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Square buys $170M worth of bitcoins

87 points by undefined1 6y ago

natas 6y ago
pump and dump
schmorptron 6y ago
I was really confused for a bit about what a video game developer wanted to do with bitcoin, turns out it's a different Square.
endisneigh 6y ago
If it ends up that 40 years from now quantum computing can beat all present-day encryption methods, would the bitcoin price instantly just go to zero? Is there anyway to retroactively make it more secure with tomorrow's cryptography? EDIT: I only ask this because if the world becomes more and more dependent on the blockchain and quantum computing becomes an existential threat, the existence of blockchain-breaking computation could potentially result in a global catastrophe. I compare quantum computing in this scenario to a device that can just magically take money away from you without your knowledge. Given that this obviously hasn't happened yet, I'm curious what mitigation strategies exist now. Thanks everyone for your replies. disclaimer: I believe it's just a matter of time before all current (2021) encryption is broken. whether that happens in 2060 or 3000 obviously is TBD, but it's a matter of when not if IMHO.
- reidjs 6y ago
  If that happens I’m pretty sure we have much larger problems than someone stealing your bitcoins
  - RIMR 6y ago
    Strong encryption turning into weak encryption is a severe problem, but it's a manageable and resolvable one also. The ease of exploiting quantum encryption-breaking might not be comparable to exploiting a public ledger of trust like the blockchain. If BTC has a multi-trillion-dollar market cap, and quantum exploitation occurs, the only thing that backs the currency (trust) vanishes, and the values quickly drops to zero. If we are reliant on BTC for global finances in the future, as many are proposing, this could result in a global depression. This might be the single biggest problem quantum computing could bring us, short of the "talking to alternate universes" theoretical use cases some people are talking about (that probably won't happen). Encrypted data can be re-encrypted to be quantum-secure. The vulnerability is temporary A compromised blockchain dies forever. A brand new quantum-secure blockchain would need to be invented.
    - Erlich_Bachman 6y ago
      Look up the term "fork" in the context of cryptocurrencies. It will answer all your questions and you will save yourself a lot of brain cycles.
      - echelon 6y ago
        If crypto is broken, any fork could be broken too. It's a question of how much time a new algorithm buys.
        danaur 6y ago
        There are quantum resistant methods forks can use.
        RIMR 6y ago
        But my old keys, that hold my funds, are still traditionally encrypted, so how am I supposed to securely claim my same bitcoins on the other side of the fork?
      - RIMR 6y ago
        How do you migrate the old keys to a quantum fork without allowing the exploit to still exist retroactively? I could exploit the old blockchain, then migrate my stolen keys to the quantum blockchain. Forking doesn't work here. Traditional computing and Quantum computing are different enough that "porting" isn't just something you can do.
      - ASalazarMX 6y ago
        "Guys, we are going to start quantum exploiting your blockchain for profit in a couple of months, please fork before that XOXO" - No criminal ever More likely: "We'll skim from dormant wallets that won't be immediately noticed, and when it becomes too obvious, we move all of Satoshi's bitcoins to force an emergency fork that launders our profits".
  - dzader 6y ago
    when*
    - akvadrako 6y ago
      No, if. Scalable quantum computers might be physically impossible or close to it. That would explain why the world, which is really quantum, always appears classical. Quantum computers have something similar to moore's law which is that adding each bit is as difficult as all the previous bits. i.e. the required noise floor scales exponentially, unless a certain threshold is reached.
- jackson1442 6y ago
  Presumably there could be another fork like there was with BTC vs Bitcoin Cash (BCH).
  - nickysielicki 6y ago
    If the discrete logarithm problem turns out to be not so difficult, the entire concept of proof of work is meaningless. There is no patch or fork that can possibly fix that.
    - darawk 6y ago
      Proof of work does not depend on the DLP. It depends on SHA.
      - nickysielicki 6y ago
        PoW is just a filter to prevent denial of service attacks, to ensure that if you're a bad actor, you'll waste electricity to send bogus messages. But if the DLP is easy, then anyone can fabricate proper ECDSA sigs, and you're not wasting electricity to send bogus messages, you're wasting electricity to send valid messages. The point I was trying to make is that there is no migration path from ECDSA. You can't fork bitcoin if the DLP is easy. It's just game over. Proof of work becomes irrelevant.
    - Erlich_Bachman 6y ago
      That's just not correct. There are plenty of crypto algorithms already, including hash functions, that are designed to be resistant/resilient against a functional quantum computer. A PoW scheme can use any (well, at the very least many) of them. [1] https://en.wikipedia.org/wiki/Post-quantum_cryptography https://en.wikipedia.org/wiki/Post-quantum_cryptography
- Vecr 6y ago
  No, only the signatures would be at risk, and the fix would be quite simple. Create a new address type that's quantum-secure, then have everyone move their coin over. After practical breaks start happening, disable the old signature type.
- arcticfox 6y ago
  In short, yes it's possible to secure, but it'd be a project. Like securing everything else against QC https://en.bitcoin.it/wiki/Quantum_computing_and_Bitcoin https://en.bitcoin.it/wiki/Quantum_computing_and_Bitcoin
- RIMR 6y ago
  If Bitcoin doesn't destroy itself somehow, quantum computing will be the destruction of the modern blockchain. Quantum Bitcoins might be possible, but developing a quantum blockchain before traditional Bitcoin can be exploited by the same tech is highly unlikely, so any Bitcoins today will almost certainly never become quantum Bitcoins. I don't think there is any feasible way you could ever convert the Bitcoin blockchain into a quantum variant, even if you set a hard sunset date before any exploitation could occur. You would have to start from the ground up and completely reinvent the wheel.
