Why there was a Bitcoin hype

[helloworld]

It's dead obvious, but most people seem to persistently neglect it:

Silk Road.

Was it just silk road, or was it some idiot in gov saying it should be shut down, LOL.

[payb.tc]

Has bitcoin ever reached phase hype? I can't seem to remember

not on the 'beanie babie' level. or even the flooz level.

in general most people have never heard of it.

[Ayo_4_Yayo]

Maybe bitcoin is helping the government by filtering out people who don't go with their system and then arrest them and put them to death in FEMA holiday camps!!!

[ElectricMucus]

Let the people decide what they want.
Doing any business with developing countries basically means further ruining their citizens

Lol, I understand the whole 'killing them with kindness' issue, but I think you're taking it a little overboard.

Their business model basically seems to be to sell kits for AAVs and stations to anybody who wants them:

Business Model
The initial kit consists of one AAV and two stations. Cost for parts plus labor is $1200. We plan to sell it for $2500.
.

At this price they gonna have a hard time selling them.
These costs sound like they use the RC-Store for parts, that's really not efficent.

Take 3 old harddrives, a FDM Printer, some fiber glass rods and a pcb with a few mosfets and 2 MPPAs and your hardware costs are at $100 without the battery and gyros. (And I doubt those cost more than $500)
Maybe I should invent a competing product lol.  

Oh well, forgot the stations,  well... nevertheless I doubt 2 stations cost more than one the AAV and it probably only has acceleration ics.

[Xenland]

Wow OP this was very inspiring and kind of kicked me into reality what bitcoins were truly ment for.

I will be adding more products to my www.CheaperInBitcoins.com website just from this inspiring post i will be adding printers,ink, and HD televisions to the mix

Someone needs to get bitcoins debit system going.... then that bit coin curve will sky rocket!

[netrin]

People are selfish and you can bet this is even more apparent where people don't live in abundance.

I'm going to bet you've never been to a place where people don't live in abundance. You may be pleasantly surprised.

[ElectricMucus]

People are selfish and you can bet this is even more apparent where people don't live in abundance.

I'm going to bet you've never been to a place where people don't live in abundance. You may be pleasantly surprised.

You're right. But I'm in good company.... 

[Remember remember the 5th of November]

Well you've got it all wrong. 50% of the price jump was due to none other than OCN i.e overclock.net. That was the day I and many others learned about Bitcoin's existence.

The thread got over 150 pages in just under an hour.

[fivebells]

One thing I'd appreciate to see coming from the developers is, for example, ways of rendering bitcoin more anonymous to the average Joe. Like, distributing a preconfigured bundle bitcoin+Tor+I2P would already help. But that would be dangerous to the network if it doesn't come together with a patch that makes the client capable of reaching hidden services, so, yeah, it needs some development.

Can you expand on the network damage which could result from using Tor?  I am not familiar with the hidden services you're refering to.

[bonker]

It was all Max Keiser's fault, that monkey-man kept hyping things up .

[EhVedadoOAnonimato]

One thing I'd appreciate to see coming from the developers is, for example, ways of rendering bitcoin more anonymous to the average Joe. Like, distributing a preconfigured bundle bitcoin+Tor+I2P would already help. But that would be dangerous to the network if it doesn't come together with a patch that makes the client capable of reaching hidden services, so, yeah, it needs some development.

Can you expand on the network damage which could result from using Tor?  I am not familiar with the hidden services you're refering to.

Maybe "damage" is too strong as a word. What happens is that, if you're behind Tor, the IP you show to other nodes is that of your exit-node. If other nodes try to open a connection to an exit-node, they won't find anything. Basically, while you can initiate a connection to normal nodes, the opposite isn't true, they can't find you.
In a hypothetical scenario where everyone is running behind Tor, the network would just die, as nobody would be able to find anybody else. Of course there will always be some publicly known nodes to prevent such a disaster, but if there are too few of them, they might start having too much incoming connections.

So, from a financial privacy ("banking secrecy") point of view, it is highly recommended to use Tor or something alike, but from a technical point of view, it is not that good.

