Bitcoin : The New World Currency

[submethod]

Perhaps you have heard of it, perhaps you haven't. But Bitcoin is quickly becoming all the buzz on the web about the new decentralized banking digital currency. I think it is a great FU to the corrupt banking systems and overall evil gov't in place.
Even more so, it appears to be the next gold in an otherwise abysmal economy. It was even built by an anonymous entity who capped the number of coins at 21 million. The code is also unhackable. Even started seeing news on the WSJ and BCC about it. Gaining a lot of ground!

I am a firm supporter of it and yes I do own quite a few when they first came out. They are now around $100 USD each and were at around $266 a few months ago. Highly volatile but incredibly promising.

Bitcoin also introduced me to DWOLLA. A new for of eWallet that totally bucks Paypal. I strongly recommend it.


http://www.technologyreview.com/news/515391/bitcoin-millionaires-become-investing-angels/
http://bitcoin.org/en/
https://en.bitcoin.it/wiki/Main_Page


Thoughts? Anyone tried it?

[cybernigel]

Perhaps you have heard of it, perhaps you haven't. But Bitcoin is quickly becoming all the buzz on the web about the new decentralized banking digital currency. I think it is a great FU to the corrupt banking systems and overall evil gov't in place.
Even more so, it appears to be the next gold in an otherwise abysmal economy. It was even built by an anonymous entity who capped the number of coins at 21 million. The code is also unhackable. Even started seeing news on the WSJ and BCC about it. Gaining a lot of ground!

I am a firm supporter of it and yes I do own quite a few when they first came out. They are now around $100 USD each and were at around $266 a few months ago. Highly volatile but incredibly promising.

Bitcoin also introduced me to DWOLLA. A new for of eWallet that totally bucks Paypal. I strongly recommend it.


http://www.technologyreview.com/news/515391/bitcoin-millionaires-become-investing-angels/
http://bitcoin.org/en/
https://en.bitcoin.it/wiki/Main_Page


Thoughts? Anyone tried it?

There is no such thing as unhackable code. There is unbreakable encryption, but that's a different animal. Major Bitcoin thefts have occurred, though due to its public and perpetual transation log (the Blockchain) they are traceable to the extent that things are on the internet. However, even though the bitcoin is flagged as stolen, you aren't getting your money back. The real vulnerability lies in the wallets and exchanges that store and transmit them, but if there is a vulnerability in the system (and there is) what does it matter if its the infrastructure or the protocol? It's all risk at the end of the day.

Like any fiat currency, it will always be very risky but it has a place in electronic commerce. It at once has pros and cons for being unregulated but this certainly increases its risk. If you had the stomach for taking a day-trading approach to bitcoins, you could make some money, and people definitely have, but I would never leave a substantial amount of money in a bitcoin wallet for very long because of hackers or other threats. To wit...

http://www.techweekeurope.co.uk/news/fe ... nds-116572

[submethod]

That article is an old one but good. And yes, by all accounts, the code is unhackable. It would take the US Gov't till the end of time to break it.

You might want to reference this instead. http://www.cnbc.com/id/100815062

I can only speak for myself and fellow technologists who have made some money at it. Again, I have already been paid in BC for tech work and even more so have, used my DWOLLA for various purchasing online.

I would say that your response is mostly accurate. The encryption is unbreakable and there can of course be vulnerabilities in computer code, but those would be vulnerabilities in the apps or services that are built on top of the Bitcoin platform - not Bitcoin itself.

The blockchain and Bitcoin protocol has represented a multi-million dollar target for several years now and no one has been able to find any vulnerabilities. I think it is fair to assume, that with Bitcoin being open source, some of the brightest hackers in the world have inspected that code thoroughly.

An analogy to our current system would be; nobody claims that the USD is somehow flawed when there is a bank robbery, or when people people lose bills out of their wallet. Yes, the players (anyone who transacts) in the USD space may have flawed systems, but that doesn't mean the basic mechanisms of our monetary system is somehow not secure/safe/sound.

