378912

https://bitcointalk.org/index.php?topic=471355.0

With cpu-only mining, then you buy PCs with fiat to buy (by mining) coins, you buy more PCs with coin and sell the PCs to get fiat.

That is why a cpu-only coin is so damn important. Most people will then enter by mining, and spending will be preferred over selling!


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: sidhujag on March 01, 2014, 07:39:21 PM
Lots of new coins pop up everyday and most are burried in the process so it's getting harder to launch a new coin and have it noticed.

Perfect.

Bitshares is supposed to be like a decenrralized bank via BitUSD or Bitxxx is this similar to your understanding of a decentralized exchange?

No because it attempts to do market clearing of bids and asks at the miner. And it has no mechanism to move fiat in the system and depends on their unproven faith that BitUSD will track the value of fiat (which I think I refuted in the thread of discussion on that, yet they are welcome to try it and see what happens).

I am thinking something like a P2P decentralized localbitcoins, with decentralized 3rd parties (with multi-signature) chosen for escrow when escrow is needed. Third parties would compete to gain reputation, but need not be their true identity. If you are not doing meetups where no third party is needed for escrow (maybe only a timeout lockup on the coins), then identity of the holder of the bank account isn't anonymous any way. And the depositor of the fiat need not provide identity, only bank receipt that deposit was made.  Apparently others are working on a similar concept for Bitcoin (https://bitcointalk.org/index.php?topic=488934.msg5415307#msg5415307), but not built-in by default in the official wallet and mining client (note those are the same in a cpu-only coin).

I know the MyCelium bitcoin wallet has a localbitcoins thing builtin where it would creates a sort of marketplace for people local to you, and you would meet up with them and only transfer coins after receiving fiat... its not far off from using multi-sig and bank receipts but it does handle trader feedback for reputation and signature signing in future release...  what you are saying should  not be that far off from current implementation.

See: https://bitcointalk.org/index.php?topic=293472.msg5104823#msg5104823


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 01, 2014, 11:08:04 PM
https://bitcointalk.org/index.php?topic=493115.msg5454129#msg5454129

How would you propose they return coins to the victim of a theft if his coins are now distributed as taint across 24,000 other coins?  Say Sally has 1 BTC that has 0.002% taint of a coin that was stolen from Sam.  Would they correlate Sally's human identity with her 1 BTC wallet, find her somehow, and then ask for 0.002% x 1 BTC = 2000 Satoshi's back?  And then they would find the other 23,999 coins and do the same?  And what if Sally was also the victim of a theft at some prior point in time, but the Coin Rescuers hadn't found her coins yet.  She might be upset that you're taking some of her coins, when she was a victim herself.  Do you think you could add an appeal process so that victims waiting for their settlements could defer having a portion of their coins removed?

The authorities could either start as early in the chain as possible where the stolen coin is not very distributed, especially since many Bitcoin investors hold long-term. And these big fish (if Bitcoin goes to $1 million, then BTC100 is worth $100 million) would be the most lucrative to attack as well.

And at some point in the game, the G20 could declare a class action against Bitcoin in the collective public interest. They can mandate a tax on all conversions of Bitcoin to fiat to fund a new global insurance agency, which will be responsible for paying the victims.

Since this would be very popular given so many millions of people will have been stolen from (and told by the callous community of idealists that this was their learning experience and "c'est la vie" you have no recourse), this is the perfect way to begin to institute a world government, i.e. to have a demand for a global entity. You've provided a popular demand for a function that only government can do with its mandate on the use of force, which is the worst possible thing for liberty. It is so clever how this design leverages the Libertarians to help promote global governance. Makes me want to puke. And I am not going to stand idle and watch like a deer in the headlights. I am a real minanarchist-Libertarian (actually a contentionist) not like you mofos.

This is yet another in my long list of reasons to know with relative certainty that Bitcoin was planted by the powers-that-be who have for a long-time stated they intended for us to have a world government, i.e. the powerful group behind the launch of the failed League of Nations.

Bitcoin was well designed to have this outcome, because there are alternative designs for a crypto-currency which don't have this repudiation ex post facto weakness. I will be moving my investment (not from Bitcoin since I wasn't invested in it other than my effort to research it) to one of these superior altcoins soon.

You all can stay in the NWO coin. Have fun.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 01, 2014, 11:36:16 PM
https://bitcointalk.org/index.php?topic=493115.msg5454588#msg5454588

Here is a set of directions for the G20. I suggest that Wall Street Journal reporter who contacted me, can refer to this post.

hmmm the gox problem.

0) figure out the exact amount of missing coins and figure out where they went

Government directs through public announcements for users to document their stolen BTC, perhaps at a global entity website. Previously filed cases with local authorities can be forwarded.

1) verify which balance include part of the stolen ones

This can be automated. It is all on the blockchain. Mixers (a.k.a. laundries, tumblers, CoinJoin, etc) could simply pollute all outputs on the mixer.

2) Contact persons in possession by finding  actual Identities without infringing on rights....for which said agency is opening it'self wide for a class privacy lawsuit

You have no rights any more as the $150 trillion global debt bubble collapses society into a pancake chaos, because too many people are trying to hide assets from the onerous taxation and confiscation coming. The society will try to tax and claw-back as necessary in order to meet the impossible (bankrupted) obligations of the government. Observe carefully post-2015.

The NSA & GCHQ can correlate your identity (https://bitcointalk.org/index.php?topic=439357.msg5355485#msg5355485) (read all my posts in that linked thread).

3) prove that they actually are in my possession

Irrelevant. You are liable because you possessed. The law doesn't require you to still be possession.

4) gain access to my wallet
5) try to break my password, 215 characters
6) separate stolen from legitimate inputs

Not necessary. Just confiscate your real assets and auction them to recover the value stolen. Or garnish your wages.

7) figure out which gox customer exactly owned those particular coins
8) manage to distribute each and every coin to its owner

Already explained in #0 above.

this all assumes i am in the U.S, now, in my country the U.S has no power

Keep dreaming of your Alice in Wonderland fantasy. Meanwhile the G20 has been ramping up their coordination to go after all those Europeans who have been hiding assets abroad. They've got to pay that unpayable $150 trillion debt somehow.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 02, 2014, 12:24:51 AM
https://bitcointalk.org/index.php?topic=493115.msg5455202#msg5455202

Maybe you should have (sold BTC above $1000) purchased some gold at the $1150 low, since it has no traceable ledger.

Yet I speculate there will be another dip closer to $1000 after this spring rally. Gold won't blast off until after 2015 (http://armstrongeconomics.com/2014/02/27/the-gold-question-luck-v-fate/).

Quote
Gold is going to rise WHEN capital realizes that we have a geopolitical problem [after 2015] and there is uncertainly on the horizon as to what monetary system emerges afterwards. This is the real issue – not inflation. Plain and simple, gold reach $875 in 1980 and the Dow 1,000. The Dow has reached almost 17,000 and gold at its peak below $2,000. From a plain numbers game, the Dow was a far better hedge against “inflation” than gold since 1980.

See also:

http://armstrongeconomics.com/2014/02/24/gold-all-lathered-up-but-are-we-ready-to-go/


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 02, 2014, 01:08:30 AM
https://bitcointalk.org/index.php?topic=493115.msg5455800#msg5455800

There is no such thing as a stolen bitcoin.

Bitcoin is not property.

It is a ledger with a set of rules. Those rules are determined by consensus and enforced by the protocol. If you choose to take part in the game, you agree to accept the validity of the rules, and any future changes to the rules as determined by consensus.

With bitcoin, the rule is unambiguous: Whoever validly signs the transaction, "owns" the bitcoin.  

You cannot claim to be a legal "owner" of some bitcoin if you do not have the ability to sign (ie. knowledge of private key) because the bitcoin clients/developers/businesses never made such a promise, implicitly or explicitly, and the above rule was clear from the start.

Just because around 2010 everyone started behaving as if it was property doesn't make it property.  The mtgox victims never actually owned any bitcoins. At best, they owned bitcoin IOUs. It's sad that they were misled by mtgox's marketing and that we failed to educate them better about the above.

If you think this is all just theoretical musings,  remember this:

Indeed the above is all theoretical bullshit that won't help you in reality. The law is the law. The will and power of society is what wins because BITCOIN IS NOT ANONYMOUS. And Mt.Gox's Terms of Service was (as I documented in a linked post in an upthread post) they were acting as an agent with YOUR bitcoin property.

Any bitcoin can be "dispropriated " by consensus.  Not by the government, not by the legal system, not by the police, but only by the protocol itself.

Irrelevant, the law can confiscate other real property and/or garnish wages, because BITCOIN IS NOT ANONYMOUS.

Notwithstanding that the consensus is already controlled by a few mining pools, which can easily be expropriated by the government either overtly or covertly.

if bitcoin were property in any legal sense those protocol changes would have been Illegal!

No. They would have gone to a judge for a fair ruling, if there was enough incentive, but apparently not enough people were harmed wrongly in order to bring it to court.

PS. I don't want to condone antisocial behaviour like the mtgox heists, but the solution should come from the protocol itself, eg. in the form of multisig and timelocked transaction. It should not come from wrongly treating bitcoins as property.

I agree one of the solutions is decentralized exchange, but this won't stop all the theft and criminal activities that are tainting Bitcoin in ever increasing proportions.

Only will be true with rock solid, widespread anonymity. And Bitcoin will NEVER have that!  Never.

Tl;Dr code is law

It could be, with rock solid, widespread anonymity. But Bitcoin doesn't have this and NEVER will.

Tl;Dr Repudiation is always possible if there is not rock solid, widespread anonymity.

Tl;Dr Code is law iff (http://en.wikipedia.org/wiki/If_and_only_if) the identities of the participants can not be discovered.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 02, 2014, 03:20:08 AM
https://bitcointalk.org/index.php?topic=493115.msg5456994#msg5456994

Irrelevant, the law has to establish a case for bitcoin, which means accepting it as legal tender, which then means, law starts then. Which will nevr happen.

The underlined quoted text is unadulterated nonsense.

Quote
Notwithstanding that the consensus is already controlled by a few mining pools, which can easily be expropriated by the government either overtly or covertly.

Unless D.O.D comes up with a new really good ASIC, then manages to overtake the network before we can notice and react. Which falls to consensus yet again, ant dev will just roll back, switch algos place some new checkpoints and we'll continue, right where we left off. They can hold their "bitcoins" which we either invalidate, or they become worthless because the community that gives them value, has moved on.

Hahaha what naive fool you are. I won't even bother to explain.  ::)

Continue on in bliss boiling frog.

... rest of your nonsense not worth responding to...

I would not be surprised if new protocols and measures are introduced along with chain size reduction.

Hahaha, yeah the Bitcoin community is going to accept adding required strong anonymity to Bitcoin and the huge risk in change of legal status.

Just try.  ;)

You will learn what inertia and vested interests are.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 02, 2014, 05:38:36 AM
https://bitcointalk.org/index.php?topic=491181.msg5458015#msg5458015

long bullshit post

He appears to be saying buy Darkcoins while they're still low

Indeed those who deserve the NWO coin are lathered up in their groupthink due to salivating at the sight of multiple ZEROs following any non-zero digit.

They intellectually fail to connect the implications (https://bitcointalk.org/index.php?topic=495527.0) of whether those ZEROs will ever actually benefit them or instead an illusory trap of noisome woe and gnashing teeth.

https://www.google.com.ph/search?q=denver+airport+mural

http://3.bp.blogspot.com/_Rqr-1ncfKZA/TPAsVvt6wAI/AAAAAAAACsU/aTozc9MJBrI/s1600/denver-airport-mural.jpg

http://www.kaitseomatervist.ee/img/dia/mural1-2.jpg

https://fbcdn-sphotos-g-a.akamaihd.net/hphotos-ak-prn2/969434_436425246452703_1563954802_n.jpg

http://www.grabairdeals.com/wp-content/uploads/2014/01/denver-airport-murals-flickr-sharing-193953.jpg

http://2.bp.blogspot.com/-6Crplt3rNfs/UnCDPWjuqaI/AAAAAAAAass/anf0YtZ6ZoI/s1600/DIA-mural-02.jpg


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Vlad2Vlad on March 02, 2014, 05:42:31 AM



Nice Denver Airport Pics.


I'm sure they don't mean anything.  lol.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 02, 2014, 06:27:14 AM
...buy Darkcoins...

DarkCoin isn't anonymous (https://bitcointalk.org/index.php?topic=421615.msg5458409#msg5458409).

Edit: follow-up (https://bitcointalk.org/index.php?topic=421615.msg5464454#msg5464454).

Edit#2: Another followup (https://bitcointalk.org/index.php?topic=421615.msg5499170#msg5499170).


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Vlad2Vlad on March 02, 2014, 07:01:20 AM
...buy Darkcoins...

DarkCoin isn't anonymous (https://bitcointalk.org/index.php?topic=421615.msg5458409#msg5458409).


Nothing out there will be truly anonymous and if anything actually gets created it will be snuffed out in its crib in the name of National Security and your own safety.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 02, 2014, 07:26:27 AM
Don't give up before you've seen the white paper.  ;)

And don't ask me when and where you will see it.  :-X

Remember what we said as kids, "That's for me to know and for you to find out".

Also factor in that the NWO coin will be much more widespread, and the government has limited resources, especially as the sovereign debt bubble bursts 2016ish. They know they can't get 100% perfection, or if they don't, they will soon realize that as their resources are finite.

As I said, let them have their NWO coin and their dying industrial age economy, with 6 billion members. We only need a million or so (10 or 100 million is fine too) for it to be sufficiently widely available.

And guess who will come out the other side of this global crisis with their capital intact and with a much larger valued economy? The 6 billion zombies or the 100 million Knowledge Age winners?

Do you realize how fast we can innovate as compared to the NWO coin.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Vlad2Vlad on March 02, 2014, 07:37:25 AM
Don't give up before you've seen the white paper.  ;)

And don't ask me when and where you will see it.  :-X

Remember what we said as kids, "That's for me to know and for you to find out".

Also factor in that the NWO coin will be much more widespread, and the government has limited resources, especially as the sovereign debt bubble bursts 2016ish. They know they can't get 100% perfection, or if they don't, they will soon realize that as their resources are finite.

As I said, let them have their NWO coin, with 6 billion members. We only need a million or so (10 or 100 million is fine too) for it to be sufficiently widely available.

And guess who will come out the other side of this crisis with their capital intact and with a much larger valued economy? The 6 billion zombies or the 100 million Knowledge Age winners?


Well, I own NWOcoin dot com, so they'll need to find a new name.

Bhahahahaaaa.  Always one step ahead.  lol.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 02, 2014, 09:28:09 AM
https://bitcointalk.org/index.php?topic=491181.msg5459843#msg5459843

Most insiders and heroes here dont share your conspiracy theories.

I didn't say they do. I said they do speculate the Satoshi was NSA. Don't conflate two orthogonal things.

I'm not a cypherpunk

I am.

but I am nevertheless able to handle a device which can't being linked to myself.

Tell me more about your method, so I can tell you why you are technically ignorant of the fact that you are linked by the NSA.

I know of only two current ways to be truly anonymous. That is to access the internet from either netcafe with no cameras or from a mobile device for which you have not registered you id, and which you have not used for any other purpose (and remember the device has an id too, not just the simmpak). And you need to be careful about being recorded on the numerous cameras and ways of tracking your location, e.g. license plate tracking and every car now has tracking secretly built in. Because wireless device location can be pinpointed with triangularization.

As I've read in other threads (in your totalitarian 'self-moderated(!) thread and the mad max thread) you dont understand the concept of society, economy, debt and growth.

Hahaha. You are referring to these threads:

Economic Devastation (https://bitcointalk.org/index.php?topic=355212.0)

Mad Max outcome (https://bitcointalk.org/index.php?topic=365141.0)

"Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws) (https://bitcointalk.org/index.php?topic=455141.0)

You think the hypercomplex society/economy (that came about solely on the basis of additional debt which is enforced by organized violence of the state) could be maintained in a barter world where crypto currencies replace growing debt. This is mickey mouse economics.

I never said that. You have reading comprehension problems. Perhaps you didn't read my other thread, where I stated that currency is fundamental to the maximum division-of-labor.

No Money Exists Without the Majority (https://bitcointalk.org/index.php?topic=226033.0)

Cryptographics will destroy society/economy. That's the reason why I support it. I dont support it for the purpose of maintaining an endlessly rampant growing economy.

Since you've confirmed you are Malthusian idiot such as the Luddites (http://unheresy.com/Information Is Alive.html#2nd_Law_of_Thermo), I can now dismiss you as delusional.

Btw, the economy and society have continued to grow since Mesopotamia until now. That won't stop.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 02, 2014, 12:05:21 PM
https://bitcointalk.org/index.php?topic=491181.msg5461032#msg5461032

I'm perfectly happy to have a serious debate about this. But before I do so you really do need to do some proper research. Until then, I think we're back to "ask your dad".

Stop playing hide&seek games and cite some case law.

I've already provided a resource which says nemo dat quod non habet applies in tracing into mixed funds.

Now it is your turn to cite something that refutes that. Otherwise you are just playing games.


DooMAD and crazy_rabbit, I'm happy if you convince yourselves to make the biggest mistake of life. Please proceed.

nemo dat quod non habet has been fundamental to Western civilization. You proceed in your Alice in Wonderland fantasy.

Besides the USA has succeeded in forcing every major country to acquiese to our FATCA law (http://www.nestmann.com/finally-some-good-news-about-fatca), which is much more intrusive into sovereignty than nemo dat quod non habet norms in western civilization.

DooMAD apparently you are in the UK and nemo dat quod non habet originates from your country.

I think you guys have a few screws loose.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 02, 2014, 12:17:20 PM
https://bitcointalk.org/index.php?topic=491181.msg5461622#msg5461622

a mad max-type collapse of the society on the actual level doesn't lead into the mother of all dark ages in the history of the societies (collectivism), but instead into a 10-20 years lasting interruption of a prospering society (collectivism) only. Really funny.

I must concede that the odds favor your outcome (https://bitcointalk.org/index.php?topic=365141.msg5461592#msg5461592), but I am hoping the Knowledge Age cyberpunks can rejuvenate production. However, it is quite depressing to see how ignorant (tunnel vision, boiling frogs, zombies) most people are even here in these supposedly enlightened forums of libertarian white males.

In either case, we need a more anonymous crypto-coin. Bitcoin won't suffice.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 02, 2014, 02:54:00 PM
https://bitcointalk.org/index.php?topic=491181.msg5463449#msg5463449

I'm perfectly happy to have a serious debate about this. But before I do so you really do need to do some proper research. Until then, I think we're back to "ask your dad".

Stop playing hide&seek games and cite some case law.

I've already provided a resource which says nemo dat quod non habet applies in tracing into mixed funds.

Now it is your turn to cite something that refutes that. Otherwise you are just playing games.

" the original payer will have an equitable proprietary interest in the monies so long as they are traceable into whomsoever's hands they come other than a purchaser for value of the legal interest without notice."

 Westdeutsche Landesbank Girozentrale v Islington LBC [1996] UKHL 12 (22 May 1996) at p. 26 per Lord Browne Wilkinson

Your turn

Hahaha. You misinterpreted the decision. So now I know you are not an attorney. Rather the decision reaffirms the equitable interest in mixed funds even if the recipient "had no knowledge at any relevant time that the contract was void".

http://www.ucc.ie/law/restitution/archive/englcases/westdeutsche.htm

Quote
He held the money to be recoverable by the bank either as money had and received by the council to the use of the bank, or as money which in equity the bank was entitled to trace into the hands of the council and have repaid out of the council's assets. He decided that the bank's right to restitution at common law arose from the fact that the payment made by the bank to the council was made under a purported contract which, unknown to both parties, was ultra vires the council and so void, no consideration having been given for the making of the payment. The decision by the judge, which was affirmed by the Court of Appeal [1994] 1 W.L.R. 938, raised important questions in the law of restitution, which are of great interest to lawyers specialising in this field. Yet it is an extraordinary feature of the present appeal to your Lordships' House that the judge's decision on the substantive right of recovery at common law does not fall for consideration by your Lordships' House. The appeal of the council is confined to one point only - the question of interest.

Quote
The breadth of the submission

    Although the actual question in issue on the appeal is a narrow one, on the arguments presented it is necessary to consider fundamental principles of trust law. Does the recipient of money under a contract subsequently found to be void for mistake or as being ultra vires hold the moneys received on trust even where he had no knowledge at any relevant time that the contract was void? If he does hold on trust, such trust must arise at the date of receipt or, at the latest, at the date the legal title of the payer is extinguished by mixing moneys in a bank account: in the present case it does not matter at which of those dates the legal title was extinguished. If there is a trust two consequences follow: (a) the recipient will be personally liable, regardless of fault, for any subsequent payment away of the moneys to third parties even though, at the date of such payment, the "trustee" was still ignorant of the existence of any trust: see Burrows, "Swaps and the Friction between Common Law and Equity" [1995] R.L.R. 15; (b) as from the date of the establishment of the trust (i.e. receipt or mixing of the moneys by the "trustee") the original payer will have an equitable proprietary interest in the moneys so long as they are traceable into whomsoever's hands they come other than a purchaser for value of the legal interest without notice. Therefore, although in the present case the only question directly in issue is the personal liability of the local authority as a trustee, it is not possible to hold the local authority liable without imposing a trust which, in other cases, will create property rights affecting third parties because moneys received under a void contract are "trust property."


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: S4VV4S on March 02, 2014, 03:03:35 PM
AnonyMint, how did you become a senior member here?

Dating back, March 14th 2013, when you first joined, your very first post was about a flaw in Bitcoin.

What gives?

Why do you fight Bitcoin so much?

Who is your employers?
You are spending too much time trying to get people away from Bitcoin so obviously there is something else behind it.

Wanna share with us?



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 02, 2014, 03:11:48 PM
AnonyMint, how did you become a senior member here?

Dating back, March 14th 2013, when you first joined, your very first post was about a flaw in Bitcoin.

What gives?

Why do you fight Bitcoin so much?

Who is your employers?
You are spending too much time trying to get people away from Bitcoin so obviously there is something else behind it.

Wanna share with us?

https://bitcointalk.org/index.php?topic=493115.msg5463544#msg5463544


Incorrect. You had to transmit your public key to the sender who sent you BTC.

This guy claims a deep technical understanding and argues why Bitcoin is doomed to fail and yet demonstartes his total ignorance by clearly not understand the basics of Bitcoin... What a muppet... Ignored.

Quoting me out-of-context by eliding much of the quoted post (and pretending not to read my post that followed it), and then using that liar-method to claim I didn't understand something, is the epitome of beta-male chest thumping.

https://bitcointalk.org/index.php?topic=491181.msg5462012#msg5462012

DooMAD, I like what is linked (http://www.wearedecentralised.co.uk/) from your signature. One mistake is you seem to assume that Bitcoin is the certain solution.

Okay it is quite clear now to me what is going on. If for example you study the linked website from DooMAD's signature and study his posts in that thread where he is debating me and factor in comments such as above, it is quite clear that the beta-males think they discovered the Holy Grail that can empower them to fight back (while getting rich at the same time!) and they are very butthurt when any one tries to tell them:

"Wait, the concept of decentralized crypto is great, but Bitcoin has serious flaws which render it incapable of giving you that win that you think you are getting".

I am here to make the decentralized cypto that will win.

I am not here to hang out with beta-male losers who can't comprehend.

Guys decide whether you want to follow the losers or the winners.

Be astute.

Signing off now. See ya at the winning coin. It will be up to you to find it in that sea of altcoin announcements. I won't be posting it here.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 02, 2014, 06:01:04 PM
Ah have to sneak back in to say, looks like I am winning the information war:

https://bitcointalk.org/index.php?topic=441414.msg5466479#msg5466479

I get really nervous when I read articles like this (http://rt.com/news/bitcoin-not-anonymous-stallman-522/) or talks like this (http://www.reddit.com/r/Bitcoin/comments/1uizch/a_m_antonopoulos_says_bitcoin_needs_to_implement/) which highlight the extreme dangers that can be imposed by world governments without anonymity.

Add my thread (https://bitcointalk.org/index.php?topic=455141.0) to the logic about the threats from lacking anonymity.

Zerocoin doesn't obscure IP addresses. Still vulnerable to traffic and pattern analysis too. CoinJoin can't scale due to denial-of-service in its 2nd signing step. DarkCoin appears to be fundamentally flawed. Etc.

All the gory details in this thread:

https://bitcointalk.org/index.php?topic=439357.msg5355485#msg5355485


https://bitcointalk.org/index.php?topic=441414.msg5467500#msg5467500

I get really nervous when I read articles ... or talks like this (http://www.reddit.com/r/Bitcoin/comments/1uizch/a_m_antonopoulos_says_bitcoin_needs_to_implement/) which highlight the extreme dangers that can be imposed by world governments without anonymity.

Andreas' rant started around 33 minutes or so, and he really got into by 39 min. He basically says that the developed world is too focused on profit, navel-gazing, kissing the boot of regulators. He says the 6 billion are driving the real future of Bitcoin.

Cool! He and I are shouting the same thing!

So fuck these assholes in this forum who are criticizing me.

P.S. Andreas has one flaw in his analysis, the developing world is short the dollar and the tail doesn't wag the dog yet. The USA is still fully in control for another decade or so. So we have to go through a really big mess first before we get to his ideal.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 03, 2014, 02:50:00 AM
https://bitcointalk.org/index.php?topic=491181.msg5474716#msg5474716

I really want to sign off now, because I have programming work to do. So I hope this is the last time I need to rebutt here.

If they can't stop people torrenting movies and games, they won't be able to stop the flow of digital money.

And my point is I agree with you only if the coin has anonymity which the NSA can't subvert.

Bitcoin does not and will never have it (https://bitcointalk.org/index.php?topic=441414.0).

Because we are talking about control of money, which is essential to governments' existence, so they will fight with every tool in their warchest. As they have been with 9/11 falseflag to foist AML and KYC laws every where. Now FATCA forced on all sovereign nations. Downloaded media has actually been a boon to Hollywood not an existential threat, and they aren't the government any way.

So as I said, you have a few screws loose in your ability to see reality. Perhaps you can tighten them.



This whole thread is built upon a fundamental misconception

...

The decision to handle and classify Bitcoins in a specific way is a political decision.

Exactly it is a political outcome and the fact of democracy is that it is a power vacuum and always controlled by the vested interests who control the money i.e. the banksters. And you thought I was disagreeing, because you conflate orthogonal issues as non-intellectual people do.



Did anyone even mention the legal fees to accomplish all this would probably be equal or higher than the Bitcoin market cap itself? lol

And you are too myopic or naive apparently to see that the real cost here is the loss of control of the money, which is an existential threat to government and vested interests. They will spare no expense and besides Japan is complicit state in their network. Haven't you seen that Rockefeller is often over there hobnobbing with the elite and government over there.



BTC is not legal tender but clearly a BEARER INSTRUMENT

so, not affected in most countries

http://books.google.ch/books?id=uJxxMrf4MEkC&pg=PA244&lpg=PA244&dq=Nemo+dat+quod+non+habet+bearer+instrument&source=bl&ots=RNMPS9ew7Z&sig=6UxI9ljhlE7nsAZHMqR1dIRDdds&hl=de&sa=X&ei=CsETU8WLMMLnygP96oGwBQ&redir_esc=y#v=onepage&q=Nemo%20dat%20quod%20non%20habet%20bearer%20instrument&f=false

...because it is not practically possible to chase bearer instruments, that is why lawmakers all over the world agree on this

You searched on a Germanic language Google, the english link is:

http://books.google.com/books?id=uJxxMrf4MEkC&lpg=PA244&ots=RNMPSafs85&dq=Nemo%20dat%20quod%20non%20habet%20bearer%20instrument&pg=PA244#v=onepage&q=Nemo%20dat%20quod%20non%20habet%20bearer%20instrument&f=false

This does not apply to Bitcoin because bearer instruments (e.g. physical ownership certificates without a name on them and no ledger) are an exception only because the law doesn't want to make illegal what it can't enforce, as it makes the law look impotent.

Bitcoin chain of ownership is very explicit in the public block chain (the public ledger), thus the law can very easily trace.

And remember we are talking about an existential threat to governments, so they will spare no effort.

I agree with you that anonymity is the way to defeat the government and make them go away.

However Tor, DarkCoin, CoinJoin, Zerocoin are all fundamentally (meaning can't be fixed) flawed.

https://bitcointalk.org/index.php?topic=279249.msg5474597#msg5474597
https://bitcointalk.org/index.php?topic=439357.msg5454853#msg5454853

Note I think Zerocoin has a very important role to play combined with my design for mixing, but not by itself.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 03, 2014, 04:08:17 AM
The information war has been won. Really time to sign off now. See ya on the other side.

https://bitcointalk.org/index.php?topic=441414.msg5475723#msg5475723

The next incarnation of Bitcoin will be spearheaded by another anonymous genius.

