I believe this has been mentioned before (it definitely has on IRC), but I'm fascinated by the topic and want to bring it up again...one of the nice properties of the bitcoin protocol is that communications are asynchronous...nodes only need to announce transactions and blocks to anyone willing to listen.  I've never dabbled in HAM radio or anything, but it seems like transactions and blocks would be the perfect thing to broadcast over some sort of radio network as a backup to the internet.

I figured it would either be within 3 years or never. 

I'm not meaning to spread any fear about mtgox, I love the service...but this has to be on peoples' minds (especially considering Schumer's presser).

On this note, I'd like to once again mention the need for a new kind of decentralized p2p exchange using a ripplepay type of system for settlement.  I see several components to such a system:

- order listing and announcement ...orders with the required collateral (bitcoins or ripple-debt contracts) are placed with trusted third parties and order book information made available to the public
- order matching engines (people collect orders they hear about and match them to other orders...exchanging ripple-debt for bitcoins in the process and providing trade data to the public ...these matching engines would need to not only match orders, but match only orders where there is a path with sufficient credit connecting the buyer and seller through the ripple-debt network)
- ripple-debt super nodes ...this are nodes in the ripple trust network that have many trust relationships...these nodes can optionally choose to accept deposits of various currencies in exchange for ripple credit
- settlement of ripple credit ...to periodically rebalance credit in the system, people would pay some form of currency to settle their ripple debts (in cases where they had not pre-paid)

If there were open source implementations of these various components of the system that made it trivial for anyone to operate any component of this system, I think bitcoin trading would be much less vulnerable than it is today.

I think this is a very plausible scenario indeed.  Gold has really always been at the foundation of the international banking system even though currencies were allowed to float against gold long ago.  It's not hard to imagine bitcoin taking at least part of that role in the future.

I think publicity is no longer something that need to be sought out.  However, some of the anti-bitcoin propaganda that is becoming more and more prevalent does need rebuttal...in a rational, level headed manner.  Predictably, the propaganda machine is cranking up and trying to associate bitcoin with various illegal activity.  A simple counter point to that is to describe to people how insane you'd be to use bitcoin for illegal activity as every transaction will be recorded permanently and available to anyone for analysis.  Most criminals likely do not possess the skills that would be necessary to hide your tracks in the digital world. Criminals and tax evaders would be wise to steer very clear of bitcoin.

I was thinking that a proof of work system for establishing a TCP connection might solve the issue of a DDOS.  Low and behold, I found this:
http://web.cecs.pdx.edu/~edkaiser/Papers/GlobalInternet08_paper.pdf

Haven't read the paper yet.  Looks to be like something designed to work on today's internet, but I wonder if a robust solution wouldn't ultimately need to employ routers (such that routers are able to kill traffic close to the source that is trying to establish a connection to a destination, but the required difficulty is not satisfied).  Routers wouldn't necessarily need to retain difficulty requirements for all destinations, but a destination that is getting a large amount of connection attempts that don't meet the difficulty requirement could cry out for help from the routers.  Routers would just check connection attempts for a list of "hot" destinations.

Btw, has anyone stopped to consider that those early adopters might need a substantial amount of wealth to be successful in lobbying the politicians to prevent bitcoin from being banned and chased into the shadows for years to come?

I think block chain analysis & tools would be a very good contribution...I'm sure many people are keenly interested in knowing exactly what kind of information can be harvested from the block chain by someone sufficiently motivated and skilled.

I don't know of any such plugin, but I would be surprised if there weren't already a few people working on it.

What techniques do people use to defend against DOS and DDOS attacks?  Can anyone recommend some resources to help people running various bitcoin related sites defend against these attacks?  As someone contemplating creating a bitcoin related service, I am interested in this subject.  The topic probably warrants a dedicated section on the wiki given the recent troubles.

I think it would be great...it might also make huge headlines when Facebook bans it because it is eating into their profits from Facebook credits...LOL!  Go for it!

These arguments remind me of people that complain about how much money sports stars make.  Nobody is forcing anyone to buy sports tickets and merchandise and that is what is paying those athletes salaries.  Likewise, no one is forcing you or anyone else to use bitcoins.  Ultimately, it comes down to competition.  If you think the early adopters might become too rich, start a new currency that works how you want it to work and convince people of its merits and that they should start using it.  You'll need to do a lot of work to convince people that it's better than anything else out there and that they should put their money into it, but such is the nature of free market competition.

At the end of the day, if bitcoin is successful, then no matter how rich the early adopters become, the value that everyone else has derived from bitcoin will have been greater.  Only if people were forced through the threat of violence to use bitcoins could that not be the case.

I think a little perspective is in order...first, if someone does have 20% of all bitcoins, the notional value of those coins is around $10 million.  However, were they to sell all those coins on any short time scale, they wouldn't get anywhere near that amount and they would crash the market.  But, let's assume they could bleed out $5 million over the span of 3 months (but I think that's still far above what the market could support today).  That's peanuts compared with the wealthiest people on this planet and I'd bet that the contribution these bitcoin pioneers have made is far greater than the vast majority of those extremely wealthy individuals (and yes, even for those that did little more than buy or mine bitcoin...because, after all, without them, there would be no "us").  If the price of bitcoin continues to appreciate, these early adopters will have increasing pressure and incentive to either lock in those gains or to invest it in some capacity (quite likely in businesses involving bitcoins).  Continuing to hold such a large hoard will make less and less sense as time passes.  

