

Can BitCoin, the First Open Source Currency, Threaten the Dollar? - TuxPirate
http://www.deathandtaxesmag.com/90660/can-bitcoin-the-first-open-source-currency-threaten-the-dollar/

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markkat
I have BitCoins, so this only is of benefit to me; but I have the feeling that
stories about BitCoins are being promoted on HN, not only for the community's
interest in BitCoin, but in an effort to pump the exposure to increase
awareness and value of their stock.

I don't mind the effect too much, as I personally find the Bitcoin phenomenon
to be endlessly interesting, but I feel compelled to point out what might be a
small elephant in this room.

~~~
trotsky
The relentless promotion campaign that is conducted here and similar places
makes it very hard to not interpret the whole phenomenon as a type of penny
stock style pump and dump scheme, regardless of the technical merits at the
core of the system. One would think that anyone who thought of themselves as
not of part of a speculative frenzy would realize that promoting such a
bubble, and not caring about giving people the impression that they are, would
be bad for its mid to long term success.

~~~
wladimir
It's certainly over-the-top. I tried to flag this post down, as it has nothing
to do anymore with Bitcoin as open source project and thus hacking. But
there's just too much incentive to get it on the front page, I guess...

I like the idea of cryptocurrencies very much but can we stop the overhyping?
Nothing good can come of it.

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DiabloD3
Small problem, he says "They cannot be taxed, which would remove yet another
source of power the state has over individuals."

I hate to inform everyone, but Bitcoins CAN be taxed. Anything that is
normally taxable in USD transactions are also taxable as a BTC transaction.

Remember people, pay your damned taxes.

~~~
rd7
Why does everyone miss the point that once you cash out your BTC you're paying
USD taxes.

~~~
wccrawford
Because they are dreamily thinking that they will spend BTC directly, and
never convert to USD.

~~~
stonemetal
No conversion to dollar necessary. An American citizen say lives on the US
Canada border and has a job just across the line and gets paid in Canadian
dollars they are still expected to pay income tax. If an American citizen
lives and works in France for a decade they are expected to file income taxes
in the US every year. Income tax is just that, tax on income it applies to
every citizen of the US no matter where they live or what currency they get
paid in. BTC is no different.

~~~
yread
I am no expert on american taxes (eh, IANEOAT?) but I believe there is a
treaty between France and USA preventing double taxation. You might or might
not be forced to file the papers but if you're already paying taxes from the
income in France (as would be the case - since the employer would just deduct
it) you wouldn't have to pay the US taxes.

Sorry for the OT

------
inoop
Bitcoin uses a distributed timestamping server. The paper literally states
that "new transactions are broadcast to all nodes". This effectively means
that they need a global broadcast to the majority of nodes for every bit coin
transfer.

This doesn't scale in terms of number of nodes, and it doesn't scale in number
of transactions. They can not compensate for an increase in the number of
transactions by adding more nodes because instead of distributing the work
load over the nodes, they are in fact replicating it.

The rationale seems to be that as long as you have more honest nodes than
malicious ones the system will not be hijacked. Of course, the chance that a
Russian botnet has more CPU power than you do is quite real. They go on to say
that if an attacker has more computational power than everyone else they would
do better to use it mining coins than to break the system, and they seem to
leave it at that. Counting on the rational behavior of potential attackers
does not seem like a good strategy to me.

Maybe I'm missing something here, but I'm pretty sure this thing will simply
not scale. It reminds me of Gnutella, which implemented search through scoped
flooding and somehow promised both scalability and coverage. I have the same
feeling here. Scalability _and_ security in a peer-to-peer network? Surely you
jest.

When something sounds too good to be true it probably is.

edit: link to the paper: <http://www.bitcoin.org/bitcoin.pdf>

------
wccrawford
Governments aren't governments because they control currency. They control
currency because the people gave them to power to do so. They were already
governments before that.

------
Duff
Answer: No.

------
seociety
Bitcoin will change the world; end of story.

~~~
rd7
no it wont.

