WTH? why a sudden drop by 10 cents?

[ShadowOfHarbringer]

Depends on the weakness.

- If this is a critical design-related weakness, it may even destroy the currency (but i don't think something like this exists, BTC has been on for 2 years and everything looks perfect)
- If this is a serious weakness, it may reverse the expansion for some time.
- Smaller weaknesses will only slow down the expansion.

That's not what I asked. My point is, it's perfectly possible for Bitcoin never to gain sufficient critical mass to remain viable and for the economy to slowly grind to a halt, without any technical flaws at all.

OK, i re-read your post and i understood what you were asking about.

Yes, i think that technical weakness is the only thing that can stop/slow down Bitcoin in the long term.

Bitcoin is ultimately superior to all existing currencies, so it's completely natural that it will replace them sooner or later. Or perhaps other currencies will be backed in Bitcoin. Of course, there will be clones, but the original one will always rule.

[Raulo]

Bitcoin is ultimately superior to all existing currencies, so it's completely natural that it will replace them sooner or later. Or perhaps other currencies will be backed in Bitcoin. Of course, there will be clones, but the original one will always rule.

"Utimately superior"? What about being non-physical? Difficult to understand how it works for non-geeks? Prone to attack by any large entity? Non-official (possibility of being delegalized)? That payments aren't and never will be instant (so for instant payments you will need a Paypal-like entity with fees and bullshit)?

Don't get me wrong. I wish Bitcoin success and I think it is a very good project but there is so much bubble mentality going on here that I'm much less optimistic about its future that when I first learned about Bitcoin.

I'm pretty sure that  shareholders of pets.com in the 1990s had similar attitudes to yours that there is no other future than a bright one.

[eMansipater]

"Utimately superior"? What about being non-physical? Difficult to understand how it works for non-geeks? Prone to attack by any large entity? Non-official (possibility of being delegalized)? That payments aren't and never will be instant (so for instant payments you will need a Paypal-like entity with fees and bullshit)?

I won't weigh in on the "Ultimately Superior" question, though I think bitcoin has impressive technical merits.  However, regarding the instant thing I think that once mining goes massively commercial it's very likely there will be instant payments.  All that is needed is to assure that a given transaction has reached the clear majority of mining power without a double-spend:  this is easy to build a protocol for once you have a majority of hash power owned by organised, interested parties.

[gohan]

All that is needed is to assure that a given transaction has reached the clear majority of mining power without a double-spend:  this is easy to build a protocol for once you have a majority of hash power owned by organised, interested parties.

Plus, banking institutions can guarantee these kinds of things within themselves or through an inter-bank protocol, similar to how you currently can make instant payments via MyBitcoin. Maybe not preferable but obvious. This can also fix the "non-physical" and "non-anonymous" problems; if you have a trusted authority, printed currency (though I'd expect credit cards) and untraceable transactions can be made possible.

Difficulty to understand IMO is not an issue, in fact it seems to me that Bitcoin will be pretty easy to use when it won't be required of the user to understand the internals.

Attacks on the other hand, is what I'm pessimistic about. Not technical attacks to bring down the network (I think they can be circumvented easily as long as there is Internet as we know it), but legal ones.

EDIT: "Legal attacks" came out wrong. What I meant was that Bitcoin is not likely to be adopted by current institutions because it's not suitable to be part of the scheme. This may or may not result in legal attacks or state coercion though. It's a very exciting aspect and I just want to be part of the network when it comes to that.

[khal]

What about being non-physical?

It could be, like any other currency. Maybe by local initiatives first, and less probable, but still possible, by some countries.
But, who cares ?

Difficult to understand how it works for non-geeks?

- How does it cost ?
- What is your account/bitcoin address ?
=> send

All the other things aren't needed. You know it is secure because the official website says it is and geeks and first users and press say it too, but you are not forced to read the whole wiki pages nor the source code.

Prone to attack by any large entity?

Like anything on internet (like paypal and mastercard recently ?).

Non-official (possibility of being delegalized)?

Yes, there is dumb government everywhere...

That payments aren't and never will be instant (so for instant payments you will need a Paypal-like entity with fees and bullshit)?

If you really need instant payment, on internet, current solution is to use a bank/centralised account for both sender and receiver (just change balance of both users and a real bitcoin transaction is not needed, but still possible to still rely on the secured transaction system of bitcoin)

[khal]

I explain it with a box with to 2 doors at opposite side and 2 differents keys.
If you put something in the box with the first key, only the second key can get it, and vice-versa.
Everbody can have several boxes.

Now, imagine it's not keys, but pin code or passwords, and 1 of the 2 is known to everbody.
- Everbody can insert things in the box, and only you can retreive them with the second code.
- You can put things in the box, and everbody has your public code to get it and they know it comes from you, brcause they use your public code.

[gohan]

Legal attacks? I do not see any, which cannot be countered. Care to give an example?

There are different laws and countries of course.

(I was too slow to edit my comment. )

It's hard to predict what will happen but to speculate, it could start by going after businesses, especially exchanges, and first by trying to make it difficult for them to go on. I'd start with accounting demands, which would scare off pussies like me for instance, which I'd think is the majority, at least in the countries I do business. Also, money laundering is like child porn, they already have enough laws to make arbitrary demands from anyone they want to harass. For example, AFAIK it's illegal to make transactions larger than 10K EUR outside the banking system.

Having said this, there is a lack of know-how on my side. I asked a couple of bankers and accountants about this and they are clueless about most of the issues I raised, which makes me more pessimistic.

