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Those older examples suffered from the "double spend problem" where you could spend the digital currency twice (or more). Kind of like cheque fraud. The Proof

Those older examples suffered from the "double spend problem" where you could spend the digital currency twice (or more). Kind of like cheque fraud. The Proof of Work part of bitcoin (the part that consumes all that electricity) creates a consensus record so that if double spends are performed, only one of them will stick. Now double spends are a "feature" called "replace by fee." Preventing double spends is worth millions to investors, so that's why it continues.

xigency 10y ago
Yes, and maybe that was the main obstacle to implementation. Reading some of the original literature, and glossing over the textbook, it seems like many of the issues involved with double spending and counterfeiters are _eventually_ resolved with someone going to jail, rather than being able to resolve the financial payments in order. A naïve solution - which might save some energy - what about using signed timestamps from an adequate authority? Here is the article from 1991 for those interested in the original idea: http://link.springer.com/chapter/10.1007%2F3-540-46766-1_27 http://link.springer.com/chapter/10.1007%2F3-540-46766-1_27
- WizzleKake 10y ago
  Part of the point of bitcoin is that it is decentralized.
  - xigency 10y ago
    Yes, but that isn't the entire purpose of digital currency. It is just a part of Bitcoin.
    - Melkman 10y ago
      Almost all currencies are digital today. Bank notes are just a physical transaction mechanism. You could use Bitcoin notes if you want with the private key under a scratch layer. The big difference is exactly that Bitcoin has no central authority. If that doesn't matter to someone he'd be perfectly happy to use state endorsed currencies.
      - xigency 10y ago
        Digital cash doesn't have a scratch-off layer. It has information associated with its minting and mechanisms to be used in spending and transactions. > ... perfectly happy to use state endorsed currencies. Unless what you are looking for is a digital currency. Being able to send $5,000 cash in the form of information is a separate issue from who controls the money supply. If someone wants to exchange that amount without having access to a distributed network of computers, is that more centralized? What I'm saying is, I would be happy to use an information based currency, even if it means holding a key with a central authority, if it means being able to make free, anonymous transactions easily with a completely digital, offline currency. That is not what Bitcoin provides. And it isn't possible to e-mail paper bills, either.
    - CydeWeys 10y ago
      I've been using central ledger currency systems (i.e. logging into my bank's website and issuing payments) for longer than Bitcoin has existed. Decentralization is the entire point of Bitcoin. Take that away and you aren't left with anything that wasn't already done long ago. What you're proposing is something that banks have already been doing widely for decades.
      - xigency 10y ago
        > Take that away and you aren't left with anything that wasn't already done long ago And that is exactly my point. There are very interesting ideas in digital currencies/digital cash that have no representation in Bitcoin or at all. By using Bitcoin, like using your bank's website, you still need an Internet connection to use your currency digitally. However, it's possible to create a digital currency that doesn't have to be plugged-in to a network to operate. Being able to send an e-mail with a cash value integrated in its data is something that hasn't been done long ago, or even yet today. Even better, some digital currencies could (conceptually) be sent in a paper letter as cash. Whether the value is created algorithmically or by bankers is a separate, economic debate, and really less interesting, in my opinion, than the technology itself.
        CydeWeys 10y ago
        > By using Bitcoin, like using your bank's website, you still need an Internet connection to use your currency digitally. You can do all sorts of things with Bitcoin without needing to be attached to a network. You can have an address that has value associated with it and then print a private key as physical Bitcoin -- variants that have been done include coins, bills, paper wallets, and OCR-able backups of regular wallets. In a high security situation you can have Bitcoin running on an offline computer and sneakernet signed transactions from it to avoid ever exposing it to the Internet. > However, it's possible to create a digital currency that doesn't have to be plugged-in to a network to operate. Yes, like all of the above. > Being able to send an e-mail with a cash value integrated in its data is something that hasn't been done long ago, or even yet today. You lost me. How does email work without being attached to a network?! If you're giving us access to a network, why not just use Bitcoin? If you meant something like snail mail, well then, again, see above. > Even better, some digital currencies could (conceptually) be sent in a paper letter as cash. Yes. Like Bitcoin. Or are you truly trying to propose some kind of digital currency that never requires network access? How could that possibly work? If network access isn't allowed, how do I know that you haven't already sent the same "digital coin" that you're sending me to ten other people? The double spend problem is real. Bitcoin solves it. I don't see how a solution is possible that doesn't involve some kind of communication.
- stale2002 10y ago
  OK, but then you have to have an authority, and that authority would have power over you and the transaction! The whole point of bitcoin is permissionless transactions. It is to make transactions even if the authorities don't want them to happen.
  - xigency 10y ago
    No, I'm saying the authority would provide resources to enable transactions, not an authority that controls transactions, which is actually what the distributed network of miners does in the case of Bitcoin. In this case, the authority would provide stamps for transactions.
    - stale2002 10y ago
      Aaaand what if that authority refuses to provide resources to transactions it doesn't like? That's why bitcoin is decentralized. To prevent something like that.
      - xigency 10y ago
        Well, ideally there would be a scheme where the authority facilitating transactions (with timestamps in this case) wouldn't be provided identifying information.
- Andrew_Quentin 10y ago
  Some are working on a consensus system called proof of stake which does not use energy. It is not clear whether it will be fully secure, etc., but if you read about this stuff decades ago you might want to google and research primarily Bitcoin and Ethereum.

