I'm reminded of: https://twitter.com/patio11/status/583696870704152576
> No, seriously, the decentralized nobody-needs-to-trust-anybody payments network was shut down by an IRC channel's consensus* for 8 hrs.*
It wasn't "shut down" in any sense of the word, the network kept working (in duplicate, no less). It was the decision of two pool owners with extraordinary hashrates to sacrifice their chain (which was actually the "correct" one as far as intentions go), rather than the core developers. Nobody has some magic key to shut down the network (though originally, Satoshi's alert key did enable a "safe mode", this is long gone)
> Bitcoin is not a protocol in any meaningful sense of word. It is a single C++ codebase that you have to be bug-for-bug compatible with.
That's the reality of distributed consensus. Matching it bug for bug is completely foolhardy (and many have failed at the task), you should be just linking in the consensus library which is currently being broken out of the bitcoin core source.
> Most advantages of Bitcoin which matter are captured by, and improved upon by, a LAMP app which simply holds account balances.
Except for the key one, that a LAMP setup running on a shared host isn't a distributed consensus. You could replace your car with a hamster wheel and it would still go round and round, but it's missing the core function of getting you to work.
> Bitcoin presently costs on the order of $6.5k per megabyte of data added to the block chain.
Which is why signatures are made with ECDSA, a very compact signature system compared with lamport or RSA. You don't want to be storing data in the block chain, and it's never been posited to be good for this (quite the opposite).
> Time between Bitcoin blocks is not guaranteed (follows a Poisson distribution). Sometimes all pending transactions just stop for a while
This isn't at all surprising, if they were regular then Bitcoin wouldn't be a functioning distributed consensus. You can get near instant, low trust "confirmations" by using a multisignature oracle which promises not to sign double spends. There's at least one company doing this at the moment, though it hasn't seen huge adoption.
For example, on the first point:
this is akin to saying the bit torrent foundation closed down bit torrent! waah!
it's impossible
once they released the reference implementation, it was out of their hands
this is the beauty of open sourced and decentralised technology, once it's out there it's difficult to control
the analogy would be Linus going batshit mad and deciding to include binary blob drivers provided by the NSA in the kernel mainline, fine - nobody will use it, business continues as usual using a fork before that and he becomes irrelevant
The network can enter a state where people that are familiar with it decide to tell people to not use it until it is fixed, and that did happen.
The incident begins at 22:11. If you don't trust my summary of it, and you consider yourself very, very well-briefed on what Bitcoin is doing under the hood and who the players are in the Bitcoin community, just read the next ~12 hours of logs. It's absolutely riveting.
My summary:
The Bitcoin protocol doesn't exist. The only protocol which matters is the actual behavior of the Bitcoin Core client -- the one originally coded by Satoshi, which forms a supermajority of the network. Bitcoin Core released version 0.8 on or about March 11, 2013. This differed from Bitcoin Core 0.7 in at least one respect, which was that 0.7 used Berkeley DB and 0.8 did not.
BDB has a configuration issue, specifying the maximum number of locks it can use at once. If you attempt to use more, it returns an error.
Here's one reason I say the Bitcoin Protocol doesn't exist: No sane person says "An important feature of the Bitcoin Protocol is that conforming clients MUST REJECT any Bitcoin transaction which would exhaust the default number of locks available to the Berkeley DB."
Someone submitted a Bitcoin transaction which did, in fact, exhaust the number of locks available to the Berkeley DB. It was conformant with all the rules that Bitcoiners believe transactions have to be conformant with except that bit about the lock limit in the Berkeley DB. This transaction was accepted by a miner running the 0.8 software.
Let's, for convenience, call the blockchain as it existed prior to that block being mined Blockchain B. The blockchain with that block in it is B'.
Bitcoin Core 0.7 rejected the authenticity of B'. Accordingly, when 0.8 nodes said "I have a new block to publish! It checks out and builds off of the-present-head-of-B'", 0.7 nodes said "I don't know what that nonsense you're spouting is, but it sure isn't Bitcoin." Bitcoin Core 0.7 nodes and miners continued talking amongst themselves and building B up.
Bitcoin Core 0.8 nodes accept the authenticity of B' and all blocks chained on top of it. If you presented them with a block chained off of the head of B, they would say "Oops, sorry, sucks to be you -- someone already has a longer chain. You've created a blockchain, but by the writ of Satoshi, we only do business with the longest compliant blockchain, which is B'."
This is called a network split. And it is, in laymen's terms, utterly cataclysmic.
Here's why: Suppose Mt. Gox runs on 0.7 and Coinbase runs on 0.8. I can create a transaction which spends some output(s) $COIN and have it accepted into a B' block. Perhaps that transaction deposits my $COIN into Coinbase. Since that transaction doesn't exist on B, I can then deposit the same $COIN into Mt. Gox. Both Mt. Gox and Coinbase believe themselves to be in possession of the same Bitcoin.
And both of them are right.
