Will encrypted peer-to-peer currencies make banks obsolete? BitCoin, ECash Ripple ..

[FastTadpole]

Seems everyone I've talked to in cyberland in and outside of ConCen (myself included) has a half arsed grasp of what it really is. Seems that there is a lot of controlled opposition around this thing to make it seem like it is being attacked by a consolidated attack.

Very sophisticated marketing to brush of any critique to the masses by framing it as an attack by "The Bankers" and even though this is just a test balloon the Hindenburg likely isn't to far behind with pay as you go cell phone apps and the advent of corporate currency we'll see lots of flavours of this being bounced off of us.

The security breach was a bit overblown and may have been set up to get critiques (real ones and pawns) to crawl out of the woodwork only to get bashed down.

The guy really didn't lose anything and it only showcased how well the security end of things worked for this type of attack.

Basically it breaks down like this..

Quote:If a thief steals your wallet, as happens hundreds of times every day, you're definitely out, with bitcoin you lose nothing if you prepare in advance.

high level encryption is not hackable so far as I know. (well it is but not by the common crimmigeek) I've never heard of anyone breaking 1024bit or higher encryption and we can easily do 4096bit, which is exponentially stronger.

if that's not good enough, then use multiple wallets stored in multiple places and only keep a small amount in each wallet.


FYI from the bitcoin forum topic that started this fraud:

Quote from: allinvain on June 13, 2011, 08:47:05 pm
The transaction sent belongs rightfully to this address: 1J18yk7D353z3gRVcdbS7PV5Q8h5w6oWWG

...If this is true, then why doesn't the balance for that address ever get above 25,000 BTC?

http://blockexplorer.com/address/1J18yk7...Q8h5w6oWWG

ANSWER: because they never existed.

~TJ - FB Comments

Security is further down my list of concerns with BitCoin. Like you said they are somewhat dumbtarded for not having it encrypted as a backup but anything digital can (and will) be hacked.

Glad to hear there is a recourse option but what happens to the stolen BCs? There are some positives we can taken from it though and be applied to other forms of commerce.

RE: SiLVa Siggy - Prove it with your own research indeed.

Here are the experts and pseudo experts if you want to look into the Fraud Topic:

Bitcoin Forum > Bitcoin > Bitcoin Discussion > I just got hacked - any help is welcome! (25,000 BTC stolen)
http://forum.bitcoin.org/index.php?topic=16457

[FastTadpole]

Doesn't it seem coincidental even funny that BitCOiN is being pitched like mad now in most conspiracy / truther / tea party circles as our economic saviour telling us we can pretty much do things as we did and CHANGE doesn't have to be difficult. "We got all taken care of you" they say in an even more detached form of commerce that you even have to buy with fiat .. wtf¿

We should be getting more direct, more face to face, maybe reinstate the handshake for transaction security. That's how we get a real commerce system back and stronger than ever. You give me this and I give you that and build up from there. Create money from value.

I'd be for something loosely based on this but smaller scale community based. Global transactions lead to global markets and manipulation and oversight and we need to have our differences to well - make us different. A global language in trade would be convenient but it would taint real value with speculation still. Supply and demand of money would be an alluring shiny mechanism to be messed with and it has been since it's invent.

Sorry for the double post .. it just came to me as separate thought and I was going to post it in this thread but it belonged smack dab in this one.

[FastTadpole]

A bit of a whitewash on this crash of the currency .. wow that was fast. Inside Job? Well kinda since everyone is potentially on the inside in this model. Rigged attack? Maybe the competition. Simple profiteering by gaming a system with a ridiculous amount of loopholes? Blame the end user? Well kinda they got jacked but it wasn't extremely difficult.

Quote:Can geeks save bitcoin after hellish week of hack, heist, trojan and a crash?
Darlene Storm
June 21, 2011 - 12:07 P.M.

The open source, P2P, virtual currency bitcoin has suffered through a really rough week, including an attack on the MtGox bitcoin exchange that resulted in a theft of almost $9 million worth of bitcoins before it crashed the $17 exchange value of the currency down to just pennies. There was another bitcoin theft worth about a half million dollars, and a Trojan designed to steal bitcoins from unsuspecting users' bitcoin wallets is floating around in the wild. And now the EFF (Electronic Frontier Foundation) removed the option to accept bitcoin donations. If you are looking for the silver lining in this dark cloud, it might be that bitcoin is now popular and successful enough to be targeted by attackers.

