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With all the disclosures and absolute failures of security and operations that we've seen coming out of the Bitcoin field, can we start to quell the attitude th

• jasveer 14y ago
  The currency and its audience are different.
  • jsprinkles 14y ago
    Not at all. These sites that are being repeatedly compromised and yet positioned as "the market" for Bitcoin are, for all intents and purposes, the currency. Compare to USD: banks, exchanges, conversion, speculation. Without them, USD is just me handing someone else some paper, and Bitcoin is just as useless without the "market" as defined by a few hobbyist Web devs, in this case. Think about it. I can send a Bitcoin address some Bitcoins, which is equivalent to me handing someone else some cash. Anywhere you want to go from there requires an external market, and that includes: - Accepting Bitcoins online - Converting to Bitcoins - Speculating with Bitcoins ALL of those things are a "secondary market" which, in turn, increase the value of the currency. Traditional currencies have extensive support structures built around them, and those structures are heavily regulated to avoid this exact scenario. So far, Bitcoin has some hobby Web sites without any real consequences for fucking up.
    • SkyMarshal 14y ago
      This is an argument over semantics. What you seem to claiming is basically that a currency is defined by both its inherent features and its supporting ecosystem. So in BTC's case, inherent features = protocol, client, and miners. Supporting ecosystem = buyers, sellers, savers, merchants, exchanges, investors, speculators, banks, escrow, etc. Further, you seem to assert, failure of parts of the supporting ecosystem causes BTC to lose value (true), and that losing value means the currency is failing (not necessarily, stochastic variables fluctuate, hard to tell the signal from the noise). The value of a currency is fundametally a function of its demand relative to its supply (as with pretty much everything in this world). Demand for currencies increase with their utility. For example, is it the only currency in the world you can buy oil with? If yes, utility increases -> demand increases -> value increases (ceteris paribus, no increase in supply). In that regard, Bitcoin appears to have a strong baseline of utility in that its core technologies are relatively sound. Truthfully it's probably too soon to make that call, given potential problems with mining pool consolidation, pseudo-anonymity, etc. But Bitcoin's core technology is so far sound enough to provide a consistent utility/demand/value/price baseline relative to the shaky, hobbyist/amateur supporting ecosystem that has sprung up around it. So that when even its biggest exchange MtGox.com is hacked, or one of its most high-profile financial companies Bitcoinica.com is hacked and bankrupted, the BTC price in dollars continues to revert to a mean of around $5-$6, aka the BTC Baseline. So, asserting that failures of BTC's peripheral components represent failure of the currency itself, or that BTC is not a currency because its supporting ecosystem (which the BTC devs have almost no control over) is weak, is a bit of hyperbole, and the reason for all the pushback. Also, keep in mind that Rome wasn't built in a day. Building a new currency of any sort is difficult (ask Europe), and building one that's made of electricity and algorithms instead of gold or sovereign debt is probably one of the most difficult things in the world, and BTC is the first viable one humanity has ever seen. Getting the core technologies right is crucial, and the BTC team has done a great job for their first try, but have another few decades of continuous improvement before it will be considered truly sound. Asserting at this point that it has failed or succeeded is probably a bit premature. The jury will be out for a while yet. Speculate at your own risk.
• ubernostrum 14y ago
  Bitcoin is the currency for people who've read John Locke but not Thomas Hobbes.
  • jl6 14y ago
    Your comment sounds clever, but I have read neither. Could you please elaborate?
    • koeselitz 14y ago
      Extremely roughly: Locke was an idealist of liberty; Hobbes rationalized the social contract by pointing out that people are bastards and that life without it is nasty, brutish, poor, and short.
    • anigbrowl 14y ago
      Locke: private property is a cornerstone of liberty. Hobbes: without government, life has historically tended to be 'solitary, poor, nasty, brutish, and short.' As a practical matter, it's a lot easier to enjoy your liberty when your property isn't under constant assault from everyone else; by everyone pooling a little of their individual sovereignty in a government, aggregate liberty is vastly increased. It's a political economy argument at its core.
