Bitcoin

alb

B0 SELECTRA wrote: »

True not much good at computing.But at least i don't make fun at people behind a keyboard with anonymity. That takes a real big man :D

That email was written in anger.The only reason i used Eircoin because it was fast before. There fee is quite high 5%. I will be using mtgox from now on they have Terms of use and Privacy Policy on there website. Not much privacy when you have to sent your name and account details through email to get a refund . Even when i requested a contact number to give my details.One more point there is no business address or phone number on the Eircoin site. Is it a Registered business. ??

Why would you go near gox?! it's had issues for about a year now and is currently not allowing withdrawal of USD or bitcoins. I suspect it is insolvent. You need to do some due-diligence before sending money to any company or individual.

I have no idea if Eircoin is a registered business, that should have been something you should have checked before dealing with them, though I suspect the reason they are currently closed is because they act as a broker for gox or bitstamp, who both currently have withdrawals suspended.

Personally I would suggest looking at kraken.com as I have had no problem with it, but again, don't take my or anyone elses word for it, do some research.

dbran

Folks.

Can we keep this thread on the subject of Bitcoin please and leave the childishness to the afterhours forum where it belongs or it will be closed.

dbran

dbran

Right ye be then:rolleyes:

dbran

Thread reopened provided everyone plays nice:D

pedroeibar1

Nice?? About Bitcoin?? That will be difficult!

Eircoin is a typical example of what I and many others have been saying about Bitcoin and many of its investors. According to a CRO search Eircoin is not a company, it is not even a registered business name and the site is registered to the David Fleming (mentioned above) at two addresses (a housing estate in Ballinteer, Dublin and in Co. Wexford, along with contact phone number.)

Just goes to prove what we naysayers have maintained all along about Bitcoin and its extollers.:D
Now, is that nice and polite enough?

Peterdalkey

A decent funeral is delayed yet again! "Wake"me when it's finally over!!

The Corinthian

pedroeibar1 wrote: »

Eircoin is a typical example of what I and many others have been saying about Bitcoin and many of its investors.

While I agree that it is ultimately a bit of a bubble built on sand, I'll have to disagree with your conclusion here. As much as you'd like this unregulated 'business' to be proof that Bitcoin is a bubble built on sand, all it proves is that it is (dangerously) unregulated, which isn't the same thing.

Zauka

At a moment it's a very good time to buy some bitcoins. It's going down and down every hour....

relaxed

Zauka wrote: »

At a moment it's a very good time to buy some bitcoins. It's going down and down every hour....

So if I buy it today for €500 and it goes down every hour until it reaches €400, I am down €100, how is that a good time to buy it?

Graham

Zauka wrote: »

At a moment it's a very good time to buy some bitcoins. It's going down and down every hour....

I'm trying to work out if you intended to put a big row of smileys at the end of that post.

pedroeibar1

The Corinthian wrote: »

While I agree that it is ultimately a bit of a bubble built on sand, I'll have to disagree with your conclusion here. As much as you'd like this unregulated 'business' to be proof that Bitcoin is a bubble built on sand, all it proves is that it is (dangerously) unregulated, which isn't the same thing.

Not my conclusion, my issue is not just about regulatory matters; many of the pro-Bitcoin posters here have been taken in by the ‘get rich quick’ idea and neither understand what they are on about or appreciate the risks involved. The promoters thrive on the innocents. Earlier in this thread I wrote “Bitcoin proponents have failed miserably to show how a futures market can be created, by whom and how it could be governed or regulated. A crock of s#1t remains a crock, no matter how it is dressed up. It will smell the same whether it is held for short or long periods. Ask anyone who once worked in Lehmans!” CDO’s were a typical example (as were tulip bulbs and South Sea Stock).

This thread was reactivated by an idiot moaning about another Bitcoiner with whom he was doing business. He had no idea of the nature, state or legal standing of his business partner, nor did he even have the nous to know where to check basic credit control data.

Running out of power, still no ESB connection......may be gone for a while.

alb

I'm curious what you mean by this futures market aspect? Why is it not possible to create and regulate this in the same way for digital currencies the same as you would for commodities?

bitfinex.com already offers long and short positions and leveraged trading. Does this cover it?

If there are advanced financial products to be offered in digital currencies for profit I have no doubt it will happen - someone will want the business. Any big player will be waiting for regulatory guidelines before doing this though. The New York state regulator has been fairly active about this recently and will be legislating soon.

