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The Future of Cryptocurrencies

Soulskill posted about 9 months ago | from the start-mining-Americoins-and-Mexicoins-and-Coinadas dept.

Bitcoin 221

kierny writes "Today, Bitcoin, tomorrow, the dollar? Former Central Intelligence Agency CTO Gus Hunt says governments will learn from today's crypto currencies and use them to fashion future government-protected monetary systems. But along the way, expect first-movers such as Bitcoin to fall, in a repeat of the fate of AltaVista, Napster, and other early innovators. But the prospect of fashioning a better, more stable crypto currency system — and the likelihood that Bitcoin may one day burn — is good news for anyone who cares about crypto currencies, as well as the future and reliability of our monetary systems."

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Is that so? (1)

Anonymous Coward | about 9 months ago | (#46467407)

Napster:Itunes::Bitcoin:Dogecoin?

Re:Is that so? (3, Insightful)

viperidaenz (2515578) | about 9 months ago | (#46467523)

Except iTunes 1.0 didn't come out until the same year Napster was shut down.
I didn't support iPod's until after Napster was gone too. (probably because iPod's didn't exist then)

so:
Napster -> iTunes, Bitcoins -> something that doesn't exist yet, not Dogecoin. Dogs don't need currency.

Re:Is that so? (2)

chris200x9 (2591231) | about 9 months ago | (#46467649)

Darkcoin?

Re:Is that so? (4, Funny)

Farmer Pete (1350093) | about 9 months ago | (#46467781)

iCoins are the new thing. Apple is releasing them next week. You need an iPhone to use them. All iTunes transactions will require iCoins. You also can only buy them in $1000 USD increments.

Re:Is that so? (-1)

Anonymous Coward | about 9 months ago | (#46467791)

I like to fuck your ass, where at least I know I'm free!

Re:Is that so? (1)

master5o1 (1068594) | about 9 months ago | (#46468077)

Buy 1 iCoin for $2, but when spending, 1 iCoin = $1.

Can only buy in blocks of 500.

Re:Is that so? (0)

Anonymous Coward | about 9 months ago | (#46467549)

One can only hope... To the moon!

Re:Is that so? (1)

Anonymous Coward | about 9 months ago | (#46467637)

Dogecoin etc only seem fun because Bitcoin has jumped the shark in so many ways. As soon as the usual crowd of scammers, hackers, and incompetent php programmers move over to Doge, the party will be over.

Re:Is that so? (2)

HairyNevus (992803) | about 9 months ago | (#46468171)

I didn't believe dogecoin was real at first. I thought it was a weird front of some anti-bitcoin group that took to a very annoying way of mocking its opponent. I didn't find out it was real until I was reading some user stories of scammers, and hackers in the "Dogecoin network" and people griping about how they had made their way over from something called Litecoin. Things are already moving too fast for me, in my twenties...

On a more serious note, ripple looks interesting [wikipedia.org] .

Re:Is that so? (1)

mythosaz (572040) | about 9 months ago | (#46468467)

I didn't believe dogecoin was real at first.

It's hardly real now.

http://dogedir.com/ [dogedir.com]

None of these are "real" businesses, and it's still about 11 doge to the penny.

Sure, I get that BitCoin started that way, but I'll eat my hat if doge (the worst meme ever) ever grows beyond a circle-jerk of \b\tards.

I imagine there's some sort of 3rd party coin to cash payment processor out there that takes Doge, so, again, I recognize it's "real" in that regard, but, doge is a joke by design.

BTC != Napster (2)

globaljustin (574257) | about 9 months ago | (#46468037)

bitcoin isn't the Napster of currency...that's part of the scam!

the **system** of generating "bitcoins" is novel for sure, but as implemented it looks like the whole thing was a scam...part of the scam, of course, is to get people to take it seriously...

that's why drug dealers have 'front' operations!

they were tapping into the 'l33t h@x0r' crowd

BTC is an 'alternative currency' in today's financial world, but really it's just an algorythm that allocates resources based on parameters

what makes BTC a currency is the act of trading it...it's comparable to trading a nug of weed for a beer

anything traded is 'currency'...BTC is an algorythm for allocating resources in a closed exchange community

Napster mediated file transfers anonymously...BTC is not the mediation, it is the thing being traded...MtGOX is the mediator

so MtGox::Napster

Re:BTC != Napster (5, Informative)

CrudPuppy (33870) | about 9 months ago | (#46468525)

I take mild offense to the OP insinuating that Napster "fell". It didn't fall, it was torn down by the claws of the RIAA who didn't have the foresight to even recognize this would be the future of media distribution.

Re:Is that so? (2)

Flytrap (939609) | about 9 months ago | (#46468321)

iTunes was hardly a first mover

So, while AltaVista, Napster and Friendster may be in the first mover categories of their respective industries, iTunes falls into the same space as Google and Facebook... who all built upon and capitalised on the missteps of the early pioneers in their respective industries.

Crypto-coin advocates = anarchists or libertarians (3)

noblebeast (3440077) | about 9 months ago | (#46467459)

Tell me again how crypto-currencies being "future government-protected monetary systems" is good news?

Re:Crypto-coin advocates = anarchists or libertari (0)

Anonymous Coward | about 9 months ago | (#46467497)

No shit, the idea of unregulated currency just screams, hey, I want to steal YOUR money, please give it to me, you will get to use some "money" for a short time, but I will steal your money.

Why don't we just use sea shells or blades of grass as currency at this point? It's no different. Crypto-currency has no value, never has, never will. Those dealing in it, are just dumb and don't value their own money.

Re:Crypto-coin advocates = anarchists or libertari (1)

viperidaenz (2515578) | about 9 months ago | (#46467541)

Those dealing in it, are just dumb and don't value their own money.

