So it's possible Satoshi ran a client or two for that purpose, which had the side-effect of mining coins.
To me, this seems like a very likely scenario. Almost required, even.
Another interesting comment- if enough miners agreed, coins from the Satoshi blocks could just be blacklisted from the network. Some irony there, eh?
Well, if enough miners agreed, anything can happen, but I doubt you'd get the required majority. It would undermine the entire system.
I suspect it's the sort of thing that will increase in pressure if bitcoin grows much further. It wouldn't surprise me if blacklisting eventually happens in some form or another.
Probably? There are already escrow services for Bitcoin that heavily used.
Some day it's possible that you will have to mine a block to publish your own transactions! Not likely though, there will always be people willing to take less money to do it for you. And you're both right, if you start taking away the features then it undermines the advantages that generally bring users to bitcoin. Who knows what will happen. It's a software system with majority rules.
This lets you predict how long your transaction will take based on the amount sent and the fee attached. It does not consider coin age, minimum transaction fees, or kb transaction size.
This matters for decisions like blacklisting stolen Bitcoins, because it causes deflationary pressure, making all future Bitcoins mined more valuable. Note that about half of all Bitcoins are yet to be mined, and they will all start out in the wallets of miners.
Take gold, for instance. If a majority of the people who find gold to be valuable were to agree that they should value Palladium instead and stop using gold, then gold would drop in value and palladium would take over. The people who own palladium could even go around to the gold users and bribe them with some palladium to get them to go along.
Now, there is one important difference between my "gold" example and bitcoins. With bitcoin, there are two populations: the users of bitcoin and the subset of those who are miners. For a change to bitcoin, only miners need to agree -- but that's not as much of a limitation as it seems. For instance, if all the miners formed a secret cabal and agreed to blacklist all existing bitcoins and value only FUTURE mined bitcoins, then what would REALLY happen is that someone else would step in and start mining without that policy, forming a fork in the blockchain. The entire community would wind up deciding which fork to follow. So really, what you need is a strong enough majority of the miners (and those qualified to set up as miners if they wanted to) to ensure that there is no blockchain fork. This is not all that different from my "all users of gold" example.
Ass to messing with the block chain, the real problem is a 51% attack is one that people don't know for a while, start randomly seeding bad transactions and there is no obvious point as to which where good transactions and which where bad ones. People my suggest reversing all transactions but if you traded bit-coins for stuff your now out your bit-coins and your stuff. Net result Bitcoin's probably dies.
But "a majority of the users could redefine what is considered valuable" is a vulnerability (mentioned in the post I was replying to) of EVERY representation of value, and not a particularly interesting or realistic one.
To take an extreme example, imagine that ALL bitcoins have already been mined, and there are no more bitcoins to be found. Then imagine that they start blacklisting bitcoins at an incredible rate: HALF of all bitcoins in existence are blacklisted each year. Remembering that it is possible to subdivide bitcoins (and arbitrarily far, given minor changes to the protocol), in what year will there be no coins left?
You falsely assume there'd be a fixed rate of coins lost to theft. When there's 100k coins left, though, it's entirely possible that someone goes and steals all of them.
Is the idea so novel that it can't be re-booted in a manner that has better protection of anonymity and which isn't amenable to being mined for years by just a handful of people (to the point that they own a huge % of all available coins)?
The guy who owns all of the gold mines is more than happy to back gold as a currency, after all.
MO seems the appropriate measure since it's the hard currency, without the multipliers of fractional reserve. M2 is around $10 trillion.
But maybe we'll go down a different path. Maybe an economy based on equity instead of debt, backed by colored coins. Then Satoshi becomes the richest human in history, if he hasn't diversified before then.
(Or maybe another cryptocurrency takes over and Bitcoin goes back to ten cents a coin, who knows.)
Imagine extrapolating the injustices of the NYC housing market to the whole economy...
simply by virtue of the fact that their parents go there first
Lots of parents didn't choose to go there at all. Some parents chose to buy residences in better parts of Manhattan, some in worse. Some chose better buildings, some chose worse. Some parents took out big loans betting on their future to own real estate, some preferred to spend that money on vacations.
In your mind, what investments that appreciate over time are not "undue credit"? Do you have a certain amount of gain that we can all know is fair, deserved, or not lucky?
Investments generally appreciate over time because they create increased value. If your Apple stock goes up, it's because Apple is making more money each year. That's due credit. Investments that appreciate simply by virtue of fixed supply result in undue credit to older generations.
