Julian Assange Show: Cypherpunks Discuss Bitcoin

[Mike Jones]

http://www.youtube.com/watch?v=FPebAr7ST-E#t=24m13s

[Mike Jones]

Funny quote:

"Money can disappear from Bitcoin. It cannot work in the long run."

[Meatpile]

Funny that bitcoin has a major flaw in this regard?

Because the first sentance is absolutely true, people will lose wallets / hard drives, send to accidental addresses that do not exist etc. Thus money dissapearing forever.

[vampire]

Funny that bitcoin has a major flaw in this regard?

Because the first sentance is absolutely true, people will lose wallets / hard drives, send to accidental addresses that do not exist etc. Thus money dissapearing forever.

You can burn real money also :-)

[mb300sd]

Yes, but you can always add more decimal places.

[Technomage]

People losing bitcoins will simply be good for everyone else. The value of all other bitcoins go up. This is not a flaw of any sort because bitcoins are very divisible.

It is a problem if the security of Bitcoin clients suck but I think the security is decent and it's getting better all the time. Mostly it's up to how one secures ones bitcoins. Cold storage for savings... simple rule.

[anu]

Funny quote:

"Money can disappear from Bitcoin. It cannot work in the long run."

Bitcoin is infinitely divisible.

Lost Bitcoins only harms the individual who lost it, while actually improving the position of everyone else holding Bitcoins.

I would have to go ahead and completely disagree with that quote.

He is right. In the long run, the universe will run out of hydrogen. This means Bitcoin is doomed!

[giszmo]

People losing bitcoins will simply be good for everyone else. The value of all other bitcoins go up. This is not a flaw of any sort because bitcoins are very divisible.

So raw eggs would be a perfect currency or at least there would be no problem with them breaking all the time as it makes the raw eggs of others just even more valuable.

Oh come on. Being easy to loose in fact is a problem of bitcoin right now. Reminds me I should refresh my wallet backup

[notme]

People losing bitcoins will simply be good for everyone else. The value of all other bitcoins go up. This is not a flaw of any sort because bitcoins are very divisible.

So raw eggs would be a perfect currency or at least there would be no problem with them breaking all the time as it makes the raw eggs of others just even more valuable.

Oh come on. Being easy to loose in fact is a problem of bitcoin right now. Reminds me I should refresh my wallet backup

Good money has more than one property. Being divisible is one. Durable would be another.

A wallet is so easy to back up, and you can make as many backups as you wish, that I'm going to call bullshit on "easy to lose" being a problem.

Backups do you no good if you're hacked.  Seeing as how most of the population is still stuck on the monoculture of Microsoft's software, this is a serious concern.

Until we have diversity in software, security for the masses will be impossible.

[Technomage]

I have used Bitcoin for quite a while now and I've had a lot of different wallets of different types and I have lost exactly 0 satoshis during the entire time. I may be an exception or "lucky" but I don't think bitcoins are easy to lose. They are easy to lose if you're careless but it is sort of idiotic beyond idiotic to not be careful with Internet money.

Internet money, which is used in the realm of hackers and viruses, is something one should be a bit careful with. There are improvements to be made though, one of them would be easy to use implementations of multisig so that wallets could be easily set up that require signatures from multiple devices to send bitcoins.

[Technomage]

I'd like to add that what I'm talking about is from the perspective of an individual Bitcoin user, who is not in general a target of a serious hacker. On the other hand the services that hold a lot of bitcoins and are targets, should take extreme measures for security. I think more and more will though, the hacks have been a learning process that will improve Bitcoin security in the long run.

[notme]

Multisig is the best answer, but we still have yet to see a working system implemented across multiple devices.  Hmmm... if only I wasn't already working on a few things and going back to school in a few weeks...

Until we have widely used, simple multisig I can't feel comfortable suggesting bitcoin to people who don't understand computer security.

[Technomage]

Multisig is the best answer, but we still have yet to see a working system implemented across multiple devices.  Hmmm... if only I wasn't already working on a few things and going back to school in a few weeks...

Until we have widely used, simple multisig I can't feel comfortable suggesting bitcoin to people who don't understand computer security.

I have to agree with this. That is why in a recent poll I actually voted that multisig should be a bigger priority than working on the scaling issues. Both are very important though.

[Explodicle]

What about android phones? I've been suggesting that n00bs use BitcoinSpinner, because IMHO it's the best combination of ease of use and security.

[notme]

What about android phones? I've been suggesting that n00bs use BitcoinSpinner, because IMHO it's the best combination of ease of use and security.