That depends on which side of the "I want to steal your money" you're on.

Re:Crypto-coin advocates = anarchists or libertari (1)

Anonymous Coward | about 9 months ago | (#46467633)

Crypto-currency has no value, never has, never will. Those dealing in it, are just dumb and don't value their own money.

It does have value, it just is (perhaps unintuitively) not direct value. For example, there is a market for cronuts. One could have a 'market' that trades merely on the value of cronuts. They become worth one thing for food, and another for currency. Take out the food part... you have bitcoin. See?

Why don't we just use sea shells or blades of grass as currency at this point? It's no different.

Now you're getting it!

Re:Crypto-coin advocates = anarchists or libertari (0)

Anonymous Coward | about 9 months ago | (#46467723)

Right, Marx called money a "collective delusion", there's no real difference between seashells and green slips of paper and digits in a computer somewhere.

However the issue with crypto-currencies is that they apparently have the explicit goal of enabling illegal behavior, tax avoidance, etc. So it should be no surprise that the Bitcoin community is mostly a bunch of criminals and a bunch of marks.

Re:Crypto-coin advocates = anarchists or libertari (0)

Anonymous Coward | about 9 months ago | (#46467753)

> However the issue with crypto-currencies is that they apparently have the explicit goal of enabling illegal behavior, tax avoidance, etc.

You misspelled "removing electronic transfers from centralized control."

Re:Crypto-coin advocates = anarchists or libertari (1)

noblebeast (3440077) | about 9 months ago | (#46468515)

Where in Satoshi's white paper does it talk about illegal behaviour, tax avoidance, etc?

Re:Crypto-coin advocates = anarchists or libertari (1)

schneidafunk (795759) | about 9 months ago | (#46467743)

If it is run by the government, it will be regulated. FTA: ...people's embrace of Bitcoin. "The concept is great, [but] the execution has a couple of things -- the deflationary currency, there's no central bank to be able to regulate the amount of coins that are in there... that would be good to have in there," Hardy said.

Re:Crypto-coin advocates = anarchists or libertari (1)

Anonymous Coward | about 9 months ago | (#46468051)

Which only demonstrates the author's entire lack of knowledge on Bitcoin, geez, how many times must it be said that Bitcoin is 'not deflationary', crypto-currencies aren't physical items already! And we do not WANT a 'central bank' controlling it.

This whole MitGox debacle is entirely misunderstood from what I can tell. Who the hell thought it was a great idea to GIVE an 'untrusted & unknown' company their Bitcoins to hold for them! That's like walking up to a new 'bank' that opens in your neighborhood & handing them a brick of gold you have for 'safe keeping', than going back the week after & finding out they disappeared!

Re:Crypto-coin advocates = anarchists or libertari (1)

Anonymous Coward | about 9 months ago | (#46467751)

So... people are investing time and effort in stealing valueless stuff?

Valueless? (4, Insightful)

Nialin (570647) | about 9 months ago | (#46468073)

Every time I see/hear someone mention "[X] has no value!" I feel like I have to remind them of the subjectivity of value. Robert Heinlein, I feel, provided the best interpretation:

"Value" has no meaning other than in relationship to living beings. The value of a thing is always relative to a particular person, is completely personal and different in quantity for each living human—"market value" is a fiction, merely a rough guess at the average of personal values, all of which must be quantitatively different or trade would be impossible. [...] This very personal relationship, "value", has two factors for a human being: first, what he can do with a thing, its use to him and second, what he must do to get it, its cost to him."i/>

-Lt. Col. Jean V. Dubois (Ret.), pp. 93-94 [Starship Troopers]

Re:Crypto-coin advocates = anarchists or libertari (1)

skywire (469351) | about 9 months ago | (#46467853)

You failed to engage the implicit argument of noblebeast that states cannot be trusted to manage a currency that they can create by fiat, and offered no evidence that your criticisms of cryptocurrencies do not apply equally to state currencies. But then, spouting unsupported assertions is characteristic of trolls, so I guess my replying means you can chalk up a success.

Re:Crypto-coin advocates = anarchists or libertari (1)

i kan reed (749298) | about 9 months ago | (#46467513)

Because no black market is a bad thing, of course. If the market has demand for hired killers, for example, obviously they should exist.

(The is/should fallacy of free marketism is legitimately scary to me)

Re:Crypto-coin advocates = anarchists or libertari (2)

blackicye (760472) | about 9 months ago | (#46467685)

Because no black market is a bad thing, of course. If the market has demand for hired killers, for example, obviously they should exist.

(The is/should fallacy of free marketism is legitimately scary to me)

Governments and the elites have long had access to and will always have access to professional killers, the only difference is the volume of transactions that will be conducted and their targets.

Re:Crypto-coin advocates = anarchists or libertari (0)

Anonymous Coward | about 9 months ago | (#46467849)

You're right. Correctly stated:

If there is demand for hired killers, the market exists.

Demand for and supply of a good is that market, it becomes a 'black' market when the good is made illegal. 'Should' only enters the equation when determining if the market is 'black' or not. Anarchists really just want to do away with a meaningless label. Indeed, even 'market' itselves is just a proxy term for 'people exchanging things'.

On a side note, "The is/should fallacy of free marketism" is a strawman.

Re:Crypto-coin advocates = anarchists or libertari (1)

i kan reed (749298) | about 9 months ago | (#46468275)

On a side note, "The is/should fallacy of free marketism" is a strawman.

I entirely disagree. It's a serious problem, if you're concerned about human beings.

Re:Crypto-coin advocates = anarchists or libertari (2)

shaitand (626655) | about 9 months ago | (#46468067)

A black market is a pretty essential thing if you are opposed to tyranny, including the tyranny of the majority.

