Bitcoin Forum

Bitcoin and similar technologies may have a significant role to play in the future, and the technology is legitimately elegant and adeptly applies several modern strains of cryptographical research.

The recent speculative runup in the main Bitcoin block chain, however, is insane and entirely unfounded. I can't promise that people buying Bitcoins now will lose money, for no one can easily predict where a bubble will end, but the grandiose claims of most of the people in the official Bitcoin forums are absurd and border on the illegal fraud that is explicitly disclaimed by people like Rezin777. Investors would be well advised not to risk their money here. There are several significant reasons for this:

1. Most of the exchanges between Bitcoin and other currencies are illegal or, at the very least, unlicensed and illegitimate. They likely run afoul of US securities laws and US banking laws. This is not just a pub-style bull session about law; it is the result of a reasoned consideration informed by legal experts, though of course it does not constitute legal advice to you. Speaking generally, though, individual users of these exchanges risk having their assets and accounts frozen, risk running afoul of money-laundering laws, and generally risk losing even more than they put into the system.

2. Related, given that the exchanges are entirely unregulated, they can themselves be manipulating the market. Given that Bitcoin is touted as a distributed currency, it is ironic that there is absolutely no check on "Mt. Gox," the major Bitcoin exchange, through which $200,000/day is (unbelievably) passing.

3. The Bitcoin protocol itself is not robust against denial-of-service and other attacks. Many on the official Bitcoin forums have noticed this, and some have spelled out the attack vector in detail, but in short, a persistent denial-of-service attack that shuts down Bitcoin entirely can be mounted trivially for about $700,000 and can very likely be mounted with more sophistication at a substantially lower cost. Indeed, the Google employee who (in a personal capacity) wrote a Java version of part of the Bitcoin client has recognized publicly that any sophisticated analyst could shut down Bitcoin at will, and he explicitly opposed calls for tests of the system's security by the general public. The system has created the impression of security, but it is not secure. What ARE secure and robust are the ideas behind the protocol; it is likely that something like Bitcoin will survive, in some form, in the future. But the main block chain, in which everyone's presumed "wealth" inheres, is of questionable soundness. (To say that more simply: Bitcoin as an idea might survive, but it is far less likely that your "bitcoins" will.)

4. Given that technological attacks are possible, a corollary is that economic attacks in the style of securities fraud are possible as well. If you can disrupt the network at will, you can easily disrupt the network in a strategic way in order to profit from the disruption's effect on the market. Much unsophisticated analysis of Bitcoin rests on the premise that attacks aren't worthwhile to mount because it would be more profitable, with massive computing resources, to "mine" for Bitcoins, but that entirely neglects (1) the economic motivations that come from market manipulation and (2) ideological, political, regulatory, and commercial competition to the main Bitcoin block chain, which makes attacks relatively more attractive for many parties.

5. To the extent the official Bitcoin forums have informed investors' views of Bitcoin, they have likely misled the public. This is interesting from a legal perspective because it amounts to fraud without the individualized intent of fraud (can a mob "defraud" someone when no individual person in the mob is consciously telling a lie from which he or she expects to profit?), but several features of the official forum stand out immediately to informed readers. These are largely tangents, but they may help paint a more accurate picture of the current users of Bitcoin than the official forums would:

a. While I said at the outset that Bitcoin is legitimately interesting from a technological standpoint, it is not as creative or novel as most of the adopters seem to think. Judging from the official forums, the typical adopter is someone with a modicum, but no more, of technical and theoretical experience. (Perhaps of note: those who are leading the ongoing "development" of Bitcoin are little different; they are not sophisticated or creative technological thinkers, and they struggle even with the details of the present protocol. What this means for an investor is that Bitcoin is not practically resilient even to those attacks to which it might respond in theory, such as a compromise of the hash function it mainly uses or the development of a new "mining" technology that cheapens various attack vectors.) To paint the picture very broadly: these people know how to run Linux, compile programs on it, and maybe write a few lines of code; they can also evaluate at a very general level the claims of a cryptosystem. But all except about five people on the official forums have no specific mathematical or systems training, and so the general discussion and enthusiasm creates the impression in a novice that Bitcoin is far sounder than it is.

b. More obviously, the official forum is filled with disturbing and juvenile, extreme anarchism. Comments like "I reject all systems of human morality and law" are common. Uses of Bitcoin to encourage trading in illegal goods and services are routine; even "assassination markets" are encouraged. Bitcoin as a virtual currency probably does not threaten governments the way that some novices initially imagine upon hearing about the technology, but when the only people buying Bitcoins are (1) engaging in illegal activities, (2) anarchist teenagers who want to promote the technology for ideological reasons, and (3) speculators, sound investors like those in the Fatwallet crowd would be well advised to stay away. To a mainstream community of investors, however, the deranged rants that are commonplace among early Bitcoin adopters are perhaps reason alone to hesitate to adopt the technology.

6. Probably less significantly, but still interestingly, the Bitcoin block chain has now been demonstrated by at least two good analysts to be able to store arbitrary data "steganographically." This means that the Bitcoin block chain can contain arbitrary contraband, so that merely by running the Bitcoin client, you may (at least theoretically) be propagating child pornography, Wikileaks, and other material in the style of Freenet and other distributed storage systems. This is more theoretical than practical at the moment, but it is disconcerting. How popular would VISA cards be if (say) 4% of them contained contraband information encoded in the holograms on the front of the cards?

NOTHING IN THIS MESSAGE CONTAINS INDIVIDUALIZED LEGAL OR INVESTMENT ADVICE. My motives for writing this are a distaste for fraud, even when that fraud is not consciously propagated. As a researcher, I also have privately made proposals that address some of the technical drawbacks of Bitcoin, but I have no vested interest in seeing Bitcoin as a technology either succeed or fail.