- dylkil 6y ago
  yes, you can fork the network to use a new hashing algorithm
- kube-system 6y ago
  I would hate to be a scientist working on quantum computing when there is so much wealth to be threatened by their success. Sounds like a quick way to meet the mafia.
  - missedthecue 6y ago
    I think the threat would be less from billionaires and big companies. Their fortunes get disrupted, accumulated and lost all the time. If such a threat to those researchers exists, it is likely from intelligence agencies around the world.
- trident5000 6y ago
  Vitalik Buterin himself said sha256 is likely not hackable by quantum computing, certainly not any time soon. If it is then consensus or a fork is needed to change the security.
  - bottled_poe 6y ago
    Wow not a crypto founder himself. He wouldn’t have a conflict of interest would he?
    - Erlich_Bachman 6y ago
      Vitalik is not only extremely smart, has many times demonstrated his abilities, but has also shown himself to be incredibly honest and straight-forward kind of guy when it comes to public utterances. Can you find even a couple of times when he has misled or lied to the public, even a bout a small thing? He comments on technical issues and engineering problems, things he knows a thing or two about.
      - jude- 6y ago
        He once tried to sell investors on using a classical computer to simulate a quantum computer to mine Bitcoin faster [1]. Granted, this was before Ethereum. > He comments on technical issues and engineering problems, things he knows a thing or two about. He still doesn't seem to truly understand BFT [2]. [1] https://davidgerard.co.uk/blockchain/buterins-quantum-quest/ https://davidgerard.co.uk/blockchain/buterins-quantum-quest/ [2] https://news.ycombinator.com/item?id=25984251 https://news.ycombinator.com/item?id=25984251
  - nickysielicki 6y ago
    Just because he developed ethereum doesn't mean he has any idea what is going on in quantum computing. Whatever we've seen out of the private sector in terms of quantum computing is a total joke in the context of black budget NSA programs. Nobody knows except the people doing it.
    - 6y ago
- chemmail 6y ago
  Quantum computing gives near infinite parallelization. It does not solve/break serialized equations/problems.
- Erlich_Bachman 6y ago
  They would just switch to another algorithm. Sad for all the miners who bought ASICs, doesn't change a thing for all users and investors. It would just be a hard-fork. It would not be the first one, and it would very likely be quite a consensual one, since no user wants their transactions to be unsecured. I really wish people would research a bit more before posting these questions here. The quantum computing argument has been asked a thousands times before, it was first seen shortly after the bitcoin paper was published, it has been answered and re-answered and re-answered so many times, everywhere. And yet here we are filling the internet with more and more copies...
  - Retric 6y ago
    The issue is the private keys become vulnerable not just the hashing algorithm. If 3/4th of Bitcoins are in lost wallets in 1,000 years those instantly flood the market once someone can discover them from the old public keys. You can’t distinguish between someone that’s kept a wallet inactive for all this time and someone discovering a private key. Which means you need to fork early and abandon any wallets that don’t do a transaction with the new system. That’s not the kind of transition that works with just the miners involved.
    - Erlich_Bachman 6y ago
      You can trivially distinguish those transactions from real ones. In fact so trivial that you could do it in one if clause #define LATEST_BLOCK_BEFORE_EMERGENCE_OF_QC 76283747 # fill in number when that happens if (block_height>LATEST_BLOCK_BEFORE_EMERGENCE_OF_QC) { # Treat transaction as invalid if it still uses SHA256 } You know transactions are timestamped through the medium of being included in a block, right?
      - Retric 6y ago
        You don’t understand, this has nothing to do with SHA256 for mining after crypto. You need to sign a transaction with a private key. Quantum crypto makes all current private keys public. This means you need to pick some date where everyone with a private key needs to create a new key under a new system. Then before quantum crypto is available they need to make this transaction from their old wallet using an old key to a new wallet with a new secure private key. And they need to do this before quantum crypto is available.
- jude- 6y ago
  Yes -- the network could soft-fork to require post-quantum transaction signatures. Naively, you could make it so that each transaction would put the hash of its parties' post-quantum signatures in an OP_RETURN output, and distribute both the transaction and the post-quantum signatures to the network. Miners would package the transactions into blocks, and separately validate them with the associated post-quantum signatures and distribute them as ancillary block data (e.g. the coinbase transaction could contain a Merkle tree root that authenticates all the block's extra post-quantum signature data).
- tomerico 6y ago
  Bitcoin is vulnerable in two ways: 1. The oldest (and largest) wallets directly stored their public key on the blockchain. This would mean that attackers could transfer money away from these wallets (many of them are dormant). 2. Relatively early, the blockchain shifted to only storing the hash of the public key, which seems less susceptible to a quantum computing attack. The risk in these wallets is that once you want to transfer bitcoins out, you need to temporarily publish your public key - this key is not stored on the blockchain, but might be stored by future attackers. In addition, at some point getting your private key will be so fast that the moment you publish a transaction request you'll many fake requests asking to transfer to another wallet. The solution is likely a soft fork - new addresses that are quantum resistant (similar to how in the past Bitcoin moved away from public key address into hash). The trick is that this needs to be deployed before attacks exist, and people need to transfer their Bitcoin into the new wallets.