Re:Crypto-coin advocates = anarchists or libertari (1)

i kan reed (749298) | about 9 months ago | (#46468263)

Yeah, I know just how tyrannical it is that you can't buy custom-shot child porn, or stolen human livers. (some things are illegal for a reason, beyond just sticking it to the little guy)

Re:Crypto-coin advocates = anarchists or libertari (1)

noblebeast (3440077) | about 9 months ago | (#46468437)

Is it not possible that a regulated organ market could actually reduce organ theft? It would certainly save many lives: http://online.wsj.com/news/art... [wsj.com]

Re:Crypto-coin advocates = anarchists or libertari (0)

Anonymous Coward | about 9 months ago | (#46468435)

Name someone who says that hired killers, child pornographers, and other scum should exist as desirable entities.

Re:Crypto-coin advocates = anarchists or libertari (1)

BasilBrush (643681) | about 9 months ago | (#46467537)

Consumer protection. The possibility that when you are ripped off by wallet-services, exchanges or hackers poking around your hard disk, there is a legal authority you can go to, who may be able to get you your money back and deal with the criminals.

Re:Crypto-coin advocates = anarchists or libertari (1)

Cajun Hell (725246) | about 9 months ago | (#46468053)

Addressing those issues sounds like a neat idea. Best of all, if you really want to, you can do all that stuff today with Bitcoin, through use of contracts, only sending money to agencies that can prove they've posted a bond (i.e. sent money to to someone you have decided that you trust, such as a government), etc. Whenever you need the extra security, you pay for it, just like everyone always does with dollars. The difference is that when you don't need those things, with Bitcoin you can opt out (or rather, it doesn't automatically opt you in).

You can build regulated structures out of unregulated primitives. I'm not anti-Python; I'm just sayin' that sometimes a little C can be very useful. Not every program needs garbage collection.

Re:Crypto-coin advocates = anarchists or libertari (1)

BasilBrush (643681) | about 9 months ago | (#46468271)

Best of all, if you really want to, you can do all that stuff today with Bitcoin, through use of contracts, only sending money to agencies that can prove they've posted a bond (i.e. sent money to to someone you have decided that you trust, such as a government), etc. Whenever you need the extra security, you pay for it, just like everyone always does with dollars. The difference is that when you don't need those things, with Bitcoin you can opt out (or rather, it doesn't automatically opt you in).

A reiteration of a common but naive libertarian argument. Citizens shouldn't need to check the status of each company they do business with. That would be too much work for individual in the real world to ever do it. Rather citizens should know that whenever they do transactions in their own country with companies that are known to the government, that they are covered by a common set of protections. Then they only need to take the extra steps of checking that you mention on those rare occasions when they need to send money abroad.

You can build regulated structures out of unregulated primitives.

Experience says you can't. And Bitcoin certainly isn't regulated.

Re:Crypto-coin advocates = anarchists or libertari (1)

shaitand (626655) | about 9 months ago | (#46468083)

Last I checked ripping someone's bitcoin wallet off is just as illegal as taking their physical on filled with fiat.

Re:Crypto-coin advocates = anarchists or libertari (1)

BasilBrush (643681) | about 9 months ago | (#46468183)

Bitcoin has no chargeback mechanism. Once your transaction is gone, it's gone, regardless of whether it was really you who did it. Unlike the conventional banking system.

Last I checked ripping someone's bitcoin wallet off is just as illegal as taking their physical on filled with fiat.

Oh really? And how exactly did you check that? Where's the law that mentions bitcoins? As an intangible string of binary information, we can't simply treat it as property unless the law says so.
Where's the person that's been convicted for stealing bitcoins? For sure there's been people done for drug trafficking and money laundering, who've incidentally used bitcoin as part of the transaction. But where's the convictions for bitcoin theft? There's been millions of bitcoins stolen, so we should expect some prosecutions were it an established crime.

Re:Crypto-coin advocates = anarchists or libertari (2)

bigpat (158134) | about 9 months ago | (#46467799)

Tell me again how crypto-currencies being "future government-protected monetary systems" is good news?

Actually, I want to know why bitcoin wouldn't be government protected. Trading bitcoins for some good or service would just be a type of barter exchange. So unless what is being purchased is illegal, then the law, police and courts would still apply to handle situations like fraud and theft.

Re:Crypto-coin advocates = anarchists or libertari (1)

Jane Q. Public (1010737) | about 9 months ago | (#46468395)

"Actually, I want to know why bitcoin wouldn't be government protected. Trading bitcoins for some good or service would just be a type of barter exchange. So unless what is being purchased is illegal, then the law, police and courts would still apply to handle situations like fraud and theft."

Bitcoin *IS* protected, approximately as much as cash is protected. That is to say, laws against fraud and the like still apply.

The problem (as the government sees it) is that also like cash, Bitcoin is anonymous. And the government doesn't like anonymous cash flows. It sees that as a threat.

Which is why, of course, everybody else sees a "government-sponsored" cryptocurrency as a threat. You can bet your ass they would try to make sure they had tabs on who spent exactly how much, exactly where and when.

And if that happens, you can kiss your freedom goodby.

Re:Crypto-coin advocates = anarchists or libertari (1)

medv4380 (1604309) | about 9 months ago | (#46468081)

Properly run, established, and backed crypto-dollars could be an acceptable replacement for banks to hold and transfer funds. With a central authority transfers could be rolled back, and appropriate monetary policy established, or enforced. It beat the heck out of the banks that just move gold from one vault to another at the end of the night. You could esstially tie crypto-dollars to US issued bonds that the Fed Purchases. For example one 100 dollar bond could be represented by one crypto-dollar. It would just be on the banking network, and never go over the internet at all. It would eliminate a large amount of the physical hoops we currently use. Properly done it could replace, or enhance the existing Clearing House Interbank Payments System we currently have.