Thank you very much.  :-X


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 05, 2014, 05:17:41 AM
Back one more time for sloppy seconds...  :-[

https://bitcointalk.org/index.php?topic=500994.msg5518821#msg5518821

Bottom line is Bitcoin can be cracked with a future quantum computer (because it is based on number-theoretic assumptions cryptography, e.g. destruction factoring from a constructed whole, instead of Random oracle style cryptography, e.g. construction of deconstruction into partitions).

It is argued this won't matter because the public key addresses are hashed on the blockchain until the balances are spent. (that is if you follow best practices and don't resend the change back to same public key address spent from) And that everyone can spend their balances to a new quantum-proof encryption method (e.g. Lamport) if ever quantum computers are known to be created.

However that erroneous argument has at least 4 flaws.

  • When you spend, the quantum computing adversary could sniff your spend before it propagates sufficiently on the network and insert a double-spend that reaches more mining nodes faster than yours. In particular a powerful entity such as the NSA is already admitted to be capable of propagation attacks (https://www.schneier.com/blog/archives/2013/10/how_the_nsa_att.html) (see "The Quantum system" section at linked article).
  • How do you ever get everyone to do the same human action in large distributed systems? There isn't even an official Bitcoin client any more (https://bitcointalk.org/index.php?topic=498002.msg5501014#msg5501014).
  • How do we know when the adversary has a quantum computer, given the capability of the NSA to issue national security letter gag orders? They had differential analysis to break cryptography in the 1970s and 80s and the public was unaware.
  • If we adopt something like Zerocoin to add more anonymity (https://bitcointalk.org/index.php?topic=495527.msg5508024#msg5508024) to the tracing of trail of ownership of a coin, these signatures can't be retroactively hardened later, thus all that history of anonymity is suddenly lost once the adversary gains a quantum computer.

And people wonder why I think Bitcoin is piece-of-shit.  ::) (and this is only 10% of the technical problems I see in Bitcoin)

The worst would be if the current ECDSA variant chosen was seeded by the NSA. There is some speculation about that yet apparently Bitcoin's choice was not one of the ones seeded opaquely by NIST or other potential surrogate (although I haven't dug in and don't trust the summaries I've seen to do my homework for me).


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 05, 2014, 07:49:36 AM
We see here the true nature of man. When someone is trying his best to fix and improve what we human kind need the jealous mofos have nothing better to do but try to mock and sabotage.

They won't succeed.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Vlad2Vlad on March 05, 2014, 08:05:44 AM
We see here the true nature of man. When someone is trying his best to fix and improve what we human kind need the jealous mofos have nothing better to do but try to mock and sabotage.

They won't succeed.



Welcome to Bitcointalk but I'll say this: you're doing a lot of talking for a full year now with nothing to show for it.

You can clone Bitcoin and add your changes in a single day.  If you're good enough you can code an entire new coin in a month so my questions is:  What are you waiting for, 3,000 alt coins to burry your idea?

Seriously, if you're that good and you have a great idea then get to it.  

Just do it!


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Vlad2Vlad on March 05, 2014, 08:14:27 AM
Stop teasing us by claiming you're leaving.

He can't trust himself. He is not able to follow his own will. Such a life is punished by itself the most.


Ahahahaaa.  There may be some truth in that.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: cAPSLOCK on March 05, 2014, 08:24:19 AM
Stop teasing us by claiming you're leaving.

He can't trust himself. He is not able to follow his own will. Such a life is punished by itself the most.

That's pretty good stuff really.  Wise and sad.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: redsn0w on March 05, 2014, 08:27:27 AM
Ok, I'm not going to debate what the powers that be may do or not do, but Visa is still worth something, yes?  

If Bitcoin, in any form, effects the sort of large scale change on the financial system that it is capable of, even to the point of grabbing  any substantial market share whatsoever from traditional payments people, Visa, PayPal et al, that is still going to be worth a good pile of cabbage.

I am not arguing that Bitcoin won't go up in price (although it is remotely possible it could be entirely defeated by an altcoin, the more likely future is Bitcoin prospers while an altcoin might also due to a bifurcation on the principle of strong anonymity).

I am arguing that we will lose our decentralized currency and anonymity.


Well I can't disagree.  They have the tools, and they'll use them, no doubt.

And I agree it's utter bullshit, although I do not see anything whatsoever that can be done about it.

Not adhering to laws results in bitcoin going underground.  If that happens, people may think it will still retain value/use, but I am not one of them.  If it is not an accepted medium of exchange now it is no more likely to be so after some financial meltdown or Mad Max situation.

If bitcoin is not widely adopted, and the financial system melts down, it isn't worth anything.  Then it's gold, silver, the normal things.  Stuff.  If it is widely adopted it may well be a great hedge against exactly that sort of thing; and on a financial level and with enough ease of access, that a lot of people could afford to squirrel away some amount, but only if they know it exists, know how to use it and have a realistic expectation that it will have value that will be portable and insulated from fiat meltdown.

Widespread adoption is basic to use in any future scenario, including a global meltdown, which I'm not going to argue isn't going to happen, as I'm as amazed as anyone with what I see going on in that department.  To allow for adoption that you have to follow the law, even if it sucks because you know damn well half of it was written so governments can stick their noses in places it doesn't belong, behind the guise of the greater good, whatever the hell that means anyhow.  

It's not a matter of not understanding anything, I don't think, it's a difference of opinion on what actually has the better chance at any sort of real success.  

Why The Only Solution is Technological

By the time you realize I am correct, you will be behind the others who realized earlier. Most people are still on the Titantic rearranging the deck chairs (see quote of Hoover (http://armstrongeconomics.com/2013/11/21/capital-flows-the-key-to-everything/)). This is why the USA is actually booming until 2015.75, because capital is now fleeing into the USA (https://www.google.com/search?q=site%3Aarmstrongeconomics.com+capital+moving+to+USA) from the emerging (peripheral) markets where the riots first manifest. But this ends up at the core reserve currency at the end game 2016ish. We can see how regulation appears to be a very loving and correct direction (https://bitcointalk.org/index.php?topic=481213.0) (listen to her charming speach). She is head of the IMF that is proposing 10% confiscation (termed "financial repression") of bank account balances across the EU to bring debt back to 2007 levels (i.e. not a solution and they will have to come back for more and more).

My opinion is that anything that does not circumvent law (which can be a legal activity, e.g. see the "Don't follow me, I'm the 5th car" (http://armstrongeconomics.com/2014/02/21/ukrainian-govt-is-fracturing-the-debt-default-contagion-is-likely-to-unfold/)) is going to end up destroyed just like that dramatic upthread chart (https://bitcointalk.org/index.php?topic=455141.msg5033950#msg5033950) of the population of Rome falling from 1.3 million to 30,000 (because everyone fled the government). Apparently the-powers-that-be in the USA government are moving towards totalitarian allegiance (http://armstrongeconomics.com/2014/02/22/ukraine-the-need-to-always-blame-someone-govts-are-all-the-same-wake-up/) analogous to recent events in the Ukraine. The entire premise of the Economic Devastation (https://bitcointalk.org/index.php?topic=355212.0) thread is that the Ineptacracy (https://bitcointalk.org/index.php?topic=355212.msg5246253#msg5246253) of socialism can't stop (https://bitcointalk.org/index.php?topic=355212.msg5274282#msg5274282) until it kills everything or until one of the following occurs:

  • A new technology renders the government impotent.
  • A Benevolent dictator like Caesar crosses the Rubicon (https://www.google.com/search?q=site%3Aarmstrongeconomics.com+Caesar+crossed+the+rubicon) to restore sanity

Note the people rising up as in Ukraine (http://armstrongeconomics.com/2014/02/22/ukraine-the-need-to-always-blame-someone-govts-are-all-the-same-wake-up/) is not a solution, because they have no economically viable technology to remain decentralized. They will fall right back into the power vacuum of democracy with escalating chaos with Egypt as a recent example, because the fundamental problem is economic bankruptcy due to peaking socialism and debt (the people are not ready to embrace the decentralized Knowledge Age and the end of a public welfare and retirements system). Only a dictator or a technological solution to the power vacuum is a solution at this time (the contentionism has swung to anarchy because the time to make new social constitutions is not now for reasons stated).

And the benevolent dictator is also not sustainable, e.g. Rome continued to destroy itself after the vested interests of socialism killed Caesar. This is why only technology is responsible for sustainable gains in the lives of the people. Note CoinCube and I have postulated that in the theory of contentionism (a new term we invented) the top-down order (with socialism being one form) plays a role in the organization necessary to spawn new entropy, e.g. decentralizing technology.

Thus the only popular thing left standing will be the one that is impervious to government.

Gold and silver hoarding leads to a feudal Dark Age (which historically typically have long durations, e.g. 600 years), because the velocity-of-money (V in the Quantity Theory of Money) collapses. V is already down -50% since 2008. Capital is already running and disappearing into hoards. This will accelerate (as more frogs wake up from their blissful ignorance of what is going on and jump out of the boiling pot) if we don't have technological solution very soon.

And I have good news for you. I've had an additional epiphany recently that I have not written about publicly. I am becoming uber confident that Bitcoin is not the future of commerce, finance, and business. And become more confident I see (all the economic and algorithmic details of) the future technology in my mind's eye. Stay tuned, it won't be too long now. Commerce, finance, and business will never go back to centralized again. This changes the order that had existed since Mesopotamia.

So this isn't about crossing a crisis and coming back to the same notions of the way things are today. This is leaving the old ways behind forever.

P.S. Three prominent forecasters (with not such stellar prediction performance as Martin Armstrong who predicts the same (http://armstrongeconomics.com/armstrong_economics_blog/), yet all with a correct model) are predicting "economic devastation" ahead (http://usatoday30.usatoday.com/money/perfi/stocks/story/2012-02-26/stock-market-bears-doomsayers/53259742/1). CoinCube do you think they read your thread (https://bitcointalk.org/index.php?topic=355212.0) and got that quoted term from you? (your thread in in the top 3 listings at Google for that quoted term)

P.S.S. W.r.t. to Bitcoin becoming government compliant, there is this problem that there isn't just one global government (yet), so its global fungibility will be pecked away by the discordant nation-state vultures. And as the recent Mt.Gox fiasco (https://bitcointalk.org/index.php?topic=455141.msg5305367#msg5305367) exemplifies, there isn't anything the government touches that doesn't get bloated and less efficient.

"An elephant is a mouse built to government specifications." - Lazarus Long.


Disclaimer: I am not providing legal nor tax advice. I am not a professional adviser, please consult your own. I am merely sharing my thoughts and anything you do after reading my thoughts is your own responsibility.


Update: there is a new thread on anonymity (https://bitcointalk.org/index.php?topic=475574.msg5308941#msg5308941) which is quite astute and exemplifies the evolving improvement in the knowledge of the community.

+1


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 05, 2014, 09:03:03 AM
Bitcoin core developers wumpus and gmaxwell on the new improvements announced (but not yet published) for Zerocoin.

https://bitcointalk.org/index.php?topic=336514.msg3674938#msg3674938

My understanding was that the size of the proofs was the primary hurdle to implementation. Is that true?
There were several other additional limitations:

* Very slow to validate (e.g. on the order of 1-2 tx per second)
* Required a trusted party to initiate the accumulator, and if they violate that trust they could steal coins
* Uses cryptography which is less well studied
* Only handled anonymized coins with one value, reducing the anonymity set size substantially
* Didn't conceal values
* Spent coins list is needed for validation and grows forever (e.g. no pruning of the critical validation state).

Of these only the first two and the last are probably real barriers, the others are more "doesn't work as well as some hypothetical future system might".

There was no way within their prior system to achieve size reductions to the currently mentioned, I'd speculated in some other threads (https://bitcointalk.org/index.php?topic=277389.0) on some technology that could make the proofs smaller and faster, but if they've gone that route there may be some other consequences. It's hard to say much of anything useful without more information being made public.

I would note that the prior ZC implementation has been made available for some time now, and no altcoin has picked it up.

Deep technical explanation of the original Zerocoin:

https://bitcointalk.org/index.php?topic=175156.msg2296916#msg2296916


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 05, 2014, 09:19:40 AM
We see here the true nature of man. When someone is trying his best to fix and improve what we human kind need the jealous mofos have nothing better to do but try to mock and sabotage.

They won't succeed.

Welcome to Bitcointalk but I'll say this: you're doing a lot of talking for a full year now with nothing to show for it.

How do you figure? I am the messenger. Have I not delivered it far and wide?

There is a difference between nothing to show and nothing shown.

If you were digging (not on the forum although your hint of where to dig is here on the forum), you could possibly locate a breakthrough in cryptography on trading computation for space which I helped publish today. The core idea was not mine however I helped clarify it.

You can clone Bitcoin and add your changes in a single day.  If you're good enough you can code an entire new coin in a month so my questions is:  What are you waiting for, 3,000 alt coins to burry your idea?

Seriously, if you're that good and you have a great idea then get to it.  

Just do it!

AnonyMint has already answered the question upthread as to whether he is creating an altcoin with a one word post "No".

AnonyMint has also promised in the DarkCoin thread to never announce nor help promote any altcoin (note what I didn't promise by exclusion). See the post upthread about DarkCoin, I added to it (in short the anonymity if any is not scalable).

If you are not entirely confused, that is unfortunate because it is intentional.

The best way to destroy your enemy is to first destroy their fear of you.

So many rushed altcoins, and what is the result?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: cAPSLOCK on March 05, 2014, 03:48:08 PM
I anticipated you'd nuke my Sistine Chapel of a parody post.  So I preserved it in advance. (https://bitcointalk.org/index.php?topic=457105.msg5521173#msg5521173) :P


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: sidhujag on March 05, 2014, 04:24:20 PM
The information war has been won. Really time to sign off now. See ya on the other side.

https://bitcointalk.org/index.php?topic=441414.msg5475723#msg5475723

The next incarnation of Bitcoin will be spearheaded by another anonymous genius.

Thank you very much.  :-X

I thought true nobility is when a person is not bringing upon himself asking to be in the light.. quite the contrast to your actual behavior in your posts.. or is it that you just wanted to preach that you know what a noble genius looks acts and feels like but that is anything but you?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Paashaas on March 05, 2014, 05:51:20 PM
If another alt-coin pops up that it better than Bitcoin, it will need to kill Light-coin first and i've not even seen 1 alt-coin thats doing that in this time.
In time scale; Bitcoins infrasturcture+the amounth of the ppl in the world that is even aware of Bitcoin will be to big to catch up. In other words; Bitcoin wil be in the top 3 most used crypto money in the comming 10+ years.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: cAPSLOCK on March 05, 2014, 06:11:55 PM
If another alt-coin pops up that it better than Bitcoin, it will need to kill Light-coin first and i've not even seen 1 alt-coin thats doing that in this time.
In time scale; Bitcoins infrasturcture+the amounth of the ppl in the world that is even aware of Bitcoin will be to big to catch up. In other words; Bitcoin wil be in the top 3 most used crypto money in the comming 10+ years.

Litecoin as a early warning system for the eventual bitcoin-killer is worth considering. A very interesting thought.  I wonder if it has merit.




Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: GodHatesFigs on March 05, 2014, 07:00:07 PM
The guys over at the Mises Circle have already shown that altcoins cannot succeed (http://themisescircle.org/blog/2013/08/22/the-problem-with-altcoins/); my main worries are coin taint and a backdoor in the cryptography.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 06, 2014, 03:18:40 AM
The guys over at the Mises Circle have already shown that altcoins cannot succeed (http://themisescircle.org/blog/2013/08/22/the-problem-with-altcoins/); my main worries are coin taint and a backdoor in the cryptography.

The OP has a link to the thread where we discussed that article and tore it to shreds.

Any altcoin can be converted to Bitcoin instantly upon payment if there are liquid exchanges, as Bitpay does for converting Bitcoin to fiat at checkout time. The OP mentions the fallacy of the lockout network effect in this case and explains why it is different than the inertia of a network protocol that requires changing every server on the internet. However there is a post upthread wherein I admitted that the market size is an inertia in terms of brand recognition, confidence, economies-of-scale, etc.. So yes there does come a point where Bitcoin can not likely be surmounted and we are almost there, with the userbase some where in the range of 1 million already and growing very very fast.

However, one of my other points is if Bitcoin can't adopt anonymity (which I am very confident can't be done, because CoinJoin doesn't scale, Tor isn't a good choice to build-in, and Zerocoins is insoluble as all mixers are because the coin amounts can't all be the same thus pattern analysis eliminates the anonymity), then a bifurcated future is likely where there is an altcoin which is highly anonymous (can't be DarkCoin their CoinJoin technology can't scale), even if Bitcoin remains the most popular the anonymous coin will also have transaction volume. Because the world is headed into a debt collapse and governments will confiscate and hunt down wealth. Thus there will be a demand for anonymity, regardless how popular Bitcoin is. I've also explained that anonymity must be built-in to the coin, otherwise the commerce with the coin is tainted and can't be anonymously used by anyone.

And there is a technical reason Bitcoin can't adopt my anonymity solution, but if I tell you, then you will know what my solution is. And I am not ready to reveal it quite yet. Soon.

The information war has been won. Really time to sign off now. See ya on the other side.

https://bitcointalk.org/index.php?topic=441414.msg5475723#msg5475723

The next incarnation of Bitcoin will be spearheaded by another anonymous genius.

Thank you very much.  :-X

I thought true nobility is when a person is not bringing upon himself asking to be in the light.. quite the contrast to your actual behavior in your posts.. or is it that you just wanted to preach that you know what a noble genius looks acts and feels like but that is anything but you?

I am conflicted on that. Certainly I would rather shut up. But also I wanted to give his buried point more eyeballs and weight, so that people won't lose hope on the ideal of what we thought Bitcoin was going to be. It is not so impossible as it might seem to be.

I anticipated you'd nuke my Sistine Chapel of a parody post.  So I preserved it in advance. (https://bitcointalk.org/index.php?topic=457105.msg5521173#msg5521173) :P

Keeping the thread less noisy, but that terse link is fine.



https://bitcointalk.org/index.php?topic=471355.msg5518181#msg5518181

One way to get the fiat in is to accept centrally issued Fiat-backed crypto currencies as well in the p2p exchange.

-1

You are right back to the same problem of centralized theft again.

People will always disfavor P2P exchange, because it is more inconvenient, the spread is higher, and it feels more unsafe (which is debatable).

That is why a cpu-only coin is so damn important. Most people will then enter by mining, and spending will be preferred over selling!

Nobody can ever force you to sell your bitcoins for Gollum_USD_IOU. But you should have the technical possibility to do so on the p2p exchange.

We can't stop people from dangling centralized failure nodes in front of the naive users.

One thing we can do is make the altcoin very anonymous, thus any user going through these centralized vehicles is going to give up their anonymity via AML & KYC regulation of the centralized vendors.

For the moment users have no reason to care, because Bitcoin isn't anonymous any way.

If we issue an IOU coin it would be a piece of code, just like bitcoin.

What part of centralized failure modes is not clear?

You promise to pay fiat. Many people become dependent on your ability to do so. Govenment fines you, you can't meet obligations. Or you are corrupt/inept and issue more IOUs than you have resources to pay. Many centralized failure modes to get same result.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 06, 2014, 04:26:53 AM
Vlad this is for you bro.

https://bitcointalk.org/index.php?topic=500994.msg5539769#msg5539769

PS: AnonyMint is right, once QCs appear Bitcoin will be f***ed. At least noone has offered a good solution to avoid this.

I think the community has grown tired of hearing me say I know solutions but haven't released them yet. I will give a small tidbit gift (giving away my secrets before I can implement them) to the community now, so they will realize I am not all talk and no action.

I added the following partial "solution" to Wikipedia yesterday:

https://en.wikipedia.org/wiki/Lamport_signature#Short_keys_and_signature

Now I go quiet if I can.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Vlad2Vlad on March 06, 2014, 04:46:51 AM
I wish I understood this software stuff better to fully appreciate it. 

Thanks.

Good luck with your project, if you ever decide to make it a reality.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 06, 2014, 05:12:58 AM
Vlad, I wrote an explanation for you and others.

https://bitcointalk.org/index.php?topic=500994.msg5540305#msg5540305

For the laymen, most public key cryptography (e.g. RSA and Bitcoin's ECDSA and Zerocoin) is based on number theoretic assumptions such as the difficulty in factoring discrete logarithms which makes them impossible to crack (at sufficient bit lengths) with current computers. However, quantum computing would (in theory) enable Shor's algorithm which reduces these factoring problems from exponential to polynomial time. Thus what would have required a zillion years to crack can be cracked in reasonable time to make it practical.

However, cryptographic hash functions do not rely on number theoretic assumptions. Instead they rely on the assumption of asymptotically perfect random distribution of the input to the output, which can be somewhat verified like this (http://cr.yp.to/snuffle/diffusion.html). Thus they can't be cracked with Shor's algorithm and only Grover's algorithm can be applied with a quantum computer. Thus they remain exponential time, and only the bit lengths (exponents) get effectively halved.

Lamport signatures use only cryptographic hashes. One of the problem with employing them in a blockchain has been they take up much space (either for the public key or the signature or both), but I just published a discovery in my prior post which enables making them smaller in exchange for more computation.

This discovery makes Lamport signatures more practical for blockchains than they were before, but still they are not as small as number theoretic public key cryptography.

Unfortunately I don't think this will work for Bitcoin, at least not until they implement pruning of the UXTO, but it can work in an altcoin.

I currently see no way to make Zerocoin resistant to Shor's algorithm, but I am still researching this. But Zerocoin is mostly useless any way because of pattern analysis on coin amounts.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 06, 2014, 05:44:40 AM
Most humans think that political discussion will make any difference in the outcome.

In the burgeoning Knowledge age, the outcomes will be increasingly decided by technology and the macro-economics (https://bitcointalk.org/index.php?topic=495527.msg5537899#msg5537899).

https://bitcointalk.org/index.php?topic=503258.msg5540510#msg5540510

1.  Create a bitcointalk account.  
2.  Make lots of posts to become a "Sr. Member" so you have a pretense of credibility.
3.  Create long posts enumerating the possible ways Bitcoin is flawed.
4.  Claim bitcoin will fail.  Posture as being "pro cryptocurrency", yet offer no real solutions.
5.  Paint "doomsday" scenarios to spread fear.
6.  Be sure to mention the NSA ,the NWO, the FBI, and the elite will either stop Bitcoin or secretly created Bitcoin.
7.  Debate endlessly with people.  Make sure your posts get more than 100 replies so they become "very hot topics".
8.  When you can't refute a point, either ignore it or use an ad hominem attack.
9.  Make yourself look really smart by referencing advanced topics and/or claiming 'credentials'.
10. Link back to your own posts to create more views and controversy.

It is amusing that he takes my "Bitard" comments as inability to refute. I've refuted every challenge presented to me without exception. (or in the case of PoS, I made strong arguments in a cordial discussion upthread) That is why I feel entitled to insult those who are incapable of or obstinately unwilling to comprehend what they supposedly read, especially when they push that sort of political insanity above.

As a technical dolt (fact not ad hominem), he can't discern a genuine expert from a pretender (https://bitcointalk.org/index.php?topic=495527.msg5464897#msg5464897).

In short, let them go ahead. I should go quiet. Action will speak loudest now.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 06, 2014, 08:08:18 AM
https://bitcointalk.org/index.php?topic=503473.msg5542038#msg5542038

http://techcrunch.com/2014/03/05/congressman-calls-to-ban-u-s-dollar-in-response-to-bitcoin-ban/  (http://techcrunch.com/2014/03/05/congressman-calls-to-ban-u-s-dollar-in-response-to-bitcoin-ban/);D


Lmao good on him. Might email him a thanks for that even if I'm not from the US.

He better be careful what he proposes, or maybe he is a "wolf in sheepskin" pretending to be your friend just like Satoshi.

The governments are slowly phasing out cash. EuropeSwitzerland eliminated the 1000 EU bill and ATM daily limits continue declining in all countries.

Government (and banksters) would love for a pseudonymous digitally tracked public ledger to replace the very anonymous physical cash.



https://bitcointalk.org/index.php?topic=451376.msg5542173#msg5542173

...why exactly are people quite blatantly trying to attack the idea of Bitcoin so much?

...It definitely doesn't make sense because surely if a system is flawed and going to break anyway the sensible thing to do would be to stay back and let it implode on it's own rather than rush it's demise.

Because we (I) see that as wonderful as the ideal is, Bitcoin's flaws could mean it can be much worse than cash (https://bitcointalk.org/index.php?topic=503473.msg5542038#msg5542038) and put all of us (no choice for anyone any more) into a very severe slavery system.

we have open source and altcoins so we can find out what works best

Agreed.

If Bitcoin and cryptocurrencies are really that bad though, why do opponents of it not only attack it on their own private networks and channels but feel the need to literally come over here and lecture us about what a piss poor thing Bitcoin is?

This community is the Bitcoin ecosystem which includes all altcoins, not just Bitcoin's protocol. We have a right to be here too.

The discourse adds more veracity to the truth.

Since our ideal is all about truth, then what are you afraid of?

the more angry and incoherent they get.

Who is angry? Seems like it is the Bitards who don't like our arguments and logic.



https://bitcointalk.org/index.php?topic=451376.msg5543183#msg5543183

Well an a Bitcoin user and a firm supporter of this community, we all understand the risks involved that we can potentially lose money and many of us are willing to take that risk.

Could you re-read my post upthread. I am not concerned about your personal decisions.

The american media has the opportunity in essence to influence all matters concerning financial investments and can even create a environment that creates scared users.

There you naive Bitards (Bitnaives doesn't sound as good) go getting fooled by the Hegelian dialectic. You know when you enter the car dealer (at least in USA), one saleman pretends to be your friend and is the "wolf in sheepskin" (https://bitcointalk.org/index.php?topic=503473.msg5542038#msg5542038) and the other pretends to be the bad guy who wants to rip you off. They create a conflict to make you think the good guy is fighting for you against the bad guy, but in reality they're both ripping you off. After you've signed the loan documents, you later realize you've like fucking overpaid by $3000 after all the shit is included that you naively agreed to.

Stop this USA vs Europe crap. This Democrats vs. Republicans crap. The Pirate Party vs Social Democrats, etc.. These are heads of the same monster.

Yes bitcoin can you be used in negative ways but it can be used in more positive ways.

There is a theory that it could also be used to create a world-wide slavery system where all cash is gone (https://bitcointalk.org/index.php?topic=503473.msg5542038#msg5542038).

Creating panic causes people to back out and say "this is too much for me" and just over all over it.

And what is wrong with that? You need groupthink?

Anything that needs cheerleaders is always the property of the government. Don't forget that fact.

Also I see the BTC price is going up not down.

And they will always come back. The lure of Bitcoin is too irresistible.

Bitcoin is a threat to all centralized fiat currency issued by the government and the best part is their is no one person pulling the strings.

This is ignorant of the facts.

Mining is already controlled by a few pools. Exchanges are controlled by a few players. Most of the coins are controlled by a few big players beholden to the government. Etc.

Government (and banksters) would love for a pseudonymous digitally tracked public ledger to replace the very anonymous physical cash.



https://bitcointalk.org/index.php?topic=498002.msg5543751#msg5543751

OK, that is what I thought.

I wonder how much of the volume reported at exchanges is real, and how much is just them trading with themselves to make themselves look more respectable? With all the shit that went down from MtGox, can we really trust the numbers they self-reported?

Indeed not. "We" now know Gox mostly traded with itself, and MP sez (http://trilema.com/2014/mpoe-february-2014-statement/) the price signal is pretty much RIP these days.

So the transactions to price growth ratio is even worse than we thought or was this all internal trades not on blockchain? The chart is in my archives at the Ponzi thread. Don't feel like digging it up.



https://bitcointalk.org/index.php?topic=502612.msg5545053#msg5545053

Sorry to say I was expecting the videos to be much funnier. I didn't bust a gut.

Probably because it isn't about trolls posting here and there.. ;)

+1

There is Zoloft medication for your irrational personalizing your anxiety and lashing out at someone who is rational. I am just expressing a preference for something funny enough to make me fall on the floor laughing, e.g. Homer Simpson, Richard Pryor, Rodney Dangerfield (http://www.youtube.com/watch?v=r2yH5YcK13s), Jim Carey, SNL, Beavis and Butthead, or my best friend snorting out peanut butter through his nose, etc.

Even the old Wendy's commercials were funnier than that bland snot in the OP videos.

http://www.youtube.com/watch?v=5CaMUfxVJVQ

Or some Dancing Baby or dancing dog is more entertaining than seeing his yuppie twat face:

http://bluefishway.com/2012/08/26/the-dancing-dog-video/

Even guilty dog with cute little girl is more entertaining:

http://www.youtube.com/watch?v=8u5I33rEhCQ

I am reasonably obsessed with fixing Bitcoin, but you guys are beyond pale obsessed if you think those OP videos were above a 2 on the 1 to 10 comedy metric.

