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The only way for Bitcoin to not go up is for a different cryptocurrency to come to fruition that has significant improvements over Bitcoin, like zerocoin, and s

The only way for Bitcoin to not go up is for a different cryptocurrency to come to fruition that has significant improvements over Bitcoin, like zerocoin, and subsequently can not be integrated into Bitcoin's blockchain.

darkmighty 13y ago
Can bitcoins security algorithms become outdated due to Moore's law in any reasonable period of time? Is there a possible threat of algorithm compromise by cryptanalysis?
- teraflop 13y ago
  Bitcoin uses ECDSA signatures to verify transactions. According to Wikipedia [1], the current record for solving the discrete logarithm problem (which is how you recover a private key from the corresponding public key) was done on a 112-bit key in 6 months. Bitcoin uses 256-bit keys, and the algorithm in question has a complexity of O(2^(N/2)), so breaking its keys is 2^72 times harder. So even under the ridiculously unlikely assumption that computational power halves in cost every 18 months for the indefinite future: 50 years from now, the entire current global GDP still won't be enough to buy a processor that can crack a Bitcoin key in less than a decade. (Of course, this is assuming there are no other unknown flaws in the protocol, and that no better algorithms are found to find discrete logarithms over elliptic curves. But if a vulnerability is found, it won't be thanks to Moore's law.) [1] http://en.wikipedia.org/wiki/Discrete_logarithm_records#Elliptic_curves http://en.wikipedia.org/wiki/Discrete_logarithm_records#Elli...
- oleganza 13y ago
  As for mining, there are enough bits in SHA256 to allow billion-fold increase in difficulty. And if there is a danger of breaking it much quicker, all people holding bitcoins have huge incentive to change the protocol to fix the problem. As for ECDSA, it can only be broken by quantum computers, but still most balances are protected by sha256*ripemd160 hash, so they are safe in the face of sudden QC attack or a weakness in ECC. People will want to protect their wealth and thus will change the protocol for other algorithms.
  - darkmighty 13y ago
    Cool info, thx! But do you think it would actually be viable to make a protocol algorithm transition?
    - oleganza 13y ago
      When everyone's money is at stake, it'll be very quick. This March, when the network forked, miners with newer version 0.8 agreed to forego mining rewards and abandon their own branch (incompatible with v0.7) just to resolve the issue quickly to not shake the confidence in Bitcoin.
      - nwh 13y ago
        They got their money back anyway. A user paid every single missed bounty from blocks on the abandoned fork.
        oleganza 13y ago
        v0.7 miners got those rewards, not v0.8 ones.
        nwh 13y ago
        v0.8 miners were paid back for the lost funds from a private fund, leftover from the original Bitcoin Faucet.
        oleganza 13y ago
        Yes, but this was not planned ahead. Miners did abandon their rewards even being on a longer chain just to maintain trust in the system. They did not know if they will ever get their money recovered.
RussianCow 13y ago
Or stricter regulations are put in place, or a big company like PayPal creates a competitor product, or... Lots of things can happen. There is absolutely nothing backing the price of Bitcoin, so to say that its price won't go down is foolish--pure speculation. If that were irrefutably true, the price would already be $1,000 or $10,000, but it's not, which means there are valid concerns for the future of Bitcoin.
- yason 13y ago
  There isn't much to back the price of fiat currencies either: Bitcoin is valued by demand which is effectively the case with other currencies too. If there's demand for bitcoins and trust in the platform, that's all the back up Bitcoin needs. After all, with any currency the only value it has is the ability to later exchange the currency back to services or material goods. Even if a currency is backed by gold like in old times there can only be faith in that gold will actually buy you goods in the future, too.
  - RussianCow 13y ago
    Currencies aren't backed by anything physical; they're backed by the confidence that you will actually be able to buy something with them. Bitcoin doesn't yet have that confidence, so it basically has no inherent value. (Technically, fiat currencies don't have truly inherent value either, but I don't want to argue about semantics.) The value of Bitcoin today is purely speculative, because it doesn't actually have much of a practical use. Those investing in Bitcoin are betting that it's going to become a currency you can use as confidently as US dollars, but no one can accurately predict whether that will ever happen; it's all a gamble at this point.
    - umanwizard 13y ago
      Fiat currencies (at least those that are the official currency of one or more sovereign states) actually do have intrinsic value beyond people's beliefs. USD is valuable not only because people trust you'll always be able to buy things with USD, but also because the US. government collects USD-denominated tax. As long as the government continues to have the firepower to enforce the tax code, there will always be a demand for USD, irrespective of how confident people are in its viability.
wmf 13y ago
Or maybe for it to be outlawed in the US, Europe, and China.
raws 13y ago
Besides Zerocoin which other ones would you consider improvements over Bitcoin?
- iSnow 13y ago
  Zerocoin is not a competing cryptocurrency but a way to anonymize transactions that could be integrated into bitcoin.
  - throwaway98604 13y ago
    Yes, but the creator of Zerocoin has stated that it seems unlikely to integrate into Bitcoin's blockchain and may only be usable if it is put into a new blockchain.