And Bitcoin is not a fiat currency. That is a hotly debated topic though.

[cybernigel]

I guess I just think it's reckless to make a blanket statement like "bitcoins are unhackable" when a system is only as strong as it's weakest link and bitcoin's weakest links have been hacked.

Yes, the encryption of the bitcoin itself, which is largely a mathematical operation and essentially what would allow someone to create counterfeits if compromised, has not been hacked and likely won't barring the invention of a quantum computer. The bitcoin platform as you agree, is implemented in computer code (originally C++) and all computer code is hackable. This includes the bitcoin code, which has been hacked.

You reference the blockchain, a key element of the bitcoin protocol, as invulnerable when it fact, it did (and probably still does) have vulnerabilities that were exploited and resulted in the electronic theft of money.

You can read the gory details of the blockchain fork and infamous integer overflow bug in this account of how the bitcoin protocol has been exploited:
http://bitcoinmagazine.com/bitcoin-netw ... hain-fork/

There is also a vulnerability in that someone could conceivably take over bitcoin mining by garnering 51 percent of the overall processing power used in the peer-to-peer operation.

I guess it's not a fiat currency in the sense that it is not regulated by a government but what is the intrinsic value of a bitcoin?

The Winkelvoss article speaks to the virtue of regulation which seems contrary to bitcoin's "great FU to the corrupt banking systems and overall evil gov't". Regulation would certainly bring stability and might legitimize the currency to enable it to gain more substantial market capitalization but it would likely diminish the benefit of anonymous transactions with low fees.

These issues aside, it's a brilliant concept and will continue to get better but it is not without risk.

[submethod]

Cyber- good stuff.

Additionally, AFAIK the blockchain has never been hacked. It is mathematically impossible. I doubt seasoned programmers would agree that all computer code is hackable. I mean, society relies on all sorts of critical computer systems that are not being hacked... Some are, but those with enough eyeballs on them don't get hacked afaik. There has to be an attack vector in place. With this line of thinking you might as well cast doubt on https, ssh etc...

There is a lot of talk of regulation these days. Bitcoin itself cannot be regulated any more than BitTorrent can... You can only regulate the interface between bitcoin and fiat - the exchanges. No one will ever be able to prevent or regulate one person from sending coin to another person.


Here's another great article by Jon matonis:
[url]
http://www.americanbanker.com/bankthink ... gination=1[/url]

[cybernigel]

Cyber- good stuff.

Additionally, AFAIK the blockchain has never been hacked. It is mathematically impossible. I doubt seasoned programmers would agree that all computer code is hackable. I mean, society relies on all sorts of critical computer systems that are not being hacked... Some are, but those with enough eyeballs on them don't get hacked afaik. There has to be an attack vector in place. With this line of thinking you might as well cast doubt on https, ssh etc...

There is a lot of talk of regulation these days. Bitcoin itself cannot be regulated any more than BitTorrent can... You can only regulate the interface between bitcoin and fiat - the exchanges. No one will ever be able to prevent or regulate one person from sending coin to another person.


Here's another great article by Jon matonis:
[url]
http://www.americanbanker.com/bankthink ... gination=1[/url]

Blockchain hacked:
https://bitcointalk.org/index.php?topic=152348.0

HTTPS hacked:
http://www.infoworld.com/t/security/red ... ked-174025

SSH hacked:
http://www.net-security.org/secworld.php?id=14052

In fact, you'd be hard pressed to name a programmed system on the internet that hasn't been hacked (encyption of course being a diiferent animal). When I was getting my CS degree I never heard a Ph.d say anything other than all code contains vulnerabilities. Hence, the notion of defense in depth.

Looks like Mantonis just got a cease and desist order from CA:
http://www.forbes.com/sites/jonmatonis/ ... alifornia/

If they go after the exchanges it could hard to directly cash out a bitcoin domestically.

[submethod]

Cyber- good stuff.

