Topic: Hostile action against the bitcoin infrastracture - page 6. (Read 20693 times)

How do you know they haven't already started? 

Consumer demand isn't the only thing that prices an item $150 over list price.
  http://www.pricewatch.com/gallery/video_cards/radeon_hd_5970

More likely, many people will use a website such as mybitcoin rather than the bitcoin client.

Each user then only has to worry about their login password, just like other banking websites.

A few years ago, this might have been true, but not anymore.  Dropbox has millions of users.  OS X comes standard with Time Machine.  Backup is becoming easier and more common.  There are also centralized Bitcoin services such as MyBitcoin which manage your wallet for you.  Just like other cloud services, they handle backups and presumably use infrastructure that's far more reliable than most home users have.

By the time Bitcoin is popular enough for viruses to steal wallets, these kind of services will be far more prevalent.

No it doesn't force them to be techies.

Forcing people to be responsible for their own health doesn't force them to be doctors.

Forcing people to secure their gold coin doesn't force them to be banks, or safe manufacturers.

etc.

If there is strong demand for user friendly wallet security, I gurantee that it won't take long until lots of friendly entrepreneurs will offer this service.

Just give it some time. This project is still in its infancy.

Do you carry your entire life's savings in your wallet?  Most of mine is in one financial institution or another.  Trusted third parties will emerge in the bitcoin economy for the purpose of safeguarding your funds.

I also keep my bitcoin "wealth" spread around several different machines, and each of those wallets is backed up in a TrueCrypt vault.  For the one publicly-accessible server that I have with a wallet on it, I only keep the minimum necessary balance in it.

Sorry, that was too abrupt.

I'm all for making bitcoin easier and safer for the non savvy, I'm not super savvy myself.

My backup is physically separate from my computer. I realize both are vulnerable, but losing both at the same time seems unlikely.

People who can't even do that can get advice, or even have someone else handle their large amounts.

Again, I didn't mean to imply that it shouldn't be considered only that it isn't a fundamental problem imo.

*facepalm* Why do I bother? Did you even read what I said? It's not that simple. How do I know where I copied it is safe? You are demanding that everyone who uses the currency be tech savvy. I don't care how reasonable you think that demand is because you happen to be tech savvy, it isn't.

The second a common good problem crops up and people are afforded the opportunity to be callous, snide, and unhelpful to new people, they make a career out of it.

You'll change your tune the first time you have your wallet burnt by a DOD professionally crafted virus.

You answer is as dim as saying "don't crash your car" in response to issues of vehicle safety. No one plans on getting in a car wreck and sometimes it's not your fault, worse, sometimes, it's no one's fault.

Copy your wallet somewhere else.

Just to contribute a potential attack methodology...

Wallet eating viruses. Since there is a fixed number of bitcoins, the system in effect has hit points and consistent wallet attacks could crush the currency by attrition and give rise to something akin to a deflationary spiral.

The nature of the wallet is in my opinion the weakest link of the bitcoin system followed closely by the inability to readily exchange them to other currencies.

I would like to somehow store my wallet in the network itself, or dispense with the wallet entirely somehow, so if my computer is destroyed or I am prevented from accessing it, my money is not destroyed/lost.

This problem will only get worse over time when one realizes the majority of Internet connected devices on the planet are phones, this pretty much assures us that eventually we'll have mobile versions of bitcoin, making wallet loss and destruction ever more common.

Forcing end users to secure their wallet file in effect forces them to be techies to feel safe enough to use the currency. This is a non-trivial problem because perception is a huge part of any currency's value. And right now the number one biggest problem I would have in convincing family and friends to use the currency is when they realize they have to treat a file on their computer like a sock full of life savings.

Regardless of the reality of the situation the perception will be that your money could vanish at anytime and as a result of that adoption rate be pressured downward as the acceptance of the currency climbs. Or, as bitcoins become more worth stealing, the anxiety of the wallet file will increase.

to make matters worse there also seems to be a conflict of interest with regard to wallet files and this problem generally since the more coins that are destroyed the more the rest of the coins are worth. We've created a common good problem where it makes individual sense to encourage the destruction of wallets to inflate your own assets.

Wallets need to be made secure and permanent along with the rest of the system, and yet those most in a position to do this are most motivated not to.

In my opinion if bitcoin ultimately fails, this will be why and a cunning government will exploit that truth to disastrous effect.

I think the best way to strengthen Bitcoin against attacks is for it to become a more useful medium of exchange.  Namely, to be accepted for payment for a wider selection of goods and services.  We have a long way to go, but if Bitcoin were accepted as widely as PayPal, there would be substantial pressure against shutting down the entire network.  Too many jobs and businesses would depend on it.
PayPal processed donations for WikiLeaks, but the Feds didn't shut down the entire payment processor.  Certainly governments will pressure exchanges and other centralized components of the bitcoin community, but peer to peer means new components will spring up to replace them.