Launch called bitcoin "the most dangerous product we've ever seen" and suggested it could "topple governments, destabilize economies and create uncontrollable global bazaars for contraband." Then bitcoin miners were busted after police mistook miners' power consumption usage for marijuana grow-ops.

On the 13th of June, the first bitcoin theft worth about $500,000 was reported on the Bitcoin Forum. The user was an early adopter of bitcoin and claimed nearly 25,000 bitcoins were stolen from him; the value was close to a half million dollars, so it's not so hard to understand his intial reaction of "I feel like killing myself now." Publicly accessible information from the bitcoin network did show a transfer of 25,000 bitcoins.

Then on the 19th, MtGox, the world's largest bitcoin marketplace, was attacked. The resulting security breach allegedly involved fraudulent trades, a theft of about $8.75 million worth of bitcoins, and exposed hundreds of account logins with poorly-hashed passwords. The value of the virtual money crashed from $17.50 per bitcoin to almost nill - mere pennies. MtGox was shut down before operators rolled back the fraudulent transactions and restored bitcoin value to $17.50. MtGox claims it was not hacked, "The site was not compromised with a SQL injection as many are reporting, so in effect the site was not hacked."

However, on the Bitcoin Forum, bitcoin user "Kevin" tells the story of how he watched the bitcoin market plunge and managed to sneak in a $0.0101 per bitcoin bid which gave him $5,000,000 in bitcoins for under $3,000. Kevin claims the official MtGox story is "fishy." Another bitcoin user verified Kevin is who he says he is and the forum currently has 16 hotly debated pages about the MtGox security breach.

Last week, security firm Symantec discovered and blogged about the Infostealer.Coinbit "malware designed to steal bitcoins from unsuspecting users." But now Symantec said the Bitcoin Infostealer case is "getting funny." After finding and analyzing two more Infostealer samples, the trojan author appears to have been infected with a worm when he wrote the code. Symantec guesses the malware writer submitted his code to Virus Total to check for potential AV detections when he discovered he was infected and cleaned his computer before releasing the malware into the wild. The Infostealer executable leaves account passwords in cleartext, ready and waiting to be sniffed by anyone, and included a message from the trojan's author: "If you are looking for it, stop and go mine your bitcoins, or else I may get you the next time." Symantec said the message might mean that the malware author previously had his bitcoin account hacked and his data stolen.

Here are some tips for securing your bitcoin wallet.

And yesterday, the EFF reversed its public policy of accepting bitcoin donations. At the beginning of 2011, the EFF blogged about bitcoins being a step toward "censorship-resistant digital currency" and began to accept bitcoin donations. But now the EFF announced it would no longer offer a bitcoin donation option and placed its accumulated bitcoins back into circulation via Bitcoin Faucet. The EFF gave three reasons for the change:

1. We don't fully understand the complex legal issues involved with creating a new currency system.
2. We don't want to mislead our donors.
3. People were misconstruing our acceptance of Bitcoins as an endorsement of Bitcoin.

While some sites are claiming this is the end of bitcoin, that seems a bit extreme. Although the EFF said it never officially endorsed bitcoin, its about-face regarding the virtual currency for donations is a troubling sign since so many people look to the EFF for cues. I doubt bitcoin is going away as it has way too many supporters . . . and that's on top of Anonymous and LulzSec.

full story + links: http://blogs.computerworld.com/18504/can...nd_a_crash

[Hans Olo]

Peter Schiff Radio with guest Donald Norman, consultant for Bitcoin (Part 1)
http://www.youtube.com/watch?v=vTr_hTC90oQ

[FastTadpole]

Can geeks save bitcoin after hellish week of hack, heist, trojan and a crash?
http://blogs.computerworld.com/18504/can...nd_a_crash

Bitcoin Mining Profitability Chart
http://tvori.info/bitcoin/charts/

It seems to fluctuate in value big time great for creating and busting bubbles.

[FastTadpole]

Microsoft is trying to fix BitCoin.. hmm..

Quote:"Researchers at Microsoft Research and Cornell identified a potential flaw in Bitcoin's transaction propagation. In a recent paper they show how miner nodes in the Bitcoin network have an incentive not to relay transactions to the rest of the network, and propose to implement a scheme that rewards nodes [PDF] for relaying messages."

http://science.slashdot.org/story/11/11/...n-protocol

[fujiinn]

(06-09-2011 06:32 AM)FastTadpole Wrote:  Still haven't heard a negative critique of BitCon. Anyone care to pick it apart - or is this the real deal?

