Bitcoin hate... I don't understand it... ?

[drm604]

88. What insiders?

I'm not taking a position on whether Bitcoins are good or bad, but there are no "insiders" able to manipulate anything. It's all decentralized p2p stuff. There's no central server or processing house. Just because someone doesn't want to play by the rules doesn't mean that it's possible for them to not play by the rules.

Any changes to the the algorithms would require a majority of the participants to agree. This isn't just a gentlemen's agreement, it's enforced by the model. Sure someone could modify their personal copy of the Bitcoin software to play by different rules, but if they did so then none of the other participants would recognize any of their transactions so the attempt would be futile. All transactions must be approved by X other users (actually the users' mining software, using cryptographic algorithms) before they're considered valid. It's essentially mathematically impossible to generate more than 4 or 5 fake approvals without controlling more than 50% of all mining capacity. Since there are thousands of miners all over the world, it's not feasible to garner that level of cooperation.

Theoretically, there might be some flaw in the software that could be exploited, but the party doing that wouldn't have to have any special "insider" status, just a high level understanding of the open source-code and the mathematics involved.

What happened at MTGox was not a breach of the bitcoin algorithm, it was a breach of MtGox's weak security measures combined with the carelessness of people who thought it was a good idea to store their wallet info with a third party. Anyone who has access to your wallet keys has access to your Bitcoins. That's a necessary feature of the model. If you share your keys with anyone, than that person can access your Bitcoins themselves, or someone can hack them and gain access to your keys.