I don't know bitspinner, but I would be very careful on that platform, especially if the keys aren't stored in an encrypted format.

[Jutarul]

bitcoins don't get lost, they just become inaccessible (which can be the same for all practical purposes). However, inaccessible bitcoins are like gold treasures on the bottom of the sea. Sometime in the future the incentives to find "lost accounts" will be big enough for people to develop "bitcoin treasure hunting" solutions. The cool thing about lost accounts is that it's kind of a static problem because the funds don't move anymore  

[notme]

bitcoins don't get lost, they just become inaccessible (which can be the same for all practical purposes). However, inaccessible bitcoins are like gold treasures on the bottom of the sea. Sometime in the future the incentives to find "lost accounts" will be big enough for people to develop "bitcoin treasure hunting" solutions. The cool thing about lost accounts is that it's kind of a static problem because the funds don't move anymore  

This will only happen after ECDSA is broken and we move to a new addressing system.  Until then, if "bitcoin treasure hunting" is possible, it will be possible to steal bitcoins.

[apetersson]

Multisig is the best answer, but we still have yet to see a working system implemented across multiple devices.  Hmmm... if only I wasn't already working on a few things and going back to school in a few weeks...

Until we have widely used, simple multisig I can't feel comfortable suggesting bitcoin to people who don't understand computer security.

i am working furiously on multisig support for bitcoinJ/android
see my work at the clone http://code.google.com/r/andreaspeterssonat-hackathon/source/checkout
its not 100% finished but on a good way

if you have any practial ideas how to handle distributed keys, let me know. as a reference app i will most likely have a http signer service which lets you spend funds from multisig addresses if you supply a pin

[giszmo]

bitcoins don't get lost, they just become inaccessible (which can be the same for all practical purposes). However, inaccessible bitcoins are like gold treasures on the bottom of the sea. Sometime in the future the incentives to find "lost accounts" will be big enough for people to develop "bitcoin treasure hunting" solutions. The cool thing about lost accounts is that it's kind of a static problem because the funds don't move anymore  

This will only happen after ECDSA is broken and we move to a new addressing system.  Until then, if "bitcoin treasure hunting" is possible, it will be possible to steal bitcoins.

From a treasure hunter's point of view there will be big and small loots. The biggest unspent address will be the first target no matter if it is "lost" or the cold storage of Gox. As people will know about ECDS being weak when it actually happens (I doubt there will be a zero day exploit), all non-lost funds will get moved. Either split up to decrease the loot/increase the effort per BTC or if it already exists to a more secure key.

My worries is that mining hardware will essentially be the tool to loot those addresses so greedy pools might throw their computing power on where there is the highest profit and therefore maybe big fractions of mining (aka double spend protection) will be lost to looting (aka mining).

[Jutarul]

bitcoins don't get lost, they just become inaccessible (which can be the same for all practical purposes). However, inaccessible bitcoins are like gold treasures on the bottom of the sea. Sometime in the future the incentives to find "lost accounts" will be big enough for people to develop "bitcoin treasure hunting" solutions. The cool thing about lost accounts is that it's kind of a static problem because the funds don't move anymore  

This will only happen after ECDSA is broken and we move to a new addressing system.  Until then, if "bitcoin treasure hunting" is possible, it will be possible to steal bitcoins.

From a treasure hunter's point of view there will be big and small loots. The biggest unspent address will be the first target no matter if it is "lost" or the cold storage of Gox. As people will know about ECDS being weak when it actually happens (I doubt there will be a zero day exploit), all non-lost funds will get moved. Either split up to decrease the loot/increase the effort per BTC or if it already exists to a more secure key.

My worries is that mining hardware will essentially be the tool to loot those addresses so greedy pools might throw their computing power on where there is the highest profit and therefore maybe big fractions of mining (aka double spend protection) will be lost to looting (aka mining).

The good news is that hashing vs. finding private keys are two very different computational problems. Based on how things develop right now, I doubt that the hardware used for mining will perform well for finding private keys. Also hashing the blockchain is a dynamic problem (input changes every 10 minutes or so). Finding private keys can be done offline. So you can move your equipment next to a really cheap energy source without bothering about network connectivity... Anyway, we're talking about 20 years in the future here...

Also if such a "looting" market develops people may be encouraged to move their funds once in a while, which may benefit the whole mining industry because of additional transaction fees...

There's a simple solution to reduce the risk of getting looted: Just spread your X BTC across X addresses. Then the "incentive" for cracking your address becomes negligible.