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June 15, 2011 4:58 PM   Subscribe

Bitcoin is growing up: early adopters lost money due to bad backups; the US Senate wants to crack down due to possible illegal drug purchases with the digital coins; it had its Black Friday, losing 30% of its value in one day (after a 5,600% increase in the first year); the Economist weighs in; and now an alledged heist of 25k bitcoins (original forum post), valued between $250k and $750k on the Mt. Gox exchange. Currently 154 petaflops of CPU and GPUs are computing SHA256 hashes in tight loops, easily beating the #1 on the top500, the Tiahne-1A with 2.56 petaflops. (Previously and more previously)
posted by autopilot (113 comments total) 18 users marked this as a favorite

 
I always thought bitcoin-like application would be the perfect cover for a chinese lottery cryptanalysis style attack...
posted by yeoz at 5:00 PM on June 15, 2011 [2 favorites]


Hopefully, the decline of virtual currency will usher a return to the alchemical gold standard.
posted by Smart Dalek at 5:07 PM on June 15, 2011 [3 favorites]


the US Senate wants to crack down due to possible illegal drug purchases with the digital coins;

It's OK, they only bought digital drugs.
posted by jonmc at 5:08 PM on June 15, 2011


It's OK, they only bought digital drugs.

Hey man, want to buy some her01?
posted by Riki tiki at 5:17 PM on June 15, 2011 [21 favorites]


If you want to see what an internet-libertarian, neckbeard dystopia would look like, look no further than bitcoins.
posted by codacorolla at 5:17 PM on June 15, 2011 [15 favorites]


In related news, paper currency has been outlawed because people might use it to purchase illegal goods and services; the lack of a digital record renders such transactions virtually untraceable, making paper currency a powerful inducement to commit a crime.

Next, the senate will turn its attention to the troubling matter of free will: yay or nay?
posted by logicpunk at 5:18 PM on June 15, 2011 [8 favorites]


Currently 154 petaflops of CPU and GPUs are computing SHA256 hashes in tight loops, easily beating the #1 on the top500, the Tiahne-1A with 2.56 petaflops.

I so don't understand this future we're living in.
posted by item at 5:20 PM on June 15, 2011 [11 favorites]


I believe that Petaflop is the best name for a rabbit that there ever was.
posted by Lipstick Thespian at 5:22 PM on June 15, 2011 [27 favorites]


Exaflop's a thousand times better.
posted by Flunkie at 5:23 PM on June 15, 2011 [48 favorites]


Though I'm no neckbearded dystopian, it has been fun to play around on MtGox this past month. I'm curious to see the long-term viability of the BTC, but for now it's a great little gold rush to watch play out.
posted by secondtolastresort at 5:31 PM on June 15, 2011


logicpunk: In related news, paper currency has been outlawed because people might use it to purchase illegal goods and services...
You jest, but of course paper currency banking transactions of over US$10K must be reported to the government, and bills are limited to US$100 and below, for exactly these reasons. Large sums of paper currency are frequently impounded by the police on the presumption that they are evidence of criminal activity, and purchasing an airline ticket with it is a sure way to get yourself interrogated.

We've long since crippled our paper currency system, making it anonymous and untraceable only for trivially small transactions, largely because of the war on some drugs. I see nothing far-fetched about the idea that we'd cheerfully cripple a digital currency system in the same ways for the same reasons.
posted by Western Infidels at 5:37 PM on June 15, 2011 [11 favorites]




Buttcoin via projects.
posted by cjorgensen at 5:42 PM on June 15, 2011 [4 favorites]


Boy am I glad I never invested in this enormous fake money scam!
posted by tumid dahlia at 5:50 PM on June 15, 2011 [1 favorite]


I like Bitcoin the way I like Eve Online--fascinating reading, interesting from a distance--but I will never ever go near either of them.
posted by aerotive at 5:52 PM on June 15, 2011 [2 favorites]


Neckbeard Dystopia is the name of my new band.
posted by moss at 5:57 PM on June 15, 2011 [2 favorites]


Neckbeard Dystopia is the name of my new band.

They play prog influenced math rock.
posted by Lovecraft In Brooklyn at 5:58 PM on June 15, 2011 [2 favorites]


I have some old tokens from a now-defunct "Aladdin's Castle" video arcade. Memail me if you want to trade some blotter acid for them.
posted by chaff at 6:01 PM on June 15, 2011 [9 favorites]


This thread is making me feel inadequate.
posted by teraflop at 6:07 PM on June 15, 2011 [12 favorites]


I have just about every single trading card from the original Tim Burton Batman movie, as well as a bunch from Terminator 2. You can have them for a jetski.
posted by tumid dahlia at 6:07 PM on June 15, 2011 [1 favorite]


I have an irrational string of numbers that's infinitely long and never repeats itself. Somewhere in there is the hash of every single bitcoin that is and will ever be available. Please memail private bids - best offer wins!
posted by loquacious at 6:12 PM on June 15, 2011 [7 favorites]


Also, how does it make any sense whatsoever to measure SHA256 performance in flops? Last time I checked, cryptographic hashes don't exactly involve a lot of floating-point math. Bitcoinwatch.com seems to have decided that one bitcoin hash iteration equals 12,700 flops, but I can't find any reference to where that number came from.
posted by teraflop at 6:19 PM on June 15, 2011


Seriously though, that Economist article is I think the third one I've read about Bitcoin and I'm still not entirely sure what, beyond money laundering, is the point. Sure you can create an economy outside the reach of the rapacious central banking authorities, but it looks like you can get ripped off in Bit-land just as easily as you can here. As long as there's money someone has to be in control of the printing press, even if it's printed on rare combinations of bits.
posted by chaff at 6:22 PM on June 15, 2011 [1 favorite]


If you want to see what an internet-libertarian, neckbeard dystopia would look like, look no further than bitcoins.

You know what, I'd rather live in neckbeard dystopia-land than in the land Charles Schumer, one of the Democratic Senators, appears to be pushing for. A land where Four Loko is a grave threat to this nation, worthy of wasting precious resources fighting against.

None of the neckbeards are trying to throw people in jail for doing something to their own body.

It appears Schumer has found a niche, tilting at media-induced public-hysteria drug windmills like Four Loko, bath salts and bitcoin.
posted by formless at 6:27 PM on June 15, 2011 [14 favorites]




That's a really good point, teraflop, and one that I'm somewhat embarrassed that I didn't consider in the comparison with the top500. SHA256 has 64 rounds and each round has approximately 32 32-bit integer ops so call it 2k ops/hash, although with modern CPUs most of these will likely be overlapped in the scheduler. As a quick estimate, I ran shasum -a 256 to try to time it on my 2.66 GHz desktop; it clocks in at 120 MB/s, or about 240 Mhash/s, which is 1100 cycles/hash.

