Bitcoins, as a new invention, are causing lots of confusion. Bitcoins are not issued by any government so banking institutions may be unsure how to handle them in context of banking regulations.

Banks may over react and close accounts to be on the safe side. In fact, that happened to MtGox's bank in France a year ago I believe, but MtGox sued and had their account reopened (I think they later switched banks anyway).

The first thing to understand is bitcoins are not illegal. Guidance issued by FinCEN (Financial Crimes Enforcement Network, a bureau of US Dept. of the Treasury) pertaining to virtual currencies, and seemingly Bitcoin in particular, specifically says users that trade virtual currency directly for goods/services are not subject to regulation. This is generally taken to mean using bitcoins in legal ways is fine. There is an entire industry springing up around Bitcoin, including a possible stock exchange listing.

So a bank saying it's against their rules seems to me overly cautious.

If you're willing to take the time it may be possible to have your account reopened, but that outcome is not guaranteed. The easiest thing to do I think is simply open an account somewhere else and don't use it for anything directly bitcoin related until these issues become clearer. There are other ways to buy/sell bitcoins with localbitcoins.com usually available if nothing else. BitInstant.com is also a popular way to transfer money into Bitcoin exchanges. More options are in the works.

You realize there is only one r in the name of POTUS Barack Obama.

This belongs in Speculation.

Also, you forgot the counter position. Why not also ask how high it will go now having reached bottom? Are you looking for cheap BTC?

No I think I have a pretty good idea. Your explanation glosses over the nuances of DDoS, which in summary attempts to overload the resources available to an online service provider. DDoS is a progression from DoS (denial of service) which began as an attack on early websites with methods as simple as rapid requests. The defense was then to filter problematic IPs, which led to the attack becoming "distributed" where problem IP traffic blended with legitimate traffic. Complex sites, like heavily database driven ones (like MtGox for example), could be quickly overwhelmed.

Such DDoS, which is what I believe MtGox fell victim to, while more effective is generally less available because attackers must control a range of IP traffic. This is why I mentioned motivation and profitability being factors for DDoS. What I consider the most severe form of DDoS is what you refer to, where an attacker has access to such a large footprint of IP traffic (botnets) they can also impact the network layer of the service. Such an attack is non-trivial. Still, as I said, DDoS is not 100% effective. You can for example use a CDN like Akamai to distribute content with little worry of the network layer becoming clogged.

But all that is not so relevant to MBRs as I see it ("clearing houses" I feel mischaracterizes the function).

The MBR is an addition to the network, not a component of it. Just as your car doesn't need nitrous oxide to run, but having it can improve engine capability, MBRs going down only means the network reverts to its performance without them (remember there can be many).


Again, MBRs are an addition to what's already there. Miners don't have to use them, and the consequence is the same as it would be for normal orphan rate.

You might take more time considering how to support the idea because I conceived it for Bitcoin too. I understand Bitcoin was seeing multi-minute block propagation time, which could worsen as the network expands. Orphaned blocks are a disincentive to any miner. MBRs simply look to solve network latency which exists due to decentralization.


I agree anything less than 2.5 minute block time is probably not practical. Still block size, block time, and network ability overall are factors which affect cryptocurrency in general. I still believe it's helpful to look at ways to improve usability and chance of success for cryptocurrency regardless of our different opinions on how that ultimately looks.

D&T even when I'm arguing with you I can't help but admire the usually informative technical specifics you include in your posts which I appreciate. However, for the points I award you there I must dock you some for imagination.


DDoS isn't a 100% effective or sustainable attack even with a motivated attacker and profitable target. While a target like MtGox might be profitable a site/node simply relaying mining data wouldn't seem so. But even if DDoS was employed it would be much easier to defeat than a traditional target, because you can know exactly which IPs are friendly and which to block. Remember honest miners wanting honest data have incentive to get it quickest. Problem solved.


Here we see things differently. I've participated (with some stress) in many block size debate threads. I really have trouble seeing block sizes at hundreds of MB being actually implemented in the near future. I endorsed Gavin's proposed course of a simple infinite raise allowing the market to sort out the rest, but I'm less than confident we'll see that adopted soon. His recent public comments on the issue seem to reflect my thoughts.

I think we're more likely to see either no change and more reliance on off-chain txs and alt-coins to relieve scalability pressures and/or a modest increase (say to 5/10 MB once) or modest increases at future points.

I addressed latency and orphans here:



Litecoin was never meant to replace Bitcoin. It was meant to be the silver to Bitcoin's gold.


LOL now that I agree with (note I don't consider some coins like NVC pd/scam).

So you're the reason people are panicking.

You're post has no evidence for Mt.Gox lacking funds. Their statement says they processed over 1M to US customers by manual methods. All you'd have to do is find someone that was in fact able to receive funds which shouldn't be hard, but instead you spread FUD. That's the real reason you amplify the price crash, which already had downward pressure because of the efficiency of ASICs coming online. Nice job.

I cringed reading that. You say "stuck" like it's a bad thing when in fact it's exactly what we want.

