Bitcoin at the US Senate

[freedomno1]

I sense a Ripple effect to BTC

[niner]

Hearings are archived on c-span:

Senate Hearing:  http://c-spanvideo.org/program/DigitalCu

Joint House/Senate Hearing: http://www.c-span.org/flvPop.aspx?id=10737442693

[coinpr0n]

Kudos to BitPay CEO. The rest didn't seem so knowledgeable. FinCEN representative did well and was honest. OMG that redhead was ----.

No one mentioned how the handle the taxation in Germany, which could have been interesting. I may be wrong, but I believe for private affairs it's considered like barter and companies must register to use it.

[deepceleron]

deepceleron: Your avatar is the stuff of my nightmares.

So you see what it looks like when you turn it right-side-up then; most don't:
, not
http://en.wikipedia.org/wiki/Thatcher_effect

http://www.youtube.com/watch?v=xnnOtdOcOFk

[hayek]

To the people bashing this you are either just mindless anarchists or just flat out dumb.

Hey listen I know you like the safety your overlords provide but how about staying out of our business?

What the Bitcoin Foundation is trying to do is get the US powers that be to understand bitcoin and not stiffen bitcoin businesses in the US.

You have to be a special kind of slow to think we need US powers to do anything. We can rule ourselves quite fine, thank you.

Unfortunately the US is a land of laws, and bitcoin can attempt to explain laws that should be put in to place that won't stop adaptation.

Oh, I didn't know bitcoin was part of the US. I can understand how people like you, yes people like you, think you rent the land and air and water ect. from the government and need their permission to use those things but some of us are quite sovereign.

Bitcoin can go on without the US saying so, but it can also become successful quickly if the US adapts sensible laws.

Show me 1 (one) instance of anything that has ever become adopted quicker and more successfully than consumer want in exchange for regulation. This is the EXACT warning of every decent economist. You clearly think that a central planner saying "Shut up and do this it's in your best interest - take it from me I know what's best for you" is better than people deciding for themselves.

Regardless, bitcoin will live whether the US attempts to thwart it or not.

Despite your best efforts. But what do I know. I'm just a mindless anarchist.

[dscotese]

To the people bashing this you are either just mindless anarchists or just flat out dumb.

Hey listen I know you like the safety your overlords provide but how about staying out of our business?

What the Bitcoin Foundation is trying to do is get the US powers that be to understand bitcoin and not stiffen bitcoin businesses in the US.

You have to be a special kind of slow to think we need US powers to do anything. We can rule ourselves quite fine, thank you.

Unfortunately the US is a land of laws, and bitcoin can attempt to explain laws that should be put in to place that won't stop adaptation.

Oh, I didn't know bitcoin was part of the US. I can understand how people like you, yes people like you, think you rent the land and air and water ect. from the government and need their permission to use those things but some of us are quite sovereign.

Bitcoin can go on without the US saying so, but it can also become successful quickly if the US adapts sensible laws.

Show me 1 (one) instance of anything that has ever become adopted quicker and more successfully than consumer want in exchange for regulation. This is the EXACT warning of every decent economist. You clearly think that a central planner saying "Shut up and do this it's in your best interest - take it from me I know what's best for you" is better than people deciding for themselves.

Regardless, bitcoin will live whether the US attempts to thwart it or not.

Despite your best efforts. But what do I know. I'm just a mindless anarchist.

Me too!  Except I think chsados is misusing the word "mindless."

[socrates1024]

These are my favorite clips from the hearing:

"so there's a centralized public ledger that's encrypted.... is that prime number trapdoor cryptology?"
http://c-spanvideo.org/clip/4474124&updatedclip

BitPay Tony gives a great example of how Bitcoin is a general purpose property rights system that could simplify the transactions involved in buying a house.
http://c-spanvideo.org/clip/4474122

[deepceleron]

"so there's a centralized public ledger that's encrypted.... is that prime number trapdoor cryptology?"
http://c-spanvideo.org/clip/4474124&updatedclip

No senator, there is no encryption or prime number-based cryptology used by Bitcoin to store or transfer value. However, please respond to this freedom of information act request, requesting transcripts of any testimony or council you may have received that may have informed you that the words "prime number" "encryption" and "trap door" go together...

[willphase]

requesting transcripts of any testimony or council you may have received that may have informed you that the words "prime number" "encryption" and "trap door" go together...

'trapdoor' refers to a mathematical construct that's considered easy to do one way but hard to do the reverse way - e.g. factorisation of primes (used in RSA) or the discrete logarithm problem (used in EC and thus bitcoin).  The three words therefore do go together well, but bitcoin doesn't use any prime factorisation.

Will

[drawingthesun]

I posted this in another thread.

Am I wrong to be so critical of Ripple? I really feel they are trying to privatize cryptocurrencies.

This is in response to the possibility that RippleLabs/Opencoin are going to position themselves as the better cryptocurrency.

