Bitcoins

[sharktale1212]

First of all I'm not surprised at all, I know about litecoins too.. was considering mining them at a point, but then I thought better of it and yeah I also know there are other such up and comping crypto-currencies.

Secondly, can u actually prove that robbing a bank is more difficult than hacking a computer(and oh thats oversimplification coz you cant simply hack a computer, there's more to it) ?
I acknowledge your point of view but I completely disagree with it.

Thirdly,yes bitcoins are actually too volatile to be used in business at least right now, but from an investment point of view I can see its only gone up. That's what attracts me as an investor, yes the research material on it is light but like everything else, there is always a method to the madness, sensex fell 800 points on Friday and I'm quite sure a lot of money changed hands but I'm still quite unsure why the drop was so large and so sudden. Also,yes its(BTC) value may drop, and in fact I think its already extensively used to launder money so I guess you are right there.

I have heard of Silk Road , its almost synonymous with Bitcoins but didn't know about Atlantis . But its a major misconception that BTC has its roots in Silk Road. Bitcoins came into being sometime around 2008, Silk Road began in 2011.

Sources:
https://en.bitcoin.it/wiki/History
http://en.wikipedia.org/wiki/Silk_Road_(marketplace)

Well, I am not sure if you are serious when you ask to prove robbing is more difficult than hacking a computer. The simplest of reason is the human element (guards/physical security) involved. If you are, then I think you don't know what an exploit is.
As for Silk Road and BTC, when I say roots I means it gained attention(and price rise) only after being adopted on Silk Road. It dint really matter before 2011. If you dont believe me, look at the BTC charts:
http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zv

There is significant volume but no price change before Feb 2011.

 

[blkrb0t]

That still doesn't mean Bitcoin as a currency is dependent on Silk Road marketplace. Silk Road can close shop tomorrow and go away, but Bitcoin will still live on.

Also, you are over-hyping the robbery of money by hacking versus physical manoeuvres. Your digital wallet is safer than your physical wallet any day.

 

[sharktale1212]

@sharktale1212 I know all about Bitcoins, but it is still not any easier to hack than real bank accounts. What you are talking about is hacking users and exchange sites and not the Bitcoin protocol itself; the protocol is very secure and will not budge even if the US government makes it illegal. It will still keep running; it works on some solid cryptology and peer-to-peer file sharing technology. The only difference is that currency exchange sites and legal shopping places won't be accepting it.

It's value might drop tremendously and those who use it as an investment will lose out, but the currency itself will still be valid.

And moreover, more Bitcoin-like currencies such as Litecoin or PPCoin will only give it more validity going into the future. Bitcoins don't have their "roots" in Silk Road; it's just what the market has adapted them for.

Silk Road closes down because of Atlanta? No problem, some other site(s) will crop up; though Atlanta is struggling from what I've heard. Illegal drug selling sites make up a large percentage of Bitcoin transactions, but as it picks up more legal sites and sales venues, it will only keep moving forward. The government can't shut it down completely; they can only restrict it, just like peer-to-peer file sharing.

Were we discussing bitcoin protocol hack? As @6pack put it "people loosing lots of bitcoins after the server was hacked sometime" which I think meant an exchange site hack (most probably Mtgox). If you put it like that, yes even Steam is difficult to hack. Doesnt mean steam accounts are not for pickings.
And you do know one of the features of bitcoin that is anonymity proven to be moot. It is possible to trace real world identities by looking at the block chains. So until someone has the laundering operation of Silk Road, you can be traced back. So if it is blocked/made illegal it will be gone for good.

 

[blkrb0t]

It's clear that you don't understand how it works.

Even bank accounts get hacked daily; so that point is moot to discuss in the first place. There are many other specific points to discuss about crypto-currencies, but getting hacked isn't one of them. That is shared by even the normal currencies.

 

[sharktale1212]

That still doesn't mean Bitcoin as a currency is dependent on Silk Road marketplace. Silk Road can close shop tomorrow and go away, but Bitcoin will still live on.

Also, you are over-hyping the robbery of money by hacking versus physical manoeuvres. Your digital wallet is safer than your physical wallet any day.

I think you need some reading lessons - where did I say it is dependent on Silk Road? I said it has roots ie gained attention. As simple as that. I don't have anything to prove that currently majority of volume is coming from Silk Road or outside. So, I wouldnt even make an assumption whether it survives if Silk Road closes down tomorrow.

And again, I can show you videos which talk about bitcoins not being that safe. So lets not even go there.[DOUBLEPOST=1376827986][/DOUBLEPOST]

It's clear that you don't understand how it works.

Even bank accounts get hacked daily; so that point is moot to discuss in the first place.

I was gonna close this by saying Bitcoin is a novel idea and I hope it survives to prove me wrong. But then I forgot I am up against the great blkrb0t, who knows it all.

