Topic: Bitcoin concept is groundless TECHNICALLY..this article says..Can anyone defend? - page 3. (Read 10046 times)

the cost of the attack grows linearly with mining capacity, no more. so whether it's asymmetric to value doesn't change.

I assume that's right now. Is there any way to extrapolate to when we're at the point that he's talking about, when typical clients can't even be bothered to listen for all transactions or scan the entire block chain?

the fatwallet link does exactly this sort of analysis. it would cost on the order of $700,000 for a competitor with a vested interest in the block chain's failure, or someone intending to profit from manipulating the exchange rate for coins in the current block chain, to launch a dos attack. that also suggests that a government - any government - could very easily stop bitcoin if it wanted to.

It's decentralized in that there is no single authority determining which transactions are valid or not.


In the British Peerage system, not just anyone can declare themselves a "lord". That's the exact opposite of Bitcoin where anyone can become a "lord" by simply downloading the entire block chain.


That's not an argument against anonymity. That's an argument against usability which wasn't on his list of things he was going to argue against. I would say he's moving goalposts.


Just to keep the system afloat? No, that's a side effect. The reason why honest nodes are consuming resources is so they can make money, either through finding blocks and gaining a bounty or eventually, transaction fees.


What deeds? What do you think can be accomplished by controlling the network for a short amount of time? I admit that I don't know but do you? I'm not sure how fearful, uncertain or doubtful I should be without any specifics. Though, I admit "deeds" doesn't sound very pleasant.


The key phrase is "sufficiently CPU-rich attacker" which eventually would be infeasible for just a DDoS by a single attacker. Any attack has to include some kind of discussion about incentives. If I can make 2 billion by spending 1 billion then it makes sense. If I can piss the world off by spending 1 billion, there might be better ways to spend that money from the perspective of an attacker. Otherwise, if no profit is being made, we can just wait for the attacker to run out of money and resume business as usual.


That's a fairly huge claim with nothing to back it up. Is he saying that the same attacker able to bring down a decentralized system somehow can't bring down a centralized one? That seems implausible especially considering that he can't even audit the code he's depending on for his alleged security. He just has to take someones word for it! Either way, a data center full of GPU miners costs orders of magnitudes higher than a few exploding yellow vans. Also, if he's not paying any fees, who is paying for the infrastructure? Most likely, he is, with his tax money or if the fees are charged to the merchants then he's paying for it through higher prices for goods and services. Few things in this world are free. Of course, "privacy-preserving" has to be false or at least qualified. Privacy from whom? If it's just from the other end of the transaction, I can do that too. I'd like privacy from everyone, including the government and all their contracting middlemen.

Europeans, particularly Western Europeans, have a trust of government and government regulated institutions that Americans do not tend to share.  I think that this faith in such social constructs is going to be tested over the next several years.  And although you may not be directly charged for these transfers, there is a cost.  Someone is paying for it.  If it's not you, then it's likely the online vender; which is the Paypal/Credit Card model.  If not, it's your government paying the costs; which means it's still you indirectly.  But what is the catch?  You may feel that your private business is still private because the government doesn't share it, but it's not private from your government.  There may yet come a day when you regret that.


The inflation issue is a red herring.  Bitcoin inflates, and currently does so at a rather high rate.  The only reason that the relative value of a bitcoin continues to rise is because the size of the economy is rising at a substantially higher rate.

Honestly, I couldn't care less if Europeans use Bitcoin or not.  If Bitcoin needs my advocacy to succeed, then it's already doomed to failure.  There are always going to be those who disagree on anything.

@creighto, that's not how people will look at it unless bitcoin becomes their operational currency, and that's a pipe dream at present. even the wildest bitcoin optimist doesn't think it will happen soon, if ever.

in the meantime, people get paid in dollars, euros, pounds, and similar currencies, and they want to buy stuff in those currencies. for them, bitcoin is a very expensive and unreliable way to do that. they face large exchange fees, unregulated and probably illegal currency exchanges like mt gox, and value that fluctuates as the result of speculation.