The obvious thing is, that currently dominating institutions don't like off-record transactions; they don't even like paper money. It's forbidden to carry more than a certain amount on yourself while traveling between countries. Bitcoin makes that as easy as it can be, so it's almost inevitable that we will face some kind of battle on the grounds of legality. They could, for instance, declare that all transactions shall be between legally identifiable entities, which would make the Bitcoin protocol illegal by definition. Isn't this already the case in many countries?

Sorry if I sound paranoid, it's possibly because of the ignorance on my side.

[gohan]

well, i could argue on this with you. understanding how public/private key crypto works is fundamental
please help me to improve my teaching skills, i was not able to explain to my wife what i'm reading about
without using the pki and there we stopped

Hehe, you should have seen me trying to explain to my wife how blind-signing works. It took 3 days and I still don't know if she got it. 

No, but the idea is that you don't have to understand this forum in order to use bitcoins. Almost no one understands pki but they successfully connect to their bank accounts through https. The problem is that the lack of knowledge leads to unpredictable user failures, like the bank user thinking the advertised million-bit encryption mambo jumbo is an all-encompassing fact of security and happily continuing to access his bank account on public computers.

[Raulo]

Legal attacks? I do not see any, which cannot be countered. Care to give an example?

Adding to Gokhan post, a practical way of killing bitcoin in Europe would be to introduce VAT on bitcoin sales, i.e. selling bitcoins for fiat.   VAT on silver effectively killed silver bullion market in Europe.

And anti-money laundering laws are already there and it's just a matter of enforcing them.

[rebuilder]

Scenario:
Bitcoin goes big-time. Governments realize they're missing out on a lot of tax income due to people not reporting their BTC trades, or at least suspect they are. Also they know it enables people to transfer large amounts of funds across national borders without detection. What does a government do? I wouldn't be surprised if they just banned using Bitcoin altogether, either directly or indirectly.

Now, this is going to be hard to enforce, assuming a similar level of Internet freedom we enjoy today. However, if Bitcoin is still small enough, I believe it is entirely possible for governments to contain it through propaganda ops, much like they do with drug prohibition. They can't eradicate it, but they can make the population at large hostile to it.

There's an interesting dynamic here: The odds of government intervention rise as Bitcoin gains in popularity. At the same time, the difficulty in disturbing the Bitcoin economy rises as well. The big unknown is how far Bitcoin can develop before governments start trying to shut it down, probably by going after exchanges.

[LMGTFY]

...probably by going after exchanges.

But bitcoins can be traded either on an exchange, or over the counter. I've used both, and OTC (bitcoin-otc) was far more convenient that exchange trading (MtGox). OTC is far harder to attack, as it's decentralised. A private, possibly encrypted, discussion takes place somewhere online between two parties, one party sends some bitcoins, and the counterparty transfers some money from their account in Singapore to an account in the Caymen Islands.

tl;dr: The State will need to find a better way to bring Bitcoin down :-)

[Raulo]

There is no need for any additional laws on this one, VAT is applicable already on bitcoin sales just as on sales of, let's say... coal.

VAT is applicable if you sell goods and services for bitcoin and it will never be a problem for Bitcoin adpotion.  But if bitcoin itself were declared VAT-taxable like silver bullion, you would have to pay VAT on bitcoin exchange. You want to buy 150 BTC for 100 EUR, you will have to pay 100 EUR + VAT from any EU-based VAT-registered entity. Read about the VAT on silver bullion for example here: http://www.silverpetition.com/

Of course bitcoins are non-physical so you have a much better chance of "smuggling" it cross border but it may put off a lot of people just like with the silver bullion market which is very weak in EU.

[wb3]

VAT on the other hand is a big problem, but for only companies which (in UK) have turnover above 55k£

I never understood the VAT, it didn't make sense. I don't know the cost of forming a company in the UK but in the US it is about $99. It would be way more beneficial to form multiple competing companies under the 55 Thousand in turn over, rather than conform to VAT.

It also seems like the end user carries the biggest burden because the end user is not going to take advantage of Volume discounts like all the businesses that did in front of him.

[Anonymous]

Bitcoin is the first time in my life I've had monetary value and no government is stealing it from me.

That is all.

[marcus_of_augustus]

+1

It is like the fiat slaves monetary prison door has finally been cracked opened, yet 1 in a 1 million notice it ... and even less choose to wander outside and breathe the free, fresh air.

[nster]

I expect a quick rise soon, maybe up to 0.92~0.95$ for the selling price, if we're lucky, 1$

[ryepdx]

+1

It is like the fiat slaves monetary prison door has finally been cracked opened, yet 1 in a 1 million notice it ... and even less choose to wander outside and breathe the free, fresh air.

+1

Edit:
What you said reminds me of Plato's Allegory of the Cave. The thought is somewhat disconcerting.

[ShadowOfHarbringer]

Bitcoin is the first time in my life I've had monetary value and no government is stealing it from me.

That is all.

+10

Government can even make[1] fake[2] gold[3], but it cannot mine fake bitcoins.

Bitcoin FTW.

[marcus_of_augustus]

spikes beyond the natural rate of system growth will be mercilessly corrected.

Ouch, doomed to trudge to the tune of the law of numbers? where's the bubbly fun we've become addicted to? Interesting to see if it plays out ...

[BrightAnarchist]

Bitcoin is the first time in my life I've had monetary value and no government is stealing it from me.

That is all.

+1000

It's a miracle, really