Did I hear yet another claim of "Bitcoin bubble"?

http://bitcoinweekly.com/articles/comic-reaction-after-dramatic-rise-of-bitcoin-s-value

Repost from here 8 days ago:
http://www.fatwallet.com/forums/finance/1090435/m15945892/#m15945892

And already discussed a bit here:
http://forum.bitcoin.org/index.php?topic=8248.msg120599#msg120599

Welcome to the forums!  :)

that is simply not true

and if you opening with a lie \ lack of knowledge like that i really don't want to read any further

how is purchasing btc different than purchasing a pair of shorts online?
IF you sell it and actually make some money, you should pay income tax in most countries \ cases, but paying taxes has nothing to do with bitcoin being legal or not

as i mentioned in comment you (?) deleted:

WHO CARES?

there is zilions ways to do that, starting from drawing dicks on dollar bills, through paypal \ bank transfer descriptions and ending on embedding hidden content in websites... you can't see any porn in chain, you would have to decode it


my guess? exactly the same - because joe sixpack don't give a f#ck that:
"if you change those two dots, scan this qrcode and swap those three letters it will be hyperlink to picture of a big dick"

no average user will ever know that blockchain even exist (or for that matter locate, decode or use any information from blocks) who cares if there is DICKDICKPUSSY recorded into magnetic strip of one's VISA card?

Oh look, yet another wizard who knows the Real Value of Bitcoin™.

I enjoyed reading your points on the fatwallet forums, CS. I just want to address a few of your concerns that sort of stick out to me.

Point 1. I think you will find it difficult convincing many here that regulation, licencing and legislation from some central authority adds legitimacy to anything.  

Point 2. Again you need to prove the assertion that regulation lowers the chance of manipulation or corruption, rather than increases it.  I mean that rhetorically of course, because that would be a long debate off topic.

Point 3. Technically speaking, it is possible that bitcoin is unsound, or limited in some way. If you could expand on your points here, i would be interested.

Point 4. Again, if you could expand on specific ways to do this, i, and im sure everyone else would be interested.  I think most would agree its in the realm of possibility,  but you could make similar claims about any technology.

Point 5. This is more of a philosophical or personal point, which again could be a long off topic conversation.

Point 6. Interesting, but I don't find it relevant.

1. Yep, probably it is the case for most exchanges. Didn't you know that Bitcoin is very young?

2. I do not see anything unbelievable in 200k$/day passing on some days at mtgox. Lots of private deals are happening too, probably. Manipulating the market? Even if this is true, it is just growth pain. Bitcoin is bad because exchanges are bad!  With with your approach you could as well criticise linux kernel for bugs in sendmail and bind.

3. A million USD to temporarily disrupt the network, and push some panicking speculators to sell some coins. So where is a big news here? This can be done at much lower cost to 'blue chip' companies, to paypal, visa, mastercard and others. Did you see all those news about Sony being taken down by Anonymous? Note that market cap of bitcoin is a fraction of percent of those troglodytes.

4. See above.

5. Mob fraud? It is something new and bordering on libel. People are just excited and for a good reason.

a. What else did you expect from a predominantly geek crowd of teenagers and twentysomethngs? No "sophisticated or creative technological thinkers"? Do you expect those "thinkers" to spend all their time posing here?

b. Yep, mostly juvenile. Yep, extreme. Fat wallet investors better stay away for now. You will be able to buy bitcoins from teenage millionaires with less risks a few years down the road.

6.Irrelevant.

I find point 6 to be extremely relevant.  There will be some groups for whom it would be advantageous for Bitcoin to fail.  Many of these groups are capable of influencing the police and public.
If child porn is spammed onto the blockchain.  I can well believe that the protection of minors is plenty of excuse to target miners.

Tell us something new.  Anybody can manipulate the market if they own enough BTC. Anybody can manipulate any commodity market if they own enough of the commodity.  There is nothing unique to Bitcoin about this.  DeBeers and diamonds comes to mind.  
 
If that bothers you, don't invest in Bitcoin.


Tell us something new.  That's why it's called beta software.

If that bothers you, don't invest in Bitcoin.


Agreed. But  I think that anybody who invests a large amount of money in BTC has researched the technology beforehand and is well aware of this.  If they haven't, then they are fools, bluntly put.


Securities fraud??
Bitcoin is a commodity, not a security.  Why? Because owning Bitcoin doesn't involve guarantees or contractual obligations.  It's just a number stored on your computer.


No such thing as "official" Bitcoin forums. That's kind of the point with a decentralised project. bitcoin.org is just a website run by an individual who is involved with the project, that's all.

And do you realise that the Bitcoin forums are the public?

So I guess the public is misleading the public?


Agreed. We should stress more often that Bitcoin is still beta, also on wesuecoins.com


Libertarians prefer to use the word "consistent" rather than "extreme", to describe their system of ethics.  They would counter that inconsistency is juvenile.  But I agree, some people on this forum are very idealistic.



I don't get this type of reasoning. Why do you care what other people are doing with their bitcoins? I mean, there are lots of deranged people who buy carrots. Does that stop you from buying carrots?


Does it take "at least two good analysts" to demonstrate that the sky is blue?

Obviously the block chain can store data steganographically.  Anything that can store data, can store data steganographically.


Some evil biotechnologist could (theoretically) encode child pornography in a carrot's DNA.  That means that every time you buy a carrot you may (at least theoretically) be propagating child pornography.  

OMG! We should all stop eating carrots!


You're contradicting yourself now.

Your own words from the beginning of your post:


So I guess that wasn't advice at all but just a brainstorm?  Thanks for letting me know, I was just about to take it.

Welcome to the forum - I've read your post at fatwallet - and my intuition is that you are mostly right about the threats, but I don't think  anyone of them has the power to bring the project completely down.  Sure there are many of them and I agree that they are probably treated too lightly here - but this is how projects start - you cannot start from defence.

Great, an anonymous grad student gives himself the pseudonym "ComputerScientist" and then makes a bunch of libelous attacks.  I'll be sure to take this seriously.

Was cryptographic currency going to be the subject of your thesis?  Is the job market looking a little thin?  Were you hoping to be a quant on Wall St.?  Does the prospect of paying off those student loans look a little daunting now?


Do you have any clue what these words mean, or are you just grasping at straws?


Bitcoin is not a security.  So, probably not.


Unsurprisingly, a search reveals the only place this phrase appears is in your post.


I don't see anyone on this site encouraging this.  Do you have a quote or citation?

