tag:blogger.com,1999:blog-8883034.post600584338669482186..comments2024-01-27T12:50:11.862+01:00Comments on atdotde: Bitcoin explainedRoberthttp://www.blogger.com/profile/06634377111195468947noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-8883034.post-30753045971052089492011-08-19T11:05:05.738+02:002011-08-19T11:05:05.738+02:00Really-Really This is nice blog till i have been v...Really-Really This is nice blog till i have been visited. Innocent photos are wonderful. I think this is the blog which i was search before. it so informative and i enjoyed very much from it . so thanks you very much to created such a nice blog & written article.Rohitpalhttps://www.blogger.com/profile/00050219481331027940noreply@blogger.comtag:blogger.com,1999:blog-8883034.post-74161628907943323802011-06-20T11:39:39.348+02:002011-06-20T11:39:39.348+02:00That was Jacques point that you cannot roll back b...That was Jacques point that you cannot roll back bitcoin transactions. I am still not convinced that that is a feature since once you received bitcoins you are sure you have them and the other party cannot claim them back (which is a major problem of paypal, it happens far too often that paypal freezes accounts).<br /><br />On the other hand, this incident shows that all the macroeconomic discussions were orders of magnitude off target since a currency that can be brought down by selling worth a few thousand dollars cannot be a threat do anything (except those people's purses that own too much of it).<br /><br />Even if the price at the other exchanges is not affected too much, it shows that currently bitcoin is still far too volatil to be really useful for anything except gambling. Which is too bad since I am convinced (as stated above) that the internet still lacks a good micropayment system.<br /><br />The situation reminds me a bit of some sort of spam popular during the dotcom bubble: You would receive emails stating that some penny-stock is about to make a great announcement that will skyrocket its value (the idea being that the sender of the spam bought shares of that company before sending the spam). A number of people would than buy that share and since the market is so small the price would indeed go up (even without announcement). So the sender could make a profit by selling the shares that he bought before anybody else.<br /><br />The curious thing is that upon receiving the email it is not 100% clear that one should not buy the share although the information in the mail is clearly wrong since one could still hope to be early enough to buy the share at a good price before more people react to the spam and bring up the price even further.Roberthttps://www.blogger.com/profile/06634377111195468947noreply@blogger.comtag:blogger.com,1999:blog-8883034.post-9202069798908173272011-06-20T09:27:03.487+02:002011-06-20T09:27:03.487+02:00Somebody apparently stole a whole bunch of bitcoin...Somebody apparently stole a whole bunch of bitcoins at mtgox over the weekend. Or something like it. The bitcoin crashed from 30$ to 1 cent, which can be watched live at <a href="http://www.youtube.com/watch?v=T1X6qQt9ONg" rel="nofollow">youtube</a>.<br /><br />mtgox claim that they will rollback all trades. But can they? I thought bitcoins were supposed to be untraceable.Thomas Larssonhttps://www.blogger.com/profile/15985129937633673870noreply@blogger.comtag:blogger.com,1999:blog-8883034.post-34230545607570437782011-06-09T10:37:10.775+02:002011-06-09T10:37:10.775+02:00A good explanation why Bitcoin will not work can b...A good explanation why Bitcoin will not work can be found <a href="http://www.quora.com/Bitcoin/Is-the-cryptocurrency-Bitcoin-a-good-idea" rel="nofollow">here</a>.Thomas Larssonhttps://www.blogger.com/profile/15985129937633673870noreply@blogger.comtag:blogger.com,1999:blog-8883034.post-70817284917527882912011-06-08T08:57:11.685+02:002011-06-08T08:57:11.685+02:00Just a practical point about bitcoins: Transaction...Just a practical point about bitcoins: Transactions are really slow (it can take hours) if one does not pay a fee.<br />In order to get transactions done within minutes one needs to set fees to 0.01 BTC or higher.<br />At the current exchange rate this is equivalent to 16 US cents.<br />Not really a good starting point for a micropayment system imho.<br /><br />Also, one warning: We do not know how tax authorities treat the conversion from bitcoins to e.g. US$ (with traditional currencies conversion from one currency to the other is not a taxable income event) and some people who trade on bitcoin exchanges could have some explaining to do.