You need a computer. That alone raises the price of entry. With bank notes, you need eyes.


Can't do a whole lot with a hash value; a computer is needed. Cash is low-tech and works. Anywhere. Any time. Bitcoin doesn't come close. Here's an experiment. Go to a local market. Try to buy a loaf of bread with bitcoins. Try again with the local currency. Report your observations. Make a conclusion regarding bitcoin's portability.

Try this in a remote area in your country. Tell me what the local hillbillies would tell you to do with your bitcoins if you want to buy something.

I see potential in digital cash, but to compare it to bank notes is just unrealistic.

This remains to be seen. Seems pretty easy to lose a wallet. Or for the network to be attacked.

Definitely not yet. Also, how to recognize an abstract mathematical concept in a way analogous to cash?

Not like cash. At least, not yet.

I cannot tell if the last sentence is meant seriously or in jest.

I hesitate entering into discussions where terms like "libertarianism" start getting thrown around. At least in the US, the term has been reclaimed by far right-wing elements and is associated with the myth of the rugged individual that lives on the frontier and can survive all alone. If you look at what the cypherpunks actually wrote, they were anarchists with strong socialist undercurrents. Their ideas of online p2p communities and strong collaborations rooted in solidarity have basically nothing to do with what people think of libertarians today. Also, "free markets" now essentially mean socialism for large corporations, paid for by normal people and assisted by favorable policies as enforced by central banks. Capitalism, as envisioned by Adam Smith, does not exist today. I encourage anyone here who disagrees with me to go and read the writings of the cypherpunks in the 90s and Adam Smith. Digital cash may facilitate a true free market by disallowing a corrupt central banking authority that favors the interests of large corporations. This is indeed a strong democratizing force - one which forces all to play by the same rules. I also suspect (and this is conjecture) that simply by forcing all to play by the rules, wealth will be less likely to accumulate into the hands of very few, as it has so many time before. The extent to which wealth is accumulated by the very few is largely the result of what I regard as unjust "socialism for the rich and tough love for everyone else." Social libertarianism and social anarchism are not contradictions in terms.

It depends which point of view you take. If you take the point of view of a rich landowner, then democracy sure doesn't scale well. If you are a regular person, it scales a bit better.

That is the purpose of propaganda.

Quite true. They knew that they needed to establish a government that would protect the interests of rich landowners from regular people. They were very explicit about how they regarded non-property holders - as dangerous and stupid masses from which the rich needed to be protected. Madison and Hamilton both were shockingly open about it.

From http://en.wikipedia.org/wiki/History_of_the_United_States_Senate
I leave it to the readers here to decide what they think is right or wrong about what they thought.

The same ideas are now working for the interests of large corporations, which essentially own governments. Incidentally, none of what I am writing here is particularly controversial, but I encourage anyone who is interested to investigate these matters on their own (i.e. don't take my word for anything).

Yes. If there is great inequality, then a democracy will tend to eliminate the inequality. To maintain inequality, democracies must be avoided at all costs. This is not just US history. This is the history of western civilization.

And you are saying these are good things? I think you must be on the wrong forum.

Your last sentence articulates well the contempt for democracy inculcated by western "liberal" education. This thinking leads to centralization of power and capital, which are exactly what frameworks like bitcoin are designed to dismantle.

I'm in favor of democracy. A truly democratic government by definition would tend to decentralize control and would look very little like what we currently regard as governments. Don't mistake what we have in western countries with democracy. That is all just garbage they teach kids in school - what we have are republics and parliaments. As FatherMcGruder mentioned, a democratically controlled infrastructure may look like a co-op. There are small manufacturing shops in the US that take this form. The workers and engineers own the factory and manage it democratically, not like most companies. Caveden, it is certainly possible for networks to be organized at the local level and extended, using a co-op or even volunteer model. Some networks like this already exist. Bitcoin can be a complementary tool to raise capital and establish more and more reliable networks. I'm not smart enough to foresee how this would happen, but history shows that these sorts of societal structures are at least possible. Pre-Columbian Native American cultures in North America give a good example.

Crypto is a tool. What is most important is the infrastructure -- the physical network, which is owned by companies and governments. The networks we build upon them (tor, bitcoin, torrent, etc) are still ultimately vulnerable. If your ISP decides to make your upstream 1kbps, then you are effectively a "content consumer" and no longer a peer in a network. Carrier grade NAT (more and more common) can also essentially cut you off from participating in p2p. These trends have been apparent for many years now.

As others have mentioned above, parity is not what matters. We are rapidly approaching parity already. What matters is is how widespread it becomes as a method of payment. In other words, how reliable it is perceived to be. Expect a smear campaign to discredit it (and this community) as soon as it begins to gain traction with the "general public" and a follow-up attack to the network via legislation and technical means.

If bitcoin survives these assaults (no guarantee at all) then a BTC will likely be worth 10^n USD for some value of n greater than 2.

We should be busy trying to make the network as resilient as possible. This reliance on IRC and a few hard-coded nodes is an obvious weak point. The protocol should be hashed out rapidly and implementations should be as secure as possible. If the protocol is set, the software is solid and the network strong, then bitcoin has hope. The value will sort itself out naturally.

Those 128 bits refer to the key-length of the symmetric cipher (e.g. AES, arc4), which is quite secure and actually controlled by the webserver. The asymmetric cipher (e.g. RSA) has a much greater key-length, typically a multiple of 1024. An RSA key with length 1024 or greater is widely considered secure, although more people are going to 2048. SSL, OpenPGP, etc are considered hybrid cryptosystems since they use both types of algorithms in a complementary way.

