A Business Primer on the Bitcoin Ecosystem - Erik Voorhees

[cypherdoc]

I'm yet again very disappointed. You would expect an accurate and fair representation of the topic, not some pro-Bitcoin propaganda ad.

It looks like you misunderstood the intent of this writing.
The article wants to "sell" the Bitcoin idea to business people.

Nitpicking on technical details won't help with that goal -- this is a typical geek's mistake.

For example: does the article even mention mining?
No (and IMHO it was a tactically clever decision to leave that out)
 -- so what would be the point of explaining a 51% attac??

+1

[Yankee (BitInstant)]

I'm yet again very disappointed. You would expect an accurate and fair representation of the topic, not some pro-Bitcoin propaganda ad.

It looks like you misunderstood the intent of this writing.
The article wants to "sell" the Bitcoin idea to business people.

Nitpicking on technical details won't help with that goal -- this is a typical geek's mistake.

For example: does the article even mention mining?
No (and IMHO it was a tactically clever decision to leave that out)
 -- so what would be the point of explaining a 51% attac??

+1

Yes sir exactly (thanks for pointing this out)

We created this primer as a short introduction explaining the business aspects within Bitcoin.

This is being read by people who run major companies that want to work with us, or us work with them.

Don't forget, most people don't understand Bitcoin beyond the news articles they read.

Charlie

[mcorlett]

I'm yet again very disappointed. You would expect an accurate and fair representation of the topic, not some pro-Bitcoin propaganda ad.

It looks like you misunderstood the intent of this writing.
The article wants to "sell" the Bitcoin idea to business people.

Nitpicking on technical details won't help with that goal -- this is a typical geek's mistake.

For example: does the article even mention mining?
No (and IMHO it was a tactically clever decision to leave that out)
 -- so what would be the point of explaining a 51% attac??

No, it doesn't mention mining, and nor does it fabricate a lie regarding it. But when you tread on the topic on reversibility, and state that "Bitcoin payments cannot be reversed", that's a big fat lie. Would replacing that with "Bitcoin payments are astronomically difficult to reverse" (which would be the truth) really add that much weight to the article?

I agree with you on the point that it tries to "sell" the Bitcoin idea, but blatantly lying in order to do so is a big no-no in my view.

[evoorhees]

I'm yet again very disappointed. You would expect an accurate and fair representation of the topic, not some pro-Bitcoin propaganda ad.

It looks like you misunderstood the intent of this writing.
The article wants to "sell" the Bitcoin idea to business people.

Nitpicking on technical details won't help with that goal -- this is a typical geek's mistake.

For example: does the article even mention mining?
No (and IMHO it was a tactically clever decision to leave that out)
 -- so what would be the point of explaining a 51% attac??

+100

I also didn't mention what kind of hash algorithms are used, or how the P2P network operates, or even what a block is. Adding a caveat to the (true) statement that Bitcoin transactions can't be reversed, due to an extremely unlikely 51% attack (which to my knowledge has never been successfully carried out on the Bitcoin network) would be silly.

[Boussac]

tl;dr: The cost of a 51% attack for a single transaction is prohibitive.

So we should completely disregard this when introducing new merchants and users to Bitcoin, rather than state that it is currently extremely difficult and improbable?

No, I think you bring up a good point that could be addressed by Erik's otherwise very thorough and accurate paper.

When a traditional bank signs up a merchant, the merchant account is not immune to identity theft and phishing attacks that will set her back financially. At best, the merchant can wait for the bank to reimburse her if the bank's responsibility is proven.

In a 51% attack , a temporary financial setback occurs also for the merchant accepting bitcoins but legit transactions are eventually confirmed once the attack stops.
A successful, continued 51% attack by an unidentified attacker is much less likely than a bank identity theft with a bank subsequently refusing to reimburse.

[IveBeenBit]

Wow 2 1/2 pages debating whether or not to describe the technical details and likelihood behind a 51% attack to a non-technical businessman. Congratulations mcorlett.

[mcorlett]

Wow 2 1/2 pages debating whether or not to describe the technical details and likelihood behind a 51% attack to a non-technical businessman. Congratulations mcorlett.

I did not suggest that. Replacing "Bitcoin payments cannot be reversed" with "Bitcoin payments are astronomically difficult to reverse" would be more than enough, but I think you can tell by Mr. Voorhees' stubbornness to change details that might portray Bitcoin in a worse light that such a thing will not be happening, and nor will the lies about wallet backups or every other thing I pointed out about his earlier article.

