General Discussion

DanTex

(20,709 posts)

120. The bitcoin foundation does not control the ledger or pay bandwidth for it.

Sun Mar 2, 2014, 05:11 PM

Mar 2014

The "ledger" is distributed, and anyone who participates in bitcoin mining is taking part in maintaining and updating it. That is one of the supposed strengths of bitcoin: there is no single server which holds the information of who owns what. By making it distributed, it is more secure, since there isn't any single computer that can be hacked into to modify the ledger.

From a technology point of view, bitcoin is sound. The Mt Gox thing wasn't a failure of the bitcoin protocol. It's not that the bitcoin ledger itself got hacked, it's more that (roughly speaking) a computer holding a bunch of passwords to bitcoin wallets got hacked. So people who let Mt Gox hold bitcoins for them lost their money.

On the other hand, from an economic point of view, bitcoin is basically a Ponzi scheme or at best a speculative bubble. The prices are way too volatile for it to function as a currency, and most people who own them are simply hoping to sell them to someone else at a higher price. The amount of actual commerce that takes place in bitcoins is tiny. Just because it's a good technological idea doesn't mean it's actually a good currency.

Edit history

Please sign in to view edit histories.

Recommendations

0 members have recommended this reply (displayed in chronological order):

223 replies

= new reply since forum marked as read

Highlight:

Bitcoin hate... I don't understand it... ? [View all] ReverendDeuce Mar 2014 OP

My best guess... Democracyinkind Mar 2014 #1

I always assumed, considering the source, that he was talking about Jews. arcane1 Mar 2014 #3

That's an interesting observation. Democracyinkind Mar 2014 #9

In a non-Jew context I agree 100% arcane1 Mar 2014 #11

I used to work for a large swiss bank and then switched into auditing. Democracyinkind Mar 2014 #15

Exactly. He would know, and he may have had no bias when making that statement. arcane1 Mar 2014 #19

Regardless. I think an examination of Bit Coin will cause people to look behind the curtain at how GoneFishin Mar 2014 #116

Agreed. arcane1 Mar 2014 #117

The actual quote from Ford's book is different, the one given here is not verified Bluenorthwest Mar 2014 #125

We were discussing the dog whistling aspect in the subthread above. Democracyinkind Mar 2014 #126

Yes, and I've always like the John Kenneth Galbraith quote: enough Mar 2014 #8

Yes. There's a lot of defensiveness around the whole topic. woo me with science Mar 2014 #53

I also would like an answer to this question. I've never used it, but Bitcoin enough Mar 2014 #2

My speculative theory is that... ReverendDeuce Mar 2014 #7

The wild fluctuations in value show it has not yet been a medium of exchange muriel_volestrangler Mar 2014 #25

Not exactly. The insiders can create as much of it as they like. BlueStreak Mar 2014 #29

What insiders? drm604 Mar 2014 #88

You don't think the code can be exploited? BlueStreak Mar 2014 #92

"The unfortunate part is that we may never know exactly how this happened" BlueStreak Mar 2014 #96

Of course they won't say, because it's better to say they don't know than admit incompetence. n/t ReverendDeuce Mar 2014 #167

That's one possibility. Three other possibilities are: BlueStreak Mar 2014 #177

I don't think you understand how Bitcoin works... ReverendDeuce Mar 2014 #106

Have you paid any attention to the hacker world the last 25 years? BlueStreak Mar 2014 #108

That's just ignorance on display... ReverendDeuce Mar 2014 #138

Even though it was all on public display (as open source) BlueStreak Mar 2014 #146

Oh, come down from your perch... ReverendDeuce Mar 2014 #148

So I have your personal guarantee that no hacker will figure out a clever way BlueStreak Mar 2014 #151

What highly successful attacks weren't supposed to be possible? DanTex Mar 2014 #158

Yep. Springslips Mar 2014 #173

Buffer overruns, e.g. BlueStreak Mar 2014 #188

Those are examples of software vulnerabilities, not breaches of cryptography. DanTex Mar 2014 #193

My point was simply that it is unwise to be over-confident BlueStreak Mar 2014 #197