It claims to be annonymous and secure. In reality there is nothing that would be perfect but would it be good enough?

[...]

Reaching over the years here

The least problems of bitcoin are anonymity and security. There are strategies that can be employed to enhance both. For instance strong multi-layered encryption and splitting the bitcoin wallet into multiple wallets would achieve strong security. If buying bitcoins using traceable methods of payment (like credit cards) you could also benefit from anonymity if you use a third party service, like an ASR (anonymity-strengthening relay).

The biggest problem of bitcoin is it's deflationary nature. Deflation is undesirable because it encourages hoarding in expectation of easy money. This leads to a shrinkage of the amount of active bitcoins while at the same time to an increase in their value. In short it promotes virtual prosperity, similar to the housing bubble.

[CharliePrime]

(03-21-2013 08:29 AM)fujiinn Wrote:  This leads to a shrinkage of the amount of active bitcoins while at the same time to an increase in their value. In short it promotes virtual prosperity, similar to the housing bubble.

How is saving wealth for future use similar to the housing bubble?

That makes no sense to me.

[macfadden]

CharliePrime Wrote:How is saving wealth for future use similar to the housing bubble?

That makes no sense to me.

"virtual prosperity" is the similarity.

fujiinn Wrote:The biggest problem of bitcoin is it's deflationary nature

Just try telling that to a free market goldist, lulz.


"There is that scattereth, and yet increaseth; and there is that withholdeth more than is meet, but it tendeth to poverty.
—Proverbs 11:24"


"As this prudent economy, which some people call Saving, is in private families the most certain method to increase an estate, so some imagine that, whether a country be barren or fruitful, the same method if generally pursued (which they think practicable) will have the same effect upon a whole nation, and that, for example, the English might be much richer than they are, if they would be as frugal as some of their neighbours. This, I think, is an error."

"What is prudence in the conduct of every private family can scarce be folly in that of a great Kingdom."

"Had the whole population been alike bent on saving, the total saved would positively have been much less, inasmuch as (other tendencies remaining the same) industrial paralysis would have been reached sooner or oftener, profits would be less, interest much lower, and earnings smaller and more precarious. This ... is no idle paradox, but the strictest economic truth."
—John M. Robertson

Paradox of thrift

[fujiinn]

(03-21-2013 01:07 PM)CharliePrime Wrote:  

(03-21-2013 08:29 AM)fujiinn Wrote:  This leads to a shrinkage of the amount of active bitcoins while at the same time to an increase in their value. In short it promotes virtual prosperity, similar to the housing bubble.

How is saving wealth for future use similar to the housing bubble?

That makes no sense to me.

Fair enough. Saving is not the same as hoarding. By hoarding you get artificial value which disappears when hoarding ceases, just like in the case of the housing bubble which was fueled by cheap loans. Once the cheap loans are gone or someone drops a large amount of bitcoins in the market to cash in the profit, the artificial value disappears too.

[CharliePrime]

(03-21-2013 04:11 PM)fujiinn Wrote:  Saving is not the same as hoarding.

How is saving different from "hoarding"?

For thousands of years prudent people saved wealth to live on in the future when they were too old to earn money. Saving seems like a good thing to me.

[fujiinn]

(03-21-2013 08:33 PM)CharliePrime Wrote:  

(03-21-2013 04:11 PM)fujiinn Wrote:  Saving is not the same as hoarding.

How is saving different from "hoarding"?

For thousands of years prudent people saved wealth to live on in the future when they were too old to earn money. Saving seems like a good thing to me.

When you "save" you expect to keep the value unchanged. When you "hoard" you expect to make a profit. Anyway, money are meant as an exchange tool in trade, not as a store of wealth.

[CharliePrime]

Where did you get the idea that money shouldn't be used to store wealth?

I never heard that before. I'd like to read more about it.

[fujiinn]

(03-21-2013 08:57 PM)CharliePrime Wrote:  Where did you get the idea that money shouldn't be used to store wealth?

I never heard that before. I'd like to read more about it.

Anthony Migchels Wrote:The modern definition of money is: ‘anything agreed upon by the community to be used as a means of exchange’.

Money derives its value exactly from this agreement. It is not because of its value that it is money. It’s clearly wrong to say a means of exchange needs to have (stable) value to be called money. It’s the other way around: by agreeing it will be money, it becomes valuable.

More details here.

[macfadden]