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I've not bought in to Bitcoin yet. It just seems like a massive, world-wide scam to me. I'm not saying that it is a scam, I'm just saying that Bitcoin is someth

I've not bought in to Bitcoin yet. It just seems like a massive, world-wide scam to me. I'm not saying that it is a scam, I'm just saying that Bitcoin is something that I don't really understand, and so I don't entirely trust it. That said, this event is extremely encouraging. Not only is the security and the viability of the currency being tested. But more importantly, the communication and cooperation between the major players in the Bitcoin ecosystem is being tested. And so far, the community is kicking ass. To me that signals that perhaps Bitcoin really is a viable currency for the long term, and that it may really be a great way to think about money and value exchange.

bitexploder 13y ago
It is a non issue, honestly. This issue was known about as early as 2011. You can only modify non-essential pieces of the transaction, but it does change the overall transaction hash. These poorly coded exchanges were looking for an exact hash match to pop up on the block chain, instead of looking for the deposit/address. The actual security of the system is not really impacted at all, and the core Bitcoin clients cope fine with this. The exchanges may have put themselves at risk, but that is on them.
- wtbob 13y ago
  > You can only modify non-essential pieces of the transaction, but it does change the overall transaction hash. That's the thing I don't get. If one is going to allow non-essential changes, shouldn't one _not_ include those data in the hash? Alternatively, should one simply not allow changes, period? I've not read the Bitcoin paper, just summaries (been too busy, and it's outside my area); perhaps there's a good reason for it.
  - bitexploder 13y ago
    I think you are mostly correct. That is why some people call it an "issue", while others refer to it as a "vulnerability". I personally don't think it is a real vulnerability, more like a quirk.
  - Guvante 13y ago
    The important bits are signed with an ownership signature, and the whole transaction is hashed to be added to the block chain. As long as you don't trust the transaction hash (which isn't designed to be secure) you won't have an issue.
- yetfeo 13y ago
  It is not poorly coded exchanges that are causing the issue. It's actually an issue with the reference bitcoin client and those that use the same behaviour: http://www.reddit.com/r/Bitcoin/comments/1xm49o/due_to_active_malleable_transaction_relayers_it/ http://www.reddit.com/r/Bitcoin/comments/1xm49o/due_to_activ... Spending unconfirmed outputs in the presence of malleable transactions is unsafe. The reference client allows spending unconfirmed change outputs as they used to be considered safe. But if the original transactions is modified then the chain of unconfirmed transactions becomes double spent and the reference client gets confused about balances.
salgernon 13y ago
What I'm waiting for is the large scale real world scams to start. Look in the back of the Sunday Newspaper Color supplement and the ads for Genuine Si1ver Coins Minted at some exotic locale (sold as collectables) and replace with "Genuine BitCoins with individual serial numbers". Sold for $CURRENT_RATE and including the hash of some lost wallet, or random gibberish. The scammer will be able to sell the same "bitcoin" over and over if they want, or set up a fake "Validate your bitcoin here" site. The type of people that buy from the back of magazines are probably the type that would hang on to this "investment" for their grandchildren... while the scammer is long gone.
api 13y ago
I wouldn't say it's a scam. I'd say it's the cryptocurrency equivalent of Lycos. I'm sure the cryptocurrency equivalent of Google is coming someday.
lukifer 13y ago
It's easy to get confused by BitCoin's technicals; it's the difference between reading an article on Wikipedia, and examining that article's source code (or the various web protocols that deliver it to you). At its core, BitCoin is unbelievably simple: a ledger of account, no different than an Excel file, distributed across millions of computers, kept honest through offering rewards for protecting the ledger's integrity. There's really no such thing as a BitCoin, just a row in that ledger that says "1.23456", and only the holder(s) of the key for that row can send a portion of that number to a different row. Like with any form of money, any value derived from that ledger is purely a product of collective belief. BitCoin is roughly at the place where Mosaic was in the early 90s. The real story isn't about BTC becoming the new world currency; it's a technological and sociological prototype of a new type of distributed application which has only barely begun to be explored.
- monkeynotes 13y ago
  This is the first time I've actually even begun to understand how Bitcoin works. Thanks!
  - aestra 13y ago
    If you would like to read a more detailed, just as simple, but much longer explanation of bitcoin I recommend this: http://www.michaelnielsen.org/ddi/how-the-bitcoin-protocol-actually-works/ http://www.michaelnielsen.org/ddi/how-the-bitcoin-protocol-a...
- brian_cloutier 13y ago
  Unfortunately in that respect Bitcoin is a bit of a one-trick pony. It relies on the honesty of a plurality of the network hash-strength. Systems which use the bitcoin mechanic need a lot of adoption before they become trustworthy.
  - lukifer 13y ago
    In theory, applications can be built on top of the existing BitCoin blockchain, which is now well-guarded by many vested interests; some projects like MasterCoin [1] and Colored Coins [2] are attempting to do just this. But ultimately, you are correct: bootstrapping a new blockchain-based service requires assembling a community with enough hashing power to fend off 51% attackers. Time will tell how the experiment will pan out, but even if most projects fail, my gut is that at least a few will succeed in the long run. [1] http://www.mastercoin.org/ http://www.mastercoin.org/ [2] http://coloredcoins.org/ http://coloredcoins.org/
pera 13y ago
> I'm just saying that Bitcoin is something that I don't really understand, and so I don't entirely trust it. Then read the paper! :) it's not complicated and it's pretty short. btw do you understand how the banking system works?
- bduerst 13y ago
  That is horrible financial advice.
  - kordless 13y ago
    So evidently educating yourself is horrible financial advice. Who knew?
  - VMG 13y ago
    And horrible gardening advice as well.
    - BlackDeath3 13y ago
      No kidding. I guess I missed the part where advice was given.
  - jafaku 13y ago
    I guess your comment is horrible financial advice too then.
- mandalar12 13y ago
  I second this, the original paper is quiet clear and short : https://bitcoin.org/bitcoin.pdf https://bitcoin.org/bitcoin.pdf
efuquen 13y ago
>That said, this event is extremely encouraging. Not only is the security and the viability of the currency being tested. But more importantly, the communication and cooperation between the major players in the Bitcoin ecosystem is being tested. And so far, the community is kicking ass. If this was two major banks and they said they had to stop withdrawals for 1-3 days to fix a software bug that's been exposed through a concerted attack, one they already knew about and could have prevented, I don't think you would be saying the same thing ... Ultimately this might prove a footnote in the Bitcoin story, or it might be the harbinger of more trouble, who knows. But I do think it takes quite a bit of spin to think of this as somehow being encouraging or a net positive. I think if this had maybe stopped at Mt. Gox, an exchange that was universally considered a bad player, you could think of it has good overall (ignoring the fact many people would have still been screwed over). But it seems clear it's gone beyond them.
- erichocean 13y ago
  If this was two major banks You can stop right there, as Bitcoin is nowhere near the place where it is equivalent in any way, shape, or form to "two major banks". If it was, your critique would be valid. Since, instead, it's more like a bank startup, these kinds of disruptions are expected and encouraging, because it allows third-parties to see how difficulties are resolved, and how robust Bitcoin is or is becoming. P.s. I have never owned, mined, or otherwise installed or used any software related to Bitcoins. I have no horse in this race whatsoever.