We can hope. (1)

jythie (914043) | about 9 months ago | (#46467463)

I do not see any reason why the BTC protocol itself could not be adapted and adopted with some kind of backing. It really does open up some really good options when it comes to moving tokens around and the push oriented payments could do wonder for combating CC fraud.

Re:We can hope. (1)

blackicye (760472) | about 9 months ago | (#46467707)

I do not see any reason why the BTC protocol itself could not be adapted and adopted with some kind of backing. It really does open up some really good options when it comes to moving tokens around and the push oriented payments could do wonder for combating CC fraud.

Because anyone with that level of resources and authority would not be amenable to spreading of the wealth and letting the dirty unwashed masses mine it at the ground level.

It likely will fall to make room for the future. (0)

Anonymous Coward | about 9 months ago | (#46467499)

In fact, a lot of people are counting on it to fail so that it makes room for all the other currencies.
All of the other ones use a much better system that makes it more stable and fair. (well, most other ones even)

Once bitcoin falls (if it falls), all of these other coins will instantly boom as the bitcoin group jumps to all the other mid-tier coins like Litecoin. (well, previously mid-tier, it is more like low-mid-tier given that trade price explosion the other year)

If one thing is certain though, it will not die. People will pay for services using any method they can. (including literally giving people used panties)
Even if it goes underground, the floodgates are open and a whole universe is flowing though it with the force of a big bang.

Good (2)

ArcadeMan (2766669) | about 9 months ago | (#46467507)

Anything that makes it easy to transfer funds to anyone in the world without going through PayPal is a good thing.

Re:Good (1)

BasilBrush (643681) | about 9 months ago | (#46467563)

Of course the problems with PayPal have been down to too little regulation, not too much. What do you get when you remove most of the regulation from PayPal? Mt Gox.

Re:Good (1)

ArcadeMan (2766669) | about 9 months ago | (#46467679)

I was talking mostly about the high PayPal fees. Never had a trouble with PayPal myself, then again I think they're more regulated in Canada.

Re:Good (1)

TubeSteak (669689) | about 9 months ago | (#46467883)

Anything that makes it easy to transfer funds to anyone in the world without going through PayPal is a good thing.

Right now, someone in the Department of Homeland Security is calling you a Terrorist.
That's how Governments traditionally feel about the easy flow of currencies across borders.

Re:Good (1)

ArcadeMan (2766669) | about 9 months ago | (#46468507)

If it's government-controlled currencies just like Bitcoins, they'll be easy to track. I'm against delays, high fees and troubles. I don't care if big brother USA knows that I bought a small stepper motor from Hong Kong, there's already a trace of that on eBay itself. But the credit card company takes a cut, eBay takes a cut, PayPal takes a cut. A small 5.00$ motor ends up costing me nearly 6.00$ instead of 5.05$

More secure transactions (1)

BasilBrush (643681) | about 9 months ago | (#46467511)

There's certainly much the government and official banking system can learn from transactions in crypto-currencies. And actually the government backed implementation can be better. Bitcoin suffers from the problem that a transaction can take some to to become certain, as two or more block chains fight it out for fitness, before being reconciled. This only happens because of the goal of avoiding a single point of authority. A government backed system can always have a blessed block-chain. And can thus have transactions finalised almost instantly.

Re:More secure transactions (0)

Anonymous Coward | about 9 months ago | (#46468099)

And spied on by that 'authority', I do not WANT or need a government watching every financial transaction I make. Is there a good need for governments to know about criminal activity? Sure, but anything that requires that they spy on me (or even just gives them to opportunity to do so) to catch criminals is entirely verboten. Yeah, it may make it harder to catch criminals but that is the price of freedom. Being free doesn't not mean being safe from harm, suck it up & deal with it.

Where's the tea party trolls? (-1)

Anonymous Coward | about 9 months ago | (#46467517)

Hey Karl Rove you fat fuck, where's all the teaparty neckbearded faggots submitting stories on slashdot for all the libertarian cunts? C'mon you fuck!

Bingo (2)

Eric Bacus (2942717) | about 9 months ago | (#46467531)

I've made similar comments to those who've waved negative news articles about bitcoin in my face. The interesting thing about all this is; it was never about "Bitcoin", it was about the concept of cryptocurrency, driven by the revolutionary ability to create digital scarcity. You'd better believe though, that if governments get involved, the whole idea of a publically viewable global transaction ledger (i.e. blockchain.info) will never see the light of day.

hi. I have money. (0)

Anonymous Coward | about 9 months ago | (#46467607)

I have money. I do not trust Bit Coin or any other Crypto currency.

Go ahead and call me stupid or a "Luddite", the fact of the matter is that _I_ do not trust these currency mediums.

So, fuck you.

Re:hi. I have money. (0)

Anonymous Coward | about 9 months ago | (#46467823)

Your hosility is unwarranted.

Re:hi. I have money. (0)

Anonymous Coward | about 9 months ago | (#46467825)

Ok. You're a stupid luddite. Consider yourself fucked very much.

Re:hi. I have money. (1)

Eric Bacus (2942717) | about 9 months ago | (#46467831)

alright then!

Devil's advocate here... it hones the opposition.. (1)

Anonymous Coward | about 9 months ago | (#46467535)

The thing is about cryptocurrencies, they also hone the attacks that can be done against them.
Precedents are being set with BitCoin which make it easy to go and arrest people using the currency's successor, similar to how laws against one designer drug are easily adapter to another making it a banned substance in hours to days by the DEA.

For example, if a currency needs 51% of the clients out there for enforcement, a bad guy can make a botnet to add millions to billions of nodes to sway things to his/her favor. Or, if it is a large mining operation, take it and another over to corner the currency and change how it operates.

