Quite the opposite, with electronic systems it's not particularly difficult to make fraud almost mathematically impossible. That the electronic systems in actual use don't do that speaks volumes about the priorities of the people who deploy them.

It is possible to devise electronic voting systems that:

1) Make it possible for a person to prove that a vote wasn't counted if a vote was not counted.

2) Make it all but impossible to determine how any particular person voted.

3) Make it all but impossible to coerce a person to vote a particular way.

4) Make it all but impossible for any votes to be altered after they are cast.

5) Make it all but impossible for unauthorized votes to be slipped into the system.

Doesn't every optical semiconductor have holes for the light to pass through?

What seems suspicious to you exactly? It's an online wallet, so they commingle your finds with other people's funds, right? You asked them to send 20 coins to you, and they did. What do you care what else they do?

In this case, it's just change. They had 89.1 coins that they paid you out of, so they had 69.1 left over that they send to another account they control. But even if it wasn't change, why would it matter to you what else they do?

You may want to consider offering, though only as an option, to let people withdraw their fiat currency balances in Bitcoins. You can use the rate from another exchange or you can fix the week's average rate. This is probably easier for you to do than mailing people checks, especially from closed accounts. And at least offering it will reassure people that they'll be getting their money back.

It should last many years, even running at full load constantly. Pretty much all modern solid-state computer parts are designed to run at full load for years and should not suffer reduced lifespan so long as power and cooling is not sub-standard. It might throttle if it gets too hot though. That will affect its short-term performance but should not significantly affect its life.

If this is not the case of the RaspberryPi, it would only be due to almost inexcusable incompetence.

The only issue I can think of would be whether the RPi can supply enough power on its USB port. Using a powered hub should solve that problem. You could also use any cheap SoHo router (with a USB port, of course) that can run Tomato USB or DD-WRT.

Except it's something in the past that nobody can change and has nothing to do with Bitcoin going into the future. You can buy at today's prices and early adopters can sell at today's prices. So any future changes in Bitcoin prices are equally available to early adopters and today's adopters.

How would these transactions get in the block chain exactly?

Creating a bitcoin address has no effect on anyone else whatsoever. Creating an address is purely something you do locally. So if they did this, nobody would ever even know.

Now, in order to take your Bitcoins, they'd have to find a private key whose corresponding public key has the same 160-bit hash as your key. The size of the hash was specifically chosen to be way too large to make this possible. The consensus right now is that a 104-bit hash would be safe from such an attack, even against an attack funded by all the resources the human race could muster, until around 2050. A 160-bit hash is 72,000,000,000,000,000 times harder.

I'll repeat it, because I like to say it at least once every few months: Long-term, predictable currency-driven deflation is essentially impossible.

If I give you 10 Bitcoins today, you can hold onto them and have 10 Bitcoins next year. You also have the option of doing anything else with those 10 Bitcoins during that year if you wish. So 10 Bitcoins today must be worth at least as much as 10 Bitcoins next year -- because it's that and then some.

Long-term, predictable deflation says that 10 Bitcoins next year can be reliably and predictably more valuable than 10 Bitcoins now. That would require the option to use the Bitcoins early to have less than no value at all, which is impossible.

As for deflation's effect on loans, permit me to quote my favorite expert on economics arguing that loans and borrowing are not affected by currency-driven inflation or deflation:

Sure, but only because you made a profit on the purchase that you are now giving away for no logical reason. You can't expect to make it up by selling above market some of the time because nobody will buy from you when you are above market. So when you have gains due to good luck, you'll give them away. When you have losses due to bad luck, you'll be stuck with them. And consumers will shun you because your pricing won't be reliable.

Right, which you start paying in 30 days or so.

Sure, at that point. But that's the non-chargeback case. That's not what happens if you reverse the charge.

No, one is not "just like" the other. When you buy a house, the seller has *no* agreement with the mortgage company. The mortgage company just pays them. When you buy something with a credit card, there is a contractual arrangement between the merchant and the credit card issuer. These two situations are simply not comparable at all.

I don't understand what you mean by "with my logic". These are two different factual situations. With a home mortgage, the mortgage company only pays the seller. With a credit card, the merchant has a contract with the bank that sets out a different relationship. This is a factual difference, it's not something you can logic out. You have to read the contracts to understand the relationship. (The contracts are not really freely negotiated though. The credit card issuer tells the merchant to take it or leave it, and Federal law sets out many of the requirements.)