According to this hash rate/CPU comparison, the same 2.66 GHz CPU can do 2.5M bitcoin hash/s. From that we can estimate that a bitcoin hash takes the same time as about 100 SHA256 rounds. So 1100 cycles/SHA256 * 100 SHA256/bitcoin = 110,000 cycles/bitcoin hash. And since everyone knows that 1 FLOPS == 8 MIPS, that gives their result of 12.7 KFLOPS/bitcoin hash.

That last part might be a bit handwavy.
posted by autopilot at 6:48 PM on June 15, 2011 [1 favorite]


I've been following BitCoin for a bit, and there's something disquieting about literally pouring so much computational energy into... nothing. Literally, except for generating agreed-upon quantities of currency, cranking out SHA256 hashes accomplishes nothing at all. It is perfectly, utterly, completely useless as BitCoin applies it. I really can't put my finger on why, but that really bugs me. And the more people that join in the game of mining - or, alternatively, who wager their CPU/GPU capacity, cooling, power, and housing costs in a gamble for BitCoins - the harder it becomes and the more computing power is literally frittered away. It's not that I think the players are dumb or that it makes me angry... It just bothers me in a vague way.
posted by TheNewWazoo at 6:55 PM on June 15, 2011 [12 favorites]


I have an irrational string of numbers that's infinitely long and never repeats itself. Somewhere in there is the hash of every single bitcoin that is and will ever be available.

If you're thinking of pi, or e, or sqrt(2), none of those have been proven to be normal numbers, and so can't be guaranteed to contain all finite strings in their expansions.
posted by Pyry at 6:55 PM on June 15, 2011 [2 favorites]


I've forgotten... Which novel was the one where William Gibson predicted this part of our current dystopia 20 years ago? I thought that we'd pretty much actualized the entirety of Snow Crash by now.
posted by schmod at 7:14 PM on June 15, 2011


Bitcoins are totally awesome to use as a currency, all stable currencies fluctuate in value by +/-50% in an hour. Wait, not awesome, what's that other word? Insane.

Fun fact: the main exchange, Mt. Gox, stands for Magic the Gathering: Online eXchange. Treat it like a penny stock and you might make some money, invest money in "mining rigs" and you'll be left holding the bag when the commodity finally crashes.
posted by fifteen schnitzengruben is my limit at 7:15 PM on June 15, 2011


"...And since everyone knows that 1 FLOPS == 8 MIPS"

Where have you gone, Dick Fosbury?
posted by mr_crash_davis at 7:31 PM on June 15, 2011 [2 favorites]


What exactly is the exchange rate (right now...and maybe history) of 1 bitcoin to US Dollars?
posted by hal_c_on at 7:32 PM on June 15, 2011


Right now it's about $19-20 for one bitcoin. Historical data can be found here.
posted by ymgve at 7:47 PM on June 15, 2011


TheNewWazoo: It's poetic, really. All of that pointless computation is needed to overcome lack of trust in others - the less trustful you are, the more resources you have to divert from what you're trying to get done to making sure no one takes advantage of you.

A perfect implementation of capitalism's ethos.
posted by elektrotechnicus at 8:06 PM on June 15, 2011 [2 favorites]


i wonder if it is possible to fork bitcoin software and create an alternative block chain (and ecosystem) with none of this mining nonsense.. would such a system be vulnerable to cryptoattacks? what if it had an authoritative centralized txn history backup? Sure, it would defeat some of bitcoin's points, but would it work?
posted by 3mendo at 8:08 PM on June 15, 2011


The "easy" coins have all already been mined to the point that the cost of electricity alone makes it cheaper to simply buy bitcoins rather than try to mine them, as this calculator demonstrates (just enter zero for the cost of hardware — it still comes out negative).
posted by Potsy at 8:08 PM on June 15, 2011


3mendo: Mining is a brilliant solution to the problem of initial distribution. How would you give out coins otherwise? There needs to be some physical brake on how quickly they can be produced initially, or you need do hand them out by fiat.
posted by elektrotechnicus at 8:09 PM on June 15, 2011


i'd give them out for money and use bid ask spreads to cover my expenses =)
posted by 3mendo at 8:12 PM on June 15, 2011


Something Awful and something calling itself "buttcoin".

ugh. why

ugh
posted by This, of course, alludes to you at 8:14 PM on June 15, 2011


I've been following BitCoin for a bit, and there's something disquieting about literally pouring so much computational energy into... nothing.

Anyone with a sense of the future would have figured out that time X processor power per time = future currency of value in a society and economy where time and and well organized information is money. But we were talking about work done for a client, or the speed of a money or stock trade, or the timely information that makes our modern info-businesses possible.

I don't think anyone ever thought of it like this, where there's this closed system of a limited number of hashes to represent tokens of "money", and where you can literally mine them from the data space and claim them as your own.

It's weird shit. Ponzi/pyramid scheme? Yeah, probably - but the end result depends on how much actual work or value you can trade a bitcoin for in the future, how "attack" proof it is, how readily you can purchase things, how safe it is... etc.

All the stuff that makes currency currency is more or less there or has the potential to be there except for the threat of force that backs up, secures and enforces government issued currencies. Which is a whole different kettle of fish, and if you really look at the Federal Reserve system for the US in the right places it does look like a very complicated Ponzi scheme with constructed, intentional inflation and other interesting problems.

If Bitcoin takes off and becomes widely usable there will likely be an interesting side effect to drive computer security forward, because suddenly cracking encryption or breaking and entering an OS on an unencrypted volume on a single user's computer could become very lucrative to a thief.

Instead of a market for bitcoin-mining machines there will be a market for "bitcoin secure" wallets in the form of dedicated computers or portable devices.
posted by loquacious at 8:17 PM on June 15, 2011 [2 favorites]


The "easy" coins have all already been mined to the point that the cost of electricity alone makes it cheaper to simply buy bitcoins rather than try to mine them,

So theoretically the bitcoin market should be reaching some kind of stability and parity?

There's a curve or graph you could plot between Moore's Law and computing costs and the profitability of mining bitcoins in the near and far future.
posted by loquacious at 8:19 PM on June 15, 2011


What exactly is the exchange rate (right now...and maybe history) of 1 bitcoin to US Dollars?

Live Bitcoin Tracker will show the current buy and sell prices on Mt Gox. There are other bitcoin/USD exchanges but this is probably the main one. As of this writing it's $19.60 for one bitcoin.
posted by fifteen schnitzengruben is my limit at 8:20 PM on June 15, 2011


Can they use Bitcoins to buy Seed Banks, Liberty Dollars or gold? What about copies of Atlas Shrugged? What about DVD's of Atlas Shrugged?
posted by Sphinx at 8:32 PM on June 15, 2011 [3 favorites]


fork bitcoin software and create an alternative block chain (and ecosystem) with none of this mining nonsense

I think you're sort of missing the point, which is that the "mining nonsense" is the primary (perhaps sole) reason why Bitcoin took off where a whole lot of other digital currencies have flopped.