      • jl6 14y ago
        So after a very brief read of Wikipedia, the voting-via-hashpower mechanism of Bitcoin seems to me to be a form of social contract, whereby users consent to be governed by the rules laid down by the majority.
    • dsrguru 14y ago
      We don't want the government restricting our freedoms (i.e. libertarianism is cool), but trying to implement that with anarchy gives bad guys the freedom to take away our own.
    • deleted 14y ago
      [deleted]
• Cushman 14y ago
  Bitcoin has a lot of problems, but this one confuses me. People steal real money all the time; it's one of the things that makes it real money.
  • fusiongyro 14y ago
    Why don't we get these kinds of responses when there's large-scale credit card fraud? "Hey people, it's just money, this shit happens. Go make more and quit crying." I'll posit it's because the system we inherited—fiat currency insured by governments, poorly secured and handled by credit card companies—works just fine. Nobody would build it this way from scratch, but looking at the endless stream of fiascos with bitcoin, it's obviously better than the alternative. Bitcoin is a bad solution to a non-problem.
    • sgornick 14y ago
      With bitcoin, the muggings like this incur a 50% or 100% loss, impacting those who extended trust to the wrong place. With fiat, the muggings when using a payment card incur a 3% loss each time the currency is used, impacting every person on every transaction.
    • Cushman 14y ago
      Because it's completely different? Credit cards are designed to be accountable and refundable. The credit card is sold with a guarantee that it cannot be used to steal money from me. They can do this because credit is not "real" money; it's credit. Bitcoin is designed to be easy to steal because cash is easy to steal.
      • fusiongyro 14y ago
        It's an amazing technical achievement, it's just not necessary or desirable. There's no music format that replicates vinyl's degradation with each performance. This is not just because it would be hard, but also because it would be undesirable. We just don't need a currency that solves non-problems and brings back solved ones: it's undesirable.
• javert 14y ago
  I could point out several fallacies in your post. The most obvious one is that some very, very smart people (including at least one professional Linux kernel hacker) are doing a good job working on the official bitcoin client, so it's not true that the only people working on Bitcoin stuff are Rails users. But what's the point in pointing out this and other fallacies in your post when you already stated that I am misled and that you're not willing to listen to me? This kind of comment does not belong on HN. I don't care if you're PG, I would still say the same thing. EDIT: Also, I really strong resent that you're trying to stop me from doing what I want with my time and money, which is what you're doing when you insist that bitcoin needs to be regulated. You have no right to tell me how to spend my money. Fuck off, man. EDIT AGAIN: OP edited his comment after reading this comment, so this comment probably looks too harsh (but it wasn't originally).
  • jsprinkles 14y ago
    By "Bitcoin stuff", I mean the secondary markets that have arisen around it. That was probably a poor choice of phrase, and I'll update accordingly. I agree that Bitcoin itself is probably cryptographically strong and mostly well-designed. To respond to your edit, regulation does not tell you how to spend your money. Regulation ensures that the systems accepting your money are designed against and proactively secured against failures such as this one, so you don't lose. FDIC insurance at your bank is an example of regulation designed to protect you. I have no interest in telling you how to spend your money; I do have an interest in the systems processing that money being reliable and safe. I will ignore the rest of your needless incendiary comment, as it has no place on HN. You also don't need to inform everyone that I've edited my comment, as I did that for you at the base of it.
    • mdonahoe 14y ago
      I love when two people claim each other's post has no place on HN.
      • jsprinkles 14y ago
        I claimed his incendiary language has no place on HN, as one of the guidelines is to be civil. I did not claim his post has no place on HN. It's also just good manners to not flame someone to death for attacking something you hold dear. Be objective, and reasonable.
• mdonahoe 14y ago
  This incident was a bank robbery. Cash has the same problem. It's not like the thief subverted a flaw in bitcoin security. He ruined a crappy centralized service built on top of a decentralized system.
  • jsprinkles 14y ago
    More like a bank designed with an overly weak vault, because nobody at the bank spent a lot of time designing a very secure vault.
    • drivebyacct2 14y ago
      Which means the currency the bank housed has a "not real" market, obviously. That's the "logical" conclusion, right?