darkmighty 13y ago

Can bitcoins security algorithms become outdated due to Moore's law in any reasonable period of time? Is there a possible threat of algorithm compromise by cryptanalysis?

teraflop 13y ago
Bitcoin uses ECDSA signatures to verify transactions. According to Wikipedia [1], the current record for solving the discrete logarithm problem (which is how you recover a private key from the corresponding public key) was done on a 112-bit key in 6 months. Bitcoin uses 256-bit keys, and the algorithm in question has a complexity of O(2^(N/2)), so breaking its keys is 2^72 times harder. So even under the ridiculously unlikely assumption that computational power halves in cost every 18 months for the indefinite future: 50 years from now, the entire current global GDP still won't be enough to buy a processor that can crack a Bitcoin key in less than a decade. (Of course, this is assuming there are no other unknown flaws in the protocol, and that no better algorithms are found to find discrete logarithms over elliptic curves. But if a vulnerability is found, it won't be thanks to Moore's law.) [1] http://en.wikipedia.org/wiki/Discrete_logarithm_records#Elliptic_curves http://en.wikipedia.org/wiki/Discrete_logarithm_records#Elli...
oleganza 13y ago
As for mining, there are enough bits in SHA256 to allow billion-fold increase in difficulty. And if there is a danger of breaking it much quicker, all people holding bitcoins have huge incentive to change the protocol to fix the problem. As for ECDSA, it can only be broken by quantum computers, but still most balances are protected by sha256*ripemd160 hash, so they are safe in the face of sudden QC attack or a weakness in ECC. People will want to protect their wealth and thus will change the protocol for other algorithms.
- darkmighty 13y ago
  Cool info, thx! But do you think it would actually be viable to make a protocol algorithm transition?
  - oleganza 13y ago
    When everyone's money is at stake, it'll be very quick. This March, when the network forked, miners with newer version 0.8 agreed to forego mining rewards and abandon their own branch (incompatible with v0.7) just to resolve the issue quickly to not shake the confidence in Bitcoin.
    - nwh 13y ago
      They got their money back anyway. A user paid every single missed bounty from blocks on the abandoned fork.
      - oleganza 13y ago
        v0.7 miners got those rewards, not v0.8 ones.
        nwh 13y ago
        v0.8 miners were paid back for the lost funds from a private fund, leftover from the original Bitcoin Faucet.
        oleganza 13y ago
        Yes, but this was not planned ahead. Miners did abandon their rewards even being on a longer chain just to maintain trust in the system. They did not know if they will ever get their money recovered.

RussianCow 13y ago

Or stricter regulations are put in place, or a big company like PayPal creates a competitor product, or... Lots of things can happen. There is absolutely nothing backing the price of Bitcoin, so to say that its price won't go down is foolish--pure speculation. If that were irrefutably true, the price would already be $1,000 or $10,000, but it's not, which means there are valid concerns for the future of Bitcoin.

yason 13y ago
There isn't much to back the price of fiat currencies either: Bitcoin is valued by demand which is effectively the case with other currencies too. If there's demand for bitcoins and trust in the platform, that's all the back up Bitcoin needs. After all, with any currency the only value it has is the ability to later exchange the currency back to services or material goods. Even if a currency is backed by gold like in old times there can only be faith in that gold will actually buy you goods in the future, too.
- RussianCow 13y ago
  Currencies aren't backed by anything physical; they're backed by the confidence that you will actually be able to buy something with them. Bitcoin doesn't yet have that confidence, so it basically has no inherent value. (Technically, fiat currencies don't have truly inherent value either, but I don't want to argue about semantics.) The value of Bitcoin today is purely speculative, because it doesn't actually have much of a practical use. Those investing in Bitcoin are betting that it's going to become a currency you can use as confidently as US dollars, but no one can accurately predict whether that will ever happen; it's all a gamble at this point.
  - umanwizard 13y ago
    Fiat currencies (at least those that are the official currency of one or more sovereign states) actually do have intrinsic value beyond people's beliefs. USD is valuable not only because people trust you'll always be able to buy things with USD, but also because the US. government collects USD-denominated tax. As long as the government continues to have the firepower to enforce the tax code, there will always be a demand for USD, irrespective of how confident people are in its viability.

wmf 13y ago

Or maybe for it to be outlawed in the US, Europe, and China.

raws 13y ago

Besides Zerocoin which other ones would you consider improvements over Bitcoin?

iSnow 13y ago
Zerocoin is not a competing cryptocurrency but a way to anonymize transactions that could be integrated into bitcoin.
- throwaway98604 13y ago
  Yes, but the creator of Zerocoin has stated that it seems unlikely to integrate into Bitcoin's blockchain and may only be usable if it is put into a new blockchain.