Bay 12 Games Forum

Please login or register.

Login with username, password and session length
Advanced search  
Pages: [1] 2 3 ... 24

Author Topic: Bitcoins, e-currency or just fancy crap?  (Read 31324 times)

BinaryBeast1010011010

  • Bay Watcher
    • View Profile
Bitcoins, e-currency or just fancy crap?
« on: November 21, 2012, 01:28:56 pm »

I launched a thread about bitcoins and got quite a bit of reactions about them. Originally I asked wether or not toady should accept bitcoins donations. I got a lot of answers and now I'm doubting...
As MrWiggles pointed out bitcoins might not be whatever I wanted them to be (not a real quote, I think there was "fable" in it but cant recall correctly). I wont hide that I am a big TOR and Bitcoin fan, because the former gives anonimity and the latter is the electronic equivalent of cash. But eh, IT is not my field (just a hobbie) and there are much more knowledgeable people around here, so I ask them this question, and humbly ask to anyone in the community with any experience with bitcoins to share about it.

from my point of view, new bitcoins are mined by using a trial and error function until it returns a hash having precise specifications, these specifications determines how hard it is to mine new bitcoins. Since it's trial and error some may be lucky but most miners would just have to spend a lot of electricity and CPU cycles to mine new bitcoins (hence miner pools wich appeared when one couldnt make a profit mining bitcoins without a big investment or a specific botnet).

so CPU cycles AND electricity are what gives bitcoins values. Someone said toady could use BJS (what's that?) or wow gold.

from my point of view (again, so if anyone want some good nub bashing time they can knock themselves out) BJS (whatever they are, correct me if they are some kind of shells used as a currency) or WoW gold arent "real" currency : nothing guarantee their values.

To put it that way : governments mint currencies, what keep citizen from going to the government and asking a "refund" (give me gold for this coins I dont trust anymore) is the trust they put in it. that's why they call it Fiat Money.

so here you have a government making money out of thin air (printing paper money I mean, not fiddling with  interest rates to make money more valuable)
there you have a lot of people making money

in the first case the government decide when and how they are going to feed the money to the system without breaking it
in the second case a mathematical formula decide how much money will be made until miners "run out" of bitcoins...

I've seen a fair share of corrupt governments but never saw a corrupt mathematical formula. But, again, I dont know much about mathematics.

so, Bitcoins, e-currency or just fancy crap? (or anything between)
Logged
cant stop playing DF?
 : (){ :|:& };:

AutomataKittay

  • Bay Watcher
  • Grinding gears
    • View Profile
Re: Bitcoins, e-currency or just fancy crap?
« Reply #1 on: November 21, 2012, 02:24:32 pm »

:D

Methinks you're too young to know what a BJ is! It's not a real currency, that's for sure, it's something that's done.

And TOR can be traced perfectly well if the governments are determined to do it, so can be bitcoin. It's usually just not worth the increased effort, which can be quite a bit, compared to more traditional methods, nor does most of them invests that much in internet survey over watching things and having snitches. TOR tracking's been done in a couple countries, though more on experimental side since it can be difficult.

Beside, government can always dilute hard metal currency with debasement, if they're already an hard currency state. And honestly, the economical issues and equations doesn't changes very much with how hard or soft currency is, since both requires a stable state to support them to ensure functional trade and legal system in the place, however primitive it is. If there're no stable state or no currencies are supported, then the trade won't be done in currency, they'd be bartering for want of stable system.

Even bitcoin won't be immune to systematic instability, either in exchange value or in system stability. That's including exchange security and government support.

As for your 'refund' argument, gold price aren't stable, nor are they legal tender since sometimes between 1930's to 1970's when it was decoupled from dollar entirely in USA. Though I am sort of assuming that this is USA-related subject, since I've not spoken to someone outside of it in support of bitcoin or hard currency, as well as personally living in USA :D

Then again, you can just buy your gold on the free market or from your local gold dealers or jeweler, which'll charge you more for buying it. Then sell it when you need to buy something, which'll get you less than market value. It's virtually the same as whatever magical hard standard someone's dreaming of, just more complicated and actually wasteful, more wasteful than using debit/credit card, really.

In fact, precious metal currency's probably the worst investment you could have, if you're seeking to use it as a trade medium. It's pretty much a signal of having more money than sense nowadays. It's good for personal investment, though, like stock market. If current economy fails, then, well, you'll have more to worry about than your shiny coins.

Food, shelter and protection are far more valuable than whatever shiny shards you can trade in if the economy's broken down. Tin cans of food and boxes of shotgun shell will buy you more than some coin that nobody can use, until things are stable again.