As I understand it Ripple was around before Bitcoin

This is a misconception that Opencoin loves to propagate. Ripple has been around longer than Bitcoin, but not in the current state it is in now. That was the old Ripple.

Don't confuse the old Ripple (Ryan Fugger's) and the new Ripple (Jed McCaleb/OpenCoin). They have more differences than similarities

In fact the old Ripple did not contain the built in Bitcoin replacement stealth currency XRP (Ripples) of which Opencoin own most of them and create artificial scarcity and sell them off over inflated for Bitcoins to idiots.

Make no mistake, Ripplelabs/Opencoin is the prefered currency for the USA, and Google know this, the entire thing is just a layer on top of the current credit/fractional reserve system.

One of our greatest threats is a freedom restricting bank friendly currency called XRP.

Also this forum is full of Ripple shills, you have been warned.

[NewLiberty]

"so there's a centralized public ledger that's encrypted.... is that prime number trapdoor cryptology?"
http://c-spanvideo.org/clip/4474124&updatedclip

No senator, there is no encryption or prime number-based cryptology used by Bitcoin to store or transfer value. However, please respond to this freedom of information act request, requesting transcripts of any testimony or council you may have received that may have informed you that the words "prime number" "encryption" and "trap door" go together...

The tragedy is that the panel let it float not to embarrass the senator, which is a mistake.  The senator was asking it as a question, and also to display some level of knowledge, though that knowledge didn't apply.

The ledger is "decentralized" and not encrypted to hide it but to secure it as unalterable.  Those points would have been useful for him (and more importantly the video audience) to understand.  It was an opportunity missed.  The notion that it is public, (thereby requiring no subpoenas), and forensically useful (as it is provably unaltered) are very important elements to diminish the need for any attempts at meddling with the protocol or making laws attacking it.

Opportunity missed.

[NewLiberty]

I posted this in another thread.

Am I wrong to be so critical of Ripple? I really feel they are trying to privatize cryptocurrencies.

This is in response to the possibility that RippleLabs/Opencoin are going to position themselves as the better cryptocurrency.

As I understand it Ripple was around before Bitcoin

This is a misconception that Opencoin loves to propagate. Ripple has been around longer than Bitcoin, but not in the current state it is in now. That was the old Ripple.

Don't confuse the old Ripple (Ryan Fugger's) and the new Ripple (Jed McCaleb/OpenCoin). They have more differences than similarities

In fact the old Ripple did not contain the built in Bitcoin replacement stealth currency XRP (Ripples) of which Opencoin own most of them and create artificial scarcity and sell them off over inflated for Bitcoins to idiots.

Make no mistake, Ripplelabs/Opencoin is the prefered currency for the USA, and Google know this, the entire thing is just a layer on top of the current credit/fractional reserve system.

One of our greatest threats is a freedom restricting bank friendly currency called XRP.

Also this forum is full of Ripple shills, you have been warned.

Criticism, if effective, will improve it.  Be as critical as you like.
Personally I see nothing wrong with folks making private cryptocurrencies.  They can do anything they like in the walled gardens, and it doesn't damage or compete with Bitcoin.  Innovations developed independently may even ultimately be added into Bitcoin if they are acceptable and good for Bitcoin.  
Places where the marketing is false or misleading should be pointed out, and you are correct in doing so.  If they are wise, they will refine their messages.
I don't see the "greatest threat" of Ripple.  It would be like suggesting that Apple the greatest threat to Linux?

[drawingthesun]

I don't see the "greatest threat" of Ripple.  It would be like suggesting that Apple the greatest threat to Linux?

Unfortunately the average person walks past the Apple store everyday and knows nothing about Linux, even though Android is sort of closed Linux.

If Ripple becomes the cryptocurrency of the people by being marketed very well, it might take off and become mainstream and destroy Bitcoins value.

[niothor]

So , it all ended like.... nothing changed?

[NewLiberty]

I don't see the "greatest threat" of Ripple.  It would be like suggesting that Apple the greatest threat to Linux?

Unfortunately the average person walks past the Apple store everyday and knows nothing about Linux, even though Android is sort of closed Linux.

If Ripple becomes the cryptocurrency of the people by being marketed very well, it might take off and become mainstream and destroy Bitcoins value.

That risk seems extraordinarily unlikely.  I don't get why folks are worried about it.
1) Ripple is marketed very poorly, Bitcoin marketing is far superior and no one is even being paid to do that.
2) Ripple becoming "mainstream" would be like x400 "beating" SMTP in the marketplace, it isn't going to happen, they have different purposes.
3) They solve different problems, with different solutions, they don't even really compete.  Ripple is a debt conveyance system, Bitcoin is an asset class and a payment system.  They aren't much in the same game, even though they use some similar technologies.
4) Centralized and proprietary vs open, free, user supported.
5) Ripple is trust based and centralised, Bitcoin is trust free and distributed.

It is more likely that Bitcoin and Ripple will each do better because of each other.  Ripple certainly benefits from Bitcoin's leadership in the market place, and Bitcoin can benefit from a trust based system for those that want that.  For example if I have trusted business partners who can initiate exchanges.