Broader acceptance of Bitcoin as payment also strengthens the infrastructure.  It means more network peers, more mining, more exchanges, more smart developers improving infrastructure.  I keep coming back to the first answer to the FAQ, "How to help Bitcoin?": "offer Bitcoin as a payment option at your web shop or service."

All of these, of course, can be fixed with the robotic courier network!

Or less ambitious, local bitcoin dealers.

What, coffee isn't a food?

That's right, because without such an exchange bitcoin worthless. Becouse for them you can't buy food right now

Manipulation of price for bitcoin is not the problem, but rather the ability for price information is the problem. Shutting down liberty reserve and other way to exchange currencies for bitcoin meant that people no longer have any way of price estimation for bitcoin.

Decentralized P2P infrastructure is Bitcoin's strength.  If one were desiring to suppress Bitcoin, are there easier ways?  Consider this approach:

Right now, it has become a de facto standard that the "official" price (USD/BTC) is obtained by looking at the market on Mt. Gox.  Even on Bitcoin OTC for example, offers are made in amounts relative to the "current market price" on Mt. Gox.

Mt. Gox acts as a spigot for the Bitcoin economy that spews Liberty Reserve USD since withdrawals from Mt. Gox are sent to your Liberty Reserve account number.  However there is no comparable inlet for LRUSD.  Today, the average Bitcoin participant cannot easily fund an account on Mt. Gox for which to purchase bitcoins.  The options available to these participants are to first buy LRUSD outside of Mt. Gox (takes too long, costs too much) or to wire funds to Mt. Gox (takes too long, costs too much) and even then, Mt. Gox buys LRUSD with the funds that were sent.

Thus there is an imbalance between the supply of one commodity (bitcoins) and the supply of the exchange medium (LRUSD MTGUSD).  This is visually apparent when looking at the Mt. Gox Matrix: http://bit.ly/mtgoxmatrix  

When those bitcoin sellers on Mt. Gox chase the buyers, the only remaining potential buyers are those whose accounts still have funds available in their Mt. Gox account.  Those remaining have the luxury of being able to sit on lower bids and let the sellers approach.  As the result of this, the price falls.   It is thus apparent, in my opinion, that the price at Mt. Gox does not necessarily reflect the supply and demand for bitcoins, but instead reflects the supply and demand for LRUSD MTGUSD.

To control the price of all bitcoins, simply buy bitcoins from sellers outside of Mt. Gox, transfer those bitcoins to Mt. Gox, withdraw in LRUSD, hold onto those LRUSDs by not selling, rinse and repeat.

Ironically, this actually becomes a less expensive endeavor over time as once the price on Mt. Gox starts to drop, the price to buy bitcoins outside of Mt. Gox drops because other markets use Mt. Gox's price as their reference.

It would make sense then that the ability to easily control the price provides the opportunity to suppress rapid adoption of Bitcoin as a currency.

This is an easily employable option that needs no legislation and can be accomplished without any brute force attack / internet filtering, etc.

[Edit:
  tl;dr: At this phase, insufficient access to LRUSD MTGUSD is Bitcoin's Achilles' heel.]

Since you are using p2p filesharing networks as an analogy...

Government crackdowns actually stengthened the p2p filesharing ecosystem instead of weakening it.

Government crackdowns acted like something of an evolutionary pressure; for every filesharing network that was successfully destroyed, a new generation of better, stronger ones sprang up.

Napster relied on a single centralised server. The government  shut down the server. Result? Several Napster clones that could support multiple servers. Then the government started taking down servers one by one. Result? Serverless technology. Then the government started prosecution of individual users. Result? Proliferation of VPN providers and pseudonymous p2p. And so on....

I doubt we would have a lot of innovative technologies today (eg. i2p, tor, bittorrent) if governments simply had left Napster alone.  Talking about unintended consequences!

Conclusion:

Government may succeed in destroying the current block chain. It may even succeed in destroying the current implementation of the Bitcoin protocol. But it will never destroy the source code, the meme, the spirit, and the community. The p2p cryptocurrency genie is out of the bottle.

Or they can approve a law with the orwellian title of "net neutrality" to end net neutrality and a lot of people will support it.

This is a solution: http://guifi.net

Given how eager some supposedly liberal western governments (like Britain and Australia) are to push for internet filters, I don't see how they would uphold internet freedom. They can simply say "child pornography", and the masses will support any action they might take to curtail internet freedom.

They don't have to "support" bitcoin they just have to not eliminate all internet freedom. Which many may not want to do if they could since the internet enables huge quantities of taxable trade.

The US has already been quite successful in pushing the rest of the world to adopt legislation to curtail p2p file sharing. It would probably be able to achieve the same with p2p currencies, unless the other states support bitcoin. But what incentive would they have to support a currency over which they will exercise absolutely no control, and that will compete with their own national currency? Unless a major nation state steps in to support bitcoin, I don't see how it will be able to withstand the pressure from the American government.