It's also important to realize that the cryptography is secure. DanTex Mar 2014 #201

Cryptography is 1% of the system. BlueStreak Mar 2014 #208

If there are "many examples", then you shouldn't have a problem naming one. DanTex Mar 2014 #209

Here are 2 I pulled up in 5 seconds. I used The Google. That is really cool. Try it. BlueStreak Mar 2014 #210

Umm, none of those are examples of the encryption being broken. DanTex Mar 2014 #215

The point is encryption never lives alone. The system is vulnerable. BlueStreak Mar 2014 #217

Which is why it is important to understand what the vulnerabilities actually are. DanTex Mar 2014 #218

Then why has the bitcoin exchanges lost coins ... do you believe in magic ... MindMover Mar 2014 #203

The code itself is almost laughably simple. sir pball Mar 2014 #185

You may be wrong about your 50% claim. So says MIT. BlueStreak Mar 2014 #199

So it is kind of like S&H stamps or coupons that you use at the grocery store. madinmaryland Mar 2014 #54

You can use them that way in some places in the EU, or here in the US using gyft.com n/t ReverendDeuce Mar 2014 #166

It's air. It's a bubble. It is backed by NOTHING. aquart Mar 2014 #43

It's backed by the same thing Federal Reserve Nots are, TransitJohn Mar 2014 #105

Slight bit of difference there, John jmowreader Mar 2014 #119

But not the credit of the United States. aquart Mar 2014 #134

I know little about it or how it works, so I have no opinion at this time. arcane1 Mar 2014 #4

Well, to me it's the same as using money... ReverendDeuce Mar 2014 #12

It seems like it would be fun if I had mined them myself. arcane1 Mar 2014 #21

Not if the value can drop 30% is a week. BlueStreak Mar 2014 #32

Where do you invest your bitcoins? joeglow3 Mar 2014 #47

Well, you could hold them... ReverendDeuce Mar 2014 #137

That is my concern with bitcoins as a currency joeglow3 Mar 2014 #141

I literally just said you can do that... ? ReverendDeuce Mar 2014 #145

I don't invest in dollars. I invest WITH dollars joeglow3 Mar 2014 #147

Banking in established currencies provides wealth for many millions closeupready Mar 2014 #5

Well, that isn't what happened. This was a criminal enterprise. BlueStreak Mar 2014 #17

If it's different, you have to kill it instead of understand it. n/t Whisp Mar 2014 #6

Jealousy. Loudly Mar 2014 #10

Oh, I have not been able to mine my own for quite some time... ReverendDeuce Mar 2014 #16

Yes, I see a 1 terra hash miner available for $12,000. Loudly Mar 2014 #23

I prefer to use clam shells, buttons and bottle caps. L0oniX Mar 2014 #13

It isn't hate. It is seeing the bigger picture. Let me offer a metaphor BlueStreak Mar 2014 #14

But it can be audited... the ledger is 100% public. ReverendDeuce Mar 2014 #20

So you have solved he crime already? I am impressed. BlueStreak Mar 2014 #24

Quite the little advocate aren't you? TeamPooka Mar 2014 #30

not hate. incredulity. arely staircase Mar 2014 #18

virtual lol TeamPooka Mar 2014 #31

To be fair, US currency is virtual as well. ZombieHorde Mar 2014 #110

Full faith and credit of the US Govenrment as opposed to arely staircase Mar 2014 #111

Well, it is an unrelgulated purely virtual currency stored on computers susceptible to hacking. Tommy_Carcetti Mar 2014 #22

Other than that, Mrs. Lincoln, how did you enjoy the play? BlueStreak Mar 2014 #27

You and okaaywhatever crack me up Pretzel_Warrior Mar 2014 #51

How do I "like" this post? Bucky Mar 2014 #212

i hope bitcoin catches on usa liberal Mar 2014 #26

No taxes, something that is normally anathema to Democratic principles. randome Mar 2014 #39