EDIT: Superintendent Lawsky's speech today was very interesting, and promising:

The Corinthian

pedroeibar1 wrote: »

Not my conclusion, my issue is not just about regulatory matters; many of the pro-Bitcoin posters here have been taken in by the ‘get rich quick’ idea and neither understand what they are on about or appreciate the risks involved.

Well, to a degree you'll find that in the most traditional of investment options; lest we forget, didn't we have an investment bubble a few years ago in property? My attitude is that adults are perfectly entitled to be greedy idiots, so long as they can deal with the consequences of being greedy idiots (which many of the losers of the aforementioned bubble were not, as they cried about being duped by everyone else).

The promoters thrive on the innocents.

As with all bubbles, pyramid schemes and even scams, the promoters thrive on the greedy, ignorant, stupid and, above all, lazy. I add the last because in most cases, especially in today's interconnected World, it takes relatively little effort to do even basic research on an investment opportunity and realize what the risks are (or even if it is an out-and-out-fraud). A frightening number don't bother and will rather seek others to advise, and do the legwork for, them than even do a simple Google search - the poster who came on and revived the thread was a classic example of this.

To me, I maintain that in the long run something like Bitcoin will become part of our financial future; but I think it unlikely to be Bitcoin and when this will finally happen is another question. Also even ignoring the lack of regulation involved, it is hugely volatile and thus clearly falls into the 'high risk' category, something which has clearly been ignored by some of the evangelizing comments made by some posters here.

But one thing that no one seems to have really talked about is Bitcoin's origins. Who is Satoshi Nakamoto? He's only been mentioned in passing here and I suspect more than half of those with Bitcoins don't even know who that is (actually, none of them do, as no one knows who it is). People are seeking to invest in a financial product (essentially this is what it is) which is based upon mathematics designed by someone whose identity we don't even know and who's agenda or motivations we have no clue about.

For me, that is ultimately the scariest thing about the currency.

Graham

The Corinthian wrote: »

But one thing that no one seems to have really talked about is Bitcoin's origins. Who is Satoshi Nakamoto?

I'd like to think he's someone who deliberately architected an inherently deflationary crypto-currency while stockpiling millions of units for himself from the outset when they were easily generated.

He's now drip feeding them to a voracious market while watching the $£€ roll into his Swiss bank account from his private island lair in the style of a James Bond villain.

relaxed

30-day Range 302 — 1038.15894

alb

The Corinthian wrote: »

But one thing that no one seems to have really talked about is Bitcoin's origins. Who is Satoshi Nakamoto? He's only been mentioned in passing here and I suspect more than half of those with Bitcoins don't even know who that is (actually, none of them do, as no one knows who it is). People are seeking to invest in a financial product (essentially this is what it is) which is based upon mathematics designed by someone whose identity we don't even know and who's agenda or motivations we have no clue about.

For me, that is ultimately the scariest thing about the currency.

The scariest thing? It's the best thing about it. We don't care that we don't know who Satoshi is because it doesn't matter. Satoshi just invented it, he doesn't control Bitcoin in any way and he doesn't have any private knowledge of it - everything about it is completely open and transparent. He first announced it to a cryptography research mailing list - to people who would understand how it works and appreciate the point of it. They were all free to mine early coins as soon as he did. Surprisingly no one took much notice at the time. He even encoded a news headline from the day in the first block as proof that he did not mine it any earlier than the announcement.

When you use the internet or email does it matter to you who created it or what their motivations were? Do you think facebook, boards or twitter were part of Tim Berners Lee's agenda or motivations? does it matter? Bitcoin is an open platform, people will use it however they like, whether Satoshi intended it or not. Satoshi controls Bitcoin about as much as Thomas Edison controls your lightbulbs.

Let me be clear, if Bitcoin was not open source, or if I had to trust any single company or person in control of it, myself and most other fans wouldn't care about it. This point is a dealbreaker.

Here's a post by Satoshi from 2008 described how he solved the Byzantine generals problem, a computer science problem researchers had not been able to solve for 20 years:

http://www.mail-archive.com/cryptography@metzdowd.com/msg09997.html

Even his peers in that thread were not getting what a breakthrough this was - that he had actually solved it. Typically his writing was simple, clear and humble.