The Founding Fathers of America were surprisingly knowledgeable about money. They understood a gold standard was what was best for the people which is why they enshrined it in the U.S. Constitution.

Let me explain it this way. Imagine two separate games of Monopoly. In one the participants are all equal. The "Bank" of money is at the side where everyone can see it and be sure nobody playing has unfair access to it. This game should be most competitive and fun as all participants are on equal footing. In the other game one player convinces the others he will administer the game so everything goes smoothly, but while also playing himself. He places the Bank behind him where he alone has access to it. With this setup over time what do you think would happen?

It should be obvious the player in the second version is a super player with unfair advantage for controlling game outcome. Yet the second version is exactly the setup we have where the government (in partnership with the Fed) has a monopoly on money. The setup is great for government and banks but ordinary people are not so empowered.

This actually means less innovation not more. Innovation comes from the private sector not government, but our setup has placed more resources with government than the private sector. The people have been robbed, actually, for years now.


As I said, the people have been robbed. We would be far better off today (with solvency/innovation etc.) having had a true gold standard than we are now.

I believe off-chain transactions will play a role. I started a thread about it:

Off-chain Transactions

We might use what I call Bitcoin Clearing Houses (BCH)...

If they could accomplish that without XRP they would be hailed as heroes I'm sure.

Instead many (most?) regard what they're doing as a scam (or at best a misleading venture) which may benefit them and their investors with added benefits to cryptocurrency.

One of the big problems with cryptocurrency is it's hard to exchange it into other currencies. That's because the traditional financial system is not flexible that way for AML reasons. The reason Ripple seemed such a big deal is because they could provide a sort of bridge currency to link all currencies for direct exchange (no more wire fees, documentation etc.). They did this with "ripples" which were supposed to be like IOUs which held value. I'm not physically near you, but if we're friends and you trust me I could give you an IOU for $10 worth of ripples and send it to you online. Theoretically that $10 is real value because you'll get it from me when you see me. Well if that's the case then you can instead send that "10 dollars" to Sally (so you owe her $10) who can then trade it too. As long as I can be counted on to honor the $10 then the value is real theoretically.

That's my understanding of the original Ripple system anyway. It required a level of trust, but as long as users knew each other to some degree it could work. Well if that's the case then anything, including gold or euros, could be traded too.

The problem is Ripple seemed to go away from this and close their model where they issue XRPs without transparency. That means they can increase their own bank accounts any numbers of XRPs (for free) and have that be worth real value to anyone valuing XRPs. In an ecosystem worth billions of dollars of trade that could mean a lot of money. I like that they're trying to solve the problem, but I think it can be done other (more open) ways too.

Looks cool, but as long as the total number of XRP in existence, and method for their distribution, is not transparent I would avoid assigning any value to them.

What if you create 1,000,000,000 addresses? You have no worry. Here's why. That number is 1 billion or 10^9.

Imagine how many grains of sand there are on a beach. Got it? Now, realize that in one grain of sand there are about 22,000,000,000,000,000,000 atoms (over 10^18).

Now imagine how many atoms there must be in the entire universe. Got it?

Realize the number of possible bitcoin addresses is about 1 for every 8 atoms in the universe.

I believe New Hampshire State Representative Mike Warden was the first ever politician to accept Bitcoin donations. Reporting requirements was an issue that came up for that too:

https://bitcointalk.org/index.php?topic=99968.0
http://www.markwarden.com/page/contribute-campaign

It's not only that. It's harder to optimize for Scrypt mining, which is the whole point. Scrypt intentionally "gums up" the works making computation costly by requiring, specifically, large amounts of memory.

SHA-256 ASICs had a relatively low barrier to entry. All you have to do is analyze the problem then custom tailor a chip to optimize the solution process. It's like going out and finding the smartest kid in school to ace a test. If you don't have the smarts you can hardly compete.

However, the Scrypt analogy is you have to not only be the smartest, but also the longest distance runner, for example. It adds another dimension to the problem, making relevant others who may not be the smartest (ASIC wise) but who may for example excel at running.

Thanks for the info and link.

I'm old enough to remember that era, but I wouldn't have been aware of any market forces. I also remember R.O.B.!  That thing may still be in my parent's attic. Very cool introduction by Nintendo. Duck Hunt and R.O.B were the days, some serious fun.

I totally agree crashes can be good. I don't see the problem there. The market got flooded, bankrupted those that produced crap, and what emerged was something with superior value/quality, as evidenced by Nintendo's success.

Why? How do you know Satoshi wouldn't be on the alt-coin supporter side?

Satoshi left "Bitcoin" for whatever reasons. I think it's because he had put as much as he could into it in terms of core design. The rest he simply didn't know. He may have had ideas, but ones which could be debated with a broader development audience. I think Satoshi felt Bitcoin's fundamental design was strong enough to be released into the free market, which could then prove the model successful, in need of change, inherently flawed, or whatever the case would be. An example is the block size issue. There is still no solid consensus on it, and Satoshi didn't give specification. The 1MB limit was only included because Satoshi couldn't think of anything better at the time (to prevent flooding), although his writings show he didn't intend this to be permanent.