moreover, much analysis in the forum suffers from a us-centric view. american banks are particularly inefficient, corrupt, and old-fashioned. americans come to europe and offer magnetic-stripe cards for payments, and grocery clerks laugh at them because it reminds them of the 90s. if you're not familiar with european banking, as this dutch author is describing it, imagine that you had free american-style 'ach' push and pull payments available to you from all of your bank accounts. the average european can presently make payments online for free, in a trusted environment backed by law, to anyone, for any reasonable amount of money, very easily. (very large amounts are typically paid through swift rather than such ach-style payments, at a slightly greater, but still relatively small, cost to the consumer.) that's what most of them want to do.

similarly, the average person concerned about the inflation of their currency doesn't become an activist and try to stop all inflation. people instead simply diversify away from their currencies in their long-term portfolios, which is very easy and cheap to do. even americans have very good instruments available for this through etfs listed on the nyse.

I read the article.  I can't say I was impressed by his grasp of the concepts.

Really?  What other method of online exchange system are you are off that can transfer an arbitrary amount of value for seven cents?

The way you make millions is to literally build a business in the bitcoin economy and finding niches that are profitable. That's the probably the best way to give bitcoin a fighting chance.

nikileshsa, i wouldn't go quite that far. the system is likely secure enough make payments and similar transactions. it is severely questionable as a way to make investments or savings, at present.

i've linked to it before, but the analysis on fatwallet got this right: http://www.fatwallet.com/forums/finance/1090435/?start=192

i strongly agree with you, however, that bitcoin needs more of a systems-security analysis. it is still a very young project and ought to be conceived as less ossified than many people in the forum currently conceive it. the software is very definitely still 'beta'. developers, users, and speculators would do well to remember that.

i honestly say that only for their own sake. it's not like i'm betting against bitcoins in the main block chain. indeed, i own quite a few through mining. i am concerned, however, when i see people speak of waking up as millionaires or planning for their retirement based on similar positions. moreover, that runaway enthusiasm can very possibly end poorly for bitcoin as a technology, and the technology deserves a better chance.

As I see it, his claims are basically true, except for his assumptions that Bitcoin is somehow inefficient.  He claims that current systems are without fees, and provide high levels of "security", "privacy" and "liquidity".  And from a typical consumerist perspective, this may seem to be the case.  Really the fees are just hidden.  I think that if he looked into it further he would find huge costs, quite a bit of insecurity, forced-liquidity, and very little actual privacy.  Let's put it this way:  I might concede that Bitcoin is an inefficient way of solving the technical problem of facilitating trade;  but it is an extremely efficient way of solving the political problems of facilitating trade.

Bitcoin is peer-to-peer in the same way as Usenet or the Internet itself. Anyone can be a peer -- most people just aren't.

Anonymity can be perfect if you take the necessary precautions. It's just difficult right now.


It isn't possible to do this indefinitely unless you have more than 50% of the network's CPU power. If you've got that much CPU power, there are more damaging things you can do.

I second unk. This article is a balanced analysis and it highlights the need for a  really secure virtual currency system and I am convinced that the current system is far from being secure enough to make real transactions and there is a lot of scope for improvement.

I would encourage similar balanced technical analysis to happen by experts in Systems Security research.

yes, this is a good, balanced analysis. he outlines several denial-of-service attacks that sensitive bitcoin developers have been aware of for some time. for example, it is easy to tie up a node with incorrectly signed transactions, and it takes about ten lines of code to mount that 'attack'.

he is also right about the asymmetry of various attack vectors (though the reward for mining attempts to counteract this, albeit in a somewhat self-fulfilling way that may not be self-sustaining). and he's correct about the opportunity to aid a dos attack by forcing block-chain reorganizations strategically rather than just in the 'dumb' way to which many people casually assume an attacker will be limited.

his social point is murkier, and many here will disagree with it, but i tend to be sympathetic to it. another way to say it is that for people who don't already ideologically oppose governments (and seriously, how many people has anyone in this forum ever persuaded with his or her rhetoric?), bitcoin has to compete on fees and features. it can compete on features, but i am not sure in the end that it can compete on fees without substantial modification.

Well. Here is an interesting article I just saw in one of the tweets.....

http://www.pds.ewi.tudelft.nl/~victor/bitcoin.html

I would be happy if this article is discussed in detail before anyone tries to take Bitcoin seriously.


The authors profile is interesting.....