  - Melting_Harps 6y ago
    > 1. The oldest (and largest) wallets directly stored their public key on the blockchain. This would mean that attackers could transfer money away from these wallets (many of them are dormant). That doesn't mean the Public key has ever been exposed online and therefore not true. Look up cold storage best practices, I'm not going to line it out for you but what you said is entirely false and built on a flawed premise. > 2. Relatively early, the blockchain shifted to only storing the hash of the public key, which seems less susceptible to a quantum computing attack. The risk in these wallets is that once you want to transfer bitcoins out, you need to temporarily publish your public key - this key is not stored on the blockchain, but might be stored by future attackers. In addition, at some point getting your private key will be so fast that the moment you publish a transaction request you'll many fake requests asking to transfer to another wallet. You started it off with a valid observation, but then led into a non-sequitur, what does that have to do with Bitcoin's vulnerability if as we just said 1 is not true if done correctly. > The trick is that this needs to be deployed before attacks exist, and people need to transfer their Bitcoin into the new wallets. While I agree security on mainchain is an issue, we should dhave had taproot long ago, and mixing by default by now as tx fees get more and more expensive--all you're doing is mixing it with other adddresses to make the sum indistinguishable from it's source and that cost adds up as the netowrk gets more expensive to operate on. But also your premise is at odds with the fact that most of the traffic will be done on LN moving forward, and the bitcoin (token) will locked out of the network's mainchain (Bitcoin) to operate on LN and thus does not require your 'solution.' In short, these are non-concerns. Note how I didn't downvote you, and instead I challenged your arguments in order for others to benefit from this conversation, instead of being a child and downvoting simply because I disagree with your points. Edit: HAHA!
- mudlus 6y ago
  If that happens you're worried about Bitcoin? lol Besides, the algorithm in question here is Shor's algorithm, it WILL be used to break some basic encryption. If Satoshi is dead, his coins will be hacked (they are old P2PK outputs). But there is no algorithm for breaking P2SH outputs (eg Native Segwit wallets). There could be, but Bitcoin has the ability to adapt if necessary. Bitcoin is not a static thing. See also : https://www2.deloitte.com/nl/nl/pages/innovatie/artikelen/quantum-computers-and-the-bitcoin-blockchain.html https://www2.deloitte.com/nl/nl/pages/innovatie/artikelen/qu... More importantly, quantum computers actually allow for something better than encryption. If you are having a secret conversation over the quantum internet, not only can no one listen in, BUT you will KNOW if they are listening. I read about this in David Deutsch's "Fabric of Reality," which I HIGHLY recommend and is freely available on archive.org https://archive.org/details/TheFabricOfReality/page/n1/mode/2up https://archive.org/details/TheFabricOfReality/page/n1/mode/... https://en.wikipedia.org/wiki/Quantum_cryptography#Mistrustful_quantum_cryptography https://en.wikipedia.org/wiki/Quantum_cryptography#Mistrustf...
RIMR 6y ago
What are they going to do with $160M worth of bitcoins?
- nikolay 6y ago
  HODL! Edit: Don't you have a sense of humor?!
  - belval 6y ago
    HN as a community does not have a high tolerance for short reddit-like replies that could be considered funny. The general opinion being that it lowers the overall quality of the discussion.
    - nikolay 6y ago
      Well, sometimes a short reply like "HODL!" hodls (!) paragraphs of meaning.
      - RIMR 6y ago
        You're right, when I see "HODL!" I think: "This person is addicted to online gambling. 'Investing' doesn't involve screaming 'hold the line!' on web forums 15 times per day, it involves patience and confidence and research. This person is investing based off of internet memes, and is treating a highly volatile security as if it were some sort of get-rich guarantee, because they see a select few winners rise to the top, and ignore the numerous losers that never made a dime." Is that the kind of paragraph a reasonable person might extract when they see "HODL!"?
        nikolay 6y ago
        Yeah, a form of a get-rich-quick scheme.
    - eroded 6y ago
      Have fun staying poor.
nikolay 6y ago
Copycats. I guess, their business isn't doing so great if they try to speculate with their cash instead of beating competition, which is growing daily!
- deleted 6y ago
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qeternity 6y ago
Square pays $170m for $160m worth of Bitcoin
DenisM 6y ago
My guess they are rolling out btc payments and bought some amount to cover transaction delays or rollbacks.
- oafertino 6y ago
  This feels like the most rational reason - the other would reason would be trading BTC with shareholder money so let's hope you're right.
hntrader 6y ago
Isn't it a conflict of interest for Dorsey to make such a market moving purchase, as an agent of Square, in an asset that he is personally invested in? I guess we'll have to wait and see the rationale of the purchase. If it's to facilitate payments on their platform, then no biggie.
- really3452 6y ago
  CEO's do this all the time with the US dollar and no one blinks an eye.
  - deleted 6y ago
    [deleted]
  - loceng 6y ago
    Sorry, is the US dollar akin to an MLM scheme in any apples to apples way? Edit to add: Glad instead of getting 3 downvotes right off the bat, people decided to spend effort into writing thoughtful comments.
    - neolog 6y ago
      What's the difference between btc and usd? They both gain value when more people want them, and they have no other value.
      - missedthecue 6y ago
        The dollar is backed by the full faith and credit of the US federal government, for starters. Bitcoin is backed by hoping a greater fool will pay you more for it, and a bunch of GPUs in Xianjiang.
        xref 6y ago
