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There are no exchange of bitcoin at all in this swap - it's all in USD. You guys are talking about a future contract.
This is more like your Costco price warranty. You have Bitcoins today but if it's worth less in a year, you get the difference. However, in the case of the swap if it's worth more then you pay the difference. Also, the reference may not be today's price as long as both parties agree to it.
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Electrum stores the seed and the rest of the wallet data in the same file. It's not a good idea because the file is written over with new transaction data and there is risk of losing the entire file in case of a crash.
Better would be to keep the seed in a read only file and application state in a writable one.
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How about storing your private key on the blockchain? Encrypted of coarse.
If you want to store bitcoin for someone 9 generations down.
How else would you store your bitcoins for 10k years?
Companies, clouds, hardrives can disintegrate but the blockchain will always be there.
Where would you store the decryption key? |
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If done correctly and soon I think even major changes don't have to be catastrophic for the economy. The way changes are implemented determines the effect. It's better to know about a vulnerability and fix it now than to recover from the exploit later. Some things will always need to be fixed. Isn't it better to tackle the large problems now rather than wait until the economy is even larger?
All Hearn is really saying is that Bitcoin needs more developers. I'm saying it needs more professional paid full time developers and fewer free time hobby developers. Of course he's not going to say that because it's insulting to his colleagues.
I was replying to someone who had a fairly casual approach to bug fixing. If it breaks, no worry we'll fix it. Whether bitcoin needs full time developpers or hobbyists is open to discussion but we need to a way to rollback. I'm sure that everyone in the software business will agree that using production to test out high scale deployments is bad idea. Doing so without rollback is crazy. Now the economy is already pretty large but still minuscule compared to the real world yet we are not generally concerned about the product stability. The topic is "Bitcoin Core Developer says Bitcoin Too Fragile and in its Infancy". Immediately some people jumped and called him ignorant, biased, etc. Ready to put his head on a pike for blasphemy. In my opinion, if we want to have it reach out to everyone and be a serious competitor to Fiat or even VISA it is too fragile and in its infancy. This is not a bad thing. Everything has to start small. It's a serious problem if we think it's ready when it's not. |
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It is not actually possible to "turn off" or "disable" the bitcoin software. That is not a feature of bitcoin. The closest thing to this that could happen is to recommend that users not spend any of their bitcoin. This did happen somewhat when Gox announced that they were suspending withdrawals due to malleability as other exchanges followed, however mining still very much continued and people that had bitcoin in wallets they controlled personally still were able to and did spent their bitcoin.
Theorically, not possible. In practice if the software crashes or worse produces unexpected results it will be down. |
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With due respect to Mike, the human element is what ultimately makes bitcoin resilient. No matter what current problems exist, there is a huge body of people with incentives & knowhow to keep bitcoin going. Real world example: March 2013 chain fork recovery. https://github.com/bitcoin/bips/blob/master/bip-0050.mediawikiTheoretical example: If the core SHA256 hashing algorithm is compromised, software cannot automatically recover from that. It will be humans who decide the best course of action for the network to take. It will be other humans who evaluate that judgement, and agree (by downloading & using new software) or disagree. But while we figure it out, the entire system is offline and what does the economy do in the meantime? If the software protocol (rule set) is broken or not working effectively enough then you need to stop all connections and implement a change. Bitcoin is a set of rules that connects clients together to make magic happen because all the clients know what to do and they do it all by the rules that are set up. You may have a little thing that needs to be fixed that is in the wrapper. You have to stop everyone's connection (shut down the network) put in your little fix (give everyone worldwide a new copy of the fix) and then restart everyone. If the change is small and you tested it well for every outcome then we all march along happily ever after. What if the change is big? What if the base set of rules that make your release work needs to be changed because it was broken from the start? Your little test net group most likely won't be big enough to discover every problem and everyone around the world will be running a broken Bitcoin. What the economy will do in meantime is sit static waiting for the fix. There will be issues that can't be corrected because it's to late the damage is done (think Mt Gox - malleability). But what are the draw backs of not fixing the problem, not taking the risk? Then you end up with an even bigger problem because your are shutting down an even larger economy that can have even more damage done and even more lost money. There is no logical choice other than to fix the problems now and that's not really a good choice it's just the only thing you can do. That's the problem with letting this little experiment get so large before you fix big issues. As a dev when you work at a big company then you benefit from a group of sometimes thousands of computer scientists and software engineers working on the same problems. We have a test-net and a handful of volunteer and paid professional and semiprofessional programmers some working only part time. They have done a great job so far making sure that things stay running and fixed but they have a working disadvantage. Bitcoin has been balancing on the edge of sword since it's release. You need a lot of users to drum up interest in development and you need a lot of developers before you have a lot of users spend money. I was just trying to point out that any suspension of service would be catastrophic for the economy. If bitcoin is used by everyone and no one can do any purchase while developers fix and deploy a new version, we would be back to the stone age. The user I was replying to didn't seem to realize that software that must run 99.999999999% of the time must be treated very differently. Bitcoin has a long road ahead but hopefully it can grow slowly just like the internet did. |
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With due respect to Mike, the human element is what ultimately makes bitcoin resilient. No matter what current problems exist, there is a huge body of people with incentives & knowhow to keep bitcoin going. Real world example: March 2013 chain fork recovery. https://github.com/bitcoin/bips/blob/master/bip-0050.mediawikiTheoretical example: If the core SHA256 hashing algorithm is compromised, software cannot automatically recover from that. It will be humans who decide the best course of action for the network to take. It will be other humans who evaluate that judgement, and agree (by downloading & using new software) or disagree. But while we figure it out, the entire system is offline and what does the economy do in the meantime? |
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They make super secret to create a buzz but I think it works like this.