  • namidark 14y ago
    Except banks are FDIC insured.
• rasengan 14y ago
  I think this is awesome. We'll see technological evolution in its truest and rawest form happen at light speed. With every mistake and error comes a fix. When someone crashed into the highway-wall when you are getting off the highway on a ramp the first time, they learned they needed to put barrels filled with water to cushion the impact. I can't wait to see what awesome, hardened code comes out of this. :D
  • jsprinkles 14y ago
    "Innovate quickly and break things" is a strategy for social networks and games, not financial platforms nor life support systems. I hate that on one hand, we have people saying "Bitcoin is a totally real currency" and accepting payments, and on the other we have sites falling like flies to vulnerabilities and the defense being "we're just learning".
    • rasengan 14y ago
      I am not in any way defending, friend. Rather, I agree with you - the "innovate ... " strategy should not be in financial nor life support systems. It's unfortunate we're still bailing banks out today, and re-deciding what's good and bad for our health/medicine/etc. With that said, once a mistake is made, we can't turn back time. I love watching society get stronger and stronger. If you think about it, it's our ability to pass on and learn from our mistakes that has helped us get here today. Otherwise, who knows, we might not even have had agriculture yet. (Which also could be good or could be bad. For example, I'm allergic to gluten -__- ) Either way, I'll end with this quick story: http://www.conures.net/stories/horse.shtml http://www.conures.net/stories/horse.shtml (note: this is a shortened version and the story could go on forever).
    • rapind 14y ago
      So learning from your mistakes is relevant for everything except financial platforms and life support systems? Those we need to get perfect out of the gate? That sounds great. Please provide some examples of financial systems (isn't capitalism a big experiment?) and life support systems (yeah we're not poking a stick at the environment at all...) supporting this theory. I honestly don't have a dog in the bitcoin race, but considering it's a fairly recent invention I expect there'll be some growing pains just like everything else.
• zyb09 14y ago
  Bitcoin is very alive and kickin right now. The bitter truth is Bitcoin is now the de facto standard method of payment for all kinds of shady, criminal & laundering services on the net. What you got is a lawless currency, with no regulations what so ever, and no (assumed * ) oversight of trade. There so much hacking, fraud and insider scams going on, that trusting an online wallet like Bitconica is just waiting for your money to be stolen. Very hostile environment. No, this is not like "real money" at all, but it still holds value. * it is assumed gov. institutions are monitoring large transactions now
  • bigphishy 14y ago
    What is the difference between bitconica and the most reputable bitcoin selling site? And what do you mean online wallet site like bitconica?
    • tedunangst 14y ago
      You should store your wallet offline and only transfer bitcoins to an exchange at the instant you need to exchange them, and then empty the account. For purposes of this discussion, there are no "reputable" sites.
      • jerguismi 14y ago
        Well, you can as well use multiple wallets with different security/usage goals. For example, I use for my daily usage easywallet.org on my Android/iPhone/Computer, but for larger sums I have better storage. Disclaimer: I am the developer of easywallet.org
  • Frozenlock 14y ago
    "What you got is a lawless currency" Laws are for people, not currency. Property and contract laws still apply even with different currencies. The fact that the surrounding infrastructure is still being built can be frowned upon, but this has nothing to do with laws. And yes, it is like real money. In fact it's even more like real money then what most people use daily. Bitcoin properties are almost the same as precious metals, making it much more money-like than a fiat currency. (On which we build our bank accounts and, as yet another layer, various credit tools. At the end of the day, you start to be quite far away from "real money".) Now, if such a thing is desirable is another question entirely. Nevertheless, Bitcoin is money.
• drivebyacct2 14y ago
  There is no bitcoin market because some of the trading platforms that also work as banks have a hard timing doing a good job? Pssh, what a lame argument.
  • jsprinkles 14y ago
    Care to refute it in any way, or are you just going to post pointless noise?
    • drivebyacct2 14y ago
      The US Dollar sucks because we had to bail out banks. NASDAQ sucks because they fumbled on Facebook's IPO. What other drawn out doomsday conclusions do I need to make?
      • jsprinkles 14y ago
        A relevant one, for starters.