        btc is backed by the same thing as usd and gold: the collective belief it is worth something. You can try to gussy it up with arguments like “faith and credit” or “the military” or “you can pay taxes with it” or “has industrial applications”, but that’s not the basement level of determining value.
rtx 6y ago
Taking shareholders for a ride. Scamming people at two companies.
cecida 6y ago
I've reached the consensus that any company investing in Bitcoin doesn't actually care about the future of the planet.
- RIMR 6y ago
  I view it more along the lines of business owners being more and more willing to take company funds to the casino.
  - tinus_hn 6y ago
    In most casino games you can’t really influence you chances of winning
- missedthecue 6y ago
  How would this be different from saying that anyone who drives an SUV or plays computationally intense computer games doesn't care about the future of the planet? If it isn't different, is it really that much of an insightful statement beyond "people tend to do what they think is their own personal self interest"?
  - rscho 6y ago
    There's a gradation in carelessness and selfishness, though...
  - wmf 6y ago
    You can choose to drive an electric car or a gas car. Likewise you can choose to use PoS coins or PoW coins.
- pavlov 6y ago
  Personally I agree. It's a signal that a company is run by people whose values are fundamentally different than mine. I've bought a Tesla in the past and was mostly happy with it, but I'll never get another one. (I'm sure they won't miss my business, as Musk's antics are presumably gaining them many enthusiastic customers. Still, buying elsewhere is the only power we customers have.)
hahahahe 6y ago
So they’re buying bitcoins with the money generated from their payment business. This is far worse than any toys Zuckerberg ever bought for Facebook (except for Libre).
mancerayder 6y ago
Aren't a lot of companies buying BTC as a way to help their perception of growth, given BTC is going up? Square is a payment system, sure, but a bunch of non payment system companies are doing the same. If companies invest in BTC instead of growing themselves and hiring people, isn't that bad for the economy?
- federona 6y ago
  So very strange to invest so heavily in Bitcoin a highly volatile crypto at its peak. Not to mention an old generation crypto with dubious value on the face of 3rd generation crypto that does not damage the environment and does not have the same scaling issues. It's like considering some old tech as which has dubious value just because it was invented first. Like overvaluing a gas car when an electric exists and is the wave of the future. What do these companies know that we plebs don't.
  - thebean11 6y ago
    > at its peak All time high yes, but we don't know that this is a peak
    - wmf 6y ago
      But these companies don't know it's not the peak either. Buying the dip, as the kids say, is more defensible.
      - thebean11 6y ago
        You mean catching a falling knife? Truth is, nobody knows when a good time is.
  - Erlich_Bachman 6y ago
    You can do a much much more deep fundamental analysis than a simple checking {if price_at_ATH then..}. Many of the companies have likely done such deeper analysis.
  - 6y ago
chemmail 6y ago
I wonder why it took so long, Dorsey has always been in bed with Blockstream
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rcavezza 6y ago
I'm not sure I've ever seen a one sentence news story before.
sschueller 6y ago
I wonder if companies are viewing bitcoin in a similar way as currencies? I don't know how common this is in the US but in Europe specifically Switzerland larger companies buy and hold Euros and Dollars to deal with currency fluctuations. Maybe its just speculating that bitcoin will bring in money. It worked for Tesla.
- federona 6y ago
  Is it easy to convert a billion for a hundred million of btc to cash as it is to buy a stock? I don't think this is it or usd or euro.
electriclove 6y ago
I'm surprised to see so much negativity in regards to these headlines about Bitcoin. I expect to see more and more companies doing the same and diversifying their holdings partially away from the USD.
- electriclove 6y ago
  Some may find this article enlightening: https://www.lynalden.com/fraying-petrodollar-system/ https://www.lynalden.com/fraying-petrodollar-system/
notJim 6y ago
What is the actual purpose of buying BTC? Tesla also bought some recently, IIRC. I assume that large publicly-traded companies aren't doing this for the memes, and it seems tangential to their actual businesses. Do they also trade other equities/assets?
- missedthecue 6y ago
  I can't make heads or tails of it either. Some people have been speculating that it's because they want to take payments in BTC, but I don't see building massive positions in it helps them facilitate that.
- pvarangot 6y ago
  I think there's two purposes: - They have cash, and want to cover against inflation - They want to eventually accept payments or provide withdrawals or pay salaries or bonuses in crypto, and they need to stock up to be able to have or provide liquidity
- Erlich_Bachman 6y ago
  Investment. Any large company has a stack of cash on hand, this is just required for operations. Traditionally many of them have been putting that cash into government bonds. Lately when many bonds have negative yields, it becomes more and more stupid to hold money in bonds for every year of guaranteed lost money in them.
  - missedthecue 6y ago
    What makes Bitcoin the second best option after US Treasuries?
- 1996 6y ago
  > What is the actual purpose of buying BTC? $$$$$$$$
escardin 6y ago
It's because CashApp lets you buy and sell bitcoin, that is, CashApp is buying this bitcoin so it can sell it to customers [1]. It's not speculation on the part of Square or Jack Dorsey. All this speculation about speculation is wildly disappointing. [1]: https://www.investors.com/news/technology/square-stock-sq-square-earnings-q42020/ https://www.investors.com/news/technology/square-stock-sq-sq... > Square said revenue jumped 141% to $3.16 billion as more Cash App users bought and sold digital cryptocurrency Bitcoin.
new_realist 6y ago
Executing a trade and then shouting from the rooftops to drive up the price is an age-old trick.