That said I am outta this thread. What ever floats your boats.

 

[blkrb0t]

I think you need some reading lessons - where did I say it is dependent on Silk Road? I said it has roots ie gained attention.

That's not how you use the word "roots." It's clear you are the one who needs a reading lesson in comprehension. Instead of saying that your use of word was wrong, you have taken it personally.

I don't have anything to prove that currently majority of volume is coming from Silk Road or outside. So, I wouldnt even make an assumption whether it survives if Silk Road closes down tomorrow.

Silk Road is just a marketplace that uses it. It being there or not being there isn't core to the existence of Bitcoin.

And again, I can show you videos which talk about bitcoins not being that safe. So lets not even go there.

Yes, that was supposed to be the discussion, not about "getting hacked OMG" and other over-hyped stuff. Those are the same with every currency. The point about anonymity which you raised is worth discussing.

I was gonna close this by saying Bitcoin is a novel idea and I hope it survives to prove me wrong. But then I forgot I am up against the great blkrb0t, who knows it all.

That said I am outta this thread. What ever floats your boats.

Again, you've taken it too personally. I never said I know it all, but what you were saying wasn't right either. If you could've countered my points with valid rationale, I would've accepted them gladly and corrected myself.

 

[coolcrook]

Well , well , well... that escalated quickly.

Anyway here's some news

India's central bank is "watching" Bitcoin, the virtual currency that is gaining popularity among Net users, but has no intention of regulating it right now.

RBI commented on bitcoins, read full article below:
http://articles.economictimes.indiatimes.com/2013-08-14/news/41409715_1_bitcoin-gox-virtual-currency


Also in apparent celebration of this news, buysellbitco.in is giving a 5 % discount to all customers:
http://blog.buysellbitco.in/news-from-rbi-on-bitcoin-and-its-good-news/

@sharktale : Saw the charts your'e quite right , it started rising in Fab-Mar 2011 but it stayed around 20$ for a long time after that and then suddenly jumped again in Feb 2013 and this time it was a far greater rise. In April it touched 200$, currently running around 100$.

And think me dumb if you want but I think robbing a bank is easier than hacking and stealing bitcoins for the following reasons:
A. Anyone who wants to can try robbing a bank.
B. Hacking seems like something that requires a lot of skill( being a computer engineer I'm no closer to being a hacker )
C. Even with a lot of skill finding a vunerability isn't easy
D. Involvement of Humans actually makes it easier to rob stuff, humans make mistakes, humans also get greedy, many bank jobs are inside jobs.
E. Banks have hard cash, lot more incentive for criminals
F. I watch a lot of heist movies

I have no way to prove myself, its just my view.

 

[6pack]

Most hackers or people wanting to hack, outsource the job or buy exploits from certain places. No need to be a scripter or well versed in programming. You just need some money.

 

[sharktale1212]

@coolcrook - that was just a discussion between all-knowing troll and an idiot me. That said, go back and see when did Atlantis opened its operation (read around Feb/March 2013).
And though it ran upto 250+ in April, it came crashing down to 100 - which for me makes it shit even for investment. Not even Sensex -800 points will cause people to loose more than half of their savings so quickly.
As for computer hacks, let me put things to perspective. Google Zeus exploit pack - a very famous pack used to hack bank accounts - yeah it does prove banks are not safe and makes bitcoins the hero. Remember this, bank hacks can get your money back to an extent, bitcoins doesnt - its gone when it is gone. (and seriously you dint just use the computer engineer = or closer to hacker analogy).
Edited

 

[coolcrook]

@sharktale1212 :Sorry, didn't realise saying bickering was offensive, edited post now.

Back to the discussion, are you implying that the opening of Atlantis (which I read about a little now) was what made the price of Bitcoins rise 12x ?

As for investment, greater the risks, greater the reward, if some bought bitcoins when they first came out, they'd be rich no matter what, if someone bought it at 50$, they'd still be rich, yes of course the unlucky folk that got in late must have lost money. As high as the risk is(very high) the reward seems quite equally fruitful is what I'm saying.
And about the sensex, people lose all their money in a day, I speak from 1st hand experience here. Coz you don't just invest in the sensex, you invest in individual stocks which rise and fall sometimes independent of general consesus of the markets, the most volatile stocks(read SmallCap) are usually the most risky and thus usually the ones that have the highest potential for large and/or quick rewards.

Frankly I haven't even understood the entirerity of Bitcoins but its quite fascinating quite simply because of the underlying Anarchism and the genius behind the idea. I hope it wasnt created simply to launder money or sell drugs but even if it was , its quite something , isn't it ? After all neccessity is what breeds creativity.

Didn't get the computer hack thing .

