Bitcoin

[TheAncientGoat]

BitCoin is a P2P cryptocurrency that allows people to transfer funds without any transaction fees. It has an interesting economic model that is explained on the site, basically you generate bitcoins if you help the run the network, calculating hashes and transfers, but the amount of bitcoins is limited to a cap of 21 mil.

There are also a surprisingly large amount of services built on it, like a Flattr clone, a craigslist like marketplace, and exchange services that you can trade bitcoins for real money and vice versa. Heck, there's even a guy selling his games for bitcoin

[Julius]

Rather interesting concept, in a sense similar to the old gold-standard currencies, where inflation was driven only by mining efforts (as opposed to todays dept crated fiat currencies).

It's too technical to ever catch up to a level where it might serve as a useful internet currency though

[TheAncientGoat]

What do you mean by too technical though? From an ease of use perspecitive, it's easy to use, just run the program and enter whomever's ID you want to send money to / give your ID to whomever wants to pay you. The biggest thing is to get services to use it, and like I stated, a lot of people already do. The weakness I see is that it is rather reliant on trust though..

[Julius]

What do you mean by too technical though? From an ease of use perspecitive, it's easy to use, just run the program and enter whomever's ID you want to send money to / give your ID to whomever wants to pay you. The biggest thing is to get services to use it, and like I stated, a lot of people already do. The weakness I see is that it is rather reliant on trust though..

Most people don't understand the technical background and therefore don't trust it, is what I ment. Of course most people also don't understand the "technical" background of our banking and money system, but there you have "trustworthy" (hahahahahaha, biggest joke in history) institutions backing it up.

Oh and btw, as far as I understood it, Bitcoin doesn't rely so much on trust, but on encryption technology. Even double spending is accounted for, and unless the entire P2P system is compromised (basically the majority would have to be scammers, which is unlikely) it's a pretty secure system.

From a technological point of view (as far as I can tell from their descriptions on the website) it's a rather trustworthy system, not really requiring much trust at all (in fact MUCH less trust than "real" money). The question is only if it is a save encryption algorithm (besides security questions concerning all forms of online payment).

Edit: lol and that their website is now broken doesn't help creating an image of trustworthiness either

[TheAncientGoat]

Well, once you get services to back it, people would become more likely to use it. I mean look at OAuth/OpenID, they could sound hugely sketchy, but big sites support it so people use it as well. Heck, people don't even have to /know/ that they are using bitcoin, it could all be done on a server and accessed from a webpage (of course, this kinda defeats the point, but people wouldn't care)

And the technology doesn't rely on trust (except for the promise of a cap + the promise of increasing difficulty rates to counter inflation), but using it as currency does (e.g you say you'll ship something to me for 100BC, I pay you, you don't ship it), although that is the usual nature of a lot of systems, many online systems have measures to counteract it..

[Julius]

Well that kind of trust applies maybe even more so to "real" cash and Internet transactions

Btw, the increasing difficulties rates, well yes inflation counter... to counter inflating cpu speed Not sure though the stepwise system is the best way to do that.

All in all I think this system would probably work well (on a medium scale), but yet has to reach a big enough scale to make it worthwhile, which I doubt it ever does.
But if I would make something small for sale, I would probably support it just for the fun of it (even if that would mean giving away some of the stuff more or less for free, since there is no way to really spend these bitcoins)

[TheAncientGoat]

Unless you use the money exchange services :P

[Andrew]

When I first saw this I got really into it but then I realised that it has a huge fundamental flaw which makes it totally useless for a currency replacement.

As soon as it becomes a popular form of money exchange all one has to do to ruin it is hire out a huge botnet for an hour and have more untrusted machines then trusted on the network. The developers only response to this is that if it happens they'll revert back to a trusted time, however real money can't have those kind of disruptions. What if you sent something over the internet after receiving bitcoins only to have the whole world community of bitcoin operators revert back to last week due to a botnet disruption? A company would go out of business if that happened.

It's this kind of situation that makes BitCoin (as it stands right now) unusable in real world conditions for real world things. With that said I think it would be very useful in a distributed MMOG. It completely solves the issue of ownership over a distributed network of game servers.

[TheAncientGoat]

Andrew, they've been working on fixing that, seeing as at the moment there's someone with a huge cluster doing 200MHashes and doing basically 50% of the network's proofs. They've implemented a block locking system that theoretically makes it a lot harder to generate fraudulent blocks, although I'm not completely sure how..

[Andrew]

If they do find a way to deal with that then it would become more practical however even with your explanation I don't see how they can defend against it.

Here is a quote from the paper.. http://www.bitcoin.org/sites/default/files/bitcoin.pdf

The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes

In other words all you would need to do to disrupt the service is control more dishonest nodes then there are honest which in these days is very easy to do.

[TheAncientGoat]

Bitcoin 0.3.2 released
July 17, 2010, 09:33 pm
#1
Download links available now on bitcoin.org. Everyone should upgrade to this version.

- Added a simple security safeguard that locks-in the block chain up to this point.
- Reduced addr messages to save bandwidth now that there are plenty of nodes to connect to.
- Spanish translation by milkiway.
- French translation by aidos.

The security safeguard makes it so even if someone does have more than 50% of the network's CPU power, they can't try to go back and redo the block chain before yesterday. (if you have this update)

I'll probably put a checkpoint in each version from now on. Once the software has settled what the widely accepted block chain is, there's no point in leaving open the unwanted non-zero possibility of revision months later.

This is the latest version, the wiki etc. hasn't been updated to reflect the security changes.

[Andrew]

In that case I will have to check it out again.

[david_cz]

whats P2P its mean psp???

[charlie]

whats P2P its mean psp???

P2P - peer to peer