A system like Bitcoin, which is essentially a P2P distributed database, only works if you have enough nodes participating in the network. You have to create some sort of incentive for people to start using it ... enough people so that someone can't just grab control of the network themselves. Without the mining aspect, I'm not sure how you would get the critical mass of users required.

And if you throw away the distributed P2P architecture and make everything centralized, then you're no better than Liberty Reserve, Dwolla, or any of the other dozen or so 'digital currencies' / 'irrevocable payment processors' being operated out of Costa Rica, the Cayman Islands, etc. None of them are terribly popular, mostly because any idiot can see -- based on what happened to e-Gold, that they have a really terrible single point of failure that will probably be used to shut the whole mess down if it becomes too popular with the wrong sort of people.

Personally I think the real challenge for Bitcoin is going to be whether it remains popular once the easy money has all been made. The number of coins given out by mining decreases over time, so that the total number of BTC asymptotically approach a pre-set limit. In theory, the incentive to keep a node operational is by receiving transaction fees, but it doesn't seem clear whether or not there will be enough transactions, and thus enough fees, to make it worthwhile to keep nodes up and running.

But the initial 'mining', for all its pointlessness and waste of computing resources, is probably deserving of more credit for Bitcoin's popularity than any other part of its design. (Arguably the promise of a fixed limit and thus a deflationary currency is also important, but I don't think in the short run that's what's driving the miners.)
posted by Kadin2048 at 8:47 PM on June 15, 2011 [6 favorites]


amass a ton of CPUs via a super stealthy apparently harmless worm. Then start mining via distributed proof of work. If your botnet gets big enough you might even be able to con the network with double spending.
posted by humanfont at 8:51 PM on June 15, 2011


I hope this thing holds together until I can figure out a way to use it to get my studio apartment full of terrible unsaleable paintings sold off-- coda corollary to my failed writing career.
posted by This, of course, alludes to you at 9:03 PM on June 15, 2011


amass a ton of CPUs via a super stealthy apparently harmless worm. Then start mining via distributed proof of work. If your botnet gets big enough you might even be able to con the network with double spending.

Conficker?
posted by Blazecock Pileon at 9:13 PM on June 15, 2011


Currently 154 petaflops of CPU and GPUs are computing SHA256 hashes in tight loops, easily beating the #1 on the top500, the Tiahne-1A with 2.56 petaflops beneath a sky the color of television, tuned to a dead channel.
posted by SPrintF at 9:14 PM on June 15, 2011 [2 favorites]


In other news, this "JP" guy who writes for the Economist is probably the smartest jounalist in tech ever. I am always amazed by his posts.
posted by falameufilho at 9:49 PM on June 15, 2011 [1 favorite]


I've been following BitCoin for a bit, and there's something disquieting about literally pouring so much computational energy into... nothing.

Me too, but then I think about CDOs, TARP, high-frequency traders, etc. It doesn't seem that bad in comparison.
posted by RobotVoodooPower at 10:42 PM on June 15, 2011 [3 favorites]


Adam Cohen: Is the cryptocurrency Bitcoin a good idea?
No. Bitcoin is a ludicrously bad idea. It is a scam. A Scam. It is not a currency. The economic assumptions underpinning the Bitcoin ecosystem are laughable, and ignore hundreds of years of accumulated understanding of how currencies work with each other...

Question: if your money is getting predictably more valuable, why would you want to spend it? Answer: marginally speaking, you wouldn't... Bitcoin is not designed to be a functioning currency, it's designed to enrich early adopters. Again, that is why it is a scam. Period.
posted by TheophileEscargot at 11:02 PM on June 15, 2011 [3 favorites]


I used to play A Tale in the Desert intermittently. It was an interesting co-op MMO, where players could essential vote on the features they wanted the game to have. Last Christmas, I came back to check in on it after a few months offline, and found it to be a bit of a ghost town.

The game client offered me the option to connect to another world, billed as some kind of "bitcoin" casino. This was the first time I'd heard the term. Basically, the creator of ATITD had used his game engine and art assets to establish a place to gamble with bitcoins. Think kind of like second life, but without the penises.

Anyway, that was a pretty shady introduction, but after looking up the whitepaper on it I was intrigued. I believe if you think about it not as a "currency", but as a decentralized way to make payments online, it makes more sense and seems appealing. I'm not expecting it to replace the USD any time soon, but I'd be ecstatic if it put Paypal out of business.
posted by heathkit at 11:30 PM on June 15, 2011




Kadin, my question is not whether it makes sense to do so, but rather if it is possible. Also I have no use for truckloads of SHA hashes and no intent of actually doing this. As for being no different to other digital cash schemes and thus having a single point of failure, i claim ignorance on this but i seem to understand that btc is so far the only scheme that's open sourced. so if i were to be shut down a transaction db backup could be brought up somewhere else..
posted by 3mendo at 12:37 AM on June 16, 2011


People that say Bitcoin is a scam deeply misunderstand the fundamental social impact of something like Bitcoin. There's way too many replies to people who think it is, but a good summation would be to compare bitcoin to Gold, not to the US Dollar. I am absolutely serious when I say there may be a greater than 1% chance that Bitcoins will replace Gold. I am less confident about the US Dollar (it's closer to zero, for the dollar in my opinion). This tail risk for gold is extremely small, but it's nonzero and something that can have wide social repercussions. Cohen is being disingenuous when he compares Bitcoin to the USD, the creators of Bitcoins designed it to mimic Gold, no the USD, and when you look at the actual design and economic fundamentals behind Bitcoin, it is absolutely evident. However, Bitcoin's relative value is not the greatest social value. It's just hype.

Its greatest social value exists no matter the value of one Bitcoin. The ability to send money without transaction fees is absolutely new. A peer to peer transaction system over the Internet is absolutely new. The social impacts of these cannot be underestimated.

If you're an Indian or South American ex-pat and want to send money back home to your family, Bitcoins provides a way to do so with minimal hassle and kills the large Western Union fees which can be as high as 10%. If you want to send $1000 to your family, it doesn't matter if one Bitcoin is worth $20 or $0.02. You exchange it and exchange it back within the span of a couple hours. Decentralized peer to peer financial transactions have never existed in this manner over the Internet before.

Don't think of Bitcoin's value as its appreciation as a commodity, think of its impact as a internet peer-to-peer financial exchange/transaction system. Yes there's speculators betting their life savings hoping their BUTTCOINS WILL BE WORTH ONE MEELION DOLLARS. They're just a sideshow from the real potential social impact.

A lot of the people hating on Bitcoins are primarily complaining about how overvalued it is in terms of its liquidation value (not understanding that a lot of investments today are treating it like an out-of-the-money-option). For me, I don't care about its value. I care what the impact will be after the market bubbles and crashes a few times; I care what this means a couple years from now.
posted by amuseDetachment at 1:53 AM on June 16, 2011 [2 favorites]


Currently 154 petaflops of CPU and GPUs are computing SHA256 hashes in tight loops
The difficulty went up substantially today, so the estimate is a little off. It'll probably reach 154 Petaflops (I believe that'd be fairly close to being over the TOP500 supercomputers combined) soon enough, but right now it's probably closer to 90 Petaflops.