And sorry I'm not as graceful, coz I haven't really ever gotten into such heated discussions on forums much.
*Earlier Post Edited*

 

[blkrb0t]

I agree, I am an all-knowing troll. A troll who never claimed to know everything, but still wasn't given enough valid rationale to change his stubborn mind. A troll who never called someone anything, but only on the points they made, but yeah, still a troll.

"take this whatever way you want" - so rational indeed.

I am not arguing to just win or lose the debate here, nor am I disrespecting everyone as a person, just the points they're making. Believe me, I pay equal respect to every poster here, or on any other forum/community, irrespective of the side they're debating on. If you point me out how I'm trolling, without just outright labelling, I will make sure that I learn from it and don't repeat it in the future.

Anyway, back to the discussion.

 

[sharktale1212]

@coolcrook Atlantis started off a competition for a limted resource. Think unregulated and uncontrolled onions in current market (for a moment forget about the hoarding traders get into). And to top it off, it has been proven that you could trace people using the blockchains (read a forbes interview with the owner for silk road - here) - so to actually run a full scale laundering scheme you do need to have cash in hand. I mean, how do you even hide drug cash without having legitimate cash. That actually lead to hoarding and then the rise. When the realisation set in that Atlantis was not all it was being touted to be, it came crashing down. (Check Tulip mania: http://en.wikipedia.org/wiki/Tulip_mania -- a classic example of this kind of thinking from a fav movie - Wall Street (1987) )
As for investment, high risk and high reward is gambling, not investing. In investment, capital protection is the first and paramount trick. And, not to sound conscending but the people buying penny stocks loose money by the dozen. Its not investment, its not trading, simply gambling. If you still are not convinced, then lets agree to disagree.
IMO, Bitcoins are a great idea and then a shitty idea, all at once.
Why great? for everything you can think of.
Why shitty? money normally has a backing behind it. If you see our rupee notes, it says I promise to pay the bearer a sum of Rsxx - theortically you could return this to the Indian government (yeah they will resist it for sure) to get some value out of it (some say equivalent amount in gold ). So whats the backing behind bitcoin? Only the people who accept it as money for their services. Without them there is no value ie without demand it wont even climb that high. Its just my two cents.

An exploit pack is basically a collection of known vunerabilites. Some of them being 0-day ie just being released. You can buy them off underground websites. They come with handy installation guides (or might not depending on the quality of the pack). Install it on a sever/infect a file/usb and you are ready to go. Its that simple. The Zeus exploit pack is a collection of vunerabilities targeted specifically at banks. If you are interested in knowing more - check out Krebs on security. Some of his stuff are pure popcorn style puts even the Hollywood heist movies to shame.

Edit: Germany just said Bitcoins can be used as a legal tender for payment.

 

[sharktale1212]

Post will be edited after 12 hrs. Really unnecessary on a good piece of discussion

Edited: As quoted earlier.

 

[coolcrook]

Well sharktale made me think about the backing of Bitcoins and your'e quite right in that perspective but here's an interesting page that tries to delve into backing for monetary currency from a slightly different perspective.

http://www.quora.com/Bitcoin/What-is-the-value-backup-of-BitCoin

Excerpts
So what is the value backing of Gold?
Well, it's been around a long time, so there are some historical signals about the likelihood that it will continue to be valued. But it's price is certainly not based on it's utility.

What's the value backing of Brad Pitt?
Without the assistance of Wikipedia, I can tell you that this man can easily earn $20 million dollars for a few months work.
So what backs his value? Nothing tangible. There are equally good looking people out there. But none of them have his name, persona, reputation and acting career.

See above link for complete article. Despite being pro-bitcoins even I'm not completely convinced(for Practical reasons) but it does make for an interesting read. And do not miss the comments below either.

 

[sharktale1212]

There is this: But none of them have his name, persona, reputation and acting career. And there in lies the rub.
What reputation and career does Bitcoin have? None. Yeah with time it might get a rich history later, I mean even Pitt was not famous at a time....but....

How can we be sure that tomorrow there wont be another thing called Sitcoins (or a Michael Fassbender, bear with me ) , which have similar features (persona) to bitcoins and then some? What becomes of bitcoins then? Are we going to jump ship?

And then about gold, I think the author forgot about why gold is preferred metal (completely discards the utility). It's mallelability (world's most) as in it could be broken down to smaller parts and still be useful. It can be given a shape and carried.

As for fiat, there is again an assumption - government is not a "bunch of people". Even if we hate them to their core, they a representation of a group of people (called a country). Yeah, they might abuse their status or make popular/unpopular policies, but they still represent me or you.