Your statement of "undue credit" is unfounded and arbitrary. Following your logic, all appreciating investments are "undue credit".
Forget about price for a second and look at intrinsic value. What is the underlying asset represented by ownership of property? It's the right to exclusively use some land and accompanying buildings. What is the underlying asset represented by stock? Leaving aside different kinds of stock, it's generally the right to receive a certain percentage of the profits of a company over time. Now, look at how price changes in the two assets are correlated with changes in the intrinsic value of the assets. A plot on the UES might appreciate 50% between 2000 and 2013, even though the neighborhood hasn't really changed in that time. The use and enjoyment a given person gets from that property is the same in 2000 and 2013. Now, compare to a stock. If the price of a stock appreciates 50% between 2000 and 2013, it's generally because the company has increased profits. Your enjoyment of the $150 in stock in 2013 is higher than your enjoyment of the $100 in stock in 2000 because it represents the same percentage of the right to receive a larger amount of profits.
I have no idea where you get that notion. Are you suggesting that Manhattan and the surrounding area hasn't changed? It's the very changes that have driven the rise in value for living there.
it's generally the right to receive a certain percentage of the profits of a company over time
Not even close. Most equities these days don't distribute dividends.
As another responder said, you're not understanding how people value assets - whether they be property or stocks.
Value is inherently fluid but ultimately only what someone will pay for it. Your arguments for the limited nature of property vs stocks are tortured. You're working extremely hard to call gains from property value "undue". Gains from speculation are fundamentally the same whether they come from stocks, currency, property, commodities, collectors items, whatever.
From a purely $/sqft perspective.
It's all rather subjective. I would not trade my current living situation with that of my parents at my age.
Detroit is still cheap.
Aggregate demand is a (imperfect) proxy for value.
e.g. using an exchange site (which has legitimate reason to exist), sell Bitcoins for Litecoins, then sell Litecoins for Bitcoins of different provenance.
Very disappointing to see those kind of entitlement discussions around here. Who are you to tell others what they deserve? If he/she/it founded a project that is so solid, so engaging, so successful, h/s/i absolutely deserves whatever others are willing to pay.
This blog post is written by Sergio Demian Lerner who has found a number of minor security vulnerabilities in bitcoin's source code.
His method of associating blocks to Satoshi's identity has been disputed by several developers of bitcoin.
The 2 persons who are disputing Sergio's findings (gmaxwell and DeathAndTaxes) are the minority. I personally agree with Sergio, I understand his analysis technique, and I have read his previous supporting arguments.
gmaxwell was for example making incorrect claims, saying you would need 50+ computers to mine at ~5 Mhash/s (average hashrate throughout 2009) because CPU and code at the time was not optimized. I proved gmaxwell wrong by benchmarking an early version of Bitcoin and showing a 5-year old $200 4-core Phenom was able to do 5 Mhash/s. This validates Sergio's theory that Satoshi could have very well represented the majority of the mining hashrate with a single computer throughout 2009.
Gregory Maxwell is listed as a developer. He also has contributed a lot of code to the project.
He could have mined a lot of cheap coins in 2010-2011, though, so he's probably not without a big reward.
I guess the thing is that he ows such a large fraction of the Bitcoins out there that he can't conceivable liquidate all his Bitcoins in a reasonable amount of time, thus exposing himself to a certain time period where he is known to have a large sum of Bitcoins that are by nature anonymously transferable to a kidnapper?
IMO such threats depend largely on where he lives. If he lives in highly affluent areas, then the typical security precautions and rich neighborhood surroundings used by fellow millionaires should be sufficient protection. There are plenty of "rich people" in the world who get by just fine without being kidnapped. Just wander over to your neighborhood Silicon Valley rich neighborhood, and you'll bump into plenty of 8~10 figure people.
Ah, how easy it is to forget history. A few examples from http://en.wikipedia.org/wiki/List_of_wealthiest_historical_f...
Cornelius Vanderbilt: 1.15% of US GDP
John D. Rockefeller: 1.53% of US GDP
""it's hard to spend a day in Mexico and not put money in [Slim's] pocket." You can barely make a call without doing so: Slim's phone company Telmex — snapped up on the cheap in 1990 — controls 80 percent of the landlines; its subsidiary América Móvil handles 70 percent of the cell service. "
"For Bill Gates to have the same grip on the U.S. economy, says Brian Winter in Foreign Policy, he would have to be worth "909 billion" and own "Alcoa, Phillip Morris, Sears, Best Buy, TGIFriday's, Dunkin' Donuts, Marriott, Citibank, and JetBlue.""
