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5521  Economy / Speculation / Re: A more in-depth BTC/USD analysis... on: February 08, 2013, 10:32:47 PM
We don't want another sprint to $30 or beyond followed by a crash... that'd be bad news.


Still even if you are right and it bad to have crashes, it is all but guaranteed we will see many (probably a dozen or more) giant crashes (30%, 40%, even 50%+) on the way to higher and higher money supply valuation.  So it is all but guaranteed to be .... "bad" (your definition).
5522  Bitcoin / Development & Technical Discussion / Re: Question on the scriptSig and scriptPubKey on: February 08, 2013, 04:30:37 PM
It sounds to me like you are struggling to understand what ECDSA (Elliptic Curve Digital Signature Algorithm) is and how it works.

Or more generally the concept of Asymmetric Cryptography (also known as public key cryptography).

Really to start understanding Bitcoin one needs to have a very good understanding of the following concepts:
Cryptographic Hash Function
Asymmetric Cryptography
Digital Signatures
Cryptographic Nonce  <- used in mining not transactions

(Some wikipedia links to get the OP started).

Note I didn't reference a specific hash function or the asymmetric cryptography algorithm used.  It is important to understand in general terms what these are, how they work, and why they are used.   For example why do we use a cryptographic hash instead of the original value?  What does a digital signature prove?  How can we verify the authenticity of a digital signature with the public key if it was signed by the private key?

Then one should be familiar with the algorithms used:
SHA-256 (cryptographic hash function)
RIPEMD-160 (cryptographic hash function)
ECC (Elliptical Curve Cryptography)
ECDSA (ECC Digital Signature Algorithm)
SECP256K1 (specific ECC curve used by Bitcoin

One doesn't need to know for example the internal dataflow of SHA-256 but one does need to know what it is and at a high level how it works. Purpose?  Block size? Hash size?

None of these are Bitcoin specific and if someone doesn't have a fairly good understanding of them, then any explanation on Bitcoin really becomes a confusing mess of Bitcoin concepts AND the underlying cryptographic concepts.

It would be like trying to learn double entry bookeeping without understanding arithmetic.  It simply can't be done.  

5523  Economy / Speculation / Re: BTC prise isnt rising! USD is loosing value, thats all! on: February 08, 2013, 04:22:00 PM
Well... true but that doesn't explain the magnitude of the price rise.

Compare Bitcoin to gold, or a basket of commodities and it is still rising.
5524  Other / Beginners & Help / Re: I could not answer this BTC security question on: February 08, 2013, 04:12:14 PM
Simple version ...  That is why we wait for confirmations.  

Unconfirmed transaction should only be trusted as much as you trust the sender.  If I send you a check, how do you know it won't bounce. If you trust me you can trust my check, if you don't then you can't and shouldn't.  Also you need to put the amount and thus the risk in context.  Selling a $5 steam game to someone on the forum?  0-confirm might be fine.  Launching a network of Bitcoin ATMs which instantly dispense up to $1,000 cash upon a 0-confirm transaction? Well that is a good way to go bankrupt.

As Gabi pointed out there is nothing that prevents you from "hacking" your client (wallet).  It is open source software. Trying to make it hackproof would just be "feel good security" and not prevent double spends as the protocol is open and anyone can make an alternative client even one designed solely for double spend attacks.  Now in reality there are some technical challenges to successfully performing a double spend but they have nothing to do with your client.  They have to do with how other nodes and miners handle unconfirmed transactions with the same input (double spend).  To avoid a potentially false sense of security unless you have very detailed knowledge of how the network works and have a specific need to make delivery upon 0-confirm notification, you should treat unconfirmed transactions as untrusted.
5525  Bitcoin / Hardware / Re: Are Botnets Afraid of ASICs? on: February 08, 2013, 02:38:41 PM
Ah, I see your point, although I'd call it premature for them to resort to that just now. 2-3 weeks from now it might be a better idea, or about a week before whenever BFL starts shipping might be a better time for scorched earth policy on their botnets.

Botnets don't really lose nodes that fast and there really is nothing out there which is as profitable or consistent in revenue then bitcoin mining for botnets.  Even if you knew difficulty wasn't going to put you out of the game for another two months it would make sense to start sacrificing nodes and maxing short term profits. 
5526  Bitcoin / Hardware / Re: Are Botnets Afraid of ASICs? on: February 08, 2013, 02:37:03 PM
Is there a chart like that calculates based on fewer than a 2016 block history? 2 weeks is a long time.

Remember mining has a random element to it. A small pool getting "lucky" and finding 5 blocks in the time they normally find one isn't that rare and would massively skew the results if looking at say last 144 blocks (~1 day). 
5527  Economy / Services / Re: Looking for people to store some of the forum's money on: February 08, 2013, 02:33:40 PM
Not all companies gamble with funds they don't own...