Which is why after that channel figures out what is happening that engineering gets real. After discussions between several core developers they ascertain that the Bitcoin mining cabal behind B' is small enough to get, well, both of them on Skype and convince them to throw away hours of history on B' (which is, again, built off the new-and-improved bug free version of Bitcoin) and instead start building off of B instead. Their history must die so that Bitcoin can live.
This plan is executed. It works.
Read the chat transcript if you don't understand this: Bitcoin was virtually unusable during the interim -- most of the merchants people cared about turned off transactions entirely because they were, sensibly, scared shitless. Several hours of transactional history got wiped out. One security researcher successfully executed a ~$10,000 double spend attack against a merchant -- he gave the money back afterwards.
Now, you tell me: how do you rate my credibility here versus your friend? My assessment of this event is "Bitcoin has an identifiable governance structure. You can fit them into an IRC channel +/- a few Skype sessions. They can independently decide to change the rules of the 'Bitcoin protocol' a) at will b) retroactively. I cannot reconcile this with claims that Bitcoin is 'does not require trust' or is 'decentralized.'"
You really need to get up to speed with the event before commenting on it, there's a very good writeup in the form of BIP50.
https://github.com/bitcoin/bips/blob/master/bip-0050.mediawi...
The issue has nothing to do with a particular transaction or block, it was going to fail anyway and just happened to be triggered by a large block. The oversight meant that all 0.7 clients were inconsistent with one another depending on the history of the node and how long it had been operating.
> No sane person says "An important feature of the Bitcoin Protocol is that conforming clients MUST REJECT any Bitcoin transaction which would exhaust the default number of locks available to the Berkeley DB."
Nobody did say that, the failure was implicit not explicit.
> Several hours of transactional history got wiped out.
No it didn't, it was replaced with a slightly different history, or history remained the same, depending on which side and which client you happened to be running at the time.
This is precisely what he just said. A valid blockchain being replaced by fiat (heh) is certainly a destruction of transaction history, whether that happened to everyone using Bitcoin or just a subset of people using Bitcoin.
Isn't everyone sufficiently aware by now that there have been bad bugs and fraud?
Wouldn't it be more interesting to discuss what needs to be improved?
Or is your point that distributed currency can not possibly work? (that would also be a more interesting debate)
There is no debate, distributed currency does work. I have been using it on and off for four years. Bitcoin works the same at 1 dollar as it does as 1000. Using the currency as a store of value, however, is another matter.
But can you imagine a possibility of building a system where the db that each person holds is not berkeley db or whatever but just plaintext and then writing your own functions to traverse the same.
I'll admit I do not understand the bitcoin core at all because I never invested time yet to read it. But I completely understand the blockchain algorithm and can write a cryptocurrency without even caring about what bitcoin did.
All I am asking you is do you believe that such a system can be built? Or do you believe that the current developers are intelligent enough that if they couldn't do it you can't do it either?
If you're basing your system on "oh we'll just make the software bug-free!", you have already lost.
Aren't these floating variables, not booleans? "Level of decentralization" vs. "how much does it require trust". I would argue that the level of decentralization and trustlestness is better on bitcoin than fiat payment systems.
So what has happened subsequently ?
Was everybody encouraged now to upgrade to the 0.8 client across the board? Otherwise the same thing could occur again, deliberately or not, couldn't it?
Should it happen again you could fix it by either forcing everyone to quickly upgrade (and losing the transactions that occurred on the old main chain post-fork) or by doing what happened here (holding back or downgrading the upgraded clients until the old main chain was the longest chain again, and losing the transactions that had occurred on the new chain post-fork).
What will be even more interesting is what happens if we actually ever get multiple compatible implementations of Bitcoin. As patio11 hinted at, if those implementations are not all "bug for bug" compatible then type of thing could recur over and over again.
So we're left with the choice of remaining with a single reference implementation to reduce (but not eliminate) the risk of introducing partitions due to slight incompatibilities between Bitcoin clients, or to encourage multiple implementations of Bitcoin to reduce the dependency of an entire "decentralized" economy on a centralized reference code base.
Maybe a take away point from all this is that even if you are doing just a 20K transaction you should still wait 24+ hours to make sure a bug of this nature isn't occurring.
https://blog.ethereum.org/2015/04/02/implementing-vitaliks-v...
Right, but in an attack scenario, Bitcoin can continue and survive without that governing structure. It can fall back entirely on its trustless protocol.
Your analysis does not appreciate the significance of this.
Insofar as this or future versions of Bitcoin might still have critical bugs that require social consensus to fix, then yes, Bitcoin is not guaranteed to be totally independent of the type of ad hoc centralized governing structure that emerges in IRC channels and Skype chats. But a bug is a failure of implementation, not the concept. Bitcoin, the concept, is sound, and is a major breakthrough that is not appreciated by OP's analysis.
Sigh. Your post was a great up until the very end.
Bitcoin developers can't push any rules on anybody. They haven't the power.