Of course the US military has tried (without authorization from Congress) to create assassination markets before.  And since the CIA seems to have developed an interest in Bitcoin, it's entirely possible that the US government could create such a market.  Would you consider that illegal or illegitimate?

http://en.wikipedia.org/wiki/Policy_Analysis_Market
http://hanson.gmu.edu/policyanalysismarket.html

Otherwise, the thrust of your argument seems to be that Bitcoin is not immune to attack.  So, in the interest of debate, could you kindly give an example of a system that is immune to attack?

Because this whole rant sounds just a little bit like sour grapes to me.

"Waah, waaah.  These people don't have training and licenses.  They can't make legitimate software!"

Planting kiddie porn to incriminate your enemy?  Sounds like a brilliant plan that could definitely never backfire.

Seriously?  Do you really think that those "groups" you are talking about would do something so stupid? 

Welcome to the forums, ComputerScientist!  I hope this will be just the first of many posts from you.  You are bound to get some flack from the crazy libertarians, but do not let them discourage you from engaging in the discussion...

You make some very good points, and overall I would agree with the tone of your message.  However, I cannot make an unconditional endorsement of your post, because there's also one point where I strongly disagree:


Bear in mind that there is no official Bitcoin™ entity behind the currency and the block chain.  It truly is a distributed, P2P, grass-roots effort.  What you get from these forums are the ravings of a deeply heteregenous bunch of individuals acting as such -- individuals.  We do not get kickbacks from The Bitcoin Cabal™ and I reckon very few people on these forums even have any education on economics and finance.  If you go down the road where you think that popular anonymous discussion on an open forum should be liable to accusations of fraud, then you're seriously misunderstanding the nature of the Internet.


Yeap, here I mostly agree.  It does get very tiring to come across the same infantile rants again and again, and I fear a large portion of this community suffers from a serious case of epistemic closure.  Moreover, I'm pretty sure that if the present incarnation of Bitcoin is to fail, this will happen in large part because it was unable to grow past the juvenile philosophy of a large portion of its early adopters.

As you noted, this is indeed less significant, even if a bit disconcerting.  However, bear in mind that nothing prevents someone from steganographically embedding whatever "forbidden" data into a photograph used in a newspaper, for example.  Yet no one seriously defends abolishing newspapers to prevent that from happening...

An interesting side note: if the mathematical constant π (3.14159...) turns out to be a normal number (http://en.wikipedia.org/wiki/Normal_number) like many suspect (it has not been proven yet), then for whatever natural number N you will be able to find embedded within π all possible binary strings of size N.  Which means that all copyrighted materials ever created, all the sickest forms of porn, all classified state secrets, etc, etc, will be found somewhere in π.  Should we ban circles too?

OH MY GOD, I DID A `cat /dev/urandom` AND THERE WAS CHILD PORN THERE (somewhere, anyway). COMPUTERS ARE DOOMED!!!

uh, guys, this isn't the ComputerScientist who has been posting elsewhere. see http://www.fatwallet.com/forums/finance/1090435/?start=249

most of what he has been saying around the web is accurate and interesting, and those of you with the angry tirades are dismissing him and ben laurie way too easily. unjustified inferences that CS is a student are unhelpful, and who cares if he is anyway? i strongly suspect that he isn't, as he's given several credible indications of being around on the internet in the mid-1990s. he is plainly competent and honourable, or at least very good at pretending to be those things.

benjamin, your tone is very offputting in its arrogance and stridency. technological attacks against an economic system can be quite important in evaluating the system. as for the law, the american legal analyses that have been shown to the forum so far do suggest that bitcoin is likely a security, or at least could be. 'what is a security' is a very difficult question to answer, and the law doesn't accept answers by mere assertion.

as i've pointed out in other discussions, you're talking as cultural conservatives, as if bitcoin is perfect and has already achieved all its goals. it's remarkable to me how quickly the forum consensus got to that point, and benjamin is a good example of it. if we prevent ourselves from learning from anyone with real experience in these matters, it's our loss.

as for the forums, it's not hard to find statements as mental as that quote. just casually poking through the histories of people posting in this very discussion, it took me 20 seconds to find this from JohnDoe: 'Basically I'm close to anarcho-capitalists/agorists except that I completely reject morality, law and the existence of rights'.

I really don't know what this ComputerScientist guy is all disturbed about. All I wanted to do was to trade some hash cookies with my international friends.

the 'all it is is data' argument ignores all law and policy. and you're all misunderstanding the argument about embedding rogue data in the block chain, which is a serious enough concern that satoshi acknowledged it.

Do you mean unhelpful in the same way that CS unjustly infers that the bitcoin forum users are extreme anarchists and pro-"assassination markets" in 5.b? If you are going to chide one, it would benefit your argument to chide the other. Yet, you don't. You link his posts throughout the forums here without a mention of this.

i don't agree with everything he (or she) says, but it was the first smart critical commentary i saw about bitcoin, and there's a lot in it that's correct and very important. he directly shows a flaw in the logic of satoshi's original bitcoin paper's threat analysis, and nobody has yet addressed the flaw, which may be impossible to address. you don't think that's important?

benjamin's argument was 'i bet this anonymous critic is a student or out-of-work person and thus we shouldn't listen to his or her'. that's manifestly silly, and very different from considering the community of early adopters as an asset or liability for a fledgling technology.

and the assassination-market stuff doesn't seem like a guess. i recall whole multi-page discussions myself on the matter, with many people voicing support. it may be useful to disaggregate 'support': maybe some people don't 'want' such markets, but they use the possibility to try to promote the value of a bitcoin in the current block chain. a member called dacoinminster has done that tirelessly for some time now, for example.

unk, woooaaaa, you're the one that needs to take a chill pill. Most of the people on this forum are not dismissing CS and Ben Laurie. It's just that most of their criticisms have already been refuted and they are the ones that did not expend the energy to properly research the arguments that they were jumping into.


These same discussions have been going on for over a year.  It says a lot about a cryptographer's relevance if they are just now discovering bitcoin!

