How To Use Bitcoin – The Most Important Creation In The History Of Man

[mhaze]

Originally Posted by wrs
Bitcoin now dropping like a rock, headed back to $150. It has dropped $140 in the last hour on heavy volume at MTGOX.

JUST GOTTA BUMP THAT ONE!!!!!

 

[Anders Lindman]

Ah, no, I think what is happening is that you are stringing words together and then believing them. That doesn't work here.

Bitcoin is a mathematical algorithm. Nowhere does it benefit from or have need of governments. Nowhere do they benefit from it. Any ecurrency promulgated by a government would have differing characteristics and thus be a different algorithm.

Hence, bitcoin is not a proof of concept as you see it. At the core of the bitcoin algorithm is the conception of a currency that does not require trusted intermediaries, and that is not based on trust. Banks, central banks, master card and visa, paypal and other intermediaries are some of the business concepts that are what we call "trusted intermediaries" which are not necessary when bitcoin is utilized.

I agree that when governments are involved in the specification, they will be tempted to sneak in some nasty Orwellian stuff. The proof of concept is the crypto and peer-to-peer part. Bitcoin has shown that it can work in practice.

"A proof of concept (POC) or a proof of principle is a realization of a certain method or idea to demonstrate its feasibility,[1] or a demonstration in principle, whose purpose is to verify that some concept or theory has the potential of being used. A proof of concept is usually small and may or may not be complete." -- http://en.wikipedia.org/wiki/Proof_of_concept

My idea is that an international authority, such as the UN, issues the currency. For example by letting anybody exchange ordinary currencies for the new digital global currency. The UN destroys the currency they receive to keep the overall money supply in the world at the same level, and to prevent the UN from getting rich because of this interest-free service.

Once the global digital currency is in circulation in society it's "hands off" for the UN, meaning that the digital currency can now function in a decentralized manner, just like bitcoin. It's only in the issuing part of the new currency where a centralized international body has control. This will reduce the risk of Orwellian controls.

 

[Anders Lindman]

An internationally legally approved and agreed upon crypto peer-to-peer currency would probably outcompete bitcoin, especially when governments would begin to make bitcoin explicitly illegal. Isn't that unfair and skewed competition? Yes. That's what happens to toy experiments like bitcoin. Get ready for a REAL digital currency.

 

[mhaze]

An internationally legally approved and agreed upon crypto peer-to-peer currency would probably outcompete bitcoin, especially when governments would begin to make bitcoin explicitly illegal. Isn't that unfair and skewed competition? Yes. That's what happens to toy experiments like bitcoin. Get ready for a REAL digital currency.

You see, it doesn't really matter that you string words together and they sound good. Bitcoin is an algorithm, part crypto and part computer programming in C++. You are just wildly guessing that "something" would/could be developed by your grand one world vision that would work.

It doesn't work that way. You don't have an algorithm, and it would be a big mistake to think it would be easy - or even possible - to develop. You've got some made up words strung together. Kind of like saying "we can build the starship Enterprise all we need is dilithium crystals for the power system and a design or two".

So you see, you have basically a fantasy of sort of a shell of an idea, but not the actual idea. I can't say it even interests me a bit, because it has no content. That means you don't even have an argument to debate...

 

[Anders Lindman]

You see, it doesn't really matter that you string words together and they sound good. Bitcoin is an algorithm, part crypto and part computer programming in C++. You are just wildly guessing that "something" would/could be developed by your grand one world vision that would work.

It doesn't work that way. You don't have an algorithm, and it would be a big mistake to think it would be easy - or even possible - to develop. You've got some made up words strung together. Kind of like saying "we can build the starship Enterprise all we need is dilithium crystals for the power system and a design or two".

So you see, you have basically a fantasy of sort of a shell of an idea, but not the actual idea. I can't say it even interests me a bit, because it has no content. That means you don't even have an argument to debate...

I was thinking that the Bitcoin protocol would be used with an addition of encryption of the mining process. There already exists other crypto currencies than bitcoin, such as Litecoin:

"Litecoin is a peer-to-peer Internet currency that enables instant payments to anyone in the world. It is based on the Bitcoin protocol but differs from Bitcoin in that it can be efficiently mined with consumer-grade hardware. Litecoin provides faster transaction confirmations (2.5 minutes on average) and uses a memory-hard, scrypt-based mining proof-of-work algorithm to target the regular computers and GPUs most people already have. The Litecoin network is scheduled to produce 84 million currency units." -- https://litecoin.org/

 

[psionl0]

An internationally legally approved and agreed upon crypto peer-to-peer currency would probably outcompete bitcoin, especially when governments would begin to make bitcoin explicitly illegal. Isn't that unfair and skewed competition? Yes. That's what happens to toy experiments like bitcoin. Get ready for a REAL digital currency.

I have speculated about a FIAT-COIN myself in this thread. It certainly seems technologically feasible. The problem is that neither the politicians nor their banker lobbyists have any interest in reducing our dependance on banks.