The reason the estimate gets out of wack every difficulty change (on average every 2 weeks), is that it's a moving average, and for some reason includes the fast completions in the previous difficulty block as part of its calculation.
posted by amuseDetachment at 2:03 AM on June 16, 2011


Here's the real reason that Bitcoin is the scammiest of scams. Dude/Lady/Nobody actually knows who created it, though the name on the whitepaper is completely fake, that person has something like 300,000 bitcoins. "They" (because really, the likeliest theory is that some mafia somewhere realized they could scam the fuck out of the gullible) mined those coins before the system went live. Basically every person who buys a coin is buying into a closed market where they are already the smallest fish in a tiny pond. Given the wealth disparity, a better analogy is that they are fish who are spawning inside a whale, the whale just hasn't decided to swallow yet. You see that massive drop from $30 to the 'stable' current price? Someone sold a thousand coins. A thousand. If you get into this for any reason other than selling a bitcoin as soon as you've mined it, you are the sucker.

As for what the coins themselves are actually useful for, the answer is drugs, hookers, and massive amounts of money laundering if the market stays stable. The best part about that stable market though? Say you fuck it up, move the price of bitcoins up or down a few bucks, (which is trivially easy for the whales and impossible for the suckers) you've just cost some cartel somewhere a bunch of money. That anonymity is the only thing standing between you and some pissed off triggermen.
posted by Peztopiary at 3:15 AM on June 16, 2011 [5 favorites]


I guess all the IPOs in the world are a scam to enrich the original shareholders as well. I think the fact that early adopters are (unfairly?) enriched is true in any new market. I'm of the opinion that the social value of a peer-to-peer transaction system with close-to-zero transaction fees the creators put in is entirely worth their "unfair" enrichment. It's not like everyone's keeping this a secret. In any case, anyone that buys and holds Bitcoins should know that risk. You're obsessing over the value of Bitcoins. I think it is irrelevant. Absolutely irrelevant.

All new technologies are dual use and adopted by those willing to take more risks. I think it'll come out that Bitcoin's anonymity is a lot less than the hype, in any case. You're belittling the potential social impact of Bitcoins if you're saying:
As for what the coins themselves are actually useful for, the answer is drugs, hookers, and massive amounts of money laundering if the market stays stable.
It's certainly true that Bitcoins may be used by illegal activities for its anonymity, but so can cash. This is a real threat to entire businesses, entire markets can be disintermediated such as Western Union or Paypal. This is potentially the first viable method to do micropayments over the internet. There are a whole host of potential legitimate transactions and economies that can exist from a peer-to-peer financial transaction system with exceptionally low fees.
posted by amuseDetachment at 3:34 AM on June 16, 2011 [1 favorite]


No all IPOs aren't scams, but some are. Some IPOs are deliberate attempts to take public something that isn't worth the money invested in it, hope a bunch of credulous suckers buy it, and then cash out before people notice that you've sold them a product that has less than zero value. Also, I didn't say jack about unfair, I said that Bitcoins are literally a scam. Scams aren't unfair, they're rigged from the start.

You can literally delete the wallet file it generates and the money is gone forever. You have to encrypt your wallet and back it up on multiple computers, just in case something goes wrong or you get hacked. This is not Cryptonomicon, this is Emperor Norton.

Also, let's completely ignore criminal activities. Pretend that bitcoins won't be used to support exploitation of people who are already being victimized by prostitution. It would, if widely adopted, bring down the federal government. No person would chose to be payed in dollars if they could instead be paid in completely untraceable bitcoins. Basically it's yet another attempt by libertarians to turn the world into the 'fuck you, got mine' paradise that they dream of, with the added benefit that the early adopters would be able to crash the world's economy on a whim. I'm all for crushing the wealthy, but not if we're going to throw a bunch of new people up their instead!
posted by Peztopiary at 4:31 AM on June 16, 2011


A lot of things have zero value (whatever that means). Gold and diamonds industrial value is probably several dollars per once/carat. One could argue that they are a scam as well, but we need to categorize the "scamminess" of something. I'd say it on the same level as gold as an investment vehicle. Not the same level as a ponzi scheme.

Yes, security is a known tradeoff. I consider the risk worth it as a transaction system, not so much for your life savings.

I know this sounds oddly contradictory, but I'm not as optimistic as you with the upper ceiling for success for Bitcoins. I genuinely think it's impossible for Bitcoins to replace a national currency. Bitcoins are a deflationary vehicle and cannot be used to plan any government. It's far inferior. At best, its success ceiling is a replacement for something like IMF SDRs or national gold vaults. While I consider this the ceiling, I see a replacement for SDRs are close to impossible (while replacement for the US Dollars as pretty much 100% impossible). I see this more as a replacement for Western Union, Paypal, et al. I doubt anyone's going to get their paycheck in bitcoins, unless they rely on remittances.

Look, I really, really really, don't care about the early adopters. In fact, I don't care about the success of Bitcoins in the next several years, it'll still be growing. Quite frankly, it's entirely possible to create a fork of Bitcoins and to say, "OK guys, we're redoing everything, let's start off with a new block chain," and the original creators will be screwed and won't have any money at all. Now, this isn't happening because there's too much inertia for bitcoins, but it doesn't matter.

To me, the value is the idea of Bitcoins itself. If there's a competing currency that has an exchange rate of $0.0005 as opposed to bitcoin's exchange rate of $20, the social value remains the same. The fork is just as useful if the same foreign exchange infrastructure exists (the infrastructure is why I see competing currencies as less likely for the time being).

I do agree that a lot of Randroid Libertards are attracted to Bitcoins, and that's unfortunate. I don't see them getting their way of a "fuck you I got my own island" if Bitcoins become widely successful.

I'm thinking more Paypal replacement rather than Central Bank replacement.
posted by amuseDetachment at 4:48 AM on June 16, 2011 [2 favorites]


so much computational energy into... nothing

Does anyone have any idea how much energy is required (computers require electricity of course) to mine a bitcoin? That is, 1(bitcoin) = X(watts) = Y($)

??
posted by gracchus at 4:49 AM on June 16, 2011


gracchus: It depends on the current global bitcoin difficulty and what hardware is used. Let's say you can get 1200MH/s on 700W. Using the bitcoin calculator, that would be ~1.38 bitcoins/day at the current difficulty level. That's about 12 Kilowatt-hours (0.7W * 24 Hours / 1.38). Just yesterday it was a little more than half that, probably close to 7 KWH because the difficulty was a lot lower. Remember that mining's primary systemic purpose is not currency inflation, but rather the public transaction journal. It's a peer-to-peer bank, so think of this "waste" are part of the bank overhead fees for logging account transactions, arguably this may be substantially lower than current bank fees, especially when Bitcoins stabalize.
posted by amuseDetachment at 4:59 AM on June 16, 2011


I think of BitCoin as a bunch of guys standing around a vat, masturbating furiously, until they fill the vat. Once the vat is full they make a bunch of t-shirts that say "I MASTURBATED FURIOUSLY TO FILL VAT 203484 AND ALL I GOT WAS THIS LOUSY T-SHIRT". Then people trade the t-shirts.