Peterdalkey

Of course your money is safe ........well quite safe http://www.dailymail.co.uk/news/article-2559357/2-7-million-worth-Bitcoin-stolen-successor-dark-web-market-place-Silk-Road-hacked.html

alb

Peterdalkey wrote: »

Of course your money is safe ........well quite safe http://www.dailymail.co.uk/news/article-2559357/2-7-million-worth-Bitcoin-stolen-successor-dark-web-market-place-Silk-Road-hacked.html

My coins are perfectly safe. I don't entrust them to drug dealers who may just keep them. They weren't hacked either, they just stole them and are blaming the protocol.

You don't have to trust anyone to use Bitcoin (once you have some) . The fact that people keep giving their money to unregulated untrusted 3rd party 'businesses' be it eircoin, silk road or Mt gox and then losing it is not a flaw in Bitcoin.

The Corinthian

alb wrote: »

Satoshi just invented it, he doesn't control Bitcoin in any way and he doesn't have any private knowledge of it - everything about it is completely open and transparent. He first announced it to a cryptography research mailing list - to people who would understand how it works and appreciate the point of it.

You do understand that mathematics is not actually so transparent in reality.

How much do you actually know about the Bitcoin mining algorithm? Or does anyone else?

srsly78

Most things in science and engineering are not "transparent" to the lay person. This does not mean that they are sinister secrets tho. Most people don't know how the lights in their house or the engine in their car work.

Similarly, the crypto most people use everyday securing their banking and email etc is not "transparent". In theory it should be unbreakable, but the NSA etc have other methods around this

This stuff is open to inspection by the scientific community, which is what counts. Lay people are free to go take the necessary courses if they also want to understand the intricacies.

The Corinthian

srsly78 wrote: »

Most things in science and engineering are not "transparent" to the lay person. This does not mean that they are sinister secrets tho. Most people don't know how the lights in their house or the engine in their car work.

Then it should be easy for you to show us where proof behind Satoshi's mining algorithms exists. Even if you don't understand it, it will still have been published for those who do.

This stuff is open to inspection by the scientific community, which is what counts. Lay people are free to go take the necessary courses if they also want to understand the intricacies.

Open to inspection by the scientific community is not the same as actually being fully understood.

And using algorithms that are, in reality, not fully understood and may contain flaws (unintentional or otherwise) is a dangerous proposition in economics What do you think was one of the causes of the 2008 financial crisis?

srsly78

Rather it works the other way around, can you show disproof? Many mathematicians have scrutinised the details of bitcoin and said "seems legit". If it was dodgy they would be poking holes in it.

The recent furore over "transaction malleability" is a flaw with exchanges apparently, not with bitcoin itself.

The Corinthian

srsly78 wrote: »

Rather it works the other way around, can you show disproof? Many mathematicians have scrutinised the details of bitcoin and said "seems legit". If it was dodgy they would be poking holes in it.

Sorry, but that's - for lack of a better term - bollocks.

It took approximately 350 years for someone to come up with a proof for Fermat's Last Theorem; that's 350 to finally prove something that could have been wrong all along. And before you respond, that is exactly what's happens to theorems in the past; they've been disproven and/or found to otherwise have flaws (some of Fermat's other conjectures and theorems were disproven, by Leonhard Euler, decades after his death).

That many mathematicians have scrutinised Bitcoin and failed to poke holes in it does not constitute a proof, only a lack of disproof. Now, maybe I'm wrong and this proof does exist and you can point to it, as I asked, but if not you are asking us to put our faith into it - and I mean faith, because that's what you call belief or trust in something in the absence of proof.

And that, especially when considering we don't even know who Satoshi is, his (or her) motivations or agenda is or ultimately his (or her) competency, is very very scary if we're putting our faith in it.

I mean, do you really want to potentially put the fate of the World's money supply in something that is at best unproven, potentially flawed and at worst written with a malicious intent?

The recent furore over "transaction malleability" is a flaw with exchanges apparently, not with bitcoin itself.

I never suggested it was. Don't change the subject.

srsly78

You could use the same argument about all the crypto in use. Some of it has been found to be flawed, some of it is in daily use all over the world.

Bitcoin is a first generation thing, indeed there might be holes in it. If so these could be fixed and another iteration released.

I didn't say I wanted to "put the fate of the world's money supply" in it. Your argument seems to be be that just because something is complex it shouldn't be used - which as you say is "bollocks".