87 points by undefined1 6y ago

pump and dump

I was really confused for a bit about what a video game developer wanted to do with bitcoin, turns out it's a different Square.

endisneigh 6y ago

If it ends up that 40 years from now quantum computing can beat all present-day encryption methods, would the bitcoin price instantly just go to zero? Is there anyway to retroactively make it more secure with tomorrow's cryptography? EDIT: I only ask this because if the world becomes more and more dependent on the blockchain and quantum computing becomes an existential threat, the existence of blockchain-breaking computation could potentially result in a global catastrophe. I compare quantum computing in this scenario to a device that can just magically take money away from you without your knowledge. Given that this obviously hasn't happened yet, I'm curious what mitigation strategies exist now. Thanks everyone for your replies. disclaimer: I believe it's just a matter of time before all current (2021) encryption is broken. whether that happens in 2060 or 3000 obviously is TBD, but it's a matter of when not if IMHO.

reidjs 6y ago
If that happens I’m pretty sure we have much larger problems than someone stealing your bitcoins
- RIMR 6y ago
  Strong encryption turning into weak encryption is a severe problem, but it's a manageable and resolvable one also. The ease of exploiting quantum encryption-breaking might not be comparable to exploiting a public ledger of trust like the blockchain. If BTC has a multi-trillion-dollar market cap, and quantum exploitation occurs, the only thing that backs the currency (trust) vanishes, and the values quickly drops to zero. If we are reliant on BTC for global finances in the future, as many are proposing, this could result in a global depression. This might be the single biggest problem quantum computing could bring us, short of the "talking to alternate universes" theoretical use cases some people are talking about (that probably won't happen). Encrypted data can be re-encrypted to be quantum-secure. The vulnerability is temporary A compromised blockchain dies forever. A brand new quantum-secure blockchain would need to be invented.
  - Erlich_Bachman 6y ago
    Look up the term "fork" in the context of cryptocurrencies. It will answer all your questions and you will save yourself a lot of brain cycles.
    - echelon 6y ago
      If crypto is broken, any fork could be broken too. It's a question of how much time a new algorithm buys.
      - danaur 6y ago
        There are quantum resistant methods forks can use.
        RIMR 6y ago
        But my old keys, that hold my funds, are still traditionally encrypted, so how am I supposed to securely claim my same bitcoins on the other side of the fork?
    - RIMR 6y ago
      How do you migrate the old keys to a quantum fork without allowing the exploit to still exist retroactively? I could exploit the old blockchain, then migrate my stolen keys to the quantum blockchain. Forking doesn't work here. Traditional computing and Quantum computing are different enough that "porting" isn't just something you can do.
    - ASalazarMX 6y ago
      "Guys, we are going to start quantum exploiting your blockchain for profit in a couple of months, please fork before that XOXO" - No criminal ever More likely: "We'll skim from dormant wallets that won't be immediately noticed, and when it becomes too obvious, we move all of Satoshi's bitcoins to force an emergency fork that launders our profits".
- dzader 6y ago
  when*
  - akvadrako 6y ago
    No, if. Scalable quantum computers might be physically impossible or close to it. That would explain why the world, which is really quantum, always appears classical. Quantum computers have something similar to moore's law which is that adding each bit is as difficult as all the previous bits. i.e. the required noise floor scales exponentially, unless a certain threshold is reached.
jackson1442 6y ago
Presumably there could be another fork like there was with BTC vs Bitcoin Cash (BCH).
- nickysielicki 6y ago
  If the discrete logarithm problem turns out to be not so difficult, the entire concept of proof of work is meaningless. There is no patch or fork that can possibly fix that.
  - darawk 6y ago
    Proof of work does not depend on the DLP. It depends on SHA.
    - nickysielicki 6y ago
      PoW is just a filter to prevent denial of service attacks, to ensure that if you're a bad actor, you'll waste electricity to send bogus messages. But if the DLP is easy, then anyone can fabricate proper ECDSA sigs, and you're not wasting electricity to send bogus messages, you're wasting electricity to send valid messages. The point I was trying to make is that there is no migration path from ECDSA. You can't fork bitcoin if the DLP is easy. It's just game over. Proof of work becomes irrelevant.
  - Erlich_Bachman 6y ago
    That's just not correct. There are plenty of crypto algorithms already, including hash functions, that are designed to be resistant/resilient against a functional quantum computer. A PoW scheme can use any (well, at the very least many) of them. [1] https://en.wikipedia.org/wiki/Post-quantum_cryptography https://en.wikipedia.org/wiki/Post-quantum_cryptography
Vecr 6y ago
No, only the signatures would be at risk, and the fix would be quite simple. Create a new address type that's quantum-secure, then have everyone move their coin over. After practical breaks start happening, disable the old signature type.
arcticfox 6y ago
In short, yes it's possible to secure, but it'd be a project. Like securing everything else against QC https://en.bitcoin.it/wiki/Quantum_computing_and_Bitcoin https://en.bitcoin.it/wiki/Quantum_computing_and_Bitcoin
RIMR 6y ago
If Bitcoin doesn't destroy itself somehow, quantum computing will be the destruction of the modern blockchain. Quantum Bitcoins might be possible, but developing a quantum blockchain before traditional Bitcoin can be exploited by the same tech is highly unlikely, so any Bitcoins today will almost certainly never become quantum Bitcoins. I don't think there is any feasible way you could ever convert the Bitcoin blockchain into a quantum variant, even if you set a hard sunset date before any exploitation could occur. You would have to start from the ground up and completely reinvent the wheel.
dylkil 6y ago
yes, you can fork the network to use a new hashing algorithm
kube-system 6y ago
I would hate to be a scientist working on quantum computing when there is so much wealth to be threatened by their success. Sounds like a quick way to meet the mafia.
- missedthecue 6y ago
  I think the threat would be less from billionaires and big companies. Their fortunes get disrupted, accumulated and lost all the time. If such a threat to those researchers exists, it is likely from intelligence agencies around the world.
trident5000 6y ago
Vitalik Buterin himself said sha256 is likely not hackable by quantum computing, certainly not any time soon. If it is then consensus or a fork is needed to change the security.
- bottled_poe 6y ago
  Wow not a crypto founder himself. He wouldn’t have a conflict of interest would he?
  - Erlich_Bachman 6y ago
    Vitalik is not only extremely smart, has many times demonstrated his abilities, but has also shown himself to be incredibly honest and straight-forward kind of guy when it comes to public utterances. Can you find even a couple of times when he has misled or lied to the public, even a bout a small thing? He comments on technical issues and engineering problems, things he knows a thing or two about.
    - jude- 6y ago
      He once tried to sell investors on using a classical computer to simulate a quantum computer to mine Bitcoin faster [1]. Granted, this was before Ethereum. > He comments on technical issues and engineering problems, things he knows a thing or two about. He still doesn't seem to truly understand BFT [2]. [1] https://davidgerard.co.uk/blockchain/buterins-quantum-quest/ https://davidgerard.co.uk/blockchain/buterins-quantum-quest/ [2] https://news.ycombinator.com/item?id=25984251 https://news.ycombinator.com/item?id=25984251