bitexploder 13y ago

It is a non issue, honestly. This issue was known about as early as 2011. You can only modify non-essential pieces of the transaction, but it does change the overall transaction hash. These poorly coded exchanges were looking for an exact hash match to pop up on the block chain, instead of looking for the deposit/address. The actual security of the system is not really impacted at all, and the core Bitcoin clients cope fine with this. The exchanges may have put themselves at risk, but that is on them.

wtbob 13y ago
> You can only modify non-essential pieces of the transaction, but it does change the overall transaction hash. That's the thing I don't get. If one is going to allow non-essential changes, shouldn't one _not_ include those data in the hash? Alternatively, should one simply not allow changes, period? I've not read the Bitcoin paper, just summaries (been too busy, and it's outside my area); perhaps there's a good reason for it.
- bitexploder 13y ago
  I think you are mostly correct. That is why some people call it an "issue", while others refer to it as a "vulnerability". I personally don't think it is a real vulnerability, more like a quirk.
- Guvante 13y ago
  The important bits are signed with an ownership signature, and the whole transaction is hashed to be added to the block chain. As long as you don't trust the transaction hash (which isn't designed to be secure) you won't have an issue.
yetfeo 13y ago
It is not poorly coded exchanges that are causing the issue. It's actually an issue with the reference bitcoin client and those that use the same behaviour: http://www.reddit.com/r/Bitcoin/comments/1xm49o/due_to_active_malleable_transaction_relayers_it/ http://www.reddit.com/r/Bitcoin/comments/1xm49o/due_to_activ... Spending unconfirmed outputs in the presence of malleable transactions is unsafe. The reference client allows spending unconfirmed change outputs as they used to be considered safe. But if the original transactions is modified then the chain of unconfirmed transactions becomes double spent and the reference client gets confused about balances.