<br /><br />And one last point: BTC mining is not profitable unless somebody else pays for the electricity and hardware bill(s). Thus I predict that bitcoins will mostly be minted by those who control botnets - the first currency mostly coined by crooks and thieves.<br /><br />The major use for bitcoins right now seems to be 1) speculative trading and 2) purchase of illegal drugs and since nobody enforces any transaction agreements (as Jacques explained) there will soon be a flood of bitcoins scams etc.<br /><br />So I predict that somebody will have to invent a better mousetrap 8-)wolfganghttp://wbmh.blogspot.com/2011/06/i-am-now-in-bitcoin-mining-business.htmlnoreply@blogger.comtag:blogger.com,1999:blog-8883034.post-56778927615588718392011-06-07T04:27:30.105+02:002011-06-07T04:27:30.105+02:00"In my understanding one central idea of bitc...<i>"In my understanding one central idea of bitcoin is to use cryptography to eliminate fraudulent/disputed transactions."</i><br /><br />It does absolutely <strong>nothing</strong> of the kind. To the contrary, it says you are completely on your own, in dealing with such matters. If you pay a merchant in bitcoin, and he fails to deliver the desired merchandise? <em>Tough luck</em>, you're on your own. If you laptop is stolen, or if a computer virus steals the bitcoins stored on your computer? <em>Tough luck</em>, you're on your own.<br /><br />The only thing that all that cryptography achieves is the part that is <em>absolutely trivial</em> on a centralized system: securely transferring an amount X from the account of party A to the account of party B.<br /><br /><i>"Paypal does not have a lot of cheaper competition as with a centralized system where all funds are routed through a central entity you want the central entity to be so rich/strong that it can buffer all this traffic..."</i><br /><br />Any such system could (and surely would) start small, and grow larger as it gains acceptance. In any case, as I said, the expensive part of the operation is not provisioning the network of servers.<br /><br />And, as should be obvious, there are plenty of existing financial institutions (banks, credit card companies, ...) with the required infrastructure already in place. The only reason they don't get int the business of undercutting Paypal is that there's no money in it. (In fact, I suspect that the only reason Paypal is still in business is that its owner, eBay, finds it a necessary and useful adjunct to its main line of business.)<br /><br /><i>" and has no incentive to at some point in time just take the money and run."</i><br /><br />That's your worry?? That the service would abscond with all the users' money? Since that would result in civil and/or criminal proceedings, I think that scenario is pretty low down on the list of things to worry about.<br /><br /><i>"They can do without the central entity that would need to be of a size of the order of the whole market."</i><br /><br />Nonsense. Bitcoin cannot possibly scale up <em>even</em> to the size of Paypal, let alone the banks and credit-card clearing houses, which handle <em>several orders of magnitude</em> more transactions than Paypal.<br /><br />The decentralized nature of bitcoin is an ideological choice, not the result of any technical superiority.<br /><br /><i>"I don't care if you call it a 'currentcy' (that's probably a misnomer). What I think it is interesting for is that it establishes a commodity ..."</i><br /><br />No. "Currency" is the right name. "Commodities" are things that have some intrinsic value in and of themselves. "Currencies" are valuable only to the extent that they can be exchanged for goods and services (that <em>are</em> of intrinsic value).Jacques Distlerhttp://golem.ph.utexas.edu/~distler/blog/noreply@blogger.comtag:blogger.com,1999:blog-8883034.post-14824058359724614092011-06-05T09:35:18.239+02:002011-06-05T09:35:18.239+02:00I tend to disagree here: In my understanding one c...I tend to disagree here: In my understanding one central idea of bitcoin is to use cryptography to eliminate fraudulent/disputed transactions. And that was what my post was about, how this is supposed to work.<br /><br />Paypal does not have a lot of cheaper competition as with a centralized system where all funds are routed through a central entity you want the central entity to be so rich/strong that it can buffer all this traffic and has no incentive to at some point in time just take the money and run. So setting up a global, centralized money transfer system is not something a small start-up can handle IMHO not even a single although big bank. <br /><br />And this is the second point (besides taking algorithmic measures to stop fraud) where bitcoin differs: They can do without the central entity that would need to be of a size of the order of the whole market. Thus it has a chance to grow without being established full size at day one.