See my initial reply to Ben at my blog (link below).  I can happily say that Ben did not delete my comment so I am glad for that. The cryptographers mailing list thread from 2008 is where Satoshi vetted his approach and his protocol with fellow cryptographers (link to that exchange is also on my Ben Laurie blog post http://themonetaryfuture.blogspot.com/2011/05/ben-laurie-blathering-on-bitcoin.html ).  Come on, please don't cater to Ben.  Just because he's late is not what makes him wrong, but he is far from objective.  First of all, he designed a brilliant, albeit centralised, system and he has periodically dismissed the 'proof of work' concept, so a bitcoin recognition from him now would essentially invalidate 10+ years of his own work. You just have to see it for what it is.

do you have any idea who ben laurie is? he wrote a good chunk of the cryptography software that the public uses every day in its ordinary work. i doubt he has much personal stake in seeing a technology that happens not to use one of his ideas fail. to suggest that is just casual bullying; it's armchair psychology at its worst, and it's very immature.

there's an ongoing, remarkable lack of perspective in this forum. why haven't people heard about bitcoin? because it was a tiny project that wasn't in the news. it's still a very small project. nobody on any mailing list has the time to follow up on all projects. it's almost impossible to stay current. to say that a cryptographer who didn't use bitcoin in 2010 is irrelevant is like saying that a media expert who didn't use facebook in 2003 is irrelevant.

and my point is that CS and laurie are pointing out new criticisms, and they have not yet been addressed. a repeated error in this forum is to assume that all criticisms are old. maybe it's because so many criticisms of bitcoin are bad that people assume all of them are going to be bad, but that's a poor way to think and argue. it's like people's rhetorical techniques were trained upon teaching bitcoin to incompetent newbies on a forum, and they adapt poorly to responding to serious criticism.

related to 'lack of perspective', many of you seem to have lost track of how fringe the political and economic ideas on which you base your reasoning are. pretty much all mainstream economists regard the austrian school's assumptions and normative propositions as silly at best, and saying 'but mainstream economists have a vested interest in preserving the status quo because they leech off the teat of the state' is not a very persuasive response to that. it is the austrians who are more or less irrelevant and behind the times, and bitcoin could grow ten times and still not suggest otherwise.

I do think it's important to discuss. I also think if you are serious about discussing the technical nature of Bitcoin, you would avoid the silly forum politics that people like me tend to get involved in. The fact that he does include it leads me to believe he is more interested in discrediting Bitcoin, for whatever reason, instead of actually discussing the technical merits of the project with those capable of doing so.

Hmm, as I got called out in this post I guess I should respond to (parts of) it.


I disagree. Whilst "most" might be in some technical sense accurate as there are quite a few tiny or abandoned exchanges, the big ones at least try to be legitimate. MtGox is run by Tibanne Co, Ltd which is a trading firm registered in Japan. They limit withdrawls to $1000 per day and if you go through the US KYC requirements they can lift it higher.

However whilst it doesn't address your point, I think it's worth noting that the laws around money laundering and movement of money are generally:

a) Very new
b) Very vaguely written

A lot of them have been driven by the US PATRIOT act. For example the US Govt requires submission of transactions that are merely "suspicious" without clearly defining what that means. Likewise the $1000 per day limit includes rules against "structuring", ie, trying to avoid hitting the limit by breaking things up. Again, very poorly defined.

As a result whether any given exchange is in compliance with the law isn't something that can really be decided in a web forum. The relevant regulations are just way too open to interpretation. It's quite possible to get legal advice saying you are in compliance and then be found to not be. A few high profile prosecutions for "money laundering" were in fact against people who did not obtain money from criminal proceedings but rather just failed to follow the new legal regimes aggressively enough.

I think the current state of money laundering legislation is quite concerning to anyone who looks at it closely. Indeed the Economist called time on these post-9/11 systems more than 5 years ago:

  http://www.economist.com/node/5053373

A simple example of why money laundering is not like other crimes: the relevant police authorities refuse to even guess at how much takes place. A crime that cannot be measured is certainly unusual.


Please don't twist what I've said like that, it's not polite. I did not and do not oppose tests of the systems security in a controlled environment or on the testnet. "Tests" that take place on the production network are not helpful for obvious reasons. This is normal - I've yet to encounter an organization which deliberately attempts to take their own networks offline in ways that could impact customers. These tests are usually performed on sandbox environments.

With regards to the DoS potential in general, I think you're over-dramatizing things. Bitcoin nodes are susceptible to DoS attacks mounted by sophisticated attackers just like:

• Web servers
• Chat networks
• Cell phone towers
• Power grids

... etc. I think you get the point. Many systems people rely on every day can be damaged or taken offline completely by sophisticated attackers, who have a deep understand of how those systems work.

If TX floods against nodes actually start occurring in practice then the software will be improved to automatically detect and block them, just like websites can detect and block DoS attacks today. How sophisticated these mitigation measures become really depends on how sophisticated the attacks themselves become. As taking a single node offline doesn't achieve much and attacking the entire network requires some fairly decent skill the DoS attacks we've seen today are mostly against more traditional targets, where there's a clear business case (eg DoSing MtGox).


If somebody wanted to short Bitcoin in any significant amount they would probably be traceable in the same ways any other type of securities fraud can be. At some point they have to cash out, right?


The fact that you're even talking about a compromise of SHA256 weakens your credibility significantly, and insulting the present development teams intelligence doesn't help your case either. The protocol is well understood, what is being explored is interesting new applications of the technology.

I have talked about Bitcoin with Yu Sasaki, one of the people responsible for the current best known attack on SHA256. The conclusions of that discussion were quite clear, failure of SHA256 is the least likely problem the project faces by a long, long way.


Transactions that are not financial in nature can be safely deleted, so if somebody doesn't want to store such data they don't have to.

A final note: there is no such thing as unintentional fraud. I suggest you consult a dictionary. Google helpfully provides a definition (http://www.google.com/search?sourceid=chrome&ie=UTF-8&q=define%3Afraud&qscrl=1#hl=en&qscrl=1&q=fraud&tbs=dfn:1&tbo=u&sa=X&ei=WwXYTeGCAYjzsgav16j4Ag&ved=0CCMQkQ4&bav=on.2,or.r_gc.r_pw.&fp=2c0b26cc73f7ec25):

• Wrongful or criminal deception intended to result in financial or personal gain
• A person or thing intended to deceive others, typically by unjustifiably claiming or being credited with accomplishments or qualities.