A majority of bitcoin hashpower can enforce a strictly stronger set of validation rules, as indeed happened here. Is it a problem that a very small number of individuals represent policy for >50% of the bitcoin hash rate? Yes. Is this intrinsic to the nature of bitcoin? No. And it's something that people are working to fix.
Can a majority of hashpower arbitrarily rewrite history? Yes, but only with a very real opportunity cost to themselves. And that is the rules of bitcoin since the beginning -- although in reality people would probably choose to reject a long reorg. Some level of human intervention is a good thing.
So it is a Protocol but still really young and immature in some senses, but it doesn't mean anything else, it is evolving almost everyday.
They could have just as well, seeing as they had the longer chain, decided to continue working on that chain, but they voluntarily decided otherwise. In the process, validating the inbuilt incentives of bitcoin.
The decision therefore wasn't "independent", but reached by consensus and further supported by everyone else. Had there been some disagreement, for example if what the devs were proposing was not seen by the two "powerful individuals" as being in their best interest, then matters could have developed far differently.
So, what exactly requires trust in all of this?
https://bitcointalk.org/index.php?topic=152030.0
If you're a merchant: please stop processing transactions until the chains converge.
So there is room to argue about how patio11 phrased that, but it seems fair enough to say that advice from the insiders was to stop using it for a while (and given that the fork was resolved in keeping with the results of the discussion, I think it is fair to say that there really are insiders).
Saying not to use the network has pretty much all the same problems as making it unavailable (and the additional problem that it is confusing for the bad state to be available but not recommended for use).
>"..Most advantages of Bitcoin which matter are captured by, and improved upon by, a LAMP app which simply holds account balances."
The blockchain is a ledger fine. But mining & proof of-work are separate concepts from the ledger. Mining is not only digging gold for distribution but also checking that the money note you just received is 'not counterfeit' + 'unique'.
> "Bitcoin is not a protocol in any meaningful sense of word.."
Bitcoin isn't but blockchain is. It is an algorithm that enables value transfer over any medium of transmission. Similar to how morse code enabled data transfer where only signal was being transferred. Similarly, internet enabled information transfer where only data was being transferred. Blockchain is the 8th layer of the OSI model.
>"..Bitcoin's disaster recovery plan is a) get a cabal of people together in IRC, b) shut down the entire payment network, c) sort things."
Forget bitcoin. Its like looking at the internet and finding faults in hotmail as the first email service.
> "A good portion of geek enthusiasm for Bitcoins comes from the fact that it is programmable money. But: Money is also programmable money."
No. Forget money. Blockchain is the thing. Its like saying internet is all about email. Internet enables information transfer, now what is information-transfer in plain english? A letter. Hence messaging is the first natural application of internet. Blockchain enables value-transfer, what is that in plain english? Money.
A lot of times if your tone is unintentionally off you'll get a few initial downvotes but other people will see your intentions and bring you up out of the grey, which is what happened here. You're continuing to get downvoted on other comments because they're contributing to a discussion nobody wants to see, the discussion about the discussion. It's best to just stick to the topic, and treat downvotes and the score in general as the ultimately meaningless internet points that they are. HN prizes the generally high signal-to-noise ratio of the comments.
Also Bitcoin is a political topic, one that will draw lots of people who will downvote you just because they don't agree with you.
There's some truly transformative tech at the core of Bitcoin, which is why it's been as successful as it has been (and will be) as a technology. On the other hand, there really is a contingent of supporters that primarily has a profit motive.
I've come to see it like politics. People pick a side and then become extreme about it, to no one's real benefit.
People are weird about money, in several directions at once. Bitcoin is money. Therefore people are weird about Bitcoin.
That's my theory, anyway.
Which the HN community helpfully confirms by downvoting your perfectly reasonable comment.
I think Bitcoin tickles a rather deep-rooted fear in many people.
Money is fundamental to everyone's existence and has always been exclusively issued and controlled by "the authority". Seeing a completely different system appear out of nowhere, and seeing it actually work (on a small scale), triggers a strong enough anxiety-reflex in enough people for every debate about Bitcoin to immediately derail into discussing BTC as if its definite purpose was to replace "real money", starting tomorrow, completely and entirely, and to devalue my pension fund in the process.
When enthusiastic bitcoin supporters parade around this kind of nonsense while simultaneously heaping on volumes of nebulous praise like "transformative", "revolutionary", "world-changing", likening bitcoin to the early internet, claiming it will stop wars, stop corruption, free the people and all the rest, it really puts up red flags for a lot of people.
Then how would you explain this irrational aggression in every Bitcoin thread?
As a case in point, why were you so eager to follow up with a strawman of your own:
heaping on volumes of nebulous praise like "transformative", "revolutionary", "world-changing", likening bitcoin to the early internet, claiming it will stop wars, stop corruption, free the people and all the rest
Neither waterlesscloud nor me wrote or implied anything like that.