To mitigate long-term risk, but not short-term risk. And to avoid having to do credit inquiries and avoid having to meet other requirements. Nevertheless, the bank's agreement with the merchant permits them to refuse to collect from the consumer on behalf of the merchant. A merchant cannot use a credit card issuer to protect themselves from the risks associated with their own non-performance and the consumer need not sue the merchant if they have not yet made payment. That's what the contracts between the merchant and the credit card issuer say.

No, the bank is extending credit to the merchant in the case of a credit card. Why do you think credit card companies bother to investigate merchants or closing down merchant accounts for fraud? The credit card company is collecting the principle on behalf of the merchant and if you do not owe the merchant the principle, you do not owe it to the credit card company. That is the way credit cards work, at least in the United States.

By the way, in the vast majority of cases, this really does benefit the merchants. Very few people would buy a camera from an online store if they had to investigate the camera and the store the way you have to investigate a real estate purchase. And, of course, the credit card issuers don't make much money if consumers are afraid to use their credit cards.

Yes, but it is an extension of credit (to some extent) *by* the merchant.

It is. And one of the things a customer might do when someone who extended them credit fails to comply with the terms of the agreement is not pay them.

The bank didn't extend the credit until and unless the service is completed and accepted by the customer. Until then, the merchant has extended the credit.

Right, that's because mortgages are not like credit cards. In the case of a mortgage, the bank is extending credit directly to the mortgagee.

The merchant does have to pay a chargeback fee. But they are still absolutely free to collect directly from the consumer. If the chargeback was legitimate, the merchant *should* be out the money. If it's illegitimate, the consumer still owes them the money and they can still demand payment or sue the customer. That's the risk when you extend credit -- the recipient may not pay you and you might have to sue them.

At least in the United States, credit card chargebacks are nothing like ACH chargebacks. It's simply the bank electing not to collect the debt on behalf of the merchant because they are not convinced it's legitimate.

If you mean ACH chargebacks, 100% agree. If you mean credit card chargebacks, 100% disagree. (The big difference is that an ACH transfer is an actual payment. A credit card is an extension of credit.)

If you can't beat 'em, join 'em.

Authenticating the key ID is not sufficient. Creating your own key with the same ID as a given key is much easier than mining a Bitcoin block. You either need to obtain the key from a trusted source, validate the key with cross-signatures with keys you've validated from trusted sources, or validate at least 24 hex digits from the key fingerprint.

Is there a solipsist here, or is it just me?

This is what I first thought when I heard about the Linode hack. It stunned me that people would run these kinds of things from low-end virtual servers. But it just happened that I always worked for companies that were ISPs, had ISP businesses, or had server infrastructure that pre-dated easy virtualization. I was quite surprised to find that use of virtual servers for business-critical infrastructure and highly-sensitive information is now quite common. I'm still not sure how I feel about it.

Right. There's a continuum from damages that certainly should be the responsibility of the wrongdoer to damages that are too indirect. It comes down to whether this is a case akin to lost profits (which would be covered) or acts of a third party (which wouldn't unless they're forseeable, which these aren't).

"For the breach of an obligation arising from contract, the measure of damages, except where otherwise expressly provided by this Code, is the amount which will compensate the party aggrieved for all the detriment proximately caused thereby, or which, in the ordinary course of things, would be likely to result therefrom."

Honestly, I don't know which side of the line this case falls on.

Or the fraud was largely the result of one coordinated group and they preferred TradeHill for some reason. Perhaps they just tried TradeHill first, it worked, and they had no reason to try anything else. Perhaps TradeHill processed things faster. Or perhaps Mt. Gox had faster/better cash outs, so they wanted their money in TradeHill so they could buy Bitcoins to cash out at Mt. Gox.

Where are you seeing this? I was under the impression they bought bitcoin.com (and a few other domains) for $1 million.

The damages are a consequence of their fraud. If someone intentionally and wrongfully throws a rock through your window when you're not home, and as a result, the rain damages your painting, shouldn't they also be responsible for the damage to the painting? Replacing the window doesn't make you whole.

The legal system can't work that way. Dwolla should have eaten those losses. If the lawsuit just makes Dwolla pay the amounts they should have paid anyway, then all the harm they caused is unaddressed. There is no reason Dwolla should not be responsible for the consequential damages their fraud caused. And given that was seems to be an intentional and considered fraud, there should be punitive damages as well.

No, that's true. But if a thief steals the money they would have used to buy the widget and they lose profits as a result, the thief should be liable for those losses as well.

Yes, and had Dwolla simply severed its relationship with TradeHill, the situation would have been completely different. They certainly had every right to do that. Sadly, that's not the choice Dwolla made. But they have to live with the consequences of the choice they did make.