Bitcoin is NOT ready for mainstream because of 4 major problems

[Serith]

In May bitcoin received a lot of publicity and many non tech people got involved, unfortunately, despite how brilliant the abstract idea, it was and it is still not ready for use by average consumer, someone using bitcoin at least have to know how NOT to trust a someone on the internet and have secure setup to store wallet. I think right now the next four problems stand on the way of wide bitcoin adoption, but it will take years to get established solutions

1.Creating a way to transfer funds into bitcoin system that would compete with credit card or PayPal in terms of convenience, e.g. you just need to sign up for credit card to start using it for payments.

2.Safe and secure e-wallet or lightweight bitcoin client for smartphone to use on the go, capable of making instant transfer to use in store or to buy something from vending machine, etc. Something like green address or MtGox QR voucher

3.Privacy and anonymity is important for long and short term survival of bitcoin. De-anonymizing process should be made not cost effective by implementing a method that would enforce use of one address per transaction and having sophisticated algorithm to select inputs and outputs for transaction to prevent consolidation. Enforce use of some form of proxy for bitcoin client to hide IP address.

4.Development of flexible software rather then all in one "take it or leave it" client, and eco system that would take advantage from it.

[1714102479]

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[1714102479]

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[FlipPro]

In May bitcoin received a lot of publicity and many non tech people got involved, unfortunately, despite how brilliant the abstract idea, it was and it is still not ready for use by average consumer, someone using bitcoin at least have to know how NOT to trust a someone on the internet and have secure setup to store wallet. I think right now the next four problems stand on the way of wide bitcoin adoption, but it will take years to get established solutions

1.Creating a way to transfer funds into bitcoin system that would compete with credit card or PayPal in terms of convenience, e.g. you just need to sign up for credit card to start using it for payments.

2.Safe and secure e-wallet or lightweight bitcoin client for smartphone to use on the go, capable of making instant transfer to use in store or to buy something from vending machine, etc. Something like green address or MtGox QR voucher

3.Privacy and anonymity is important for long and short term survival of bitcoin. De-anonymizing process should be made not cost effective by implementing a method that would enforce use of one address per transaction and having sophisticated algorithm to select inputs and outputs for transaction to prevent consolidation. Enforce use of some form of proxy for bitcoin client to hide IP address.

4.Development of flexible software rather then all in one "take it or leave it" client, and eco system that would take advantage from it.

1. This can be made by you or anyone else in the community. I actually own Bitwal.com so if you want to invest in a secure payment system lets do it...

2. Fixing problem one would automatically fix problem 2.

3. Bitcoin is only as anonymous as you make it. If you log in with a public computer on tor network it will be almost impossible for someone to find you...

4. A better/flexible wallet can once again be written by anyone in the community.

What part of OPEN SOURCE do people not understand? If we want something done we can't wait around for other people to do it, because once again it's OPEN SOURCE.

[Serith]

3. Bitcoin is only as anonymous as you make it. If you log in with a public computer on tor network it will be almost impossible for someone to find you...

not entirely true because negligence of someone from whom i received or send money to, would compromise me as well

4. A better/flexible wallet can once again be written by anyone in the community.

correct, but it will just take quite a lot of time to develop it

[Serith]

I think it will take a while for bitcoin to mature, but at least i know where to look to measure the progress

[cunicula]

The key problems are wallet security and exchange rate volatility. These are not among those you listed. What % of internet payments are made via smart phone now anyway? If that % is not large, the case for a lack of smart phone integration being a major issue is weak. I think tech geeks are focusing on the wrong set of problems to some degree.

[markm]

3. Bitcoin is only as anonymous as you make it. If you log in with a public computer on tor network it will be almost impossible for someone to find you...

not entirely true because negligence of someone from whom i received or send money to, would compromise me as well

4. A better/flexible wallet can once again be written by anyone in the community.

correct, but it will just take quite a lot time to develop it

Setting yourself up in such a way as to allow someone else's negligence to compromise you would be negligence on your part, wouldn't it?

Is your theory that it will take "quite a lot time" to develop it actually a misleading disguise for an actual meaning of "it would take quite a lot time to come up with the money it would take to get it done fast" ?