All companies are a gamble in the sense that businesses can (and do) fail even for legitimate reasons.  As someone who would directly benefit from low cost funding I am still against it.  Forum funds shouldn't be used to invest in third party companies either as debt or equity because they weren't donated for that purpose.
5528  Economy / Services / Re: Looking for people to store some of the forum's money on: February 08, 2013, 02:14:40 PM
After some more thought, i dont want to be part of any m of n. Last thing i need is for a large amount of btc to go missing, and i own a private key. Put me down as someone who would just take responsibility for a small amount of coins.
Ack, that's a good point. If you have an m-of-n, and some money is transferred, you can't usually tell who revealed the key parts. You would just know that it's some m of those n people. That might provide enough cover and plausible deniability for some of them to conspire. Nice catch.

What?   The multi-sig transaction would need to be signed by the m keys that authorize it. So if there is an unauthorized transactions transferring the balance of the coins to address xyz it WILL be signed by "m" keyholders and that will provide both the guilt of the keyholders and involved and exonerate the keyholders not involved.

On edit: I see you were referring to a key sharing vs multi-sig.  Yes secret sharing should not be used for this type of structure (where accountability is required).  Multi-sig provides higher security and accountability.
5529  Other / Beginners & Help / Re: Just lost 190 bitcoins through Mt. Gox on: February 08, 2013, 02:00:50 PM
That point is of course quite true, however, it is basically illegal to send money through the mail for that very reason.

In the US it isn't illegal to send cash in the mail.  Never has been, just an urban legend.  Now the USPS recommends you don't send cash in the mail unless you send it registered mail as it isn't insured but the same applies to other valuables as well.

Bitcoin is not going to win any supporters if it just takes the attitude "sorry but you are just too stupid to use this" (this last was about attitude at not any sort of attack on the OP btw).

I think the larger point is that MtGox has offered 2FA for what two years now.  Despite the never ending stream of "my coins are gone" posts they all have one thing in common ... 2FA wasn't enabled.  I don't think anyone said "too stupid" but if your house comes equipped with the ability to lock the doors but you choose not to and then get robbed well ...  Now if MtGox provided no mechanism to keep balances safe that would be a different story but they do.  Despite all the prior losses it seems people just refuse to accept that passwords are insecure.  That is why 2FA exists.

5530  Economy / Services / Re: Looking for people to store some of the forum's money on: February 08, 2013, 01:12:44 AM
Not sure if there's a point to overcomplicating this thing with multi-sig, multiple people owning split keys, etc. You get a bit more security for a lot more headache, versus just having very few very trusted people hold the keys and send only the amounts you request.
Consider that if you have an n-of-m multisig address with $10,000 in it, you might only have the option to send the entire $10,000 at a time, and then store the unused portion in another m-of-n setup, going through all the requirements again.

Of course that is true of any Bitcoin transaction.  You can only spend a full ouput never part of one.  Luckily there is this concept of change and the change address can be the same address as the source.  Still I think the point is that this is more like  savings account not a checking account.  The forum has ~5000 BTC in funds.  All 5000 BTC aren't needed tomorrow even if the forum was buying a server, or hiring a developer.  So some portion (say 3000 BTC) are put into mult-sig cold storage.  It may be months or even years before the funds are needed.  The day to day can be handled by theymos using the remainder of the funds and thus not need any involvement of the keyholders.  If/when the operating wallet runs low, it can be reload via a one large multi-sig tx.  If the operating wallet gets too large then more funds can be moved to the multi-sig cold storage.    It probably would be good to do a test tx moving a token amount out of multi-sig storage every couple months to ensure no keys (or keyholders) have been lost.
5531  Other / Beginners & Help / Re: Just lost 190 bitcoins through Mt. Gox on: February 07, 2013, 07:34:47 PM
Let me guess.... no two factor authentication?

5532  Economy / Economics / Re: How could wages in Bitcoin work? on: February 07, 2013, 06:15:01 PM
It's a weird concept to think about salaries with a deflationary currency.  Instead of an "annual raise" you'd get an "annual cut"...

Imagine coming home from work and saying to the wife "Got my annual cut today, only 3%!"..."Congratulations!"

It IS weird to think that way but only because we are so accustom to the idea that prices always rise.  What if the wife's response was "That's great the power company announced a 7% cut in our electric rates. More coins to put in cold storage".   

Ok maybe that isn't going to happen. Smiley
5533  Economy / Service Discussion / Re: My MtGox account was just exploited - 3 BTC stolen on: February 07, 2013, 06:08:08 PM
I am assuming no 2FA enabled?

With password compromise usually it is
a) phishing attack
b) password re-use on another compromised site
c) keylogging

I am sure you realize it in hindsight but a 20 char lastpass passwords protecting a 6 char account password doesn't enhance security. Still I doubt you were brute forced as the account probably would be locked. 
5534  Bitcoin / Hardware / Re: Avalon ASIC users thread on: February 07, 2013, 05:51:57 PM
How are the modules actually attached to the controller board?  The Avalon site indicated expansion to 6 modules was possible before scaling it back to 4.  Ia m just wondering if there is any limit ... with sufficient power and large enough chasis would 8 modules be possible, 10?
5535  Economy / Speculation / Re: Uh oh - fat fingers. on: February 07, 2013, 05:47:38 PM
Sold instead of bought (MtGox layout makes this easier than it should be).  Of course I didn't realize what I had done so I went ahead and did it again.  Double down! 