This problem could be solved if bitcoin nodes automatically configured hidden services, and propagated their hidden services URL to other nodes. A hidden service is basically what the name says, some service, accessible only through the Tor network, whose IP cannot be easily guessed. Silk Road is a good example. With such, people could still hide their IPs, protecting their privacy, while accepting incoming connections.
I read somewhere that I2P is more efficient in what concerns hidden services than Tor, while Tor is more efficient than I2P to connect to public IPs, that's why I mentioned I2P as well as Tor. But I don't know how I2P works so I don't know if this is true.

[netrin]

Bitcoin could implement a Tor-like network itself. Any node can encrypt a transaction and send it to any number of nodes. Any node can and should eventually send transactions in plaintext, either their own or from other nodes. No node will know if a transaction comes from the sender, the sender's sender, or numerous hops away.

Although less robust, and risks spamming, the transactions do not need to be onion wrapped. Any node may refuse an onion wrapped transaction from any other node (if it believes the node is a spammer).

[wumpus]

Bitcoin could implement a Tor-like network itself. Any node can encrypt a transaction and send it to any number of nodes. Any node can and should eventually send transactions in plaintext, either their own or from other nodes. No node will know if a transaction comes from the sender, the sender's sender, or numerous hops away.

Bitcoin will never become Tor. Doing network anonymity in a secure way is very hard, and bitcoin should not take up that responsibility. Just run it over tor or another proven onion-routing network, if you want onion routing.

[netrin]

Bitcoin will never become Tor. Doing network anonymity in a secure way is very hard, and bitcoin should not take up that responsibility. Just run it over tor or another proven onion-routing network, if you want onion routing.

What I propose could also be run over Tor, but solves the one-way-only issue. Currently all nodes broadcast their own transactions in plaintext. By simply sending 75% of transactions encrypted and rebroadcast 25% in plaintext would drastically reduce the ability to connect addresses to IP address, while still allowing incoming ports. If people need Tor, they'll use Tor. For the rest of us, we just don't want lists of (political contributions, flowers/chocolate/porn/engagement ring purchases, donations, Google tracking) by IP address.

[fivebells]

Maybe "damage" is too strong as a word. What happens is that, if you're behind Tor, the IP you show to other nodes is that of your exit-node. If other nodes try to open a connection to an exit-node, they won't find anything.

  Thanks for the explanation.  I take it that, say, mining behind a tor exit node is not directly harmful at this stage?

[Revalin]

Mining is fine, since mining just uses RPC to the pool server and doesn't directly participate in the BitCoin P2P network.

And in practical terms, performing your transactions through TOR is fine too.  There are plenty of non-TOR nodes to support network stability.  Even if everyone decided to send all transactions through TOR the network would be fine: we'd just need a bunch of non-transacting relay-only public nodes.  There are probably already a lot filling this role, though there's no easy way to measure it.

[EhVedadoOAnonimato]

What I propose could also be run over Tor, but solves the one-way-only issue.

The one-way-only issue could be easily solved if bitcoin nodes could connect not only to IPs, but to named servers as well. This would allow the use of hidden services and even normal DNS for those wishing to make a public, trusted relay. It's a good and safe improvement.

If find it a better and simpler solution. The bitcoin protocol doesn't need encryption, IMHO.

[BitcoinRedLight]

The development community has made a great effort to distance itself from 'criminal' activity, for understandable reasons. But one has to understand the correlation between the price development earlier this year and the public's perception of Bitcoins.

To date, Silk Road has been the single most daring and unconventional business idea related to Bitcoins and it has given people hope that fundamental change was possible. I'm convinced, it was the boldness and openness with which the business was conducted that excited and elevated people's spirits and drew them to buy. It defeated fear (for as long as the party lasted) and the people thought they had -through a technological breakthrough- reached sovereignty over the state, its laws and the threat of legal prosecution. And consequentially, be able to avoid having to go criminal by definition. In one word: Freedom. It could be observed even with those who obviously weren't customers to that particular service.

People choose to take sides with daredevils and winner attitudes. Silk Road clearly offered that and it gave Bitcoins a kickstart more than anything. The 'bad news' and opposition from authorities only made newly aware people understand that Bitcoins were to be taken seriously.

With Silk Road going into hiding, prices plummeted.

There may be many reasons for why prices rise or decline but it's good general practice to look at the biggest possible picture.

