Dogecoin!
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When I started, I had almost two and a half bucks in Bitcoin. Now itâs less than $1.80. Iâm ruined, I tell ya; ruined!
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People should take these cryptocurrency, not seriously. I personally find it a waste of time. Might as well go back to devoting your spare CPU cycles to folding proteins for research and making money the old fashion way.
I propose BoingBoing use that animated image every time cryptocurrency is brought up. Just like Ars Technica uses an image of Dan Aykroyd and Eddie Murphy holding a âbitcoinâ. =)
For a forward thinking group of people, you are all dismissive of the technology behind bitcoin to an amazing degree.
All those examples were also the result of people trusting their bitcoin to a third-party. These thefts are really an example of how easily people are willing to cede control for comfort.
I do not dismiss the technology. I dismiss the antics!
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Or derivatives. or tulip bulbs.
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In case you were heavily sedated at the time, that ground-shattering explosion of purest primal rage that you may have observed rending the fabric of reality not long ago was every crypto-nerd neo-goldbug in this gravity well reacting to the mere concept of bitcoins not actually being Platonic Forms, sublimated from a truer reality into our own by the application of lots of compute power.
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Unfortunately, bitcoin is a brilliant object lesson in how you can have an (if anything, quite atypically well) designed cryptosystem, and then snatch defeat from the jaws of victory in more ways than you could ever have dreamt possible.
Pending a smackdown by a suitably qualified cryptoanalyst, which I am generally given to understand is not in the cards, I fully accept, and am duly impressed by, the design of the bitcoin core system. Much elegant. Such secure.
The trouble is that surviving real-world use as currency without numerous and exciting faults is not, to the best of our present knowledge, a property possessed by anything. Itâs not that there is some mathematical flaw, at which we remark snidely in high-handed derision, itâs that an absence of mathematical flaws is almost wholly orthogonal to bitcoinâs present⌠condition. On the plus side, the problem isnât a bug. On the minus side, the problem is so unrelated to there being a bug that there does not exist a bug such that fixing it would make the problem go away.
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The same flaw was used to pull all the BitCoin out of Silk Road 2.
One of the reasons why Iâm dismissive of BitCoin is that I was around in the early 90s when Dr David Chaumâs DigiCash solved all the practical problems that BitCoin reinvented. You may notice that we arenât using DigiCash, and thatâs because introducing digital cash is not a technical problem. Sure, BitCoin sidesteps some barriers by leveraging distributed trust; but by doing so, it introduces a set of new problems, and fails to deal with any of the killer economic reasons why digital cash hasnât happened.
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Bitcoin needs the equivalent of a âGarbage Collectionâ algorithm. e.g. any bitcoin thatâs been sat dormant in a wallet for > 2 years should become donatable to a special ârecyclingâ address, whose purpose is to reduce the work factor.
At the moment, only 21 million bitcoins could ever be mined. I think itâs more appropriate that only 21 million bitcoins could ever be in circulation. Bitcoins that are genuinely lost (donated to an address with no private key, or thrown away on a laptop hard drive without backups, etc.) could be identified as dormant by looking at the blockchain, and then declared void, to reduce the work factor.
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The design does seem to encourage hoarding. Also, the idea of regularly paying for things in millionths of a bitcoin just does not appeal to me as a consumer, at all.
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I thought that transaction malleability could cause a multiple-withdrawal from a wallet to seem to have occurred, but that the blockchain would always ultimately self-correct and the money would be restored: therefore, transaction malleability can be used to screw up the system, but not permanently, and it could not actually be used to steal money.
But BoingBoing readers are pretty sharp, and so far on this thread, several people have referred to transaction malleability wiping out e.g. Silk Road II or Mt. Gox, and nobody has challenged them. So Iâm confused.
You are correct about transaction malleability itself, but the idea is that you use that to dupe someone into making another, technically separate, transaction. The glitch in the protocol is that there is a transaction ID that seems as if it should identify a transaction uniquely, but it doesnât effectively. So the idea is that a service that relies on that transaction ID alone may never notice that while the transaction it sent failed, a functionally identical one went through under a different ID.
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Even if the value of a Bitcoin was stable enough for its use as currency, it wouldnât be used; itâs a pretty straightforward application of Greshamâs Law. Since the value of a Bitcoin tends to increase over time relative to ordinary currencies, in general, itâs economically irrational to spend Bitcoin to make a normal purchase; it only makes sense to use Bitcoins for certain special sorts of transactions.
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Hereâs the question though: Was it an attack designed to profit the crooks, or to just tear down MtGox? Thereâs nothing about the transaction malleability attack that forces it to be used to profit an individual crook - suppose you discovered the transaction malleability attack actually worked against MtGox - you could easily defraud them but the real risk is that you get identified.
How could you disguise the fact that youâre defrauding MtGox? By using the same transaction malleability attack to duplicate any transaction that you can capture coming from an MtGox server.
I wonder if there are MtGox customers who received duplicate payouts, who were not knowingly exploiting transaction malleability, but who benefited from a âman in the middleâ attack which nevertheless generated a double pay-out for them.
It would be rather implausible if one customer was always calling up to complain about the withdrawal transaction failing, and if that customer made off with 750,000 bitcoins individually, but if thousands of customers who were not consciously part of the attack were also having their ordinary requests subjected to the transaction malleability attack, and thought their legitimate withdrawals were failing, and were contacting MtGox to demand re-runs of the transaction, the true thieves would be lost in the noise of the many people making âlegitimateâ complaints.
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