Likely I was able to unwind for only a token 2% or so educational fee.
5536  Bitcoin / Bitcoin Discussion / Re: Bill Still ("The Money Masters") not a fan of Bitcoin (Adam vs The Man) on: February 07, 2013, 04:48:18 PM

Still: I basically have a lot of trouble being comfortable with Bitcoin. Number one, it was hacked about two years ago. Number two, although it purports to be decentralized money and everybody says 'oh, the security features make it impossible to control centrally,' you know, I just...I have no facts to support it, I just, I'm uncomfortable with the situation.

Anyone who says nonsense like that has no credibility. Why can't people just say, " I don't know enough about it to make a comment".
Just recently that kind of BS has been filling the comments in bitcoin press articles too, my tinfoil hat tells me the disinformation machine has been fired up again.

No need to look for conspiracies when plain ignorance and lack of due diligance is sufficient to explain this.


Never attribute to malice that which is adequately explained by stupidity*.'s_razor

*In this case it is more ignorance than stupidity. 
5537  Economy / Services / Re: Looking for people to store some of the forum's money on: February 07, 2013, 04:07:40 PM
Before this goes way off topic I, earlier I said either an offline key splitting system OR multi-sig would be fine.  I change my opinion to only multi-sig.  There are offline n of m methods to split any secret (including a private key) an example would be Shamir Secret Sharing.  However this wouldn't be ideal in a scenario like this as we would lose accountability.  If the funds were suddenly spent .... whodunit?  There is no way to know for sure.

With n of m multisig and "m" private keys if the funds are moved without authorization it is instantly possible to prove it was the "n" and clear the "m-n".  If I was a partial keyholder I know I won't misuse the funds but I would want the ability to prove my good name and multi-sig gives us that.

The other thing is that the contract should be PGP signed, it shoudl specific the exact terms under which keyholders can authenticate a request to release funds (should be verifiable and provide non-repudiation).  An example would be that release requests are PGP signed.  This ensures keyholders responding to an authenticated request are held blameless.  If theymos wants to get super secure the contract could specify two (or more trustees) which each need to pgp sign a request to transfer funds.

Custodians only respond to an authenticated (by PGP signature) request by y of x trustees.  n of the m custodians need to sign the multi-sig transaction.  This makes custodians merely "guards" and trustees responsible for proper usage.  When custodians gets proper message they act.  If they don't then they don't.  The process can be made more secure by requiring trustees to make a public request and custodians required to wait a certain amount of time (to allow challenge in the event of compromise).

If the entire process is made public it can become a resource to the community for "best practices" if something similar needs to be done in the future.
5538  Other / Beginners & Help / Re: Are ASIC's worth the investment? on: February 07, 2013, 03:01:07 PM
I bought a Jalapeno not out of any delusions of striking it Bitcoin "rich" but because someday it will be a "classic".  Like the commodore 64 of Bitcoin miners.   In the future when the first datacenter installed petahash scale rack mount mining clusters is available from Dell*, my Gen1 Jalapeno will look quaint sitting on my desk.

* Just kidding (kinda) but that probably is the end game.  A full datacenter rack of 3U or 4U mining chassis connected to a redundant pair of management servers. 
5539  Economy / Services / Re: Looking for people to store some of the forum's money on: February 07, 2013, 02:35:26 PM
This absolutely no reason to take the risk with anything less.
Why do you think keeping the money with trustees is risky, and keeping it with theymos is not? Utmost respect to theymos, but he could embezzle or lose the funds too and I'm sure there are other people just as reliable.

I think you misunderstood.  I believe the funds SHOULD be decentralized I just think there are more than enough people that there is no need to take a risk of <100% reserve, give anyone direct control of the funds, or payout excessive holding fees.

100% reserve in publicly verifiable address.
n of m multisig.
No dubious fee structures (plenty of trusted entities willing to do it to help the forum)*

* Sorry I am all for charging a fair wage but some of the proposals top out at 3% a year.  $3,000 a year just to keep one private key of an n of m multisig address safe?  Of course if theymos wants to payout fees well I got no problem with it. Decentralized and paying fees is better than centralized and $100K disappears if theymos gets hit by a bus.
5540  Economy / Speculation / Re: A more in-depth BTC/USD analysis... on: February 07, 2013, 05:00:08 AM
I don't have any knowledge of if the number is wrong or right but to put it into context FC4B does >$20K per day and BitInstant is a lot larger and older.  Even if inaccurate $100K is certainly a plausible number.  IIRC there was a Forbes article over a year ago which said something (paraphrasing from memory) like "more than $1M a month".  A year is forever in Bitcoin time.  I mean it is over 87,000 blocks. Smiley  I think people who assume bitointalk = Bitcoin have no idea how big the system is becoming.  
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