For my personal opinion, bitcoin is an interesting currency system. It just happen to be not viable with how unstable the market is and how little security there are with it, relative to currencies supported by major governments ( Dollar, Euro, Yen, Pound ), with requirement of overseering of the banks. And it's complicated by grey area of the currency itself, completely unrelated to their reputation.
Logged

BinaryBeast1010011010

  • Bay Watcher
    • View Profile
Re: Bitcoins, e-currency or just fancy crap?
« Reply #2 on: November 21, 2012, 03:09:47 pm »

bj blowjob, just got it...
I'm 21 but I'm not lucky enough to be a native english speaker, that's all  ;D

in the past kings have been known to cut the coins in two to make more of them just to pay someone's ransom, it seems I'm still stuck in the past thinking one could go to the bank and ask for the equivalent in gold of his paper money.

About Tor tracking : one would need to control the whole node chain, wich cant be easily done since some of them are in foreign countries wich arent necesarily ok with giving the US government node logs...
Logged
cant stop playing DF?
 : (){ :|:& };:

10ebbor10

  • Bay Watcher
  • DON'T PANIC
    • View Profile
Re: Bitcoins, e-currency or just fancy crap?
« Reply #3 on: November 21, 2012, 03:15:52 pm »

About Tor tracking : one would need to control the whole node chain, wich cant be easily done since some of them are in foreign countries wich arent necesarily ok with giving the US government node logs...
Since when does the US care about foreign governements? Hacking is not that hard. Just infiltrate some virusses into the TOR system, which will remove the trust in them if half are bugged

Or you could go for end user scanning, as happens in China.
Logged

forsaken1111

  • Bay Watcher
    • View Profile
    • TTB Twitch
Re: Bitcoins, e-currency or just fancy crap?
« Reply #4 on: November 21, 2012, 03:18:06 pm »

About Tor tracking : one would need to control the whole node chain, wich cant be easily done since some of them are in foreign countries wich arent necesarily ok with giving the US government node logs...
Since when does the US care about foreign governements? Hacking is not that hard. Just infiltrate some virusses into the TOR system, which will remove the trust in them if half are bugged

Or you could go for end user scanning, as happens in China.
This post made me giggle. "Just infiltrate some viruses!" yes. That is how it works. ::ThumbsUp::
Logged

AutomataKittay

  • Bay Watcher
  • Grinding gears
    • View Profile
Re: Bitcoins, e-currency or just fancy crap?
« Reply #5 on: November 21, 2012, 03:31:18 pm »


About Tor tracking : one would need to control the whole node chain, wich cant be easily done since some of them are in foreign countries wich arent necesarily ok with giving the US government node logs...

Actually, they don't need to. They just need to monitor the major exit points and their internal routes to see -who- is using it. Then tap it and take advantage of the fact that traffic can be cracked and watched with right application of knowledge as well as man in middle attack. It does pretty much require access to major routing hardware or ISP help.

That said, it's not normally worth the effort over more conventional techniques ( which can be MUCH easier, depending on purpose) as I've noted. And there're breached machines, spyware and so on. There're a whole lots of different way to skin the cat, and most of them don't involves having to have end to end survey, or even computer investigation for some of them.

Similar methods can be used on bitcoin as TOR system, and still just as not worth the effort for most application.
Logged

Capntastic

  • Bay Watcher
  • Greetings, mortals!
    • View Profile
    • A review and literature weblog I never update
Re: Bitcoins, e-currency or just fancy crap?
« Reply #6 on: November 21, 2012, 03:38:51 pm »

Mining bitcoins is proven to be less profitable than farming items in TF2 and also you should move this thread to a non-DF related subforum.
Logged

BinaryBeast1010011010

  • Bay Watcher
    • View Profile
Re: Bitcoins, e-currency or just fancy crap?
« Reply #7 on: November 21, 2012, 03:50:11 pm »

how can I do that? (moving the thread), btw are you the REAL capntastic, the one from the talks?

hm, if you want to infiltrate viruses in ALL tor nodes you're going to have a hard time, a lot of them run linux, different flavors... you can infere that someone savvy enough to run a tor exit node will have SELinux installed and know how to configure it to get the most secure setup he can without unplugging the computer from the internet and shutting off the power source...