Additionally, AFAIK the blockchain has never been hacked. It is mathematically impossible. I doubt seasoned programmers would agree that all computer code is hackable. I mean, society relies on all sorts of critical computer systems that are not being hacked... Some are, but those with enough eyeballs on them don't get hacked afaik. There has to be an attack vector in place. With this line of thinking you might as well cast doubt on https, ssh etc...

There is a lot of talk of regulation these days. Bitcoin itself cannot be regulated any more than BitTorrent can... You can only regulate the interface between bitcoin and fiat - the exchanges. No one will ever be able to prevent or regulate one person from sending coin to another person.


Here's another great article by Jon matonis:
[url]
http://www.americanbanker.com/bankthink ... gination=1[/url]

Sorry, these are examples of core tech not the chain being hacked. All systems can have vulnerabilities. The question is really how they are being dealt with by the maintainer.

Blockchain hacked:
https://bitcointalk.org/index.php?topic=152348.0

That was a double spend not a hack.

HTTPS hacked:
http://www.infoworld.com/t/security/red ... ked-174025
That is not a block chain.


SSH hacked:
http://www.net-security.org/secworld.php?id=14052
These exploits compromise exchanges not the the blockchain.

In fact, you'd be hard pressed to name a programmed system on the internet that hasn't been hacked (encyption of course being a diiferent animal). When I was getting my CS degree I never heard a Ph.d say anything other than all code contains vulnerabilities. Hence, the notion of defense in depth.

True, your points are valid. However, it's not like the Internet collapsed because an exploit to an older version of https was released.

Looks like Mantonis just got a cease and desist order from CA:
http://www.forbes.com/sites/jonmatonis/ ... alifornia/
I agree with this. But remember they do need to play by the rules when it comes to the USD and California.....especially California.

If they go after the exchanges it could hard to directly cash out a bitcoin domestically.

Agreed.

[cybernigel]

A double spend attack is a hack. The blockchain fork is the vulnerability and a double-spend is the exploit thats steals money. An exploited vulnerability is a hack.

https://news.ycombinator.com/item?id=5372956
http://bitcoin.stackexchange.com/questi ... in-illegal

[submethod]

A double spend attack is a hack. The blockchain fork is the vulnerability and a double-spend is the exploit thats steals money. An exploited vulnerability is a hack.

https://news.ycombinator.com/item?id=5372956
http://bitcoin.stackexchange.com/questi ... in-illegal

So I guess you're not a bitcoin user then.
We can go back and forth about this all day of what a hack truly is.

[outeredgestudio]

All I need to know is, can they feed my monkey! Buy more obey prints?

[submethod]

All I need to know is, can they feed my monkey! Buy more obey prints?

Well if you bought coins about a year ago for 20 bucks a pop, ya...you could by a grip with each coin weighing in at 100 bucks each. In April it shot up to $266, then plummeted.

[cybernigel]

A double spend attack is a hack. The blockchain fork is the vulnerability and a double-spend is the exploit thats steals money. An exploited vulnerability is a hack.

https://news.ycombinator.com/item?id=5372956
http://bitcoin.stackexchange.com/questi ... in-illegal

So I guess you're not a bitcoin user then.
We can go back and forth about this all day of what a hack truly is.

That would seem unproductive as hacking is already defined and a double spend hack is clearly covered in that description.
"knowing and with intent to defraud exceeds authorized access and obtains anything of value"
http://definitions.uslegal.com/c/computer-hacking/

I think in your effort to espouse the virtues of bitcoin, and there are many, you may have taken liberties with the concept of hacking which really isn't that debatable outside of in which specific components of the platform the vulnerabilities lie. To the end user though, it's all bitcoin, and if you woke up one day an found your money gone because of a blockchain fork, integer overflow, or insecure wallet, you are going to say you got hacked and you'd be right. And this happens enough with bitcoin to be a risk worth mentioning.