If he did that, he was, for once, very stupid. You don't want to delete the keys, since no one will believe you. ('Sure you did, pal, sure you did. You took all those careful precautions to remain completely pseudonymous and you expect me to believe that?')
What you want to do is publicly, verifiably, irreversibly destroy coins. This is perfectly doable and there are at least two ways to do it: you can send bitcoins to invalid addresses where no corresponding key can possibly exist, and you send the coins with a transaction where the scripting language will never evaluate to true and release the coins (something along the lines of 'release coins iff 1==2'). As the inventor of Bitcoin, one would expect Satoshi to know of these methods and other approaches I don't know of.
I recommend Satoshi to spend his coins by depositing them to a Bitcoin ATM and withdrawing cash - this should be completely anonymous :) http://www.youtube.com/watch?v=fU3vht4LTZI
Edit: Or he can use one of the bitcoin "mixer" services. Or send a fraction of them to an online wallet, and withdraw (most online wallets just mix all their users' coins). Or he can create transactions moving coins around, pretending they are being spent from user to user, until he spends them one time (and the recipient sees a chain of 100 transactions between a block presumably originating from Satoshi, he would simply claim he received them through someone else). Etc.
Then he's just another rich person, holding cash, not BTC coins that can be taken after a serious beat down.
(URGENT BUSINESS ASSISTANCE STRICTLY CONFIDENTIAL)
COMPLIMENTS OF THE SEASON
My name is Sir Akadayo Olemobado, I am the manager of bills and exchange at the foriegn remittance department of the (Mt.Gox Exchange ). I am writting you this letter to ask for your support and co-operation to carry out this transaction. We discovered some abandoned sum $15,500,000(FIFTEEN MILLION, FIVE HUNDRED THOUSAND BTC ) in an account that belongs to one of our foriegn customer who died along-side his entire family in march this year in a terrorist train bomb blast in Spain some few months ago.Since this development,we have advertised for his next of kin or any close relation to come forward to claim this money,but nobody came yet to apply for the claim.
To this effect,i and other official in my department have decided to look for a trusted foriegn partner who can stand in as the next of kin of the deceased as we cannot do it only ourselves and claim this money.We need a foreign partner to apply for the claim on our behalf because of the fact that the customer was a foreign and we don't want this money to go into the treasury as unclaimed fund.
Every document to effect this process will emanate from my table and i will perfect every document to be in accordance with the banking law and guideline,so you have nothing to worry about and we have agreed that 30% of this money will be for you,while 10%will be for any expenses incured on both sides wihile 60% will be for my colleagues and me. If you are willing to help us,please indicate by replying this letter and putting in your name, private telephone number,fax and permanent residential address via my private email address below.I awaits your immediate response to enable us start this transaction as soon as i recieved your reply,i will send you a text application form for immediate APPLICATIION OF CLAIM.
Please contact me even if you are not intrested in my proposal to you to enable us scout for another partner in the event of non-interest on your part. Thanks for your co-operation
Mr Akadayo Olemobado
Satoshi (the man, the woman, the government, the organization, etc) programmatically creates many wallets at random intervals over an extended period of time (months, years). Money is moved into and out of these accounts to make them appear to be 'consumers'.
Bitcoins are then moved from Satoshi's wallets into these accounts as well as some percentage "burned" by sending bitcoins to random addresses not belonging to him. The larger the burn rate, the higher the chances he won't be discovered.
(Essentially, this ends up being a self-implemented version of Bitlaundry that sends the service fee to random members of the Bitcoin community).
The hilarious thing is that Bitcoin is quite transparent about exactly how it works, while a real Ponzi scheme goes to great lengths to hide this dynamic. Anyone can see this dynamic in the rising price and the increasing CPU time needed to mine a new coin. And yet, brilliant, savvy investors like the Winklevosses are somehow still getting involved...
A more defining characteristic of a Ponzi scheme is that the early player's dividends are actually paid from the principal of late-comers. Which only works until you have a steady stream of new investors. As far as I understand Bitcoin, this is not the case there. It just gets harder and harder to "mine" new coins.