what do you mean by "more conventional"? say there is one guy, running tor on linux tails with his bitcoin wallet encrypted in a truecrypt volume and every thing going into it is first tumbled around from instawallet to bitcoin fog to instawallet back and forth until it gets in his own wallet. He then connect to the internet through a McDonald connection or even his neighbour cracked wifi network (he is a baaaaad kitty)... how would the government track him down? Even with help from the ISP (maybe CCTV records of the McDonald) the Man couldn't tell, could he?

just to say that even if cash has serial numbers and bitcoins can be traced, bitcoins + tor could guarantee a form of anonimity you could never achieve with cash, yes?
Logged
cant stop playing DF?
 : (){ :|:& };:

Putnam

  • Bay Watcher
  • DAT WIZARD
    • View Profile
Re: Bitcoins, e-currency or just fancy crap?
« Reply #8 on: November 21, 2012, 04:02:45 pm »

how can I do that? (moving the thread), btw are you the REAL capntastic, the one from the talks?

Yes, that is the REAL Capnstastic.

Also, it's somewhere in the "edit" menu on the top right part of the topic post.

AutomataKittay

  • Bay Watcher
  • Grinding gears
    • View Profile
Re: Bitcoins, e-currency or just fancy crap?
« Reply #9 on: November 21, 2012, 04:13:44 pm »

how can I do that? (moving the thread), btw are you the REAL capntastic, the one from the talks?

hm, if you want to infiltrate viruses in ALL tor nodes you're going to have a hard time, a lot of them run linux, different flavors... you can infere that someone savvy enough to run a tor exit node will have SELinux installed and know how to configure it to get the most secure setup he can without unplugging the computer from the internet and shutting off the power source...

what do you mean by "more conventional"? say there is one guy, running tor on linux tails with his bitcoin wallet encrypted in a truecrypt volume and every thing going into it is first tumbled around from instawallet to bitcoin fog to instawallet back and forth until it gets in his own wallet. He then connect to the internet through a McDonald connection or even his neighbour cracked wifi network (he is a baaaaad kitty)... how would the government track him down? Even with help from the ISP (maybe CCTV records of the McDonald) the Man couldn't tell, could he?

just to say that even if cash has serial numbers and bitcoins can be traced, bitcoins + tor could guarantee a form of anonimity you could never achieve with cash, yes?

Cash's actually far more secure than bitcoin, being completely isolated from networking and lack of tracking system. Servers tend to have IP logs even if only to prevent DDOS or attempted cracking :D

And by more conventional, just someone telling on them. Or shipment of illegal product being caught. Or someone getting creeped out and calling the cop. Or the guy accidentally showing themselves. Or the guy saying that they did something on somewhere unsecured ( which can be done within TOR if they're careless, even!).

And yes, police can track people down from CCTV if it have enough visual detail, it's been actually done a few times and a few more times using public sites, like, oh, Facebook to have others snitch on who the person is.

Also, Linux OS might be among the most secure basic OS, it's not invincible nor perfect. And even then, there are so many methods that don't involves cracking someone else's computer. There're setting up your own services with special compiles, there're route re-directing. And man in middle attack. Those tend to involve fairly major effort, but perfectly within government's ability if they felt like it.

And yeah, this isn't really related to DF discussion so I might not see new posts wherever the thread'll be next :D
Logged

Boea

  • Bay Watcher
    • View Profile
Re: Bitcoins, e-currency or just fancy crap?
« Reply #10 on: November 21, 2012, 04:23:39 pm »

Might I suggest some reading material?

And a first paper by Mr Satoshi.
Quote
Abstract.  A purely peer-to-peer version of electronic cash would allow online
payments to be sent directly from one party to another without going through a
financial institution.  Digital signatures provide part of the solution, but the main
benefits are lost if a trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-to-peer network.
The network timestamps transactions by hashing them into an ongoing chain of
hash-based proof-of-work, forming a record that cannot be changed without redoing
the proof-of-work.  The longest chain not only serves as proof of the sequence of
events witnessed, but proof that it came from the largest pool of CPU power.  As
long as a majority of CPU power is controlled by nodes that are not cooperating to
attack the network, they'll generate the longest chain and outpace attackers.  The
network itself requires minimal structure.  Messages are broadcast on a best effort
basis, and nodes can leave and rejoin the network at will, accepting the longest
proof-of-work chain as proof of what happened while they were gone

The Problem from the start was mostly wallet security, and concerns for usage as a medium for cash laundering, and concerns about anonymity.

For a tracking system, everyone is the tracking system, every transaction is tracked, and verified by the collective CPU's of the network.