1. You buy a code from some guy for BTC.
2. You send an email to a bot that invalidates that code and sends you back two fresh ones. Thus doubling what you have.
3. You sell the new codes and get BTC.
4. Profit!
I can't believe some people can fall for that.
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why is a bitcoin atm any different? why cant someone load something in there that copies everything that the atm spits out? if something made a copy of it and sent it out to someone they would have the private key and address and could generate it and take the bitcoins that were loaded to the address.
not sure what ur talking about.
Some Bitcoin ATMs don't spill out anything. They transfer money to the address you give and there is nothing secret about that. Even for the ones that print out a ticket, a typical user will immediately transfer the balance into his own wallet. If the scammer beats him to it, he will notice and call the bank on the spot. But with a normal ATM the scammer steals the PIN and he can rob the user at a later time for even more than what later withdrew. In a way, we see the power of asymmetric encryption. With BTC, you only give information that allows you to receive money. With a normal ATM, you are showing the secret key that allows people to withdraw any amount of money. |
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But even if the subsidy were removed today, what would likely happen is people switch off hardware, increasing transaction fee payouts to the remaining players until equilibrium is reached in terms of transaction fees = costs. ...but that would decrease the security of the network as POW security depends on the amount of hashing power available to the network. That's right. It's why I said that Bitcoin needs to solve the transaction limit problem (1 MB) and get massive adoption so that while fees remain low, their total value is enough incentive to continue mining. If fees are too high, people will not use it. If total value is too low, miner will quit. We need both for a secure system. Fortunately, smart people saw that it takes time and built the schedule over a hundred years. |
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Right. It's quite simple actually. The price is determined by the equilibrium between suppliers of the service and the people paying for it. Today, everybody is happy to settle on 0.0001 BTC per transaction (excluding large transactions). It's as if there is a massive subsidy on bitcoin transactions. So much that it hides the real cost. When it goes away, we'll settle at a different point. I can't tell you where. We can look at where the reward comes from though. If 25 BTC are created, they dilute the value of the previous coins. But also there, people factored that in. They already consider the final number of coins in their valuation of bitcoin.
So basically, the transaction cost is the transaction fee because we are paying for the rest by accepting the scheduled inflation.
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It's very risky to accept a transaction that uses inputs from an unconfirmed transaction so we shouldn't expect businesses to do so.
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We shouldn't use atm that print out secret keys but the models that let you scan a receiver qr code.
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Doing this calculation today ignores the award. Miners work to get it, they don't care about our transactions. You say 18$ because you divide the mining cost by the transaction count but they would be doing the same even if the blocks were empty.
Would it mean that the transaction cost is infinite?
We'll have a clearer picture when all the bitcoin are created. Then, we'll know the transaction cost. If it's greater than 5 cents, bitcoin is not viable for microtransactions. Until then, it's an upperbound estimation with a significant error margin.