As for banning, I suspect that by the time the banks see bitcoin as a threat to their volume of business, too many voters will be making money off of bitcoin and a ban would be political suicide.

 

[mhaze]

I was thinking that the Bitcoin protocol would be used with an addition of encryption of the mining process. There already exists other crypto currencies than bitcoin, such as Litecoin:

"Litecoin is a peer-to-peer Internet currency that enables instant payments to anyone in the world. It is based on the Bitcoin protocol but differs from Bitcoin in that it can be efficiently mined with consumer-grade hardware. Litecoin provides faster transaction confirmations (2.5 minutes on average) and uses a memory-hard, scrypt-based mining proof-of-work algorithm to target the regular computers and GPUs most people already have. The Litecoin network is scheduled to produce 84 million currency units." -- https://litecoin.org/

I don't know what you are trying to say. Mining bitcoin is a process of finding cryptographic solution to the last block of transactions, then if successfully being the first to do so, attaching said block and crypto to the blockchain, then receiving a reward for so doing - that reward is where bitcoins originate. You see, they don't originate from governments.

There is nothing in the paragraph about litecoin that has anything to do with some scheme such as you have envisioned.

Miners produce bitcoins. No approval or endorsement is needed, the cryptography itself is the proof of the work.

 

[mhaze]

I have speculated about a FIAT-COIN myself in this thread. It certainly seems technologically feasible. The problem is that neither the politicians nor their banker lobbyists have any interest in reducing our dependance on banks.

As for banning, I suspect that by the time the banks see bitcoin as a threat to their volume of business, too many voters will be making money off of bitcoin and a ban would be political suicide.

That would require banks to actually produce crypto keys in the ratio to which they did fractional reserve banking, and maintain some transaction history. Essentially they would be issuing a crypto with the backing being your belief that the bank and the FDIC were good for the money. But then that code would have to be tracked through all of the joins and splits which occur in dollar amount and receiver/sender through the economy. No bank could begin to do that task.

Although that would be pretty ridiculous, it is not impossible, just nearly so...say in comparison to some global UN sponsored crypto currency.

That's what I was saying to Andrew, that when you actually try to lay out the solution algorithm, most simply won't work.

 

[Anders Lindman]

I don't know what you are trying to say. Mining bitcoin is a process of finding cryptographic solution to the last block of transactions, then if successfully being the first to do so, attaching said block and crypto to the blockchain, then receiving a reward for so doing - that reward is where bitcoins originate. You see, they don't originate from governments.

There is nothing in the paragraph about litecoin that has anything to do with some scheme such as you have envisioned.

Miners produce bitcoins. No approval or endorsement is needed, the cryptography itself is the proof of the work.

The mining would be done only by the UN! And the coins encrypted with a private UN key, and decrypted with a public key.

 

[mhaze]

The mining would be done only by the UN! And the coins encrypted with a private UN key, and decrypted with a public key.

Well, that wouldn't work.

First, eliminate the idea that 'mining would be done by the UN'. They'd just make up the number sets with no mining and no block chain. That's what governments do, after all. They just make up currency out of thin air, keeping the right to print all they want.

Then they give out a 35 digit number say to you and you go and buy something.

What happens then?

If I take a picture with my phone of your 35 digit number, what prevents me from spending it?

How is double spending prevented, or even detected?

How do you get change? Does the number somehow split into two pieces?

How is stealing of the private keys prevented within the UN?

Since the UN can print all they want, there would be nothing to prop up or hold up the value of the coin.

See, you haven't actually got a solution. You started with a personal belief like "It'd be really great if the UN ran a world wide ecurrency!" and then well, somehow all the pieces of that would surely fit together, right?

Wrong. That is why bitcoin system is actually astonishingly brilliant. It actually works. It is a system made up by hackers, which means it is pretty hack proof. You are not going to devise a system that works in a few moments. It is say, somewhat more difficult than a piece of work like a Phd dissertation. That is for 'a system', not 'a good system' or 'an excellent system'.

 

[psionl0]

That would require banks to actually produce crypto keys in the ratio to which they did fractional reserve banking, and maintain some transaction history.

As I suggested earlier, a FIAT-COIN would have nothing to do with banks. The main difference would be that fiatcoin miners would only get the transaction fees while any new coins mined would go to the government. The only role the banks would have would be to offer investment accounts that paid interest so they could make loans. Nobody would need their bill payment services anymore so you can be sure the banks would oppose a fiatcoin all the way.

 

[Anders Lindman]

Well, that wouldn't work.

First, eliminate the idea that 'mining would be done by the UN'. They'd just make up the number sets with no mining and no block chain. That's what governments do, after all. They just make up currency out of thin air, keeping the right to print all they want.

The coins could have a block chain of transactions just as bitcoin, and with the proof of work algorithm replaced with the UN encryption. I don't know the technical details for this though.