If you have any questions, please refer to this page.
Quote from: Bitcoins don't solve any problems that fiat currency and/or gold doesn't solve
Unlike gold, bitcoins are:
  • Easy to transfer
  • Easy to secure
  • Easy to verify
  • Easy to granulate
Unlike fiat currencies, bitcoins are:
  • Predictable and limited in supply
  • Not controlled by a central authority (such as The United States Federal Reserve)
Unlike electronic fiat currency systems, bitcoins are:
  • Potentially anonymous
  • Freeze-proof
  • Faster to transfer
  • Cheaper to transfer


May I suggest more reading?
Next Post [Value]
Post After [Research Papers]
Post After [Block Genesis]
« Last Edit: November 21, 2012, 07:04:58 pm by Boea »
Logged

Matt_S

  • Bay Watcher
    • View Profile
Re: Bitcoins, e-currency or just fancy crap?
« Reply #11 on: November 21, 2012, 05:14:25 pm »

so CPU cycles AND electricity are what gives bitcoins values. Someone said toady could use BJS (what's that?) or wow gold.
As much as I respect bitcoins, I have to take issue with this.  This sounds like the labor theory of value.  It's basically saying that something is valuable because it takes a lot of work to make it.  Considering how closely bitcoin meshes with Austrian economics, it must be said that Austrian economists discredit the labor theory of value.  Things are valuable because people want them.  It would be different if bitcoins could be converted back into CPU cycles or electricity.

Quote
in the second case a mathematical formula decide how much money will be made until miners "run out" of bitcoins...
And as much as I hate fiat currencies, I have to take a bit of issue with this.  A limited (or at least predictable) supply is a good thing for a currency, but scarcity alone doesn't make something valuable.  It's supply AND demand.  Bitcoins will only be valuable if people think they are worth something.
Logged

Boea

  • Bay Watcher
    • View Profile
Re: Bitcoins, e-currency or just fancy crap?
« Reply #12 on: November 21, 2012, 05:24:40 pm »

so CPU cycles AND electricity are what gives bitcoins values. Someone said toady could use BJS (what's that?) or wow gold.
As much as I respect bitcoins, I have to take issue with this.  This sounds like the labor theory of value.  It's basically saying that something is valuable because it takes a lot of work to make it.  Considering how closely bitcoin meshes with Austrian economics, it must be said that Austrian economists discredit the labor theory of value.  Things are valuable because people want them.  It would be different if bitcoins could be converted back into CPU cycles or electricity.

Might I suggest some reading?
3 Bitcoin is backed by processing power
4 Bitcoins are worthless because they aren't backed by anything
5 The value of bitcoins are based on how much electricity and computing power it takes to mine them
6 Bitcoins have no intrinsic value (unlike some other things)
10 Bitcoins can be printed/minted by anyone and are therefore worthless
11 Bitcoins are worthless because they're based on unproven cryptography
13 21 million coins isn't enough; doesn't scale
14 Bitcoins are stored in wallet files, just copy the wallet file to get more coins!
15 Lost coins can't be replaced and this is bad
17 Finite coins plus lost coins means deflationary spiral
18 Bitcoin can't work because there is no way to control inflation
22 Fractional reserve banking is not possible
23 Point of sale with bitcoins isn't possible because of the 10 minute wait for confirmation
26 Quantum computers would break Bitcoin's security
28 Shopkeepers can't seriously set prices in bitcoins because of the volatile exchange rate
32 Bitcoin is a pyramid scheme


Quote
in the second case a mathematical formula decide how much money will be made until miners "run out" of bitcoins...
And as much as I hate fiat currencies, I have to take a bit of issue with this.  A limited (or at least predictable) supply is a good thing for a currency, but scarcity alone doesn't make something valuable.  It's supply AND demand.  Bitcoins will only be valuable if people think they are worth something.

Might I suggest more reading?
Deflationary Spiral
Fractional Reserve Banking and Bitcoin


May I suggest more reading?
First Post in Topic and Previous Post
« Last Edit: November 21, 2012, 07:03:13 pm by Boea »
Logged

Matt_S

  • Bay Watcher
    • View Profile
Re: Bitcoins, e-currency or just fancy crap?
« Reply #13 on: November 21, 2012, 05:31:11 pm »

Might I suggest some reading?
*links*
I appreciate it, but I've already read it :P
Logged

Boea

  • Bay Watcher
    • View Profile
Re: Bitcoins, e-currency or just fancy crap?
« Reply #14 on: November 21, 2012, 05:36:28 pm »

The links aren't for you- think of it as me inserting reference links for what you've said.
Logged
Pages: [1] 2 3 ... 24