Sorry no offense intended to the lady who posted them, nor her bf. They could have exaggerated the ideas much more to a much greater effect. Great comedy is about exaggeration.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MagicalBear on March 06, 2014, 10:30:33 AM
Seems a good article, following


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on March 06, 2014, 02:57:40 PM

It is amusing that he takes my "Bitard" comments as inability to refute. I've refuted every challenge presented to me without exception.

You are a self-deluded meglomaniac.

Refute that.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 07, 2014, 04:51:49 AM
The "Lifetime Foundation" members continue to try to spread propaganda and lies.

https://bitcointalk.org/index.php?topic=500994.msg5562217#msg5562217

No one has provided any argument against my upthread point about Zerocoin (if it were added to Bitcoin or an altcoin):

  • If we adopt something like Zerocoin to add more anonymity (https://bitcointalk.org/index.php?topic=495527.msg5508024#msg5508024) to the tracing of trail of ownership of a coin, these signatures can't be retroactively hardened later, thus all that history of anonymity is suddenly lost once the adversary gains a quantum computer.



If you aren't interested in looking up any of the many, many threads on QC, but still want to know about it, I'll give you the very short version.  QC is hard to scale up.  At the moment, it looks like QC devices will not be following Moore's law because the difficulty of retaining coherence appears to scale close to linearly with the number of gates, rather than inversely with the feature size like in classical devices.  Even in the worst case, we should have years of warning before devices capable of breaking ECDSA are created, with decades much more likely.*

And he still hasn't refuted what I asserted upthread as re-quoted as follows.

  • How do we know when the adversary has a quantum computer, given the capability of the NSA to issue national security letter gag orders? They had differential analysis to break cryptography in the 1970s and 80s and the public was unaware.

He is speculating on what science knows now and what it can do in the future (and I don't even agree with his speculation but any way speculation is speculation, not fact). Due to National Security gag orders we can't even be sure we know what the current science is. The USA's covert agencies including the NSA have a $52 billion ANNUAL budget. And this doesn't include the black budget which Secretary of Defense Donald Rumsfeld admitted the day before 9/11 on national TV was $3 trillion unaccounted for in the defense budget (over the years), then the relevant records were conveniently destroyed when the Pentagon was hit by an "airplane" the next day. No backup copies of the records.  ???

And his is ignoring the fact of history of what happened in the 1970s and 1980s (see what I wrote before as quoted above) which is an example that we can't always know.

Don't forget that Edward Snowden leaked (http://www.washingtonpost.com/world/national-security/nsa-seeks-to-build-quantum-computer-that-could-crack-most-types-of-encryption/2014/01/02/8fff297e-7195-11e3-8def-a33011492df2_story.html) (Washington Post) that the NSA is actively attempting to build a quantum computer.

Why risk it? Why not switch to Lamport signatures so no more risk at all.

The reason is because Bitcoin's blockchain is design in a way that switching to Lamport probably won't scale well. But an altcoin can fix this. Bitcoin probably can't, although maybe if they get off their lazy arse and finish the UXTO pruning, they might be able to do it.

Here is an excellent article on this quantum computing topic and also explains how Bitcoin's three encryption methods are combined, so it is relevant to this thread's title as well:

http://www.bitcoinnotbombs.com/bitcoin-vs-the-nsas-quantum-computer/

There are two things I dispute from the article.

Quote
Let’s consider the type attack most people think of when hear of quantum computers―a brute force attack.

Nonsense. Shor's algorithm is not a brute force attack. The author inserted this disinformation into his otherwise good article, because most users don't understand that Shor's algorithm doesn't require a brute force capability (http://www.askamathematician.com/2011/02/q-how-can-quantum-computers-break-ecryption/).

Quote
The good news is that ECDSA should be relatively easy to swap out if/when it becomes compromised.

I already refuted that upthread:

  • When you spend, the quantum computing adversary could sniff your spend before it propagates sufficiently on the network and insert a double-spend that reaches more mining nodes faster than yours. In particular a powerful entity such as the NSA is already admitted to be capable of propagation attacks (https://www.schneier.com/blog/archives/2013/10/how_the_nsa_att.html) (see "The Quantum system" section at linked article).
  • How do you ever get everyone to do the same human action in large distributed systems? There isn't even an official Bitcoin client any more (https://bitcointalk.org/index.php?topic=498002.msg5501014#msg5501014).




And Shor's does not magically provide instant answers to questions posed, it allows a reduction in the search space, to the square root.  sqrt(xy) = xy/2, so it will reduce the strength of our keys from 2128 to 264**.  Note that 264 is still a huge number, and it is not at all a given that a real world system can accomplish it in 10 minutes.***

http://crypto.stackexchange.com/a/2642

Quote
A security level of about 64 bits can be broken by a determined attacker, and a level of 32 bits can be trivially broken on a single home computer.

Also I think you are wrong. Grover's algorithm is what halves the effective bit length, i.e. square root of the solution space. As I explained upthread, Grover's algorithm applies (in theory) to cryptographic hashes, but for ECDSA and RSA the much more powerful Shor's algorithm applies. Shor's algorithm reduces to polynomial time as I explained upthread. If I am not mistaken, you've just shown yourself to be incompetent and not worth listening to.

http://security.stackexchange.com/a/37638
http://en.wikipedia.org/wiki/Key_size#Effect_of_quantum_computing_attacks_on_key_strength
http://crypto.stackexchange.com/a/9940



Also note I wrote upthread that in addition to the quantum computing threat, we can't be sure that the curve chosen for ECDSA isn't backdoored or that some mathematical algorithm couldn't be discovered secretly by the NSA, as they did with differential cryptographic analysis in the 1970s and 1980s and they could crack everyone, but no one knew.

Cryptographic hashes are much less likely than mathematical group algorithms (e.g. RSA and ECDSA) to fall to mathematical cryptographic analysis if they are designed correctly (http://cr.yp.to/snuffle/design.pdf) to break algebraic linearity over all mathematical groups.

So, hardly the end of the world.  And that isn't even considering non-technical solutions, like a mining service that cultivates a reputation for safely embedding transactions into the blockchain in exchange for fees****.

Here we go again depending on miners which are now becoming very centralized.  ::)

*  It is not clear whether or not it is possible to apply Grover's algorithm to hashing in reality.  Grover's works on quantum circuits, and we can't even design a classical circuit for single SHA-256, much less double, and vastly much less for a quantum version.  Note that I said circuit.  The distinction is important, it isn't that I'm unaware of FPGAs and ASICS.

If anything that is argument for using cryptographic hashes such as Lamport for public key cryptography. You are reinforcing my point.

** ECDSA has a work factor of 1/2, so 256 bit ECDSA is as strong as an ideal 128 bit crypto system.

*** Incidentally, 264 falling down to the hour-or-two range is likely to trigger a crypto upgrade, in my opinion.  Assuming, of course, that we haven't done so already for aesthetic reasons.

You are talking about conventional computers. My point above is we might not know the progress of quantum computers or mathematical attacks not released to the public.


**** The service would solicit transactions spending from old keys into new keys and would only accept transactions that met their fee structure.  They would then mine internally, without revealing the pubkey to the rest of the network.  Presumably for large enough transactions, they could even be convinced to mine at a loss by discarding blocks until they had two that they could publish at once.  I leave the rest of the details as an exercise for the reader.

Here we go again depending on miners which are now becoming very centralized.  ::)

I thought we were supposed to have a decentralized paradigm in play yet the Bitwards always fall back to centralization when ever they lose the technical argument...


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 07, 2014, 06:59:59 AM
What would Satoshi say when he comes back into public view...

https://bitcointalk.org/index.php?topic=504771.msg5563694#msg5563694

"It would have been impossible for us to develop our plan for the world if we had been subjected to the lights of publicity during those formative years. But, the world is more sophisticated and has accepted the all seeing ledger. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national autodetermination practiced in past centuries."


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Paashaas on March 07, 2014, 01:41:07 PM
If another alt-coin pops up that it better than Bitcoin, it will need to kill Light-coin first and i've not even seen 1 alt-coin thats doing that in this time.
In time scale; Bitcoins infrasturcture+the amounth of the ppl in the world that is even aware of Bitcoin will be to big to catch up. In other words; Bitcoin wil be in the top 3 most used crypto money in the comming 10+ years.

Litecoin as a early warning system for the eventual bitcoin-killer is worth considering. A very interesting thought.  I wonder if it has merit.

Yhe, but the price between Lightcoin and Bitcoin is huge so the maker of the ''Bitcoin killer'' needs to come up with very innovative tools ore reinvent the wheel of crypto again that will make his coin atleast $100 and up worthly. When Bitcoin rises; Lightcoin will follow in price. Its really interesting and i will keep an close eye to crypto.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 07, 2014, 01:57:52 PM
Do indeed keep your eyes on altcoins. There is a lot of money to be made there.

Based on the coins I know that are in developments (e.g. Ethereum, Zerocoin, ...) and the lag time for research & development since the huge price rise in Bitcoin since last summer, I estimate 30 - 50% odds on the serious competitor to Bitcoin arriving before June. Initially it might not be apparent that such a coin can challenge Bitcoin, but it will become clear rapidly (in weeks or few months after coin launch).

If another alt-coin pops up that it better than Bitcoin, it will need to kill Light-coin first and i've not even seen 1 alt-coin thats doing that in this time.
In time scale; Bitcoins infrasturcture+the amounth of the ppl in the world that is even aware of Bitcoin will be to big to catch up. In other words; Bitcoin wil be in the top 3 most used crypto money in the comming 10+ years.

Litecoin as a early warning system for the eventual bitcoin-killer is worth considering. A very interesting thought.  I wonder if it has merit.

Yhe, but the price between Lightcoin and Bitcoin is huge so the maker of the ''Bitcoin killer'' needs to come up with very innovative tools ore reinvent the wheel of crypto again that will make his coin atleast $100 and up worthly. When Bitcoin rises; Lightcoin will follow in price. Its really interesting and i will keep an close eye to crypto.

Don't forget to multiply Litecoin's price by 4 to compare with Bitcoin, since Litecoin has 4X as many coins planned to issue than Bitcoin.

In other words, you really want to compare coin market caps.

http://coinmarketcap.com/

http://bitbet.us/bet/621/any-altcoin-will-surpass-litecoin-in-market-capitalization/

http://www.coindesk.com/top-altcoins-2013/

http://motherboard.vice.com/blog/beyond-bitcoin-a-guide-to-the-most-promising-cryptocurrencies

Note compare the hype and launch momentum of MaxCoin to the actual result in the market cap comparison:

http://www.nasdaq.com/article/the-next-altcoin-to-hit-20-million-cm323873

http://crypt.la/2014/02/16/10-signs-that-maxcoin-was-the-largest-altcoin-launch-in-history/

Appears that features are more important than hype and interest at launch.

Bitshares is supposed to be like a decenrralized bank via BitUSD or Bitxxx is this similar to your understanding of a decentralized exchange?

No because it attempts to do market clearing of bids and asks at the miner. And it has no mechanism to move fiat in the system and depends on their unproven faith that BitUSD will track the value of fiat (which I think I refuted in the thread of discussion on that, yet they are welcome to try it and see what happens).

Oh shit did I do that crash on March 1 when I wrote the above (ProtoShares is the premine for Bitshares):

http://coinmarketcap.com/pts_30.html


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 07, 2014, 03:29:53 PM
At least 30% of the people on this forum have IQs that are insufficient for them to be rational (fits the Bell Curve as expected that 30% or so would be below 90 IQ):

https://bitcointalk.org/index.php?topic=505355.0

So keep that in mind on all polls such as for example the one on this thread. We can probably subtract up to 30% from the 50% above and arrive at a super majority of the rational people agree with the OP.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: sidhujag on March 07, 2014, 03:42:13 PM
Do indeed keep your eyes on altcoins. There is a lot of money to be made there.

Based on the coins I know that are in developments (e.g. Ethereum, Zerocoin, ...) and the lag time for research & development since the huge price rise in Bitcoin since last summer, I estimate 30 - 50% odds on the serious competitor to Bitcoin arriving before June. Initially it might not be apparent that such a coin can challenge Bitcoin, but it will become clear rapidly (in weeks or few months after coin launch).

If another alt-coin pops up that it better than Bitcoin, it will need to kill Light-coin first and i've not even seen 1 alt-coin thats doing that in this time.
In time scale; Bitcoins infrasturcture+the amounth of the ppl in the world that is even aware of Bitcoin will be to big to catch up. In other words; Bitcoin wil be in the top 3 most used crypto money in the comming 10+ years.

Litecoin as a early warning system for the eventual bitcoin-killer is worth considering. A very interesting thought.  I wonder if it has merit.

Yhe, but the price between Lightcoin and Bitcoin is huge so the maker of the ''Bitcoin killer'' needs to come up with very innovative tools ore reinvent the wheel of crypto again that will make his coin atleast $100 and up worthly. When Bitcoin rises; Lightcoin will follow in price. Its really interesting and i will keep an close eye to crypto.

Don't forget to multiply Litecoin's price by 4 to compare with Bitcoin, since Litecoin has 4X as many coins planned to use than Bitcoin.

In other words, you really want to compare coin market caps.

http://coinmarketcap.com/

http://bitbet.us/bet/621/any-altcoin-will-surpass-litecoin-in-market-capitalization/

http://www.coindesk.com/top-altcoins-2013/

http://motherboard.vice.com/blog/beyond-bitcoin-a-guide-to-the-most-promising-cryptocurrencies

Note compare the hype and launch momentum of MaxCoin to the actual result in the market cap comparison:

http://www.nasdaq.com/article/the-next-altcoin-to-hit-20-million-cm323873

http://crypt.la/2014/02/16/10-signs-that-maxcoin-was-the-largest-altcoin-launch-in-history/

Appears that features are more important than hype and interest at launch.

Bitshares is supposed to be like a decenrralized bank via BitUSD or Bitxxx is this similar to your understanding of a decentralized exchange?

No because it attempts to do market clearing of bids and asks at the miner. And it has no mechanism to move fiat in the system and depends on their unproven faith that BitUSD will track the value of fiat (which I think I refuted in the thread of discussion on that, yet they are welcome to try it and see what happens).

Oh shit did I do that crash on March 1 when I wrote the above (ProtoShares is the premine for Bitshares):

http://coinmarketcap.com/pts_30.html

Far from it.. ppl were buying pts to get into bts snapshot to recieve free coins.. after snapshot they sold... it will be back up when the next dac is released that is interesting.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: cAPSLOCK on March 07, 2014, 03:59:38 PM
Do indeed keep your eyes on altcoins. There is a lot of money to be made there.


Oh shit did I do that crash on March 1 when I wrote the above (ProtoShares is the premine for Bitshares):

http://coinmarketcap.com/pts_30.html

Of course you didn't.

That is the market's perceived value of Bitshares-x exiting the Bitshares-PTS price.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 08, 2014, 04:33:47 AM
Detailed discussion of the problems with Zerocoin:

https://bitcointalk.org/index.php?topic=470987.msg5580855#msg5580855


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: sidhujag on March 08, 2014, 04:47:15 AM
Big wrench in altcoin.. coinpayments closing down because FinCEn classifies then as a money transmitter..

They would need to apply anti money laundering procedures to verify accounts and record keeping... I believe a proper company can step in here.. heck even bucket shop forex brokers and market makers comply why cant a crypto business do the same??? looks like coinpayments doesnt want to bother.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Vlad2Vlad on March 08, 2014, 05:01:29 AM
Detailed discussion of the problems with Zerocoin:

https://bitcointalk.org/index.php?topic=470987.msg5580855#msg5580855


The biggest problem with any "ZeroCoin" is that Bitcoin was never truly designed or meant to be anonymous nor decentralized and thus any attempt to create a clone for that purpose will be snuffed out by the banks and governments of the world.  

They have zero chance of widespread success but I suppose it makes for a nice hobby.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 08, 2014, 05:12:14 AM
Big wrench in altcoin.. coinpayments closing down because FinCEn classifies then as a money transmitter..

They would need to apply anti money laundering procedures to verify accounts and record keeping... I believe a proper company can step in here.. heck even bucket shop forex brokers and market makers comply why cant a crypto business do the same??? looks like coinpayments doesnt want to bother.

Crypto-currencies can be exchanged decentralized. So we can just put a decentralized exchange in front of Bitpay or any merchant accepting BTC.

The decentralized exchanges are not yet well developed. And as I said upthread, users may not use them if there is no compelling reason (because they are perceived to be less convenient, greater bid/ask spread+variance), but they can help users remain anonymous.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 08, 2014, 05:14:07 AM
Detailed discussion of the problems with Zerocoin:

https://bitcointalk.org/index.php?topic=470987.msg5580855#msg5580855


The biggest problem with any "ZeroCoin" is that Bitcoin was never truly designed or meant to be anonymous nor decentralized and thus any attempt to create a clone for that purpose will be snuffed out by the banks and governments of the world.  

They have zero chance of widespread success but I suppose it makes for a nice hobby.

How can they snuff out something when they can't identify any of those who own the coin?

Paying for physical merchandise is an issue. But I will concede that market to Bitcoin and go after all the virtual merchandise, which will eventually be a larger market (as 3D printing in the home becomes prevalent).


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Vlad2Vlad on March 08, 2014, 06:06:03 AM
Detailed discussion of the problems with Zerocoin:

https://bitcointalk.org/index.php?topic=470987.msg5580855#msg5580855


The biggest problem with any "ZeroCoin" is that Bitcoin was never truly designed or meant to be anonymous nor decentralized and thus any attempt to create a clone for that purpose will be snuffed out by the banks and governments of the world.  

They have zero chance of widespread success but I suppose it makes for a nice hobby.

How can they snuff out something when they can't identify any of those who own the coin?

Paying for physical merchandise is an issue. But I will concede that market to Bitcoin and go after all the virtual merchandise, which will eventually be a larger market (as 3D printing in the home becomes prevalent).

The way they make counterfeit dollars illegal and few use them even though many could print their own dollars and do it well.

Most people would not risk prison given it's easy to track IP addresses and even physical hardware or software wallets.

And ZERO businesses would accept an illegal currency.

So then you'd be relegated to pure underground use, for things like drugs as only people willing to break the law would risk prison for a currency.

And that's being snuffed out, they would use national security to ban any truly anonymous currency saying a terrorist could easily buy bombs and maneuver through society using such anonymity and drug dralers as well.

Of course that's a lie, terrorists can be anonymous now with cash even more easily and so can drug dealers but who can fight the machine when they only need one executive order to kill anything and now, anyone.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: sidhujag on March 08, 2014, 08:39:18 AM
Big wrench in altcoin.. coinpayments closing down because FinCEn classifies then as a money transmitter..

They would need to apply anti money laundering procedures to verify accounts and record keeping... I believe a proper company can step in here.. heck even bucket shop forex brokers and market makers comply why cant a crypto business do the same??? looks like coinpayments doesnt want to bother.

Crypto-currencies can be exchanged decentralized. So we can just put a decentralized exchange in front of Bitpay or any merchant accepting BTC.

The decentralized exchanges are not yet well developed. And as I said upthread, users may not use them if there is no compelling reason (because they are perceived to be less convenient, greater bid/ask spread+variance), but they can help users remain anonymous.

Im not talking about exchange coins but paymeny processors via third party need to follow regulation now. My business which was to accept devcoin litecoin bitcoin cant happen via unregulated third party processor now.. Cp did the job of ensuring payments are secure before fwding them on to a service you implement.. so i would just recieve coins with order info and a tx.. im sure i can do without but its more work.

Now im pretty sure my business which provides products in exchange for coins may need to be regulated too but im not sure if that classifies as money transmitter.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 08, 2014, 09:26:41 AM
Detailed discussion of the problems with Zerocoin:

https://bitcointalk.org/index.php?topic=470987.msg5580855#msg5580855


The biggest problem with any "ZeroCoin" is that Bitcoin was never truly designed or meant to be anonymous nor decentralized and thus any attempt to create a clone for that purpose will be snuffed out by the banks and governments of the world.  

They have zero chance of widespread success but I suppose it makes for a nice hobby.

How can they snuff out something when they can't identify any of those who own the coin?

Paying for physical merchandise is an issue. But I will concede that market to Bitcoin and go after all the virtual merchandise, which will eventually be a larger market (as 3D printing in the home becomes prevalent).

The way they make counterfeit dollars illegal and few use them even though many could print their own dollars and do it well.

Most people would not risk prison given it's easy to track IP addresses and even physical hardware or software wallets.

And ZERO businesses would accept an illegal currency.

So then you'd be relegated to pure underground use, for things like drugs as only people willing to break the law would risk prison for a currency.

And that's being snuffed out, they would use national security to ban any truly anonymous currency saying a terrorist could easily buy bombs and maneuver through society using such anonymity and drug dralers as well.

Of course that's a lie, terrorists can be anonymous now with cash even more easily and so can drug dealers but who can fight the machine when they only need one executive order to kill anything and now, anyone.

I believe allmuch of the economy will be forced underground by the collapse of the $150 trillion global debt bomb (which will attempt to confiscate all wealth and destroy all business at its end-game). Ignition is 2016ish.

I believe it will become illegal to write many kinds of software, to create 3D printer designs that compete with the factories owned by the old capital, etc..

A new age is upon us.

This paradigm shift will tear to shreds our current reality.

Ready for the Jetsons?

I believe many (most?) of you are not ready. You are still thinking in terms of this world we have now which is propped up by $150 trillion in funny money. Pull away that veneer and you have remaining those who are useless in the hitech world coming and those are useful. Make sure you are in the latter.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 08, 2014, 09:33:07 AM
Big wrench in altcoin.. coinpayments closing down because FinCEn classifies then as a money transmitter..

They would need to apply anti money laundering procedures to verify accounts and record keeping... I believe a proper company can step in here.. heck even bucket shop forex brokers and market makers comply why cant a crypto business do the same??? looks like coinpayments doesnt want to bother.

Crypto-currencies can be exchanged decentralized. So we can just put a decentralized exchange in front of Bitpay or any merchant accepting BTC.

The decentralized exchanges are not yet well developed. And as I said upthread, users may not use them if there is no compelling reason (because they are perceived to be less convenient, greater bid/ask spread+variance), but they can help users remain anonymous.

Im not talking about exchange coins but paymeny processors via third party need to follow regulation now. My business which was to accept devcoin litecoin bitcoin cant happen via unregulated third party processor now.. Cp did the job of ensuring payments are secure before fwding them on to a service you implement.. so i would just recieve coins with order info and a tx.. im sure i can do without but its more work.

Now im pretty sure my business which provides products in exchange for coins may need to be regulated too but im not sure if that classifies as money transmitter.

I already explained the potential technical solution for paying businesses with a real-time conversion on decentralized exchange, but yeah it won't help you if your business can be regulated by the authorities. You could change jurisdictions or change the business model to anonymous.

My prediction is that if you don't, Obama and Merkel and Hollande, etc will destroy your business eventually. I see really bad times coming.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: sidhujag on March 08, 2014, 02:42:07 PM
Big wrench in altcoin.. coinpayments closing down because FinCEn classifies then as a money transmitter..

They would need to apply anti money laundering procedures to verify accounts and record keeping... I believe a proper company can step in here.. heck even bucket shop forex brokers and market makers comply why cant a crypto business do the same??? looks like coinpayments doesnt want to bother.

Crypto-currencies can be exchanged decentralized. So we can just put a decentralized exchange in front of Bitpay or any merchant accepting BTC.

The decentralized exchanges are not yet well developed. And as I said upthread, users may not use them if there is no compelling reason (because they are perceived to be less convenient, greater bid/ask spread+variance), but they can help users remain anonymous.

Im not talking about exchange coins but paymeny processors via third party need to follow regulation now. My business which was to accept devcoin litecoin bitcoin cant happen via unregulated third party processor now.. Cp did the job of ensuring payments are secure before fwding them on to a service you implement.. so i would just recieve coins with order info and a tx.. im sure i can do without but its more work.

Now im pretty sure my business which provides products in exchange for coins may need to be regulated too but im not sure if that classifies as money transmitter.

I already explained the potential technical solution for paying businesses with a real-time conversion on decentralized exchange, but yeah it won't help you if your business can be regulated by the authorities. You could change jurisdictions or change the business model to anonymous.

My prediction is that if you don't, Obama and Merkel and Hollande, etc will destroy your business eventually. I see really bad times coming.

Actually ya come to think of it ya just a few rpc calls would do it if there was an exchange built into
my node..  Hopefully it happens to help out the business side of things.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 09, 2014, 10:55:16 AM
https://bitcointalk.org/index.php?topic=507784.msg5602408#msg5602408

All those who think crypto-currency should be unregulated are implicit (de facto) members of the Dark Enlightenment (https://bitcointalk.org/index.php?topic=495527.0), and are delusional if they think it can happen without anonymity being built-in to the coin (https://bitcointalk.org/index.php?topic=505355.msg5581873#msg5581873).

The linked article in the OP implies the powers-that-be (not politicians, I mean the truly powerful who control the DEEP STATE (https://bitcointalk.org/index.php?topic=455141.msg5347903#msg5347903)) are aware they need to regulate Bitcoin.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Zarathustra on March 09, 2014, 11:15:21 AM


I believe allmuch of the economy will be forced underground by the collapse of the $150 trillion global debt bomb (which will attempt to confiscate all wealth and destroy all business at its end-game). Ignition is 2016ish.

I believe it will become illegal to write many kinds of software, to create 3D printer designs that compete with the factories owned by the old capital, etc..

A new age is upon us.

This paradigm shift will tear to shreds our current reality.

Ready for the Jetsons?

I believe many (most?) of you are not ready. You are still thinking in terms of this world we have now which is propped up by $150 trillion in funny money. Pull away that veneer and you have remaining those who are useless in the hitech world coming and those are useful. Make sure you are in the latter.

You're a dreamer. You really believe that there will still be something like a hightech world around when all debt (=money) with its just-in-time economy and -society has gone? It means dark age, but with the difference of 500 nuclear reactors and fuel pools not being cooled anymore. That's not the same as the infrastructure in ancient rome, egypt, maya etc., where pyramids and aqueducts only were left behind.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 09, 2014, 11:43:49 AM
I believe the gains made by the super intelligent who are freed from the chains of socialism will rectify issues such as that, c.f. cryptographic expert Daniel Bernstein's struggle to be free to do research (http://groups.csail.mit.edu/mac/classes/6.805/student-papers/fall95-papers/kokoski-crypto.html).

For example, Toshiba has a design for a 20MW solid-state nuclear reactor that doesn't need to be mechanically cooled.

"On a poetic note, I can dream can't I, and that is a start..." (http://www.youtube.com/watch?v=ovbF0D2wySI#t=417)


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Zarathustra on March 09, 2014, 02:24:32 PM
I believe the gains made by the super intelligent who are freed from the chains of socialism will rectify issues such as that, c.f. cryptographic expert Daniel Bernstein's struggle to be free to do research (http://groups.csail.mit.edu/mac/classes/6.805/student-papers/fall95-papers/kokoski-crypto.html).

For example, Toshiba has a design for a 20MW solid-state nuclear reactor that doesn't need to be mechanically cooled.

"On a poetic note, I can dream can't I, and that is a start..." (http://www.youtube.com/watch?v=ovbF0D2wySI#t=417)

Toshiba is a centralist, hypercollectivist monster.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 09, 2014, 03:13:11 PM
What does that have to do with whether the technology exists to improve nuclear?

I hope you realize energy is regulated and taxed such that it is controlled by cartels. Getting rid of that doesn't imply a Dark Age, rather it frees us to realize innovations which were suppressed because they are paradigm shifts which compete with the cartels.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: DoubleSwapper on March 10, 2014, 01:23:50 AM
What does that have to do with whether the technology exists to improve nuclear?

I hope you realize energy is regulated and taxed such that it is controlled by cartels. Getting rid of that doesn't imply a Dark Age, rather it frees us to realize innovations which were suppressed because they are paradigm shifts which compete with the cartels.
AnonyMint, I realize you are a very intelligent man and I enjoy reading your posts because they address many glaring problems others might realize but either subconciously or deliberately ignore to protect their investments or agendas.
My question to you though is because I have read your prediction about the burst of a $ 150 trillion debt bubble multiple times in your posts how you think such an event will unfold.

To whom is the world in debt exactly and how does this creditor force the government(s) to act as his debt collector(s)? From my understanding of your scenario it will lead to a widespread pauperization of the world respectively the majority of the people. Do you predict a simultaneous increase in the creditor's wealth or is this a scenario where basically everybody gets poorer?

With both scenarios (further concentration of wealth/obliteration of wealth) I see several problems that make this scenario seem unlikely.

1) The widespread confiscation of wealth would inevitably weaken or even nearly eradicate consumerism which is one of the strongest motors to our society and one of the most effective measures for the elite to concentrate wealth at the same time by concentrating the production to satisfy consumerism.  What would the elite gain by basically wiping out most people's spending capacity?
This would in either case harm the creditor by either obliterating his own wealth or at least a lot of possibilities to spend his own wealth.
2) Do all relevant governments work on this collectively? From my current observations of international politics it seems as this is not the case most of the time. Why would it be the case in this event and wouldn't it create opportunities for backstabbing and breaking of the agreement to confiscate all wealth?
3) What boundaries are set for the governments in this scenario? Are concepts like democratic elections or consistency with the constitution still applicable in this case? If not what changes and what keeps governments from doing now what you predict for 2016?

