"community is defined by the cooperation of its participants, and efficient cooperation requires a medium of exchange"
"I hope this is a step toward making crypto-anarchy a practical as well as theoretical possibility."
amazing how mute Wei's reaction was and still is. b-money was a nice idea, but it seems he was never too much interested in impelementation. the request is obviously fake. Nakamoto was clearly well versed in the history of this topic and was very likely to be around in 1998.
other than that, gwern is still the authority on Bitcoin. "What’s wrong with Bitcoin is that it’s ugly."
In spite of all that, it still works, and works reasonably well. The protocol is also full of all kinds of nice features planned for the future. There was an article that went into these plans in a lot of depth (which unfortunately I can't find offhand) but the point was that bitcoin is capable of far more than just being a simple money transmitter.
So that's the protocol aspect. But what about the social aspect? How has that fared?
It turns out that bitcoin is dangerous to its users. The reason it's dangerous is also its core strength: irreversible transactions.
There have been so many losses due to theft and fraud. Some guy on Reddit posted that he'd lost his 16BTC after he took his macbook into an Apple store for some minor repair. Some employee popped his harddrive into an external enclosure and scanned it for wallet.dat files, then made off with his coins by using a mixer. No one could prove anything, and that thief is now thousands of dollars richer while the victim is that much poorer.
One unexpected reason for the danger to consumers is the legal protections provided to corporations. It's relatively easy to start an exchange right now. It's as easy as starting a corporation and putting together a website. And if users are persuaded to send their coins to the exchange, and the exchange happens to lose those coins due to e.g. a massive technical problem, an unforeseen protocol problem like malleability, theft by an attacker, or even theft by the founders themselves, then the users are completely hosed. They lose everything. What happens to the corporation? It's dissolved, and that's that. No one from the failed corporation is exposed to any kind of legal risks. That's the whole point of a corporation: so that the people starting them aren't directly liable for the corporation failing. But when a bitcoin exchange or webwallet fails, all of the users lose their money.
This unfortunately happened to me on Mt. Gox. They recently discovered 200,000 BTC that they accidentally misplaced, so hopefully those will be distributed among customers in a few months and I'll get about 10-15% of my holdings back. In the meantime, it's pretty clear that the exchanges can basically do whatever they want. How can consumers know which exchange to trust? The answer is that you can't trust any of them. There is no mechanism by which to recover from disaster, and disaster is just a matter of time. Bitcoin The Protocol has the chance to last decades. How confident are you that your favorite exchange (or broker dealer like Coinbase) will last that long?
Beyond that, there is still no turnkey solution for consumers to manage their coins themselves. There are solutions, but they are uncomfortable. They require careful reading and time, both of which are inconvenient. The current best solution is a dedicated cold storage computer (or Raspberry Pi) running Armory, and to make multiple paper backups and store them yourself in various locations, so that it's unlikely your computer and your papers are all wiped out simultaneously.
And even with that kind of protection, someone can still hold a gun to your head and force you to send them your bitcoin, and there's not a damn thing you can do to protect yourself if they succeed. All transactions on the blockchain are public, so if someone gets wind that you control a 1,000 BTC wallet, suddenly you're a target. If they compel you to send your coins to them and somehow get away, you'll never get them back. Heck, if they force you to send them your coins and don't get away, it's still unlikely you'll ever get your coins back. They'll just sit in prison and bide their time, then enjoy your coins as a pension plan for when they get out of prison.
Is there hope? Perhaps. As far as I can tell, what's needed is for an exchange/dealer like Coinbase to purchase some kind of high-risk insurance which is guaranteed to pay out in the event of a disaster. The insurance plan would have to be able to cover all coins that the exchange holds at the time of the disaster. Since Coinbase has >1M user wallets, Coinbase probably controls quite a lot of coins. Let's say that they hold ~1/4th the number of coins Mt. Gox claimed to: about 200,000 BTC. Let's say the price per coin at the time of the disaster is $400/coin. That's $80M of losses which the insurance company would have to cover. And how precisely will they pay out to the exchange's users? Or even to the exchange themselves? Let's say the insurance company hands over $80M. Now the goal is to use that $80M to buy back enough coins from some other source in order to return all lost coins. Well, you can't do it! You'll skyrocket the price of bitcoin from $400 to $MASSIVE_NUMBER if you tried to buy 200,000 coins, especially if everyone realized what you were trying to do. So the exchange may still wind up hosed! And of course, that means the users will wind up hosed in the end.
> The current best solution is a dedicated cold storage computer (or Raspberry Pi) running Armory, and to make multiple paper backups and store them yourself in various locations, so that it's unlikely your computer and your papers are all wiped out simultaneously.
The Trezor, a hardware wallet that signs transactions without exposing private keys to the computer it is connected to just shipped its first unit: https://bitcointalk.org/index.php?topic=553818.0
Dedicated hardware wallets (which will hopefully be cheap and readily available) may be the future solution to malware related theft.
The infosec industry needs to mature and bitcoin needs to thoroughly adopt it at every stage. This means consumers as well. There will be a knowledge-gap to participate in Bitcoin because of this for a long time.
quoting from there: "Security researcher Nick Szabo has coined the term bit gold for information objects which are provably costly to create"
bitgold as it was publicly described in 2005 was different than bitcoin in that there was a market for the tokens. bitcoin uses an agreement mechanism to establish the difficulty.
