Bitcoin's and the future of online banking - Page 4

Bitcointalk.org/index.php?topic=93074

On hacker news it's number 60 ish.

Basically they used the same password that was abailable in their source code on another site lastpass.

I love the concept but in reality bitcoins is just an untraceable playground for hackers.

Some ppl had their life savings there and are completely crushed. Lot of anger in the thread and legal action being considered

Bitcoins is illegal activity its printing money out of nothing without government control. I would really doubt if the courts would hold up a debt in bitcoin

Called it multiple times on LiquidPoker, yep.

Shady as hell, wouldn't be surprised if there was a second bottom to the whole "hacking accident" and that whole stuff was a long-term scam.

baller hustle

man I wish there were some solid overviews of what the heck is going on here

apparently the bitcoinica was/is a bitcoin bank and was offering crazy interest rates to promote people holding their bitcoin balances with them?

how obv is this sick scam? was genjix the scammer? apparently he is a head honcho at this bank?

idk I have little knowledge, more info plz

ROFL WTF? So I'm reading some of these threads on the bitcoinstalk.org board.

There is apparently a guy called pirateat40 who is running a 'fund' which offers 7% per interest. Compound (via "re investment".

Weekly.

And from what all of these people are saying, his fund has in its possession a majority very, very large share of bitcoins (people suspect he is manipulating the bitcoin exchange market, tho it could be someone else with a ton of coins).

many Bitcoin users = retards

ALSO HIS FUCKING NAME IS PIRATE LOL

Pirate be takin all your booties!

It was $40k. nothing to a boss.

Teething problems for a truly free future; without credit cards raping you like rake for 3% of every purchase, without banks locking you out of your account because hmm sir seems you received a transaction from a global ponzi scheme know as "full tilt", without corrupt governments holding you down and blocking your donations to wikileaks.
Cryptocurrency gives power to the people, its just these freed people overestimating how well things will go, like in nights' example.

ok this will will surely die now. nice prospect and promise in the beginning but obviously people running this are a bunch of greedy fucks who want sports cars and hot bitches. nice try fucker nerds diagf

Yo silver you seem to know a thing or two. I brainstormed a few newbie-type questions about bitcoin that I'd like some input or direction on as to where to look for answers (so far there's the bitcointalk forum and the bitcoin wiki). I plan to take a look around on my own tomorrow, but I'm pretty tired, so I'm just going to leave this list of questions here for now.

1) How exactly are bitcoins generated? I understand that computers "do work" and eventually come out with a bitcoin at the end, but by what mechanisms are bitcoins supposed to become more and more difficult to 'mine'? What can we expect of the interaction between the rate of growth of the 'difficulty' or 'size'(?) of a bitcoin's mining compare to the growth of computing power over time?

What of technology 'breakthroughs' which might drastically increase computing power?

2) What value do BTC have? I understand that the 'cost' to mine a bitcoin is basically measured in the electricity required to run the computer(s) which generate it. Thing is, they possess no redeemable value (ie. you can't extract the electricity back out of them). In this regard, are they any better than the maintstream fiat currencies which at least have the issuing country's force of law requiring them to be accepted in the payments of debt?

b) Can BTC be broken into smaller units of currency? How will people in a world with only bitcoins purchase a pack of gum? What about when the unit of smallest value that you can exchange a BTC for is a 52" plasma TV?

3) This is related to (1), but I understand that bitcoins' rate of growth in supply is supposed to slow to a virtual crawl over time. Such a thing might be expected to result in enormous deflation as the growth in supply nears zero. Deflation can cause big problems for the continued activity of an economy. There will of course be some counter balancing forces, such as when no one is trading their BTC (because they are 'too valuable') they may experience a downward pressure on their value since the only real value of such a currency in the first place is that you can buy things with it.

Are there any good discussions on the deflationary scenario, which seems built into the design of BTC?