I hope you can answer some of these potential problems/questions as the theory seems pretty far-fetched in my opinion. I would rather fear a global nuclear war at the moment.

Looking forward to hearing from you.     


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 11, 2014, 09:28:37 AM
About the imminent conflagrapocalpyse...

What does that have to do with whether the technology exists to improve nuclear?

I hope you realize energy is regulated and taxed such that it is controlled by cartels. Getting rid of that doesn't imply a Dark Age, rather it frees us to realize innovations which were suppressed because they are paradigm shifts which compete with the cartels.
AnonyMint, I realize you are a very intelligent man and I enjoy reading your posts because they address many glaring problems others might realize but either subconciously or deliberately ignore to protect their investments or agendas.
My question to you though is because I have read your prediction about the burst of a $ 150 trillion debt bubble multiple times in your posts how you think such an event will unfold.

To whom is the world in debt exactly and how does this creditor force the government(s) to act as his debt collector(s)? From my understanding of your scenario it will lead to a widespread pauperization of the world respectively the majority of the people. Do you predict a simultaneous increase in the creditor's wealth or is this a scenario where basically everybody gets poorer?

As I explained in an upthread post (which I am too rushed to go find the link to at the moment), the ledger of who owes whom is less important consideration than the fact that it represents $150 trillion of human capital that was misdirected in its activities since mid-1980s and especially since 1994 or so when the debt-based economy accelerated (1994 is when Clinton had the equations for official statistics changed so they can unleash the surge (http://www.shadowstats.com/alternate_data/inflation-charts)).

http://www.shadowstats.com/imgs/sgs-cpi.gif?hl=ad&t=

(note we have inflation of fractional reserve digits which is why official stats lie about inflation to hide its relevance, but simultaneously we have a deflation of M0 which official stats also lie about by including bank deposits held Federal Reserve (which should be monetary base MB not M0 (http://en.wikipedia.org/wiki/Money_supply#Empirical_measures_in_the_United_States_Federal_Reserve_System)), thus MB is hockey stick but the Fed doesn't show us the true M0. The Fed is trying to hide from us the deflation that is really there. We can get a proxy for what is happening with M0 by looking velocity of MB which falling like rock! Go to this link (http://research.stlouisfed.org/fred2/graph/?g=een) then change the "a/b" to "b/a", click the "Redraw Graph" button, so that you get GDP / MB, then you will see velocity is falling off a cliff since 2008.)

So this is why technological employment is going to be so severe and massive overcapacity in manufacturing, fixed capital infrastructure, and conspicuous consumption, because all during the 1970s, 80s, 90s, and 2000s, while a few of us hackers were becoming 100000X more productive with our new found toy (the personal computer), the bulk of the population was able to stay in the old industrial economy thanks to increasing debt.

So what you are going to see when the $150 trillion debt bomb explodes 2016ish is that anyone who is not very technically relevant in the new Knowledge Economy will find themselves unemployable. The governments will try to appease this majority by taxation and confiscating everything, because they fundamentally don't understand the cause of the problem.

With both scenarios (further concentration of wealth/obliteration of wealth) I see several problems that make this scenario seem unlikely.

Those ledger IOUs are worthless to both lender and borrower. The capital now is all in the brains of hackers such as myself. We take over now. Checkmate. While we were busy sleeping under our desks for the past 3 decades, the rest of you were out enjoying yourself. Now the payback comes. Oxford U. admits 47% of the existing jobs will be replaced with robots over next 19 years (was 20 last year when study was published).

1) The widespread confiscation of wealth would inevitably weaken or even nearly eradicate consumerism which is one of the strongest motors to our society and one of the most effective measures for the elite to concentrate wealth at the same time by concentrating the production to satisfy consumerism.  What would the elite gain by basically wiping out most people's spending capacity?

The government isn't run rationally. The vested interests want to suck as much blood out of a turnip as they can. They have no foresight on outcomes, especially they don't even understand.

However, I am one of those who do believe the Bilderbergs understand they must first collapse the economy in order to create the chaos from which they can get their one world government. They want to weaken local and national structures so they can get the economy-of-scale of control to compete with the technology which is rewarding bottom-up hackers.

It is really a defensive move for them and they while getting their world outcome are actually in retreat and losing the way ultimately.


This would in either case harm the creditor by either obliterating his own wealth or at least a lot of possibilities to spend his own wealth.
2) Do all relevant governments work on this collectively? From my current observations of international politics it seems as this is not the case most of the time. Why would it be the case in this event and wouldn't it create opportunities for backstabbing and breaking of the agreement to confiscate all wealth?

The nation-state is being destroyed by this. The national institutions will be completely discredited and untrusted within a decade.

Out of the ashes the Phoenix will rise. The world will see massive new productivity once the youth take political control away from the boomers and we move to a high tech Knowledge Age where there are no more severe national barriers. You will be able to freely travel and invest in all countries, we will be headed towards a Jetsons level of lifestyle...


3) What boundaries are set for the governments in this scenario? Are concepts like democratic elections or consistency with the constitution still applicable in this case? If not what changes and what keeps governments from doing now what you predict for 2016?

The constitutions aren't followed any more any way.

Government is reactionary. The owners of the government (the vested interests) only do what they need to maintain their position of privilege. They are preparing (e.g. the 2714 tank-like vehicles and 10 billion rounds of hollow point bullets for the Homelove Security dept in the USA, the 9/11 pretext to track everything we do, etc..) but just like in Ukraine and other places where there have been unrest, they will only act as necessary.

The peripheral economies blow up first. We see already Ukraine, Greece, Spain, Thailand, India, Indonesia, Egypt, even China has -18% drop in exports just this month over last year.

Then core of Europe 2015ish or so.

Then the USA will be last to fall 2016ish.

We are getting very close now. We might see a dead-cat bounce in 2017, and the severe SHTF hard down phase maybe 2018.


I hope you can answer some of these potential problems/questions as the theory seems pretty far-fetched in my opinion. I would rather fear a global nuclear war at the moment.

Looking forward to hearing from you.    

Well yeah that is why I've been screaming this in the Mad Max thread in the Politics forum (https://bitcointalk.org/index.php?topic=365141.msg5637564#msg5637564). Check it out for more details. See also the Economic Devastation thread in the Economics forum (https://bitcointalk.org/index.php?topic=355212.0).

There is no chance I am wrong. Zero. The only variability is in the timing. By 2020, I assure you we are in a shithole outcome.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 11, 2014, 09:49:04 AM
https://bitcointalk.org/index.php?topic=509144.msg5636651#msg5636651

Listen up please to learn some new technical information...

Got any good suggestions for trustless and low-fee mixers?  I think all the P2P mixer projects are not yet fully ready, as far as I know.

...

Tumblers like bitcoinfog provide better obfuscation, but the (huge) trade-off is that you should trust an unknown third party. I'd never risk more than 1% of my holdings to such services, but I think the service they provide is necessary and should be used, albeit with care and with just a very minor portion of ones funds at a time.

Problem is there is no way to know if a centralized service (VPN, exchange, mixer, tumbler, laundry) is hacked, under NSA gag order, dishonest, buggy, etc..

Also using the centralized (VPN, mixer, tumbler, laundry) identifies you as someone that deserves extra monitoring by the authorities.

A decentralized solution is always best, as it should look like regular transactions.

Yes, I think CoinJoin should be a very good start.  But do any really decentralised and fully working implementations of CoinJoin exist already?  I don't think so and would be interested to know if they are.

I'm not aware of any either but don't let that deter you from using one of the already existing solutions even if they aren't perfect.

A decentralized CoinJoin will have difficulty forming transactions (including unequal or equal transaction amounts) that look like this if anyone can join:

https://blockchain.info/tx/e4abb15310348edc606e597effc81697bfce4b6de7598347f17c2befd4febf3b?show_adv=true

A sharedcoin transaction will look something like this: https://blockchain.info/tx/e4abb15310348edc606e597effc81697bfce4b6de7598347f17c2befd4febf3b (picked at random). As you can see multiple inputs and outputs make the determining the actual sender and receiver more difficult.

The server does not need to keep any logs and transactions are only kept in memory for a short time. However If the server was compromised or under subpoena it could be force...

Because the way it must work is the users sign the transaction first with their requested outputs, then in the second round they sign their payments as inputs to the transaction. If the payment inputs are less than the total, then the transaction is invalid. There is no way to determine who cheated and rate limit them. Thus the saboteur can stomp on every attempt to create a CoinJoin transaction and destroy the decentralized system.

DarkCoin says they can solve this by charging a fee, but you will see I originally proposed that idea in the CoinJoin thread and the requirement is all the participants must be permanently identified and then must use divide-and-conquer to whittle down to who was the saboteur. But identification defeats the mixing!

Thus I have not yet seen a workable decentralized CoinJoin that can scale. And I don't expect one.

I posted this to the CoinJoin thread (https://bitcointalk.org/index.php?topic=279249.msg5637143#msg5637143) to get their technical peer-review of my statement.

Now, if the zerocoin concept would be implemented in bitcoin, it would be cool.

Just forget zerocoin even in an altcoin it won't work. Because it requires a trusted person to hold the private key that can unlock everything including taking all the zerocoins. This can't be fixed (contrary to ruminations otherwise), it is a fundamental mathematical property of the way zero knowledge proofs work when combined with an accumulator.

Also zerocoin has to be dedicated to preset transactions amounts (e.g. 1 BTC) else the anonymity set can be trivially collapsed by comparing input and output transaction amounts.

Never recommend noobs to use Tor, it's a honeypot where they are worse off than not using Tor at all.
Noobs should use a trustworthy VPN instead.
The optimal solution is VPN + Tor.

Not if you stay in-network. Unfortunately, my services (bitcoin node) are not tor-enabled yet. Namecoin has the potential to facilitate this with human-readable addresses as well.

Not true. Tor is always subject to timing analysis by an entity such as the NSA (which is recording ans storing nearly all global encrypted traffic in Utah) which can see the encrypted packets running between Tor nodes.

Popular VPNs are also very likely all honeypots and unpopular ones give only a small anonymity set.

Currently the only known way to be reliably anonymous is use a connection to the internet that can't be traced to you, e.g. netcafe without cameras any where and don't drive your car as that has secret tracking built-in according to CEO of Ford, a throw-away mobile device and simm that doesn't have your id registered and used for no other activity, etc.



Anonymint: we are not discussing being safe against a global adversary such as the NSA, we all know that mixers + Tor is probably not enough to defeat them because of honeypots, timing attacks, deep packet inspection, etc...

We are discussing using basic security procedures in order not to be "the low hanging fruit" and thus being reasonably safe against the casual hacker/criminal doing trivial blockchain and network analysis to easily link identities to BTC balances. For that purpose running your wallet through Tor and using a decentralized and trustless mixer such as coinjoin should be enough.

The government and the criminals are sometimes one in the same.

But (uninformed) trust is all that is holding up the $150 trillion in fractional reserves (https://bitcointalk.org/index.php?topic=455141.msg5637503#msg5637503), so you won't find too many people that subscribe to my view (yet). They will learn by 2020.

And you did not address my technical point about CoinJoin, which has nothing to do with the NSA.

In short, we are pretty well f8cked approaching the 2016ish global conflagrapocalpyse.


Adam Back (the creator of Hashcash which Bitcoin is based on) explains the anonymity problem (https://bitcointalk.org/index.php?topic=509674.0) (jump to 24:25 mins into the video).



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: tkbx on March 11, 2014, 10:40:00 AM
How are there so many "no"s? Did I not understand the question?

If someone doesn't invest in Bitcoin because they don't understand it, they'll be missing out.
If someone does invest in Bitcoin when they don't understand it, unless they've got an honest friend to help them securely set up an encrypted paper wallet, they'll likely have their coins stolen.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 11, 2014, 11:10:45 AM
At the end of my prior post, there is a link to an insightful Adam Back presentation. Skip also to the 113:00 min point in the video to hear him describe how potentially Ethereum could be infected with a virus!


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 11, 2014, 12:32:11 PM
F8ck the coming apocalypse is worse than I previously estimated...

Soooooooooo, I read today that the world's debt amount to $100 trillion.
Wikipedia says that in 2012, the GDP was ~72 trillion. Let's suppose that it's $80 trillion now.

Debt to GDP = 125%

Incorrect. Total debt is $157 trillion in developed countries plus $66 trillion in emerging markets, because is 313% of GDP and the GDP is $72 trillion:

http://www.gfmag.com/tools/global-database/economic-data/11855-total-debt-to-gdp.html#axzz2iu5C4Y4Z

http://blogs.wsj.com/economics/2013/05/11/number-of-the-week-total-world-debt-load-at-313-of-gdp/

Chinese corporate debt is the highest in the world as a percentage of GDP:

https://bitcointalk.org/index.php?topic=365141.msg4337574#msg4337574

Don't forget to add on $1000 trillion of sovereign bond derivatives, and $1000 trillion of unfunded social liabilities.

http://www.indexq.org/economy/gdp.php


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: rpietila on March 11, 2014, 05:21:17 PM
Operating the NSA requires quite bright people. Don't you think they will be increasingly hard to find when the U.S. descends towards being the Animal Farm?

My thinking goes like this: what people want the most is freedom, and working for a totalitarian state is the antithesis of freedom. Probably some will still choose to do it, but the brightest have the most choice and are the least likely to choose working for the govt.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on March 11, 2014, 06:03:50 PM
Operating the NSA requires quite bright people. Don't you think they will be increasingly hard to find when the U.S. descends towards being the Animal Farm?

My thinking goes like this: what people want the most is freedom, and working for a totalitarian state is the antithesis of freedom. Probably some will still choose to do it, but the brightest have the most choice and are the least likely to choose working for the govt.

While I agree that most of the brightest wouldn't work for the government as long as they can find income elsewhere, that's already the case.  Those that are ideologically opposed to government leave those services fairly quickly under any economic conditions.  However, there are always the remainder.  I've read that roughly 3% of the adult population are sociopathic to some degree or another.  Having worked in government 'enforcement' in the past, my own experiences tell me that government is significantly overrepresented by this demographic.  If you have ever really known a true sociopath, they are not motivated by economic gain so much as by personal power gain.  A society in decline would give many of them an increased opprotunity for power gains in the near term.  I just can't picture these people walking away from government 'service', and (unfortunately) almost all of them are quite intelligent.  Do not underestimate your enemy, and trust me when I say that they are, indeed, your enemy.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: rpietila on March 11, 2014, 06:11:42 PM
[sociopaths] I just can't picture these people walking away from government 'service', and (unfortunately) almost all of them are quite intelligent.  Do not underestimate your enemy, and trust me when I say that they are, indeed, your enemy.

:(

Perhaps this is why Third Reich was perfectly operational until destroyed militarily. Who is there to destroy this one? Or should we start to accelerate our prayers concerning Jesus' coming?  ???


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on March 11, 2014, 06:18:47 PM
F8ck the coming apocalypse is worse than I previously estimated...

Soooooooooo, I read today that the world's debt amount to $100 trillion.
Wikipedia says that in 2012, the GDP was ~72 trillion. Let's suppose that it's $80 trillion now.

Debt to GDP = 125%

Incorrect. Total debt is $157 trillion in developed countries plus $66 trillion in emerging markets, because is 313% of GDP and the GDP is $72 trillion:

http://www.gfmag.com/tools/global-database/economic-data/11855-total-debt-to-gdp.html#axzz2iu5C4Y4Z

http://blogs.wsj.com/economics/2013/05/11/number-of-the-week-total-world-debt-load-at-313-of-gdp/

Chinese corporate debt is the highest in the world as a percentage of GDP:

https://bitcointalk.org/index.php?topic=365141.msg4337574#msg4337574

Don't forget to add on $1000 trillion of sovereign bond derivatives, and $1000 trillion of unfunded social liabilities.

http://www.indexq.org/economy/gdp.php

While that is likely a fairly accurate statistic, it's still very misleading.  There is a fable that is told (sometimes) to economics students to illistrate the nature of debt like this.  Here is one version of it I quickly found with google...

It is the month of August; a resort town sits next to the shores of a lake. It is raining, and the little town looks totally deserted. It is tough times, everybody is in debt, and everybody lives on credit.

Suddenly, a rich tourist comes to town. He enters the only hotel, lays a 100 dollar bill on the reception counter, and goes to inspect the rooms upstairs in order to pick one.

The hotel proprietor takes the 100 dollar bill and runs to pay his debt to the butcher. The Butcher takes the 100 dollar bill and runs to pay his debt to the pig raiser. The pig raiser takes the 100 dollar bill and runs to pay his debt to the supplier of his feed and fuel. The supplier of feed and fuel takes the 100 dollar bill and runs to pay his debt to the town’s prostitute that, in these hard times, gave her “services” on credit. The hooker runs to the hotel, and pays off her debt with the 100 dollar bill to the hotel proprietor to pay for the rooms that she rented when she brought her clients there.

The hotel proprietor then lays the 100 dollar bill back on the counter so that the rich tourist will not suspect anything. At that moment, the rich tourist comes down after inspecting the rooms, and takes his 100 dollar bill, after saying he did not like any of the rooms, and leaves town.

No one earned anything. However, the whole town is now without debt, and looks to the future with a lot of optimism.



Most of these derivitives are just like the debt that this small town had, interlinking trade debt that largely self cancels.  (Insert plug for Ripple here, if you like)  What the real fear is that, should one of the major players here, say the hooker, was also indebted to the tune of $100 to her drug dealer.  This whole story coudl come crashing down if the rich tourist didn't get his $100 bill back.  However, not all of it would come crashing down; some portion of the debt is real enough and back by real assets.  No matter how much of the derivitives can actually be paid, the assets are real.

EDIT::  Notice that in the story, the total indebtedness of the town was about $400


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on March 11, 2014, 06:41:34 PM

Wow, you have sunk to the level of posting shadowstats to help back your claims? Come on man.

Shadowstats is probably the most trustworthy source of information available in the United States today.  Basicly, their metrics are the most similar to those used prior to WW2, so they would be the best to compare to the official statistics for the Great Depresssion, as an example.  The data that comes out of official US government channels are only slightly more trustworthy than those that come out of official Chinese channels, or official Cuban channels.  It is unwise to trust the word of the institution that is most likely to benefit from an unrealisticly positive image.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: HappyFunnyFoo on March 11, 2014, 06:52:00 PM
Bitcoin users actually use fiat as their currency of choice.  They use bitcoin as an investment vehicle - dollars, euros, etc. are the medium of exchange by which they either buy bitcoins on exchanges or use to buy mining equipment which generates bitcoins, the investment.  Let's contrast the difference between something used as a medium of exchange, such as a dollar, and something used as a store of value which is expected to appreciate over time ("investment"), such as bitcoins.

A dollar is a good example of a currency.  Most people hold on to a small amount of dollars at any given time, and readily swap those dollars out for things they need - products or services.  Most people are also receiving dollars at the rate they spend them.  For example, your average person's checking account doesn't hold much currency at any given time - something like $1,000 - but that person might have received $3,000 in income and spent $3,000 over a single month.  The person uses the dollar as an exchange of value, because he is exchanging the vast majority of his dollars for things he needs as he receives dollars for providing services or goods for other people.  The average person doesn't let his dollars sit around because they don't gain value over time relative to anything else - they tend to slightly lose value.  Therefore, dollars are constantly and rapidly moving from person to person, business to business.  The average American starts and ends the year with about $3,000, yet receives $35,000 through the course of the year and spends $35,000 through the course of the year.  95% of dollars are spent quickly on something else.  People expect their $1.00 to be worth 3% less at the end of the year, so it's readily exchanged for other things.  If that $1.00 was expected to be worth more at the end of the year, it would be held onto.  The dollar would cease being a medium of exchange, since people would hoard them.

Let's compare this to a bitcoin.  The average bitcoin user uses his currency of choice - typically dollars, euros, or other fiat - to either purchase bitcoins or purchase mining equipment to generate bitcoins.  The average joe with a job who is into bitcoins might be able to buy 1 bitcoin a month from an exchange, or generate 1 bitcoin a month with a decent mining setup.  At the end of the month, this typical bitcoin user has gained 1 bitcoin, but has spent virtually none of the coins on products or services.  It's likely he's donated 0.05 a couple of times for some apps that he downloaded which offered a donation, possibly paid back a friend, etc.  But 95% of the bitcoins are just sitting there in his possession.  After two years, the average bitcoin user has acquired 24 bitcoins, yet only spent at most 1-2 of them.  Contrast this to the poor dollar - 95% of dollars are spent on something just as soon as they are received.  The dollar (a currency) and bitcoin (a commodity/investment) are total opposites.

Bitcoin is not fundamentally designed to behave as a currency.  Its value increases rapidly over time, and there are a fixed maximum number of coins which can be in circulation, ever, so this phenomenon will continue as long as demand for bitcoin increases.  95% of 'transactions' are either users acquiring bitcoins from exchanges or simply moving bitcoins from one wallet to another in their possession, with the intent and purpose of holding bitcoin over a long period of time with the expectation that their value relative to goods or services will increase, or selling coins that have appreciated in value.  Contrast this to any currency, where 95% of 'transactions' are exchanges for goods or services, or investments.

This thread, and every other bitcoin discussion, seems to really be an endless debate about bitcoin's strengths/weaknesses as an investment.  The bigger point is missed.  The fact of the matter is that bitcoin simply cannot function as a currency, and the behavior of users on the network confirms this, more and more so over time.

Tying into the original post, I suppose, is the fact that Bitcoin's a horrible, HORRIBLE long-term investment.  When AES is rendered obsolete or any of the potential flaws discussed in this thread are exploited, all value in the network will be lost.  Seeing as how at least 8% of all bitcoins in circulation have been stolen at least once, well....


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on March 11, 2014, 07:03:44 PM
Shadowstats is probably the most trustworthy source of information available in the United States today.  Basicly, their metrics are the most similar to those used prior to WW2, so they would be the best to compare to the official statistics for the Great Depresssion, as an example.  The data that comes out of official US government channels are only slightly more trustworthy than those that come out of official Chinese channels, or official Cuban channels.  It is unwise to trust the word of the institution that is most likely to benefit from an unrealisticly positive image.

Um, lol? Who says I have to trust the BLS? My own eyes function just fine, and the prices I pay have not doubled over the last 7 or 8 years as that ridiculous chart would indicate--with or without energy costs--and tripled and quadrupled over similarly short timescales prior. That chart clearly relies on people not understanding pretty basic math, or having no memory.

Mine have more than doubled.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on March 11, 2014, 07:13:10 PM
Bitcoin users actually use fiat as their currency of choice.  They use bitcoin as an investment vehicle - dollars, euros, etc. are the medium of exchange by which they either buy bitcoins on exchanges or use to buy mining equipment which generates bitcoins, the investment.  

I don't, and never have.  I've been using bitcoins as a medium of exchange for 4+ years now, and have bought all range of items; from hats for my avatar on TF2 to handmade jewlry on Etsy to game & ebook licenses to about 16 months straight of cell service.

How does that fit into your investment vehicle model?

Bitcoins are actually a pretty crappy investment vehicle, despite the historic returns.  Like gold, there is no dividend.  You're not actually investing in anything, and the scarcity that speculators have been chasing is artificial.  There are simply too many substitutes for that to be a good idea long term.  Bitcoins are not a commodity, so they can't be made into anything, and nothing requires them to operate.  Wild swings due to speculation aside, bitcoins derive all of their fundamental value from their (current and future) usefulness as a value transfer over distance mechanism.  If you're holding onto them solely in the hopes that they will rise in exchange value, I would have to recommend that you reassess your portfolio.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on March 11, 2014, 07:26:30 PM
Mine have more than doubled.

My mind is blown.

It shouldn't have.  I'd wager that if you actually sat down and assessed your real costs, you'll find that your expenses have likely doubled as well, since about 2000.  While gas prices have been fairly flat the past couple of years, the price of a gallon of petrol near where I live was right around $2.20 in 2008 and is $3.57 today; and has been as high as $4.09 in between.  Likewise, as recently as two years ago, a gallon of propane cost me about $1.60, delivered; today it's $3.40.  Granted, there are a lot of market forces going on there, including the quite un-global-warming-like winter we just had.  Yet, the cost of beef or chicken at the grocery store is much more than it was a decade ago as well.  The offical CPI suppresses the official inflation metric in a number of ways, one of which is to use 'substitution'.  I.E., they assume, as prices rise, someone who could no longer afford beef would buy chicken instead; so they swap the price of beef for the price of chicken in the formula.  There are other examples I can produce.   And the cost of consumer energy needs isn't even included in the modern calculations at all, only the commercial and/or wholesale prices of those energy sources; or more specificly, the effect of the rising energy that commercial businesses pass onto their consumer prices.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: etlase3 on March 11, 2014, 07:38:07 PM
It shouldn't have.  I'd wager that if you actually sat down and assessed your real costs, you'll find that your expenses have likely doubled as well, since about 2000.

Well there was that jump when I upgraded to my McMansion in 2006.

Quote
While gas prices have been fairly flat the past couple of years, the price of a gallon of petrol near where I live was right around $2.20 in 2008 and is $3.57 today; and has been as high as $4.09 in between.

So it seems that your memory is suspect afterall. Gas may have been in the low $2s in 2008, but it was above $4 in 2007. Perhaps you should look into the reasons why it was so cheap in 2008? Because it does not make your case at all.

Quote
The offical CPI suppresses

There was no statement made about the official CPI, stop red herringing. Shadowstats is just as big of a pile of bs; pointing out the flaws of some other flawed metric does not make Shadowstats not flawed. Besides, all it is doing is obviously just adding 5% on to the CPI, there is no actual metric.

And I don't have the data points, but if we assume roughly 8% inflation since 2000 according to shadowstats, that means there has been ~150% inflation in 14 years. Someone making $50k today is the same as someone making $20k in 2000.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on March 11, 2014, 08:58:50 PM

So it seems that your memory is suspect afterall. Gas may have been in the low $2s in 2008, but it was above $4 in 2007. Perhaps you should look into the reasons why it was so cheap in 2008? Because it does not make your case at all.

At my age, my memory should always be suspect.

Quote
There was no statement made about the official CPI, stop red herringing. Shadowstats is just as big of a pile of bs; pointing out the flaws of some other flawed metric does not make Shadowstats not flawed. Besides, all it is doing is obviously just adding 5% on to the CPI, there is no actual metric.

Well, I can accept the argument that Shadowstats can still be flawed.  I'm just of the opinion that their methods are a bit more open, and their biases a bit less suspect.

Quote
And I don't have the data points, but if we assume roughly 8% inflation since 2000 according to shadowstats, that means there has been ~150% inflation in 14 years. Someone making $50k today is the same as someone making $20k in 2000.

You do have a good point there, but also a great many things besides have changed during those same 14 years to mitigate the effects.  (I'm not really talking about price inflation, so much as using that as an example since that is what the CPI measures.)  I'm mostly talking about monetary base inflation, which has been counteracted, to a great extent, by the debt destruction during 2007-2009 (mostly felt in the crash of houseing prices) and other smaller effects, such as the average increase in gas mialage and the decrease in average miles driven per year by Americans.  The rise of ridesharing services like zipcar really are having an outsized impact on the economy, permmitting urban millinials to commute by public transit with a ready access to a personal vehicle whenever neccessry.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 12, 2014, 04:44:26 AM
Sad to see core Bitcoin developer gmaxell threatening me to abuse his authority as a moderator of the technical subforum on Bitcoin.

https://bitcointalk.org/index.php?topic=509144.msg5653409#msg5653409

Remember what I was writing about CoinJoin upthread:

And here is our friendly Bitcoin csore developer...

...

Well I got another reply from CORE BITCOIN DEVELOPER gmaxell and here is my rebuttal...posting here in case he deletes my post there as he has threatened me in a private message (which I also publish below)...

https://bitcointalk.org/index.php?topic=279249.msg5653238#msg5653238

I see those (other than gmaxwell who is not very ad hominem in his response, other than the slight "over and over" which is irrelevant to the technical response) who posted while I was sleeping have relished in their boastful snobbery.

Now let's deal with the humbling facts.

And my post to which you are replying is in fact explaining the DOS (denial-of-service) is insoluble if you can't identify the participants in order to rate-limit them.

And again in that post you admit there is a DOS problem. You didn't solve it. And you can't solve it in a decentralized setting unless you have non-ephemeral identification of the participants. Which is precisely the point of my prior post to which you are replying

You are asserting it, (over and over again) but it doesn't make it true. It was explained in adequate detail previously enough for other people to understand it and implement tools that address it.

Quote
Incorrect. What I wrote is functionally equivalent to what you described. The point is the transaction can be jammed in the final round.