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Today, skimmers aren't going after bitcoin at ATMS and POS machines, because that's not where the money is (yet). But when it is, there will be ways to hack. One way will be a side channel attack. An operating computer that uses a private key to make a digital signature reveals details of that signature through emanations . These involve power consumption, timing, EMI, mechanical vibration, and most recently, ground potential. http://cryptome.org/2014/08/get-hands-off-laptop.pdfThanks for the article, it was very interesting. |
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One thing Daniel Larimer mentions which should be of concern to everyone who supports Bitcoin: The average cost per transaction.This obviously needs to be low because the intent is to be below the current trusted 3rd party financial institute's fees. I base this on the following from Nakamoto's paper: "Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible services."Larimer suggests that eventually the transaction fees will be around the $8 mark. This got me thinking along the lines of what the cost to process a transaction is today. So what is the cost of adding a transaction into the blockchain? NOTE: I am not talking transaction fees, I am talking the actual cost of processing the transaction based on the cost of computational power. Since the transactions are processed by miners, I would suggest the answer to is the cost of the power to mine divided by the number of transactions as a starting point. Note, this is a starting point, it does not include hardware required, services, bandwidth, etc. which would need to be added in to get the total cost before dividing the number of transactions (ie: only making it worse). Disclaimer: Please understand, I am not an economist and neither do I have a degree in finance. Total number of transactions for a year (from Blockchain.info): 45,795,557 Estimated cost to power Bitcoin mining (from Haas McCook): $780,000,000 I get $17 per transaction. This is a seriously shocking figure. Even if McCook's estimate of power used in Bitcoin mining is twice as much as he suggests it is, the cost is still $8 to process a transaction. Miner revenue for this same period is $834,649,130.70 With an increasing hash rate, though thankfully more power efficient miners, this is likely to get worse. With mining equipment having a ROI life of say 6 to 9 months, mining gear could be purchased up to twice a year in order to maintain revenue. This should really be the concern of the Proof-of-Work mechanism used. Competition is increasing the cost versus decreasing it like you would expect in other industries. Food for thought. Please find McCook's paper here: https://cdn.panteracapital.com/wp-content/uploads/The-Relative-Sustainability-of-the-Bitcoin-Network.pdfBlockchain.info URL: https://blockchain.info/charts/n-transactions-total?timespan=1year&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=CK Donations towards my thesis welcome: 1ADEzUG7HVQkq3mu5g85KkupAAbzRTppyd Agree 100%. I calculated around 30$ per transaction at the current level of POW security. https://bitcointalk.org/index.php?topic=395761.msg6852307#msg6852307With BitsharesX it is $1 cent per transaction while providing more security per time passed since the tx was broadcasted. ...Someone has to pay the costs, either the users ($8-$40 USD per tx; ~ $40 was calculated by Tim Swanson) or the coin holders (as it is today, ~10% dilution = 10 % increase in money supply per year with Bitcoin atm). Those are bare facts. Block #318997 Summary Number Of Transactions 118 Output Total 2,390.60927025 BTC Estimated Transaction Volume 1,315.50637339 BTC Transaction Fees 0.01761036 BTC Why talk about the transaction cost without considering the transaction fees vs the block reward? Today miners get 25 BTC from the reward and 0.01761036 from the fees. Basically, transaction costs are negligible. The idea is that as the rewards go lower, the total fees offset the loss. Obviously, it is not with 120 x 0.0001 btc that you get there. Very roughly, we need 250 000 transactions per block. So the main question is - How do we get bitcoin to support this type of volume and more importantly how do we get bitcoin to these kind of volumes? |
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Most people don't know or don't want to know that Bitcoin software is still beta quality. There are very few core developpers (~3?, 1 full time and paid) and very difficult code to design and write.
We shouldn't confuse the ideas of bitcoin as described by Satoshi in his seminal whitepaper with the actual implementation. Mike wants to remind all of us that there is a lot of work to do. The malleability issue is a good example. The problem was known for years to the guys who worked closely on the core. But again, that's very few people. MtGox implemented their account tracking and they didn't take it into consideration. Someone took advantage of it and scammed them. Surely not as much as they claim though. In another case, someone found out an integer overflow in the code and used it to create a transaction that generated billions of bitcoins. The blockchain had to be rolled back and all transactions cancelled. Imagine what kind of disaster that would be now. Also, the network code could be overwhelmed by DDOS, or the network split. I could go on and on but I see the drift.
In short, there are many many many very tough software challenges. They are not impossible to solve. But he warns us that they lack resources to fix them and hence we are at a point where mass adoption could very well destroy bitcoin now.
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Actually the best way to kill it or kill it off, is to leave it to the devs..
I know of 3 bugs in the origional bitcoin application, that, despite countless updates, resemble battlefield bad company. See, I cant understand why with so many updates, the bugs people actually WANT removed are allowed to stay, "but we'll add this n that, creating more bugs people can complain about that we know we can fix" - Yeah.. How many changes were made to our wallet's? My lass has 600 bitcoins in her origional wallet, yet she has to install how many different versions BEFORE she can get to use them? Instant? Yeah, after 5 years of re-downloading blockchains before she can do whatever.. and that's of course if she can find every version of bitcoin that had changes made by people who are nothing to do with bitcoin, other than pretending satochi was the bitcoin creator..