I think the idea of a P2P currency is good, and I'm strongly in favour of untraceable transactions, but ... all this wasted masturbation (CPU time)!

This really isn't very clever at all; what if folded proteins were used to generate currency instead, at least those would be actually useful for something.

In my paranoid ravings, anything that's mining BTC is probably also doing something else with those cycles. Sure there's open source available but who's to say that is what everyone is actually running? It's a huge computational effort based upon handwaving. That is to say: masturbating.
posted by seanmpuckett at 5:09 AM on June 16, 2011 [2 favorites]


AmuseDetachment is correct that the deflationary nature of Bitcoins will cause people to hoard them rather than spend them for "stuff." If most of your wealth is in Bitcoins, you're always better off to hold off as long as possible for any purchases of "stuff."

But there are some things that behave that way today if most of your wealth is in dollars. Computer memory and storage come to mind: You're always better off to wait as long as possible to purchase them. Yet the market for those-in-dollars is perfectly healthy.

If Bitcoin does take over for dollars (and I think that's actually a remote possibility), then the market for "stuff" will behave just like the market for memory and storage does today - not such a bad result.
posted by Teppy at 5:13 AM on June 16, 2011


seanmpuckett: Yes it is literally waste and masturbation to do these calculations. They have no intrinsic output. They do, however, have an intrinsic purpose. Bitcoins need a way to have a public transaction log (a list of all transfers from one account to another) to prevent double spending. If you can think of a more elegant solution with less waste, everyone would be very interested. The reason they have people waste energy is because it's an incredibly effective way to ensure that no one is cheating and doing a DDoS attack. You can't flood the global transaction log if you have to do some serious computation in order to be able to write to the log. Solving a block is like the entire world giving you a pen to write down all the transactions that have occurred in the world in the past 10 minutes. Everyone's watching you and double checking that the accounts are in order, but nothing's stopping you from writing down a bunch of spam (but still legitimate) transactions over and over if there wasn't this check in place. It sucks and is the worst part of Bitcoin, but literally there is no other known solution that solves both double-spending and DoS attacks. Bitcoins are able to exist because of this single feature. Without it, there's nothing stopping people from either A) Giving money to one person and then another, creating duplicate forged currency or B) Spamming the network to the point of failure. This is the first solution which solves both, this is why everyone is excited. This is new.

You can't do "good" stuff like fold proteins because the work is heterogeneous (you don't know how hard the solution is and can't adjust the difficulty dynamically and you don't know how easy it is to hack) and it's hard to verify the work without a lot of computation as well, you can't ensure a protein is properly folded without doing it again.
posted by amuseDetachment at 5:23 AM on June 16, 2011 [1 favorite]


That anonymity is the only thing standing between you and some pissed off triggermen.

The anonymity of bitcoins isn't even that great. As far as I understand it, by design, there's a huge register of every bitcoin transaction ever. Using your cartel example, if you can figure out who spooked the market by looking at known data versus transaction data you can then start assembling pieces of the puzzle to track down their identity. It's difficult, but given the proper motivation it can definitely be done.

Bitcoin also, ironically, privelages large state and corporate actors, as they can generate bitcoins, and throw computer power at hacking wallet.dats more than any deluded, small time operator.
posted by codacorolla at 7:14 AM on June 16, 2011


No person would chose to be payed in dollars if they could instead be paid in completely untraceable bitcoins.

Yeah, just like we all demand to get our salaries delivered as suitcases of small-denomination unmarked bills.
posted by ook at 7:41 AM on June 16, 2011 [4 favorites]


The CIA just had one bitcoin developer give a tech talk. Google has a 20% project for a java bitcoin client. It's cool stuff, and ATI/AMD is beating nVidia for once in something.

I have a comp sci MS focusing on high performance computing (ahem). This is a great embarrassingly parallel problem with a really simple algorithm that vectorizes nicely (especially in OpenCL, oddly beating CUDA). It definitely throws all of the current GPGPU supercomputers (tsubame and keeneland) for a loop and has me wondering exactly how to optimize for ATI/openCL vs nVidia/CUDA... apparently the SHA256 algorithm uses a lot of right shifts, which along with other operations work a lot faster on ATI. I don't divide by 2 that much, but maybe I should be... :-)

Neat stuff. I almost have 10 of them, woohoo. (I hope no one jacks me now)

Part of me really hopes amd(ati) is stress testing all of their new cards with a 24 hour run on their own mining pool. That would sure bring them some much needed cash.

That is unless the monetary value of these completely evaporate.
posted by nutate at 8:16 AM on June 16, 2011


If Bitcoin does take over for dollars (and I think that's actually a remote possibility), then the market for "stuff" will behave just like the market for memory and storage does today - not such a bad result.
Precisely. Even if it's not immediately obvious that "bitcoins will inevitably become overvalued thereby making them worthless" is a nonsense argument, shouldn't it be obvious that an isomorphic argument could be applied to *any* system with negative feedbacks? Yet the conclusion, "systems with negative feedback are unstable", is precisely the opposite of reality.

There are reasons not to invest in bitcoins ("no underlying value except for the ability to make pseudonymous transactions" and "the present price looks like a bubble" are my two biggest), but "nobody will want an appreciating good" is not one of them.
posted by roystgnr at 8:17 AM on June 16, 2011


Bitcoin also, ironically, privelages large state and corporate actors, as they can generate bitcoins, and throw computer power at hacking wallet.dats more than any deluded, small time operator.
posted by codacorolla at 7:14 AM on June 16 [+] [!]
You're forgetting that, as compute power goes up, the probability of finding a block goes down. This is to keep the rate of currency generation more or less constant over the short and medium term. So, literally, the more CPU/GPU cycles are wasted, the more they'll make everyone need to waste. You could throw all the computing power in the world at this problem, and, so long as you're not a bad actor looking to exploit the system, you'll burn up a block in a short time and then the difficulty will reset and you'll be generating BitCoins at the same rate, it'll just cost you the total compute power of the world to do so.
posted by TheNewWazoo at 9:07 AM on June 16, 2011


There are reasons not to invest in bitcoins ("no underlying value except for the ability to make pseudonymous transactions" and "the present price looks like a bubble" are my two biggest), but "nobody will want an appreciating good" is not one of them.