It's actually not, since it's not actually possible in the Bitcoin protocol to do what (it sounds like) you're describing, but more importantly performing the operation in that order defeats the anti-dos. If you lead with the inputs they provide a trivial anti-dos mechanism.

And precisely how do you identify which input is the adversary when the correlation of the inputs and the outputs is necessarily cryptographically blinded?

As far as I can see, you can't.

I am confident that now you see the functionally w.r.t. to anti-DOS of what I described and what you described are equivalent, i.e. any one who is the least bit mathematical can see that the salient mathematical foundation of CoinJoin is that the correlation between the inputs and outputs must be cryptographically blinded, thus it makes no difference mathematically for anti-DOS whether the inputs or outputs are specified in the first round of the protocol.

As for whether my proposed protocol of putting the outputs in the first round is implementable on the Bitcoin blockchain, it is irrelevant since we are talking about a general protocol here and an altcoin could be designed to allow a transaction where outputs and inputs can be signed to point to the transaction nonce (a hash of any number) plus the addresses of the inputs OR outputs. I didn't bother to check how Bitcoin signs the transactions, because it is conceptually irrelevant to our discussion. Perhaps in Bitcoin the signature of the transaction must include all the inputs AND outputs. The reason I presented my formulation (in fact I mentioned the ring signatures idea from Adam Back in the Zerocoin thread months ago in this thread) is because it is more powerful conceptually than one gmaxell described. I thought gmaxell would appreciate that since I think he is a math guy.

Quote
And exactly how do you propose to identify that adversary in a decentralized setting?  ;) My point is you can't, at least not without breaking anonymity, and anonymity was the entire point of mixing.

Because they fail to sign. There is no need to identify them beyond identifying their input coins to achieve rate limiting, and no need to identify the input/output correspondence.

I'll repeat it, since maybe other people are having problems following the link:

I will quote from your more detailed description upthread.

This is an extremely interesting idea.  Could you elaborate on how the Zerocoin transaction stages map to the stages of CoinJoin transaction creation?

For non-decenteralized coincoin, you simply pass around a transaction and sign it. It's a single sequence and an atomic transaction, you'd make two loops through the users, one to discover the inputs and outputs, and another to sign them. There really aren't stages to it.

Making a decenteralized CoinJoin secure, private, and resistant to DOS attack (people refusing to sign in order to make it fail) is trickier... for the privacy and dos attack resistance you can use ZC:

Presume the participants for a transaction are sharing some multicast medium and can all communicate.  They need to accomplish the task of offering up inputs (txid:vout) for inclusion in the transaction and then, in an unlinkable way, providing outputs to receive their coins.

Each participant connects and names bitcoin input(s), an address for change (if needed), and the result of performing a ZC mint transaction to add to the ZC accumulator. They sign all this with the keys for the corresponding inputs proving its theirs to spend.

Then all the parties connect again anonymously and provide ZC redeem transactions which specify where the resulting bitcoins should go.

Zerocoin (ZC) requires a trusted party to generate the parameters, thus it is the antithesis of decentralized, so you have a logical error above.

https://github.com/Zerocoin/libzerocoin/wiki/Generating-Zerocoin-parameters

This isn't the only way to do this in a decentralized manner, the way to do it with blind signatures is fairly similar:

Each participant connects, names Bitcoin input(s), an address for change (if needed), a key for blind signing, and a blinded hash of the address they want paid. They sign all this with the keys for the corresponding inputs proving its theirs to spend.

Each participant then blind signs the blinded hashes of all participants (including themselves).

And so how can you correlate which input is the one who didn't blind sign all?

As far as I can see, you can't.

I've dug very deep (into cryptography research papers) lately into trying to find a way to delink inputs from outputs without a trusted party, and I have realized that mathematically it can't be done. It is a fundamental conceptualization.

The only way to delink without anti-DOS is to use an accumulator commitment scheme with common NP-hard parameters that can be presented in an NIZKP (non-interactive zero knowledge proof) which will always require a trusted party to generate the common parameters for the trapdoor math.

This is just one example of a way to address this. There are several other ones possible— and discussed early on in this thread.  Other ones include publishing commitments and then if the process fails having everyone reveal their intended outputs (which they then discard and never use) in order to avoid being banned, or using an anonymous accumulator instead of blind signing to control access.

That isn't anti-DOS.

Each spender commits a hash of his intended output. Then everyone does the blinded protocol. If the blinded protocol fails, everyone including the adversary reveals the link between inputs and outputs, because by definition the output key must be an abundant resource so that it is not costly to reveal it and generate a new one to try again.

, or using an anonymous accumulator instead of blind signing to control access.

A ZKP + accumulator isn't decentralized as I explained above.

Tada!  :P


Here is the private message he sent me and my response to him... (bold emphasis is mine)

Go read my post in his thread from yesterday. It wasn't belligerent. It was a discussion of the technical issues and asked for technical comments. How is discussing technical facts belligerent?

Looks to me like below he is trying to justify an imminent abuse his authority...

Note about the veracity and quality of my technical arguments, perhaps this one by me about the quantum computing threat qualifies (https://bitcointalk.org/index.php?topic=500994.msg5563229#msg5563229).

Eat humble pie. See my reply in the CoinJoin thread.

You are an ego maniac.

AnonMint, Every post you've made here has been error and confusion.
Keep your ad hominem attacks out of it please. I asked kindly for technical comments.

It wasn't an ad hominem— I'm not expressing any opinion about your character. I can only assume that if you treat other people like you do people on the forum that you'd be starving in the streets or incarcerated, so presumably you're actually a nice person when you're not hiding behind a pseudonym on a Bitcoin forum...

Regardless, Your behavior in the technical subform is not very productive.  I have warned you previously.  Your responses come across as universally belligerent which is particularly aggravating to people because they are often confused in the technical details. Whatever approach you are using is not effectively communicating to people and not getting you useful answers because many people have you on ignore.

Your posts have been cited as an example by technical experts as to why they no longer participate in the forum... and I've certainly experienced it myself.

If you do not adopt a style which is less aggressive or up your level of technical mastery to the nearly flawless state which would be required to justify your aggressiveness I will exclude you from the technical subforum.

Cheers.  


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on March 12, 2014, 05:23:04 AM
Anonymint, I have read the PM you posted (which is, itself, rude) and I have to say I agree with every word of it.  Your attitude gets in the way of any constructive intentions that you may have; and as has been pointed out many times by many people previously, you don't understand Bitcoin as well as you think that you do.  Alternative, invitation only, technical bitcoin forums have been founded specificly to avoid you.  Which, BTW, is quite an accompishment if your goal was to troll.  Ironicly, I can't believe that you're a talented troll; but instead passionately believe everything that you claim.  Therefore, I must admit that the highest form of trolling that I have ever seen on this forum (or anywhere else) is accidental.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 12, 2014, 05:27:56 AM
Why not stick to point form facts? Nothing else.

Yeah that is what I was trying to do. Go read the posts from others in that CoinJoin thread in response to my request for technical comments (https://bitcointalk.org/index.php?topic=279249.msg5637143#msg5637143).

Anonymint, I have read the PM you posted (which is, itself, rude) and I have to say I agree with every word of it.  Your attitude gets in the way of any constructive intentions that you may have; and as has been pointed out many times by many people previously, you don't understand Bitcoin as well as you think that you do.  Alternative, invitation only, technical bitcoin forums have been founded specificly to avoid you.  Which, BTW, is quite an accompishment if your goal was to troll.  Ironicly, I can't believe that you're a talented troll; but instead passionately believe everything that you claim.  Therefore, I must admit that the highest form of trolling that I have ever seen on this forum (or anywhere else) is accidental.

Let's wait to see if gmaxell can refute the technical argument. I am fairly sure he can't. Which would then mean that he is doing the trolling per your definition. If he can't then he fails his own test for banning "level of technical mastery to the nearly flawless state", so therefore he must logically ban himself from his own subforum. Hahaha.  ::)

It is unfortunate that you see spirited discussion as trolling. You've just provided an example of totalitarianism.

(mathematically the end-game of totalitarian regimes is to ban, i.e. destroy, themselves)

The implication that I would be "incarcerated" for expressing (sharing!) a technical opinion is definitely the markers of the psychology of a totalitarian sociopath control freak. That is not the decentralized freedom of the hacker and internet world that I worked hard (back in the 80s and 90s) to hand to kiddie gmaxell.

Operating the NSA requires quite bright people. Don't you think they will be increasingly hard to find when the U.S. descends towards being the Animal Farm?

My thinking goes like this: what people want the most is freedom, and working for a totalitarian state is the antithesis of freedom. Probably some will still choose to do it, but the brightest have the most choice and are the least likely to choose working for the govt.

While I agree that most of the brightest wouldn't work for the government as long as they can find income elsewhere, that's already the case.  Those that are ideologically opposed to government leave those services fairly quickly under any economic conditions.  However, there are always the remainder.  I've read that roughly 3% of the adult population are sociopathic to some degree or another.  Having worked in government 'enforcement' in the past, my own experiences tell me that government is significantly overrepresented by this demographic.  If you have ever really known a true sociopath, they are not motivated by economic gain so much as by personal power gain.  A society in decline would give many of them an increased opprotunity for power gains in the near term.  I just can't picture these people walking away from government 'service', and (unfortunately) almost all of them are quite intelligent.  Do not underestimate your enemy, and trust me when I say that they are, indeed, your enemy.

The problem is that the NSA doesn't need to be that smart because they have the asymmetric power derived from political power.

However indeed we can outsmart them if the outcome purely depends on technology.

Hence one of the reasons I created this thread. And hence the reason AnonyMint won't be announcing any altcoin that implements the ideas in this thread.

The outcome will be a mix of the technological and the political. The NSA+G20 will win the political (i.e. the majority will follow Bitcoin + world government) until everything is burned to the stumps. I am hoping the technologists can win in the sense that we don't get burned to stumps. Then at some point we take over and the majority comes to our side.

Tortilla (that is what MPOE calls you, hehe I don't agree just a joke), perhaps you don't understand that we can't get from here to there without a severe lashing.

[sociopaths] I just can't picture these people walking away from government 'service', and (unfortunately) almost all of them are quite intelligent.  Do not underestimate your enemy, and trust me when I say that they are, indeed, your enemy.

:(

Perhaps this is why Third Reich was perfectly operational until destroyed militarily. Who is there to destroy this one? Or should we start to accelerate our prayers concerning Jesus' coming?  ???

That is what my efforts are about surviving my friend. One day you might understand. Am I motivated by fear, greed, or helping? Or a mix? And you?

Be careful with applying the Biblical of the macro on the micro steps along the way. The Bible says God works in mysterious ways.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 12, 2014, 06:11:06 AM
http://blog.mpettis.com/2014/03/will-emerging-markets-come-back/#comment-22383

Quote from: AnonyMint
Quote
This simple step will eliminate systematic labor arbitrage across the world and reveal true competitive advantages arising from know-how and expertise instead of competitive advantage arising from undervalued currency / labor cost given labor productivity.

This assumes that labor (or exchange rate) arbitrage is the root of the problem. The problem is the lack of annealed fitness created by debt. Period. This is why debt can't be written down painlessly because there are social capital costs to large debt that can't be unwound quickly.

And labor is going away, even Oxford University predicts 47% of all existing jobs will be replaced by automation.

What all that debt did since the 1980s was allow people to sustain in jobs which had already become irrelevant because nerds like me were fooling around with this new toy called the personal computer since 1978. And while we changed the world by being a million times more productive, no one noticed because they didn't need to because debt was there to hold their labor hand. So now they will pay for it with an abrupt collapse into technological unemployment, probably at 50% of the global population unemployable (uneconomic in their knowledge versus a computer or robot).

So while those globalists will get together to fantasize about non-solutions, it is going to be up to us technologists to devise a way to keep us from spiraling into a Dark Age. And we will. Because we can.



You fail to understand that you can't just wipe the debt ledger clean, then everything continues as if there wasn't debt.

Not only is there the problem of leverage meaning some people expect more than can ever be produced to pay them, i.e. a unit of money is a claim on production.

There is also the problem that the population has become lulled into technological irrelevance by the debt which sustained their desire to remain technologically ignorant.

F8ck the coming apocalypse is worse than I previously estimated...

Soooooooooo, I read today that the world's debt amount to $100 trillion.
Wikipedia says that in 2012, the GDP was ~72 trillion. Let's suppose that it's $80 trillion now.

Debt to GDP = 125%

Incorrect. Total debt is $157 trillion in developed countries plus $66 trillion in emerging markets, because is 313% of GDP and the GDP is $72 trillion:

http://www.gfmag.com/tools/global-database/economic-data/11855-total-debt-to-gdp.html#axzz2iu5C4Y4Z

http://blogs.wsj.com/economics/2013/05/11/number-of-the-week-total-world-debt-load-at-313-of-gdp/

Chinese corporate debt is the highest in the world as a percentage of GDP:

https://bitcointalk.org/index.php?topic=365141.msg4337574#msg4337574

Don't forget to add on $1000 trillion of sovereign bond derivatives, and $1000 trillion of unfunded social liabilities.

http://www.indexq.org/economy/gdp.php

While that is likely a fairly accurate statistic, it's still very misleading...

...The hotel proprietor takes the 100 dollar bill and runs to pay his debt to the butcher. The Butcher takes the 100 dollar bill and runs to pay his debt to the pig raiser. The pig raiser takes the 100 dollar bill and runs to pay his debt to the supplier of his feed and fuel. The supplier of feed and fuel takes the 100 dollar bill and runs to pay his debt to the town’s prostitute that, in these hard times, gave her “services” on credit. The hooker runs to the hotel, and pays off her debt with the 100 dollar bill to the hotel proprietor to pay for the rooms that she rented when she brought her clients there...

...No one earned anything. However, the whole town is now without debt, and looks to the future with a lot of optimism.

Most of these derivitives are just like the debt that this small town had, interlinking trade debt that largely self cancels...

And this exemplifies you are a mainstream (Keynesian Krugman-esque) economist and they are incorrect.

You fail to understand that you can't just wipe the debt ledger clean, then everything continues as if there wasn't debt.

Not only is there the problem of leverage meaning some people expect more than can ever be produced to pay them, i.e. a unit of money is a claim on production.

There is also the problem that the population has become lulled into technological irrelevance by the debt which sustained their desire to remain technologically ignorant.

What you fail to understand is that along the way of creating $227 trillion of global debt, the people were incentivized to attain skills and life experience that makes them entirely unemployable in the robotics and computer automation age.

I already explained this twice upthread, but you seem to have selective comprehension, i.e. you ignore (and fail to refute) my logical points when they challenge your basis.

https://bitcointalk.org/index.php?topic=455141.msg5637503#msg5637503

About the imminent conflagrapocalpyse...

As I explained in an upthread post (which I am too rushed to go find the link to at the moment), the ledger of who owes whom is less important consideration than the fact that it represents $150227 trillion of human capital that was misdirected in its activities since mid-1980s and especially since 1994 or so...

So this is why technological employment is going to be so severe and massive overcapacity in manufacturing, fixed capital infrastructure, and conspicuous consumption, because all during the 1970s, 80s, 90s, and 2000s, while a few of us hackers were becoming 100000X more productive with our new found toy (the personal computer), the bulk of the population was able to stay in the old industrial economy thanks to increasing debt.

So what you are going to see when the $150227 trillion debt bomb explodes 2016ish is that anyone who is not very technically relevant in the new Knowledge Economy will find themselves unemployable. The governments will try to appease this majority by taxation and confiscating everything, because they fundamentally don't understand the cause of the problem.

With both scenarios (further concentration of wealth/obliteration of wealth) I see several problems that make this scenario seem unlikely.

Those ledger IOUs are worthless to both lender and borrower. The capital now is all in the brains of hackers such as myself. We take over now. Checkmate. While we were busy sleeping under our desks for the past 3 decades, the rest of you were out enjoying yourself. Now the payback comes. Oxford U. admits 47% of the existing jobs will be replaced with robots over next 19 years (was 20 last year when study was published)...

...I've been screaming this in the Mad Max thread in the Politics forum (https://bitcointalk.org/index.php?topic=365141.msg5637564#msg5637564). Check it out for more details. See also the Economic Devastation thread in the Economics forum (https://bitcointalk.org/index.php?topic=355212.0).

https://bitcointalk.org/index.php?topic=455141.msg5097815#msg5097815

But first, we go to a strong dollar and massive global deflation. The USA and the NSA will thus be in the driver's seat of the default of $150227 trillion in debt. They will not give up this power (thus they will not hyperinflate away their power). They plan to charge to all of us. This is massive deflation.

No major nation in the world has ever hyperinflated away their power. They always self-destruct by attacking their own citizens. Study Rome. Study Germany, etc....

You don't sniff this yet, but Armstrong and I do. Later when you do finally capitulate and realize, that is when the others have also figured it out and it will be mad rush into the dollar and away from all other economies. Then we move into the peak for the USA Sept. 2015, then the USA goes over the cliff and total chaos will ensue. It will be much worse than 2008 and the central banks will be powerless this time. In fact, the Fed has been warning the banks they will not be bailed out again. This is why all the G7 have official bail-in plans (seen on their government websites) to take the money from the depositors instead.

You also don't understand that $150227 trillion global debt means every one has been doing the wrong activities and everything is uneconomic.

You don't understand that debt is not just a ledger item, it also reflects real waste of human years, wrong skills acquired, wrong decisions made, etc.. These real problems are not corrected just by changing a line on the financial ledger.


This frustration is why riots and global unrest (and the war cycle) is increasing all over the world right now (https://bitcointalk.org/index.php?topic=365141.msg5043927#msg5043927). There is no way to avoid the global deflation contagion.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Zarathustra on March 12, 2014, 06:28:27 AM
What does that have to do with whether the technology exists to improve nuclear?

I hope you realize energy is regulated and taxed such that it is controlled by cartels. Getting rid of that doesn't imply a Dark Age, rather it frees us to realize innovations which were suppressed because they are paradigm shifts which compete with the cartels.

You fail to understand anarchy. Anarchy had never ever been something different than self-sufficiency. Whoever is (had been) self-sufficient, doesn't have a desire to trade with aliens and building (maintaining) complex structures. Anarcho capitalism is an oxymoron promoted by pseudo-anarchists. They are collectivists.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 12, 2014, 06:45:33 AM
Bitcoin is not fundamentally designed to behave as a currency...

Agreed I've been making similar points as you did throughout the archive of my posts.

This thread, and every other bitcoin discussion, seems to really be an endless debate about bitcoin's strengths/weaknesses as an investment.

No I am actually trying to fix the currency use too (but pushing for an altcoin because Bitcoin can't be heavily modified), but it is more complex than the logic you expressed. Essentially there must be investment first to drive the currency uses, but the currency uses need to survive the investment phase. Bitcoin can't remain decentralized so if it survives as a currency it will only be with government blessing.

The bigger point is missed.  The fact of the matter is that bitcoin simply cannot function as a currency, and the behavior of users on the network confirms this, more and more so over time.

I haven't missed that point. It is just difficult to read all my posts. There are too many.

Tying into the original post, I suppose, is the fact that Bitcoin's a horrible, HORRIBLE long-term investment.  When AES is rendered obsolete or any of the potential flaws discussed in this thread are exploited, all value in the network will be lost.  Seeing as how at least 8% of all bitcoins in circulation have been stolen at least once, well....

I don't think that necessarily follows.

Part of your point is valid, but some people have gained a lot on this investment.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 12, 2014, 07:27:57 AM
It shouldn't have.  I'd wager that if you actually sat down and assessed your real costs, you'll find that your expenses have likely doubled as well, since about 2000.

Well there was that jump when I upgraded to my McMansion in 2006.

Quote
While gas prices have been fairly flat the past couple of years, the price of a gallon of petrol near where I live was right around $2.20 in 2008 and is $3.57 today; and has been as high as $4.09 in between.

So it seems that your memory is suspect afterall. Gas may have been in the low $2s in 2008, but it was above $4 in 2007. Perhaps you should look into the reasons why it was so cheap in 2008? Because it does not make your case at all.

We have been in severe deflation since 2008, which is the main point of my post upthread (which quoted Shadowstats).

For the moment you are not yet seeing the severity of the deflation in your daily lives because most still trust that there are a $quadrillion of fractional reserves. By 2016ish (2018 at latest) all hell will break loose.

Quote
The offical CPI suppresses

There was no statement made about the official CPI, stop red herringing.

My entire point was the official CPI was understated to hide the fact they pumped up the fractional reserves, while they simultaneously hide the fact that actual circulation of currency, i.e. velocity of M0 and MB, have fallen off the cliff (especially since 2008).

And no there isn't any hyperinflation, the Shadowstats figures only show about 8-10% per annum inflation which seems to roughly correlate with the growth in my expenses.

Shadowstats is just as big of a pile of bs; pointing out the flaws of some other flawed metric does not make Shadowstats not flawed. Besides, all it is doing is obviously just adding 5% on to the CPI, there is no actual metric.

Mathematically we can't have an average which applies to everyone. We can look at the geometric weighting of what the majority of the population spend on, and use that metric to compute a CPI which is representative of that group.

And without that hedonics bullshit of the official CPI where if a computer becomes 2X as fast, the official CPI counts that as a halving of the price of a computer! Bullshit.

And I don't have the data points, but if we assume roughly 8% inflation since 2000 according to shadowstats, that means there has been ~150% inflation in 14 years. Someone making $50k today is the same as someone making $20k in 2000.

1.08^13 = 2.71, thus 171% increase or 2.71 times. Thus $50k would be $18k. There is a calculator on their website for computing exactly. You can get the green bar value by comparing its height in pixels (to cheat so you don't have to pay a subscription).

http://www.shadowstats.com/inflation_calculator

It says $50k in 2014 would be $36k by BLS and $14k by SGS.

That BLS figure implies an average of 2.5% per year, which is complete bullshit. The SGS figure may be a bit too high though.

The following roughly agrees with my experience.

http://www.thepeoplehistory.com/70yearsofpricechange.html

So for meat:

1.075^23 = $4.89/$0.89

Thus 7.5% ≈ 8% is not far from the actual truth, at least for meat.

P.S. John Williams (proprietor of ShadowStats.com) thinks we will have hyperinflation. He is entirely mistaken. We will have severe deflation.



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 12, 2014, 07:45:54 AM
Anonymint, I have read the PM you posted (which is, itself, rude) and I have to say I agree with every word of it.  Your attitude gets in the way of any constructive intentions that you may have; and as has been pointed out many times by many people previously, you don't understand Bitcoin as well as you think that you do.  Alternative, invitation only, technical bitcoin forums have been founded specificly to avoid you.  Which, BTW, is quite an accompishment if your goal was to troll.  Ironicly, I can't believe that you're a talented troll; but instead passionately believe everything that you claim.  Therefore, I must admit that the highest form of trolling that I have ever seen on this forum (or anywhere else) is accidental.

I came to post regarding the copied PM (I agree it is also extremely uncool to quote PMs in the open).

The above post does better than I ever could.

I revealed it because it expressed a veiled threat that I should be incarcerated for expressing my logic.

Also I did not PM him. I asked him in my public post to not do ad hominem, so he sent me a PM. So I had no agreement with him to have a private discussion. In any case, I wouldn't normally reveal a PM (especially if didn't remove the author's identifying information), but when someone equates debate in a forum with jail time, that is a pattern that needs to be exposed as early as possible. I hope he didn't really mean that.

He sent me another PM and I don't need to reveal it as it was more conciliatory, yet still made a demand of me but it wasn't so unreasonable so I complied in the interest of keeping the discussion on the technical issues.



Let's wait to see if gmaxell can refute the technical argument. I am fairly sure he can't. Which would then mean that he is doing the trolling per your definition. If he can't then he fails his own test for banning "level of technical mastery to the nearly flawless state", so therefore he must logically ban himself from his own subforum. Hahaha.  ::)


You missed his point.  Fail.

The reason he mentioned your lack of "level of technical mastery to the nearly flawless state" was to explain what it would take to justify the arrogant blathering you do on the forums.

Like here (https://bitcointalk.org/index.php?topic=500994.msg5563229#msg5563229) where I was correct.  ::)

Or here where you were being a dick to me (https://bitcointalk.org/index.php?topic=505355.msg5583620#msg5583620), you were logically incorrect and I was correct.  ::)

He HAS tremendous technical mastery, and isn't a dick.  He is respected for the two reasons you are maligned.  Skill and character.

He is a dick to me (sometimes, not sure yet if it is habitual). Let's see if he can learn to have a rational discussion with me instead of brow-beating me.

And it is not yet clear to me if he or I have won the technical argument. Let's see...I am reviewing his latest reply...


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 12, 2014, 09:36:57 AM
Important...

https://bitcointalk.org/index.php?topic=392963.msg5655782#msg5655782

The article is well written and he makes a strong point.

This is why I believe the open source code base for a successful crypto-currency needs the commit control given to a Benevolent Dictator, and all users should run the official client, so that the currency can be continually innovated to keep interest in competitors weak.

With constant innovation, the market will favor the one with the most developers contributing.

Please note, the author wasn't dismissing network effects. His point is that the natural desire for profit, will drive interest to invest in the undervalued thing. This will pull Bitcoin down if there aren't more novices coming in that are afraid of the altcoins. I believe there is sufficient supply of newcomers who will buy Bitcoin before any altcoin, thus his scenario isn't entirely valid.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 12, 2014, 10:46:46 AM
I revealed it because it expressed a veiled threat that I should be incarcerated for expressing my logic.

Also I did not PM him. I asked him in my public post to not do ad hominem, so he sent me a PM. So I had no agreement with him to have a private discussion. In any case, I wouldn't normally reveal a PM (especially if didn't remove the author's identifying information), but when someone equates debate in a forum with jail time, that is a pattern that needs to be exposed as early as possible. I hope he didn't really mean that.

He sent me another PM and I don't need to reveal it as it was more conciliatory, yet still made a demand of me but it wasn't so unreasonable so I complied in the interest of keeping the discussion on the technical issues.

On this point of freedom-of-speech:

https://bitcointalk.org/index.php?topic=20333.msg5656543#msg5656543

One of the things that intelligent people do, when they try to determine if Bitcoin is a system with a future, is to read what is written in this forum.  Diversity and variety is good.  Dishonesty and meaness is not good.  Bitcoin is more about freedom than it is about conformity.

Thanks. Good to see that some people still understand:

“Those who would give up Essential Liberty, to purchase a little Temporary Safety, deserve neither Liberty nor Safety" - Benjamin Franklin (one of our founding fathers)

For the increasingly popular viewpoint in AmeriKa:

http://3dblogger.typepad.com/wired_state/2012/05/those-who-use-this-benjamin-franklin-quote-deserve-not-to-be-taken-seriously.html



It is unfortunate that you see spirited discussion as trolling. You've just provided an example of totalitarianism.

(mathematically the end-game of totalitarian regimes is to ban, i.e. destroy, themselves)

Example:

http://armstrongeconomics.com/2014/03/11/feinstein-get-what-she-has-dished-out-to-the-world/


True story: When I wrote the above quote, I was specifically thinking Feinstein would end up an example (with her N"s"A apparatus somehow destroying her as well). Then I went to Armstrong's blog and see it happened (but was C"i"A instead). Amazing. I anticipated the future in the blink of an eye. That is really true!


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 12, 2014, 11:57:44 AM
Ah f8ck again, it is worse than $223 trillion, as China's huge shadow economy debt isn't included:

http://blogs.wsj.com/economics/2013/05/11/number-of-the-week-total-world-debt-load-at-313-of-gdp/

Quote
(The figures exclude China’s shadow finance and off-balance-sheet financing.)


F8ck the coming apocalypse is worse than I previously estimated...

Soooooooooo, I read today that the world's debt amount to $100 trillion.
Wikipedia says that in 2012, the GDP was ~72 trillion. Let's suppose that it's $80 trillion now.

Debt to GDP = 125%

Incorrect. Total debt is $157 trillion in developed countries plus $66 trillion in emerging markets, because is 313% of GDP and the GDP is $72 trillion:

http://www.gfmag.com/tools/global-database/economic-data/11855-total-debt-to-gdp.html#axzz2iu5C4Y4Z

http://blogs.wsj.com/economics/2013/05/11/number-of-the-week-total-world-debt-load-at-313-of-gdp/

Chinese corporate debt is the highest in the world as a percentage of GDP:

https://bitcointalk.org/index.php?topic=365141.msg4337574#msg4337574

Don't forget to add on $1000 trillion of sovereign bond derivatives, and $1000 trillion of unfunded social liabilities.

http://www.indexq.org/economy/gdp.php


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: rpietila on March 12, 2014, 12:04:24 PM
This Armstrong is probably the most intelligent person alive in the western world. For refusing to join the PTB, he was put to prison for 12 years in his advanced age.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 12, 2014, 12:25:21 PM
This Armstrong is probably the most intelligent person alive in the western world. For refusing to join the PTB, he was put to prison for 12 years in his advanced age.