Thank you nonetheless!

[evoorhees]

Wow 2 1/2 pages debating whether or not to describe the technical details and likelihood behind a 51% attack to a non-technical businessman. Congratulations mcorlett.

I did not suggest that. Replacing "Bitcoin payments cannot be reversed" with "Bitcoin payments are astronomically difficult to reverse" would be more than enough, but I think you can tell by Mr. Voorhees' stubbornness to change details that might portray Bitcoin in a worse light that such a thing will not be happening, and nor will the lies about wallet backups or every other thing I pointed out about his earlier article.

Thank you nonetheless!

Wow mcorlett this is really bothering you, huh?

I cannot simply replace the phrase with "Bitcoin payments are astronomically difficult to reverse" because... what does that mean? I cannot write a statement like that, unless I explain it, which means an inevitable devolution into technical details describing in what extremely remote way a transaction could -possibly- be interfered with. I'm not going to go into those details in a Primer. After all, it's a Primer. P is for Primer.

The comment on my prior article about the 100 Addresses issue is a valid one, and perhaps that should be changed (I'm unconvinced that it's appropriate for that discussion, but intelligent people can debate that point both ways). This case with the irreversible payments, on the other hand, is absurd to debate about.

A Bitcoin payment cannot be reversed. But you claim I'm "lying" so let's put some money on the table: You send me 10 BTC. I'll wait for 1 confirmation. If you can reverse the payment, I'll amend my article AND send you an additional 10 BTC for proving me wrong. Alternatively, if and when I hear about any significant "payment reversal" happening in bitcoin land, I'll amend the document.

Until either of the above, I will not change what I wrote. Again, ridiculous technical nuances are highly inappropriate for a business primer... but unfortunately the odds of a payment reversal are probably higher than the odds of you dropping your case, so whatev    

[mcorlett]

Wow mcorlett this is really bothering you, huh?

It is; I'm glad you noticed!

I cannot simply replace the phrase with "Bitcoin payments are astronomically difficult to reverse" because... what does that mean? I cannot write a statement like that, unless I explain it, which means an inevitable devolution into technical details describing in what extremely remote way a transaction could -possibly- be interfered with. I'm not going to go into those details in a Primer. After all, it's a Primer. P is for Primer.

Wow, what a great point! You know, the next time I'm explaining Bitcoin to someone, I'll just tell them transactions are completely free. I mean, the reason why the cost of verifying a transaction depends not on the transaction amount but amount of inputs (among others) is a huge technicality, so let's bend the truth a little.

The comment on my prior article about the 100 Addresses issue is a valid one, and perhaps that should be changed (I'm unconvinced that it's appropriate for that discussion, but intelligent people can debate that point both ways). This case with the irreversible payments, on the other hand, is absurd to debate about.

Yep, let's continue discussing this while some poor soul actually believes what you've written and ends up losing their bitcoin savings.

A Bitcoin payment cannot be reversed. But you claim I'm "lying" so let's put some money on the table: You send me 10 BTC. I'll wait for 1 confirmation. If you can reverse the payment, I'll amend my article AND send you an additional 10 BTC for proving me wrong. Alternatively, if and when I hear about any significant "payment reversal" happening in bitcoin land, I'll amend the document.

In order for that to make financial sense for me, I would have to screw over people whose permission I do not have, so I will abstain. I could if I had the proper funding and/or luck, though.

Until either of the above, I will not change what I wrote. Again, ridiculous technical nuances are highly inappropriate for a business primer... but unfortunately the odds of a payment reversal are probably higher than the odds of you dropping your case, so whatev   

If you weren't prepared to tell the truth or explain the technical nuances behind your statements, perhaps you should've skipped the subject of reversibility in the first place? But it's just too convenient to move the goalposts, isn't it?

[Yankee (BitInstant)]

A Bitcoin payment cannot be reversed. But you claim I'm "lying" so let's put some money on the table: You send me 10 BTC. I'll wait for 1 confirmation. If you can reverse the payment, I'll amend my article AND send you an additional 10 BTC for proving me wrong. Alternatively, if and when I hear about any significant "payment reversal" happening in bitcoin land, I'll amend the document.

In order for that to make financial sense for me, I would have to screw over people whose permission I do not have, so I will abstain. I could if I had the proper funding and/or luck, though.

Can I get in on this bet?

