concerns on the bitcoin system: isn't it TOO perfect?

[spinoff]

I think many of us are amazed at how genius, from a computer science point of view, the bitcoin system is. Fom the high-level design solutions, like using a computational/mathematical property (difficult reversebility of hash functions) to produce proof of work and secure the blockchain, down to the low-level implementation details (personally I don't know about that, but I'm confident that at least bitcoin-qt's code is well audited and doesn't contain any major bug).

So, if you're skeptical like me, this, plus the fact that it's creator has put so much effort in remaining anonymous (and even there, he hasn't made ONE error), automatically raises a question: isn't it too perfect? I mean, it's so well enginereed, and all by the same unknown person (or group of persons) - from the concept down to the software, and no one in all these years, despite the huge incentive, has found any flaw in it (all coins lost have come from human error, never from a bug in the protocol or in bitcoin-qt). Such astonishingly well-enginereed software, at least for me, brings Stuxnet up to mind, and IIRC we know that it was very likely made by some secret government agency, and probably LOTS of funds and research went into it (and that is a good explanation for a software that has no bugs).

So, while I'm long on bitcoin and I see the great benefits it could bring, it has my skeptical-senses tingling. Am I the only one?

A more detailed fact contributes to my skepticism: are we so sure that having *every* transaction recorded and public is really a good thing? If in the future bitcoin will completely take over other payment systems (like everyone here hopes, and it very well could given its immense advantages), including cash, we will live in NSA's heaven: you recieve your wage on a certain address, which very likely will be tied by law to your identity, and you can't do anything anonymously with that money. You can't not pay taxes, buy drugs or anything the government decides it's illegal, have privacy on how much money you hold. Probably the only way to have "unwatched" bitcoins would be to buy them with gold or silver (which you would have to have purchased earlier than this supposed big-brother regime) on the black market, but you would then have two separate stream of coins, which could never interact if you wanted to preserve anonymity. So bitcoin would actually be the exact opposite of anonymity.

I think we all agree this scenario looks very bad - do you think we could ever get there? Or is there some logical flaw in my reasoning?

I'm very interested in hearing opinions and a serious discussion on this. I hope this doesn't come out as trolling, I'm truly just skeptical, in a genuine and scientific way (i.e. I'd be very happy of being proven wrong)

[Birdy]

concerns on the bitcoin system: isn't it TOO perfect?

This simply isn't true, it was very far away from perfect and it still isn't perfect.
From what I've read Satoshi's code was more of an "rough diamond", while the idea was brilliant the code was not and had to be changed a lot.
There are still a lot of issues that have to be solved in the future (like the block size limit).

So bitcoin would actually be the exact opposite of anonymity.

I think this is a valid concern, if someone has too much control over the system, it would be easy to watch every step.

[gmaxwell]

no one in all these years, despite the huge incentive, has found any flaw in it

Not so, there were quite a few serious flaws in it. We've fixed them over time and repaired the damage. OP_RETURN in a scriptSig originally let you spend anyone's coin— "No need to check the rules, let me by!"—  value overflow let anyone summon a billion bitcoins out of thin air, the hash tree second preimage let anyone pick a block and doom it on the network, lshift (and related bugs): corrupt the memory of and crash all the nodes, duplicate transaction IDs with inconsistent rewrites left the chain vulnerable to irreconcilable forks between old and newly bootstrapped nodes. I'm sure I'm missing quite a few other deep protocol issues, plus a litany of more conventional bugs, memory leaks, and (serious) performance shortcomings.

As impressive as Bitcoin was on its first day it was far from perfect— atypically reliable for such new and novel software, perhaps, but it had to be.  Regardless of  the original being the work of just one person or more than one it has taken many people to get it to what it is today.

A more detailed fact contributes to my skepticism: are we so sure that having *every* transaction recorded and public is really a good thing? [...] So bitcoin would actually be the exact opposite of anonymity.