And they almost killed him in SuperMax prison which in solitary confinement punishment is essentially torture. Wasn't it 7 years?

Armstrong and I (although he didn't admit it was him) debated in email briefly on the subject of if there is a conspiracy at the level of Bilderbergs. He doesn't believe so. He believes the cycle is in control, not them, and they are just dumb. I have a more nuanced view, even though I agree the cycle is control, not us.

He hadn't thought a crypto-currency could overcome the government's power, and had been pushing for term-limits instead as a political solution, but maybe he is starting to realize after he thought it through (as I have)...

http://armstrongeconomics.com/2014/03/11/marxism-is-a-dead-idea-but-capitalism-freedom-has-never-truly-existed/

Quote
...

The only possible way forward would be to eliminate taxes for thereby both sides would no longer have an economic advantage to control government. Politically, we need to end career politicians for this would put the people in a real position of overseeing the bureaucracy. Those terms should be no more than 1 year. Will this solve all the problems? NO! It will not even last forever for one side or the other will find a way to alter the power and seek to attack and exploit the other side with regulation and laws.

This is just the beginning. There is NEVER a permanent solution for there is a cycle at work as well. Capitalism (defined as real free market for both sides) has NEVER existed except for some very few brief periods until one side or the other begins to try to control the other for personal gain.



The performance of his cyclic model at prediction...

...

http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.28.4015&rep=rep1&type=pdf

Efficient Accumulators Without Trapdoor Extended Abstract
Tomas Sander

There are some assumptions made when I would need to think more deeply about.

...

On further reading, apparently UFOs are impractical because there isn't an entropy source that can be trusted to be random over such large domains. Please feel free to correct me if I am mistaken about the requirement.

We shift our unreliability of trust from unknowing if someone intercepted the computation of N = PQ to the unreliability of unknowing whether our input entropy could be attacked at any time in the future.

The research paper suggests in "2.1 On the generation of public random strings" to use stock market data, but there is hidden periodicity in the stock market data:

http://armstrongeconomics.com/2014/03/09/research-shocking-there-is-order-in-the-chaos/

Just in case you believe that guy's model is nonsense, then you can try to explain how his cyclic model has predicted (in advance, this isn't just model that fits what happened) everything accurately:

https://bitcointalk.org/index.php?topic=495527.msg5464897#msg5464897

https://bitcointalk.org/index.php?topic=365141.msg5642957#msg5642957


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 12, 2014, 02:54:11 PM
Upthread I criticized DarkCoin for not realizing that CoinJoin isn't scalable in decentralized setting because it can be subject to denial-of-service attack, now time to slay another incompetent altcoin HeavyCoin:

https://bitcointalk.org/index.php?topic=506774.msg5659782#msg5659782

Someone private messaged me to check out HeavyCoin.

Sorry I realize this post will make people angry at me. I am usually the messenger who brings technical reality which is usually bad news because most coin developers are not competent.

Innovations and contributions

  • HEFTY1 - a cryptographic hash function for CPU-only proof-of-work with a small memory footprint

Insufficient technical details. From what I read about their claim of SIMD as an issue. I think they fail to understand the nature of the GPU advantage.

  • Ultra-secure hashing - a secure strategy for using multiple cryptographic hash functions

From the Github page:

Quote
Q: Doesn't Quarkcoin already implement multiple cryptographic hash functions?

A: Yes, but without increasing security against collisions. Quarkcoin (and its many clones) actually implement multiple hash functions as a simple chain of function compositions
Quark(x) = ... SKEIN512(KECCAK512( ... BMW512(BLAKE512(x))))

where ... contains additional hash function compositions using JH-512, Keccak-512, BMW-512, BLAKE-512, SKEIN-512 or Grøestl-512, which are randomly selected based on the 4th bit of previous hash outputs.

The problem is that, due to Quarkcoin's simple use of function compositions, if BLAKE512(x) has collisions, then so does BMW512(BLAKE512(x)) and SKEIN512(KECCAK512(... and so on, until we reach Quark(x), which also has collisions. Similarly, if SKEIN-512 or Grøestl-512 have collisions, then so does Quark(x). Simply put, if there's a collision attack or second-preimage attack for BLAKE-512(x), then Quark(x) is cracked.

Bullshit. Changing even one input bit to a hash should randomize all the output bits. Cracking any combinations of the hashes in the chain of hashes does not increase the risk of collisions for those in the chain that were not cracked.

This kind of silly mistake proves the developers are technically incompetent.

Whereas their "improvement" is worse in the sense that it takes 3 cracks to make it very insecure and 2 cracks to make it perhaps insecure, whereas with Quark it takes 4 cracks.

Quote
Q: How does Heavycoin implement multiple cryptographic hash functions?

A: Heavycoin takes 64 bits from the output of each of 4 well-known cryptographic hash functions (SHA-256, Keccak-512, Grøestl-512 and BLAKE-512) and interleaves these bits into a combined 256-bit hash that is more resistant against collisions and second-preimage attacks.

Hope you realize that 2^64 is crackable with a server farm. If 3 of the 4 are cracked, then the 4th is useless in Heavy's design.


  • Temporal Retargeting - multipool protection that goes beyond Kimoto Gravity Well
  • Decentralized Block Reward Voting - the mining schedule and money supply are democratically decided (total supply is still bounded to 128M)

Oh great let the early investors decide to make coins even more rare. This will be a very good experiment to show why democracy is a power vacuum.  ;)


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 12, 2014, 06:39:58 PM
Appears I was correct and Bitcoin core developer gmaxell was wrong. But he proposed a way to use Zerocoin offchain instead, which might be workable.

https://bitcointalk.org/index.php?topic=279249.msg5663322#msg5663322


Two orthogonal issues.
First, an adversary could make a 1 Satoshi input and DOS on the (3) step. You ban that address but adversary has billions more at neglible cost.
I suppose you could set a minimum input amount to avoid this. But still no problem for the adversary, he passes his BTC through a mixer can comes to hit you again and again.
I am sorry to bring you bad news Gregory but with a non-atomic operation you can always be DOS-attacked.  Zerocoin may be the solution?

Transaction fees and confirmation times should slow down the attacker.

As for slowing down, the adversary can have many parallel addresses in play so I don't think so.

Transaction fees might work if they are significant enough. I haven't studied how much the tx fees are in Bitcoin much. I think I read that certain txs can be 0 for some cases?

If the adversary is mixing through CoinJoin transactions (hehe, uses what he also DOS-attacks against itself), then the blockchain tx fee is going to be shared between all parties of the CoinJoin transaction, so could it be insignificant?

Edit: I've just realized the adversary can eliminate the transaction fees too, by spending those banned amounts as he normally would (e.g. day trading), thus he doesn't incur any extra cost.

Edit#2: unless all decentralized CoinJoins share their ban lists (which is quite impractical to achieve as it is the antithesis of decentralization), adversary can just round-robin through them..

So I've won the argument. Checkmate.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 12, 2014, 09:15:48 PM
Re: REDDIT: I am Tim Berners-Lee. I invented the WWW 25 years ago...

For the kiddies who don't understand what we did for you...

https://bitcointalk.org/index.php?topic=513051.msg5665257#msg5665257

I am reviewing (inventor of the World Wide Web) Tim Berners-Lee's comments and will quote some that I think are particularly interesting to us. Click the links to read more of the comments that followed.

http://www.reddit.com/r/IAmA/comments/2091d4/i_am_tim_bernerslee_i_invented_the_www_25_years/cg0ywqf?context=3

Quote from: tbl
Quote from: tacobell1896
How do you feel about the supposed dark side of the internet, such as the black markets? (Silk Road etc.)

Complicated question. I am not a great expert on them. Simple answers include of course that illegal things are crimes on or off the web. But anonymity is tricky. We have a right to be anonymous as a whistle-blower or under an oppressive regime but not when we are bullying someone? How can we build technical/social/judicial systems for determining which right is more important in any given case? Relates to tor...

http://www.reddit.com/r/IAmA/comments/2091d4/i_am_tim_bernerslee_i_invented_the_www_25_years/cg0ya43?context=3

Quote from: tbl
Quote from: misanthrope__
What are your thoughts on the increased surveillance on internet based mediums like GCHQ's monitoring of all the Yahoo video chats. Do you personally think it should be controlled, non existent or fine the way it is now?

I think that some monitoring of the net by government agencies is going to be needed to fight crime. We need to invent a new system of checks and balances with unprecedented power to be able to investigate and hold the agencies which do it accountable to the public.

http://www.reddit.com/r/IAmA/comments/2091d4/i_am_tim_bernerslee_i_invented_the_www_25_years/cg0xkrj?context=3

Quote from: tbl
Quote from: mart95123
Edward Snowden- Hero or Villain?

Because he

  • had no other alternative
  • engaged as a journalist / with a journalist to be careful of how what was released
  • provided an important net overall benefit to the world

I think he should be protected, and we should have ways of protecting people like him. Because we can try to design perfect systems of government, and they will never be perfect, and when they fail, then the whistleblower may be all that saves society.

http://www.reddit.com/r/IAmA/comments/2091d4/i_am_tim_bernerslee_i_invented_the_www_25_years/cg0y3qr?context=3

Quote from: tbl
Quote from: theirfReddit
Thank you very much for doing an AMA.

I can not thank you enough for what you have done in inventing the web and bettering it and making content and information accessible and usable for all!

I just wanted to say thank you. I devote my time to designing and developing interactions and experiences that a simple, intuitive, and delightful.

I don't know what I'd be doing if it wasn't for your work. I don't know where the world would be without your work.

Many, many thanks!

You are very welcome! Use it any time you like ... :-)

Okay kiddies, I see he started in 1976 and I started with a TRS-80 around 1978 when I read this book (http://www.computinghistory.org.uk/det/10007/Understanding-Microprocessors/) when I was 13, and I immediately understood how a microprocessor worked. My serious programming started when I got a hold of my friend's Apple II over the summer of 1983, then I bought a Commodore 64, then an Atari ST, etc..

http://www.reddit.com/r/IAmA/comments/2091d4/i_am_tim_bernerslee_i_invented_the_www_25_years/cg0xpno?context=3

Quote from: tbl
Quote from: chadumb
what was your first computer?

I got a M6800 evaluation kit in 1976, and built a bunch of 3U high cards, put them in a rack with a car battery in the bottom of the crate as UPS. All hand-soldered on veroboard, and programmed in hex. 7E XX XX was a long jump, and 20 XX a relative jump IIRC. The display was an old TV and some logic and a bunch of discarded calculator buttons lovingly relabeled with transfer letters. Those were the days....

http://www.reddit.com/r/IAmA/comments/2091d4/i_am_tim_bernerslee_i_invented_the_www_25_years/cg0x8rw?context=3

Quote from: tbl
Quote from: wobetmit
Do you think in the (not too distant) future we'll look back and think ourselves lucky to have witnessed a neutral, free, and uncensored world wide web?

I think it is up to us. I'm not guessing, I'm hoping. Yes, I can imagine that all to easily. If ordinary web users are not sufficiently aware of threats and get involved and if necessary take to the streets like for SOPA and PIPA and ACTA. On balance? I am optimistic.

http://www.reddit.com/r/IAmA/comments/1bzzgk/we_are_activists_and_academics_who_support_reform/c9boz5m?context=3

Quote from: lolzarro
Quote from: tbl
Quote from: b3nighted
How can all of us non-US people help with this? Just by mentioning "Your senseless laws will create dangerous precedents and will "inspire" other law-makers around the world!"?

Well, what country is free from laws or proposed laws which threaten internet freedom? Check your own country for things like CFAA, laws to allow spying or censorship, not to mention bilateral agreements agreements with the US which commit a government to enact such laws in the future!

Oh wow, Tim Berners-Lee just posted on reddit.

Gonna go on an off topic rant here that you will probably never read but!

You are an idol to a young computer scientist. Thank you for your contributions.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 12, 2014, 09:28:16 PM
And now our friendly core Bitcoin developer stoops to ad hominem even as he has lost the argument. He isn't even man enough to show respect to someone who showed him his protocol is broken.

This is not the culture of open source. This man should not be entrusted with being a core developer of our world currency.

And he won't be! I guarantee you that.

https://bitcointalk.org/index.php?topic=279249.msg5665741#msg5665741

Derp.

You just can't resist the ad hominem even after I've shown you were wrong all along about DOS attacks on your protocol.

Sigh.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 13, 2014, 04:04:45 AM
The solution for anonymity of the block chain (which is not IP anonymity so it is only one component of what we need in an altcoin)...

https://bitcointalk.org/index.php?topic=279249.msg5670270#msg5670270

Quote
So how is there unlinking of output amounts from input amounts?

Derp. Your output is equal to your input. Privacy comes from equalizing amounts.

And thus my original statement was correct:

Comments please on my technical statement herein?

A decentralized CoinJoin will have difficulty forming transactions ... that look like this if anyone can join:

https://blockchain.info/tx/e4abb15310348edc606e597effc81697bfce4b6de7598347f17c2befd4febf3b?show_adv=true

Also my statement that the CoinJoin protocol can be DOS-attacked was correct.

It was a bit difficult to explain these facts w.r.t. to gmaxell's semi-coherent, incomplete explanations of his protocol. But I think I was able to help him to specify the essential requirements of his protocol.

As for this specific topic, it basically seems like the level of the misery is just increasing.
My advise: talk less, do more - it will solve all your problems, I promise!

The solution was provided by gmaxell. Use Zerocoin which is an atomic operation from inputs -> available outputs. But it won't work for Bitcoin's current block chain design, because even if we could (which we currently can't) we don't want to put the Zerocoin accumulator on the block chain because we don't want to trust the PQ thus we want to the accumulator to have a preset short-term lifespan and all inputs and outputs must specify themselves with that time limit. However this can't work in Bitcoin because inputs have to sign the output addresses. Thus in Bitcoin the specification of the output addresses would make it a non-atomic operation thus it can be DOS-attacked.

The solution for an altcoin (or Bitcoin if we can make such a radical change) is to make the transaction id a nonce and have the inputs and outputs sign that nonce. If the outputs are greater than inputs, then the transaction is invalid. In the rare event the outputs are greater than inputs, then we know to throw away and don't reuse the Zerocoin accumulator's PQ (because its trust is compromised) and try again.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 13, 2014, 07:12:49 AM
If you are really serious to read high quality discussion then AnonyMint, tortilla, DeathAndTaxes, and others make more rational discussions over at:

cryptocrypt.org

You can join by invitation only. You can send tortilla a request for invitation I suppose, if you've exhibited a high signal-to-noise ratio in your posts on this forum.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Zarathustra on March 13, 2014, 07:36:27 AM

P.S. John Williams (proprietor of ShadowStats.com) thinks we will have hyperinflation. He is entirely mistaken. We will have severe deflation.


You are both entirely mistaken. As soon as we have severe inflation or deflation, the game will be over and dark age begins. Japan and all other 400%-Debt/GDP economies are trying to maintain zero percent inflation until they can't.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 13, 2014, 07:52:36 AM

P.S. John Williams (proprietor of ShadowStats.com) thinks we will have hyperinflation. He is entirely mistaken. We will have severe deflation.


You are both entirely mistaken. As soon as we have severe inflation or deflation, the game will be over and dark age begins. Japan and all other 400%-Debt/GDP economies are trying to maintain zero percent inflation until they can't.

Dark Age is severe deflation, but the difference is that almost nothing has value any more. Food becomes the unit of currency and becomes much more expensive, e.g. rice was money in Japan for about 600 years during its Dark Age. This means the maximization of the division-of-labor collapses back to barter money, which means productivity and new knowledge production collapses.

Agreed there exists now the threat of falling into a Dark Age. And that is why I am working so hard on a technological solution. I know you don't believe it is possible to avoid a Dark Age. You might be correct, but you also might not be. I told you upthread that my strategy is to make it so the hackers can avoid confiscation and control over their activities, so that we can create 1000X more productivity in the Knowledge Age space. I hope this can offset the collapse of 47% into technological unemployment along with a $223 trillion global debt morass with a $2000 trillion derivatives and unfunded future social liabilities.

Wait to see the outcome.

P.S. And I thought I was the pessimist in this forum, you are more pessimistic than me.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Zarathustra on March 13, 2014, 08:04:14 AM

Agreed there exists now the threat of falling into a Dark Age. And that is why I am working so hard on a technological solution. I know you don't believe it is possible to avoid a Dark Age. You might be correct, but you also might not be. I told you upthread that my strategy is to make it so the hackers can avoid confiscation and control over their activities, so that we can create 1000X more productivity in the Knowledge Age space. I hope this can offset the collapse of 47% into technological unemployment along with a $223 trillion global debt morass with a $2000 trillion derivatives and unfunded future social liabilities.


Never ever. More technology means more complexity, which is not the solution. It is the problem.

Societies - as the opposite of humanity - have never been something different than 'problem solving societies' (Tainter). Societies are growing rampant, endlessly until the end. They are permanently investing in additional complexity/energy/debt to solve exponentially growing problems. The Game is over as soon as the ever shrinking marginal return of additional complexity/energy/debt reaches the tipping point.

http://dieoff.org/Tainter1.gif

http://dieoff.org/page134.htm


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: podyx on March 13, 2014, 08:08:17 AM
Can anyone tell me if this is legit concerns??


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 13, 2014, 08:15:01 AM
More technology means more complexity, which is not the solution. It is the problem.

Societies - as the opposite of humanity - have never been something different than 'problem solving societies' (Tainter). Societies are growing rampant, endlessly until the end. They are permanently investing in additional complexity/energy/debt to solve exponentially growing problems. The Game is over as soon as the ever shrinking marginal return of additional complexity/energy/debt reaches the tipping point.

Malthusian nonsense. I wrote about why Malthusians are always wrong:

http://unheresy.com/Information%20Is%20Alive.html#2nd_Law_of_Thermo

You conflate the failure of socialism with the success of technology.

Without technology you'd be freezing your ass off in a cave with no fire.

This is why I ignore you. I allowed for the possibility that socialism fucked everything up so much this time around, we may fall into the abyss of a Dark Age.

But I am not going to let that happen. And I have the power to stop it (where my work will be leveraged by all the hackers).

Now you watch and observe.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Zarathustra on March 13, 2014, 08:19:37 AM

Malthusian nonsense. I wrote about why Malthusians are always wrong:


No, Tainter; and historic fact. Diminishing return on 'additional investment in additional complexity' until the tipping point (vulgo:the end of the society).

http://dieoff.org/Tainter1.gif


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 13, 2014, 08:22:54 AM

Malthusian nonsense. I wrote about why Malthusians are always wrong:


No, Tainter; and historic fact. Diminishing return on additional investment in additional complexity until the tipping point (vulgo:the end of the society).

That is socialism debt capital, not knowledge work capital. You conflate the problem with the solution respectively.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Zarathustra on March 13, 2014, 08:28:01 AM
More technology means more complexity, which is not the solution. It is the problem.

Societies - as the opposite of humanity - have never been something different than 'problem solving societies' (Tainter). Societies are growing rampant, endlessly until the end. They are permanently investing in additional complexity/energy/debt to solve exponentially growing problems. The Game is over as soon as the ever shrinking marginal return of additional complexity/energy/debt reaches the tipping point.

Malthusian nonsense. I wrote about why Malthusians are always wrong:

http://unheresy.com/Information%20Is%20Alive.html#2nd_Law_of_Thermo

You conflate the failure of socialism with the success of technology.

Without technology you'd be freezing your ass off in a cave with no fire.

This is why I ignore you. I allowed for the possibility that socialism fucked everything up so much this time around, we may fall into the abyss of a Dark Age.

But I am not going to let that happen. And I have the power to stop it (where my work will be leveraged by all the hackers).


You are a collectivist. You are trying to maintain the society (collectivism), which is a world of doing business with aliens. It is the opposite of anarchy, which is self-sufficiency in a world of self-sufficient communities, which means: no business and no labor division with aliens.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Zarathustra on March 13, 2014, 08:34:15 AM

Malthusian nonsense. I wrote about why Malthusians are always wrong:


No, Tainter; and historic fact. Diminishing return on additional investment in additional complexity until the tipping point (vulgo:the end of the society).

That is socialism debt capital, not knowledge work capital. You conflate the problem with the solution.

You don't understand the role of debt. Debtless humans don't suffer from productivity gains. Debtless humans in the rain forests nearly live still the same life style as 100'000 years ago.
Productivity increase and output increase is the result of tax/tribute and its derivative: the debt/interest.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 13, 2014, 08:41:40 AM
You entirely don't understand knowledge production. This causes you to conflate and confuse everything. I don't need debt to program the computer, generate knowledge and increase productivity. I don't need a constantly growing tangible capital with its debt base to perpetually increase knowledge. You are conflating the effects of tangible limitations and knowledge production. Welcome to the virtual reality of knowledge and the internet. Perhaps you've been asleep under a rock for the past 15 years.

Start your education here:

https://bitcointalk.org/index.php?topic=355212.0 (Economic Devastation thread)

Don't post any more nonsense in this thread. Go refute in the thread linked above which is not moderated by me. Readers can go there to view more of your nonsense.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: notme on March 13, 2014, 10:06:02 AM

Malthusian nonsense. I wrote about why Malthusians are always wrong:


No, Tainter; and historic fact. Diminishing return on additional investment in additional complexity until the tipping point (vulgo:the end of the society).

That is socialism debt capital, not knowledge work capital. You conflate the problem with the solution.

You don't understand the role of debt. Debtless humans don't suffer from productivity gains. Debtless humans in the rain forests nearly live still the same life style as 100'000 years ago.
Productivity increase and output increase is the result of tax/tribute and its derivative: the debt/interest.

As Adam Smith wrote, landowners are the only stakeholders in a capitalist economy that don't suffer from productivity gains in the long run.  (Read Smith's Weath of Nations for why.... it is public domain by now.)  Stakeholders outside the economy will obviously not be effected by it (except possibly by pollution), so I don't really see your point there.

Now, whether or not what we have can rightly be called capitalism is another question entirely.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 13, 2014, 10:33:21 AM
Now, whether or not what we have can rightly be called capitalism is another question entirely.

On that point, see this:

https://bitcointalk.org/index.php?topic=495527.msg5656763#msg5656763


Zarathustra is conflating the ill effects of debt and tangible capital (which is actually inertia and liability, not assets) with the gains in prosperity that all arise from technology and human ingenuity.

His assertion (I deleted the nonsense post) that knowledge can't prosper in a decentralized society (a.k.a. anarchy) is unfathomably incorrect. It is so incorrect, that he should not be included in the discussion here, because it is just noise which buries the important discussion in this thread.

I've told him by private message that if he can make comments without making a long quotation of the prior post, then I will allow his comments if they don't just repeat the same nonsense without any sufficient citation or factual backup. I don't want to bury this thread in nonsense.

If he feels that is censorship, then fine he can create his own thread. I rarely have to delete posts, but he goes on and on and on with the same nonsense asserting there can be no sharing of knowledge and no network effects once we have decentralization.

His thinking is the antithesis of everything the internet has done and brought to us.

He is correct that the complexity of the power vacuum of socialism is collapsing. But his mistake is conflating that collapse with the rise of decentralization, which is actually a knowledge networking effects phenomenon.

If you get that wrong, you've got everything wrong. It is that important.

P.S. my personal apology to him for being forced to delete his nonsense posts. It is not personal. I am just keeping the thread signal-to-noise ratio high. I have allowed silly posts of others to remain, because they didn't go on and on and on post after post.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: notme on March 13, 2014, 10:35:40 AM
Now, whether or not what we have can rightly be called capitalism is another question entirely.

https://bitcointalk.org/index.php?topic=495527.msg5656763#msg5656763

Zarathustra is conflating the ill effects of debt and tangible capital (which is actually inertia and liability, not assets) with the gains in prosperity that all arise from technology and human ingenuity.

His assertion (I deleted the nonsense post) that knowledge can't prosper in a decentralized society (a.k.a. anarchy) is unfathomably incorrect. It is so incorrect, that he should not be included in the discussion here, because it is just noise which buries the important discussion in this thread.

Right, he is confusing increasing gains along shrinking measuring stick (fiat money) for prosperity.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Zarathustra on March 13, 2014, 10:45:19 AM
Now, whether or not what we have can rightly be called capitalism is another question entirely.

https://bitcointalk.org/index.php?topic=495527.msg5656763#msg5656763

Zarathustra is conflating the ill effects of debt and tangible capital (which is actually inertia and liability, not assets) with the gains in prosperity that all arise from technology and human ingenuity.


This is Fiction and Theology. Fact in the real world and history is this: anarchist, debtless communities do not increase production and productivity. Collectivist societies do.

You are a collectivist. You are trying to maintain the society (collectivism), which is a world of doing business with aliens. It is the opposite of anarchy, which is self-sufficiency in a world of self-sufficient communities, which means: no business and no labor division with aliens.
A decentralized society is still a society (labor division). It is not anarchy, which is self-sufficiency beyond labor division with aliens.

You don't understand the role of debt. Debtless humans don't suffer from productivity gains. Debtless humans in the rain forests nearly live still the same life style as 100'000 years ago.
Productivity increase and output increase is the result of tax/tribute and its derivative: the debt/interest.

There is no such thing as a 'knowledge production' in an anarchist environment. Knowledge production is at least hundred fold slower within anarchist, debtless, stateless communities than within indebted, collectivist societies. Historic fact against theologic fiction.

Start your education in anthropology and the difference between non-growing communities (anarchy) and rampant growing societies (patriarchy/collectivism), instead of posting theologic nonsense about your idol: progress, which in fact is destruction by labor division (collectivism)


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Zarathustra on March 13, 2014, 11:07:31 AM
Now, whether or not what we have can rightly be called capitalism is another question entirely.

https://bitcointalk.org/index.php?topic=495527.msg5656763#msg5656763

Zarathustra is conflating the ill effects of debt and tangible capital (which is actually inertia and liability, not assets) with the gains in prosperity that all arise from technology and human ingenuity.

His assertion (I deleted the nonsense post) that knowledge can't prosper in a decentralized society (a.k.a. anarchy) is unfathomably incorrect. It is so incorrect, that he should not be included in the discussion here, because it is just noise which buries the important discussion in this thread.

Right, he is confusing increasing gains along shrinking measuring stick (fiat money) for prosperity.

You can't find 'increasing gains' within an anarchist, stateless environment:

http://borneo.live.radicaldesigns.org/img/original/penan_feast.jpg

Increasing gains (vulgo: destruction) start as soon as you collectivize/civilize these free people and 'educate' them at the institutions of the collectivists.



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 13, 2014, 11:13:44 AM
Btw, I have tried living like that here in the Philippines (where that photo was probably taken) and trust me, you don't want that "prosperity".

Gains in prosperity are not a zero-sum game. We can produce more energy. There is no limit. The Second Law of Thermodynamics assures us that entropy trends to maximum. Even Einstein said that law is fundamental.

Anarchy is not only people living in the jungle like rabbits. It is also the decentralized internet. You conflate poverty with decentralization. There is always a mix of top-down and bottom-up organization in society. It is when this balance skews too far to top-down that socialism is peaking in a big heap of debt and corruption.

I know you would really like a Dark Age, but sorry you won't get one inspite of the fact that the collectivism has f8cked everything up pretty severely this time around. The reason is because the internet is too powerful as a knowledge liberating tool. And I am particularly adept at seeing what needs to be done now.

The at-home 3D printing revolution will mean we can be self-sufficient and autonomous and void the 'aliens' leeches with their large capital and factories. The 3D printer can even print itself!

That is the last post I will allow from you that repeats the nonsense that all progress came from collectivism. In fact, all progress came from individual discoveries! You don't even understand the basic definition of knowledge:

https://bitcointalk.org/index.php?topic=355212.msg3829608#msg3829608

He defines knowledge here
Information is Alive (http://unheresy.com/Information%20Is%20Alive.html)


https://bitcointalk.org/index.php?topic=355212.msg3804181#msg3804181
https://bitcointalk.org/index.php?topic=355212.msg3831144#msg3831144
https://bitcointalk.org/index.php?topic=355212.msg3804256#msg3804256

Take the time to read those link posts above otherwise don't bother to reply.

Communication and network effects are not collectivism. Collectivism is making promises to each other and binding each other in futures contracts. This is slavery, because nobody can predict every micro-event in the future. The futures contracts prevent the local annealing that optimizes the economy. I first learned this concept from Jason Hommel. Ignoring the Biblical points, you can still find the mathematical wisdom of his point:

http://silverstockreport.com/2009/greenspan-misapplied.html
http://www.silverstockreport.com/essays/Freedom_from_Usury.html

I expound on the fact that only maximization of degrees-of-freedom, thus optimal fitness, via local real-time annealing is what creates prosperity:

https://bitcointalk.org/index.php?topic=355212.msg4576810#msg4576810

collectivism = promises = futures contracts = slavery = boom&bust

You can find that theme throughout my archives. Whereas collectivism stomps on and tries to prevent fitness and prosperity.

