Click to be Added / Removed.
Posted on 03/09/2014 2:14:41 PM PDT by TsonicTsunami08
The mainstream media often overlooks all the amazing and positive developments that are happening in the bitcoin world, as well as the incredibly innovative and supportive community that is building around bitcoin. To paraphrase Mark Twain: “The reports of bitcoin’s death have been greatly exaggerated.”
(Excerpt) Read more at coindesk.com ...
Click to be Added / Removed.
But I don't see how BitCoin gets us there.
It has two selling points - anonymity and lower transaction costs.
That's great news for tax evaders, criminal gangs, and people who don't want to pay a $3 bank charge for electronic peer-to-peer transactions.
But BitCoin also has one fatal flaw - anonymity.
You can't prove that you own the BitCoins at any particular wallet address.
When someone with superior technology steals all your BitCoins - which has happened recently - it does not appear that anyone knows how to find your money.
If they do know how, well, that means transactions are no longer anonymous.
At my bank, no depositor has ever lost a penny to a thief who invaded the bank's computer systems.
The bank may have lost money that way, or the bank's insurers may have lost money, but depositors are always made whole.
Bank customers can theoretically lose money via credit or debit card fraud, or via check fraud, but their loss is capped at $100 and is rarely enforced.
I wish nothing but good luck for BitCoin developers and speculators.
But, personally, I am completely satisfied with our current transaction system.
Perhaps you would read the article one more time. If you think that what happened in Cyprus can’t happen here, you are seriously deluded.
It is early in the evolution of Bitcoin, let’s look at the article again. Instead of being able to pay Wikileaks, say the government disallows payments to the Tea Party ( which could very well happen with this crew in power). You could sent Bitcoin and there is nothing anyone can do to stop it.
I can prove my ownership of Bitcoin when I spend them. They are mine and they are safe.
Ownership:
Go to https://blockchain.info/ and cut and paste the public key attached below into the search window. Please tell the forum the balance of the wallet where I transfered Bitcoin today.
12srdnnt8JE1tfbjHgwSuV8RKW9UCBmoB4
Correction: this transfer took place on 3/7/2014.
There is a private key for every unspent amount on the chain. Whoever knows the private key owns the bitcoins. If someone hacks your computer and is able to read plantext private keys (entirely your mistake), you and hacker both own the coins so it is highly advisable to immediately transact them to a new address which obviously has a different private key that has not been compromised. That is what the hacker will do and it will probably be automated and win that race.
When someone with superior technology steals all your BitCoins - which has happened recently - it does not appear that anyone knows how to find your money.
There are just two possibilities. One is you have the private keys for your bitcoins so what I said above applies. Second is you turned over ownership of your bitcoins to an exchange. If that is the case, you own nothing. Of course nobody can find "your" bitcoins because they are not yours.
At my bank, no depositor has ever lost a penny to a thief who invaded the bank's computer systems.
An exchange is not a bank. It is a place you go to buy trade dollars or other currency for bitcoins and vice versa. It has only that purpose. It is not a place to "keep" your bitcoins because, as I pointed out, when you transfer them to an exchange, they are not yours. You have no private key, therefore you own nothing.
Like I said to you in other threads, read up and learn. You would soon realize that keeping coins in the chain is completely secure and none have been stolen except in the first case I described above and is isolate and due to poor personal computer security practices. The security comes from the simplicity of the mining algorithm which nonetheless comprehensively protects the integrity of all unspent amounts (i.e. all coins). It means you own the coins and they cannot be stolen or taken except in case 1 (your security failed which has nothing to do with bitcoin)
I wish nothing but good luck for BitCoin developers and speculators.
Thanks. I don't care much for speculators but like any market they provide the necessary liquidity and lower the risk for actual users like myself. They function exactly like speculators in any commodity market where an industry that needs the commodity can hedge their risks or a farmers producing the commodity can hedge their risks.
Same as cash.
We all talk often about how a high-tech economy has the potential of leaving the less educated behind. I can't help but wonder how the less educated would handle the situation you describe above. Could something heretofore so simple as money become that complex yet succeed?
As the author claims, though, it's early in Bitcoin's development.
There are millions in venture capital being spent on solving those kinds of problems. The beauty of bitcoin is that it promotes innovation to make it more useable because everything is wide open and free for the innovators but not for the politicians, meddlers, controllers, rack and stackers and a large part of Wall St.
There will ultimately be a huge flow of capital from Wall St into the bitcoin universe. The reason is pretty simple, bitcoin itself is a perfect way to tap the innovation and intellect of the world to build those companies that will make bitcoin succeed.
Another thing to consider carefully is that Bitcoin mining, transaction handling, etc is entirely distributed and that part has been a success. It is only exchanges and other central points of failure that have failed. It is specifically the greedy people who got burned, they were on exchanges to cash out or make a quick buck. The people who kept their own coins were safe. Those are the people that will spend their coins within the bitcoin economy (digital creations) and make that grow.
The guys who stole 750,000 BitCoins from MtGox agree with you.
The bad guys spent them.
And at least 400 investors are suing MtGox because no one knows what happened to their BitCoins.
If you cannot place your BitCoins in a common pool without losing ownership, the entire framework of our financial system collapses.
Goodbye, stocks and bonds.
Goodbye, home mortgages and car loans.
Goodbye, new business creation.
By the way.....
Do you have to type in your address key every time you make a transaction?
If that is done electronically at the point-of-sale, on your device or theirs, isn't that a huge security risk?
Goodbye, new business creation.
That's completely wrong. To start a new business in the bitcoin world takes merely a few of them to pay people to create the digital infrastructure. Even in the real world there's no reason that a solely owned business needs a "framework" to sustain it.
Do you have to type in your address key every time you make a transaction?
Oh my. You have to read up on PKI. Private keys are private and public keys (addresses) are public. Everyone knows the address of your bitcoin whether or not they associate those with you. Privacy of addresses is a separate issue and not a security issue, PKI is designed that way. All addresses are all there in the chain and always readable all the time. The private key unlocks the amount and transfers it to new owner(s) potentially creating a new smaller amount for you as well. That can be assigned to that same address (unlocked with the same private key) or a new address. Obviously nobody needs your private key to assign you an amount or for any other reason. They only need your public key (i.e. address).
If that is done electronically at the point-of-sale, on your device or theirs, isn't that a huge security risk?
No. The private key never leaves your device. They are typically encrypted with a passphrase so even if someone imaged your entire device they still would not have the private keys. What happens is that the wallet creates a transaction assign some bitcoins to new addresses (which can include one or more of your addresses). The wallet then asks for your passphrase, decrypts the private key, signs the transaction, and removes the plaintext private key from memory. There is a point of vulnerability which is that the private key has to be decrypted to be used to sign the transaction. But obviously they try to keep that as brief as possible.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.