I'm too lazy to dig up the thread, sorry, but I seem to remember a time back in 2011 when there was community doubt in whether Mt. Gox really had the Bitcoins, or whether they were essentially broke.  In response. the head of Mt Gox (Magical Tux, I believe, at the time) publicized that he was going to move a bunch of bitcoins from one wallet to another, simply to prove that he was still solvent.

Everyone could see it in the Block Chain, and there was a collective sigh of relief. 

Then the price continued on its path down to 2.

I successfully transferred 60+ bitcoins out of Coinbase last night.

Good luck to you.

Our whole point of disagreement seems to be centered around this one statement.  You seem to believe that it is absolutely 100% impossible "to convince everyone to change to a different Bitcoin client with different rules", and I don't.  Difficult?  Absolutely.  Darn near impossible?  Yup.  Do I think it will ever happen?  Nope?  Am I a firm believer in the mathematics of Bitcoin, yup.  

But, impossible?  Nope.  In fact, I don't even believe it needs to be "everyone".  But for the sake of argument, say everyone.  I believe that it would be possible through legislation, port blocking, and other evil tricks (both technological and political / legal) for the governments of the world to render the current Bitcoin client useless.  I think you are kidding yourself if you think otherwise.

Or without even convincing ANYONE to "use a different client", if a major entity / government created a new block chain with a higher difficulty level, diverting all the mined bitcoins since the last check point to them, and then performed a worldwide Black Out, to knock out the internet and Bitcoin, and when worldwide power got restored one city at a time, and one-by-one, as people were connecting to the internet, and discovering a new block chain with a higher difficulty, they'd reject their existing block chain dating back to the last check point, and boom, the deed would be done - tons of transactions reversed.  Do I think this will happen?  Nope.  Do I think it is possible?  absolutely.  

In fact, I think that it is still very much within the realm of the budget of the US Government to undo a day's worth of transactions, and probably many more.

Don't get me wrong, I have a ton invested in the success of Bitcoin.  I just believe that you lose credibility when you toss around words like impossible and mathematical certainty, when they fall just short of that 100% number.  99.9% with 300 9's after the decimal ISN'T 100%.  Sorry.

We should probably agree to disagree on this one.  I like your document, but I am just trying to explain my reaction.  It's your document - you asked for feedback, I didn't mean any offense.  Just providing feedback, and trying to explain what I meant.

I hope you understand that my comment was a point to prove that it was possible, not likely.  It is addressing the words "mathematical impossibility".

But yes, I agree with you... I don't see this happening without a lot of objections either.  But stranger things have happened.

Well, I was just trying to give feedback to the document that many people (myself included) feel that the words "mathematical certainty" are not appropriate.  It's feedback - take it or leave it.

Here's what Hazek's text says:

all confirmed Bitcoin transactions are with mathematical certainty irreversible, all
bitcoins are with mathematical certainty non-counterfeitable

Hazek's response was:

Btw mathematical certainty in my guide primarily refers to the ability to fake obeying the rules. It's true it doesn't account for an attacker obeying the rules and still defrauding people, but it's a fact that rules in Bitcoin must be obeyed, even by an attacker and this is mathematically certain.


And I walked through a complete example (and was accused at various steps in the process that I was wrong) where if someone doesn't "obey the rules" of Bitcoin, his statement falls apart.  

Defending the statement by saying "oh, I meant if you follow the rules" is like saying there are absolutely zero law breakers in New York City, and then saying "Oh, I meant I was only counting the ones who follow the rules."

--

Overall, I think it's a great intro.  I was just giving honest feedback about how I, and others, react to the "mathematical certainty" lines that come from Roger Ver and others, including this text. 

So you, Gavin, Hazek and a whole lot of other people will end up with your own little private network with your private bitcoin economy, claiming adamantly to anyone who will listen that "we have the real Bitcoins". 

Meanwhile the US Government, in conjunction with the blessing of the UN and the G20 have sanctioned Bitcoin with the "new blockchain to be fair to all", reversing all past transactions, legislating that Sourceforge host their newly revised, CIA-approved version, and declaring the "new blockchain" as the one backed by the "full faith and credit of all the major countries of the world".

Yeah, you're right within the scope of your little world, that no one will "reverse" your transactions in your little world.  But it is absolutely, positively incorrect to claim that it is mathematical certainty that transactions cannot be reversed.  Because they can be.

Mathematical certainty has a specific meaning, and this is not within the realm of impossibility, despite how improbable it is.

Good point.  Perhaps SPECIFIC utility, like utility as a currency.

Gold is more valuable that bitcoin in the manufacturing process of circuit boards.

A bicycle is more valuable than one hundred bitcoins in terms of recreational exercise around my neighborhood, but one hundred bitcoins are more valuable than a bicycle in terms of trade or resale.

Gavin, you don't know what kind of neighborhood I live in.





Although I think I'd worry more about this sort of potential thief.

But if I own 51% or 85% or 99% of the network, and have modified the Bitcoin software such that every new download doesn't care about these rules of which you speak, it doesn't matter that there's this tiny faction of miners that still believe that they have the "right" blockchain.

This got me thinking.  What does it mean to be "more valuable than gold"?