No, it's not a good thing and I expect that Satoshi would have agreed that its not good. But it's the thing we can do. Bitcoin was already pushing the envelope of the kind of system that can be engineered (esp. when you start talking about making compatible alt. implementations) and at the time there was really no prospect of building a system that accomplished the goals without the public verification. It's not even completely clear yet if Bitcoin itself is fully viable, if transactions were a bit more expensive to store or validate, if the software was a bit more complex to author and maintain— perhaps Bitcoin would be a big mess of failure, perhaps it still will.

Only very recently has the very cutting edge of computer science and cryptography— e.g.  things like Groth's 2010 paper and Gennaro, Gentry, Parno, and Raykova's 2012 improved system— suggested that we could build succinct zero-knowledge argument systems with performance and space requirements not so far off from what Bitcoin uses today that we could even _consider_ the possibility of privacy stronger than Bitcoin's pseudo-anonymity in a zero-trust fully decentralized system.  And this is real rocket science stuff, layer after layer of idea that was only conceived of in the last decade or two, while Bitcoin can be pretty completely grasped— and trusted— by someone with a conventional, industry level, understanding of information technology... and could have been implemented with 1970s computer science (though not with acceptable performance on 1970s hardware— we're hardly keeping up as is).

[spinoff]

well that reply burns out my conspiracy theory concerns, thanks.

Regarding public transactions, I see what you mean, and it's invaluable hearing an opinion from someone who obviously knows all the specific ins and outs. Do you think ZeroCoin could help in this regard?

[jarhed]

Human error caused a fork several months ago via an incompatible wallet upgrade.

No Government on earth will adopt Bitcoin so as long Satoshi has control of his pre-mined. Thanx for the prototype.

[Gabi]

Perfect? Nah it has its problems

[LightRider]

Bitcoin, being as near perfect a money as man has yet created, will succeed only when we recognize just how useless and backwards money really is and abandon the concept entirely.

[franky1]

Re: concerns on the bitcoin system: isn't it TOO perfect?

try reading the coder for once, then your skeptical senses will vanish

personally I don't know about that, but I'm confident that at least bitcoin-qt's code is well audited and doesn't contain any major bug).

well many thousands of people have audited it, but your senses will continue to tingle untill YOU satisfy YOUR senses by reading it YOURSELF

So, if you're skeptical like me,

you also start to mention satoshi, well learn the history for once, then your skeptical senses will vanish,

please don't become like some people here that just theorise idea's without research.

[jdbtracker]

there could be protocol changes in the future that encrypt transactions so only the ones in your control can be revealed, using homomorphic encryption this is possible. The transaction still gets processed nether the computer nor the user can decipher the data but it can process it, Then again just encrypt all addresses that interact with you too, It wouldn't be hard to do either.

Open Transactions has a system like that, Chaumian blinded coins, no one knows who had it or who it will go to just have to transact through one of those servers; The coins could exchange a 1000 hands before it exits the server, think of it as TOR for Bitcoin, the only transactions ever seen are the ones that went in and the ones that went out.

[miner2002]

A more detailed fact contributes to my skepticism: are we so sure that having *every* transaction recorded and public is really a good thing? If in the future bitcoin will completely take over other payment systems (like everyone here hopes, and it very well could given its immense advantages), including cash, we will live in NSA's heaven: you recieve your wage on a certain address, which very likely will be tied by law to your identity, and you can't do anything anonymously with that money.

I'm still new here, but two things I see here.

1) your current bank account is just as traceable. You sign up for a bank account with your SS#.  So my bank account and identify are directly tied and you can easily trace the money.

2) Would it not be easy to hide the money even if they knew it went to you? 

Example: I get paid to my normal wallet A
I then transfer some BTC to a middleman wallet X who takes a small fee and transfers is to whatever wallet I tell him too (maybe in chunks to further hide). 
My wallet B then gets funded through Wallet X.   Becuase wallet X is moving funds all over the place, you would have no way of knowing that the funds that got sent to wallet B came from Wallet A originally, making those funds untraceable after a single hop.

[niothor]

The biggest flaw in the system is that there are people who think it is Perfect.
And until now humans haven't create the perfect thing.