Your example of the Apple store is an apt example of an innovation that is crossing-over.  There are now Android stores popping up.
http://www.wired.com/gadgetlab/2011/12/google-android-store-australia/
Android remains the globally dominant phone OS, and is only a fraction of Linux globally even without these stores, but they figured it is worth a try too.

People are more afraid than they need to be.  If Bitcoin's value were destroyed, that would hurt Ripple greatly, not help it.  Bitcoin is a main reason for Ripple to even exist.  

[NewLiberty]

So , it all ended like.... nothing changed?

There won't even be any changes considered for many weeks.  This was a hearing for getting information and questions answered.

The main requests for changes were to simplify and clarify the "money service" registration craziness.

[xenon481]

If anyone else was wondering about Tunstall:
https://twitter.com/jerrybrito/status/402918026968039425

That would explain a lot.  This is why she was saying Bitcoin needs to do things which are impossible.  It was simply a way to advocate for Ripple the centralized alternative.

Did she stand in for Ripple CEO Chris Larsen?

From my experiences with Prosper's horrible management for many years, I have learned to not support any venture of Chris Larsen.

[DeathAndTaxes]

"so there's a centralized public ledger that's encrypted.... is that prime number trapdoor cryptology?"
http://c-spanvideo.org/clip/4474124&updatedclip

No senator, there is no encryption or prime number-based cryptology used by Bitcoin to store or transfer value. However, please respond to this freedom of information act request, requesting transcripts of any testimony or council you may have received that may have informed you that the words "prime number" "encryption" and "trap door" go together...

The tragedy is that the panel let it float not to embarrass the senator, which is a mistake.  The senator was asking it as a question, and also to display some level of knowledge, though that knowledge didn't apply.

The ledger is "decentralized" and not encrypted to hide it but to secure it as unalterable.  Those points would have been useful for him (and more importantly the video audience) to understand.  It was an opportunity missed.  The notion that it is public, (thereby requiring no subpoenas), and forensically useful (as it is provably unaltered) are very important elements to diminish the need for any attempts at meddling with the protocol or making laws attacking it.

Opportunity missed.

Correction, the ledger is not encrypted.  Cryptography in the form of digital signatures and the proof of work hashing function authenticate transactions and make retroactive changes to the ledger difficulty to accomplish.  There is no encryption in the Bitcoin protocol but yes the larger context is right.  The question was in the right ballpark but all the details incorrect and nobody corrected it.  An opportunity lost.  If nothing else correcting DECENTRALIZED is kinda important.  It is the decentralized ledger which is the heart of what makes Bitcoin well Bitcoin.

[NewLiberty]

"so there's a centralized public ledger that's encrypted.... is that prime number trapdoor cryptology?"
http://c-spanvideo.org/clip/4474124&updatedclip

No senator, there is no encryption or prime number-based cryptology used by Bitcoin to store or transfer value. However, please respond to this freedom of information act request, requesting transcripts of any testimony or council you may have received that may have informed you that the words "prime number" "encryption" and "trap door" go together...

The tragedy is that the panel let it float not to embarrass the senator, which is a mistake.  The senator was asking it as a question, and also to display some level of knowledge, though that knowledge didn't apply.

The ledger is "decentralized" and not encrypted to hide it but to secure it as unalterable.  Those points would have been useful for him (and more importantly the video audience) to understand.  It was an opportunity missed.  The notion that it is public, (thereby requiring no subpoenas), and forensically useful (as it is provably unaltered) are very important elements to diminish the need for any attempts at meddling with the protocol or making laws attacking it.

Opportunity missed.

Correction, the ledger is not encrypted.  There is no encryption in the Bitcoin protocol but yes the larger context is right.  The question was in the right ballpark but all the details incorrect and nobody corrected it.  An opperunity lost.  If nothing else correcting DECENTRALIZED is kinda important.  It is the decentralized ledger which is the heart of what makes Bitcoin, Bitcoin.

Careful or you might confuse folks.  Hashing uses crypto, but the block-chain doesn't hide the result, rather it uses the cryptographic result as an indexable tx reference, so it is incorrect to say "there is no encryption in the Bitcoin protocol".
Encryption in the form of hashes, is frequently used in digital forensics to irrefutably verify a dataset as unchanged.  So the blockchain comes pre-subpoened, and pre-forensically useful.  It doesn't get any better than that for the LEOs.

[Kouye]

Careful or you might confuse folks.  Hashing uses crypto, but the block-chain doesn't hide the result, rather it uses the cryptographic result as an indexable tx reference, so it is incorrect to say "there is no encryption in the Bitcoin protocol".
Encryption in the form of hashes, is frequently used in digital forensics to irrefutably verify a dataset as unchanged.  So the blockchain comes pre-subpoened, and pre-forensically useful.  It doesn't get any better than that for the LEOs.

Agreed, http://en.wikipedia.org/wiki/Cryptographic_hash_function for once explains it pretty well.