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Most of real world fraud is exactly this kind of stuff. Bitcoin solves a problem which is not actually a problem in real world. And leaves the problems which ac

Most of real world fraud is exactly this kind of stuff. Bitcoin solves a problem which is not actually a problem in real world. And leaves the problems which actually are problems unsolved. Don't get me wrong. The proof of work ledger is a cool idea. However using it as a currency in this kind of implementation with complete disregard to anything else doesn't work in the long term.

jordigh 13y ago
The decentralised check against double-spending is bitcoin's only solution. And it's quite a genius solution, in a way. Bitcoin is not the first cryptocurrency, but it's the first decentralised one. Other than that, bitcoin behaves more like cash than like banks or credit cards. You can build banks and credit cards around bitcoin, and you should, but bitcoin itself is just like cash, and that's all it should be. It doesn't need to solve other problems that as you say have already been solved by systems like two-factor authentication and the like. This particular attack is more like thieves walking into a bank and claiming to be a person and then being able to get cash from the bank's safe (an analogy that also fits nicely with the relatively small amount of money they were able to steal). It is not like being able to rack up fraudulent charges on a credit card.
wyager 13y ago
>Bitcoin solves a problem which is not actually a problem in real world. Well, it solves more than one problem, and a few of them are certainly real-world. >However using it as a currency in this kind of implementation with complete disregard to anything else doesn't work in the long term. Would you care to expand on what you mean by "complete disregard to anything else"? I mean, clearly this is hyperbole, but I'm curious what you are referencing specifically.
- sharpneli 13y ago
  I simply meant that the bitcoin as a protocol and the standard client implementation right now pretty much ignores everything else. Some can be fixed on the client but it is not there yet. As an example the wallet is unencrypted by default. In addition one of the biggest problems with bitcoin stems from the problem it solves. Transactions cannot be reversed, thus making thefts extremely lucrative. Normal banks simply reverse transactions if they are fraudulent. As an example someone hacked Nordea (Bank operating in Nordic countries) last spring and got away with 600 000 euros. All of the transactions except one were reverted and the missing one was compensated by the bank.
  - lhgaghl 13y ago
    > Normal banks simply reverse transactions if they are fraudulent. That's not a feature.
    - svenkatesh 13y ago
      Right, fraudsters should be allowed to keep their ill-gotten gains.
      - lhgaghl 13y ago
        Rephrased: it is a feature, but it implies a tradeoff: people who are considered more important than you control your money. One which I don't consider worth it. I've never had a problem with stolen assets of any kind other than in the physical world, and I consider my physical assets that were stolen fair, I would not want a God government who can see every single thing that happens in any place and any time so they can recover my physical assets.
wlphoenix 13y ago
I only have a vague memory/understanding the subject, but I believe the Bitcoin protocol supports the concept of multi-signature contracts. That could be used to create decentralized escrow/trading/exchanges, which means that you would never have to let a single entity control your private keys. (https://en.bitcoin.it/wiki/Contracts https://en.bitcoin.it/wiki/Contracts) I don't think there is a working implementation of the multisig contracts in the wild yet, but the protocol does support a way to solve these problems.
- gnaritas 13y ago
  That won't work for traders, transactions on the blockchain are too slow to do what exchanges really do. Traders would not use such an exchange, it'd be too slow.
lhgaghl 13y ago
> Most of real world fraud is exactly this kind of stuff. So what? Banks have the same problem. If I call up my bank and ask them to do something, they'll ask for a bunch of random information I didn't know I'm supposed to keep secret. > Bitcoin solves a problem which is not actually a problem in real world. What? It solves the problem where some incompetent fucks are in charge of your money and screw you over, which is exactly what happened to this company (except they trusted them with hosting instead of money)

jordigh 13y ago

The decentralised check against double-spending is bitcoin's only solution. And it's quite a genius solution, in a way. Bitcoin is not the first cryptocurrency, but it's the first decentralised one. Other than that, bitcoin behaves more like cash than like banks or credit cards. You can build banks and credit cards around bitcoin, and you should, but bitcoin itself is just like cash, and that's all it should be. It doesn't need to solve other problems that as you say have already been solved by systems like two-factor authentication and the like. This particular attack is more like thieves walking into a bank and claiming to be a person and then being able to get cash from the bank's safe (an analogy that also fits nicely with the relatively small amount of money they were able to steal). It is not like being able to rack up fraudulent charges on a credit card.

wyager 13y ago

>Bitcoin solves a problem which is not actually a problem in real world. Well, it solves more than one problem, and a few of them are certainly real-world. >However using it as a currency in this kind of implementation with complete disregard to anything else doesn't work in the long term. Would you care to expand on what you mean by "complete disregard to anything else"? I mean, clearly this is hyperbole, but I'm curious what you are referencing specifically.

sharpneli 13y ago
I simply meant that the bitcoin as a protocol and the standard client implementation right now pretty much ignores everything else. Some can be fixed on the client but it is not there yet. As an example the wallet is unencrypted by default. In addition one of the biggest problems with bitcoin stems from the problem it solves. Transactions cannot be reversed, thus making thefts extremely lucrative. Normal banks simply reverse transactions if they are fraudulent. As an example someone hacked Nordea (Bank operating in Nordic countries) last spring and got away with 600 000 euros. All of the transactions except one were reverted and the missing one was compensated by the bank.
- lhgaghl 13y ago
  > Normal banks simply reverse transactions if they are fraudulent. That's not a feature.
  - svenkatesh 13y ago
    Right, fraudsters should be allowed to keep their ill-gotten gains.
    - lhgaghl 13y ago
      Rephrased: it is a feature, but it implies a tradeoff: people who are considered more important than you control your money. One which I don't consider worth it. I've never had a problem with stolen assets of any kind other than in the physical world, and I consider my physical assets that were stolen fair, I would not want a God government who can see every single thing that happens in any place and any time so they can recover my physical assets.

wlphoenix 13y ago

I only have a vague memory/understanding the subject, but I believe the Bitcoin protocol supports the concept of multi-signature contracts. That could be used to create decentralized escrow/trading/exchanges, which means that you would never have to let a single entity control your private keys. (https://en.bitcoin.it/wiki/Contracts https://en.bitcoin.it/wiki/Contracts) I don't think there is a working implementation of the multisig contracts in the wild yet, but the protocol does support a way to solve these problems.

gnaritas 13y ago
That won't work for traders, transactions on the blockchain are too slow to do what exchanges really do. Traders would not use such an exchange, it'd be too slow.

lhgaghl 13y ago

> Most of real world fraud is exactly this kind of stuff. So what? Banks have the same problem. If I call up my bank and ask them to do something, they'll ask for a bunch of random information I didn't know I'm supposed to keep secret. > Bitcoin solves a problem which is not actually a problem in real world. What? It solves the problem where some incompetent fucks are in charge of your money and screw you over, which is exactly what happened to this company (except they trusted them with hosting instead of money)