- nickysielicki 6y ago
  Just because he developed ethereum doesn't mean he has any idea what is going on in quantum computing. Whatever we've seen out of the private sector in terms of quantum computing is a total joke in the context of black budget NSA programs. Nobody knows except the people doing it.
  - 6y ago
chemmail 6y ago
Quantum computing gives near infinite parallelization. It does not solve/break serialized equations/problems.
Erlich_Bachman 6y ago
They would just switch to another algorithm. Sad for all the miners who bought ASICs, doesn't change a thing for all users and investors. It would just be a hard-fork. It would not be the first one, and it would very likely be quite a consensual one, since no user wants their transactions to be unsecured. I really wish people would research a bit more before posting these questions here. The quantum computing argument has been asked a thousands times before, it was first seen shortly after the bitcoin paper was published, it has been answered and re-answered and re-answered so many times, everywhere. And yet here we are filling the internet with more and more copies...
- Retric 6y ago
  The issue is the private keys become vulnerable not just the hashing algorithm. If 3/4th of Bitcoins are in lost wallets in 1,000 years those instantly flood the market once someone can discover them from the old public keys. You can’t distinguish between someone that’s kept a wallet inactive for all this time and someone discovering a private key. Which means you need to fork early and abandon any wallets that don’t do a transaction with the new system. That’s not the kind of transition that works with just the miners involved.
  - Erlich_Bachman 6y ago
    You can trivially distinguish those transactions from real ones. In fact so trivial that you could do it in one if clause #define LATEST_BLOCK_BEFORE_EMERGENCE_OF_QC 76283747 # fill in number when that happens if (block_height>LATEST_BLOCK_BEFORE_EMERGENCE_OF_QC) { # Treat transaction as invalid if it still uses SHA256 } You know transactions are timestamped through the medium of being included in a block, right?
    - Retric 6y ago
      You don’t understand, this has nothing to do with SHA256 for mining after crypto. You need to sign a transaction with a private key. Quantum crypto makes all current private keys public. This means you need to pick some date where everyone with a private key needs to create a new key under a new system. Then before quantum crypto is available they need to make this transaction from their old wallet using an old key to a new wallet with a new secure private key. And they need to do this before quantum crypto is available.
jude- 6y ago
Yes -- the network could soft-fork to require post-quantum transaction signatures. Naively, you could make it so that each transaction would put the hash of its parties' post-quantum signatures in an OP_RETURN output, and distribute both the transaction and the post-quantum signatures to the network. Miners would package the transactions into blocks, and separately validate them with the associated post-quantum signatures and distribute them as ancillary block data (e.g. the coinbase transaction could contain a Merkle tree root that authenticates all the block's extra post-quantum signature data).
tomerico 6y ago
Bitcoin is vulnerable in two ways: 1. The oldest (and largest) wallets directly stored their public key on the blockchain. This would mean that attackers could transfer money away from these wallets (many of them are dormant). 2. Relatively early, the blockchain shifted to only storing the hash of the public key, which seems less susceptible to a quantum computing attack. The risk in these wallets is that once you want to transfer bitcoins out, you need to temporarily publish your public key - this key is not stored on the blockchain, but might be stored by future attackers. In addition, at some point getting your private key will be so fast that the moment you publish a transaction request you'll many fake requests asking to transfer to another wallet. The solution is likely a soft fork - new addresses that are quantum resistant (similar to how in the past Bitcoin moved away from public key address into hash). The trick is that this needs to be deployed before attacks exist, and people need to transfer their Bitcoin into the new wallets.
- Melting_Harps 6y ago
  > 1. The oldest (and largest) wallets directly stored their public key on the blockchain. This would mean that attackers could transfer money away from these wallets (many of them are dormant). That doesn't mean the Public key has ever been exposed online and therefore not true. Look up cold storage best practices, I'm not going to line it out for you but what you said is entirely false and built on a flawed premise. > 2. Relatively early, the blockchain shifted to only storing the hash of the public key, which seems less susceptible to a quantum computing attack. The risk in these wallets is that once you want to transfer bitcoins out, you need to temporarily publish your public key - this key is not stored on the blockchain, but might be stored by future attackers. In addition, at some point getting your private key will be so fast that the moment you publish a transaction request you'll many fake requests asking to transfer to another wallet. You started it off with a valid observation, but then led into a non-sequitur, what does that have to do with Bitcoin's vulnerability if as we just said 1 is not true if done correctly. > The trick is that this needs to be deployed before attacks exist, and people need to transfer their Bitcoin into the new wallets. While I agree security on mainchain is an issue, we should dhave had taproot long ago, and mixing by default by now as tx fees get more and more expensive--all you're doing is mixing it with other adddresses to make the sum indistinguishable from it's source and that cost adds up as the netowrk gets more expensive to operate on. But also your premise is at odds with the fact that most of the traffic will be done on LN moving forward, and the bitcoin (token) will locked out of the network's mainchain (Bitcoin) to operate on LN and thus does not require your 'solution.' In short, these are non-concerns. Note how I didn't downvote you, and instead I challenged your arguments in order for others to benefit from this conversation, instead of being a child and downvoting simply because I disagree with your points. Edit: HAHA!
mudlus 6y ago
If that happens you're worried about Bitcoin? lol Besides, the algorithm in question here is Shor's algorithm, it WILL be used to break some basic encryption. If Satoshi is dead, his coins will be hacked (they are old P2PK outputs). But there is no algorithm for breaking P2SH outputs (eg Native Segwit wallets). There could be, but Bitcoin has the ability to adapt if necessary. Bitcoin is not a static thing. See also : https://www2.deloitte.com/nl/nl/pages/innovatie/artikelen/quantum-computers-and-the-bitcoin-blockchain.html https://www2.deloitte.com/nl/nl/pages/innovatie/artikelen/qu... More importantly, quantum computers actually allow for something better than encryption. If you are having a secret conversation over the quantum internet, not only can no one listen in, BUT you will KNOW if they are listening. I read about this in David Deutsch's "Fabric of Reality," which I HIGHLY recommend and is freely available on archive.org https://archive.org/details/TheFabricOfReality/page/n1/mode/2up https://archive.org/details/TheFabricOfReality/page/n1/mode/... https://en.wikipedia.org/wiki/Quantum_cryptography#Mistrustful_quantum_cryptography https://en.wikipedia.org/wiki/Quantum_cryptography#Mistrustf...