[evoorhees]

mcorlett - After pondering some more on the topic, I think my former piece about the wallet backups ought to be edited, so I have now done so. It no longer says that only one backup is needed, and explicitly mentions the 100-address issue. You were right to request that change. So let's put that behind us, I was wrong.

But I'm not wrong on the issue of reversibility, and I see you have refused my bet.

Just so you understand how silly you're being, consider that some of our companies (FeedZeBirds, Coinapult, and Paysius) have together processed thousands of transactions from BTC payments. They accept payment at zero confirmations and not once has a payment ever been reversed. Paysius processes payments for BitcoinCommodities.com, and we've sold orders over $4k in value... again at zero confirmations, and with no issue.

You seem to think I'm "misleading" or "lying" to businesses by saying Bitcoin payments cannot be reversed... yet I've set my own companies to accept even without confirmations because I stand by what I'm claiming.

I will sell you anything if you pay in Bitcoin, because I know that a Bitcoin payment is good. It will not be reversed... and again if you'd like to accept the bet, then we can settle this silly matter. I'll even up the stakes. If you reverse a payment you've made to me after I wait just one confirmation, I'll send you 100 btc. Otherwise, please bow out respectfully, and admit you are wrong on this issue, just as I have admitted I was wrong on the former one.

[mcorlett]

A Bitcoin payment cannot be reversed.

I'm not wrong on the issue of reversibility

An attacker that controls more than 50% of the network's computing power can, for the time that he is in control, [...] reverse transactions that he sends while he's in control.

Are we done here?

Edit:

<mcorlett> Hello, is it true that an attacker that controls more than 50% of the network's computing power can reverse transactions that he sends?
<luke-jr> mcorlett: yes
<gmaxwell> mcorlett: Yes, subject to limitations.

Edit 2:

They accept payment at zero confirmations and not once has a payment ever been reversed. Paysius processes payments for BitcoinCommodities.com, and we've sold orders over $4k in value... again at zero confirmations, and with no issue.

Here is Blockchain.info's list of recently double-spent transactions:
http://blockchain.info/double-spends

[evoorhees]

mcorlett - you're missing the point. I didn't refute the claim that in extremely weird, extremely uncommon situations a payment can be reversed within a tiny window.  I simply said that level of technical minutiae is not appropriate for a business primer. I stand by the statement, and you're welcome to win 100btc right now by proving me wrong with the bet I offered you. Prove that reversals are relevant by carrying one out against me. If this were PayPal, you'd be able to do it with ease... but with Bitcoin, you will not.

[dr_nix]

Nice article!

However, two links are broken:

• bitstamp.com should be bitstamp.net
• btcde.com should be bitcoin.de

[rjk]

I'll tell you what's even more interesting:

Code:

id 	rater nick 	rated nick 	created at 	       rating   notes
                                          (UTC)
9665 	vragnaroda 	mcorlett 	2012-03-13 19:36:23 	-1 	Dishonest, fascist, grandstands for principles he does not follow

Especially the last part, «grandstands for principles he does not follow».

[Yankee (BitInstant)]

I'll tell you what's even more interesting:

Code:

id 	rater nick 	rated nick 	created at 	       rating   notes
                                          (UTC)
9665 	vragnaroda 	mcorlett 	2012-03-13 19:36:23 	-1 	Dishonest, fascist, grandstands for principles he does not follow

Especially the last part, «grandstands for principles he does not follow».

Classic. Don't you just love the forums 

[cryptoanarchist]

Anyways...Great article, Erik!   

[mcorlett]

I didn't refute the claim that in extremely weird, extremely uncommon situations a payment can be reversed within a tiny window.

For about half a million dollars in BFL's upcoming ASIC rigs (I hope I'm reading sipa's charts correctly, feel free to correct me), one could attack the Bitcoin network indefinitely. No "tiny window" to speak of! Mt.Gox alone clears over $500,000 in two days, and that's just USD.

Prove that reversals are relevant by carrying one out against me. If this were PayPal, you'd be able to do it with ease... but with Bitcoin, you will not.

I have already explained why this will not be happening.

I'll tell you what's even more interesting:

Code:

id 	rater nick 	rated nick 	created at 	       rating   notes
                                          (UTC)
9665 	vragnaroda 	mcorlett 	2012-03-13 19:36:23 	-1 	Dishonest, fascist, grandstands for principles he does not follow

Especially the last part, «grandstands for principles he does not follow».

Deflection!