4) I'd like to know if there are any estimates of:
-How many bitcoins are in the bitcoin economy
-What the current rate of mining production is and how it has changed over time
Or how such data might be inferred.


~~~~~~~~~~~~~~~~~~~~~~~~~

I know that's a lot of stuff but I'm just dropping it here with the hope that someone knowledgeable will get me started in the right direction tomorrow.

Thanks~

On July 13 2012 21:07 Silver_nz wrote: It was $40k. nothing to a boss. Teething problems for a truly free future; without credit cards raping you like rake for 3% of every purchase, without banks locking you out of your account because hmm sir seems you received a transaction from a global ponzi scheme know as "full tilt", without corrupt governments holding you down and blocking your donations to wikileaks. Cryptocurrency gives power to the people, its just these freed people overestimating how well things will go, like in nights' example.

40k$ and another 40k in bitcoins, which is roughly another 350k$. That's quite some money.

And also ROFL at people in that thread that are saying that taking 0,6 on the stolen dollar is the best thing that could happen and they should be grateful, just wow.

On July 13 2012 15:47 royalsu wrote: Saw this one coming a mile away

I have physical health problems and need to see a doctor, but haven't had the time. On the forums I'm called a scammer and repeatedly insulted. Someone is trying to sue us. My bank gave me crap and held my money. I was borrowing cash from friends and spent 3 days eating bad muesli and cheap milk. I lost a lot of code by accident. I put a lot of work into the bitcoin.org clients page to make everything fairer, and now it will be removed, helping to recentralise bitcoin again. Electrum maybe has a security flaw and Macs have random problems. The conference needs the CFP announced soon, but I have to deal with Bitcoinica first. My health is suffering and im getting headaches. Right now is the first time I'm feeling depression, and I'm a little worried because I've never had it before but my father did. I emailed a health professional and they advised me to seek help. I've started sleeping very long, being very lethargic and apathetic. When the Bitcoinica thing first happened, I was considering suicide until Tihan said he had the funds.

Called it.

Told him that getting involved in the Bitcoin community would be the worst decision of all time. (Followed by an all time yo' and a Kanye West photo).

A necessary step in development of a working universal Internet currency imo. Too bad this ended the way it did. I think beyond all skeptical, I wanted this to succeed.

On July 14 2012 07:06 Arirang wrote: A necessary step in development of a working universal Internet currency imo. Too bad this ended the way it did. I think beyond all skeptical, I wanted this to succeed.

Are all those 'this'es the specific Bitcoin-based leveraging service that this topic relates to?

I ask because it seems like your 'this'es are in your mind Bitcoin as a whole.

Bitcoin as a whole is fine, it's just that some idiot users keep doing idiotic shit.

On October 08 2011 23:59 genjix9 wrote: Hi, A while back I started a community poker project but you were all too jaded to support. In that thread there was much misunderstanding about what bitcoin is. genjix

LMAO

And to your point Taco, Bitcoin is not fine. Bitcoin is a system that puts the security onus on the user and blames the user if he isn't using state of the art encryption on his local machine and doesn't know what the hell two factor authentication is. Even if you've done all that, you can lose money because Bitcoin hasn't solved the fundamental weak link problem of storing passwords. At the end of the day, a Bitcoin user has to store his password somewhere; that is the only way of identifying your funds in the current Bitcoin design. If you forget your password or your hard drive where you encrypted your password fails you lose all your money, hence users are definitely going to write down their passwords in unencrypted form somewhere (on paper at home, notepad, or whatever). Fundamentally there is a weak link because the design of Bitcoins allows idiot users to do idiotic things. Think about this: if your grandma had to use bitcoins, how easy would it be to steal her bitcoins?

A good analogy is that in email the security pass phrase is a fundamental weak link. If you forget your password you answer a security question whose answer does not follow any of the guidelines of choosing a secure password. Hackers go from a really hard and narrow set of strings containing alphanumeric characters to a really easy universe such as "what is your mother's maiden name? Susan".

On July 14 2012 10:05 royalsu wrote: Bitcoin is a system that puts the security onus on the user and blames the user if he isn't using state of the art encryption on his local machine and doesn't know what the hell two factor authentication is.

Except that that is utter rubbish.

Ever seen one of those RSA tokens? Of course you have, you're not a 96 year old woman from Switzerland.
That is what two-factor-authentication is. (Two of those)

And it's not exactly hard to encrypt something, you literally just need to install TrueCrypt, click set up volume, pick a strong password and you're off
and the combined efforts of every single computer in the world would not be able to crack your volume in a trillion years.

On July 14 2012 10:05 royalsu wrote: hence users are definitely going to write down their passwords in unencrypted form somewhere (on paper at home, notepad, or whatever).

So what? I don't think it's fair to compare Bitcoin to some utopia, try comparing it to PayPal which people do the exact same thing with.

And last but not least at all:

Since when is me saying that Bitcoin is fine equivalent to saying that it is the perfect medium of payment for everyday people?

If you lose your password, there is no way to retrieve your funds. If you have dementia as a 96 year old women from Switzerland and you forget your password, you have lost your money forever. My aunt is about 55 and I had to write down the steps on paper for her to access her yahoo email account after explaining it to her 3 times, and she was a pretty successful business women. What you take for granted as basic computer literacy skills is not possessed by a majority of the population in the world.

The features which make Bitcoins so desirable are counter to what I want from my currency system. I want my transactions to be trackable, reversable, insured by the FTIC so that my wealth is protected. I am happy to pay extra for those features. I don't want to trust my wealth to a bazillion security protocols managed by hacker nerds who have to constantly fight against the latest security vulnerability (i.e. "oh lol you didn't use salts to hash your passwords I have just pwned your database". I much prefer a guard with a gun and a bank vault.

Consider this scenario: I log into my bitcoin account online, make a transfer, then get distracted by a phone call and forget to log out of my browser. Someone ends up transferring all my money out. I can't trace this transaction and there is no authority to call. At a bank this simple scenario doesn't cost me my net worth.

What is so good about anonymity anyways? The only thing it allows you to do is buy porn, drugs, and other vices without anyone else knowing. It also prevents companies from tracking me and giving me highly targeted advertising. All stuff that I don't mind people knowing I do.

Read this post. Very enlightening. The first reply to his post actually predicted exactly what happened:

http://news.ycombinator.com/item?id=2973313

Here it is:

Zhoutang says:
Hi HN,
I'm the creator of Bitcoinica. I'm not so established here. To be honest, I'm only 17.
Please try it out. (I can pay $1 for you if you're not willing/able to deposit, email me at info@bitcoinica.com. :-D ) You can leave any suggestions, comments, bug reports and feature requests here. I'll look through every single comment. Thanks!

Jellicle replies:

Without meaning to put a damper on your technical work, you should keep in mind a few things:
-- systems that work with money are attacked hard and often, by intelligent skilled people
-- in fact some of the people who attack your system are likely to be both more skilled and more intelligent than you are
-- systems that work with money that fail, fail spectacularly ("What do you mean someone withdrew $8 million last night?"
-- banking websites, Paypal, etc. are all like icebergs - you don't see 9/10ths of the things they've done to prevent spectacular failure
-- spectacular failure is your destiny if you don't work very hard to prevent it
-- spectacular failure may be your destiny even if you do work very hard to prevent it
You should plan accordingly.