Why does anyone need to put "faith" in it? You don't have to invest your life savings in it. I used it a few times to purchase a few things, all went fine. No big deal! No life savings lost.

The Corinthian

srsly78 wrote: »

You could use the same argument about all the crypto in use. Some of it has been found to be flawed, some of it is in daily use all over the world.

And where this has happened the market has moved to replace it. However, I'm not using the same argument, unless you can point to any crypto that's based on algorithms written by an unknown person, lacking any proofs and that is in popular use for international commerce.

Bitcoin is a first generation thing, indeed there might be holes in it. If so these could be fixed and another iteration released.

What happens if such a critical hole were found once Bitcoin has become an important part of the World's money supply?

I didn't say I wanted to "put the fate of the world's money supply" in it.

Where do you think wholesale acceptance of it as a currency will likely lead?

Your argument seems to be be that just because something is complex it shouldn't be used - which as you say is "bollocks".

It only seems to be my argument if you're not paying attention. You'll note I've been focusing on Bitcoin's lack of traceability authorship and proof; not that it's complex.

Why does anyone need to put "faith" in it? You don't have to invest your life savings in it. I used it a few times to purchase a few things, all went fine. No big deal! No life savings lost.

That's not how economics works. Did you buy a house during the boom? Many didn't, but they're still paying for those who did.

srsly78

The authorship thing is nonsense. There are crypto protocols around with known authors that have NSA backdoors in them. It doesn't matter if the author is anonymous, only that the details are available for scrutiny.

The Corinthian

srsly78 wrote: »

The authorship thing is nonsense. There are crypto protocols around with known authors that have NSA backdoors in them. It doesn't matter if the author is anonymous, only that the details are available for scrutiny.

NSA back-doors that went unnoticed despite the details being available for scrutiny - it was a whistle blower who revealed them in the end. Where does that put your self-policing defence?

While Bitcoin is just a peripheral 'currency', I don't think this is a big deal and neither do I think it will ever grow to the level of acceptance that it does become one. But if it did, and Bitcoin became one of the fundamental pillars of the World's money supply and it turns out there's a fundamental flaw in it, what do you think will happen to the World economy?

I've rebutted all your defences at this stage. Unless you have any new ones or can rebut my rebuttals, I think we're done here.

alb

The Corinthian wrote: »

How much do you actually know about the Bitcoin mining algorithm? Or does anyone else?

That's a good question, and when talking about trusting Bitcoin I see four aspects
1) Trusting that the algorithm works - that the design is not susceptible to attack or corruption
2) Trusting the crypography used by the code cannot be cracked.
3) Trusting that the code - the implementation of the algorithm does not have fatal flaws
4) Trusting that Satoshi did not design in a fatal flaw, malicious feature or backdoor.

1) Media often describes mining as computers "solving complex mathematical algorithms" but it's not a good description as the theory behind the mining algorithm is really quite simple.

Everyone running the software reaches consensus on all transactions every 10 minutes. It's like a type of lottery between every miner, to win the lottery you must solve a puzzle. Every miner uses their computing power to try and solve this puzzle, trying random guesses until they find a valid solution. The more power you have the more guesses you can make so the greater chance you have of winning, but it's still random, any miner can win any lottery round.

The winner of each round gets to secure a group of recent transactions (called a block) to the end of the blockchain and the next puzzle is created from that block. The puzzle needs to be something like a big sudoku - something that is difficult to solve, but easy for everyone else to verify that the answer is correct.

The puzzle itself doesn't matter, its sole intention is that miners have to prove they did difficult work in order to append a block to the blockchain. The job is to make it random which miner will solve the next block.

Because the puzzle for one block is created from the previous block, no one can change an old block without redoing every puzzle after it. Clients keep the longest chain of blocks and ignore others. In the case of a 'bad actor' trying to append bad transactions by creating a bad block they must solve blocks quicker than everyone else in order to maintain the longest chain. This means the network is secure as long as majority of miners are honest.

Since this isn't really a complex algorithm and it's been working well for 5 years I'm confident that it works. The power required to overtake the network now is so great that I'm not concerned about it happening, because even if someone did do it, everyone would notice straight away anyway.

2) The puzzle that I mentioned above for the miners isn't a sudoku in practice, it's actually finding a specific answer to a SHA256 cryptographic hash function. This is a mathematical function that takes an input and gives a seemingly random output.