The opposition and attacks on cryptocurrencies will only get better, and opponents have two methods of attack, both technological (hacking), but through the legal system.

A good example of scoffing at opposition and having it backfire is the Great Firewall of China. At first it was a joke. Now the technology is good enough that China can intercept forums postings done through https connections in flight (due to owning CAs that are trusted in their country's Web browsers), change the text and have the changed posting end up on the site. Works almost the same as Phorm, except intercepts and changes outgoing traffic.

Precondition (1)

gmuslera (3436) | about 9 months ago | (#46467545)

Cryptocurrencies with no intermediaries can't become popular till we fix internet/personal devices security. If the intermediary is the government or banks then you are more or less in the same situation than with dollars, and if are thirdy party you will have the same problems that with bitcoin now, either they run/dissapear with your money or get hacked and stolen.

Re:Precondition (1)

JoeMerchant (803320) | about 9 months ago | (#46467745)

The current monetary has no security beyond the criminal justice system.

Today, anyone who can get a photograph of one of your checks clear enough to read the routing and account numbers can forge a check on your account and deposit the funds to their account, entirely using their cell phone, without ever setting foot inside the territorial U.S.

Re:Precondition (1)

gmuslera (3436) | about 9 months ago | (#46467869)

They must get to you somehow. Widespread use of criptocurrencies mean that with social engineering, fake/trojaned apps or even using nsa backdoors your wallet is exposed for all the world. Social engineering is a powerful tool [coindesk.com] with bitcoin stealing trojans. Things are not so easy with bank accounts, even with all the problems they have, and of course, not with cash.

Re:Precondition (1)

blackicye (760472) | about 9 months ago | (#46467747)

The problem is unregulated exchanges, and the regulation of exchanges as well. That seems like it will be a key weakness in the Cryptocurrency system until there are more avenues of directly spending them for physical goods and essential services than currently exists.

Re:Precondition (1)

jwgreene (2906395) | about 9 months ago | (#46467817)

Entirely agree. Without any sort of regulation, it is far too easy for things to be fast and loose and you end up with many people out a great deal of money. While over-regulation can be a stifling problem, no regulation is just setting a system up for failure as the unethical and immoral sorts jockey for position to fleece people that are either too trusting or too stupid to realize that there are no realistic safeguards in the system.

Re:Precondition (1)

mlts (1038732) | about 9 months ago | (#46467893)

I've wondered about having part of a cryptocurrency be a way to have a mechanism for insurance. That way, if/when coins are stolen, there is a way to obtain new ones. Of course, this would have to be carefully made/watched due to fraud ("gee, I had those coins all along in a backup wallet...")

The biggest issue with cryptocurrencies is the fact that they cannot rely on a single trusted third party or parties. This is the new ground. Conventional systems like PayPal, Amazon Wallet, etc. have a "trusted" party, either the core company doing the exchanges, a bank, the bank's insurance underwriter, or a government. With cryptocurrencies, being forced to trust a third party cannot be used as an easy way out.

render onto series; integrity & honor... (0)

Anonymous Coward | about 9 months ago | (#46467569)

the genuine trademark of a new clear options momkind of civilization. crooked little finger pointing is obsoletely useless now http://www.youtube.com/results?search_query=fiat%20currency&sm=3

Collector's Value? (1)

dmomo (256005) | about 9 months ago | (#46467651)

Suppose Bitcoin went the way of Napster. This would mean the currency might become worth less and less. People would, over time, abandon wallets and there would simply be fewer known Bitcoins to be found. Many will have simply been irrevocably deleted. At some point, wouldn't this scarcity prevent the value from dropping further?

Years from now, we'll likely be using some form of crypto/digital currency. Bitcoin will at least be an interesting historical note. Suppose my grandson steps forth with a digital wallet containing some bitcoin. Wouldn't that be worth something simply because it is rare and of historical interest?

Re:Collector's Value? (1)

Farmer Pete (1350093) | about 9 months ago | (#46467835)

Yeah. That worked for Buggy Whips. [ebay.com] I'm sure you could have bought a buggy whip for less money back around 1900. I hope you're in it for the long run though.

Re:Collector's Value? (0)

Anonymous Coward | about 9 months ago | (#46468069)

Scarcity alone doesn't inflate value - that's more a function of demand exceeding supply. When supply drops because of diminishing demand the only thing limit to how far the value of something can drop is how much you're willing to pay someone to take it from you.

Re:Collector's Value? (0)

Anonymous Coward | about 9 months ago | (#46468131)

"thing limit"? Argh - it was OK the first time around but I just _had_ to rephrase something and leave a part of the original phrase in there...

Bitcoin as a government experiment (1)

mcelrath (8027) | about 9 months ago | (#46467661)

I've always wondered whether Bitcoin actually originated with the CIA, NSA, or Federal Reserve (or analogous agencies in other countries), or maybe a major bank.

I mean, it's a brilliant kind of experiment. Let it loose in the wild and see how it behaves, as a prelude to adopting an official, government backed version, using the lessons learned from Bitcoin. It's the kind of thing you want to have in the wild, to see what people do with it, before adopting something in an ad-hoc and flawed way (like credit cards..).

Re:Bitcoin as a government experiment (1)

PRMan (959735) | about 9 months ago | (#46467709)

Yes. Because the US government always does this. We never just change things willy-nilly without testing and foist it on the unsuspecting public at large making people's lives worse.

Re:Bitcoin as a government experiment (1)

skywire (469351) | about 9 months ago | (#46467897)

Scathingly brilliant, sir.

Re:Bitcoin as a government experiment (1)

JoeMerchant (803320) | about 9 months ago | (#46467761)

before adopting something in an ad-hoc and flawed way

Like a National Healthcare portal?