Since Bitcoins have no intrinsic worth (they cannot be exchanged for the computational power used to generate them) and a physical item's value cannot be reliably pegged to it (e.g., 1 coin per banana) and because the Bitcoin is not legal tender (I can't buy a gallon of milk with Bitcoins) it looks like the only value accrued is from trading on the perceived value of what is a scarce item, which is done through speculation. In other words, Bitcoins only have value when the perceived value is greater today than yesterday, which only happens when new "investors" come in and buy Bitcoins and drive up their price. Having new suckers come in to add value to older suckers' investments is the very definition of a pyramid scheme.
posted by Blazecock Pileon at 11:25 AM on June 16, 2011


In other words, Bitcoins only have value when the perceived value is greater today than yesterday, which only happens when new "investors" come in and buy Bitcoins and drive up their price. Having new suckers come in to add value to older suckers' investments is the very definition of a pyramid scheme.

Bitcoins are valuable for the same reason that PayPal is a valuable company - it provides the service of financial transactions.
posted by elektrotechnicus at 12:17 PM on June 16, 2011 [1 favorite]


That's the way it's been explained to me - bitcoins are less a currency than they are a banking system. My problem with it is that I can vote to control who's at the head of the financial system, but I can't vote to control the nameless nerd at the helm of bitcoins. I also have redress with the police if someone hacks my Citibank account, and much less so if I lose 25k in bitcoins because of an especially determined hacker.

I like the idea of an anonymous means of exchange, but I think bitcoins only promise that on a surface, and turn into a scam upon closer examination.
posted by codacorolla at 12:29 PM on June 16, 2011


but I can't vote to control the nameless nerd at the helm of bitcoins.

The interesting thing about bitcoin is precisely the fact that there is no helm for anyone to control. The "direction" of the system is an emergent property of the algorithms used to establish it. These algorithms are available for anyone to examine. The only way to change the system would be to convince everyone involved to use different algorithms.
posted by Mars Saxman at 12:48 PM on June 16, 2011 [2 favorites]


That is true at face value, Mars, but I don't believe for a second that the creation of bitcoin was a selfless act, and also don't believe that the creators didn't leave some levers to pull.

Here's the real reason that Bitcoin is the scammiest of scams. Dude/Lady/Nobody actually knows who created it, though the name on the whitepaper is completely fake, that person has something like 300,000 bitcoins

At least I know the names of the criminals in the FED and the IMF.
posted by codacorolla at 1:22 PM on June 16, 2011


Although, of course, it's impossible to disprove a conspiracy theory like that (even if it seems likely) so I will concede that bitcoin is at least marketed and advertised as a truly decentralized system.
posted by codacorolla at 1:24 PM on June 16, 2011


So what I'm still confused about is the condition where two competing block chains exist. The docs state that the longest chain becomes the authoritative block chain, but what happens to the transactions that were not included into the previous blocks? Also what happens to any transactions that occur in the next block?

Also what happens to transactions that are not processed do they just keep getting rebroadcast until they are swept up in to a block?
posted by humanfont at 1:55 PM on June 16, 2011


I wish I had been quick enough to sell mining rigs. Other than that, meh.
posted by whuppy at 2:12 PM on June 16, 2011


My problem with it is that I can vote to control who's at the head of the financial system, but I can't vote to control the nameless nerd at the helm of bitcoins.

My viewpoint is precisely the opposite, I like the fact that there is no head of the bitcoin system.

also don't believe that the creators didn't leave some levers to pull. ... Although, of course, it's impossible to disprove a conspiracy theory like that (even if it seems likely) so I will concede that bitcoin is at least marketed and advertised as a truly decentralized system.

Or you could, you know, look at the source and algorithm description.

At my School of Information there was a ton of research looking into virtual currencies, reputation systems, prediction markets and trust networks. Classic cyberpunk technologies and ideas.

I'd highly recommend taking an opportunity to learn more about those fields if you get a chance in your studies. We need more knowledgeable librarians who understand these emerging technical systems. It may seem all "LOLibertarian", but leaving the expertise entirely to private corporations like Google isn't good for us. As you already know, the libraries of the future won't be just paper-bound.
posted by formless at 2:13 PM on June 16, 2011 [2 favorites]


humanfont: In the event of invalid blocks, the transactions in the invalid blocks blocks will eventually go into another block in the future automatically. In the meantime, there is an extremely small chance that the money could be double-spent. This is why the default configuration of the Bitcoin client will not mark a transaction as confirmed until a block chain of 6 blocks is completed after the block in which your transaction occurs (on average one hour). The odds of a double-spending attack in this fashion after 6 block confirmations is ridiculously small unless one entity controls over 50% of the network. Yes, transactions are not processed until they get into a block, if you're concerned with expediency, you could always add in a transaction fee of 0.0005, which will close-to-guarantee that your transaction will get into the next few block.
posted by amuseDetachment at 2:22 PM on June 16, 2011


PayPal is a valuable company - it provides the service of financial transactions.

PayPal is "valuable" because usable money (legal tender) goes in one end and can come out at the other end. People don't exchange "PayPals", they exchange dollars. Bitcoins are not money (as the term is generally accepted) — they can only be exchanged with parties who accept them.

Bitcoins are like collectables, the digital equivalent of baseball cards or comic books, with built-in scarcity and all the other associated problems with their valuation, such as the ability to trade them for real currency only at the online equivalent of a baseball card or comic book store.
posted by Blazecock Pileon at 3:55 PM on June 16, 2011 [1 favorite]


In other words, Bitcoins only have value when the perceived value is greater today than yesterday, which only happens when new "investors" come in and buy Bitcoins and drive up their price. Having new suckers come in to add value to older suckers' investments is the very definition of a pyramid scheme.

bitcoins have another two values besides the value of collectibles caused by artificial scarcity Blazecock pointed out above. They are anonymous and have a relatively large user base, compared to other p2p virtual currencies.

Currencies, like operating systems, benefit from network effects. The more people that use them the more valuable they become.

Their value in anonymity comes from people who may wish to use them for personal reasons they may not want public. It doesn't even need to be as socially stigmatized as drug purchasing. The recent lulzsec outing of porn purchasers shows that there is value in anonymous currencies.
posted by formless at 5:20 PM on June 16, 2011


http://www.symantec.com/connect/blogs/bitcoin-botnet-mining

Also, bitcoin isn't really that anonymous. Unless you're taking special pains to cover your tracks (and even then, with a little more work) you can have purchases tracked to you. Legal stuff like porn? No one cares enough to try. Illegal stuff like drugs? People also probably don't care enough to try, but if they do then it's just a matter of detective work (just like if your dealer gets staked out by the police IRL).

Bitcoin screams "scam" from top to bottom - it does something that doesn't really need doing, and it doesn't do it that well, unless you're one of the lucky ones that got in to start and has already long cashed out.
posted by codacorolla at 5:50 PM on June 16, 2011




Wallet-stealing trojan active. Well done Symantec for keeping up with this stuff.
posted by topynate at 6:13 PM on June 16, 2011


In other words, Bitcoins only have value when the perceived value is greater today than yesterday, which only happens when new "investors" come in and buy Bitcoins and drive up their price. Having new suckers come in to add value to older suckers' investments is the very definition of a pyramid scheme.