You can try it here: http://code.tatzu.net/sha256/
If you put in "Hello World" as the input you'll get a hash result of
b94d27b9934d3e08a52e52d7da7dabfac484efe37a5380ee9088f7ace2efcde9

An example of a miner puzzle would be if I asked you to tell me what input gives a hash result ending in "999". The trust required here is that SHA256 is irreversible - that miners have no way to work backwards from a hash result to an input, the only way to find a valid input is trial and error - trying different random inputs until one gives a satisfactory result.

This is one part I can't verify myself. I don't have the maths chops to fully understand how the SHA256 function works or prove it is irreversible, but I do know that if cryptography like this is cracked the implications would be huge for all computer security, including conventional banking. Satoshi didn't invent this. it's been around for decades.

3) and 4) Satoshi wrote the first code that implemented Bitcoin, but that's no longer the only code. He wrote it in the C++ language but since then others have written implementations from scratch in other languages such as Java. Because the design is transparent anyone can write code that implements it.

All of the Bitcoin software implementations are open source and open to audit by anyone and you can bet the companies and people staking their livelihood on Bitcoin have done this, and will be active to fix any bugs that arise, such as the transaction malleability issue recently. Since you can use Bitcoin without using any code that Satoshi wrote there's zero chance he has anything malicious in it.

A fatal flaw or bug is always a technical possibility, it just seems quite unlikely at this stage, possibly as unlikely as a fatal flaw in the traditional banking system. Why not hedge a bit on both.

The Corinthian wrote: »

I mean, do you really want to potentially put the fate of the World's money supply in something that is at best unproven, potentially flawed and at worst written with a malicious intent?

The fate of the world's money supply is already in something unproven and potentially flawed (average length of survival of fiat currencies is only 27 years), and I think we've seen plenty of malicious intent in our banking sector. If you give me the choice of having to trust in Sean Fitzpatrick or our politicians or *any* people over the integrity of the SHA256 cryptography, I'll choose the cryptography. Bitcoin doesn't have to be perfect, it just has to be better than what we already have, and that's really not that hard.

I don't think everyone should go all in on Bitcoin, even I only put a small amount of my worth in it, and even if Bitcoin becomes established I think it will live alongside existing currencies rather than replace them outright. It doesn't have to be all or nothing.

alb

The Corinthian wrote: »

NSA back-doors that went unnoticed despite the details being available for scrutiny - it was a whistle blower who revealed them in the end. Where does that put your self-policing defence?

While Bitcoin is just a peripheral 'currency', I don't think this is a big deal and neither do I think it will ever grow to the level of acceptance that it does become one. But if it did, and Bitcoin became one of the fundamental pillars of the World's money supply and it turns out there's a fundamental flaw in it, what do you think will happen to the World economy?

I've rebutted all your defences at this stage. Unless you have any new ones or can rebut my rebuttals, I think we're done here.

The biggest scandal of cryptography backdoors was about RSA. A company that suggested their closed source 'professional' implementations were audited to a higher standard than open source alternatives and of course it was then revealed they had taken payments from the US gov to put in backdoors. Open source bitcoin remained unaffected.

Such concerns are not not unique to Bitcoin, someone cracking common cryptography could potentially compromise the security of banks worldwide. It's not like your money in the bank exists as physical coins and notes sitting in a vault. It's just numbers in a computer.

What if someone invents a way to cheaply manufacture gold?

pedroeibar1

alb wrote: »

I'm curious what you mean by this futures market aspect? Why is it not possible to create and regulate this in the same way for digital currencies the same as you would for commodities?

bitfinex.com already offers long and short positions and leveraged trading. Does this cover it?

No electricity for days and being out with a chainsaw was more enjoyable than reading more uninformed crap in some recent posts about currency markets.

(1) Bitfinex is a start-up that remains in 'test' mode and is not open for business, so it offers nothing other than a dream (possibly for many better described as a nightmare.)
(2) Bitfinex is a mickey-mouse operation registered in Hong Kong.
(3) If you a such a big fan of Bitcoin (the success of which appears to be predicated on its unregulated status) why are you suggesting a regulated futures market?
(4) If your financial security is to be based on hedging/forward contracts/futures, would it not be an idea to check out the market, find out who the counter-parties are and even look to see what would/should /could happen when a hedge was tested?

No, what you wrote does not cover it, it just illustrates that my views posted earlier are correct and that most of bitcoin's proponents are, at best, financially naive.