Why do you attack something stupid that someone else once said about Bitcoin, rather than presenting an actual argument versus my "intellectually insulting" idea that Bitcoin might touch on some mammalian "fear of change", or against any of waterlesscloud's observations?
I don't consider downvotes aggression. I don't consider skepticism or even a general dislike of bitcoin to be aggression either. As far as the the discussion goes, bitcoin discourse is no more aggressive than any other technical topic on this forum.
> Neither waterlesscloud nor me wrote or implied anything like that.
A direct quote from waterlesscloud: >There's some truly transformative tech at the core of Bitcoin.
waterlesscloud is only one example: ctr+f "revolutionary" or "early internet" in this thread for others. It's not a strawman because I'm not making an argument, I'm giving you examples of enthusiast rhetoric that turns people off; it's not "something stupid that someone else once said", it's a category of condescending platitudes commonly laid out by bitcoin enthusiasts.
> presenting an actual argument versus my "intellectually insulting" idea that Bitcoin might touch on some mammalian "fear of change"
My point is that painting bitcoin skeptics as irrational people who can't help but lash out due to a subconscious fear of what bitcoin might mean for world economics is insulting and also subtly pushes the narrative that bitcoin is such a clearly amazing technology that it would be reasonable to ascribe fear of bitcoin's success as a motivator for negative reactions to bitcoin. It's absurd.
Calling the blockchain technology transformative doesn't put him in a bucket with people claiming "it will stop wars, stop corruption, free the people".
Even if you disagree with that assertion, his comment was about the discussion culture surrounding bitcoin and certainly didn't deserve any downvotes. (the irony of seeing this particular comment grayed out was what triggered mine after all...)
My point is that painting bitcoin skeptics as irrational people
What's with the generalizations?
I wrote "many people" and not "bitcoin skeptics".
I was referring to people who can't be bitcoin skeptics by the sheer virtue of not knowing enough about it to form a coherent argument against it. People who seem to never get tired of regurgitating the ever same tulip bulb and "criminals" trites at every opportunity. People who downvote completely innocent comments like the one from waterlesscloud and make any normal discussion about the subject needlessly hard.
Bitcoin skeptics are most welcome (I consider myself one), but you rarely see someone who actually knows a thing about Bitcoin (e.g. 0xFEED) bother posting in amidst the shitstorm anymore.
1. Resist complaining about downvotes. It makes boring reading (and hence gets downvoted). This is literally one of the guidelines.
2. If you find yourself saying "Downvoted because I <position in an argument>, really?", the answer is always, no, downvoted because you expressed <position in an argument> in a non-constructive manner that nobody wanted to read. If you had expressed <opposite position> in the same way, you'd have been downvoted too. This might be that you were overly aggressive, this might be that you were insufficiently clear in making your point, this might be because both <position> and <opposite position> are dead horses, etc.
But the answer is always no.
Being able to check that a ledger is accurate is a feature. It can be captured by a PHP app which uses MySQL transactions. This is, in fact, the most popular way to ensure ledger integrity even in the Bitcoin community (on exchanges, where transactions happen "off chain" because Bitcoin is wholly unsuitable for processing the type of transaction that mosts interests the Bitcoin community).
The cost of verifying transactional integrity with MySQL transactions is, generally speaking, less than $900,000 per day, which is the present cost of verifying transactional integrity on the Bitcoin blockchain.
I will respectfully decline to respond to the rest of your comment as it includes no statements which can be true or untrue about Bitcoin as a technical artifact.
I'll try to explain. The banks have a ledger of all the notes in circulation maintaining a record of the number printed on the note. Now when I give you a note, and its fake, you can figure it out by checking the unique factors. But lets say that my 3D printer is advnced and printed it so accurate that it is same as a real dollar. Now the way to catch this note would be to check if the number on this note also exists on some other note. So basically proof-of-work is you checking for unique factors(not counterfeit) and then somehow check all the notes in the world that none of them have the same number(unique). Both of these are in addition to the use of mining as a way of distribution of wealth.
Could you just reply to why you don't consider the blockchain to be an algorithm?
Also, I mostly meant that you are paying too much attention to what the media is throwing at us, in the form of bitcoin and exchanges. As a thinker, forget bitcoin and its code and just think about blockchain. Saying that blockchain enables value transfer and must be considered as the 8th layer of OSI model is technical artifact.
I find this part of the conversation to be uninteresting, primarily because it attempts to make a distinction between "Bitcoin" and "the blockchain" (despite the fact that the Bitcoin consensus blockchain as annointed by the Bitcoin Core client at this moment in time is the only one of the infinite number of possible blockchains which is cared about) but can't make a distinction between "algorithm" and "protocol". This leaves me in a position where I say "Some people call IE6 a protocol. While one could rigorously examine the entire possible space of inputs and outputs associated with IE6 and attempt to describe some set-of-rules which would resemble a protocol, this is not what we mean when we say 'protocol' and it is, importantly, not the source of the benefits which IE6 fans say when they claim that IE6 is a protocol."
