2013-05-03 Wired/Kaminsky: Let’s Cut Through the Bitcoin Hype: A Hacker-Entrepre

[jgarzik]

Let’s Cut Through the Bitcoin Hype: A Hacker-Entrepreneur’s Take
by Dan Kaminsky

URL: http://www.wired.com/opinion/2013/05/lets-cut-through-the-bitcoin-hype/

[freethink2013]

someone didn't get into the market as early as they wished they had

[psybits]

Interesting article: but what's with the tacky, sensationalist headline that doesn't even reflect the article?

EDIT: in fact most of the article contradicts the headline.

[Stark-Fujikawa]

Interesting article: but what's with the tacky, sensationalist headline that doesn't even reflect the article?

Could be an editor's decision. "It's a good article, but it lacks the hook to draw people in." That sorta stuff.

[psybits]

Interesting article: but what's with the tacky, sensationalist headline that doesn't even reflect the article?

Could be an editor's decision. "It's a good article, but it lacks the hook to draw people in." That sorta stuff.

Yeah I thought it was probably to get more traffic - whenever I see that though I lose respect for the publisher - no matter who it is. Trashy tabloids do that - Wired shouldn't.

[Stark-Fujikawa]

I generally really like Wired, as far as I know they were one of the first to pay serious attention to Bitcoin.

[psybits]

I generally really like Wired, as far as I know they were one of the first to pay serious attention to Bitcoin.

They had some opinion pieces last year slamming Bitcoin saying it wouldn't amount to anything!

[proudhon]

Bitcoin is not as secure as we think.

- Dan Kaminsky

The system and framework itself is preternaturally sound.

- Dan Kaminsky

The first quote was a lame way of his actual point, which is that bitcoin exist in an ecosystem of less sound systems that can be exploited to steal bitcoins or disrupt markets.

[FreeMoney]

Of all the millions of dollars of purloined bitcoin that’s floating around out there, not one Satoshi of it has been spent.

That seems like a claim worth giving evidence for.

[nebulus]

Pretty good read.

[hathmill]

I like what he said about litecoin 

[JackMack96]

Interesting enough read, I didn't really like the article though.

[rebuilder]

The UK flavour of Wired, wired.co.uk is better than the US one in my experience. They do run many of the same articles, but the UK site just seems far more intelligent.

[Piper67]

According to another thread, Wired has changed the headline. Wonder if Kaminski called in to complain about the old one.

[xcsler]

I like what he said about litecoin 

Can you explain in a non-technical way why he likes Litecoin.
Thanks.

[jgarzik]

Updated OP to reflect new article title.

[adam3us]

Let’s Cut Through the Bitcoin Hype: A Hacker-Entrepreneur’s Take
by Dan Kaminsky

URL: http://www.wired.com/opinion/2013/05/lets-cut-through-the-bitcoin-hype/

I thought it was a rather good article.

Did everyone notice this later comment by Kaminsky in the comments section:

A number of parties have >51% powers, and are not using them. If they were used, we'd probably see the masses arrive at a consensus to do something about it -- unless the powers weren't abused, and were used judiciously. Things get weird at this scale. The Queen of England retains interesting powers across the world, that she does not use very frequently (lest she lose them). Rarely used, extreme capabilities, that are nonetheless well known to exist -- this is a property of many systems that end up stable.

Pressure release valves. Just because something can be abused, doesn't mean it will be, or must be eliminated.

He seems to be claiming that there are multiple dark-miners with ASICs who have enough power to exceed the network, but are holding back for fear of damaging their mining profit.  He's usually quite careful to not make claims he cant back up.

You would think someone in that position given the level of investment would not be likely to try double spending, but rather would be out for mining profit.  Its an interesting dynamic though eh - restraint - maybe via explicit or implicit cartel if there are multiple.  Probably some physical oligopoly mining analogy eg diamonds with reduced supply pacts to hold the price and profit up.

Adam

[cypherdoc]

Let’s Cut Through the Bitcoin Hype: A Hacker-Entrepreneur’s Take
by Dan Kaminsky

URL: http://www.wired.com/opinion/2013/05/lets-cut-through-the-bitcoin-hype/

I thought it was a rather good article.

Did everyone notice this later comment by Kaminsky in the comments section:

A number of parties have >51% powers, and are not using them. If they were used, we'd probably see the masses arrive at a consensus to do something about it -- unless the powers weren't abused, and were used judiciously. Things get weird at this scale. The Queen of England retains interesting powers across the world, that she does not use very frequently (lest she lose them). Rarely used, extreme capabilities, that are nonetheless well known to exist -- this is a property of many systems that end up stable.

Pressure release valves. Just because something can be abused, doesn't mean it will be, or must be eliminated.

He seems to be claiming that there are multiple dark-miners with ASICs who have enough power to exceed the network, but are holding back for fear of damaging their mining profit.  He's usually quite careful to not make claims he cant back up.

You would think someone in that position given the level of investment would not be likely to try double spending, but rather would be out for mining profit.  Its an interesting dynamic though eh - restraint - maybe via explicit or implicit cartel if there are multiple.  Probably some physical oligopoly mining analogy eg diamonds with reduced supply pacts to hold the price and profit up.

Adam

how would he know?

[cypherdoc]

A number of parties have >51% powers, and are not using them. If they were used, we'd probably see the masses arrive at a consensus to do something about it -- unless the powers weren't abused, and were used judiciously....

He seems to be claiming that there are multiple dark-miners with ASICs who have enough power to exceed the network, but are holding back for fear of damaging their mining profit.  He's usually quite careful to not make claims he cant back up.

Got an email clarification: thats not what Kaminsky meant; what he meant was some pools are large (verging 50%), and some ASICs have a large amount of power.  Therefore they could be close to or at ability to do 50% attack but are seemingly not and probably wont.

Adam

well then, what was quoted in the article is totally misleading once again.

[adam3us]

A number of parties have >51% powers, and are not using them. If they were used, we'd probably see the masses arrive at a consensus to do something about it -- unless the powers weren't abused, and were used judiciously. Things get weird at this scale. The Queen of England retains interesting powers across the world, that she does not use very frequently (lest she lose them). Rarely used, extreme capabilities, that are nonetheless well known to exist -- this is a property of many systems that end up stable.

Pressure release valves. Just because something can be abused, doesn't mean it will be, or must be eliminated.

He seems to be claiming that there are multiple dark-miners with ASICs who have enough power to exceed the network, but are holding back for fear of damaging their mining profit.  He's usually quite careful to not make claims he cant back up.

You would think someone in that position given the level of investment would not be likely to try double spending, but rather would be out for mining profit.  Its an interesting dynamic though eh - restraint - maybe via explicit or implicit cartel if there are multiple.  Probably some physical oligopoly mining analogy eg diamonds with reduced supply pacts to hold the price and profit up.

Kaminsky replied on the wired thread:

Dan Kaminsky -> Adam Back -
It's not a coincidence that BTCGuild gets right up to 48% and stops, and the last group who spun up their ASICs got to 17-25% on first fire. There's a number of parties who can go ahead and grab 51%; everybody's holding back. (Of course, the dynamic of everyone holding back, is that once people aren't holding back a new equilibrium may form, the nature of which is really actually hard to judge. Great arms race to predict if you're in the business of selling arms though!)

Bitcoin will have a new work function in the next year, or there will be a new Bitcoin. Not actually sure which.

I would think the reason to hold back is economic - if you had 100TH and you mine too hard at 50% spread across a few pools, you reduce your own profit as difficulty adjusts to you.

(Deleted my other post here - since Kaminsky posted his comments on the wired article)

Adam