Again, please be careful when throwing around such serious accusations about people you do not know.

Of course I know who Ben Laurie is...that is why I wrote the reply post to him in the first place. There is a distinct difference between legitimate criticisms (such as what happens to bitcoin because of IRC vulnerability) and mere impetuous back-of-the-envelope attacks. Maybe you should re-state exactly what Ben's new criticisms are, because I'm sure many would be interested in what you think they are.

Regardless of Ben and the others, the fact still remains that today I can digitally transfer $100,000.00 worth of bitcoin value across national/State borders without any reporting requirements, any banks, any identity forms, any Know-Your-Customer rules, and any explanations.  I could not do that prior to a p2p distributed cryptocurrency.  That is the real issue, FYI.  Break it or make it.  Financial privacy restored.

mike, with all due respect, i think you're being too harsh in response to the critique.

the overarching point seems to be that many attacks against the technology here can have direct economic effects, given the economic ecosystem of the current block chain. that seems to be a legitimate point. i don't know what you said or what he thinks you said, but the present-day robustness (of, say, the client) against dos attacks is relevant to the speculative soundness of an investment or an economy, and i take that to have been his point.

similarly, i don't read the critique as suggesting a compromise of sha256. he's noticing something i've, too, seen often in the development discussions: a disconnect between the glib claim that the client can be updated in response to any threats and the difficult practicalities of doing that whenever it's contentious. it reflects the centralization that always comes back to haunt distributed technologies. the point seems to be, if there were a compromise or anything else that required a contentious upgrade, the upgrade path is unclear. a member called bytecoin has written up many good thoughts in this regard.

finally, though i don't really have any stake in defending CS's honour, i read the post as not misstating what fraud is. he's more or less saying 'this isn't actually fraud, but it's practically equivalent to fraud and can have many serious negative effects'. that said, google's nonlegal dictionary is not sufficient; fraud does not actually require intent, at least in anglo-american law. it often only requires what lawyers call 'scienter', which in practice often includes recklessness (itself a legal term of art, but much less than 'intent'). in any event, a lot of what i read as promotional literature in the forum does seem to have intent: its goal is to convince people to buy bitcoins in the current block chain.

jon, i ought to let these people speak for themselves, but ben's point seems to be about costs. i don't know if it's strictly new, but he articulated it well and seems more receptive than others to the attacks that satoshi's paper too quickly dismisses. his point is that currency doesn't exist without trust and some degree of social consensus, and the level of trust that bitcoin requires already doesn't seem to demand the level of decentralization it applies.

whether people can transfer $100,000 in the way you describe is an open question, particularly because doing it internally to the bitcoin economy may not be suited to their needs. if not, there's volatility, exchange fees, and of course exchange reporting requirements.

it's not like there aren't already ways to transfer $100,000 roughly anonymously. (e.g., cash) the question is whether bitcoin is better than those ways, and 'better' is something that we can analyze in terms of costs and benefits. are you really confident the benefits currently outweigh the costs, putting all ideology and hope aside? are you confident they will in a year? if you actually had a need to transfer $100,000 to me in the uk privately tomorrow, would you practically speaking use bitcoins in the current block chain to do it? i wouldn't.

and most people don't really have needs for extreme self-enforced privacy (rather than law-based privacy), so for them the costs are even more significant. several people in the comments to ben laurie's threads get at this point very well, and i hadn't seen a good emphasis on costs and bundling before his posts (another reason that his blog is a contribution).

I don't think Problem 6 is going to bring down Bitcoin or anything, but it's a very real threat.

The FBI logo or whatever can go through a function with another data input and output CP.  That additional data is effectively the CP.

Someone is going to develop an app that turns the block chain into write-expensive read-free Usenet.  With an innocent, completely legal app.  And some jackass is going to write CP to the BC.
At that point, any police officer who wants to can arrest a miner, confiscate their harddrives and find use the same innocent app to find CP on them.  If the miners knew that this existed and did nothing to remove those transactions, I think things might not go well for them.

This isn't something I want to happen, but it will, so I wonder whether we have a good way to voluntarily remove malicious transactions, and whether the ahving ability to do that is a good idea.

Maybe so, but this forum isn't a court of law so it's best to communicate in everyday English. I don't think it's a good idea to accuse people of being fraudsters, unless you're able to back that up with something more than opinions.

If SHA256 were to fall the network could be upgraded, assuming there was some credible replacement. What would happen is a new version of the software would be prepared and released with a flag day at which point the block chain changes format. People who don't upgrade would find themselves effectively kicked off the network at that point until they do. A few small, abandoned sites would break as their transactions would never confirm. Everyone who actually cared about their Bitcoin related business would upgrade. It wouldn't be pretty or easy, but we're talking about an extremely unlikely event.

With respect to DoS, it's been raised and discussed many times before. Obviously if you can successfully DoS an entire financial system then it will impact that economy.

I think we just need a bigger/better FAQ. A lot of these issues have been discussed a long time ago but the forum archives are hard to search.

Good point and as long as the answer to a question is "we can update the client if we need to" then we are not (yet) dealing with a distributed anything.

Worth keeping mind though that everyone involved recognizes this is a work-in-progress.  Criticism on that basis is constructive.  Criticism that fails to recognize the work-in-progress status of the project is a straw man attack.

Technically, my argument was "this anonymous critic is a penniless academic and an early adopter of some future centrally-managed pseudo-meritocratic command-economy digital payment system and thus we shouldn't listen to him or her".  But you are right -- whomever created an anonymous account just to smear Bitcoin and it's developers likely actually is a fully-grown adult and not just a student.  Mea culpa.

Also worth noting that a majority of the network has to agree with the changes in the client and update as well, so it does have a distributed nature regardless. Although, as the network currently stands, as long as a few of the large pool operators update, it is enough.

There is a distributed mechanism to block future updates but not to distribute them.  If the bitcoin.org domain name is seized and the main developers arrested or sued or otherwise intimidated, it would be a long time before the majority of the network figured out what to update to, if anything.

These problems are solvable most likely but just saying "we can update the client if we need to" in response to an actual vulnerability is not a long term solution.

