Exploiting Special Properties of Bitcoin For Uses Other Than Currency

[genjix]

If BitDNS or <other programmers pet project X> becomes conjoined to Bitcoin, I am instantly selling all my BTC and leaving.

[theymos]

Bitcoins are worthless as a source for timestamps.  The block creator can put whatever he or she wants in there.

The timestamp must be after the median time of the last 11 blocks and before 2 hours in the future (using adjusted node time). The timestamp will be accurate within a few hours unless a powerful attacker is trying to make it inaccurate. I believe moving the timestamp forward or back by more than 2 hours would require more than 50% of the network.

This property is valuable in certain circumstances.

[sturle]

Bitcoins are worthless as a source for timestamps.  The block creator can put whatever he or she wants in there.

The timestamp must be after the median time of the last 11 blocks and before 2 hours in the future (using adjusted node time).  [blahblah...]

You could have saved the trouble of writing all this by quoting one more word from me: Almost.

This property is valuable in certain circumstances.

Name one.  It's good enough for their use in the Bitcoin blockchain.  For other purposes the timestamps are still worthless.  Accurate timestamps are free.

[MoonShadow]

If BitDNS or <other programmers pet project X> becomes conjoined to Bitcoin, I am instantly selling all my BTC and leaving.

I would too.  So the exchange rate would crash.

[MoonShadow]

It's quite similar to currencies but I'd like to mention possible use of bitcoin for equities market.

A company would modify the bitcoin software to create its own cryptocurrency.  The total amount would be much lower, so that the company could make it possible to own the whole initial stock (running the software alone during some time before realease, for instance).

To what end?  A digital stock cert is easier, and doesn't require a timestamp.  Anonymous ownership of stock is risky for the investors, and illegal in most nations anyway.  Anonymous "bearer bonds" are also banned in most nations, due to a history of their use in money laundering and finanacing of wars. 

[theymos]

Name one.  It's good enough for their use in the Bitcoin blockchain.  For other purposes the timestamps are still worthless.  Accurate timestamps are free.

The standard use of a timestamp server is to prove that you created something before a certain date. Rarely in these cases do you need anywhere near the two-hour accuracy that Bitcoin provides.

For example, say that I have figured out how to break AES encryption. I put my method in a text file and hash it. I put the hash in a block. Then, if someone else finds the same method independently, I can prove that I was the first one to find it by showing them the hash in the block. Unless someone found my method less than a day after I did, observers can be very sure that mine came first because the block timestamp is reliable enough for that.

[sturle]

Name one.  It's good enough for their use in the Bitcoin blockchain.  For other purposes the timestamps are still worthless.  Accurate timestamps are free.

For example, say that I have figured out how to break AES encryption. I put my method in a text file and hash it. I put the hash in a block. Then, if someone else finds the same method independently, I can prove that I was the first one to find it by showing them the hash in the block. Unless someone found my method less than a day after I did, observers can be very sure that mine came first because the block timestamp is reliable enough for that.

It would be enough, and much easier to mail it to someone.  Use a gmail address or something, and you will have your timestamps accurate to the second, at least, on many external locations.  This method is free, and not an annoyance to thousands of Bitcoin users all over the world, who are paying for their internet connections.

[grondilu]

To what end?  A digital stock cert is easier, and doesn't require a timestamp.  Anonymous ownership of stock is risky for the investors, and illegal in most nations anyway.  Anonymous "bearer bonds" are also banned in most nations, due to a history of their use in money laundering and finanacing of wars. 

A decentralized equity market would hve no brokerage fees.  This is good enough a reason do make it real, to me.

I don't care if it's illegal or if it can be used for money laundering or whatever.  Laws are decided by people.  I'm part of 'people' so I give my opinion and I say I wish anonymous ownership of shares was legal.

[MoonShadow]

To what end?  A digital stock cert is easier, and doesn't require a timestamp.  Anonymous ownership of stock is risky for the investors, and illegal in most nations anyway.  Anonymous "bearer bonds" are also banned in most nations, due to a history of their use in money laundering and finanacing of wars. 