xigency 10y ago

Yes, and maybe that was the main obstacle to implementation. Reading some of the original literature, and glossing over the textbook, it seems like many of the issues involved with double spending and counterfeiters are _eventually_ resolved with someone going to jail, rather than being able to resolve the financial payments in order. A naïve solution - which might save some energy - what about using signed timestamps from an adequate authority? Here is the article from 1991 for those interested in the original idea: http://link.springer.com/chapter/10.1007%2F3-540-46766-1_27 http://link.springer.com/chapter/10.1007%2F3-540-46766-1_27

WizzleKake 10y ago
Part of the point of bitcoin is that it is decentralized.
- xigency 10y ago
  Yes, but that isn't the entire purpose of digital currency. It is just a part of Bitcoin.
  - Melkman 10y ago
    Almost all currencies are digital today. Bank notes are just a physical transaction mechanism. You could use Bitcoin notes if you want with the private key under a scratch layer. The big difference is exactly that Bitcoin has no central authority. If that doesn't matter to someone he'd be perfectly happy to use state endorsed currencies.
    - xigency 10y ago
      Digital cash doesn't have a scratch-off layer. It has information associated with its minting and mechanisms to be used in spending and transactions. > ... perfectly happy to use state endorsed currencies. Unless what you are looking for is a digital currency. Being able to send $5,000 cash in the form of information is a separate issue from who controls the money supply. If someone wants to exchange that amount without having access to a distributed network of computers, is that more centralized? What I'm saying is, I would be happy to use an information based currency, even if it means holding a key with a central authority, if it means being able to make free, anonymous transactions easily with a completely digital, offline currency. That is not what Bitcoin provides. And it isn't possible to e-mail paper bills, either.
  - CydeWeys 10y ago
    I've been using central ledger currency systems (i.e. logging into my bank's website and issuing payments) for longer than Bitcoin has existed. Decentralization is the entire point of Bitcoin. Take that away and you aren't left with anything that wasn't already done long ago. What you're proposing is something that banks have already been doing widely for decades.
    - xigency 10y ago
      > Take that away and you aren't left with anything that wasn't already done long ago And that is exactly my point. There are very interesting ideas in digital currencies/digital cash that have no representation in Bitcoin or at all. By using Bitcoin, like using your bank's website, you still need an Internet connection to use your currency digitally. However, it's possible to create a digital currency that doesn't have to be plugged-in to a network to operate. Being able to send an e-mail with a cash value integrated in its data is something that hasn't been done long ago, or even yet today. Even better, some digital currencies could (conceptually) be sent in a paper letter as cash. Whether the value is created algorithmically or by bankers is a separate, economic debate, and really less interesting, in my opinion, than the technology itself.
      - CydeWeys 10y ago
        > By using Bitcoin, like using your bank's website, you still need an Internet connection to use your currency digitally. You can do all sorts of things with Bitcoin without needing to be attached to a network. You can have an address that has value associated with it and then print a private key as physical Bitcoin -- variants that have been done include coins, bills, paper wallets, and OCR-able backups of regular wallets. In a high security situation you can have Bitcoin running on an offline computer and sneakernet signed transactions from it to avoid ever exposing it to the Internet. > However, it's possible to create a digital currency that doesn't have to be plugged-in to a network to operate. Yes, like all of the above. > Being able to send an e-mail with a cash value integrated in its data is something that hasn't been done long ago, or even yet today. You lost me. How does email work without being attached to a network?! If you're giving us access to a network, why not just use Bitcoin? If you meant something like snail mail, well then, again, see above. > Even better, some digital currencies could (conceptually) be sent in a paper letter as cash. Yes. Like Bitcoin. Or are you truly trying to propose some kind of digital currency that never requires network access? How could that possibly work? If network access isn't allowed, how do I know that you haven't already sent the same "digital coin" that you're sending me to ten other people? The double spend problem is real. Bitcoin solves it. I don't see how a solution is possible that doesn't involve some kind of communication.
stale2002 10y ago
OK, but then you have to have an authority, and that authority would have power over you and the transaction! The whole point of bitcoin is permissionless transactions. It is to make transactions even if the authorities don't want them to happen.
- xigency 10y ago
  No, I'm saying the authority would provide resources to enable transactions, not an authority that controls transactions, which is actually what the distributed network of miners does in the case of Bitcoin. In this case, the authority would provide stamps for transactions.
  - stale2002 10y ago
    Aaaand what if that authority refuses to provide resources to transactions it doesn't like? That's why bitcoin is decentralized. To prevent something like that.
    - xigency 10y ago
      Well, ideally there would be a scheme where the authority facilitating transactions (with timestamps in this case) wouldn't be provided identifying information.
Andrew_Quentin 10y ago
Some are working on a consensus system called proof of stake which does not use energy. It is not clear whether it will be fully secure, etc., but if you read about this stuff decades ago you might want to google and research primarily Bitcoin and Ethereum.