RIMR 6y ago

What are they going to do with $160M worth of bitcoins?

nikolay 6y ago
HODL! Edit: Don't you have a sense of humor?!
- belval 6y ago
  HN as a community does not have a high tolerance for short reddit-like replies that could be considered funny. The general opinion being that it lowers the overall quality of the discussion.
  - nikolay 6y ago
    Well, sometimes a short reply like "HODL!" hodls (!) paragraphs of meaning.
    - RIMR 6y ago
      You're right, when I see "HODL!" I think: "This person is addicted to online gambling. 'Investing' doesn't involve screaming 'hold the line!' on web forums 15 times per day, it involves patience and confidence and research. This person is investing based off of internet memes, and is treating a highly volatile security as if it were some sort of get-rich guarantee, because they see a select few winners rise to the top, and ignore the numerous losers that never made a dime." Is that the kind of paragraph a reasonable person might extract when they see "HODL!"?
      - nikolay 6y ago
        Yeah, a form of a get-rich-quick scheme.
  - eroded 6y ago
    Have fun staying poor.

nikolay 6y ago

Copycats. I guess, their business isn't doing so great if they try to speculate with their cash instead of beating competition, which is growing daily!

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qeternity 6y ago

Square pays $170m for $160m worth of Bitcoin

DenisM 6y ago

My guess they are rolling out btc payments and bought some amount to cover transaction delays or rollbacks.

oafertino 6y ago
This feels like the most rational reason - the other would reason would be trading BTC with shareholder money so let's hope you're right.

hntrader 6y ago

Isn't it a conflict of interest for Dorsey to make such a market moving purchase, as an agent of Square, in an asset that he is personally invested in? I guess we'll have to wait and see the rationale of the purchase. If it's to facilitate payments on their platform, then no biggie.

really3452 6y ago
CEO's do this all the time with the US dollar and no one blinks an eye.
- deleted 6y ago
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- loceng 6y ago
  Sorry, is the US dollar akin to an MLM scheme in any apples to apples way? Edit to add: Glad instead of getting 3 downvotes right off the bat, people decided to spend effort into writing thoughtful comments.
  - neolog 6y ago
    What's the difference between btc and usd? They both gain value when more people want them, and they have no other value.
    - missedthecue 6y ago
      The dollar is backed by the full faith and credit of the US federal government, for starters. Bitcoin is backed by hoping a greater fool will pay you more for it, and a bunch of GPUs in Xianjiang.
      - xref 6y ago
        btc is backed by the same thing as usd and gold: the collective belief it is worth something. You can try to gussy it up with arguments like “faith and credit” or “the military” or “you can pay taxes with it” or “has industrial applications”, but that’s not the basement level of determining value.

rtx 6y ago

Taking shareholders for a ride. Scamming people at two companies.

cecida 6y ago

I've reached the consensus that any company investing in Bitcoin doesn't actually care about the future of the planet.