Controlling the infrastructure is more important than anything else. This is analogous to workers controlling the means of production.

http://www.libertyandsolidarity.org/node/104

This interesting read explores some of the dynamics involved with the many facets of crypto-anarchism. It looks at the issue as a class struggle. Bitcoin is specifically mentioned. I should also note that none of the ideas here are new. These issues have been discussed since the early 90s.

Here are some links for the most common/popular GnuPG packages.

For Windows:
http://www.gpg4win.org/doc/en/gpg4win-compendium.html

For OS X:
http://www.gpgtools.org/

For Ubuntu:
https://help.ubuntu.com/community/GnuPrivacyGuardHowto

For Thunderbird (cross-platform):
http://enigmail.mozdev.org/documentation/quickstart.php.html

GnuPG and Bitcoin are complementary tools. Without GPG, a person cannot truly leverage the power of Bitcoin, secure his/her wallet or establish a strong trust identity.

I think this is correct. If bitcoin is adopted in any meaningful sense, a unit BTC would have a value of a few orders of magnitude greater than a unit of any of the current major fiats.

Bitcoin gives users control.

Control to:
trade/speculate freely, (semi|pseudo)anonymously
protect themselves against enormously powerful interests
work and live within a decentralized framework of commerce
... much more

Also, control to:
instantly lose all their bitcoin savings

There remain real limitations.

Control frightens many people; any powerful tool can be both liberating and dangerous. Firearms and speech are good examples. In fact, most currently prefer for someone else to be in control. Such people will defend centralized systems of control, despite the fact that those systems often work against the interests of normal people. The discussion cannot be rational, at least until people start becoming more comfortable with control (and responsibility) and start rejecting the standard scare tactics as outlined by the OP. This takes time and ongoing commitment (difficult, never-ending work) against strong opposition and concerted efforts in propaganda which amount to brainwashing.

GPG comes standard with many (most?) Linux distributions.

Here is a good howto for Ubuntu:

https://help.ubuntu.com/community/GnuPrivacyGuardHowto

It works with email programs like Evolution, KMail and Thunderbird. Of course, it can also be used to encrypt arbitrary data.

You can install it on other platforms besides Linux: Windows (with support for Outlook), OS X (with support for Mail.app), Solaris, etc.

Be careful with these methods:

http://freshmeat.net/projects/stegdetect/


Stego detection is an area of active research.

I called myself cautiously optimistic. The qualifier is crucial. I don't see how useful it is to assume honest actors; this is not the case that matters. The trust models that are currently being used by this community will not scale. The time to tackle these issues is now, not later.

So it isn't worth discussing? I thought this was a technical forum.

I'm cautiously optimistic, but I know that the wild-west atmosphere that will soon surround this emerging technology is going to nourish some nasty characters. Guaranteed.

Sheep go with the group and don't ask hard questions. Sheep then get slaughtered.

If this early adoption cohort takes things seriously, then bitcoin might have a chance to change the world. If not, well... things like this don't always get second chances to succeed. Powerful people are watching this closely and are looking for cracks.

Why? I don't have to prove to a shopkeeper that I have enough money to just look around in his store. If I want to buy the item and I don't have enough money in my pockets, the transaction will fail at the point of sale. He loses nothing, and I lose nothing. This analogy generalizes, too. Again: credit vs. cash. Bitcoin is digital cash.

This seems to be the most appropriate place to discuss various proposed modes of pool cheating and possible workarounds.

When I first heard of pools, I (along with many other, I am sure) immediately thought of the possibility of "micro-skimming." These are old attacks, but for a recent example, read the following link:
http://www.wired.com/threatlevel/2010/06/ftc-sues-scammers

Some people seem to think that these attacks are a waste of time, because of the small amounts being stolen at a time -- and for a small number of transaction this is true. However, the attack scales well. In fact, it scales well in two ways: 1) the more people/transactions are involved, the more money you steal and 2) the easier it is to hide what you are doing since the skimmed amounts get "lost in the wash." As long as the attacker doesn't get too greedy, the attack is difficult to detect.

My suspicion was raised in part because payments were being made in some seemingly arbitrary way. In fact, the details of how this works in slush's pool remain unclear. I hope that by discussing various forms of the fraud discussed in the above linked article, we can perhaps develop some resistant method by which we can minimize or eliminate the possibility of such attacks. How would you design a pool to cheat people out of money?

As of now, it seems easy to lie about the number of total work units required to solve a block. There is nothing to prevent the pool operator to open a few accounts and attributing some modest number of work to those accounts, increasing the number of total work units required, and dividing the 50BTC proportionally amongst all accounts, including his dummy accounts. With enough blocks, he can snag quite a sum of money. Honest clients will see that their work units are being properly accounted, but they can never see that their effort is being diluted by the operator.

As a bonus, the operator can also appeal to people's sense of gratitude by asking for donations for running his "generous and free" service.

I'll wager that if I have thought of this, somebody else has already implemented it.

How can this be defeated? Comments? Suggestions?

This functionality is redundant with that offered by the (existing, well understood, established, portable, and widely implemented) OpenPGP standard, and others. Saying that it isn't redundant because bitcoin doesn't already offer it doesn't make much sense. This kind of thinking is how the world ended up with atrocities like MS Outlook. I've said before that I like the Unix Way (TM) of doing things, and this is because there is just less room for disaster.

I bolded a section in your previous reply. My question stands. How can you ever establish an identity (such as when saying that you control a bitcoin account) without some external  bootstrapping mechanism? You can't ever "prove without a doubt" that you control a private key. The best you can do is convince someone to trust you to identify yourself correctly and not divulge your private key. I wonder if you understand the distinction that I am trying to draw.

And by bitcoin's nature, which you seem to think I never bothered to try to understand, you cannot keep secret the balance of an account after disclosing the ID. For an arbitrary account number (for which there is a record after a transaction), anyone can check its balance at any time, whether or not anyone knows who has ever controlled it.