With the lead currencies going down, naturally, a competing new currency should be going up. But it isn't right now. It's declining in unison with the rest, slowly and gradually.

And the reason for this may be that it isn't actually competing anymore.

Reading the news and public statements by key figures within the Bitcoin community I have found that, since Silk Road, a lot of energy was put into making Bitcoins look acceptable and harmless. Into making it conform to what's already there so that established entities would 'adopt' it. Be it government, Amazon.com or the banking world.

And this goes contrary to what initially made the value skyrocket, namely, that it was going by itself and offering a radical alternative as a whole. There is nothing more sad than a powerful force that pleads to its enemies for adoption and help whom it vowed to challenge.

One doesn't even have to read between the lines of what Satoshi has written to understand competition is what he intended. If he had seen any need for Bitcoins to comply with rules and regulations to be successful he wouldn't have written it in the first place.

A price development graph shows many things, but in its essence, it indicates direction.

When Bitcoin gives people what they want, the curve goes up, when it gives the opposite, it goes down.

It becomes evident, the people want something new. Something that contradicts the current state of affairs.


Upshot:

Bitcoins are revolutionary in themselves, so they should cater to revolution. That's the target audience. That's where the money comes from.

The people want a revolution because it's that time again. And they will support that which gives it to them.

Before 1933, there wasn't a competitor. This time, Bitcoin is the competitor.

Developers and entrepreneurs will have to put their khakis and insurance plans into the closet and get out the war dress.

Excellent, excellent post.

Here are a few thoughts I had on this matter as well.

--

The original nature of Bitcoin is as an underground currency. All of Bitcoin’s strengths reference its capacity for opposing the existing financial infrastructure and, by extension, trading outside of regulation & control. Bitcoin was released into the wild as an appeal to the sensibilities of resistance. And now the lash of governmental oppression vis-a-vis the Federal Reserve, IMF, Worldbank, JPM Chase, Goldman Sachs, etc. are reaching a global tipping point.

Unfortunately, some of the current Bitcoin movement is now frantically moving in the direction of subservience to the existing financial interests and regulatory dictates. Many of the new Bitcoiners want to be financier giants in a new, “legit” Bitcoin economy. That’s fine.

However this ‘government sanctioned’ Bitcoin has a short shelf-life. Powerful people are crazy (in deep psychological bondage) but they are not stupid. They understand how power works. Bitcoin is a head-on assault which strikes at the very core of their power – money. And more specifically, their power to control the creation and flow of money is at stake. Bitcoin is a proof of concept with implications more radical than anything that the money machine operators have previously faced.

http://bitcoinredlight.com/cat/bitcoin/power/

[netrin]

The original nature of Bitcoin is as an underground currency... Many of the new Bitcoiners want to be financier giants in a new, “legit” Bitcoin economy.

I expected you'd take a different spin.

Few revolutionary ideas are born from established interests. Rather they come from the underground, perhaps from a marginalized minority, outside the box, and if the idea survives and reaches the mainstream, the established interests will stop fighting it and act as though they created it in the first place. This is most obvious in the arts, though I can't think of any culturally significant shift that didn't evolve in this manor.

Margaret Mead-esque: "Never doubt that a small group of dedicated people can change the world. Indeed, nothing else ever has."

[BitcoinRedLight]

I expected you'd take a different spin.

Thanks...I'll take that as a compliment.

Few revolutionary ideas are born from established interests. Rather they come from the underground, perhaps from a marginalized minority, outside the box, and if the idea survives and reaches the mainstream, the established interests will stop fighting it and act as though they created it in the first place. This is most obvious in the arts, though I can't think of any culturally significant shift that didn't evolve in this manor.

Margaret Mead-esque: "Never doubt that a small group of dedicated people can change the world. Indeed, nothing else ever has."

Well said.

I don't blame guys for trying the various paths that they are trying, because everyone is working out of the state of consciousness at which they exist, function. And, in some sense, we need the guys who are thinking in terms of the status quo because they are helping to make Bitcoin seem vanillla to the masses - which may buy us time. However, in the end, there is just no way I can imagine this approach being allowed to succeed. In the end, Bitcoin will either emerge fully into its nature (radical) or it will be destroyed.