I don't think 0% or negative interest loans would happen simply because you then take on both the risk that bitcoins could fall in value and that the borrower will default.  However, loans will happen and people might borrow in terms of some index based on real value (a basket of tangible goods of some sort).  They'll take the loan in bitcoins and they'll repay in bitcoins, but the repayment amount will be calculated based on this index rather than be a fixed percentage of bitcoins.  This affords the lender diversification out of bitcoins with a fixed, real return and the borrower is not taking on the risk that bitcoin has a huge appreciation in value.  In short, this loan structure would eliminate the risk inherit in bitcoin volatility from both the lender and the borrower, it offers the lender diversification, and it offers the borrower the funds they may need for whatever venture they might be contemplating.

Because it's not free money.

Wow, 7 pages of replies on a thread that started just today...(tl,dr...so apologies if I'm stating something already stated)...I love the irony in this proposal...the irony is that in order for it to take off, it would very likely have to offer even greater reward for the early speculators than bitcoin (because of the current awareness of bitcoin and the very marginal improvement on bitcoin that it offers).  You would actually need to rapidly issue new currency at the very beginning and ramp down the payout and inflation more quickly than bitcoin.  The early speculator would have an even more "unfair" advantage, but that is what it would take for this to even have a chance at succeeding.  LOL

Your wallet consists of keys that let you sign transactions (i.e. spend bitcoins)...your actual bitcoin balance is stored in the block chain.  Making backups protects your ability to sign transactions.  If you open two instances of your wallet simultaneously, those two clients can become momentarily out of sync with each other and opens up a possibility of accidental double spends (though I think the spends would have to be almost simultaneous since the two clients should hear about each others' transactions within a few seconds).  So, it's not a good idea to have multiple instances of your client running concurrently (note: while you could accidentally create a double spend, the network would quickly recognize and discard one of the transactions).

You want to encrypt your wallet backups (use AES-256) just so that if a copy of your wallet fell into the wrong hands, it couldn't be used to create those spend transactions.  You want to keep those encrypted backups hosted somewhere such that if someone stole all the computers in your possession, you won't lose any of your bitcoins (as long as the wallets on those computers were encrypted).

Btw, the inflation rate of bitcoins is ~41% at this very moment (and people think the inflation rate of the US dollar is bad!!!).  Deflation is not something anyone has to worry about for a long time.  Speculation on the other hand is something to keep an eye on...there could very well be an irrational exuberance about the future of bitcoin that is driving up the value of a bitcoin.

Some people in this thread are speaking as if bitcoin is going to be the only currency and that everyone would forgo everything about diversification that's been drilled into their heads.  Even if I expect bitcoin to substantially increase in value, I wouldn't want to put everything I own into it.  So, yes, I would want to hold other things of value (debt, investment, metals).  As well as trade my bitcoins for things I need and want (I mean, you can only save so much until the harsh realities of life force you to trade some of it for food).  If bitcoins are appreciating in value, it either means there's a lot of irrational saving (i.e. a bubble that will burst and correct itself...in which case, you would be wise not to be a hoarder at that moment and the whole deflation argument is moot (because prices in bitcoin terms will rise, not fall)), or it means the bitcoin economy is expanding and is prosperous (in which case, saving is effectively like investing in a broad index fund tracking the overall bitcoin economy).

Right now, it's hard to say whether there is a lot of irrational saving of bitcoins, or whether the market is accurately pricing in a bright future for bitcoin.

Edit: one other point...bitcoin might be a good tool for saving and exchange, but might not be so good for pricing and lending.  There's nothing that says you couldn't lend in dollar terms and repay with bitcoins (based on exchanges rates at the time of repayment)...or better yet, lend in terms of some price index (i.e. a basket of staples).

Not quite...inflation above zero, but below the growth of the *bitcoin* economy still results in deflation (or as I prefer to view it, an appreciation in the value of a bitcoin).

As for the question about why not keep a permanent inflation, I think that could have also worked.  A declining payout means that the rate of inflation of the bitcoin money supply more quickly reaches rates comparable with and ultimately better than national currencies (as has been mentioned earlier).  But, if the rate remained at 50btc/block, eventually the rate of inflation would still approach 0%.  I do think the timeframes for the declining payout should give bitcoin inflation a chance at staying a bit lower than the growth rate of its economy.  If it works out that way, the value of a bitcoin should continue to appreciate, which makes it a good store of value...and that is important at this stage.

I don't think this is a huge problem, but it could be improved.  If there was widely available, somewhat standard pool software that made it simple for anyone to setup a pool, then I think you'd see a lot of smaller, private pools being created.  All a pool really needs is a few blocks/day to counter the effects of difficulty adjustments.  Right now, 50Gh/s is sufficient for that.