Taxes are not tied to the currency paid. Ms. Toad Mar 2014 #81

There are no IRS determinations on bitcoins. randome Mar 2014 #84

The payment of taxes is no more voluntary Ms. Toad Mar 2014 #93

How will the IRS know you have unreported income pnwmom Mar 2014 #102

The same way they know if you have unreported barter income. Ms. Toad Mar 2014 #113

Except there is the question of scale. People talk about bitcoin substituting for banks. pnwmom Mar 2014 #115

There are people who create local currency for bartering Ms. Toad Mar 2014 #121

They're just tulips for nerds. And a ponzi scheme for nerds. pnwmom Mar 2014 #122

The person I know personally who has been involved with bitcoins Ms. Toad Mar 2014 #127

It may be taxable but it is easily hide-able. That's why it's being used for pnwmom Mar 2014 #101

Like I said in another post - Ms. Toad Mar 2014 #114

For one, online currencies such as eGold and Bitcoin are exceptionally useful for the purposes Maedhros Mar 2014 #64

Liberals believe in progressive taxation, and bitcoin facilitates tax evasion. pnwmom Mar 2014 #100

I really don't get it, either. X_Digger Mar 2014 #28

Paypal is subject to intense audits. BlueStreak Mar 2014 #34

Which is neither here nor there, re the value or validity of a digital currency. X_Digger Mar 2014 #38

Integrity of currency is neither here nor there? Say what? BlueStreak Mar 2014 #46

It is a real currency if people are trading other things of value for them. X_Digger Mar 2014 #48

I think most people here DO understand we have a fiat currency BlueStreak Mar 2014 #50

You seem hung up on that term, as if only 'fiat currency' is 'real'. X_Digger Mar 2014 #58

No. I already agreed they were both ffiat currencies. The difference is BlueStreak Mar 2014 #60

Err.. bitcoins aren't a fiat currency. There is no government running on bitcoins. n/t X_Digger Mar 2014 #61

It most certainly is a fiat currency BlueStreak Mar 2014 #63

If you say so. *shrug* X_Digger Mar 2014 #66

You aren't going to address the substantive issues, are you? BlueStreak Mar 2014 #68

It's not a fiat currency. DanTex Mar 2014 #69

Nonsense. Fiat means it is simply declared to exist BlueStreak Mar 2014 #73

No one has responded to my point about taxes, either. randome Mar 2014 #74

Likely because most people don't understand taxes. Ms. Toad Mar 2014 #83

The IRS is still studying this issue and has issued no regulations. randome Mar 2014 #85

The regulations would address whether it is treated as a currency or a commodity Ms. Toad Mar 2014 #87

So those who have bitcoins, are you paying some form of taxes on them? randome Mar 2014 #89

I don't have bitcoins - but it is a rare year Ms. Toad Mar 2014 #94

Money laundering is a favored activity, too. randome Mar 2014 #90

I was only addressing your assertion that there were "no taxes" Ms. Toad Mar 2014 #95

Here is the proof that this was all a Ponzi scheme from the start. BlueStreak Mar 2014 #77

Paul Krugman: "fiat money is backed by men with guns, bitcoin is not" DanTex Mar 2014 #80

Nope. At least not according to INVESTOPEDIA.... MADem Mar 2014 #202

Technically, yes, it is a real currency. DanTex Mar 2014 #67

My only exposure to it is a couple sites I know who have it as a payment option. X_Digger Mar 2014 #91

People hated my Pets.com stock too and I never understood it Johonny Mar 2014 #33

Exactly. And this isn't exactly a new concept. BlueStreak Mar 2014 #35

Did you report your income on your tax returns? randome Mar 2014 #36

Did you pay FICA taxes? State taxes? randome Mar 2014 #37

I've never read a comprehensible explanation of bitcoin "mining" kestrel91316 Mar 2014 #40

And we complain about the rich avoiding taxes. randome Mar 2014 #41

Nah, it's just some majorly deep cryptography. sir pball Mar 2014 #187

I'll stop pestering you after this, Reverend. randome Mar 2014 #42

And I'm the opposite Blue_Tires Mar 2014 #44

Explain bitcoin mining in simple terms, if you can Corruption Inc Mar 2014 #45

Mining is the creation of virtual coins BlueStreak Mar 2014 #49

What do those complex calculations DO? kestrel91316 Mar 2014 #52

It is not a crime. It is how the system works BlueStreak Mar 2014 #56

The system that was designed to hyper-inflate BlueStreak Mar 2014 #59

It's very hard to take your (reasonable) thoughts seriously when you're backwards on "inflation". sir pball Mar 2014 #182