One thing people who take a solid position, whether it be for or against alt-coins, have to admit is they simply don't know whether they are right. They arrive at some conclusion based on their assessment of things, but no one can say definitively what the "correct course" for Bitcoin is, because Bitcoin is a completely novel world experiment.

It makes no sense to say there is "one true Bitcoin" because that isn't defined anywhere. All we have is a protocol released by an anonymous, brilliant mind (assuming Satoshi is one person). A protocol is a way of doing things, like dancing.

I believe Bitcoin is a product of the free market, which came about because the Internet (a rare free market) enabled the market to produce something to compete with the current inefficient money system. How well Bitcoin, this way of doing things, does depends on how things develop in the free market. So far the free market has produced Bitcoin alternatives, which I don't think is an accident.


If an adjustment (like using a stronger hash algorithm) is superior, it doesn't matter if it's a minor one. I'm not saying whether any alt-coin now demonstrates this. I'm only pointing out "minor, unproven" adjustments can be considered superior and not be ridiculous.


I agree with this.


How do you presume to be qualified to make that statement? It's only your opinion.


I disagree. Differing opinions (which will never change) is the reason I believe alt-coins have a critical role to play. Protocol changes are hard because you have to gain consensus or risk economic, confidence damaging hard forks. Take the block size issue. There isn't consensus on it, and there is still fork risk because some still have very different opinions on how to change it (or not change it). Say changing the hashing algorithm is proposed. Which algorithm do you change to? Suppose SHA-3 is ready and one group wants that, but another some Scrypt derivative? What if you want to change Bitcoin's block time away from 10 minutes? Some people may want 5 minutes (for block size & latency), and some 2 minutes, and some say no change. Every opinion can be deeply held and immovable, where forcing any particular route risks forking.

Technical changes are easy to propose, but not at all easy to implement. The few protocol changes we have had met resistance, and none were fundamental to design, and the participating group size was quite small. This only gets harder as more opinions come on board, and the type of change more significant.


Can you elaborate on this? I'm not familiar with the video game crash of the 80's.

What people don't realize is all the disagreement is the exact reason I realized alt-coins like Litecoin had a role to play.

When Litecoin (and other alts) were announced I paid them little attention. I just didn't see how they provided significant value enough to be adopted by the community on par with Bitcoin. (I believe Erik Voorhees still has this opinion.)

When the disagreement over Bitcoin Foundation broke out I realized with startling clarity there could be irreconcilable opinions between people, no matter how much debate ensued. I saw this could apply to more disputes than just the foundation, and might even threaten Bitcoin (with tempers, hard forks etc.) as stakes grew and more opinions came on board. I felt there was growing risk in corralling increasingly divergent opinions under one tent, and expecting harmony. Indeed this was long before the block size issue blew up in the community. A single coin I felt invited disaster because while threats from the outside might be defensible, a diverse group unable to counter infighting (and possibly corruption) could fall from within.

That was the important feature I realized alt-coins had which Bitcoin didn't. They provided an alternative. That was the thing Bitcoin could never provide by itself. After I realized this I found other ways alt-coins strengthened cryptocurrency overall (like providing technical/economic backup, easing pressure on block chain scalability, experimentation, etc.).

While I missed the significant value of alt-coins at first, I later realized they could be indispensable for trying to gain cryptocurrency success overall.

What people against Litecoin (or Mt.Gox adding it) I think don't realize is it's probably inevitable already Litecoin will see widespread adoption. Whether or not Mt.Gox adds it doesn't change the large number of people already holding it, which is where coins get traction/value in the first place. There are 18,810,954 litecoins in people's hands now. That's slightly more than the number of bitcoins currently. Litecoin is already being exchanged and has a growing user base, just like Bitcoin.

Last, for those worried about an unending string of new coins, don't. You can't stop that happening anyway, and you may even find (later as I did) real benefit to this. The reason new coins can't easily destroy older established ones is exactly because older coins are older and established. Any coin's code can be duplicated, so coins competing on that level only are not differentiated. What can't be duplicated easily is the willingness of a large user base to use a coin. For every coin that attempts to gain this, but offers no real value, i.e. reason to be adopted, the coin's value is never any more than how quickly the features it has can be cloned (i.e. probably zero).

If you don't believe more than one coin can co-exist and be valued by the market properly (and differently) you're not paying attention. That is already the situation we have now.

I never said 21 million coins is insufficient for a population of 7 billion and you can't quote where I did. This is just another example of you saying something that doesn't match reality. Anyway, I'm tired of the discussion with you. Go ahead and reply with your best as I'm sure you want the last word(s).

Like I said, when it comes to money being specific matters. It so happens rate of inflation can absolutely be a factor in how scarce a currency is, and it usually is, but it's not the only factor as you said it is.

Fine distinction of terms and concepts is important, especially when discussing or formulating opinions on a topic as complex as money.

Nice try.

This


does not equal this:


You should be big enough to admit when you're wrong, not try to save face after I've pointed out how you're in error. When you're talking about money - currency supply, inflation, deflation, measurements (like what 1 bitcoin is), etc. - these things do matter.