Re:Bitcoin as a government experiment (0)

Anonymous Coward | about 9 months ago | (#46467863)

And by "government" I think you could mean just a few guys that work in the basement at the NSA after work with some friends from college that also read Cryptonomicon, who got drunk and after they got board reading through the emails and browser history of celebrities decided hey lets invent a new crypto currency...

I'm 10% serious about that. In cases like this "government" usually means like 5 guys that are working on one particular thing you are interested in talking about. If it is a wild success then management and politicians take credit, but if it is a failure it is usually so obscure nobody cares, unless it is a huge failure in which case somebody gets scapegoated.

i agree (1)

aissixtir (2752321) | about 9 months ago | (#46467691)

that is what I have been saying for quite a while.

If bitcoin is without value... (0)

Anonymous Coward | about 9 months ago | (#46467721)

... then why does it suffer attacks? Things that are without value are just ignored.

Re:If bitcoin is without value... (1)

unimacs (597299) | about 9 months ago | (#46467941)

It does have value for some limited number of people but a significant amount of that value has been speculative. If successful attacks continue, both its speculative value and its value as a medium of exchange go down. The more it goes down, the fewer people will want them for either purpose, - prompting the people that own them to divest themselves of them, - which only drives the value down further.

Until there worth as much as those beenie babies people still think they can get money for on ebay.

What we've learned from Bitcoin (5, Informative)

Animats (122034) | about 9 months ago | (#46467839)

What we've learned so far from Bitcoin:

  • The distributed, eventually-consistent blockchain anchored by mining works and is quite robust against attack. Nobody has yet successfully attacked the basic Bitcoin system and stolen money. So the low level technology appears to be secure.
  • Irrevocable, remote, anonymous transactions are the con man's dream. Especially when they're assocated with a whole community of suckers who think anonymous anarchy is a good idea. The scam level in the Bitcoin world is huge. Over half the exchanges have gone under, and that was before Mt. Gox. Bitcoin-oriented "stocks" and "Ponzis" have an even worse record.
  • Personal computers are not secure enough to store money. "Bitcoin wallet stealers" are a major problem. Many "online wallet" services turned out to be scams. Storing Bitcoins safely while still being able to use them is quite hard.
  • Volatility is far too high for Bitcoin to be a useful currency. Since last October, Bitcoin has gone from $100/BTC to $1100/BTC to $600/BTC. Daily variation often exceeds 10%. The companies that accept Bitcoin for real products have to reprice every few minutes. Bitcoin behaves like a pink sheet stock. Too many speculators, not enough real customers.
  • There are scaling problems. Currently, every user has to have a complete copy of the entire transaction journal back to the first Bitcoin, and has to keep up with all the transactions as they happen. The confirmation process has a 7 transaction per second limit. Confirmations take about half an hour before they can be trusted; longer during busy periods.
  • "Mining" is more centralized than expected. The original idea was that "mining" would be a spare-time activity of each user's computer. In practice, "mining" is done in large data centers with custom water-cooled ASIC chips. Two mining pools control more than half of Bitcoin's mining capacity, and they have the power to set fees and change the rules.

Re:What we've learned from Bitcoin (1)

Comrade Ogilvy (1719488) | about 9 months ago | (#46468155)

Thank you for an informative post. The scaling problem looks like a deal killer, in terms of adoption as a generally used currency.

Re:What we've learned from Bitcoin (4, Interesting)

timholman (71886) | about 9 months ago | (#46468255)

There are scaling problems. Currently, every user has to have a complete copy of the entire transaction journal back to the first Bitcoin, and has to keep up with all the transactions as they happen. The confirmation process has a 7 transaction per second limit. Confirmations take about half an hour before they can be trusted; longer during busy periods.

IMO, this will be the ultimate nail in the coffin for Bitcoin, or any other cryptocurrency that relies on a single blockchain. Bitcoin advocates wax eloquently about the beauty of the BTC transaction verification system, but it has always struck me as profoundly stupid. It's as if someone said, "Hey, let's create a giant Excel spreadsheet, and have everyone in the world record their financial transactions on that one spreadsheet. Plus, your transactions won't be confirmed until a majority of people verify your math. Brilliant!"

No, it's stupid. If I want to buy a hot dog in New York, why should that matter to a guy who wants to buy a newspaper in Los Angeles? Why does my financial transaction have to be intertwined with his while we both queue up on the same blockchain? It is absolutely one of the most profoundly inefficient ways of spending money that anyone could have possibly invented.

Or put it this way: the BTC network can handle about 604,800 transactions a day. Assuming the average person buys or sells something with BTC an average of 5 times a day, that means the network hits its limit with 120,960 users ... worldwide. And this is the financial system that is supposedly going to replace all fiat currencies? It's laughable.

Of course, Bitcoin supporters will claim that the network can always be scaled up in speed. But what they don't point out is how quickly bandwidth and disk space requirements will explode if this happens. For example, scaling the network up to 2000 transactions per second would result in a Bitcoin node downloading about 1 MB per second. No big deal, until you realize that means each node will need about 2.6 TB of bandwidth each month, and that's just to handle the needs of 10% of the population of the United States, assuming 5 transactions per person per day.

The numbers don't make sense, and never will. Modern economies are far too complex to operate in the serial fashion that a blockchain mandates. Bitcoin will never be more than a niche player in the world financial system.

Re:What we've learned from Bitcoin (0)

Anonymous Coward | about 9 months ago | (#46468365)

This is one of the few comments to this article that has some value, I can't agree with it all but its a reasonable attempt at light. For instance, 'volatility' is a function of the #'s of users. Bitcoin would be far less volatile if say a billion people were using it & exchanging actual goods for Bitcoin, as it grows volatility will go down, but you noted this in 'too many speculators, not enough real customers'.