Which also accounts for a good chunk of gold's price. I'd say bitcoins are exactly as much of a pyramid scheme as gold with added counterparty and systemic risks (what are the chances the crypto is 100% valid?). Not something I'd put a dime into but also not worth dismissing as a scam offhand either.
posted by Skorgu at 6:23 PM on June 16, 2011


@formless .. i looked -- there's no formal protocol spec . and wrt my previous comment, it appears that an alternative block chain exists already (besides testnet) and is used by a project called namecoin.

my question du jour is then: who will be doing the mining (and thus keeping the network up) when there is no incentive to do so since all available coins have been mined?

in somewhat related news: SHA256 now considered harmful.
posted by 3mendo at 5:17 AM on June 17, 2011


So all this computing power is going to calculate SHA256 hashes and anything anyone can do to speed that up is going to make their mining more efficient. It's like someone said, "hey, let's socially engineer a system that encourages the cracking of a hash function, and not co-incidentally gets a lot of not-very-well-inspected software installed on a whole shitton of high powered computing gear." The currency thing is just so vague and handwavey and not really what it says it is (it's not safe, it's not anonymous, it's got no lasting value) it's got to be a blind.

Seriously, is there anyone at all any more who doesn't believe there's something dark and ugly at the heart of this BitCoin thing? I ran it for a few hours until I figured out what a colossal waste of CPU time it was and now that I'm thinking it through I'm creeped out about what else might have been installed by this thing. Creepy as fuck.
posted by seanmpuckett at 5:51 AM on June 17, 2011


Dark and ugly? What? It's not like bitcoin suddenly appeared out of nowhere. People have been discussing ways to build a system like this since the days of the cypherpunks list, back in the early '90s. There are a lot of technical challenges, obviously, but bitcoin is merely the first working example of an idea many people have been working on for a long, long time.
posted by Mars Saxman at 9:57 AM on June 17, 2011


There's nothing dark and ugly in Bitcoin seanmpuckett. Seriously. You must walk around in sheer terror of all sorts of things. Ouija boards, thunderstorms, rock 'n' roll music.

And what does handwavey mean to you? There are absolutely no secrets with this. All the currently available clients, miners and the protocol itself are open source. Or is it that you aren't able to review those elements for yourself and nobody has dumbed things down enough for you? Why would you run software you think might install other components? Creepy components. You're being a bit handwavey about the nature of the creepiness. The entire concept just has an intangible but unmistakable air of creepiness to it eh?
posted by Jenga at 4:20 PM on June 17, 2011


seanmpuckett: I've looked at the official client source code pretty extensively, as have others. There just isn't much room to do anything creepy. There are two or three working alternatives if you don't trust it.
posted by elektrotechnicus at 5:04 PM on June 17, 2011


seanmpuckett is just jealous because he has an nvidia card ;-)
posted by amuseDetachment at 5:22 PM on June 17, 2011


First my question of the day:
Is it mathematically proven that the proof of work is always attainable and that there are know easy shortcuts in completing the proof of work that enable one to cheat on the double sha256 operation. As I understand the following mechanism is at the core:


proof_of_work = sha256(sha256(block + nonce))


And the "proof" is that the generated hash must start with a set number of zeros in the resulting 256 byte hash (e.g. 0000101010....). Thus we take the block add a nonce, and then sha2 hash it twice to get the result. Thus I assume someone has taken 0 .. ffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffff

which is the resulting output of the first sha256 and figured it out, but then I'm not so certain. It isn't clear to me that the alleged level of difficulty is actually the level of difficulty or that there must exist a block + nonce solution, or that there wouldn't be some shortcut to figure out the first x bits of the resulting sha256 without having to do the entire actual sha256 hashing code. If one were to discover this, they would shortcut the proof of work. E.g. some formula that would let you test block + nonce much more rapidly than simply doing the full proof of work for each test. Thus reducing the computational complexity of mining a block.


To answer the other question:

who will be doing the mining (and thus keeping the network up) when there is no incentive to do so since all available coins have been mined?

Transaction fees provide the incentive after the easy coins are mined out. The person who wins the last block by offering the correct solution gets to publish the next one. That person gets all the coins from any transaction fees in the block. Thus the incentive to keep mining new blocks exists so long as there are transactions with enough fees outstanding to encourage miners to continue.
posted by humanfont at 5:25 PM on June 17, 2011


Wallet-stealing trojan active. Well done Symantec for keeping up with this stuff.

That's okay, there's the wallet inspector to help you figure out if your wallet.dat file has been compromised.
posted by Potsy at 6:52 PM on June 17, 2011 [1 favorite]


humanfront, what you describe—computing chosen bits of the hash markedly more efficiently than computing all bits of the hash—would lead to completely compromising SHA-256 as a cryptographic hash. If that leads to a break in bitcoin, it's not surprising (though it is unfortunate for anybody who "owns" bitcoins).

The impact on digital signatures would be greater—your browser will verify a secure website based on a certificate that uses SHA-1 to "sign" it, so if someone has broken SHA-1 they could manufacture fake certificates for sites where you'll merrily type in your credit card number; stealing credit cards which can spend in dollars and euros is probably more desirable to your average criminal than stealing or forging bitcoins.
posted by jepler at 9:58 AM on June 19, 2011


If anyone is still following this: one of the largest holders on MTGOX just got his account hacked, and the hacker sold off around five million dollars worth of bitcoins for a cent each, which crashed the market, which then instantly rebounded.

That person can't get that money back, or have any sort of redress because of the decentralized nature of bitcoin.
posted by codacorolla at 12:00 PM on June 19, 2011


That person can't get that money back, or have any sort of redress because of the decentralized nature of bitcoin.

While bitcoin is decentralized, the exchange, in this case MTGOX, is not, and had a $1K withdraw limit. They're going to rollback the transactions of the previous day.

The bitcoin will be back to around 17.5$/BTC after we rollback all trades that have happened after the huge Bitcoin sale that happened on June 20th near 3:00am (JST).

Service should be back by June 20th 10:00am (JST, 01:00am GMT) with all the trades reversed and accounts available.

One account with a lot of coins was compromised and whoever stole it (using a HK based IP to login) first sold all the coins in there, to buy those again just after, and then tried to withdraw the coins. The $1000/day withdraw limit was active for this account and the hacker could only get out with $1000 worth of coins.