The blockchain genie is out of the bottle.  Soon, block chains aren't going to be used just for virtual curriencies, but in a hundred other applications too.   Distributed naming systems, birth certification, obituaries, legal notices, deadline verification, identity management, and many others we can't even imagine right now.

In fact, block chains are only the beginning. The world will see an abundance of new technologies that will make the following inevitable:

data promiscuity
data ubiquity
data permanence  

Lawrence Lessing argues that the legal system eventually adapts to technological change, not the other way around (http://www.authorama.com/free-culture-2.html).

The point is, some jackass isn't just going to write CP to the BC,  Some jackass is going to write CP into RFID-tagged milk cartons in the supermarket. Some jackass is going to write CP into CCTV cameras, and vehicle sensors, and patterns of sand grains.  Some jackass is going to encode leaked state secrets in bacterial and pollen DNA.

One day, we will all be covered in insurance.aes and we are all going to have parrot porn coming out of every orifice.  

The law will change eventually, and it will stop prosecuting people for data "possession", unwitting or otherwise, it will prosecute for data divulgation alone, because,

If you are talking about Reuben Grinberg's (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1817857) paper, it's a good analysis, but his conclusion that Bitcoin could be a security is based on a misconception of the nature of the Bitcoin community/ecosystem.

You are completely right, block/hash chains are useful for everything in which you want to make sure it is not possible to remove or insert intermediate records.

It started with source control. Bitcoin is like 'git for currency'. Except that forking is frowned upon instead of encouraged :)

All very good points.  I just hope the general public become aware of the unstoppable dissemination of "banned data" before it's used to hit miners over the head.

As mentioned above, the OP was copied from "ComputerScientist" from another forum. The "real ComputerScientist" provided a PGP key (http://www.fatwallet.com/forums/finance/1090435/m15966453/#m15966453) there against which to verify his/her posts.

I'll only comment on a few specific points.

I don't think anyone can honestly refute his/her accurate characterization of a vocal group within the forum, which is the de facto official forum. This is a serious problem in that this is effectively bitcoin's "public face." And it is ugly. Talent and other important resources are likely being scared off. People like CS who actually take the time to provide lucid critiques of bitcoin ("s" left some time ago, taking his/her rather insightful posts with him/her) are unlikely to bother in this forum. It takes pretty strong will to put up with the constant abuse that even modest criticism provokes (see the typically incoherent "discussion" around the very real problem of mining pools and the Byzantine Generals' problem - lots of people just missing the point). Frankly, the moderators don't give me much confidence in setting the tone required to foster real discussion. This place has been an echo chamber for quite some time.

I am not qualified to comment on his/her characterization of the core developers' technical abilities. However, the unfortunate fact that the lead developer is not overly concerned about the appearance of accepting money from a government agency does not instill confidence.

Basically, the situation is far more stark than all the resident fanbois want to admit. Aside from technical and legal questions around the "exchange," which is almost certainly being manipulated, the network remains alarmingly fragile and highly centralized (despite its oft-touted x terahashes/sec), and serious questions regarding the transition to mining for transactions fees are being deferred. The aforementioned extreme anarcho-capitalist/libertarian ideology is seeping into what should be technical issues. Vocal regulars are far too unrealistic on nearly all aspects of the existing economy, such as it is, or how to go about legitimately enhancing it. There exists an unwavering faith in the "free-market" to automagically answer those questions in the future. Left unchecked, these attitudes are likely to relegate bitcoin to exclusive use by criminals and survivalists.

Is there any hope for someone with resources to set up a mailing list?

So what are you saying with he's "not overly concerned about the appearance...". He should have kept silent about it? I think he gives a good example by being very transparent, but hey, it's all about appearance.

Way to miss the point. He disclosed the fact that he is going to accept money. To many people, this gives the appearance of shadiness, which is still not good enough. Is this really so difficult to understand? This all goes back to the point of the echo chamber and "hero worship" which is endemic to these fora.

I simply give him the benefit of the doubt, that is far from "hero worship". When he gives me a reason to doubt him I will, but I see no reason for that personally yet. He could just as well have taken money from the CIA and not talked about it, and we'd never have known.

Yes, better for appearance, but not better for integrity.

The "head developer" should recognize that he has accepted a role which requires him to be above reproach. This responsibility extends to us as well. It means that we should not let people get by with the "benefit of the doubt."

Just because he didn't do something worse doesn't mean he can't still do something better.

I don't want the discussion to center around this sub-point, but please understand that scrutiny is what is needed in all aspects of bitcoin. This is just one aspect to consider. Why not try harder?

I agree with you that scrutiny is important, it is a fledgling project and still far from perfect. But a lot of people come with criticisms without any ideas on how to improve things. If you start out hostile and railing at the community, that's what you get back.

For example.. what to do if you really distrust Gavin? Yes, it'd be possible to fork Bitcoin and reject all Gavin's commits from it. But what would one gain? Do you think he introduced backdoors? What power does being 'lead developer' of bitcoin really give you? I think he has a lot of work and relatively little gains. It certainly doesn't make him rich.

I'm sure Linus also took money from a wide range of different companies/organizations. Does that make people distrust Linux?

Also, this is the only project of its kind at this point that has any kind of traction. For better or worse, people flock to that. In a way, it'd be better if there were competitors.

Scrutiny is important but not-well-thought out scrutiny is bad since we don't get good scrutiny. That's partly the fault of the community since we didn't make an attempt to answer with a FAQ link or write down the answer in the FAQ.

I will attempt to refute it. I will assume people like "s" and "cs" are talented or important resources. I will assume their arguments are lucid.

After assuming all that, I have to wonder, why would anyone that intelligent post in the general forums, versus the technical forums, and even if they encountered such hostility in the technical forums, why wouldn't they be able to ignore it? I mean, these are brilliant minds that can't deal with the concept that forums are public and anyone can post opinions in them? It just doesn't add up to me. Take Mike for example. He continues to post in the forums. His posts are well thought out and well written. And he doesn't seem to be affected by trolls, politics, etc.