Bitcoin app still closes when it wants. Runaway exception's causing whatever we have downloaded of the blockchain to be ruined, so start again.. and again.. how long will it take to download the blockchain in 5 years time?
Fact is, the app itself 'appears' to have zero or miniscule changes, yet how many versions of bitcoin app have been released?
Leave it to the devs.. since they probably own over 60% and wont part with them. Then there's the looming governmental controls.. it's bad enough trying to obtain bitcoins without wondering if they are worth anything at all in the real world, instead of purchasing power that gets ya 10 grands worth of pc that wont be worth half in the next year..
Look at all them faucets.. the fact they tell lies on their first page is enough to put any sensible person off them. Then ya get the stealthepixels scam of, visit next site to be paid instantly.. do you get paid instantly? NO. Conned again by a bitcoin dev.
Think I'm wrong?
75% of the world has NEVER heard of bitcoin, never mind used a computer.
Go on devs.. keep your bitcoins, cause if you think they are worth it, 75% of the world will be like, eh?
You are mistaken as to how bitcoin works. You don't need any of the blockchain to spend it. All you need is the private keys, and to know which inputs you want to spend and a way to broadcast your TX to the network. I wouldnt say I'm mistaken, maybe misunderstanding, but I have run 2 networks as a test, started each with it's own blockchain, and succesfully placed a found block from one blockchain into another, from then, the two became 1 new one run by two networks. I dont think I'm mistaken, when I think I can not so much 'replace' as 'remix' the blockchain by adding another tune entirely.. it is all a matter of when to do what.. If I had 600 BTC, I wouldn't mind waiting for a couple of days for the blockchain download... More to the point, you don't really need to wait for the complete download of the blockchain to use it. Without it, your balance would not be necessarily up to date because the app doesn't see all the transactions but if you just want to spend you can create a transaction. TBH, the bitcoin core app isn't the best wallet application at all. Its strength is in the implementation of the bitcoin protocol. As a matter of fact, the majority of bitcoin users don't even run it. The devs own a miserable portions of the coins. They could have but they are devs and not miners or investors. Besides, only of them is paid for their work on bitcoin. Faucets are scams. Yes, but that's the fault of the faucet - not of bitcoin. Do you blame the dollar for the scams in dollar? Bitcoin mining is like moving train. In the beginning, it was going at a very slow pace and very little computing resource was used. Satoshi mined a million BTC with a laptop and he could have done it in an instant if he wanted. Some altcoins premine. With the current adoption, it moves at a very fast speed. Jumping on board is nearly impossible. Your experiment shows that you can jump on a slow moving train but it won't work with the main blockchain. I'm not saying that bitcoin is without flaws but your analysis is incorrect on the technical aspects. However, whether bitcoin will work or not doesn't depend only on that. Bitcoin could die simply because people don't care / don't trust it and not because someone decides to kill it. |
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This is from a Google Hangout with Daniel Larimer. He starts talking about the issues with Bitcoin mining and PoW at 1:01:20 and goes until 1:03:44. Only a few minutes long. https://www.youtube.com/watch?v=tBcJ5rsAGaISeems to me like he's bringing up some pretty serious flaws here. He later goes on to say that PoW is dead and Bitcoin will have to change at some point. Any thoughts? The blockchain maintains the list of all the transactions in bitcoin. It must be the same to everyone and yet not created by a single person or entity. Proof of Work is what enforces both of these features. The original vision was that anybody could be a miner and participate in securing the blockchain. However, as bitcoin becomes more popular and valuable, the mining rewards lead to the creation of mining facilities. Similarly to the gold rush, at the beginning there were pioneers with pickaxes but soon after they were replaced by conglomerates with heavy machinery. Now that mining pools have mostly taken over, he questions the decentralization of bitcoin mining and therefore bitcoin security is in the hands of a few. Furthermore, what is too costly for an individual may be acceptable for governmental entity. In conclusion, he prefers to have a group of trusted organizations in charge of the blockchain. Mining would be rendered useless and the cost of maintaining the blockchain greatly reduced. I agree to most of what he said except for his conclusion and solution. I think finding a group of trusted entities is very hard and is the reason why previous digital currencies failed. POW mining is quite wasteful in computational resources but if it is what it takes to have an independent currency then I accept it. There are other suggestions out there (POS, POS + POW). They may work better or not. I'm not convinced that anyone knows. In a sense this reminds me of physics. There are many theories out there but we can't verify any of them because we are nowhere close to that energy level. Today, there are a ton of different options but no one has put enough effort into breaking BTC. At this point, you'd need 100 PHash/s to attempt it. But who knows, maybe someone will build the super bitcoin collider. |
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Good idea until someone eats your rice  |
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