Apart from this no account was compromised, and nothing was lost. Due to the large impact this had on the Bitcoin market, we will rollback every trade which happened since the big sale, and ensure this account is secure before opening access again.

posted by zabuni at 12:21 PM on June 19, 2011


Yeah, they made that decision shortly after I posted that. An exchange that offers protection to its members, rolls back transactions, and watches the market? Surely that's nothing like a centralized bank.
posted by codacorolla at 12:34 PM on June 19, 2011


The mtgox username/emailaddress/hashedpassword database has been stolen
posted by pixie at 1:15 PM on June 19, 2011 [1 favorite]


I wonder if they will contact the police. :-P

This is the main problem I have with bitcoin as a means of storing value. It has all of the security problems of modern websites, or worse yet, user computers and none of the backing of a state. Someone hacks your bank account, the FBI may get involved. If someone hacks your bitcoins, I suspect the powers that be will have as much interest in that as they will your World of Warcraft account.

Granted, this is probably a feature to the users of bitcoin more than a bug. It does mean that exchange websites, bitcoin wallet programs, and the like are going to have a bullseye on them for every monetary driven hacker. Especially with no central database, if they can read the file, they spend the money.
posted by zabuni at 1:51 PM on June 19, 2011


This is the main problem I have with bitcoin as a means of storing value. It has all of the security problems of modern websites, or worse yet, user computers and none of the backing of a state. Someone hacks your bank account, the FBI may get involved. If someone hacks your bitcoins, I suspect the powers that be will have as much interest in that as they will your World of Warcraft account.

Granted, this is probably a feature to the users of bitcoin more than a bug. It does mean that exchange websites, bitcoin wallet programs, and the like are going to have a bullseye on them for every monetary driven hacker. Especially with no central database, if they can read the file, they spend the money.


I apologize if it seems like I'm dominating the conversation with a fascination linking libertarianism and bitcoins, but I can't help it. The two seem completely related. This is your libertarian ideal. The weak perish and the strong thrive. This is what you get when you dispose of the state - a new, de-facto state of whichever entity is willing to throw the most force into the system (in this case, it appears to be a Chinese hacker).
posted by codacorolla at 2:07 PM on June 19, 2011


I apologize if it seems like I'm dominating the conversation with a fascination linking libertarianism and bitcoins, but I can't help it. The two seem completely related. This is your libertarian ideal.

Have you even read any cypherpunk history? Their ideas? Their influences? Their battles with the state, our state, over trying to bring the power to encrypt and make private your own discussions with other citizens?

I think a bit part of the disconnect here is that you're connecting cypherpunk civil libertarianism with the new "libertarianism". The word has been corrupted by the Tea Party, and bears little resemblance to the classic cypherpunk civil libertarians.

I grew up following the cyberpunk and corresponding cypherpunk movement in the 80s and 90s. This wasn't a movement by Reaganites trying to help businesses. This was a revolutionary movement influenced more by the 60s than the 80s. Look at John Perry Barlow, a founding member of the EFF. He was a Grateful Dead lyricist!

You can see this reflected in the uncomfortable feeling many cypherpunks have with the new libertarianism. Again, John Perry Barlow tweeting a few months ago:

I've always thought of myself as a libertarian. Why do I feel so little resonance with the Tea Party?.

The weak perish and the strong thrive. This is what you get when you dispose of the state - a new, de-facto state of whichever entity is willing to throw the most force into the system (in this case, it appears to be a Chinese hacker).

Ok, let me ask you this, do you think the cypherpunks are pushing to put more computing security power into citizens hands or less? Read about the history of PGP and crypto export controls if you want a look at who exactly is trying to give more power to the weak.

Do you think information technology has the potential to help dissidents in authoritarian states? Because that has always been a driving force in cypherpunk ideology. Yes, they're distrustful of the state. But that's because there are so many cases throughout history where the state has abused its power.

Cypherpunk ideology isn't about punishing the weak. It's about putting amazing technological ability into the hands of everyday people. It's about equalizing the power imbalance.

Now, we can have a discussion about cyber-utopianism and the fetishization of technology. How it doesn't exist in a vacuum, and social context must be included. But for gods sake, a look at the history of the field shows that civil libertarians has been about protecting the weak since the beginning.
posted by formless at 3:50 PM on June 19, 2011 [2 favorites]


From the Hacker News thread:
Just got an email from MtGox. Here are the important bits:

"If you were using the same password on Mt.Gox and other places (email, etc), you should change this password as soon as possible."

"While the password is encrypted, it is possible to bruteforce most passwords with time, and it is likely bad people are working on this right now."
At least some of the passwords are stored as MD5 hashes with no salt, by the way.

"PHP can do anything!" — Developer of MtGox
posted by topynate at 4:14 PM on June 19, 2011




Okay, so my wallet... Does that contain the actual bitcoins? Or is it just my private key? Like, let's say I have two copies of my wallet -- one on my laptop and one on my desktop. My desktop is on and my laptop is off. Someone gives me 5BTC. I turn off my laptop and turn on my desktop. Do I have access to that 5BTC because I have my private key and I can see, from the network, the transaction that gave me the money? Or do I actually have to move the bitcoins on a flashdrive from the laptop to the desktop?
posted by Galaxor Nebulon at 12:18 PM on June 20, 2011


Do I have access to that 5BTC because I have my private key and I can see, from the network, the transaction that gave me the money?

Yes. Your wallet contains your accounts' private keys; what an account contains is determined by the transaction log on the network.
posted by finite at 12:39 PM on June 20, 2011


Cool. So people can even give me bitcoins when my computer is off.
posted by Galaxor Nebulon at 12:43 PM on June 20, 2011


Yes. Also, you could keep the private keys for some accounts on an always-offline computer. To spend coins from those accounts, you could sign transactions offline and then move them (on a USB stick or something) to a different computer to transmit the transaction to the network.
posted by finite at 1:19 PM on June 20, 2011




It seems very likely that Mt.Gox will suffer a serious bank run when they reopen. No FDIC here to bail them out. I wonder what Japanese banking regulators will do, since the company is in Japan. If the alleged criminal associations of bitcoin are true, I think the prosecutors may be the least of the mtgox folks concerns at the moment.
posted by humanfont at 6:52 PM on June 20, 2011


There wouldn't be more than a handful of Japanese not fluent in English who are even aware of Bitcoin. There is still no Japanese Wikipedia page or client and none of the Japanese hackers I know are at all interested in Bitcoin or related topics. Hardware is what people play with here and there are all sorts of reasons for this that I've heard of over the years. The Yakuza will get in on it eventually but they don't pay attention to the latest in software development or use. Japan will remain about the safest place I can think of for the fuckheads at MtGox except they will be out of business soon. Gangsters and regulators will ignore them and the market will take them out. Belatedly.
posted by Jenga at 7:17 PM on June 20, 2011


Yeah, I'm pretty sure that Magic the Gathering Exchange has cooked its own goose.
posted by codacorolla at 8:07 PM on June 20, 2011


EFF no longer accepting Bitcoin. They note complex legal issues and concerns their act would be seem as an endorsement of a technology they dont fully understand.
posted by humanfont at 9:38 AM on June 21, 2011


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