-MarkM-

[FlipPro]

I think it will take a while for bitcoin to mature, but at least i know where to look to measure the progress

The most obvious problem is functionality. If PayPal decided to start taking Bitcoins tomorrow the price would go up to $50, because they have the usability and functionality to facilitate to dummy's. If we had that no one could stop us... (BitWal). However after what just happened with Mybitcoin I highly doubt anyone in this community is in the mood to support a wallet website. Money talks like with everything else, we are all early adopters now... What does this mean? It means it's up to us to make shit happen and money can make a secure wallet site (identical to paypal in security/and customer service) happen. I have already seen a few more ewallets pop up, but none have impressed me yet and are probably all scams...

[markm]

The key problems are wallet security and exchange rate volatility. These are not among those you listed. What % of internet payments are made via smart phone now anyway? If that % is not large, the case for a lack of smart phone integration being a major issue is weak. I think tech geeks are focusing on the wrong set of problems to some degree.

This far into development, is the exchange rate volatility an indication that the developers are not actually in good faith developing a currency but, rather, are working a ponzi scheme or some other variety of "embezzling the system's reserves so more of what it brings in is getting frittered away than is being used to actually back the currency" technique (I guess that amounts to "fractional reserve" basically doesn't it? What percentage of the funds invested in coins are actually being held/used as reserves?)

-MarkM-

[Serith]

Setting yourself up in such a way as to allow someone else's negligence to compromise you would be negligence on your part, wouldn't it?

Take a look at how de-anonymizing methods work, just sending or receiving a payment from a compromised address would compromise you as well.
An Analysis of Anonymity in the Bitcoin System
Dan Kaminsky's presentation at Blackhat

[markm]

I guess negligence is relative.

Neglecting to use as many cutout puppet nodes as the opponent against whom you wish to defend your anonymity could be considered negligence by the opponent who considers such an array of puppets to be simply a standard tool of workers in the field of identity<->anonymity.

Admittedly if the opponent was not neglecting to honour your wish for anonymity... which could be regarded as negligence on their part I suppose if you thought their goals ethics etc were the same as your own. But from their perspective they are not neglecting to honour your wishes, they are honouring their own...

-MarkM-

[kjj]

Setting yourself up in such a way as to allow someone else's negligence to compromise you would be negligence on your part, wouldn't it?

Take a look at how de-anonymizing methods work, just sending or receiving a payment from a compromised address would compromise you as well.
An Analysis of Anonymity in the Bitcoin System
Dan Kaminsky's presentation at Blackhat

A decent mixer could sort this out, but those have been big targets historically (see anon.penet.fi).

Also, I don't think that real anonymity is a show stopper.  Most of us would like it if it were there, but very few applications have it as a hard requirement.

[markm]

Maybe part and parcel of being an undeniable asset is being undeniable. You wanna be a deniable asset you take the lumps deniability is designed for like all the other double-0 agents not associated with their nation's government nor royalty maybe?

On the other hand, rumour has it that deniable assets can get some really cool toys if they play their cards right.

-MarkM- (Do we know, even yet, who the real 007 is? )

[cunicula]

Setting yourself up in such a way as to allow someone else's negligence to compromise you would be negligence on your part, wouldn't it?

Take a look at how de-anonymizing methods work, just sending or receiving a payment from a compromised address would compromise you as well.
An Analysis of Anonymity in the Bitcoin System
Dan Kaminsky's presentation at Blackhat

A decent mixer could sort this out, but those have been big targets historically (see anon.penet.fi).

Also, I don't think that real anonymity is a show stopper.  Most of us would like it if it were there, but very few applications have it as a hard requirement.

+1, anonymity matters for criminals and nutters. If there is some costly way of achieving it that is very nearly as good as having some very easy way of achieving it. The criminals and nutters are willing to go to great lengths. If it can't be achieved at all, we lose some criminals and the nutjobs. Yes, drug sales are a nice source of demand. On the other hand, rampant theft (which anonymity greatly facilitates) has not been so helpful. I don't understand what the fixation with anonymity is all about.
 

[noedaRDH]

The issue with exchange rates and volatility and all that are growing pains that will may have to deal with for a long time.

It will take much time for every single portion of the centralized network that makes Bitcoins usable to be fully secured

For the AVERAGE PERSON, using Bitcoins is difficult because there's nothing important or of great value that ONLY be bought with Bitcoins, nothing at an exclusive or discounted level.