As to the scam part, sure but really, Bitcoin is no different in this regard to those vulnerable to scams than 'physical dollars', who the heck thinks it is a great idea to just hand over their 'wallet' to someone they don't 100% trust or have a means to get the value of that wallet back (e.g. government backed 'coercion'). MtGox was not an 'exchange' or at least not JUST an 'exchange', not as I understand a 'currency exchange'. The latter, to me, as a person just wanting to exchange USD for CAND at the airport for instance just want to be able to walk up to one of those currency exchange kiosks hand the guy $100 USD & get back $90CD (as of today). If the guy just sits there and doesn't give me back my CD or says something like 'come back in a day or two & we'll have your CD for you', my first instinct is 'give me back my USD until you have CD to sell me' or to yell 'POLICE!!!'. :-)

Anyone who handed Mt.Gox USD & didn't IMMEDIATELY get Bitcoin in to THEIR wallet on their personally held physical device and didn't think something was wrong deserved everything they got. I do not feel sorry for them in any way.

Re:What we've learned from Bitcoin (0)

Anonymous Coward | about 9 months ago | (#46468585)

If you're only getting $90 CAD (not CD and not CAND) for $100 USD then you're really getting bent over, becuase somebody is witholding more than $20 from you for the privelege of converting it. Probably you just mixed up which currency is worth 90% of the other right now, which would be just another mistake in your hastily composed comment.

Your last paragraph, however, is dead on: Got screwed by a shady bitcoin bank who claimed to be "hacked????" That'll happen.

Re:What we've learned from Bitcoin (1)

crovira (10242) | about 9 months ago | (#46468375)

Accountants LOVE the idea that every coin you spend is traceable.
  A BitCoin like crypto currency is likely in the offing as a supplement to cash and bank transactions
Backed by the full faith and credit of the US it is likely to be one of MANY co-existing currencies. (Just like we have now! [on paper.])

Re:What we've learned from Bitcoin (1)

noblebeast (3440077) | about 9 months ago | (#46468465)

Is it the anonymity of the technology, or the "whole community of suckers" that makes it a "con man's dream"?

Re:What we've learned from Bitcoin (1)

codebonobo (2762819) | about 9 months ago | (#46468537)

There are scaling problems. ...The confirmation process has a 7 transaction per second limit.

This is incorrect. 7 tps is an artificial limit. There is no theoretical limit to the amount of transactions that can be processed per block as the protocol will keep adapting to scale with the demand. There are multiple solutions to deal with the size of the blockchain as well when it becomes a problem

Two mining pools control more than half of Bitcoin's mining capacity, and they have the power to set fees and change the rules.

Fees are requested and set by the market. A mining pool can not impose a fee on a user and if they request too high of a fee another miner will simply process the transaction. If too large of a percentage of miners request high fees than the protocol can be changed to increase the transactions processed per block. The users have all the control over what protocol implemented will be used as well.

Two mining pools control more than half of Bitcoin's mining capacity, and they have the power to set fees and change the rules.

Rules are set by the users, which may or may not be miners. If 95% of the miners want to go in 1 direction and the most users in the opposite direction than there will be a hard fork in the blockchain with the miners currency most likely quickly devaluing to nothing.

anonymous money is a two edged sword (2)

meaty (809792) | about 9 months ago | (#46467843)

It may be popular to slam bitcoins right now but the fact is after all these scandals they're still incredibly valuable with a lot of forward momentum. This is a very new technology and its going to go through growing pains. Its interesting that 'anonymous' money is such a two edged sword. One the one hand people want it because they're worried about the government stealing their money yet the very fact its anonymous makes it a ripe target for theft. You need to protect your bitcoins! Hopefully people are realizing that doesn't mean storing them in a perl hack website in another country.

Expect it to fall our flourish? (3, Insightful)

brxndxn (461473) | about 9 months ago | (#46467859)

AltaVista was merely one search engine in a pool of many.. Yahoo, Hotbot, and Lycos were all around at the time and they did not all fail.
Napster only failed because the government/court system took them down. If it weren't for Napster being forced to close up its business, there were no indications that people were leaving it. Napster was a disruption in the industry and major players moved in unison to take it down.

A direct contrast to this comparison is TCP/IP. Since the creating of TCP/IP, there have been numerous (arguably better) protocols. However, the whole Internet runs on TCP/IP and it does not look to be going away any time soon. Like most new technologies, I would guess that the first virtual currency to be widely adopted would be the virtual currency that becomes the standard. Any new currency has a huge uphill battle in trying to become more mainstream than Bitcoin at this point.

Bitcoin is designed so that governments or other entities cannot take it down. The fact that governments, corporations, or single powerful individuals cannot control it is a feature - not a flaw. Gus Hunt, along with every other powerful well-established individual, would naturally be against the adoption of Bitcoin. But, saying to expect it to fail looks more like wishful thinking on their part.

Re:Expect it to fall our flourish? (1)

unimacs (597299) | about 9 months ago | (#46468483)

I don't think TCP/IP is really a good comparison. The world is very used to dealing with a multitude of currencies and not so good at bridging the gap between competing technologies. There is a lot more pressure to adopt and use "standards" in the technology world. But if you still want to compare Bitcoin to TCP/IP it's worth remembering that there were other protocols and tools in use before TCP/IP came around. So is Bitcoin like TCP/IP or more like UUCP?

As far as Napster goes, the government hastened its death but I'm not sure it would have survived in the long run anyway. The quality of the recordings was uneven and the peer to peer networking was unreliable. It was at times frustrating to use, and there was no guarantee that you weren't downloading some trojan horse. Somebody would have come along with something better. Just because you're first out of the gate doesn't mean you'll become that standard. Look at myspace.