• fl3tch 14y ago
  It's a real currency market, it's just at the Bonnie and Clyde stage of its evolution. Consider how lax bank security was in the 1930s that a single couple could rob banks for years with a fraction of the sophistication of modern day bank robbers. You couldn't get away with it today, not for that long, but it was possible with "real" money, "real" banks, all government backed, at one time. And that had centralization and identity built into it. The bitcoin community isn't big enough to have serious security professionals yet, but that doesn't disqualify it as a currency market.
  • jsprinkles 14y ago
    Which is why my comment has said, from the beginning, "as it stands today". Those interested in Bitcoin should seriously learn from those very mistakes that you're discussing, rather than re-learning them all over again.
    • deleted 14y ago
      [deleted]
    • jokerswild 14y ago
      What does is matter? Everyday people get mugged and killed over cash... do you believe cash is not a "real currency" because of this?
      • codesuela 14y ago
        The difference here is that no one carries around the amount necessary to tip the balance of the economy, which is very much the case with Bitcoin sites such as Bitconica
        • muyuu 14y ago
          Actually just 18.5K were stolen and it didn't affect bitcoin's valuation. We are enjoying very good stability at this moment there are very few people leverage-trading.
  • 14y ago
• joe_the_user 14y ago
  You should be attacking Bitcoin itself. Let's see. Real security people will tell you it's a disaster. Real economists will tell you it's a disaster. What else do you want?
  • Animus7 14y ago
    > Real security people will tell you it's a disaster. No, they won't. Bitcoin is built upon decades of battle-hardened industry-standard cryptography. The day someone cracks SHA you'll have a lot more to worry about than your Bitcoin wallet. The only security problem with Bitcoin is people building insecure systems around it. Which of course has nothing to do with Bitcoin.
    • veridies 14y ago
      It does have something with Bitcoin. Bitcoin is a fully digital currency which isn't guaranteed by any bank or company. It requires its users to be way, way safer with their computers than almost anyone is.
      • weavejester 14y ago
        Surely it depends on how much currency you happen to be holding? At the moment, most holders of Bitcoin are people either speculating or experimenting with it. But if Bitcoin ever becomes a more generally used medium of exchange, users don't have to hold a lot of money for it to be useful, in the same way you wouldn't keep a lot of cash in your wallet.
    • DanBC 14y ago
      > Bitcoin is built upon decades of battle-hardened industry-standard cryptography. Like Debian's OpenSSL PRNG?
    • makomk 14y ago
      It's based around "battle-hardened industry-standard cryptography", but that cryptography is used in a less than standard way. Remember that it doesn't matter how secure the underlying cryptographic primitives you're using are if the way you're using them is flawed.
• bestes 14y ago
  Jeez, I sure hope Uncle Sam comes to protect us all from these big, mean hackers and these over-confident programmers. That is the only way we will ever be safe. I would put a </sarcasm> but I can't turn it off that quickly.
• smsm42 14y ago
  This has very little to do with currency regulation, more with banking and security. It's like some guy opening a bank in an old garage with thin plaster walls, simple pin tumbler locks on the doors and regular metal closet as storage for money. One has to be really careless to put one's savings into such bank, and only reason I can imagine why people did that because it was not apparent to them. Building secure publicly accessible website that can store bitcoins is very hard. Almost all common software has multiple vulnerabilities, and the fact that stealing bitcoins once system is compromised is trivial, and, as I understand, irreversible (unlike breaking into bank website, for example, but like breaking into bank vault with cash) - this makes such task super-hard. I would be very suspicious about any professional that is not properly intimidated by such task. I'm not saying it's not doable at all - probably can be done, but if somebody claimed he did it I'd ask for a lot of proof before I give him my money.
  • dublinclontarf 14y ago
    One of the things that makes a public website that deals with bitcoins secure is that it SHOULDN'T store them, or at least not an amount worth stealing. Bitcoinica lost a huge amount of coins in March (more than this time) because they stored their wallet online, you shouldn't do this, use cold storage. OK, Bitcionica do use cold storage, just that their hot wallet was pretty bloody big.