Re-read my prior post, I added to it.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 13, 2014, 06:10:07 PM
Armstrong says government is going along with Bitcoin because that is what they want so they can track all the wealth and tax it:

http://www.youtube.com/watch?v=-WyGfBsBxW0#t=2700

(video should begin playing at 45:00 mins so you can hear the sound bite immediately)


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: klee on March 13, 2014, 06:14:55 PM
This Armstrong is probably the most intelligent person alive in the western world. For refusing to join the PTB, he was put to prison for 12 years in his advanced age.
What is PTB?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 13, 2014, 06:33:15 PM
powers-that-be


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: klee on March 13, 2014, 06:39:06 PM
powers-that-be
Was not aware that this guy ended in prison for some time, wow...


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 13, 2014, 06:46:32 PM
powers-that-be
Was not aware that this guy ended in prison for some time, wow...

Summary:

A link to open source software would be nice but given Armstrong's alleged history, that's unlikely to happen.

Alleged ? Come come Blah Blah - the man was convicted in a court of law ;).

You are too lazy to learn what really happened. Such as being held in jail for 7 years on a contempt charge by the Kangeroo courts because he had information that the banksters wanted and he would not give it to them, so they fabricated bogus charges and refused to allow him to present evidence at the trial. He eventually did a plea deal, so he could get out of prison, but this was no admission of guilt. Armstrong has covered this in great detail in his writings on his blog...

...

...Your A.I. model wouldn't have sufficient training data.

Armstrong spent and collected $10s of millions of data from archaeology, sending researchers to newspaper archives all over the world, etc..

At least $100 million would be required to recreate his model, and also there are things he discovered along the way such as the 4th dimensional wave structure...

He has written about all of this on his blog over the past year.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 13, 2014, 07:03:08 PM
Productivity increase and output increase is the result of tax/tribute and its derivative: the debt/interest.

Moderators, must we be forced to have my thread inundated with such incredulous nonsense?!!?  ??? >:( :'(

If he actually bothered to look at the marginal increase in GDP for each $dollar of debt added, he would see it is declining. Thus mathematically, he is factually incorrect!

http://www.creditwritedowns.com/wp-content/uploads/2010/06/DIminshing-debt-utility.jpg
http://2.bp.blogspot.com/-wPoNBt_dky4/TqSPy9d4USI/AAAAAAAAPzg/QB_9sus11Y0/s1600/Diminishing-Prod%2526_1.jpg

Unfortunately Zarathustra is filibustering this thread. That means every time I delete his post, he reposts it. Thus I have no moderation power if I don't reload the page continuously.

I have emailed the moderators about this and asked if they can ban him from posting in the thread.

If they can't, then I won't be able to leave the thread open for others to post.

The reason I am deleting his post, is he repeats the exact same points he has made in the prior several posts, without addressing any of the points that have been made against him.

He is simply trolling (and I rarely use that word, search my archives) in the most aggressive and abusive way in that he purposely intends to either consume all my precious time or cause everyone to lose their ability to post in this thread.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 13, 2014, 07:28:39 PM
I've unlocked the thread, as a moderator replied to me and I assume explained to him that you can't filibuster self-moderated threads.

I will allow him to post if he makes any new points.

I am not censoring his points. But I will not let him repeat them over and over again ad nauseum.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Zarathustra on March 13, 2014, 07:35:31 PM
Productivity increase and output increase is the result of tax/tribute and its derivative: the debt/interest.

Moderators, must we be forced to have my thread inundated with such incredulous nonsense?!!?  ??? >:( :'(

If he actually bothered to look at the marginal increase in GDP for each $dollar of debt added, he would see it is declining. Thus mathematically, he is factually incorrect!

http://www.creditwritedowns.com/wp-content/uploads/2010/06/DIminshing-debt-utility.jpg
http://2.bp.blogspot.com/-wPoNBt_dky4/TqSPy9d4USI/AAAAAAAAPzg/QB_9sus11Y0/s1600/Diminishing-Prod%2526_1.jpg

Unfortunately Zarathustra is filibustering this thread. That means every time I delete his post, he reposts it. Thus I have no moderation power if I don't reload the page continuously.

I have emailed the moderators about this and asked if they can ban him from posting in the thread.


Very good charts. They are true. They present a diminishing marginal effect of additional debt within a debt driven business cycle. Do you - great censor - know what an effect is? The effect of additional debt is additional GDP, until the tipping point is reached and a collapse is imminent.

In an environment beyond the state/tribute/tax/debt one can not find societies that produce additional GDPs. That's anarchy. No state - no economy, but self-sufficiency.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on March 13, 2014, 07:39:12 PM
Can anyone tell me if this is legit concerns??

As far as I'm concerned, these guys are arguing about how many bitcoins can fit on the head of a pushpin.  They both have data on their sides, and both of them seem to get some rather significant details very wrong.  They both think they are the smartest person in the room, while the smartest people don't bother to respond to them anymore.  You'll have to make your own decisions about whom to trust.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 13, 2014, 07:44:01 PM
Zarathustra,

You miss the point that marginal productivity is declining as debt load increases, thus your argument that the lasting gains in productivity that we have now come only from debt can't possibly make sense as they would all reverse when the debt defaults come.

2016 won't be the first global debt collapse in history. Happens over and over in history.

But the fact is that lower middle class people (and even many poor people in the 3rd world countries) live higher quality lives than Kings did a couple of centuries ago.

This is because of technology.

It is true that the capitalist+socialist system drains most of the wealth back to the capitalists, but the fact is the remaining portion which is the technology, they can't take it away from us.

The proof is that even people here in the Philippines don't live shivering in a cave without electricity any more. They drive motorcycles, they use chainsaws to cut trees faster.

Here in this dinky subdivision where I am currently staying, they are even building the concrete houses using steel preforms, so they can pour all the walls in one pour.

That is technology! Much improved than laying it hollow block by block just several years ago.

Everyone here has a cell phone and smart phones (computers) are proliferating.

Etc, etc, etc..

Please take your Malthusian foolishness to some other thread.

You are wasting my time.

P.S. Up to now, there is has been no way to separate capitalist+socialist system. But if we can stop taxation with anonymity, then we can remove the power vacuum that forces those two things to meld. That is one of the main motivations of my points about anonymity, but not the only point. Note we will never eliminate all taxes. This is about keeping the government out of the knowledge age realm and let them tax the physical economy, so the capitalists get their world and we (hitech workers) get our world. So the collapsing government won't tax and confiscate us into a Dark Age. And also so capitalists can't just capture the taxation power again to leech on all of us. Note I am not against capitalists. What I am against is when capital gets so large it can only grow by corrupting the government. We need to recycle that capital back to the entrepreneurs and smaller capitalists continously (but gradually). This is what the perpetual debasement of an altcoin is all about.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: rpietila on March 13, 2014, 07:49:43 PM
Armstrong says government is going along with Bitcoin because that is what they want so they can track all the wealth and tax it:

http://www.youtube.com/watch?v=-WyGfBsBxW0#t=2700

(video should begin playing at 45:00 mins so you can hear the sound bite immediately)

How is it different than fiat then?


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: rpietila on March 13, 2014, 07:51:18 PM
If you are really serious to read high quality discussion then AnonyMint, tortilla, DeathAndTaxes, and others make more rational discussions over at:

cryptocrypt.org

You can join by invitation only. You can send tortilla a request for invitation I suppose, if you've exhibited a high signal-to-noise ratio in your posts on this forum.

"Tortilla" is me :)


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 13, 2014, 08:00:54 PM
Armstrong says government is going along with Bitcoin because that is what they want so they can track all the wealth and tax it:

http://www.youtube.com/watch?v=-WyGfBsBxW0#t=2700

(video should begin playing at 45:00 mins so you can hear the sound bite immediately)

How is it different than fiat then?

There are many pros and cons that could be made about this. I hope others express their logic.

I will simply say I am grateful Bitcoin exists, otherwise it would be nearly impossible to launch altcoins within the ecosystem that attempt to improve upon the situation at hand.

In short, I think Bitcoin is more than what the government thinks it is. Psst. Don't tell them. Don't wake up Goliath too soon.  :-X


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Zarathustra on March 13, 2014, 08:16:11 PM

Zarathustra,

You miss the point that marginal productivity is declining as debt load increases,

I don't miss that. I confirm that. It's a debt driven business cycle with the diminishing effect of additional debt, until the point is reached where the effect dives below zero.

Quote
thus your argument that the lasting gains in productivity that we have now come only from debt can't possibly make sense as they would all reverse when the debt defaults come.

Tribute was the first debt. This was the beginning of the compulsion to produce ever growing surpluses for the gluttonous masters and rulers.

Anarchist, stateless communities don't produce growing surpluses, because there is simply no need there.


Quote
But the fact is that lower middle class people (and even many poor people in the 3rd world countries) live higher quality lives than Kings did a couple of centuries ago.

This is because of technology.

Non-collectivized people in the rain forests live higher quality lives than Kings and Internet-Children.

This is because they don't have technology.

The highest suizid rates among children is found in the developed world, South Korea, Japan et al.

Quote
The proof is that even people here in the Philippines don't live shivering in a cave without electricity any more. They drive motorcycles, they use chainsaws to cut trees faster.

Here in this dinky subdivision where I am currently staying, they are even building the concrete houses using steel preforms, so they can pour all the walls in one pour.

That is technology! Much improved than laying it hollow block by block just several years ago.

Everyone here has a cell phone and smart phones (computers) are proliferating.

Yes, fully brainwashed by the collectivist parents, masters and rulers. The system is 10'000 years old and anarchy survived at some few territories on this planet only. But there will be a rebirth of true anarchy. Kontratjeff cycles are only small ones. There are much bigger ones to come.



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 13, 2014, 08:27:28 PM
Warning I am not going to go tit-for-tat with you because I have programming work to do and you are filibustering something very important!

So I will just be forced to delete your nonsense.

Here is one last attempt to explain to you...


You miss the point that marginal productivity is declining as debt load increases,

I don't miss that. I confirm that. It's a debt driven business cycle with the diminishing effect of additional debt, until the point is reached where the effect dives below zero.

But if productivity was only debt that we pay back to our masters, then we wouldn't have any sustained rewards. Yet that is not the case as we live better than Kings did.


thus your argument that the lasting gains in productivity that we have now come only from debt can't possibly make sense as they would all reverse when the debt defaults come.

Tribute was the first debt. This was the beginning of the compulsion to produce ever growing surpluses for the gluttonous masters and rulers.

Anarchist, stateless communities don't produce growing surpluses, because there is simply no need there.

You haven't refuted the point I made. You are angry about surpluses for the rich, but it still didn't reverse the permanent gains for the masses in that we live better than Kings did in past centuries. We live longer, less disease, have electricity, refrigeration, internet, combustion engines, etc..

I mean you would have to be an obstinate fool+troll not to admit that!


But the fact is that lower middle class people (and even many poor people in the 3rd world countries) live higher quality lives than Kings did a couple of centuries ago.

This is because of technology.

Non-collectivized people in the rain forests live higher quality lives than Kings and Internet-Children.

Bullshit. Leave us and go live there then. Why are you on this internet?

I tried it. You want to be itchy always? You want to have no refrigeration? You want to spend all your time doing manual labor and very little time to do something productive with your creative brain?

I realize most of the debt zombies don't have freedom, but I am my own boss and can do what ever I want every day. This is what technology has afforded me. Because I am a knowledge worker.

The knowledge I am producing isn't financed from debt. It is financed from my savings, because programmer allows me to be very productive (when I am not wasting my time debating with you).

Now leave the internet now. Do you need an introduction to a native tribe? I am Cherokee. Or I can introduce you to one of several dozens of tribes here in Mindanao. I have friends Matasalog, Banobo, Manobo. I even had a gf Manobo. There are 91 languages here in the Philippines. Malaria, dengue fever, etc.. Come on over...

I had dengue fever twice and almost died in 2012.

If you continue posting on the internet, you are a hypocrite.

The proof is that even people here in the Philippines don't live shivering in a cave without electricity any more. They drive motorcycles, they use chainsaws to cut trees faster.

Here in this dinky subdivision where I am currently staying, they are even building the concrete houses using steel preforms, so they can pour all the walls in one pour.

That is technology! Much improved than laying it hollow block by block just several years ago.

Everyone here has a cell phone and smart phones (computers) are proliferating.

Yes, fully brainwashed by the collectivist parents, masters and rulers. The system is 10'000 years old and anarchy survived at some few territories on this planet only.


So go to the jungle now.

The jungle is here about 500 meters from me. Come here and I will teach you a lesson. Do you know how dangerous it is in the jungle?

You are now banned from this thread. Do not post here again.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Zarathustra on March 13, 2014, 09:00:42 PM
Warning I am not going to go tit-for-tat with you because I have programming work to do and you are filibustering something very important!

So I will just be forced to delete your nonsense.

Censors are censors because they have no arguments.

Quote
But if productivity was only debt that we pay back to our masters, then we wouldn't have any sustained rewards. Yet that is not the case as we live better than Kings did.

Until the collectivist society collapses again.
Again and again. But this time is different.
Collapsing nuclear plants and fuel pools instead of pyramids.

This is because of collectivist technology. Really great.

Quote
You haven't refuted the point I made. You are angry about surpluses for the rich, but it still didn't reverse the permanent gains for the masses in that we live better than Kings did in past centuries. We live longer, less disease, have electricity, refrigeration, internet, combustion engines, etc..

I am not angry about surpluses for the rich. I am angry about the stupidity of the collectivists who believe that this destructive life is a better life than an anarchist one. The sixth great extinction is man made. Or, better spelled: citizen made.
"Staat nenne ich's, wo alle Gifttrinker sind, Gute und Schlimme: Staat, wo alle sich selber verlieren, Gute und Schlimme:
Staat, wo der langsame Selbstmord aller – »das Leben« heisst."


Quote
Bullshit. Leave us and go live there then. Why are you on this internet?

Because self-sufficient communities are destroyed here and I grew up as a paternalized cartoon of a human. Same as you. We can't survive without the Internet as long as a majority doesn't want to. Either we form self-sufficient communities, or we collapse as a society.

Quote
I tried it. You want to be itchy always? You want to have no refrigeration? You want to spend all your time doing manual labor and very little time to do something productive with your creative brain?

Materialist questions are not the questions that true anarchists ask. They ask: Do you want to be dependent on labor division and interaction with aliens?

Quote
I realize most of the debt zombies don't have freedom, but I am my own boss and can't do what ever I want every day. This is what technology has afforded me. Because I am a knowledge worker.

It is not relevant what some of us are able to do in this system of labor division.

Quote

So go to the jungle now.

The jungle is here about 500 meters from me. Come here and I will teach you a lesson. Do you know how dangerous it is in the jungle?

I have to do some work: I have to help destroying your beloved society of citizens (collectivism).

Quote
You are now banned from this thread. Do not post here again.

So spoke The Great Dictator ...


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on March 13, 2014, 11:33:16 PM
Quote
You haven't refuted the point I made. You are angry about surpluses for the rich, but it still didn't reverse the permanent gains for the masses in that we live better than Kings did in past centuries. We live longer, less disease, have electricity, refrigeration, internet, combustion engines, etc..

I probably should leave this argument alone, but the highlighted part is debatable.  Certainly we live much longer than the tribal cultures that Zarathustra considers to be the high mark of anarchist socites, but it can be reasonablely argued that simply understanding germ theory, which such a tribal society could understand and incorporate into their culture, did the greatest good.  It's also arguable that one of the reasons that European & Asian cultures managed to acheive such high population concentrations was due to the simple fact that both European & Asian cultures had long ago incorporated the use of plates, bowls and utensils that were made of metals or alloys that were self-sterilizing.  (http://en.wikipedia.org/wiki/Oligodynamic_effect)  Which, of course, tribal cultures in the Americas and Africa did not use.  One of the best alloys for this effect is the common Admiral Brass used all over British sailing ships for hundreds of years.  Because the stuff is mostly copper, the surfaces of admiral brass were hostile to pathogens that could be spread through touch vectors.  As we enter the post-antibiotic age, some hospitals are remodeling and including copper alloys for common touch surfaces (door knobs, push plates, countertops, chair arms, serving trays, etc.) because it's so effective that Multiple Resistant Staphylococcus Aureus is killed within 2 hours whether or not the metal was cleaned, and some studies have concluded that no Staph could be found on an innoculated surface after only 45 seconds for pure copper.

Quote
Malaria, dengue fever, etc.. Come on over...

I had dengue fever twice and almost died in 2012.

Of course, such touch surfaces would have done nothing for these tropical maladies, since they are spread by insect bites.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on March 13, 2014, 11:44:14 PM
Collapsing nuclear plants and fuel pools instead of pyramids.


Hmmm;  large artifical structure, built in the middle of a desert, obviously not intended for habitation, built by a culture with mathmatics and measurement skills that we couldn't match without laser measurement tools; using methods for quarying, transporting and elevating multi-ton stone blocks that we still can't replicate, and built before the most advanced culture known to exist before our own (Egyptian) and with similar structures built half a world away (Mayan).

Prove that they weren't spent fuel storage structures that have outlived their containment needs.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 14, 2014, 02:50:31 AM
Zarathustra's solution to the power vacuum of collectivism is to tell us to go back to being cavemen.

But what he doesn't acknowledge is cavemen still bludgeoned each other to death with cruder weapons.

Anarchy here in Mindanao during the 1800s was that every person carried 5 or 6 knives. Women were afraid to roam far, as they would be kidnapped and impregnated by the opposing tribes.

My solution which I am busy working on now, is to make it impossible for the collective to tax us (the virtual knowledge workers), because they won't be able to see what we are doing nor know who we are.

My solution is moving forwards towards greater technology and prosperity.

There is no perfect solution, but competition is the name of the game.

And all of us men share to some extent those dreams of just wanting to be left alone so we can live happily, so I am saying to you...

What is your plan to accomplish it?

I have my plan. I am competing.

We are legion. We are not beta-males.

P.S. I will repeat again for those who are sending me private messages. AnonyMint will not be announcing any altcoin, nor will he be telling you which altcoin he likes. It is up to you to figure out which features such a great altcoin will have.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Corazon79 on March 14, 2014, 04:37:24 AM
Anonymint, I have to say I've found your contributions to this board absolutely fascinating.

I share your goals. I'm wondering what you would class as imperative if we are to successfully achieve that level of privacy for the virtual knowledge worker.

Here are a few thoughts:

* Decentralised exchanges
* Decentralised web servers
* DAC version of Skype, outside of NSA control
* Privacy-centric versions of Instagram, Whatsapp, Fring etc. (do these already exist? Mobypicture, Telegram etc...may already fit the bill)

I like the Icelandic encrypted email project Mailpile.is, which should fully launch later this year. I'm looking forward to trying that.

So Anonymint, and others here - if you're up for embarking on a new project, let me know. I'm really keen to get working on something. There are a range of possible funding options.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Zarathustra on March 14, 2014, 09:31:43 AM
Zarathustra's solution to the power vacuum of collectivism is to tell us to go back to being cavemen.

But what he doesn't acknowledge is cavemen still bludgeoned each other to death with cruder weapons.


No. Paleolithic (pre-patriarchal) anarchy was an epoche without warfare.

http://gerhardbott.de/das-buch/summary-in-english.html

Read it carefully.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 14, 2014, 01:39:22 PM
Quote
    I LoL'd...
    http://www.businessinsider.com/zuckerberg-obama-nsa-letter-2014-03

Sleep sheep. Facebook wasn't funded by JP Morgan, Goldman Sachs, etc.. And they aren't actively devising ways to track everything you do, even being able to identify you from your typing patterns.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 14, 2014, 03:10:18 PM
Re: Warren Buffet: "Stay away from Bitcoin"

https://bitcointalk.org/index.php?topic=515414.msg5695190#msg5695190

1. He say consumers and merchants (he was not referring to investors in BTC) don't use it as a unit-of-account nor store-of-value, i.e. don't retain their cash in Bitcoin, and only cash in/out from/to fiat using as a money order.

2. He doesn't think duplicates can be prevented which dilute its value.

3. He doesn't expect a worse economic crash than 2008 in next few years.


Please remember #3, because he will be highly embarrassed on this one. He is wrong.

On #1, I have to somewhat agree with him, but we are preparing to change this by making features that a fiat economy can't do (https://bitcointalk.org/index.php?topic=455141.msg5688388#msg5688388).

On #2, the network effect will take over much more strongly when the prior sentence is implemented.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on March 14, 2014, 07:39:40 PM
Zarathustra's solution to the power vacuum of collectivism is to tell us to go back to being cavemen.

But what he doesn't acknowledge is cavemen still bludgeoned each other to death with cruder weapons.


No. Paleolithic (pre-patriarchal) anarchy was an epoche without warfare.

http://gerhardbott.de/das-buch/summary-in-english.html

Read it carefully.

You don't really believe that crap, do you?  Conflict is a natural state of mankind, it's peace that requires the extra effort of education and negotiation; or in other words, civilization.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 14, 2014, 11:02:19 PM
Thanks MoonShadow. I wanted to say something similar but was too mentally exhausted yesterday. Also there were no citations in that paper.

Zarathustra has some need to believe that. No matter how bad any coming crisis might or might not be, we will not lose the technology that is in our minds. For example I will not forget everything I know about computer science, even if society burns all the books.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 14, 2014, 11:39:53 PM
https://bitcointalk.org/index.php?topic=515414.msg5702933#msg5702933

"Buffett also said he would steer clear of bitcoin. Buffett said the cryptocurrency is an effective payment system, but “so is a check.” The idea that bitcoin has some “intrinsic value is just a joke.”

http://blogs.marketwatch.com/thetell/2014/03/14/warren-buffett-dont-dump-stocks-on-china-or-ukraine-and-stay-away-from-bitcoin/?mod=sfmw

Well... It's too late for some of us to stay away now.

Remember, this is the same guy that said to avoid investing in internet companies.

I respect Warrens opinion he doesn't invest in the tech sphere because he doesn't put money in things he does not understand
Since he doesn't understand bitcoin he will miss it like the rise of the internet age
But for him it does not matter his fortune is from doing what he knows best so I would say to let him be

Normally I'd agree with him because he's one of the best investors/economists on the planet but...in this case he just sounds like a rambling senior citizen that doesn't understand the internet and its related technologies.

Indeed the old tangible capital world is going away folks... and Buffet will die just-in-time to fade away with it...

I also knew in 1999 that the dot.com crash was coming because I was trying to buy PPC advertising for my CoolPage.com (had million users at that time, roughly 1% of the internet) and what I saw was the ROI on advertising was negative for any profitable business, thus there was massive overinvestment driving the ad prices too high.

So when Homepage.com offered me $1 million in stock options to take over CoolPage.com, I declined. I took a couple hundred thousand instead in a non-exclusive license, and reaped another 7 years of sales ongoing.

But Buffet missed investing in numerous internet companies that have made others into $billionaires.

The model of business he invests in is dying. We are leaving the tangible capital age and entering the knowledge age, wherein you don't need large stored capital to launch a business. For example the 3D printer (which can print itself) will eventually obliterate factories, retail stores, and shipped goods. There are already 3D printers which can print multiple materials on the same object.

Also in the past knowledge was captured by industrial stored capital, because one needed physical production and distribution. Stored capital is a claim of future human labor or production. But now for example factories will be automated with robots, so the industrialists will depend on the knowledge workers.

The knowledge workers can say "fuck you" to $billions, we don't need it. All that stored capital is becoming useless and won't be able to find a home. It is what you know in your brain that becomes capital.

When the $223 trillion global debt bomb (with $1000 trillion in derivatives to hold it up, and another $1000 trillion in unfunded social liabilities promised to the boomers) implodes circa 2016ish as the marginal-utility-of-debt has become negative right about now and the BRICs are starting to collapse (with Europe and Japan to follow by next year and USA in 2016), the all those people who are useless in the Knowledge Age will be unemployable. And those $billionaires will lose their net worth relative to the capital in our brains which will grow orders-of-magnitude in value (what we can produce and buy with our efforts).

Oxford U predicts 47% of all existing jobs will be erased by automation within 19 years (20 years from last year when the research was published).


https://bitcointalk.org/index.php?topic=515414.msg5703126#msg5703126

Which programming languages do you consider future proof, Anonymint? Obviously people will have their favourites and it depends on the job, I understand that. But I'd like to know your views.

I also listened to your recordings earlier on. Were you cut off at the end? It seemed like there was more to come. But the recording ended abruptly.

Apologies I deleted those recordings from my thread because I was so mentally and physically exhausted yesterday and somewhat incoherent. Also I gave away too many details on my plans. There were two recordings and the second one continued where the first one got chopped off. There was a lot more to explain but I think it is not yet the right timing for me. I am also suffering from exhaustion and need to focus my efforts more.

I can't predict which computer language will be most important, but I am nearly certain it won't be C, C++, C#, nor Go. Because their typing systems are inadequate for the level of expression we need to do, and if you don't need strong typing then use Python instead.

It will either be (or probably both) a dynamically typed language (i.e. actually statically uni-typed (http://existentialtype.wordpress.com/2011/03/19/dynamic-languages-are-static-languages/)) such as Python or a statically typed language that is not verbose due to its very powerful Higher Kinded typing system such as Scala (hopefully a version 3 that has a first-class union type, which is the main lacking feature of Scala which Ceylon has!) something Ceylon doesn't have. I was working on the latter for my Copute which is intended to be a better Scala and I will come back to that if I can finish my work in the Bitcoin space.

Are you a talented programmer? You can PM me.

I got into a discussion about languages at the following thread:

https://bitcointalk.org/index.php?topic=279771.msg3003835#msg3003835

Some where in that thread, I explained why I think Go sucks.


https://bitcointalk.org/index.php?topic=515414.msg5703441#msg5703441


1. Picture a complete freeze in lending, and a lack of access to cash.  No one can buy cars or houses.  People with no cash on hand couldn't buy anything.  Stores can't stock shelves or pay employees.  Forget just the banks, every company from GE to local mom and pop shops would be under within a month.  Tens of millions would suddenly find themselves out of work.  You'd have mass riots in every major city in the nation.  If we were lucky, we would be living in a state of martial law.

This entire premise is based on the fact that new players will not enter the space that just appeared.

Riots? Martial Law?  You have got to be kidding.  This reeks of statist fear-mongering.

Not even the great depression brought on Martial Law.

Unfortunately the situation is very different now in some critical ways which could indeed lead to riots and martial law.

At that time the USA was still predominantly a rural and more self-sufficient society. My grandfather was walking around selling potatos during the Great Depression.

The Great Depression was caused by the network effects from the First Industrial Revolution which created mass production factories in the Second Industrial Revolution (http://www.coolpage.com/commentary/economic/shelby/Housing%20Recovery%20Illusion.html). This bankrupted the cottage industry and socialism in Europe. Which caused 76% of the world's gold to flee to the USA.

World War 1, FDR's New Deal, and WW2 were able to keep the people busy and people could survive in the semi-rural ways too. The USA was a net creditor and had much strength in industrial undercapacity and huge resources to apply to the Second Industrial Age.

Whereas, the situation we have now is that all nations are bankrupt and have irrelevance to the Knowledge Age. Thus government has no clue how to solve this debt bomb.

The only thing the socialism knows how to do at this point is tax and spend.

There is no place for capital to run to. The economy is shifting to the Knowledge Age where capital is less important than specific knowledge and small world-changing focused opportunities.

So you are going to have a very confused and pissed off society as this accelerates 2016ish.

2. And as for your ridiculous solution, is this something you actually spent more than 2 seconds to think up?  Honestly, how long do you think it would take for the government create this plan, to identify these people, and to mail them checks.  A few months?  A year?
As opposed to giving reward to the stupid and losers?  Now that was ridiculous and down right evil.

And as for your time frame, there is this tech called a database that  Dr Codd nailed for us in 1969.

As a real world example, the Australian government gave out $800 dollars to every tax payer directly into their bank account within 3 weeks.  It's not hard.
It was a perfect Friedman helicopter drop.  Minimal implementation cost and only a few dead people wasted it.

3. What money was spent?  In the end, the banks paid the money back, so what money could have been "saved" for a better use?

The opportunity costs that the US lost by keeping the dead wood alive is immeasurable.  You are currently experiencing a "long slow painful recovery" due to propping up zombie businesses.

Worse than that. Central banks have delayed for decades the correction that should have come in the 1970s so that the boomers would have learned to be programmers as the personal computer was born. Instead the debt propped up all sorts of old world economy business that is no longer relevant. So now we will have an abrupt and very painful global adjustment that may even take us into a Dark Age.

I detailed this at the following post and downwards in the thread:

https://bitcointalk.org/index.php?topic=455141.msg5637503#msg5637503


https://bitcointalk.org/index.php?topic=515414.msg5703965#msg5703965

Riots? Martial Law?  You have got to be kidding.  This reeks of statist fear-mongering.

Not even the great depression brought on Martial Law.

Unfortunately the situation is very different now in some critical ways which could indeed lead to riots and martial law.

...

The only thing the socialism knows how to do at this point is tax and spend.