I should have clarified I was talking about the value of each coin inflating BlueStreak Mar 2014 #186

I did understand what you meant, literally, but since you're talking economics.. sir pball Mar 2014 #189

There are numerous problems that will catch up with it, I think BlueStreak Mar 2014 #190

I remember Mondex.. sir pball Mar 2014 #192

If the technology is "digital cash" (like Mondex) rathern than a separate monetary system BlueStreak Mar 2014 #196

BITCOIN UNOCKED Capt. Obvious Mar 2014 #142

Here: jsr Mar 2014 #75

What BlueStreak said minus the vitriol is correct... ReverendDeuce Mar 2014 #76

Cost and value are not related in economics. mbperrin Mar 2014 #129

The big winners are the early insiders who dealt themselves millions of coins BlueStreak Mar 2014 #191

No smoking in any jail in Texas. mbperrin Mar 2014 #220

Just reminds me too much of some friends in the 80s who were doing some bartering stuff. Gidney N Cloyd Mar 2014 #55

You got in near the beginning and so you're a beneficiary of the ponzi scheme. pnwmom Mar 2014 #57

But how is it a ponzi scheme? Nobody is "at the top"... ReverendDeuce Mar 2014 #78

How do you think Mt Gox was working when almost all of its bitcoins had been stolen pnwmom Mar 2014 #97

They had a wallet of coins and had people double-withdrawing... ReverendDeuce Mar 2014 #98

They've known for some time their bitcoins were missing and yet they were taking pnwmom Mar 2014 #99

"inexplicably" lol. Don't think that is the right word. nt. NCTraveler Mar 2014 #198

Makes MtGox the Ponzi, with BTC as the money. sir pball Mar 2014 #184

You 'mined' by running a useless computer program muriel_volestrangler Mar 2014 #136

You sound jealous... ReverendDeuce Mar 2014 #180

It's not an 'investment'; it's a bet on how many people will follow you muriel_volestrangler Mar 2014 #181

Horse apples ahoy! ReverendDeuce Mar 2014 #194

You're a speculator, like a Wall St. banker betting on the fall of a stock muriel_volestrangler Mar 2014 #200

I am speculating? Nonsense! This is an investment that required no upfront capital. ReverendDeuce Mar 2014 #205

You really are sounding like those 1%er op-eds muriel_volestrangler Mar 2014 #207

Poster does not get it PowerToThePeople Mar 2014 #206

Looks like it is starting to unravel joeglow3 Mar 2014 #223

It might be because when I pulled a dollar from my wallet it says, TexasTowelie Mar 2014 #62

I don't know about "hate" but... DanTex Mar 2014 #65

Explain why you answer "no" to both of your questions. n/t ReverendDeuce Mar 2014 #79

OK. I'll start with the second question. DanTex Mar 2014 #82

Very well said. mbperrin Mar 2014 #130

The exchange rate for Bitcoins is inherently unstable William Seger Mar 2014 #70

The systemic bias (by design) was hyper-inflation BlueStreak Mar 2014 #86

Actually, its trending towards stabilization - although a bit downward... TampaAnimusVortex Mar 2014 #103

"That said, I think that bitcoin is still going to be really volatile." William Seger Mar 2014 #109

Actually the chart does show increasing stability... TampaAnimusVortex Mar 2014 #132

"Increasing stability" compared to its ridiculously unstable past? William Seger Mar 2014 #133

Thats a bit of a high bar to set... TampaAnimusVortex Mar 2014 #135

"Bitcoin's problems are much worse than you thought" William Seger Mar 2014 #159

Pointless TampaAnimusVortex Mar 2014 #170

So, you'd like to change the subject William Seger Mar 2014 #178

The chart shows quite a bit of volatility. DanTex Mar 2014 #144

There's a lot you haven't heard about bitcoin I'm sure... TampaAnimusVortex Mar 2014 #149

