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I'm really pleased to see someone else hitting on the value of the blockchain data. One of the reasons I think Bitcoin itself will become more valuable over ti

I'm really pleased to see someone else hitting on the value of the blockchain data. One of the reasons I think Bitcoin itself will become more valuable over time is the amount of big data being added to the system via the transactions taking place. For the first time in the World's history, we actually have a completely transparent system financial system we can observe and use to make decisions. Very exciting stuff. I'm glad to be part of it.

_delirium 13y ago
I also think that aspect is interesting, but I wonder if it will really reveal as much interesting information as one hopes. If everyone used a single wallet (or small number of wallets) and made only "real" transactions, it'd be a transparent (if pseudonymous) data set about how money is flowing around in the Bitcoin universe. And that would actually give hard data for understanding an economy, of the sort that one has to estimate very imperfectly in other currencies. But it's pretty easy to purposely foul the data if you want, especially given the ease-of-use of mixers. I would guess if Bitcoin usage gets more important, obfuscating schemes will only get more sophisticated and widespread.
drakaal 13y ago
The value? No. The more data you have about where money flows the less privacy we have and the more control you give law enforcement. Think about all the Friend of Friend wire taps. Suddenly the $20 bill you bought starbucks with gets given as change to a drug dealer and you are on a known associate list. You also have all sorts of issues where if 50% of the world's transactions were done in BTC the blockchain data would be too large for 90+% of nodes to store.
- DennisP 13y ago
  Luckily there are solutions to both. For example, at least two currencies are coming out using zero-knowledge proofs to break the links between transactions, and the "finite blockchain" idea would reduce the long-term blockchain storage to a constant few bytes per block, regardless of transactions per block.
  - drakaal 13y ago
    And those features can be rolled in to BTC without breaking existing wallets?
    - DennisP 13y ago
      The original plan for the zero-knowledge idea was to roll it into bitcoin, but so far the bitcoin devs aren't going for it, so it'll be just altcoins for now at least. The finite blockchain is probably too big of a structural change. There has been a fair amount of work on less extreme ways of compressing the blockchain that could work for bitcoin. II'm optimistic about cryptocurrencies in general, but it could well be that Bitcoin itself will be made obsolete.
- dmix 13y ago
  Anonymity it still a choice with Bitcoin, regardless of having a public blockchain. Law enforcement is a strict finite resource. Much like the futility of trying to bring down bittorrent seeders, BTC has the advantage of technology, decentralization, and scale, which multiplies (in an increasing fashion over time) the complexity of being able to track individuals to cryptocurrencies. Is it possible with effort? Sure. But it's an incredibly expensive endevour. Especially when someone invests time and effort into trying to hide.
  - kordless 13y ago
    As you say, it's a choice. There will be those who choose to be transparent with their transactions.
- thwarted 13y ago
  Think about all the Friend of Friend wire taps. Suddenly the $20 bill you bought starbucks with gets given as change to a drug dealer and you are on a known associate list. While this is not something anyone who values privacy wants, this isn't that great of an example because the transaction history would show that the association is specious, as the association only exists through being a customer at the same establishment. A Venn Diagram of who "touched" which money wouldn't provide any value (this wouldn't stop people from making that association, I grant however). However, this sounds a lot like contaminated currency[0], and no one thinks that just because you have a dollar bill that has illicit drugs on it means that you're drug dealer or associate with drug dealers. This ends up working for the benefit of those in the illicit drug industry much more than it harms those who are not, despite that both parties are using the same medium of exchange. [0] http://en.wikipedia.org/wiki/Contaminated_currency http://en.wikipedia.org/wiki/Contaminated_currency

_delirium 13y ago

I also think that aspect is interesting, but I wonder if it will really reveal as much interesting information as one hopes. If everyone used a single wallet (or small number of wallets) and made only "real" transactions, it'd be a transparent (if pseudonymous) data set about how money is flowing around in the Bitcoin universe. And that would actually give hard data for understanding an economy, of the sort that one has to estimate very imperfectly in other currencies. But it's pretty easy to purposely foul the data if you want, especially given the ease-of-use of mixers. I would guess if Bitcoin usage gets more important, obfuscating schemes will only get more sophisticated and widespread.

drakaal 13y ago

The value? No. The more data you have about where money flows the less privacy we have and the more control you give law enforcement. Think about all the Friend of Friend wire taps. Suddenly the $20 bill you bought starbucks with gets given as change to a drug dealer and you are on a known associate list. You also have all sorts of issues where if 50% of the world's transactions were done in BTC the blockchain data would be too large for 90+% of nodes to store.

DennisP 13y ago
Luckily there are solutions to both. For example, at least two currencies are coming out using zero-knowledge proofs to break the links between transactions, and the "finite blockchain" idea would reduce the long-term blockchain storage to a constant few bytes per block, regardless of transactions per block.
- drakaal 13y ago
  And those features can be rolled in to BTC without breaking existing wallets?
  - DennisP 13y ago
    The original plan for the zero-knowledge idea was to roll it into bitcoin, but so far the bitcoin devs aren't going for it, so it'll be just altcoins for now at least. The finite blockchain is probably too big of a structural change. There has been a fair amount of work on less extreme ways of compressing the blockchain that could work for bitcoin. II'm optimistic about cryptocurrencies in general, but it could well be that Bitcoin itself will be made obsolete.
dmix 13y ago
Anonymity it still a choice with Bitcoin, regardless of having a public blockchain. Law enforcement is a strict finite resource. Much like the futility of trying to bring down bittorrent seeders, BTC has the advantage of technology, decentralization, and scale, which multiplies (in an increasing fashion over time) the complexity of being able to track individuals to cryptocurrencies. Is it possible with effort? Sure. But it's an incredibly expensive endevour. Especially when someone invests time and effort into trying to hide.
- kordless 13y ago
  As you say, it's a choice. There will be those who choose to be transparent with their transactions.
thwarted 13y ago
Think about all the Friend of Friend wire taps. Suddenly the $20 bill you bought starbucks with gets given as change to a drug dealer and you are on a known associate list. While this is not something anyone who values privacy wants, this isn't that great of an example because the transaction history would show that the association is specious, as the association only exists through being a customer at the same establishment. A Venn Diagram of who "touched" which money wouldn't provide any value (this wouldn't stop people from making that association, I grant however). However, this sounds a lot like contaminated currency[0], and no one thinks that just because you have a dollar bill that has illicit drugs on it means that you're drug dealer or associate with drug dealers. This ends up working for the benefit of those in the illicit drug industry much more than it harms those who are not, despite that both parties are using the same medium of exchange. [0] http://en.wikipedia.org/wiki/Contaminated_currency http://en.wikipedia.org/wiki/Contaminated_currency