To which "Why don't you think IE6 is an algorithm?" is rather non-responsive. (IE6 is, vacuously, an algorithm. Whee.)
Saying that blockchain enables value transfer and must be considered as the 8th layer of OSI model is technical artifact.
I find it difficult to extract any signal about the reality which I live in from this statement. When I say "technical artifact" I usually want to imply something about the reality I live in. For example, calc.exe is a technical artifact: it actually exists, on yonder computer, and I can right now walk over to it and calculate 6+5 with a reasonable degree of confidence that this will enlighten me. I would also say the HTTP specs are a technical artifact: I, or anybody with modest technical capability, can read the specs, open up telnet, fire it at www.google.com on port 80, and then type in a predictable series of letters which results in search results presented in the middle of a lot of HTML.
I do not know of any comparable fashion in which "the blockchain" actually exists as distinct from "the data structure embedded in the much-more-complicated series of operations that is Bitcoin Core."
That is not correct. Bitcoin is by far the largest, but people also have non-trivial amounts in various alt-coins: http://coinmarketcap.com/
In terms of your Browser-analogy: Next to IE6 (Bitcoin) we also have Safari (Ripple), Firefox (Litecoin) and whole range of smaller players.
They all speak dialects of the blockchain protocol.
It feels as if your real problem is that I am not using technical jargons :)
I understand the meaning of 'protocol' vs 'algorithm' but this is a special case where the protocol is also the algorithm. Suppose you invented making tea and wrote down the recipe for doing so. This constitutes an algorithm for making tea for people who don't care how the ingredients came about, but this can also be called a protocol for making tea involving many algorithms like sugar-making etc.
If you'd say that tea making is strictly an algo and not a protocol then I'd simply agree with you to use that term and move on since whats happening here is more important to me than the technical jargons.
It is, instead, led and managed by an entity indistinguishable in form if not in intellect from every other governmental federal reserve.
This entity responds, 100% correctly for the health of the currency, by issuing fiat mandates, just like the US government did when, e.g., real-world counterfeiters came up with supernotes and began flooding the world with fake $20 bills, mandating a switch to new notes.
Although this behavior is correct, it does conclusively prove that the emperor has no clothes, and that bitcoin is a ponzi scheme run for the benefit of the early BTC holders.
> "..Bitcoin's disaster recovery plan is a) get a cabal of people together in IRC, b) shut down the entire payment network, c) sort things."
So say somebody finds a bug in the implementation that lets you do bad things like transfer everyone's balance to an attacker's account...what's the back up plan? Is there an equivalent with US dollars where such a thing could happen that has a back up plan?
Putting myself in the shoes of Bitcoin's developers, I can't feel all but terrified that a simple buffer overflow or something similar could wipe out an entire currency. Or is there something I'm not understanding?
A digitally-signed email enables value-transfer too. Depending on your risk profile you could even go for an authenticated TLS connection that just does a RESTful style POST to enable value-transfer.
Value-transfer is not unique to a blockchain, or to Bitcoin's blockchain in particular, any more so than bubble sort is the only possible implementation of a sorting algorithm.
CS majors know to avoid bubble sort because it is so inefficient, yet many refuse to apply the same lesson to POW-based systems like Bitcoin.
An algorithm is not a protocol.
A protocol is something that two people can independently implement and expect to be interoperable. Morse code is a protocol (in addition to an algorithm): you can read the Wikipedia article on Morse code, I can go to the library and read a book on Morse code, and we can reliably communicate.
It is impossible to independently implement Bitcoin and reliably interoperate with the standard C++ implementation of Bitcoin at reliability levels sufficient for financial applications (as the 2013 BDB fork, between two versions of the standard C++ implementation, demonstrated).
It might be possible to define a blockchain-based protocol that does not have this fault, precisely because blockchain is not a protocol, but is (as you say) an algorithm. To my knowledge, nobody has done so, and Bitcoin has certainly not done so.
Why this is important is a different discussion. And yes, perhaps this will be fixed with the second generation of cryptocurrencies, past Bitcoin and its forks/variants, which you seem to favor doing to fix things. But I don't see why that makes patio11's claims wrong, since he was specifically addressing Bitcoin, not any blockchain-based system, or cryptocurrencies in general.
This is the real challenge to us crypto believers. Its hard but definitely not impossible(as demonstrated by the worth ofbitcoin today). Working on it.
Because that's the question you posed.
I don't quite get this one. How is money also programmable money? Does he mean USD, USD as claimed by paypal, USD as claimed by venmo?
One of the reasons I am excited about bitcoin is that for the first time there is decent infastructure for machine to machine payments that can withstand any one buisness failing.
Yes to all of those. Computers have been absolutely intertwined with finance and money for decades, so much so that it's become almost invisible to people. But just because it's so invisible you don't notice it doesn't mean that major economies haven't already been using "programmable money".