I think part of the interest in bitcoin has been mining but that's become more and more impractical and other competing currencies have already cropped up.

specie (1)

Gothmolly (148874) | about 9 months ago | (#46467977)

The only crypto currency is one which is not traceable. interchangeable, and infinitely divisible - gold or silver or similar. Anything backed by the whim of the government can be tracked, or revoked by the same government.

Why do you think Iran was laughing all the way to the (gold) bank when we kicked them out of the SWIFT wire network? Now they can trade oil for gold bars and the gold bars for uranium, and there's no tracing it.

The latest get rich quick scheme (1)

Kjella (173770) | about 9 months ago | (#46468045)

1. Start your own cryptocurrency
2. Make the world use it (Implementation: ???)
3. Profit!

Granted, it was much the same with Bitcoin but there everybody was pooling their work and pulling in the same direction, so either Bitcoins would fly or cryptocurrencies would crash and burn. What does 100 copycat currencies run by people who figured the best way to get in early is to start a new currency get you? It reminds me of the guy who in the dotcom boom made a 1000x1000 pixel page of pure ads and sold space at $1/pixel. He made almost a million dollars because it became a "thing" to see, creating money out of thin air. Of course afterwards there were tons of DIY kits and whatever to set up your own page, naturally they all bombed. Who'd really watch a copycat page with nothing but ads? These "altcoins" are the same kind of halo hype, my guess is most if not all of these will be worth $0 in five years.

Re:The latest get rich quick scheme (0)

Anonymous Coward | about 9 months ago | (#46468361)

Some are crap, but some innovate. From Megacoin, which recently introduced the kimoto gravity well, to peercoin with its proof of stake system, to Fedoracoin with its coin mixing ability allowing for almost complete anonymity.

Deflation = BAD (1)

SplawnDarts (1405209) | about 9 months ago | (#46468107)

As long as they're deflationary, cryptocurrencies will never be used as conventional currency. Deflationary currency rewards hoarding, which takes it out of circulation, which causes something else to be used as currency.

For a historical example, look at gold-backed currency in the US after the civil war and the Fourth Coinage Act. A nice, hard, deflationary money and largely ignored in favor of marginal reserve bank notes that frequently turned out to be worth no more than the printing. And yet by and large the later drove out the former for the purposes of actually doing business. That deflationary money was in fact so disfavored that William Jennings Bryan got within a stone's throw of the Whitehouse basically running a single issue campaign against it.

It's hard to imagine anyone who has experienced long term deflationary money wants to ever see it again. It's just that most of the people who've had that experience in the US are dead or so close as not to matter.

Re:Deflation = BAD (1)

digsbo (1292334) | about 9 months ago | (#46468443)

Deflationary currencies encourage saving until people realize they have "enough", and decide to buy something, or lots of somethings.

Inflationary currencies have their own problems.

Rothbard does a great job explaining how supply and demand for cash balances equilibrate the price of goods and services. Money is a good like any other.

that will never happen (1)

slashmydots (2189826) | about 9 months ago | (#46468207)

There have been a lot of projections on what would happen if even 50% of all bitcoins were stolen and 95% of exchanges were destroyed. Bitcoins still wouldn't go away. If 1/3 of the countries in the world thoroughly blocked bitcoin, it would still survive. If 99% of miners stopped minig, it wouldn't even have an effect and would simply attract new miners. Bitcoin basically can't die under any circumstances except a badly handled complete protocol meltdown.

pundits keep on getting this wrong (1)

dnaumov (453672) | about 9 months ago | (#46468233)

I always chuckle when I read yet another pundit claim that Bitcoin is going to fail because it's not government-backed. A significant part of current Bitcoin userbase are libertarian-minded folk who believe (and with very good reason) that a goverment-backed currency equals a currency that's constantly meddled with by said government, so having a government-backed crypto currency is precisely what they DO NOT WANT. Not having central banks fuck about with the money supply and the lack of need for banking institutions are features, not bugs.

Re:pundits keep on getting this wrong (1)

angel'o'sphere (80593) | about 9 months ago | (#46468329)

No money is government backed.

If you have (own, semi own) a Finca on Mallorca and need to pay $1,000 a month to pay it off, your government does nothing if the "exchange rate" drops by a factor of ten.

Either you still can pay the mow $10,000 ... or your Finca (whichs value has mot changed a little bit) is gone to the bank.

Generation 2.0 cryptocoins (1)

fugas (619989) | about 9 months ago | (#46468235)

Especially interesting is 2nd generation coins such as Counterparty, Mastercoin and the like, building new services on top of the existing Bitcoin blockchain. Great overview in this post: http://www.ofnumbers.com/2014/... [ofnumbers.com]

Can Cryptocurrencies please die! (1)

Zxern (766543) | about 9 months ago | (#46468339)

Stop driving up the price of video cards you bastards!

Government? (0)

Anonymous Coward | about 9 months ago | (#46468479)

Governments tend to not be the ones controlling currencies (even though they really *should* be.)

It's the central banks. For an example of this, see the consortium of privately owned and controlled banks that make up the United States Federal Reserve. "Governments" don't call the shots. They just play along and act like they're actually in charge, when in truth they're just middle management.

to the moon (1)

Mike Blakemore (999177) | about 9 months ago | (#46468493)

Most of the comments in here seem to be pretty negative concerning the potential future of cryptocurrencies. "PCs can't be trusted to store money" "I have no faith in the system" and so on.

Yes, this is all new tech and it'll take a while for mass adoption, but bitcoin isn't going anywhere. This is the kind of futuristic technology that has been envisioned since the early days of the computer. It'll happen. Credit card systems are significantly more vulnerable than the bitcoin protocol could ever be.

Unregulated by a single government does not mean anonymous. You can trace the block chains.

Even with government regulated currency, banks fund terrorism, politicians have their super pacs, and the dollar just isn't what it used to be: https://www.google.com/search?... [google.com]

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