There is no place for capital to run to. The economy is shifting to the Knowledge Age where capital is less important than specific knowledge and small world-changing focused opportunities.

So you are going to have a very confused and pissed off society as this accelerates 2016ish.

It is happening:

http://armstrongeconomics.com/2014/03/14/russian-capital-flows/
http://armstrongeconomics.com/2014/03/14/germany-to-throw-in-prison-people-with-swiss-accounts/
http://armstrongeconomics.com/2014/03/14/is-there-a-global-bank-run/
http://armstrongeconomics.com/2014/03/13/preliminary-capital-flows-fleeing-russia-exceed-50-billion/
http://armstrongeconomics.com/2014/03/13/bank-runs-starting-in-ukraine/


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 15, 2014, 12:49:08 AM
Re: Japan approves regulation of bitcoin as a commodity

https://bitcointalk.org/index.php?topic=516117.msg5704009#msg5704009

Legal tender is not taxed on capital gains and VAT. Commodities disposals are.

This is why the government will control Bitcoin.

Only an anonymous coin can break free from the government control.

End of story.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 15, 2014, 01:03:01 AM
The Fourth Branch – Deeper than the DEEP STATE

http://armstrongeconomics.com/2014/03/14/the-fourth-branch-deep-than-the-deep-state/
http://armstrongeconomics.com/2014/03/14/obama-feinstein-nsa-destroying-america-better-thsn-russia-could-ever-do/

Prior posts about the DEEP STATE:

Armstrong admits we need to eliminate taxation at the nation-state level, but he doesn't provide a way to accomplish that!

http://armstrongeconomics.com/2014/02/24/the-fourth-branch-deep-state-in-plaint-sight/

Quote from: Armstrong
(2) eliminate taxes at the federal level.

Readers must listen to Bill Moyer's interview (http://billmoyers.com/episode/the-deep-state-hiding-in-plain-sight/) about the DEEP STATE that has taken over the U.S.A. government.


To all those who say that anonymity will enable illegal activities, I remind them that so did cash. So should we eliminate physical cash and move to a state controlled digital currency in order to eliminate all crime? But my prior post about the DEEP STATE (https://bitcointalk.org/index.php?topic=455141.msg5347903#msg5347903), shows that the criminals control the state! Ukraine is another evidence (http://armstrongeconomics.com/2014/02/23/yanukovych-captured/) that all nation-states are corrupt. Come on Statistards, admit you are wrong!

I am pleased to see how the forum responded to the idiotic OP about "How do we prevent money laundering and assasinations? (https://bitcointalk.org/index.php?topic=6413.0)".

The bigger the cheese, the more mice who come to feed on it. If we put control of all the money in the hands of the state, the incentive is much larger for the criminals to go capture the state. This is why we have a DEEP STATE. There is no way to legislate or make a democracy that prevents this. You have to eliminate the cheese using a decentralized technology, so there is nothing for the criminals to go after.


All those who think crypto-currency should be unregulated are implicit (de facto) members of the Dark Enlightenment (https://bitcointalk.org/index.php?topic=495527.0), and are delusional if they think it can happen without anonymity being built-in to the coin (https://bitcointalk.org/index.php?topic=505355.msg5581873#msg5581873).

The linked article in the OP implies the powers-that-be (not politicians, I mean the truly powerful who control the DEEP STATE (https://bitcointalk.org/index.php?topic=455141.msg5347903#msg5347903)) are aware they need to regulate Bitcoin.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on March 15, 2014, 01:04:01 AM
Thanks MoonShadow. I wanted to say something similar but was too mentally exhausted yesterday. Also there were no citations in that paper.

Zarathustra has some need to believe that. No matter how bad any coming crisis might or might not be, we will not lose the technology that is in our minds. For example I will not forget everything I know about computer science, even if society burns all the books.

I forgot to mention that the Apache were, once upon a time, a matriarchal society; at least by Zarathustra's definition of same.  (I would consider them to be a decentralized society, without a 'patriarchal' preference)  History doesn't exactly describe the Apache as a peaceful lot.  They gave the Spanish hell for centuries before the Americans entered into their region.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 15, 2014, 01:09:55 AM
Thanks MoonShadow. I wanted to say something similar but was too mentally exhausted yesterday. Also there were no citations in that paper.

Zarathustra has some need to believe that. No matter how bad any coming crisis might or might not be, we will not lose the technology that is in our minds. For example I will not forget everything I know about computer science, even if society burns all the books.

I forgot to mention that the Apache were, once upon a time, a matriarchal society; at least by Zarathustra's definition of same.  (I would consider them to be a decentralized society, without a 'patriarchal' preference)  History doesn't exactly describe the Apache as a peaceful lot.  They gave the Spanish hell for centuries before the Americans entered into their region.

Apache are covered in the book The Starfish and The Spider (http://www.starfishandspider.com/preview/09.html).

The Apache may have been reasonably peaceful amongst themselves, as decentralization increases degrees-of-freedom, reduces binding futures contracts (https://bitcointalk.org/index.php?topic=455141.msg5674159#msg5674159), thus making it less likely for people to need to fight.

But yes when attacked by outsiders, all men fight if necessary (and those who are submissive, I wouldn't call them 'men' inspite of what genitalia they might have).

Now the question is could we all live decentralized and thus not need to cheat, steal and fight to get what we want?

Even if the answer is yes, it doesn't mean we have to accomplish it by giving up all technology. In fact, it is technology that might enable us to enforce decentralization, e.g. Proof-Of-Work and now my effort to add provable anonymity to crypto-currency.

The notion that we can go back in time and retry what wasn't sustainable, seems to ignore the fact that those cultures couldn't defend themselves against outsider top-down authority.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 15, 2014, 01:45:15 AM
https://bitcointalk.org/index.php?topic=515414.msg5704630#msg5704630

Bolded emphasis is mine:

I think he's being sincere about it. He knows that governments don't like the idea of people being free to trade goods and services with an unregulated, decentralized currency. Tax evasion, piracy, and black markets are the main reasons governments are likely planning to impose serious regulations on the internet. They want precise control over the flow of information. Whatever happens it's going to suck because most of us are powerless to stop it.

Agreed except the bolded part. We are more powerful now, we just need the right technology. Stay tuned...

I am a fan of crypto but Buffet has a valid point of view and has been a proven winner in the past. To me he is saying that until the bitcoin "industry" or any other system proves there is a "saving" to the user and/or receiver of funds ie transactions costs are less than other remittance forms it is not worth investing in.

Correct. But as I pointed out in my first post upthread (https://bitcointalk.org/index.php?topic=515414.msg5695190#msg5695190) (which apparently flew over the head of most readers), rather than lowering costs to use it as a fiat money transfer tool, we will simply create new features (e.g. anonymity) which fiat no longer has (fiat cash is going away). And our new currency will support the virtual commerce knowledge age, which fiat won't.

Buffet is in the dinosaur old world economy. We are preparing to do euthanasia on that dying piece of shit industrial+retail+tangible economy.

And I feel like dancing to that!

http://www.youtube.com/watch?v=yyDUC1LUXSU
http://www.youtube.com/watch?v=TH8m6J3gPH0

https://bitcointalk.org/index.php?topic=515414.msg5705455#msg5705455

he loves the current government system of economic fascism (which he can easily lobby and control).!

+1

Bitcoin community warns "Stay away from Warren Buffet!"  

Hahaha. Right on bro!

I rather hope we feel like this about the beauty of humanity.

Miguel - Adorn (http://www.youtube.com/watch?v=8dM5QYdTo08).


https://bitcointalk.org/index.php?topic=515414.msg5705723#msg5705723

Apologies but I've got a music itch today. I think Buffet lives a sheltered life. Doesn't he realize the world is a changin' (http://www.youtube.com/watch?v=qypwDdgWw7s).

I can't wait to finish programming so I can have some fun, haha!


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Imerman2 on March 15, 2014, 01:56:20 AM
Zarathustra's solution to the power vacuum of collectivism is to tell us to go back to being cavemen.

But what he doesn't acknowledge is cavemen still bludgeoned each other to death with cruder weapons.

Anarchy here in Mindanao during the 1800s was that every person carried 5 or 6 knives. Women were afraid to roam far, as they would be kidnapped and impregnated by the opposing tribes.

My solution which I am busy working on now, is to make it impossible for the collective to tax us (the virtual knowledge workers), because they won't be able to see what we are doing nor know who we are.

My solution is moving forwards towards greater technology and prosperity.

There is no perfect solution, but competition is the name of the game.

And all of us men share to some extent those dreams of just wanting to be left alone so we can live happily, so I am saying to you...

What is your plan to accomplish it?

I have my plan. I am competing.

We are legion. We are not beta-males.

P.S. I will repeat again for those who are sending me private messages. AnonyMint will not be announcing any altcoin, nor will he be telling you which altcoin he likes. It is up to you to figure out which features such a great altcoin will have.
You know its going to be impossible for me to stop making my own coin, even if I can't code well and have to hire programmers instead.  Like you said, you have a plan and are competing, I have my plan and I'm one of your competitors.  Good luck with your coin  ;D!


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 15, 2014, 03:25:58 AM
You know its going to be impossible for me to stop making my own coin, even if I can't code well and have to hire programmers instead.  Like you said, you have a plan and are competing, I have my plan and I'm one of your competitors.  Good luck with your coin  ;D!

More competition means a better result for everyone.

Who me making an altcoin? I will never announce such a thing.

Do remember this factoid from someone who is very experienced at creating successful software. It is impossible for stored capital to create software. Software is created by the programmer and the stored capital can't get close enough intellectually to the real-time granular incremental feedback loop process of programming, so such projects fail.

Rather what I envision is that many developers should be able to contribute to the killer altcoin and all of them profit.

Your stored capital is probably best invested in such an altcoin.

But please don't listen to me. The best way to learn is through experience. I do wish you good luck as well.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 15, 2014, 06:10:14 AM
https://bitcointalk.org/index.php?topic=515414.msg5710458#msg5710458

Buffet was relevant when we required factories, retail distribution, and a tangible world.

But the world has changed. We are moving towards a virtual economy and Buffet's capitalism is just a middle man that needs to be routed around in order to the make the economy more efficient.

This is his swan song, supporting Obama and Gneithner in order to prop up the global debt for another decade past 2007, in order to double the global debt from $100 trillion to the now $223 trillion (plus China's shadow economy debt, plus $1000 trillion in "weapons of mass destruction", plus $1000 trillion of unfunded actuarial liabilities/promises to the public in the form of social welfare and retirement).

He helped make everything worse and he is going to pay dearly for it.

Stop looking up this man. That form of capitalism is dying. The new form of capitalism is high tech. It is mostly what it is your brain. The $ is becoming a smaller and smaller portion of what is needed to develop a high tech project.

This is his swan song, predicting there won't be another major financial crash soon, when in fact the NYSE will double by 2015, then we will have global collapse 2016ish.

This is his swan song, not understanding the new money of the world and how that new money will propel the high tech knowledge age.

The industrial age is dying. China has massive overcapacity.

The future is about making unique things that people really need (such as this new technology that can predict if you will get Alzheimers by studying you eye twitching), not all this Wallstuff crap imported from Chinky land.

Stop admiring $billionaires. They are by definition dumber than when they were poorer. Do you not understand mathematically why that must be so?

It is a mathematical fact that smaller capital can grow faster because it able to chase smaller investments. Early Bitcoin investors made 1000X return on investment. That low hanging fruit is gone now. You will be lucky to make 10 to 100X from here. There will be competition for Bitcoin, because Bitcoin is flawed and will be easily regulated by the government.

Some altcoin has to fulfill that unregulated market demand, because the knowledge age will demand to be unregulated. That will be a smaller market for a decade, but then in the end it will be the larger market and surpass Bitcoin in the long run.


https://bitcointalk.org/index.php?topic=515414.msg5710868#msg5710868

While i obviously don't agree with warren buffet's comments calling him an idiot for them is ignorant and just makes you look like an idiot. He's made BILLIONS from investing - he knows what he's talking about. The reason he made such comments about BTC, I believe, Is because he doesn't fully understand the technology.

Idolatry much.

I stand by my comments upthread.

He is dumber now. He was super smart when his capital was small and the industrial+tangible+socialism age was still young. Now it is peaking and dying with him too.

I don't hate him, but I sure don't idolize him. I don't want to follow him into his coming massive failure.

Perhaps his underlings and managers of his businesses are savvy enough to adjust to the knowledge age. We will see.

As I wrote upthread, he is correct that Bitcoin is not yet treated as a unit-of-account.

And I do think he might end up being correct about Bitcoin and wrong about an altcoin. Because I think the government is going to tax BTC as a commodity, which will insure it can't be a unit-of-account because legal tender is not taxed on VAT and capital gains. And then merge Bitcoin into some digital fiat plan (the mining is already centralized in few pools so easily to force those owners to sell to Goldman Sachs, JP Morgan, etc). I believe this is why those banks have been patenting designs for the coming plan.

So that is why I don't think you will get 1000X gains that you BTC holders are extrapolating.

As I said in my first post upthread, he is somewhat correct, but only because Bitcoin is not designed to resist government regulation.


https://bitcointalk.org/index.php?topic=515414.msg5714998#msg5714998

I think the government is going to tax BTC as a commodity, which will insure it can't be a unit-of-account because legal tender is not taxed on VAT and capital gains. And then merge Bitcoin into some digital fiat plan...
I think you are out of your mind if you believe any such government-bankster hijacking of Bitcoin will be even remotely successful or tolerated by the cryptocurrency community.

World governments will have no more success taxing Bitcoin than the US government has had stopping the spread of piracy or winning the insane war on drugs.

And proper decentralized exchanges are coming sooner than you think.

Decentralized exchange won't help you. Because your IP address is still visible to the government, and Tor+VPN can't help you.

And the block chain is fully traceable and the available mixers won't really help you.

And CoinJoin is DOS-attackable in decentralized mode.

Sorry I speak the facts.

Eventually it will hit you like a brick. Then you will realize what the real future of Bitcoin is and that is going to be depressing realization for you.

I am not happy about, which is why I have been investigating potential solutions.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 15, 2014, 02:52:45 PM
Btw, I have tried living like that here in the Philippines (where that photo was probably taken) and trust me, you don't want that "prosperity".

Gains in prosperity are not a zero-sum game. We can produce more energy. There is no limit. The Second Law of Thermodynamics assures us that entropy trends to maximum. Even Einstein said that law is fundamental.

Anarchy is not only people living in the jungle like rabbits. It is also the decentralized internet. You conflate poverty with decentralization. There is always a mix of top-down and bottom-up organization in society. It is when this balance skews too far to top-down that socialism is peaking in a big heap of debt and corruption.

I know you would really like a Dark Age, but sorry you won't get one inspite of the fact that the collectivism has f8cked everything up pretty severely this time around. The reason is because the internet is too powerful as a knowledge liberating tool. And I am particularly adept at seeing what needs to be done now.

The at-home 3D printing revolution will mean we can be self-sufficient and autonomous and void the 'aliens' leeches with their large capital and factories. The 3D printer can even print itself!

I think he's losing his mind.

The 3d printers are just prototyping tools, and they usually specialise in just plastic or metal. A DIY silicon foundry would be nice. Good luck 3d printing that!

Try out the printing of an entire house in monolithic marble with a 3D printer:

http://d-shape.com/

Recently human cells have been sent through a 3D printer to build tissues, e.g. maybe they can repair my blinded right eye soon.

The earliest computers occupied huge datacenters and if one vacuum tube went bad, one had to go around testing all of them to find it. Now look they can put a computer on a single chip.

Go on with your pompous avoidance of the future, until it slams into you like a freight train.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 15, 2014, 07:22:34 PM
Why is Bitcoin an emergent natural order?

I am doubting it as explained below.

Please refute.

I think you all may be highly overestimating the size of adoption Bitcoin can attain.

The one single killer feature I can think of is people around the world avoiding border and banking controls. But I don't think they can set up businesses that can survive if they don't accept paypal or credit cards. Bitcoin doesn't have enough reach and won't before the 2016 global economic crash. Then no one will be making new businesses.

So the more important feature crypto-currency needs is not in Bitcoin. And that is...what do people need in a totalitarian devolution?

https://bitcointalk.org/index.php?topic=515414.msg5715922#msg5715922

Sigh. Okay you two will miss your chance at 1000X gains. Fine with me. Good luck.
Hey noob, I'm doing okay. I went in pre-100. I've already gained 1400% on my original BTC investment, and completely divested myself from the very dubious, artificially-inflated dollar. You should too.

That's what happens when you buy and hold. Cryptocurrency's value increases logarithmically year over year, and there's nothing you or anyone else can do to stop it (http://www.youtube.com/watch?v=kIbEj1CIpuU). Pandora's box has been opened.

Every obstacle the terrified governments of the world throw at crypto is a mere speedbump in the big-picture, long view of the evolution of this new technology.

And trees grow past the moon to ur-anus too.

Rather adoption curves are logistic.

So the question is at what point is Bitcoin fully adopted?

Most people in the world don't give a rats ass about our idealistic goals with decentralized crypto-currency.

They would prefer to use Paypal or a credit card.

So Bitcoin will only continue going up if:

1. More investors drink the Koolaid.

2. There is some compelling mainstream use of Bitcoin that we haven't seen yet.


So it is quite easy to displace Bitcoin, simply invent an altcoin that has some very important use which Bitcoin can't do, and which many people need desperately.


    
Re: What Bitcoin Has Taught Us About Human Nature

https://bitcointalk.org/index.php?topic=514995.msg5715936#msg5715936

Half of the population is dumber than 100 IQ, i.e. basically retarded.




https://bitcointalk.org/index.php?topic=514995.msg5717832#msg5717832

Let's not jump to conclusions, it just shows us that some people take time to recognize innovative new technology that is disruptive can actually change the status quo for the better.

So you think the masses are going to rise up and say "99% versus 1%, so let's dump our credit cards and use Bitcoin"?

I could see that possibly happening AFTER the global economic collapse that should start to collapse in 2016.

So maybe by about 2017 or 2018, they might start to make that transition in understanding. Right now, they are boiling frogs still in wonderland.

But by 2017 or 2018 it will be kind of too late. An anonymous coin will have already taken over because the wealthy are going to need an anonymous coin to avoid the massive government confiscation coming as the economy implodes.


https://bitcointalk.org/index.php?topic=516524.msg5718077#msg5718077

We need a coin that has a transaction time rivaling credit card companies, such as a PoS coin.

I don't disagree.

But do you really think that would cause the masses to leave their credit cards? Of course not! Credit cards protect them, let them make chargebacks, they can't lose their entire balance, they are familiar, etc..


https://bitcointalk.org/index.php?topic=68655.msg5718293#msg5718293

Does anyone consider that there are 200+ countries in the world, and 96% of their population is not American, and about 60% of the bitcoins are not? Does it have any practical significance?

Agreed that is seems many are over estimating the US's influence.

Every country is bankrupt with $223 trillion in global debt. They all need to ramp up taxation compliance. There is a big push in the Philippines about it all over the news every day (obviously being pushed by the PTB that control the media).

Coin taint is going to be intertwinded with tax compliance, because the government will say "prove you didn't mine it and sell it to yourself numerous times?".

So you have to prove the identities of whom you bought and sold your coins.


I think you are making several mistakes:

1) Most nations are likely to follow the U.S.'s lead for a variety of reasons.  Whatever methods the U.S. uses to promote taint will be followed by the aligned nations (or more offensively, our vassal states known colloquially as 'the free world') and the methods used by the non-aligned states will be probably even more draconian.

I think you are misunderstanding why most nations follow the US "lead" today, and why it is different with Bitcoin.

The simple reason why many nations follow US rules regarding money is the US if the reserve currency. As such the US can say "you (Russia) have to follow our regulations x, y & z regarding money and if you do not we will remove you from the FED depository system." Without access to the FED entire nations can not trade since the dollar is the world's reserve currency and all trade happens in US dollars.

But with Bitcoin the US has no control and mechanism to enforce its self declared rules. In fact, most nations are actively looking to get out of the thumb of the US, have you picked up a newspaper recently and seen not just Russia's maneuvers but also Chinese, Indian and many others response?

Yet you forgot a small detail. Russia and China banned Bitcoin.  ::)



https://bitcointalk.org/index.php?topic=400235.msg5718375#msg5718375

You can think of dividing the bitcoin adopters to segments like this:

2009 - 100
2010 - 1,000
2011 - 10,000
2012 - 100,000
2013 - 1,000,000
2014 - 10,000,000
2015 - 100,000,000
2016 - 1,000,000,000.

It is a very rough classification but approximately correct. The top of the pyramid has quite good understanding of Bitcoin, the bottom not only doesn't have it but is quite unprepared to understand it deeply even if explained.

The press articles cater to this "2016 segment" that does not have bitcoins and will not have them this or the next year. This information is mostly factually incorrect and very shallow. Because the press articles are read by the general public, they cannot be targeted to 0.1-1% of the population. They have to be poor as shit :)

I am thus questioning your premise that 1 billion people can adopt Bitcoin by end of 2016:

https://bitcointalk.org/index.php?topic=455141.msg5716065#msg5716065

I think that is utter fantasy. No way that will happen. Absolutely 0.

They would only move in if they are investors, because there is no currency reason for the masses to adopt Bitcoin any time soon.

Thus I conclude Bitcoin will crash in 2014 or 2015. It can't reach 100 million.



https://bitcointalk.org/index.php?topic=516524.msg5718527#msg5718527

@all

you must also remember that:

Competing altcoins have never tried the tactic of fiat injection as incentive to switch.

No competing altcoin has ever had the power to say all other competing coins are black market, but our altcoin is governent backed.

I can see how this is unsavoury, it is to me also. But to deny the advantage that government has is rather a narrow minded attitude.

Remember not every head on the planet is as libertarian as our good selves.

+1

Another very astute post.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: MoonShadow on March 15, 2014, 10:48:37 PM

So the question is at what point is Bitcoin fully adopted?

I don't think that this is an answerable question.

Quote
Most people in the world don't give a rats ass about our idealistic goals with decentralized crypto-currency.

They would prefer to use Paypal or a credit card.

So Bitcoin will only continue going up if:

1. More investors drink the Koolaid.

2. There is some compelling mainstream use of Bitcoin that we haven't seen yet.


I know of several off the top of my head, that were not only alluded to in the white paper, but not implimented in a single alt-coin that I've seen yet.

Quote

So it is quite easy to displace Bitcoin, simply invent an altcoin that has some very important use which Bitcoin can't do, and which many people need desperately.

I know what that is.

So goodbye to you. Enjoy your myopia.


There is no feature, compelling or otherwise, that Bitcoin can't replicate.  The only question is whether or not the userbase considers your 'killer feature' as highly as you do.  If they do, then Bitcoin will steal your idea.  I'm still waiting for your grand announcement, BTW, and I'll be the first to point out if there is prior art within the bitcoin ecosystem.

    



Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: Imerman2 on March 15, 2014, 11:23:50 PM
There is no feature, compelling or otherwise, that Bitcoin can't replicate.  The only question is whether or not the userbase considers your 'killer feature' as highly as you do.  If they do, then Bitcoin will steal your idea.  I'm still waiting for your grand announcement, BTW, and I'll be the first to point out if there is prior art within the bitcoin ecosystem.


Bitcoin has certain aspects it cannot change without disrupting the system to the point that it could collapse, which means it is vulnerable to competition.  For instance it cannot change its rate of coin creation and would not be able to change its hashing function unless it was near collapse or thought the risk of collapse was worth it.  Bitcoin will be overrun by a crypto-currency that is better in some core area, because by the time Bitcoin will make the change it will already be near collapse, and the emergent currency will have all the momentum.

Furthermore, just because it can be changed doesn't make it invincible, there are limits to the speed and scope of the changes that are possible.  If the ability to adapt makes a currency impervious then we will be stuck with dollars forever as the FED and U.S. gov't control what the dollar is and has changed this from 100% gold backed to what we use now, fiat. 

Finally it is highly unlikely that it will be clear to the masses at an early stage which currency is superior, and the only scenario that would allow Bitcoin to adopt core changes with speed would be if all the users understood that the newer version was superior.  But who understands issues at Bitcoin's  and more generally money's core?  Almost no one so Bitcoin has vulnerabilities.


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: sidhujag on March 15, 2014, 11:38:04 PM
There is no feature, compelling or otherwise, that Bitcoin can't replicate.  The only question is whether or not the userbase considers your 'killer feature' as highly as you do.  If they do, then Bitcoin will steal your idea.  I'm still waiting for your grand announcement, BTW, and I'll be the first to point out if there is prior art within the bitcoin ecosystem.


Bitcoin has certain aspects it cannot change without disrupting the system to the point that it could collapse, which means it is vulnerable to competition.  For instance it cannot change its rate of coin creation and would not be able to change its hashing function unless it was near collapse or thought the risk of collapse was worth it.  Bitcoin will be overrun by a crypto-currency that is better in some core area, because by the time Bitcoin will make the change it will already be near collapse, and the emergent currency will have all the momentum.

Furthermore, just because it can be changed doesn't make it invincible, there are limits to the speed and scope of the changes that are possible.  If the ability to adapt makes a currency impervious then we will be stuck with dollars forever as the FED and U.S. gov't control what the dollar is and has changed this from 100% gold backed to what we use now, fiat.  

Finally it is highly unlikely that it will be clear to the masses at an early stage which currency is superior, and the only scenario that would allow Bitcoin to adopt core changes with speed would be if all the users understood that the newer version was superior.  But who understands issues at Bitcoin's  and more generally money's core?  Almost no one so Bitcoin has vulnerabilities.

Btc is already under govt radar no alt is close.. There is no core feature that will be gamechanger enough to overthrow at this stage... You better wish bitcoin gets adapted or we wont be seeing any alt adopted for awhile unless a gamechanger feature that average joe can see with his eyes that btc doesnt have happens...

So nothing can haplen now for an alt to overthroe bitcoin without average joe making adaption and over time realizing that there is a better option... Without bitcoin that door is closed and alt doesnt appear.. Annonymint csn try all he wants but his fate is tied to bitcoin wether he likes it or not...

Think about it from the weakest link perspective and you can then see how widescsle changes occur.. Every argument has an even better counter argument... Becsuse bitcoin is highly technical unless everyone somehow be omes technically aware the masses will never know superiority unless they adopt and realize it for the selves without being told... If they wont see it then bitcoin is thr gamechanger as people have already seen... Otherwise we wouldnt be near widescale adoption...i think you might be saying the same thing in your last point


Title: Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
Post by: AnonyMint on March 16, 2014, 07:00:45 AM
There is no feature, compelling or otherwise, that Bitcoin can't replicate.  The only question is whether or not the userbase considers your 'killer feature' as highly as you do.  If they do, then Bitcoin will steal your idea.  I'm still waiting for your grand announcement, BTW, and I'll be the first to point out if there is prior art within the bitcoin ecosystem.

The only ways that anonymity can be made provably 100% can never be done by Bitcoin unless they totally change the way the block chain works.


https://bitcointalk.org/index.php?topic=516524.msg5723997#msg5723997

3) bitcoin has anonymity until you want to exchange it for FIAT. same will happen with any altcoin that wants some actual purpose

Bullshit. Bitcoin has no reliable anonymity even when used with Tor+VPN. The only way to be surely anonymous is connect to the internet in a way that the connection can not be associated with you such as a different netcafe or a new unregistered mobile device and sim card every time you transact.

Since most people aren't doing that, Bitcoin can be easily taken over by the government. End of story.

And Bitcoin can't be fixed, here is why:

https://bitcointalk.org/index.php?topic=455141.msg5723957#msg5723957



https://bitcointalk.org/index.php?topic=515414.msg5724116#msg5724116

Truth is as strong as Titanium (http://www.youtube.com/watch?v=JRfuAukYTKg).  :P :-*

http://b.vimeocdn.com/ps/173/126/1731265_300.jpg


Some parts of what he said make sense. If we really want to promote decentralized currencies and not just for profit, we'll be all ok for another altcoin to go mainstream instead of MUST BE BITCOIN hurr durr

The only reason we are promoting just bitcoins is it already had enough traction and we don't want to flood the average joe's mind with thousands of different copycats cryptos.

So if another cryptocurrency's rise is the death of bitcoin, it is still actually still a good news in the big picture.

+1. Good to see not everyone is dumb.

Actually we don't need that altcoin to kill Bitcoin. I believe the Fourth Branch of government (https://bitcointalk.org/index.php?topic=455141.msg5704180#msg5704180)created Bitcoin, and they will make it mainstream by regulating it then allowing it to be legal tender so no more taxes on using it. That is good even for an altcoin which the government hates, because expands our ecosystem.

So what I see is a better altcoin that is #2, but better for all of us idealists who understand where we are headed 10 - 20 years hence. The masses will follow us into this altcoin later, after they get totally fucked over by the government as socialism implodes. For now the masses still trust the government, otherwise the $223 trillion global fractional reserves (i.e. debt) and $1000 trillion of derivatives would have imploded already.