Seriously, as the world's currency and failures of other countries to issue a reserve currency, one of the dollar's biggest threats would be a crypto-currency. Either the project succeeds and you have an enormous source of potentially hidden money in the currency to maybe overtake the dollar, or it fails and you make sure it fails with such repercussions that no other crypto-currency can be easily introduced again, either due to new laws or loss of confidence.
Additionally if they have the ability to crack SHA256 (designed by the NSA), the government could print the money. And they could probably have planned a way to sabotage bitcoins if they decided to back out before a certain point.
The financial crisis may have helped sway the final decision to execute the plan:
August 7, 2007: BNP Paribas terminated withdrawals from three hedge funds citing "a complete evaporation of liquidity".
September 6, 2008: Fannie Mae and Freddie Mac placed in conservatorship by the U.S. government.
September 15, 2008: Lehman Brothers filed for Chapter 11 bankruptcy protection.
November 1, 2008: Satoshi Nakamoto publishes first bitcoin paper.
Sources of dates:
https://en.wikipedia.org/wiki/2007%E2%80%932012_global_finan.... https://en.wikipedia.org/wiki/Subprime_mortgage_crisis http://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae_.... http://www.wired.com/magazine/2011/11/mf_bitcoin/all/
Both possibilities could suggest the BTC creators had an interest in the success of the dollar. The alternative would be that it was opportunism of BTC creators who were always against the dollar or turned on it in the crisis. I happen to think that if you were always against the dollar you would just release bitcoin immediately and hope for the most disruption. I'd think that someone supportive of the dollar would be more apt to release it strategically as a contingency.
In my mind that means that dollar supporters are the better chance of being behind bitcoin because they could have made it any time in the past or as the crisis progressed, whereas dollar opponents only had the time of the crisis to make it.
Assuming that, I think then the US has an above-average chance of being the authors of bitcoin.
All they'd be doing is screwing miners out of profits.
If you're already starting at 5% of the coins, and you're steadily gaining more, and the currency is tending to deflate, that sounds pretty close to printing money. Sure you're constrained but so is the Fed today in its abilities to print money effectively. Additionally, having so many BTCs pretty much ensures you can find a way to continue bettering your financial situation, generating interest or something more creative.
Satoshi invented Bitcoin and worked on it for 3 years. Sometime in 2010, just as Bitcoin was gaining traction, he* withdrew from the project and no one has been heard from him since.
There have been many attempts to discover the real identity of this person/group/company/government but to no avail.
I believe the focus of this new analysis technique, whilst interesting in its own right, was done for the primary purpose of trying to identify Satoshi. The analysis technique purports to show that certain bitcoins were generated by the same person/computer. This information may assist the tracing of historical bitcoin transactions to their original sources. At the top of the tree is the 'genesis' block - the source of the very first bitcoins. Its reasonable to think that Satoshi mined this block considering he invented the system.
There is a thread in the Bitcoin forums discussing whether the initial blocks (up to around 50) were mined by an individual or a group. There is heated debate about what, if any, facts can be concluded by analysing the early blockchain events to discover how many (and what type) of CPUs were involved in this early stage.
Satoshi appears to have political motivations (he references distain for bailouts and fiat currency): https://en.bitcoin.it/wiki/Satoshi_Nakamoto
The Bitcoin story would make a good movie script.
The real trouble would actually be getting enough text from all the 'known actors' you might want to compare him against (for example, one Redditor thinks Satoshi is Mike Reiter, but almost all of Reiter's papers are co-authored and he doesn't seem to have any other online presence, so what would you use as your Reiter corpus?).
The original bitcoin pdf suggests a British education but some of his other writing uses American spelling. And he probably isn't Japanese. The plot thickens.
I think the future analysis of the blockchain (all Bitcoin transactions are public record) will be a ripe area for economic research. Aside from the technical stuff, watching the growth and mistakes of the economic system is fascinating - like seeing 2000 years of banking/currency evolution packed into a few years. There is also the question of intrinsic worth and how to value a bitcoin - most online debates descend into chaos but the theoretical basis for projecting valuation is a real mind bender. There is no precedent.
I'm personally interested in what, if any, nation state involvment there has been with Bitcoin. Regardless of Bitcoin thriving or dying, the system has unequivocally demonstrated that cryptographic systems relying on decentralised trust can work. The theoretical underpinnings of Bitcoin solve the Byzantine's Generals' Problem. And it doesnt just apply to money, it can apply to anything. There is already a decentralised DNS (NameCoin) based on the same protocol.