I've used them to make small purchases overseas and only have a few hundred dollars worth in StrongCoin. The paper wallets are interesting: https://bitcoinpaperwallet.com/

You have to think in 100 years everything will be cryptocurrency. It will be interesting to see the subsequent adoption and scrutiny of it by governments. There's an irony in that something that started out with the benefit of anonymity will be even more highly documented than cash once regulation gets it's mitts on it.

[djsp]

Hacking aside, In my opinion it is not a currency. It is a commodity. It fluctuates too greatly to be considered a legit currency.

[submethod]

Bitcoin just $1,000 a coin.....just saying.

http://www.usatoday.com/story/tech/2013/11/27/bitcoin-1000-cryptocurrency/3768821/

[Fattyramone]

http://www.ibtimes.co.uk/articles/52559 ... ewport.htm


Lost hard Drive Sparks £4m Bitcoin Treasure Hunt in South Wales

A hard drive containing £4 million worth of bitcoins is buried beneath several feet of mud at a recycling plant somewhere in Newport, south Wales.



hard drive containing 7,500 bitcoins is buried somewhere in south Wales. (Reuters)

The former owner of the hard drive, James Howells, who threw it away, along with a seven-year-old Dell laptop, had mined bitcoins when the decentralised crypto-currency was relatively new, easy to mine - and almost worthless.

Now, after months of widespread media coverage driving bitcoin's value up more than 4,000%, each coin is worth more than £600, making the 7,500 bitcoins stored on the abandoned hard drive worth in excess of £4.1m ($6m).

A Reddit user calling themselves Sue-dough-nim posted the story of the missing hard drive on 26 November, having spoken to its previous owner through an IRC (internet relay chat) channel.

"[The owner] went to the recycling centre and they showed him around. The hard drive, if it was there, could be buried under around four feet of mud and waste, in an area the size of a soccer field. The cost of closing the centre, hiring diggers, and searching for it would be too high, and then the chances of finding it are still not excellent," Sue-dough-nim said.

Howells, who works in IT, subsequently spoke to the Guardian, telling them: "You know when you put something in the bin, and in your head, say to yourself 'that's a bad idea'? I really did have that.

"I don't have an exact date, the only time period I can give - and I've been racking my own brains - is between 20 June and 10 August. Probably mid-July."

Read More: What is Bitcoin and How Does it Work?
The hard drive now is located at the Household Waste Recycling Centre in Pillgwenlly, Newport, Wales. Sue-dough-tim suggests gold diggers with the resources and time needed to search the centre should do so.

[submethod]

YEp...read that the other day. Dude, should have run several back up and a cold storage. Oh well...

[sweetjesus]

awkward.... http://www.nbcnews.com/business/bitcoin ... 2D11765766

[darwin]

Yep that's what you get for not backing up properly

[jjttdw]

Bitcoin exchange CEO arrested for money laundering

http://money.cnn.com/2014/01/27/technology/security/bitcoin-arrest/index.html?hpt=hp_t2

[Cookie Head]

Bitcoin just $1,000 a coin.....just saying.

http://www.usatoday.com/story/tech/2013/11/27/bitcoin-1000-cryptocurrency/3768821/

Curious as to what you are saying now?

[vvk]

I say its time to buy!
lets sell all our prints and buy in...

[cybernigel]

I say its time to buy!
lets sell all our prints and buy in...

I think it's a good time to buy if you want to diversify a little and acknowledge the high risk. MtGox was sloppy and deserves to go under, it's just a shame they lied to their users about keeping their coins in cold storage.

For non-MtGox users, there just became 6% less btcs out there.

[vvk]

while we are at it.. lets load up on FNMA as well

[submethod]

Contrary to the BS the media spews forth, Bitcoin is alive and well. I am unhappy to hear about mtgox going under and all the losses people have had with them. But to be honest, mtgox were and are dishonest from all angles.

Even more so, people need to learn to store their coins on a secure wallet and NOT on an exchange. That when you can lose them all easily.

I can personally attest that I have made quite a few bucks with Bitcoin and support it fully.

[cybernigel]

while we are at it.. lets load up on FNMA as well

Heck, they're up 10% today.