Also , there are lots of things Satoshi didn't think about when he first launched it.
Gmaxwell post shows only a few of them.

[PenAndPaper]

I 've read an interview from Gavin Andresen saying that when they first reviewed the code, some parts of it were so obviously bad that they got removed or replaced instantly. Satoshi is a genious but certainly not the best coder around.

[gmaxwell]

has control of his pre-mined

There are no "pre-mined" coins in Bitcoin. The design makes this abundantly clear— and anyone can audit the software and look at the public history to confirm this for themselves. Please don't spread misinformation.

[Lethn]

If your aware of how Bitcoin itself works generally you'll know it isn't anonymous as people claim ( feel free to correct this explanation if I completely misunderstand Bitcoin guys ) but from what I've seen the receive/send addresses work a lot like I.P Addresses so anybody can view the activity coming from that address and with some digging could find a location. Like with I.P addresses though you can't discover exactly who is behind it and easily track their every move and that is what has law enforcement and loyalists so uppity about Bitcoin because for years they've relied on persistently intrusive systems that demand all your personal information be real and attached to a bank account so they can easily prosecute you.

Bitcoin isn't perfect and there are many other methods that people want to try out which is why the altcoin market is getting ridiculously large too user friendliness is also another big problem with Bitcoin and is preventing a lot of people from adopting it good luck getting a store set up entirely on your own without any outside help from programmers who know the code required to make a store.

[bitcoinpsftp]

Human error caused a fork several months ago via an incompatible wallet upgrade.

No Government on earth will adopt Bitcoin so as long Satoshi has control of his pre-mined. Thanx for the prototype.

NOW THIS is what worries me the most.  HOW can we expect any government to say "fine... lets all usebitcoins" when just ONE PERSON controls 1/6th of all coins, and he's an anonymous kinda person that the government can't "find".  It's sad that he has to have that many bitcoins. 

[herzmeister]

Satoshi "just" brought already existing ideas together in a clever way. It's believable imho that he is just one person, and not a zillion dollar funded government agency.

Regarding conspiracy theorists that are often unfamiliar with open source and large community-driven projects and can't believe how such a thing can come out of the blue, I often point them to MAME. I don't know how many thousands of man-centuries have been put into it, it emulates thousands of arcade games almost "too perfectly", is driven by passion alone and surely has no government agency or corporation behind it.

[niothor]

Satoshi "just" brought already existing ideas together in a clever way. It's believable imho that he is just one person, and not a zillion dollar funded government agency.

Regarding conspiracy theorists that are often unfamiliar with open source and large community-driven projects and can't believe how such a thing can come out of the blue, I often point them to MAME. I don't know how many thousands of man-centuries have been put into it, it emulates thousands of arcade games almost "too perfectly", is driven by passion alone and surely has no government agency or corporation behind it.

That makes Satoshi like Apple , and Apple is evil ))

[PenAndPaper]

Satoshi "just" brought already existing ideas together in a clever way.

Allow me to help:
Satoshi "just" brought already existing ideas together in a clever genious way.

[bitcoinpsftp]

Satoshi "just" brought already existing ideas together in a clever way.

Allow me to help:
Satoshi "just" brought already existing ideas together in a clever genious way.

Oh sir, may I help you with your spelling there? But of course:

Satoshi "just" brought already existing ideas together in a clever genious genius way.


My work here is done.  Please continue the conversation.  

[Alpaca Bob]

Human error caused a fork several months ago via an incompatible wallet upgrade.

No Government on earth will adopt Bitcoin so as long Satoshi has control of his pre-mined. Thanx for the prototype.

NOW THIS is what worries me the most.  HOW can we expect any government to say "fine... lets all usebitcoins" when just ONE PERSON controls 1/6th of all coins, and he's an anonymous kinda person that the government can't "find".  It's sad that he has to have that many bitcoins. 

Why do you care what governments say regarding bitcoin? Bitcoin doesn't care. Bitcoin doesn't give a shit.

Also, Satoshi does not hold 1/6th. Probably 5% at best.