3 ms·

How does this spill over into our trust of digital currencies like bitcoin, litecoin, and others?

Glide 13y ago
Probably makes it worse. If you tell people the currency doesn't leave a paper trail then they'll worry about people scamming them or screwing them over in some way, shape, or form.
- thenerdfiles 13y ago
  That point raises, I believe, the question of what exactly is motivating these digital currencies' adoption, assuming that the strongest economic power has a growing rate of social distrust.
  - SkyMarshal 13y ago
    Because bitcoin is an algorithmic solution to exactly that problem - trust in a distributed system, casually known as the Byzantine Generals Problem, or Two Generals problem [1]. The innovators and early adopters were motivated by their understanding of the utility in finally achieving a solution to that problem in the context of digital currency (not historically possible for digital currencies till the invention of 1) the Internet and 2) the BitTorrent protocol, so essentially a major breakthrough and first in human history). They provided the critical mass, social proof, and wealth effect that then drove later adoption. [1]:https://en.wikipedia.org/wiki/Two_Generals%27_Problem https://en.wikipedia.org/wiki/Two_Generals%27_Problem
    - thenerdfiles 13y ago
      This!
    - hendzen 13y ago
      Just to nitpick a bit, the Two Generals problem is actually different than the Byzantine Generals Problem. 2GP deals with the (simpler) case of achieving consensus in a distributed system with unreliable communications. That is, messages can be reordered, lost or arbitrarily delayed, but end hosts are assumed to be trustworthy. BGP deals with the aforementioned scenario where nodes can be malicious as well.
      - SkyMarshal 13y ago
        Yes, good distinction. I should have linked the Byzantine Fault Tolerance page [1] since it describes that distinction better. Not sure why I went with Two Generals since I looked at both. [1]:https://en.wikipedia.org/wiki/Byzantine_Generals%27_Problem https://en.wikipedia.org/wiki/Byzantine_Generals%27_Problem
- pjscott 13y ago
  No paper trail? But that's what the Bitcoin mechanism is -- a way of publicly recording all transactions!
  - csandreasen 13y ago
    I've never understood the whole "Bitcoin transactions are anonymous" theory. If anything, the Bitcoin model promotes a sort of hyper-transparency. The anonymity today lies in the fact that no one knows what wallet is linked to what person/business. If it becomes a widely-accepted currency among retailers, it would eventually become trivial to look at any given wallet and see that $x was spent at Amazon on this day, $x was spent on groceries, so-and-so filled up their gas tank at this particular station, etc. You can shuffle coins between wallets to obscure your tracks somewhat, but you're still broadcasting every transaction you make to the world. I think this is horrible for the average person, but would be a great thing to implement for transactions where you would want some form of accountability, like political donations, charities, investments, taxes, etc. If I give my money to some organization, I can use the block chain to see that they're using the money they receive for exactly the purposes I expect them to be using it for.

Glide 13y ago

Probably makes it worse. If you tell people the currency doesn't leave a paper trail then they'll worry about people scamming them or screwing them over in some way, shape, or form.

thenerdfiles 13y ago
That point raises, I believe, the question of what exactly is motivating these digital currencies' adoption, assuming that the strongest economic power has a growing rate of social distrust.
- SkyMarshal 13y ago
  Because bitcoin is an algorithmic solution to exactly that problem - trust in a distributed system, casually known as the Byzantine Generals Problem, or Two Generals problem [1]. The innovators and early adopters were motivated by their understanding of the utility in finally achieving a solution to that problem in the context of digital currency (not historically possible for digital currencies till the invention of 1) the Internet and 2) the BitTorrent protocol, so essentially a major breakthrough and first in human history). They provided the critical mass, social proof, and wealth effect that then drove later adoption. [1]:https://en.wikipedia.org/wiki/Two_Generals%27_Problem https://en.wikipedia.org/wiki/Two_Generals%27_Problem
  - thenerdfiles 13y ago
    This!
  - hendzen 13y ago
    Just to nitpick a bit, the Two Generals problem is actually different than the Byzantine Generals Problem. 2GP deals with the (simpler) case of achieving consensus in a distributed system with unreliable communications. That is, messages can be reordered, lost or arbitrarily delayed, but end hosts are assumed to be trustworthy. BGP deals with the aforementioned scenario where nodes can be malicious as well.
    - SkyMarshal 13y ago
      Yes, good distinction. I should have linked the Byzantine Fault Tolerance page [1] since it describes that distinction better. Not sure why I went with Two Generals since I looked at both. [1]:https://en.wikipedia.org/wiki/Byzantine_Generals%27_Problem https://en.wikipedia.org/wiki/Byzantine_Generals%27_Problem
pjscott 13y ago
No paper trail? But that's what the Bitcoin mechanism is -- a way of publicly recording all transactions!
- csandreasen 13y ago
  I've never understood the whole "Bitcoin transactions are anonymous" theory. If anything, the Bitcoin model promotes a sort of hyper-transparency. The anonymity today lies in the fact that no one knows what wallet is linked to what person/business. If it becomes a widely-accepted currency among retailers, it would eventually become trivial to look at any given wallet and see that $x was spent at Amazon on this day, $x was spent on groceries, so-and-so filled up their gas tank at this particular station, etc. You can shuffle coins between wallets to obscure your tracks somewhat, but you're still broadcasting every transaction you make to the world. I think this is horrible for the average person, but would be a great thing to implement for transactions where you would want some form of accountability, like political donations, charities, investments, taxes, etc. If I give my money to some organization, I can use the block chain to see that they're using the money they receive for exactly the purposes I expect them to be using it for.