A decentralized equity market would hve no brokerage fees.  This is good enough a reason do make it real, to me.

I don't care if it's illegal or if it can be used for money laundering or whatever.  Laws are decided by people.  I'm part of 'people' so I give my opinion and I say I wish anonymous ownership of shares was legal.

But corporations are creations of the state, and by proxy, so are stocks and bonds that these corporations release.  How, for example, can you ensure that the corporation that you invest in isn't going to deny that you are even an investor without the threat of the force of the courts?  Sure, you could sue in a common law court, but how would you get the losing party to pay the judgement if they don't even recognize the authority of the court? Bitcoin works because there is no counterparty risk that is always central to any particular Bitcoin transaction.  But stocks and bonds are just promises, and are primarily counterparty risk.

[grondilu]

But corporations are creations of the state, and by proxy, so are stocks and bonds that these corporations release.  How, for example, can you ensure that the corporation that you invest in isn't going to deny that you are even an investor without the threat of the force of the courts?  Sure, you could sue in a common law court, but how would you get the losing party to pay the judgement if they don't even recognize the authority of the court? Bitcoin works because there is no counterparty risk that is always central to any particular Bitcoin transaction.  But stocks and bonds are just promises, and are primarily counterparty risk.

Corporations are NOT creations of the state.  They are private associations of people.

I can't ensure that the corporation won't fool me.  This is what trust, reputation, and responsability is about in a free market.  If I get screwed, I get screwed.  Period.  State should have nothing to do with that.

Yes, stocks and bonds are counterparty risk.  So what ?  It's up to me to price this risk during my bidding.

[MoonShadow]

But corporations are creations of the state, and by proxy, so are stocks and bonds that these corporations release.  How, for example, can you ensure that the corporation that you invest in isn't going to deny that you are even an investor without the threat of the force of the courts?  Sure, you could sue in a common law court, but how would you get the losing party to pay the judgement if they don't even recognize the authority of the court? Bitcoin works because there is no counterparty risk that is always central to any particular Bitcoin transaction.  But stocks and bonds are just promises, and are primarily counterparty risk.

Corporations are NOT creations of the state.  They are private associations of people.

Not the way that they exist and operate in our modern world, and certainly not in how they are funded.

I can't ensure that the corporation won't fool me.  This is what trust, reputation, and responsability is about in a free market.  If I get screwed, I get screwed.  Period.  State should have nothing to do with that.

Yes, stocks and bonds are counterparty risk.  So what ?  It's up to me to price this risk during my bidding.

Fair enough.  I think that it's going to be a tough sell for either side of the equation.

[grondilu]

Fair enough.  I think that it's going to be a tough sell for either side of the equation.

It's not that difficult.  Dark pools exist and are actualy quite successful.

[MoonShadow]

Fair enough.  I think that it's going to be a tough sell for either side of the equation.

It's not that difficult.  Dark pools exist and are actualy quite successful.

I didn't think that you were talking about a dark pool.  A dark pool is just a hidden market, there is no reason to use a blockchain to do this.

[grondilu]

I didn't think that you were talking about a dark pool.  A dark pool is just a hidden market, there is no reason to use a blockchain to do this.

There is.  Again :  zero brokerage costs.  Better confidence in the system.  And so on.

[FreeMoney]

If BitDNS or <other programmers pet project X> becomes conjoined to Bitcoin, I am instantly selling all my BTC and leaving.

This seems like an overreaction. If some junk transactions come in that's okay, but if the transactions mean something to some people then it's awful?

That is what we're talking about right? A system whereby "bogus" transactions are interpreted in an agreed upon (by some people) to mean a certain thing. Is that right? I don't see a big problem here, maybe I'm not getting it though.

[casascius]

If I wanted to timestamp a hash in a publicly obvious way to prove later that I had known an idea at a certain date... I don't need Bitcoin.