RIMR 6y ago
I view it more along the lines of business owners being more and more willing to take company funds to the casino.
- tinus_hn 6y ago
  In most casino games you can’t really influence you chances of winning
missedthecue 6y ago
How would this be different from saying that anyone who drives an SUV or plays computationally intense computer games doesn't care about the future of the planet? If it isn't different, is it really that much of an insightful statement beyond "people tend to do what they think is their own personal self interest"?
- rscho 6y ago
  There's a gradation in carelessness and selfishness, though...
- wmf 6y ago
  You can choose to drive an electric car or a gas car. Likewise you can choose to use PoS coins or PoW coins.
pavlov 6y ago
Personally I agree. It's a signal that a company is run by people whose values are fundamentally different than mine. I've bought a Tesla in the past and was mostly happy with it, but I'll never get another one. (I'm sure they won't miss my business, as Musk's antics are presumably gaining them many enthusiastic customers. Still, buying elsewhere is the only power we customers have.)

hahahahe 6y ago

So they’re buying bitcoins with the money generated from their payment business. This is far worse than any toys Zuckerberg ever bought for Facebook (except for Libre).

mancerayder 6y ago

Aren't a lot of companies buying BTC as a way to help their perception of growth, given BTC is going up? Square is a payment system, sure, but a bunch of non payment system companies are doing the same. If companies invest in BTC instead of growing themselves and hiring people, isn't that bad for the economy?

federona 6y ago
So very strange to invest so heavily in Bitcoin a highly volatile crypto at its peak. Not to mention an old generation crypto with dubious value on the face of 3rd generation crypto that does not damage the environment and does not have the same scaling issues. It's like considering some old tech as which has dubious value just because it was invented first. Like overvaluing a gas car when an electric exists and is the wave of the future. What do these companies know that we plebs don't.
- thebean11 6y ago
  > at its peak All time high yes, but we don't know that this is a peak
  - wmf 6y ago
    But these companies don't know it's not the peak either. Buying the dip, as the kids say, is more defensible.
    - thebean11 6y ago
      You mean catching a falling knife? Truth is, nobody knows when a good time is.
- Erlich_Bachman 6y ago
  You can do a much much more deep fundamental analysis than a simple checking {if price_at_ATH then..}. Many of the companies have likely done such deeper analysis.
- 6y ago

chemmail 6y ago

I wonder why it took so long, Dorsey has always been in bed with Blockstream

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rcavezza 6y ago

I'm not sure I've ever seen a one sentence news story before.

sschueller 6y ago

I wonder if companies are viewing bitcoin in a similar way as currencies? I don't know how common this is in the US but in Europe specifically Switzerland larger companies buy and hold Euros and Dollars to deal with currency fluctuations. Maybe its just speculating that bitcoin will bring in money. It worked for Tesla.

federona 6y ago
Is it easy to convert a billion for a hundred million of btc to cash as it is to buy a stock? I don't think this is it or usd or euro.

electriclove 6y ago

I'm surprised to see so much negativity in regards to these headlines about Bitcoin. I expect to see more and more companies doing the same and diversifying their holdings partially away from the USD.

electriclove 6y ago
Some may find this article enlightening: https://www.lynalden.com/fraying-petrodollar-system/ https://www.lynalden.com/fraying-petrodollar-system/

notJim 6y ago

What is the actual purpose of buying BTC? Tesla also bought some recently, IIRC. I assume that large publicly-traded companies aren't doing this for the memes, and it seems tangential to their actual businesses. Do they also trade other equities/assets?

missedthecue 6y ago
I can't make heads or tails of it either. Some people have been speculating that it's because they want to take payments in BTC, but I don't see building massive positions in it helps them facilitate that.
pvarangot 6y ago
I think there's two purposes: - They have cash, and want to cover against inflation - They want to eventually accept payments or provide withdrawals or pay salaries or bonuses in crypto, and they need to stock up to be able to have or provide liquidity
Erlich_Bachman 6y ago
Investment. Any large company has a stack of cash on hand, this is just required for operations. Traditionally many of them have been putting that cash into government bonds. Lately when many bonds have negative yields, it becomes more and more stupid to hold money in bonds for every year of guaranteed lost money in them.
- missedthecue 6y ago
  What makes Bitcoin the second best option after US Treasuries?
1996 6y ago
> What is the actual purpose of buying BTC? $$$$$$$$

escardin 6y ago

It's because CashApp lets you buy and sell bitcoin, that is, CashApp is buying this bitcoin so it can sell it to customers [1]. It's not speculation on the part of Square or Jack Dorsey. All this speculation about speculation is wildly disappointing. [1]: https://www.investors.com/news/technology/square-stock-sq-square-earnings-q42020/ https://www.investors.com/news/technology/square-stock-sq-sq... > Square said revenue jumped 141% to $3.16 billion as more Cash App users bought and sold digital cryptocurrency Bitcoin.

new_realist 6y ago

Executing a trade and then shouting from the rooftops to drive up the price is an age-old trick.