salgernon 13y ago

What I'm waiting for is the large scale real world scams to start. Look in the back of the Sunday Newspaper Color supplement and the ads for Genuine Si1ver Coins Minted at some exotic locale (sold as collectables) and replace with "Genuine BitCoins with individual serial numbers". Sold for $CURRENT_RATE and including the hash of some lost wallet, or random gibberish. The scammer will be able to sell the same "bitcoin" over and over if they want, or set up a fake "Validate your bitcoin here" site. The type of people that buy from the back of magazines are probably the type that would hang on to this "investment" for their grandchildren... while the scammer is long gone.

api 13y ago

I wouldn't say it's a scam. I'd say it's the cryptocurrency equivalent of Lycos. I'm sure the cryptocurrency equivalent of Google is coming someday.

lukifer 13y ago

It's easy to get confused by BitCoin's technicals; it's the difference between reading an article on Wikipedia, and examining that article's source code (or the various web protocols that deliver it to you). At its core, BitCoin is unbelievably simple: a ledger of account, no different than an Excel file, distributed across millions of computers, kept honest through offering rewards for protecting the ledger's integrity. There's really no such thing as a BitCoin, just a row in that ledger that says "1.23456", and only the holder(s) of the key for that row can send a portion of that number to a different row. Like with any form of money, any value derived from that ledger is purely a product of collective belief. BitCoin is roughly at the place where Mosaic was in the early 90s. The real story isn't about BTC becoming the new world currency; it's a technological and sociological prototype of a new type of distributed application which has only barely begun to be explored.

monkeynotes 13y ago
This is the first time I've actually even begun to understand how Bitcoin works. Thanks!
- aestra 13y ago
  If you would like to read a more detailed, just as simple, but much longer explanation of bitcoin I recommend this: http://www.michaelnielsen.org/ddi/how-the-bitcoin-protocol-actually-works/ http://www.michaelnielsen.org/ddi/how-the-bitcoin-protocol-a...
brian_cloutier 13y ago
Unfortunately in that respect Bitcoin is a bit of a one-trick pony. It relies on the honesty of a plurality of the network hash-strength. Systems which use the bitcoin mechanic need a lot of adoption before they become trustworthy.
- lukifer 13y ago
  In theory, applications can be built on top of the existing BitCoin blockchain, which is now well-guarded by many vested interests; some projects like MasterCoin [1] and Colored Coins [2] are attempting to do just this. But ultimately, you are correct: bootstrapping a new blockchain-based service requires assembling a community with enough hashing power to fend off 51% attackers. Time will tell how the experiment will pan out, but even if most projects fail, my gut is that at least a few will succeed in the long run. [1] http://www.mastercoin.org/ http://www.mastercoin.org/ [2] http://coloredcoins.org/ http://coloredcoins.org/

pera 13y ago

> I'm just saying that Bitcoin is something that I don't really understand, and so I don't entirely trust it. Then read the paper! :) it's not complicated and it's pretty short. btw do you understand how the banking system works?

bduerst 13y ago
That is horrible financial advice.
- kordless 13y ago
  So evidently educating yourself is horrible financial advice. Who knew?
- VMG 13y ago
  And horrible gardening advice as well.
  - BlackDeath3 13y ago
    No kidding. I guess I missed the part where advice was given.
- jafaku 13y ago
  I guess your comment is horrible financial advice too then.
mandalar12 13y ago
I second this, the original paper is quiet clear and short : https://bitcoin.org/bitcoin.pdf https://bitcoin.org/bitcoin.pdf

efuquen 13y ago

>That said, this event is extremely encouraging. Not only is the security and the viability of the currency being tested. But more importantly, the communication and cooperation between the major players in the Bitcoin ecosystem is being tested. And so far, the community is kicking ass. If this was two major banks and they said they had to stop withdrawals for 1-3 days to fix a software bug that's been exposed through a concerted attack, one they already knew about and could have prevented, I don't think you would be saying the same thing ... Ultimately this might prove a footnote in the Bitcoin story, or it might be the harbinger of more trouble, who knows. But I do think it takes quite a bit of spin to think of this as somehow being encouraging or a net positive. I think if this had maybe stopped at Mt. Gox, an exchange that was universally considered a bad player, you could think of it has good overall (ignoring the fact many people would have still been screwed over). But it seems clear it's gone beyond them.

erichocean 13y ago
If this was two major banks You can stop right there, as Bitcoin is nowhere near the place where it is equivalent in any way, shape, or form to "two major banks". If it was, your critique would be valid. Since, instead, it's more like a bank startup, these kinds of disruptions are expected and encouraging, because it allows third-parties to see how difficulties are resolved, and how robust Bitcoin is or is becoming. P.s. I have never owned, mined, or otherwise installed or used any software related to Bitcoins. I have no horse in this race whatsoever.