So, you want a decentralized currency, but you fear that the users may be too ignorant and too uncouth to post publicly on the forums because they will drive off the intelligentsia? Can I call bull shit? If the idea has merit, the adopters won't care if troglodytes are adopting the idea as well.

So, when reading the posts of such intelligentsia, I have to wonder, why do they bother mentioning such silly bull shit, when their posts should reflect their brilliance in the context?

The only answer I can come up with is that they have an agenda. If their ideas have technical merit, why bother with anything other than technicalities?

If you post with an agenda, don't cry when posters with different agendas respond.

It would be nice if weusecoins or whoever had an ubuntu-style nice forum.

I like it here, but I understand that hostility and extremist views (even if consistent and morally admirable) may not be everyone's cup of tea.

I just want to point out that this isn't a recent "finding." It is by design.

See: https://en.bitcoin.it/wiki/Genesis_block

It is good practice to provide evidence when making such a serious claim to avoid looking like a complete idiot.

I was about to reply that too. We have at least to helpful forums:

• Development & Technical Discussion: Questions about the protocol, potential security weaknesses, improvements to the protocol
• Technical Support: General technical problems with bitcoin software

General discussion, Mining are more hostile. That is at least in part because people are tired of answering the same kind of questions and refuting the same type of arguments over and over again. Economics is like a mosh pit, that's a loaded topic everywhere not just in this community.

Keep your post technical and dry. Make sure you don't mention loaded words such as 'law', 'legal', 'terrorist', 'government' and so on. Most people here are intelligent and not 'troglodytes', but are attracted to a distributed currency because they have trust issues. Apart from that it is completely useless to discuss legal issues here, as they are different per country, and no law has (afaik) ever been changed after discussion on a forum.

Also if you make one post where you criticise bitcoin and its community from six different angles, you will attract the worst people as it turns into a chaos. I'd advise making a separate topic about each technical issue that you have encountered.

This topic shows a good example: https://forum.bitcoin.org/index.php?topic=9399.0

Just out of curiousity, has anyone else paused to consider why this person posted only once and then left?  I'd have to say that as a community we're not exactly welcoming to newcomers.  What exactly is it that is accomplished by yelling loudly enough at someone that they go away, even if we do think they were wrong?  It seems to me that engaging this person more delicately would have resulted in a fairly worthwhile conversation.  Just my .02 btc.

Just pointing out that yet another person has noticed this.  Of course we're not all like this, and the description here is not even a fair characterisation of most bitcoin forum users.  But this is still how the forums tend to come off--worth thinking about.

He strikes me as a bit of a hot-head.  He comes in here and right away insinuates that most of us are criminals.  What kind of reaction does he expect after that? That everyone just gives him a big friendly smile?

Anyhow, I thought that most answers were factual and addressed his arguments, ignoring the serious insinuation he made in the beginning of his post.  That is far nicer than most forums I have experienced.

If you're careful not to take the post too personally, I think the main thing to note is that this person took the time to type out some detailed and reasonably well-expressed thoughts, as compared to people who just spew "OMG this is a Ponzi scam!!!".  I realise that in highly technical communities like ours soft skills aren't heavily emphasised to begin with, but I personally think there is a lot of low-lying fruit here consisting of people that could fairly easily converted to formidable allies with just a little TLC.

*swooon*:)

If you had bothered to read the thread you would see that this rant was originally posted elsewhere and was copied here by someone other than the original author.  The original author had no intention of even posting here, let alone putting any type of credentials behind it.

So, it was 100% intended to denigrate Bitcoin in the eyes of the public, and not to provide useful criticism.

I have to say that I'm somewhat surprised by the number of regular posters who seem blissfully unaware of the vast resources arrayed against even the idea of something like a "de-centralized digital currency".  Personally, I just mentally write-off every anonymous poster making accusations of child porn and terrorism as paid shills posting with an agenda.  So it's disconcerting to see that this type of information warfare can actually effect it's intended purpose of more widespread calls for censorship and division among even reasonable members.

You're right, I didn't read the whole thread.  I'm sometimes guilty of skimming or just reading first and last pages since there is so much content on the forums these days--thank you for calling me on it.  But I still think the post could have been interacted with in a more useful way.  First, wonder about the psychology that drove both the original author to write the piece and then someone else to come here and post it.  Then, once the original source is identified, try to compose an effective reply or even just take the opportunity as a community to examine why these types of reactions are so common, and how we might be able to proactively address them.  There's nothing wrong with people having a lot of time on their hands, but if they apply themselves productively here BitCoin could really stand to benefit.


I think you're going a little too conspiracy theory here.  I seriously doubt that anyone with money to spend on destroying bitcoin would spend it producing internet forum posts.  It seems a lot more likely that these types of responses simply reflect either people's initial impressions or other people's viewpoints that they were exposed to.  The pretty clear lesson here is that BitCoin has a huge image problem, and it's well worth addressing it.  Even if some posters were "g-men", they're not faceless drones.  What better opportunity could you have to engage someone who is in a position to have a crucial impact on BitCoin's future?  It's time to put down the novels and political rhetoric, and start interacting with other human beings.  Such as me:  you're seriously interpreting anything I've done on these forums as a call for censorship and division?  Be real here.



Ouch, gene.  I hope I'm not meant to take this personally! ;)

Why not?  It's cheap, effective, and nominally legal.  US agencies have run disinfo campaigns for decades.

The Pentagon's War on the Internet (http://www.informationclearinghouse.info/article11901.htm)
Military's 'sock puppet' software creates fake online identities to spread pro-American propaganda (http://www.guardian.co.uk/technology/2011/mar/17/us-spy-operation-social-networks)

I think once you have US Attorneys calling alternative currencies "domestic terrorism" and threatening to infiltrate and disrupt them, it's time to recognize that some conspiracies are, in fact, real.

I hope you interpret it as a challenge to uphold a better standard. Allow me to draw your attention to one particularly charming thread (http://forum.bitcoin.org/index.php?topic=8582), which illustrates my point. I'll post some relevant excerpts:


The individual then clarified himself:


Your response (http://forum.bitcoin.org/index.php?topic=8582.msg124727#msg124727) made it clear that advocating the murder of "banksters, politicians and soldiers" is acceptable here. I should note that at least one more "Global Moderator" was aware of these posts.