Szabo also appears to have forward-dated his posts talking about implementing Bit Gold so that they appear to be written after BitCoin was released.
i think some part of nakamoto wishes to have credit for BitCoin, or at least not permit someone else to take credit - which is part of why he came out of hiding to redirect people away from dorian nakamoto. to protect him, but also to ensure that credit was not conclusively misattributed.
(the font of the website is fine @stephen)
I doubt it has much to do with anything rational, such as benefiting from finding out who he is or obtaining more insight from Sathoshi. It's just deep rooted human curiosity.
thanks for the answer, totally hear what you're saying and I'll look into that book, thanks for suggesting it!
If he anticipated Bitcoins success he has been wise to remain unknown.
Now, the technology (the opensource daemon, and the network of nodes running it to create a peer to peer ledger and all that jazz) is really an quite interesting experiment in distributed systems.
The culture around Bitcoin the 'currency' at the moment (and forseeable future) is more complicated.
At worst its a pyramid scheme, and at best its an asset bubble. In practice I would say it most resembles a sophisticated, decentralized Multi-Level-Marketing scheme (MLM) of a particularly novel and insidious variety (Note that MLMs such as Amway & Herbalife have plodded along for years). This can be said not just of bitcoin, but of the entire ecosystem of cryptocurrencies.
Ironically, the fact that it has value derives from its perverse incentivizes of its "investors" to create a cycle of pump and dump bubbles, that bring more people into the fold each time. These speculators provide a liquidity pool that makes bitcoin useful to those who actually use it because they are shut out of the traditional payment system. Alarmingly, it seems at the moment that this group deriving actual utility (over credit cards) consists primarily of hackers, drug dealers, gamblers, arms dealers, pornographers, and other participants of the grey/black market economy. Yes, there is a big pool of legitimate merchants accepting bitcoin because of low transaction fees & no chargebacks, but adoption by non-speculator 'legitimate consumers' is far beyond merchant adoption.
The end game is uncertain. If the liquidity pool eventually grows large enough (resulting in a stable, high value) such that people feel confident to start settling contracts denominated in bitcoin (see mpex.co for a particularly sophisticated example), this will represent a massive challenge to the power of the state to control commerce and enforce taxation. In other words, an crypto-anarchists wet dream.
Perhaps bitcoin will stay somewhere around the size it is now or perhaps an order of magnitude larger in which case it may stay a fringe payment technology with a shady reputation, much like Liberty Reserve and egold before it.
It is also possible that governments will regulate it away by requiring all addresses be registered (see: http://blog.gardeviance.org/2014/03/how-to-fix-bitcoin.html). Or maybe they will just get fed up and attack it by targeting it at its primary point of centralization: all mining ASICs are currently fabbed at TSMC. TSMC could perhaps could be coerced into adding some kind of backdoor or kill switch into the next generation of mining chips. Note that other cryptocurrencies have and will adopt ASIC resistant PoW schemes that limit this at a risk of allowing a 51% attack by a large botnet (or entity with massive computing resources like Google or the NSA).
Either way, Pandora's Box has been opened. Future cryptocurrencies are in the works that use cutting edge advances in zero-knowledge proving techniques to completely eliminate the need for a public transaction history. With regards to bitcoin (and other Nakamoto-chain based cryptocurrencies) specifically, the widely noted scaling problems will be solved by ongoing work on 2-way pegging to side chains, tree-chains, and other ways of 'sharding' the blockchain, while maintaining bitcoin's enforced scarcity.
So really, the reason why I want to know who Satoshi is, is because bitcoin is an incredible hack. Not just of computers and networks, but also of minds. To secure the network, mining has to be incentivized by giving the coins value, which means Satoshi anticipated not just the technical aspects of enforcing concensus in the ledger of coins, but also the economic & psychological aspects of getting people to think the coins are valuable (and that their value would increase). I'd personally like to know what motivated he/she/they to build & design Bitcoin, and what his/her/their thoughts were as it took off, and what he/she/they think of the current ecosystem.
EDIT: but of course I'm making the silly mistake of assuming he's an American.
At the point a company is first created it's shares have zero value and so it's founders pay no tax when they receive them. The fact that they gain value later has no bearing on that situation.
Of course, creating shares at a later point in a companies life (when they may have value) does have tax implications.
Thus, any coins that were mined before there was any value you shouldn't need to pay tax on.
If you ever sold them, and long-term capital gains should apply, you would still owe the long-term capital gains tax on the proceeds from the sale. So, subtract your cost basis (which for THE actual creator of bitcoins is arguably more intensive than average miner who merely creates bitcoins), subtract that which has not been (depreciated?) on any other gains, and pay tax on those gains from the proceeds of the sale.
It looks very weird, but I can believe that it might improve reading speed.
edit... something def is installed on my chrome but for some reason only showed itself now.
i won't share all the magic but consider this: have you noticed how there are big and little endian flips littered throughout the code, especially in the script code? do you think that a single dev would just arbitrarily assign endianness throughout the code, then have the script code be big endian?
I have seen crazier things. A single developer who works on the code a bit, takes a break, then works on it a bit more can easily have switched conventions.
Author of CoreBitcoin, objc implementation of bitcoin.