 

[mhaze]

As I suggested earlier, a FIAT-COIN would have nothing to do with banks. The main difference would be that fiatcoin miners would only get the transaction fees while any new coins mined would go to the government. The only role the banks would have would be to offer investment accounts that paid interest so they could make loans. Nobody would need their bill payment services anymore so you can be sure the banks would oppose a fiatcoin all the way.

I'll go back and look at what you wrote, but sounds like you are not sufficiently Communist/Socialist/Fascist in leaning to produce anything that the kleptomanic schemers of the banking-government complex would want, as you have not created instruments that increase the power of the power hungry....lol...

 

[mhaze]

The coins could have a block chain of transactions just as bitcoin, and with the proof of work algorithm replaced with the UN encryption. I don't know the technical details for this though.

Right, I think where that line of thought reduces to in practice is a scheme where the government(s) know every penny you spent and to whom.

Nonwithstanding that, you need to look at my above list of questions and see where they lead. Just take one of them and think it through.

For example, how is change made? I have a uncoin for $50, and I spend $35. The essence of bitcoin is that each individual has his own private/public key pairs - so called asymmetric crypto. Say a hundred such pairs in one wallet. In the case of bitcoin I know exactly how change is made.

If the UN somehow held the private keys I can't see how it would work, unless they knew all transactions. And then you are back into a central authority, not a peer to peer system, and in fact, no block chain, just some big database somewhere. Then you have a system that requires trust in intermediaries, which has no intrinsic fail safe against fraud or coparty risk.

 

[Anders Lindman]

Right, I think where that line of thought reduces to in practice is a scheme where the government(s) know every penny you spent and to whom.

Nonwithstanding that, you need to look at my above list of questions and see where they lead. Just take one of them and think it through.

For example, how is change made? I have a uncoin for $50, and I spend $35. The essence of bitcoin is that each individual has his own private/public key pairs - so called asymmetric crypto. Say a hundred such pairs in one wallet. In the case of bitcoin I know exactly how change is made.

If the UN somehow held the private keys I can't see how it would work, unless they knew all transactions.

No! The UN encryption is a layer on top of the Bitcoin (or similar) protocol. Uncoins, lol, clever name. So the uncoins would function just as bitcoins for the individual wallets.

 

[Anders Lindman]

I found this video: How Bitcoin Works Under the Hood -- http://www.youtube.com/watch?v=Lx9zgZCMqXE

That can be interesting for people, like myself, who want to learn the technical details about Bitcoin.

My idea with the uncoins is that the proof of work algorithm in Bitcoin is replaced by a UN encryption algorithm. Let's say that I buy uncoins for $100 from the UN. And to simplify the example, 1 uncoin = $1. Then the UN adds 100 encrypted transactions to the block chain and transfers those uncoins to my personal uncoin wallet. Or could that be done with just one transaction perhaps? I'd better check the video.

 

[portlandatheist]

I don't know what you are trying to say. Mining bitcoin is a process of finding cryptographic solution to the last block of transactions, then if successfully being the first to do so, attaching said block and crypto to the blockchain, then receiving a reward for so doing - that reward is where bitcoins originate. You see, they don't originate from governments.

There is nothing in the paragraph about litecoin that has anything to do with some scheme such as you have envisioned.

Miners produce bitcoins. No approval or endorsement is needed, the cryptography itself is the proof of the work.

Much bitcoin mining is done by malware on compromised hosts and today's rise in price is being linked by some to the randsomeware crytpo locker. Great cast of characters there.

 

[mhaze]

Much bitcoin mining is done by malware on compromised hosts and today's rise in price is being linked by some to the randsomeware crytpo locker. Great cast of characters there.

no, almost no bitcoin mining is done on malware compromised hosts.

Go work the numbers , production rate say for typical graphics card 300 mega hash per second. Compare to typical aggregate computations to yield a solution resulting in an award. You will see this is urban myth.

2nd assertion similar flaw in logic.

 

[Anders Lindman]

Ha! I just learned that as the number of bitcoins possible to mine reduces, there will be a shift to transaction fees. Transaction fees! That totally sucks. With uncoins there would be no transaction fees, and instead of bitcoin miners there would be UN certified encryption nodes adding transactions to the block chain.

 

[mhaze]

I found this video: How Bitcoin Works Under the Hood -- http://www.youtube.com/watch?v=Lx9zgZCMqXE

That can be interesting for people, like myself, who want to learn the technical details about Bitcoin.

My idea with the uncoins is that the proof of work algorithm in Bitcoin is replaced by a UN encryption algorithm. Let's say that I buy uncoins for $100 from the UN. And to simplify the example, 1 uncoin = $1. Then the UN adds 100 encrypted transactions to the block chain and transfers those uncoins to my personal uncoin wallet. Or could that be done with just one transaction perhaps? I'd better check the video.

here is the problem, you are trying to create a flawed solution in order to create something that could be controlled by UN. A worse solution.

A flawed solution likely simply will not work. All possible attacks to the system will be made and they will exploit its weakness and take it down.