> machine to machine payments that can withstand any one buisness failing.
Business fail all the time, including business involved in payment processing with existing national currencies. That hasn't stopped machine-to-machine payments.
On the other hand Bitcoin has suffered payment stops in its history, which Patrick mentions in the linked tweetstorm.
> If you don't believe me or don't get it, I don't have time to try to convince you, sorry. - Satoshi Nakamoto
Either way, this post is about the Bitcoin foundation, not whether bitcoin itself has merit. I feel that this discussion has turned more into a technical tit for tat of bitcoin.
Afterwards, the democrats and republicans changed the debate rules to ensure they wouldn't be hit like that again, so they sure took it seriously.
Perhaps he meant to say Nader?
That's not a significant number. 19% might seem like a lot, but he didn't pick up a single state. If he had, then he might have been a serious contender. A serious contender is someone who "has a serious chance of winning". Ross Perot never had a chance of winning, and thus, was never a serious contender. He got closer than most to being a serious contender, but still didn't cross that line. He was projected to lose by double digits by literally every pollster and odds maker.
https://twitter.com/patio11/status/583696870704152576 1/I follow Bitcoin like some people follow Nascar crashes. Some quick thoughts in tweetstorm format:
https://twitter.com/patio11/status/583697092306014208 2/ It is an open secret in the Bitcoin community that merchants who adopt it see virtually no meaningful transaction volume.
https://twitter.com/patio11/status/583697371378257920 3/ Western Union spends roughly 1/2 of revenue on local offices by both ends of the transactions. Bitcoin remittances don't solve this.
https://twitter.com/patio11/status/583697585719746560 4/ Bitcoin presently costs on the order of $6.5k per megabyte of data added to the block chain.
https://twitter.com/patio11/status/583697812438691841 5/ The entire market cap of Bitcoin as of 4/1/2015 is a fee paid to someone for work already done between 2009 and 4/1/2015.
https://twitter.com/patio11/status/583698553614143488 6/ Most advantages of Bitcoin which matter are captured by, and improved upon by, a LAMP app which simply holds account balances.
https://twitter.com/patio11/status/583699554563784704 7/ Bitcoin's Internet cheering squad is a spontaneously organized boiler room. This is Bitcoin's #1 engineering and marketing achievement.
https://twitter.com/patio11/status/583699782624911361 8/ The cheering squad improves upon techniques used to make Ross Perot and Rand Paul seem like serious contenders for the US presidency.
https://twitter.com/patio11/status/583700634764910592 9/ Bitcoin is not a protocol in any meaningful sense of word. It is a single C++ codebase that you have to be bug-for-bug compatible with.
https://twitter.com/patio11/status/583701008754147329 10/ Bitcoin's disaster recovery plan is a) get a cabal of people together in IRC, b) shut down the entire payment network, c) sort things.
https://twitter.com/patio11/status/583701441866371073 11/ No, seriously, the decentralized nobody-needs-to-trust-anybody payments network was shut down by an IRC channel's consensus for 8 hrs.
https://twitter.com/patio11/status/583702513469104128 12/ Time between Bitcoin blocks is not guaranteed (follows a Poisson distribution). Sometimes all pending transactions just stop for a while
https://twitter.com/patio11/status/583702865098604544 13/ The media following Bitcoin, both enthusiast press and tech rags, are so incompetent at their jobs that it beggars belief.
https://twitter.com/patio11/status/583703396231716864 14/ One example of many: a single phone call or letter in Japanese would have sufficed to verify that Mt. Gox was insolvent in summer 2013.
https://twitter.com/patio11/status/583706966553276417 15/ A good portion of geek enthusiasm for Bitcoins comes from the fact that it is programmable money. But: Money is also programmable money.
https://twitter.com/patio11/status/583707625210060800 16/ This concludes my mini-rant on Bitcoin. I have a longer, more technical rant but will do it some other time.
It would have been good to put a disclaimer in there that the rant applies only to the currency aspect of Bitcoin, and not the Bitcoin Protocol.
>> Bitcoin is not a protocol in any meaningful sense of word. It is a single C++ codebase that you have to be bug-for-bug compatible with.
I don't want to discuss what a protocol is and if Bitcoin is a real protocol or not. But it's important to notice that it's more sensible to bugs/unspecified/unexpected results than normal software.
If Chrome is not bug-compatible with IE6, you can complain, mark one of them as unsupported, make two versions of your page, peek the common denominator, ...
The same happens with MicrosoftWord and OpenOficeWrite, the different implementations of LaTeX, email support of Unicode characters, C/C++ compilers, Python/PyPy/IronPython/Jython, ...
With Bitcoin, each bug difference is a hard fork waiting to happen.
There will be those who want an easy ride. They'll wait until the problems are solved and the infrastructure is in place. But for me, the exciting time is now, because the future is still being written.
Let those who want to mock the efforts of others do so. The rest of us can roll up our sleeves and be builders of this new economy for the people.