I would merely go put the hash on my user page over at Wikipedia, and then perhaps remove it so it is visible only in the history.  The edit history is visible to the world, probably will never get erased, will get mirrored a ton, everyone understands what Wikipedia is, and there would never be any need to start explaining to the baffled ladies and gentlemen of any jury what a block chain is and how it proves anything, never mind a hash.

[grondilu]

If I wanted to timestamp a hash in a publicly obvious way to prove later that I had known an idea at a certain date... I don't need Bitcoin.

I would merely go put the hash on my user page over at Wikipedia, and then perhaps remove it so it is visible only in the history.  The edit history is visible to the world, probably will never get erased, will get mirrored a ton, everyone understands what Wikipedia is, and there would never be any need to start explaining to the baffled ladies and gentlemen of any jury what a block chain is and how it proves anything, never mind a hash.

Except that it means you trust wikipedia as a robust website that won't be destroyed or altered in a foreseable future.  Rememeber also that Wikipedia is not designed for that, so wikipedia bureaucrats might very well decide to remove your modifications from the history, just in order to save some storage space.

The advantage of bitcoin is that you don't have to trust anyone in particular.

[FreeMoney]

If I wanted to timestamp a hash in a publicly obvious way to prove later that I had known an idea at a certain date... I don't need Bitcoin.

I would merely go put the hash on my user page over at Wikipedia, and then perhaps remove it so it is visible only in the history.  The edit history is visible to the world, probably will never get erased, everyone understands Wikipedia, and there would never be any need to start explaining to the baffled ladies and gentlemen of any jury what a block chain is, never mind a hash.

I think this illustrates why we don't need to worry about DNS data filling up the chain. Since there are cheaper ways to do it, people will not throw away money paying fees. Some people thinking bitcoin is an efficient way to do it might try for a while, but that's no worse than spam imo. Maybe better since it doesn't have that malicious feel.

[FreeMoney]

If I wanted to timestamp a hash in a publicly obvious way to prove later that I had known an idea at a certain date... I don't need Bitcoin.

I would merely go put the hash on my user page over at Wikipedia, and then perhaps remove it so it is visible only in the history.  The edit history is visible to the world, probably will never get erased, will get mirrored a ton, everyone understands what Wikipedia is, and there would never be any need to start explaining to the baffled ladies and gentlemen of any jury what a block chain is and how it proves anything, never mind a hash.

Except that it means you trust wikipedia as a robust website that won't be destroyed or altered in a foreseable future.

The advantage of bitcoin is that you don't have to trust anyone in particular.

Oh yeah, maybe it does need something like bitcoin. I'm still unsure.

[casascius]

I would merely go put the hash on my user page over at Wikipedia,...

Except that it means you trust wikipedia as a robust website that won't be destroyed or altered in a foreseable future.  Rememeber also that Wikipedia is not designed for that, so wikipedia bureaucrats might very well decide to remove your modifications from the history, just in order to save some storage space.

The advantage of bitcoin is that you don't have to trust anyone in particular.

Wikipedia makes its entire database available for download, plenty of mirrors are around, no fear that such a thing would disappear.

A thirty-two byte hash on one's own user page doesn't stand a remote chance of annoying bureaucrats.   If I put "F all WP's bureaucrats" in 90-point font on a popular page, that wouldn't even meet the threshold of them wanting to delete it from the permanent history, so why would they do this to recover disk space worth 0.0000000001 BTC just to hide some numbers?

Many people already put hashes on their own page for the purpose of being able to prove their identity if their account gets hacked.  Knowledge of plaintext = proof of account ownership (google "Wikipedia committed identity").  It's something they actually tend to encourage.  The plaintext doesn't have to be anything in particular, it just has to be something you can prove you know (assuming you ever get your account stolen and need to prove you're the rightful owner).  If the plaintext was "I cracked AES and here's how I did it ..." and called the hash my committed identity, it would be timestamped and condoned.