I would have thought this type of system would be of keen interest to many nation states, as it could potentially undermine their own authority or be used as a weapon against other nation states.
So yeah, a book would be interesting :) I strongly believe the decentralisation technology underpinning Bitcoin will be a notable part of history.
*In 2011 a 'msytery miner' nearly doubled the total network's computing power for a short period only to disappear within a couple of days. The theories are this miner was a clever botnet utilising host GPUs,a supercomputer, or someone testing very early stage ASIC hardware, despite none of the known ASIC producers having working hardware at that point in time. http://bitcoin.atspace.com/mysteryminer.html
Currently the bitcoin network is running around 70,000 Ghash/second. Are you aware of what kind of resources are required to perform this 'trivial' hack? If it was so trivial, why hasnt the 51% attack happened already? Its a $1B system - clearly the prize is worth the effort.
The beauty of Bitcoin is that if you somehow had access to such computing power to perform the attack, you'd probably be better off just being an honest node. You'd make a shiteload of legit money without all the hassle associated with splitting the block chain.
So yes, I'll stick with the argument that Bitcoin does solve the Byzantine Generals problem.
Theoretically speaking, even if the 51% attack did occur, it just reinforces that Bitcoin does solve the Byzantine Generals problem! If 51% of generals act in a certain manner in a decentralised network - you want this to be the truth! The decentralised network is correctly picking the majority vote!
So can you explain your reasoning? It seems by every criteria, Bitcoin meets the requirements of the BG problem.
Fast Company's investigation brought up circumstantial evidence that indicated a link between an encryption patent application filed by Neal King, Vladimir Oksman and Charles Bry on 15 August 2008, and the bitcoin.org domain name which was registered 72 hours later. The patent application (#20100042841) contained networking and encryption technologies similar to bitcoin's. After textual analysis, the phrase "...computationally impractical to reverse" was found in both the patent application and bitcoin's whitepaper. All three inventors explicitly denied being Satoshi Nakamoto.
Considering the pseudonymous nature of Bitcoin, the people it attracts and who most likely funded the creation of it, this inevitable question and its alluding nature is a laugh riot.
So I guess I'm confused the market bigger than the 1,814,400 that have been awarded somehow? I'm not that familiar with bitcoins so that's very possible, but the author seems to imply that Nakamoto has 63%.
There's no guarantee for either party that the transaction will be completed successfully. Either party can take the money and run. So you risk your money or your identity either way.
There are not enough people who want to buy bitcoins. If those 1M bitcoin were put on the market, the price would plummet.
When you hold as many bitcoins as does Satoshi, you will profit far more from not selling and trying to help out the entire Bitcoin economy and make it grow.
Bear in mind that these court cases were taking place as the Bitcoin protocol and client were likely being developed (2007 and 2008).
Not sure what the motive is to continuously mine with the wallet linked to block 0, but assuming there are multiple Satoshi wallets in the picture it may be to divert attention away from the wallet he/they are actually spending money with.
I believe that most large governments do know the identity.
Although maybe this entity represents just one of the mining machines controlled by Satoshi.
Selling 1,000,000 coins on MtGox right now would take the price down to $0.10, with an average price of $19.64, so you'd net $19 million.
Of course, what would really happen is that everyone would see it happening and cancel their bids before the wave reached them, so you'd likely not be able to actually sell them all at once.
Leaking them out a few thousand a day, though, would be completely possible. And if done correctly need not move the market at all.
The bigger problem is that selling on MtGox requires identifying himself to create an account (not to mention the current $1,000 per day withdrawal limit for USD).
If you had a supercomputer with tens of thousands of CPUs it's probably being put to more scientific use than trying to corner the bitcoin market, which is basically still a gamble at this stage.
He also gave thousands of them away to Hal and other people on the cryptography mailing list.
A different reason might be a fear that if a single inventor were known that bitcoin would become vulnerable to "change it this way because the founder says so" attacks, weakening the decentralized, P2P nature of the currency. (This is a less plausible reason, but still valid.)
Nothing new here. Do you know how many cults have done this throughout history?
There's plenty of utopian fantasy surrounding it and a fascinating social dynamic that has absolutely nothing to do with "sound mathematical proofs and concepts" but more intangible qualities assigned to it by its proponents.
What proofs? There is not even a formal security definition for Bitcoin.
"Zerocoin would give you this incredible privacy guarantee, then we could add on some features which let the police, for instance, to be able to track money laundering. A back door."