The community seems content to talk about how long email or the internet took to become common while at the same time ignoring the fact that the internet has vastly decreased the amount of time it takes for new technologies and ideas to spread.
At what point going forward of no growth would you admit it has peaked?
I don't think you're going to get such an admission from the average, invested, Bitcoin enthusiast any time soon.
You're entirely correct in your post here. 2014 was meant to be "the" year for Bitcoin and it was an absolute flop. Nothing came from it.
There seems to be this overall naive belief of "if you build it, they will come" while "it" has no clear value to anyone beyond those who want to carry out illegal transactions.
The "why" "they" will come to it seems to be ever expanding as enthusiasts grasp in hope that someday the currency they're using as an investment instrument will see wider adoption and make them money for their patience and continued public praise of it.
Bitcoin seems to have become a matter of faith more than anything else. If you truly believe you'll go to Bitcoin heaven. Ignore those who question it as they hath no clue.
Sentiments like this are akin to people looking at the internet in the days of prodigy and saying 'I can send a letter and get sports scores from the newspaper, the internet is overhyped'
20 years later it is still a transformative force in people's lives that continues to change and evolve.
Fast enough to show progress.
>It was only in the last year that there were even multiple viable places to buy btc in the US.
Coinbase has been around since 2012, and now we've had a few choices even beyond them for over a year and they still haven't made a difference. Don't you ever wonder why Coinbase and Bitpay are so adamant about not releasing real figures for anything? Coinbase releases number of wallets which is a worthless vanity metric since you can have multiple wallets and it tells us nothing of use. Bitpay released tons of details on last Bitcoin Black Friday and this year their only statement was that its not all about the numbers. More recently they've cancelled their sponsorship of the Bitcoin Bowl early.
You're replying to a comment where I point out the problem with comparing bitcoin to the early internet by comparing it to the early internet. The difference between then and now is the level of improvement and the inability for the existing system to match the improvements of the new one. The internet is a huge improvement over sending a letter and getting sports scores. Massive, unquestionable. Bitcoin isn't a huge improvement over the traditional banking system(even for the unbanked).
There is a reason IBM, UBS, etc are building blockchain research centres and not just throwing their weight behind bitcoin itself.
What about remittances that cost already poor people enormous amounts of money?
What about the more core issue of being in charge of your own money? People in Venezuela, Argentina, Russia, China and Cyprus might have something to say for being able to choose what money they use.
What about accepting payments without relying on credit card companies and middle men like Square and Paypal?
But really when you say 'consumers don't want it', what is that based on and have you ever used bitcoin yourself? It is so simple and easy I buy everything online with it that I can and it's a breath of fresh air.
Not for me as a consumer. If I lose my card I'm covered if someone steals my details and makes a charge I'm covered. As a consumer I don't care about the business. As a business I can price in fraud easily.
>What about remittances that cost already poor people enormous amounts of money?
The expensive part of remittances isn't moving money between countries and that is the only part that bitcoin makes cheaper. The expensive part is 1) Complying with regulations(ignoring this is how most bitcoin remittance services are currently so cheap) and 2) Having people everywhere that the receiver can go and get local currency from(Bitcoin companies are currently using 3rd party services to avoid paying for this but those services aren't going to fund them forever). The other side to 2 is people saying that they can use things like local bitcoins. The issue there is with success becomes an oversupply locally of people looking to sell their bitcoins which leads to a reduced price for it which adds cost to the sender to get the receiver the same amount.
>What about accepting payments without relying on credit card companies and middle men like Square and Paypal?
This is general a pain in the ass which is why companies like Bitpay and Coinbase are so popular with almost every merchant using one or the other.
>But really when you say 'consumers don't want it', what is that based on and have you ever used bitcoin yourself? It is so simple and easy I buy everything online with it that I can and it's a breath of fresh air.
Based on the fact that it hasn't been secret now for years, has been easy for people in a few countries to buy for years and the public is still very meh about it if not aggressively opposed to it. I've used bitcoin myself quite a bit. It is easy to use to make a payment but I wouldn't say my credit cards are any more difficult. However it isn't easy in general. I have to first figure out how to securely store it, then I have to worry about having it stolen since I am at a complete loss if that happens, and I have to find a way to buy it which for me not being American is still a pretty huge pain in the ass. Once that's done and I'm made my purchase I now need to hope that the company doesn't make a mistake and lose my order or screw up in processing since I have no way easy way to make them resolve a problem.
It's unlikely that the real cost of other methods will ever be 0 (cash incurs lots of risk management, bitcoin too, other systems involve fees, etc.).
Fraud happens with Bitcoin too. If anything the Bitcoin economy suffers more from it, the only difference is that chargebacks are not as easily possible with Bitcoin.
Moreover removing chargebacks shifts the burden of fraud from businesses to consumers, who are even less equipped to handle the requirements of detecting fradulent transactions and preventing misuse of their Bitcoin wallets.