This is disgusting and shameful, and I'll not mince words. Your response was pathetic.

eMansipator is a diplomatic non-confrontational communicator type person, it's just his/her apparent nature, and in my opinion is a good and useful thing. However I think we do need a harder line against such posts expressed through free speech. Murderous/bigotted/conspiraloon type attitudes need to be confronted (strongly) in the public arena. A bitcoin-awakening world should be assumed to be watching at all times.

At the end of the day it's what the forum community chooses to do about it. If people don't mind this kind of talk passing without strongly-opposed comment, well then that's all part of the bitcoin package. If bitcoin ultimately fails then perhaps it's for the best in the eyes of the wider world if bitcoins strongest proponants were happy to have talk of people being lined up and shot as useless wastes of resources pass with an indifferent/softline shrug. It could be said "well, perhaps we dodged a bullet after all, who needs some weird genocidal anarcho-swarm rocking the boat with their funny-money anyway, revolutionaries are always so shooty and judgemental, fuck em".

Just my 2 toshi.

My response that drew attention to the same issue you're concerned with by replying like this,


then warning that


and splitting his comments out of the stickied, high-visibility thread?  Put the gun down, gene:  we're on the same team.

Experience has just taught me that sometimes pointing out the larger issues has a stronger long-term effect than ending up in a flame war, and in this particular case I had recently made my position clear in other threads.  Compare, for example with this one (http://forum.bitcoin.org/index.php?topic=6413.msg94617#msg94617).  I've also started a whole thread (http://forum.bitcoin.org/?topic=4960.0) on the topic to demonstrate where I stand on these things.

But as a moderator I don't get to just make up the rules--there needs to be a community consensus first, or actions like deleting posts (which is the only further thing I could have done) will be treated as censorship and routed around.  Start a thread in meta with your ideas for new forum guidelines and I'll fully back you (Gavin probably would too), but the community has to be on board before the standard of moderation changes.  As it is there was a tooth and nail fight to ban illegal goods, but now (as you might not know because the mods are pretty fast at it) we regularly remove posts that sell drugs, credit card numbers, etc.  Consensus building is hard work--you can't just start wiping things out left and right (as I'm sure people who think I'm being too hard-line will reply next.  Ever hear that proverb that the job of a bridge is to get walked on from both sides?).

You guys need to take it easy. To get outraged by some loon who goes around spouting his murder fantasies is not befitting of an adult. This is the internet. There are content parsing practices that are your sole responsibility in here. Don't feed the troll, don't read the people you don't respect, don't take part in threads you don't value and so on. To blame the whole Bitcoin community for it is childish. To demand for the content you can't stand to be "moderated" is borderline whimsical. It's akin to hating on Facebook or Youtube because you stumbled upon an religious fanatic spouting hateful nonsense. This is a public forum, you don't like some of the content, simply ignore it.


From my standpoint, I think eMansipater is already too tolerant and welcoming with pontificating hypocrites thinking they hold the keys to the universe and the block chain because they read half the front page on the wiki and were told by their grandma that inflation is golden, so you people better cherish that cause you won't get it any better from anybody else in here.

Lastly, to delve in the spiral of forum ethics in this thread only serves to bloat the discussion, the topic of which is for the community to offer new comers answers as to why this critic of Bitcoin is fallacious. You want to discuss ethics and moderation, there's a meta forum for it.

Now to get back on topic, the DoS attack is a joke, and so far the only technical issue this guy is able to raise against Bitcoin, and if I got it right, he states he needs around a million USD to DoS the network down. That casts a huge doubt over his actual skills, knowing Botnets and LOIC are pretty much free of charge. It always amuses me when people speak of how easily they could tear down the network but won't take it to the test net. This gets even better considering the amount of valid technical issues discussed on the forum, which that man obviously didn't bother researching.

His economical and political critics have been debated to death long before Bitcoin even existed...

Lol, knew I wouldn't have to wait too long.  Goatpig's right about this being off-topic though.  Let's definitely continue this in meta, because I believe forum image is a big problem for BitCoin right now.

In terms of my own personal enjoyment of the forum this holds true. But in terms of the bitcoin project itself appearances are important. For every forum reader happy to just ignore loonspuds, there are ten more that are completely put off by the whole idea because of the insane ravings of some internet sociopath that has attached himself to bitcoin.

Quiet acceptance of this sort of thing is bad for the image. I'm one of those that want bitcoin to succeed, and not be tripped up by too high a bullshit ratio on its forums

threadjack done.

Anyone who's serious about improving the image of the forums, join in here (http://forum.bitcoin.org/index.php?topic=9854.0).

just happened to run into this again on fatwallet and thought it was interesting enough to 'bump', as they say.

Holy hell. I can't believe I'm reading a thread here with consistently intelligible and insightful comments. Where have all of you been hiding?

As a relative newcomer to Bitcoin, I can tell you my impressions of the board.  They seem like, well, any other forums on almost any other subject, except for those where the participants know each other personally (i.e., not anonymous forums).  And to offer counter-evidence to the poster who thought it was ridiculous to believe that a major entity, such as a financial or government entity, would bother posting against Bitcoin on an Internet forum, I'll just point out at the prevalence of Twitter messages critical of Bitcoin over the past few days.  If you follow many of them to their source, you'll see that many of them are the same Twitter users who are twittering about Gucci handbags, or S.T.U.P.I.D Technical University for Adults -- they're paid shills.  So someone cares enough that Bitcoin should fail that they're paying money to see it come true.

That said, one thing the original poster said shook me a little.  It's seems obvious now that it would be possible to steganographically encode anything into the blockchain, but the thought that malicious users could plant CP or other malicious content into the block chain is nonetheless a major concern for me.  The day that the average Bitcoin user finds out he or she has been accidentally downloading illegal porn is the day Bitcoin will cease to be a viable currency.  The press will have a field day.  Is there no way to avoid this vulnerability?  Mike Hearn mentioned that users who didn't want to store such content could simply delete non-financial data, but how easy would that be to do?  Manually delete the blockchain after each financial transaction, and then re-download the entire chain before the next transaction?

Thanks for the bump unk!