 

[coolcrook]

I can see you have picked out all the weak points the author has made and I somewhat agree with you but you cannot deny the following ,

At this moment money is created out of thin air:

1. You put e.g. 1000$ on a bank account.
2. The bank lends that 1000$ to someone, so theoretically you both have 1000$ now.
   But
3. If you'd suddenly want to take that money from the bank - they'd have to borrow that 1000$ from someone who has it.

On larger scale. If everyone would want to take out their money now:

• banks would be ruined
  and
• not everyone could get back their funds.
  
  Money isn't currently backed by anything.

I have known this but the way its been put here is just so simple and brilliant at the same time, this makes explaining it to a layman a breeze.

As for Brad Pitt(he's reputation etc.) - thats why he costs millions but Bitcoins are stars in their own right too 130$ and going strong thats why they are valued way over LTC and other cryptocurrencies that were late to the party.
And yes ideally if a better alternative comes along, people will jump ship(me included)

Well the usability of gold is quite low actually, speaking only about use(function) gold is quite useless, copper or iron should be much more valuable than gold, gold is used today mostly for trading and for ornamental purposes(much lower percentage). If all the gold in the world would dissapear overnight, there would be much hue and cry, economies would fall but essentially life would remain the same, losing iron the same hypothetical way would bring back man to the early ages..

Fiat is not an assumption. I didn't quite get what the point was about governments and such(please do elaborate) but Fiat ,I think means, when the currency is backed by gold worth the same value as the currency in circulation.
US currency is not backed by gold or much at all

SRC: http://www.federalreserve.gov/faqs/currency_12770.htm" collateral is chiefly held in the form of U.S. Treasury, federal agency, and government-sponsored enterprise securities"

Also the US government MINTS are owned privately, so every time every dollar is transacted, these private organizations are owed a percentage on the dollar, I haven't really reasearched on this, its hearsay actually but from a good source. I look it up and post more later.

Its surprising that nobody except me and sharktale are interested in Bitcoins

 

[sharktale1212]

I didn't pick on the weak points the author made, rather showed the points he used for justification were cherry picked. If the author wanted to make a comparison, fair enough. He should stick to a point to point comparison rather than using good points and applying. I mean, is it fair to say Bradd Pitt is handsome and So is @coolcrook -- hence proved @coolcrook can (or is) a superstar? Wont others question me saying, how do you even prove he is a superstar? Does he have a history of good movies? Does he have the same swagger? Does that sound fair to you?

As for the $1000 example, I guess you dont understand accounting? -- cause banks and financial institutions run on accounting. Lets take one step at a time:
You give $1000 to a bank: -1000 to you and + 1000 to bank
When it is given to someone for a loan: -1000 to bank and + 1000 to person X
So basically, in the end -1000 to you and + 1000 to person X. I am mystified how you both have $1000 now? Furthermore, it comes down to liabilites. In that, it becomes like this:
Step1: +1000 to you and -1000 to bank (as they are now liable and owe you the money)
Step2: +1000 to bank (as they gave the money and are the owners) and -1000 to person X (cause now he is liable to the bank)
People who give the example quoted by you mix both examples and present it as the 1 re missing question. (http://www.spiceupyourbrain.com/2013/01/hard-puzzle-who-took-missing-one-rupee.html)
What really is true that most money liablities are in digital terms and don't exist on paper money (aha! isn't it?). If every dollar liability needs to be serviced cash, we all will be doomed not because money is out of thin air; it is because there is not enough paper printed to go around. Thats is unless you believe the x% GDP growth is out of thin air, cause the RBI/FED is not really printing money so fast to service all the expansion. The growth is digital and everyone is happy to have their liability exist as a number online.
Sorry to be sarcastic, but the half baked example doesn't make explaining layman a breeze. It rather disinforms them about many things.

As for the bitcoin value vs Brad Pitt, I think we are going back and forth on the same thing over and over again. Until Brad Pitt has his value in a drugs based economy, I dont think there is even a comparison.

Gold is used in high end electronics, so if it disappears, say bye bye to your SSD, computer and other high tech stuff which rely on non-corrosive metal to transmit power.

Let me quote the whole thing for perspective:

the US Dollar has essentially been backed by the "full faith and credit" of the US Government... wait what?
The government is just a bunch of people... I guess they have some land and some building too... so if the dollar falls apart, will China be made whole with the title to Yosemite Park?

So now read my post again. Government is not simply a bunch of people, it is representation of people -- you and me (assuming you are old enough to vote , kidding). So the faith is not because of the government but because of the people, you and me, servicing what the government sows - through taxes or other means.

And yes, Fed reserve is a quasi-governement agency. It is private-public partnership, not entirely private owned.

Brother, I am giving up on trying to convince you. Cause most examples will be like the Brad Pitt thing, even if I say something, the same quotes will be repeated. It really defeats the purpose of me trying a different angle every time to see the same reply. So just lets agree to disagree.