Right now many coins are just traded back and forth, for novelty, for speculation, or to support Bitcoins' philosophy or potential future, or perhaps to buy obscure items.

But as soon as Bitcoin's advantages are utilized at a major level like Amazon it will automatically be supported by more people and the troubles of certain websites like we're dealing with now will not affect Bitcoins as much.

We need merchants and other venues to make it so that if you're NOT gonna spend Bitcoins you will lose out (ie Major gambling sites that give more perks to Bitcoiners than non-Bitcoincers).

[wumpus]

1.Creating a way to transfer funds into bitcoin system that would compete with credit card or PayPal in terms of convenience, e.g. you just need to sign up for credit card to start using it for payments.

Agreed, the ways to get money into the system are severely limited at the moment. Especially with Gox and TH having suspended SEPA transfers. Different from the other points, there is a big profit opportunity here, so I'm sure it will be solved sooner than the rest

2.Safe and secure e-wallet or lightweight bitcoin client for smartphone to use on the go, capable of making instant transfer to use in store or to buy something from vending machine, etc. Something like green address or MtGox QR voucher

Agreed. Smartphone support is really important. You might want to look at the Bitcoin-android client (https://bitcointalk.org/index.php?topic=26684.80). It still has some issues to iron out but it is pretty nice (and works with QR codes).

In addition to QR codes, NFC support would also be really nice.

3.Privacy and anonymity is important for long and short term survival of bitcoin. De-anonymizing process should be made not cost effective by implementing a method that would enforce use of one address per transaction and having sophisticated algorithm to select inputs and outputs for transaction to prevent consolidation. Enforce use of some form of proxy for bitcoin client to hide IP address.

I don't think anonymity is very high up in the concerns, at least for the devs of the mainline client. There is certainly a place for  a stealth bitcoin client (someone is working on selling bootable USB sticks with Bitcoin+TOR preloaded), however. It is not needed for mainstream adoption. We have enough shady types as it stands

4.Development of flexible software rather then all in one "take it or leave it" client, and eco system that would take advantage from it.

Yes.

There are various initiatives like this under way. I think the google one BitcoinJ (also used by the bitcoin-android client) is the most promising at the moment, but I know of a few more in active development (a Python client, another C++ client, there are designs for a scalable C one, etc..).

[Serith]

The key problems are wallet security and exchange rate volatility.

You could be right about price volatility, as a computer geek i don't know much about ways to solve it. But I don't think securing wallet.dat file on a home computer is a big enough problem to have it on the same list, LinuxCoin A lightweight Debian based OS with everything ready to go

I don't think anonymity is very high up in the concerns, at least for the devs of the mainline client. There is certainly a place for  a stealth bitcoin client (someone is working on selling bootable USB sticks with Bitcoin+TOR preloaded), however. It is not needed for mainstream adoption. We have enough shady types as it stands

I think lack of anonymity would backfire very soon because it makes easier to identify valuable targets for all kinds of manipulations e.g. phishing and theft

[error]

The key problems are wallet security and exchange rate volatility. These are not among those you listed. What % of internet payments are made via smart phone now anyway? If that % is not large, the case for a lack of smart phone integration being a major issue is weak. I think tech geeks are focusing on the wrong set of problems to some degree.

The mobile phone carriers are planning a major push into this space with NFC in the next 6-18 months. You will see it everywhere. Bitcoin should already be there waiting for them to catch up.

[markm]

Plus the so called "internet" is just some Defense Advanced Research Project agency some old geezers built into some stupid chip inside smartphones anyway, so what's the big deal about the so called internet, think real world, real people buying real things by commanding those stupid genies or whatever that the old geezers claim to have trapped inside some magic etching inside the phone someplace.

-MarkM-

[Shinobi]

Setting yourself up in such a way as to allow someone else's negligence to compromise you would be negligence on your part, wouldn't it?

In your world, can fraud exist? Any detriment to oneself is a product of his or her own negligence, right?

[2112]

4.Development of flexible software rather then all in one "take it or leave it" client, and eco system that would take advantage from it.

I'll say simply reorder this list: give your fourth item number 0.

If and when the core software is properly modularized then everything else can build on top of it. Right now we have various proposals for restyling the body while the engine is barely working and in fact dropping its own bits along the road.

And the drivers are all saying "all is well, look at our shiny new rims".