“an unambiguous challenge to the government monopoly on the power to print money.”
The proof-of-work also solves the problem of determining representation in majority decision making. If the majority were based on one-IP-address-one-vote, it could be subverted by anyone able to allocate many IPs. Proof-of-work is essentially one-CPU-one-vote. The majority decision is represented by the longest chain, which has the greatest proof-of-work effort invested in it. If a majority of CPU power is controlled by honest nodes, the honest chain will grow the fastest and outpace any competing chains.
Short bitcoin against all other legitimate currencies. Wait for collapse. Profit.
Apparently, the biggest flaw is that if more than 50% of the Bitcoin clients are fraudulent, it destroys the whole trust system. However, as the number of legit clients increases, that 50% figure becomes unrealistic to obtain.
Stage 1: Bitcoin does not exist. Stage 2: Bitcoin exists, but is worthless. Stage 3: Bitcoin exists, and is used by strange and desperate weirdos and geeks. Stage 4: Bitcoin is used by Slashdot readers, perhaps slightly less desperate. (You are here.) Stage 5: Bitcoin is used by criminals. Stage 6: All Bitcoin exchanges are shut down by USG. Stage 7: Bitcoin exists, but is worthless. Stage 8: Bitcoin does not exist.
On what legal basis would bitcoin exchanges likely be acted against?
Look at a whole day’s trading, and market participants can usually tell you a plausible story... Look at trading activity on a scale of milliseconds, however, and things seem quite different.
When two American financial economists, Joel Hasbrouck and Gideon Saar, did this a couple of years ago, they found strange periodicities and spasms. The most striking periodicity involves large peaks of activity separated by almost exactly 1000 milliseconds: they occur 10-30 milliseconds after the ‘tick’ of each second. The spasms, in contrast, seem to be governed not directly by clock time but by an event: the execution of a buy or sell order, the cancellation of an order, or the arrival of a new order. Average activity levels in the first millisecond after such an event are around 300 times higher than normal. There are lengthy periods – lengthy, that’s to say, on a scale measured in milliseconds – in which little or nothing happens, punctuated by spasms of thousands of orders for a corporation’s shares and cancellations of orders. These spasms seem to begin abruptly, last a minute or two, then end just as abruptly.
Little of this has to do directly with human action. None of us can react to an event in a millisecond... The periodicities and spasms found by Hasbrouck and Saar are the traces of an epochal shift. As recently as 20 years ago, the heart of most financial markets was a trading floor on which human beings did deals... The deals that used to be struck on trading floors now take place via ‘matching engines’ ... The matching engines of the New York Stock Exchange, for example... a giant new 400,000-square-foot plain-brick data centre in Mahwah, New Jersey, 30 miles from downtown Manhattan. Nobody minds you taking photos of the Broad Street building’s striking neoclassical façade, but try photographing the Mahwah data centre and you’ll find the police quickly taking an interest: it’s classed as part of the critical infrastructure of the United States.
[...lucid description of high frequency 'algo' trading and the flash crash last may...]
As Steve Wunsch, one of the pioneers of electronic exchanges, put it in another TABB forum discussion, US share trading ‘is now so complex as a system that no one can predict what will happen when something new is added to it, no matter how much vetting is done.’ ... Systems that are both tightly coupled and highly complex, Perrow argues in Normal Accidents (1984), are inherently dangerous. Crudely put, high complexity in a system means that if something goes wrong it takes time to work out what has happened and to act appropriately. Tight coupling means that one doesn’t have that time. Moreover, he suggests, a tightly coupled system needs centralised management, but a highly complex system can’t be managed effectively in a centralised way because we simply don’t understand it well enough; therefore its organisation must be decentralised. Systems that combine tight coupling with high complexity are an organisational contradiction...
"In normal economies, newly minted money is handed out by a central bank in return for some asset. In Bitcoin the money is randomly allocated over time. This is an advantage for early adopters who, on average, receive more 'free money' than late adopters."
Isn't this pretty much the definition of a pyramid scheme?
They weigh four tonnes! Rai stones were almost useless – they weren't even moved when they 'changed hands' – and yet the system survived until the quarries became inaccessible.
Well, because "Anonymous" doesn't have "inflation" built into the damned system as the means by which they profit from us using their currency?
In fact, BitCoins function as an inherently deflationary currency.
There is an option - not go into debt.
I could comb through the forums to learn the answers to these questions, but the point I'm making is that these basic ideas should be really, really obvious in their stock client.
Well, it works as you vs the machine (so more like a slot machine), but it doesn't require any particular central server (other than one to run the game itself): Bitcoin Darts
price Mhs/sec earning/mo
6570 $70 82 $83.35 link
6750 $104 168 $170.76 link
6850 $159 244 $248.01 link
6870 $187 329 $334.40 link
6970 $339 403 $409.62 link
6990 $734 835 $848.71 link
You actually don't need x16 slots, you can get away with a whole slew of x1 lanes - BitCoin mining involves very close to zero actual bus traffic, and electrically, an x16 card works just fine in an x1 slot (though you may need to take a dremel to the inside edge of the connector to physically seat the card).
Hmmm...would a flagged coin be recognized in any exchange on the network? Or would one have to be deliberately looking for them to discover them? To draw a real life analogy --- as it is so fascinatingly easy to do with this subject --- if I hand over $1 m in cash as ransom and the FBI keeps a list of the serial numbers, it may be possible to have banks look out for the bills, and when one turns up, trace it. But if I spend that bill on a cup of coffee, the guy at the donut shop isn't going to cross-check with Interpol before giving me change.
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