Not really. I understand it pretty well. DanTex Mar 2014 #152

So the fact you responded so quickly means... TampaAnimusVortex Mar 2014 #153

Well, you did say "watch a few minutes". DanTex Mar 2014 #154

Demographically, three of DU's favorite Dwarfs are named "Cranky" "Codger" and "Ned Ludd" Warren DeMontague Mar 2014 #71

Beanie Babies hate...I don't understand it? nt MADem Mar 2014 #72

I've read several articles that implied it's being used to launder drug money. Also that it's just OregonBlue Mar 2014 #104

I'm trying to wrap my head around this... WhaTHellsgoingonhere Mar 2014 #107

I've got questions about Bitcoin. wercal Mar 2014 #112

Message auto-removed Name removed Mar 2014 #118

The bitcoin foundation does not control the ledger or pay bandwidth for it. DanTex Mar 2014 #120

It's not hate, hell if it was not for Bitcoin and their direct link to malware Rex Mar 2014 #123

hate? i don't hate bitcoins, but they they make it easier to laugh at my libertarian buddy who dionysus Mar 2014 #124

The word you might be looking for is not 'hate' but 'apathy'. Bluenorthwest Mar 2014 #128

I don't care if you like it. I am curious why people hate it. n/t ReverendDeuce Mar 2014 #140

So you have no reasons to offer as to why anyone should like it? Apathy means 'don't care' Bluenorthwest Mar 2014 #143

Bitcoin supportters usually have invested alot and can't believe it's gone. CK_John Mar 2014 #131

You mean Mt.Gox supporters... ReverendDeuce Mar 2014 #139

Those who keep their bitcoin in their own wallets have NOTHING. tridim Mar 2014 #157

I have Bitcoin in my own wallet and I can convert it to USD in about 15 seconds... ReverendDeuce Mar 2014 #160

Given that it takes 10 minutes for bitcoin transactions to clear, this is unlikely... DanTex Mar 2014 #169

Unless you really know what you're doing, keeping bitcoins in your own wallet is a bad idea. DanTex Mar 2014 #168

A song from the 80s comes to mind when Bitcoin is discussed. Now what was it called...? randome Mar 2014 #150

That ain't workin...that's the way we do it!!! MADem Mar 2014 #204

Seems to me... NCTraveler Mar 2014 #155

I hate it because it's an obvious pyramid scheme that people take seriously. tridim Mar 2014 #156

How does it resemble a pyramid scheme? This I'd love to hear... ReverendDeuce Mar 2014 #161

I think it's mostly ignorance and jealousy. DesMoinesDem Mar 2014 #162

I think you're right on target... ReverendDeuce Mar 2014 #163

lol. Sucker. nt tridim Mar 2014 #164

Sucker? Bitcoin gained another $20 against the USD overnight... ReverendDeuce Mar 2014 #165

This statement alone is why I'm against it....instability. cbdo2007 Mar 2014 #179

So Paul Krugman is ignorant and jealous? DanTex Mar 2014 #171

A good personal rule of mine Blue_Tires Mar 2014 #175

hate it? no rdking647 Mar 2014 #172

MAYBE just maybe if the creator had not used a fake name when he started bitcoin Drew Richards Mar 2014 #174

It is distrust liberalmuse Mar 2014 #176

What I don't get is how Bitcoin even looks like a pyramid scheme... ReverendDeuce Mar 2014 #195

People give an entity real money... liberalmuse Mar 2014 #213

Here are some articles that answer that for you. BlueStreak Mar 2014 #216

Ponzi scheme hate... I do not understand it... ? PowerToThePeople Mar 2014 #183

I hear Charles Ponzi was a very nice guy BlueStreak Mar 2014 #214

The implosion continues BlueStreak Mar 2014 #211

What implosion? Value is still up today... nt ReverendDeuce Mar 2014 #222

One experience from my mom made me dislike it sakabatou Mar 2014 #219

Hate comes from fear Marrah_G Mar 2014 #221