<br /><br />I don't care if you call it a 'currentcy' (that's probably a misnomer). What I think it is interesting for is that it establishes a commodity that can be transferred electronically and which hopefully is stable enough that people are willing to assign a real value to it (i.e. that people are willing to give me real money or even better real goods in exchange).<br /><br />[I had initially posted this reply while my wife was still logged in to google, so it appeared under her name]Roberthttps://www.blogger.com/profile/06634377111195468947noreply@blogger.comtag:blogger.com,1999:blog-8883034.post-72965265624984866502011-06-05T09:32:08.764+02:002011-06-05T09:32:08.764+02:00This comment has been removed by a blog administrator.Anonymoushttps://www.blogger.com/profile/18037772473662474189noreply@blogger.comtag:blogger.com,1999:blog-8883034.post-54737810727794913992011-06-05T02:17:17.244+02:002011-06-05T02:17:17.244+02:00"[T]he internet is still lacking a reliable, ...<i>"[T]he internet is still lacking a reliable, small friction system to transfer small amounts of money. ... Paypal has too high transaction costs ..."</i><br /><br />For that, you don't need to invent a whole new electronic currency; what you need is a cheaper version of Paypal.<br /><br />So ... why doesn't Paypal have more, cheaper, competition?<br /><br />One reason is that it's expensive to deal with fraudulent/disputed transactions. And if you haven't established a good reputation for dealing with such, nobody is going to want to use your service.<br /><br />Bitcoin ignores the hard part of online monetary transactions, while triumphantly solving the easy part (enabling party A to transfer funds to party B).Jacques Distlerhttp://golem.ph.utexas.edu/~distler/blog/noreply@blogger.comtag:blogger.com,1999:blog-8883034.post-63305929013384007762011-06-04T07:37:47.820+02:002011-06-04T07:37:47.820+02:00Jacques,
of course you are right that the idea th...Jacques,<br /><br />of course you are right that the idea that basically everybody must have a record of each transaction does not scale at all. Still, in the paper linked, they claim that the amount of storage needed can still handled. <br /><br />I have to admit I had to google "Rand Paul" not being to familiar with US political figures. <br /><br />It is also totally true that if it worked, the bitcoin system opens a possibility for all sorts of money laundering, tax evasion and threatens the applicability of monetary policy. In addition, it is not clear if at this point the current value shows signs of a fast growing bubble that makes it in effect a Ponzi scheme paying out to early adopters.<br /><br />Still, I was interested in it so so much as a real currency with substancial volume to be any sort of threat to the real economy but more because I believe that the internet is still lacking a reliable, small friction system to transfer small amounts of money. Something that everybody can use both as sender and recipient. The currently existing ways do not fulfill this requirement: Sending cheques has far too much overhead and is too slow, online bank transfer works reasonably well only in the Euro region and is too much of a hassle for small amount, Paypal has too high transaction costs and there is always the threat that you cannot get your money out and credit cards do not work both ways (plus transaction costs). Here in Germany, <a href="flattr.com" rel="nofollow">flattr</a> is becoming popular but has its own restrictions being designed for a different purpose.Roberthttps://www.blogger.com/profile/06634377111195468947noreply@blogger.comtag:blogger.com,1999:blog-8883034.post-38008168205453101912011-06-03T18:05:17.826+02:002011-06-03T18:05:17.826+02:00"But what happens if two people claim they ow..."<i>But what happens if two people claim they own the same coin, how can we resolve this conflict? This is done via a public time-line that is kept collaboratively between all participants. Once you receive a coin you want to be able to prove later that you already owned it at a specific time (in particular at the time when somebody else claims he received it).</i>"<br /><br /><strong>Obviously</strong>, that doesn't scale.<br /><br />"<i>There are some finer points like ... how new coins can be created (again with a lot CPU work)</i>"<br /><br />Another thing which is completely wrong-headed, and is only explicable when you read the Rand Paul-ish nonsense, spouted by its proponents, vis-a-vis monetary policy and "conventional" currencies.Jacques Distlerhttp://golem.ph.utexas.edu/~distler/blog/noreply@blogger.com