I mean, that makes sense when comparing two materials - like "more valuable PER OUNCE".  But how do you compare two things of completely different make-up?  It's like comparing Computers and Oranges.  (see what I did there?)

It doesn't make sense to compare the price of one ounce of gold vs. one whole bitcoin, and say one is more valuable than the other, because the counter-argument would be "well let's use millibitcoins or milligrams or tonnes (or whatever)".

It seems like you have to get a common frame of reference between the two different commodities, in order to say one is more valuable than the other, when they each can be bought in divisible quantities.   And I can only think of two frames of reference:

1)  The total value of all of this commodity, at market price (what people refer to as Market Cap).
2)  The generally accepted risk-weighted rate of return for an investment in this commodity.

We can easily calculate #1, and Bitcoin is nowhere near Gold in that category.

Good luck on calculating #2.  I tend to think that Bitcoin has a much higher risk-weighted rate of return than gold at the present time and prices.  On the other hand, apparently every seller disagrees.

Correct me if this is wrong, but if I had an extreme amount of computing power, I could create an alternate blockchain dating back to the genesis block, all the way to present, with the only confirmed transactions being me solving the blocks, and then alter the mining software with my new checkpoints.  Also altering the mining software such that I ignore any information coming from the REAL miners with the CORRECT block chain.  Then I become a miner with 51% of the network.

This would effectively REVERSE every transaction that ever occurred.  Every existing transaction would appear to be an attempt to spend money that didn't belong to the owner, and so they would be reversed.

So although practically impossible, it is mathematically possible.

(I should also note that it would take just minutes to solve every block since the genesis block in an offline fashion, if I am creating this alternate blockchain, since I am not in competition with anyone, and the difficulty would be minimal.)

So, not only CAN it be done, Bruce lays out an exact plan to do it!   This is horrible!  SELL SELL SELL!

I think you are technically mistaken when you say :


Mathematical certainty is 100%.  Bitcoin is just very near to it.  It happens to be closer to it than our current banking system.

A 51% attack on the network could reverse transactions.
Likewise, a similar attack to the source code could introduce the ability to counterfeit.

You probably don't want to use the term "mathematical certainty".  Perhaps the term "impossible, practically speaking" or something like that.

It bothers me when Roger Ver tosses around the "impossible" and "mathematical certainty" terms, because he is flat out wrong.  You are introducing a binary situation here (yes/no, right/wrong) and in this case these terms are wrong.   "very near right" != "right".

I think Coinbase shows promise, but it is frustrating to watch some of their struggles.

To me, the obvious answer to a lot of their troubles with fraud and new users would be to "quarantine" a certain balance for a certain period.  If I'm a new user, and I buy 10 BTC, quarantine it for 30 days if you must.  Or quarantine 90% of it.

If I'm a regular user, transacting 100 BTC worth of purchases per month, and suddenly I try to buy 1000 BTC, that should raise a flag.  Let 100 BTC go as normal, and quarantine 90% of the balance.  Or maybe 50% if I've been around for many months.

Just maintain a trust level for each account - Account number N has proven themselves trustworthy because they've done a volume of X BTC transactions in a month.  And (like the block chain), the longer a transaction has existed, the more reliable it is.  If a person has done 100 BTCs per month for 5 months, you might cut them some slack when they try to do a 1000 BTC transaction.  Maybe quarantine less.

Give the user a choice before reversing the transaction:  We can reverse this, or quarantine it for 30 days.  Your choice.  Better yet, notify them of the quarantine at the time of the purchase, so they can decide if it's ok.

It seems like about the correct length.

34 Base-58 digits should convert to about 60 decimal digits, since 34*ln(58)/ln(10) = 59.9.
Since the Bitcoin Address starts with leading zeros (a 1 in Base-58, where zero has been eliminated from the digit pool), your 59 digit number seems in the right range.

A more mathematically sound way to convert a Bitcoin address to a string of digits would be to take the Bitcoin Address, which is a Base-58 number, and simply convert it to decimal.  This would be trivial programmatically.

It wouldn't have the properties that you described, in that it's length would always be much smaller than what you described, and usually be nearly the same length (for all randomly generated Bitcoin Addresses).

I have no affiliation with Coinbase, but I think it's worth pointing out that they have been extremely responsive to people's feedback, and are providing a very valuable service (allowing people in the US to get into Bitcoin with minimal fuss at a reasonable fee level).  

So panic messages, like "Don't use this service until this gets fixed" are a bit extreme at this point.  Time and time again, Coinbase has stepped forward to address issues, at cost to them.

My reaction to this alarmist post was "meh, they'll get it fixed.  I just won't pull coins out for a few days."  

So Bitcoin is a Prezi scheme?

I was referring to scanning in the QR code.
I always thought of sweep referring to the scanning of the Block Chain looking for transactions that match your Private Key.

I could definitely imagine a company like Mt. Gox, who is holding a lot of Bitcoins on account for people, accidentally locking themselves out of one of their reserve cold storage wallets (or having one wallet stolen by an employee).  At that instant, they have fractional reserves.  But they could easily set aside a small portion of profits each day to re-fund that wallet.

Which would be worse?  Announcing to the world, "We locked ourselves out of one of our wallets, but rest assured...." (potentially causing a run that puts them out of business), or to quietly build the reserve back up?