How many 47-step "Simple guides to using Bitcoin safely" guides are there on /r/bitcoin now? When Bitcoin experts have to non-ironically suggest sealing off network ports with epoxy to safely use the "Currency of the Internet" that should cause alarms to sound for everyone.
Far from being pro-consumer, Bitcoin is practically the logical conclusion of 'caveat emptor', trying to take Internet-based businesses back to the days before Upton Sinclar's "The Jungle" was published.
Luckily for us, the 2.5-or so transaction per second limit seems to guarantee we won't have to worry about any significant shift to Bitcoin even if people wanted to pay $10/tx fees...
I'll give you a guide: download a wallet, choose a password, backup your wallet file. Then don't epoxy any ethernet ports since that is ridiculous.
And work on transaction scaling is far ahead of its need as the current block size is not a hindrance at the current transaction rate, although maybe you actually know that already.
Note that this isn't a guide on how to use Bitcoin securely. The guide itself admits right up-front that this is the "20% effort for 80% security" guide, or in other words they have to leave some more advanced stuff out that is still required for security, even if it doesn't represent a large amount of marginal risk.
(P.S. epoxying your ports was mentioned, un-ironically, in an upvoted post in that same thread).
Among the things that a mere mortal has to contend with to use Bitcoin securely (assuming they get the other 20% of what they need to know elsewhere, of course):
* "Unplugging their Internet" to generate a safe wallet password.
* Ensuring their computer is completely secure as well (as pointed out in the section on choosing a software wallet, "They are among the best place to store your money safely (provided your computer is secure as well)").
* Deterministic wallets and other wallets.
* The need to take extra steps to backup wallets if using BitcoinQT
* How to spend money if you're not actually keeping your computer seat warm with mobile/online wallets, with the caveat that you can't actually store any more money in such wallets than "you're prepared to lose".
-- They also point out blockchain.info here for use as online wallets, even though blockchain.info is notoriously insecure compared to other alternatives.
* "Don’t use your online wallets from unsafe computers", which is practically as useless as advice goes as saying "Always carefully read and understand all prompts that a webpage or software program displays before clicking on any buttons, even if closing the prompt is required to proceed to your actual task".
* Advice for cold storage: 'set one up easily by buying an old laptop, reformatting it, installing Linux and a Bitcoin client'. Anyone else remember that time you couldn't safely save USD without buying an old laptop and installing an OS for experts?
> And work on transaction scaling is far ahead of its need as the current block size is not a hindrance at the current transaction rate, although maybe you actually know that already.
Indeed, Bitcoin is in no danger of approaching its practical transaction limits anytime soon given current Bitcoin use growth....
Still not sure how Bitcoin even remotely solves this. If someone steals my wallet and racks up a bill on my credit card there are legal recourses and ways to get my money back. If someone compromises my bitcoin wallet and empties it there is _absolutely no recourse_. Saying I should have protected it better is no better than saying I shouldn't have been mugged and had my wallet taken. In one case I have a chance at recovering funds, in the other I don't.
> What about remittances that cost already poor people enormous amounts of money?
I'm not sure a highly volatile currency that currently requires an expert knowledge of the internet and computing and is only a valid form of payment in a handful of incredibly affluent tech focussed markets solves this in any way.
> What about the more core issue of being in charge of your own money? People in Venezuela, Argentina, Russia, China and Cyprus might have something to say for being able to choose what money they use.
This has been discussed in what's currently the top comment, but Bitcoin is notably less democratic than a large number of government backed currencies. I can vote for a president who will put people in charge of the Fed who share my economic interests, and I think there's reason to trust that process more than an anonymous group of developers and middlemen who are attempting to make the entire process less painful.
> What about accepting payments without relying on credit card companies and middle men like Square and Paypal?
Excluding investing huge capital in hiring a group of developers (whom you are relying on) to develop a solution for you, you're trading that for relying on less proven companies like coinbase, bitpay, coin, etc. Philosophically it may be superior, but I'd trust my money more with Visa than any of the fraudulent bitcoin startups that have disappeared with millions in funds.
> But really when you say 'consumers don't want it', what is that based on and have you ever used bitcoin yourself?
I have used it, and it's pretty awful. I've tried explaining it to non-technical friends and family and they see no value proposition over traditional payments.
> It is so simple and easy I buy everything online with it that I can and it's a breath of fresh air.
When my options to get my paycheck to bitcoin are a) wait a week for a website I'm forced to trust to process my money or b) meet a guy in a coffee shop with a large amount of cash on me and have him transfer the bitcoin to me. I'd hardly call that a "simple" nor "easy" process, especially when the merchant then has to go through an equally difficult process to get the funds in a usable currency for things like taxes and payroll.
Bitcoin may be an interesting development in digital currency and blockchain is undoubtably a promising technology, but claiming that for most users bitcoin is more reliable, safe, and easier than traditional payments is, to be frank, laughable.