Daniel A. Nagy 3:00 PM on Nick Szabo's blog at blogspot called Unenumerated in May 2011, this snippet lifted from a conversation with Nick.

"It's not just deflation against which BitCoin is defenseless. Given the lack of feedback, it is just as susceptible to inflation:
Suppose that mining costs catch up with market price. Then, for some reason, market price falls as people sell off their BitCoins. Some miners stop. Some may even sell their equipment and quit the network altogether. This will not reduce the supply of BitCoin, just makes the system a bit more fragile. Those who stay in the mining business will see their rate of mining increase, and rationally anticipating further fall in prices, will also increase the rate at which they sell BitCoin, fulfilling their expectation.

People with BitCoin savings liquidate, some businesses stop accepting BitCoin.

BitCoin's market price falls further. The limit is zero. No feedback to stop the ensuing inflation caused by the general shrinking of BitCoin economy. More and more BitCoin chasing fewer goods and services (and currencies).

This is what I actually expect to happen after the current bubble bursts."

People seem to forget what money and BTC is.
Money is just a form of communication, a subset of language.
Bitcoin is the evolution of this made possible by the internet. It is not really in our control anymore.

We narcissistically think of humans as separate from nature but this is a subjective, short sighted delusion.
Nothing is separate from nature. The fact that we can not see how we are just part of the pattern means the processes and evolution that determine our fate as a species, planet, solar system is something we don't have a complete picture of. We don't know what we don't know.(Hell... until recently we did not even have a good theory on how we developed, now thankfully we have evolution.)
I alternate between being dumbfounded by how stupid humans are to being astounded by how clever we are. Take this Satoshi guy for example. Genius. Brilliant.
Yet just like any other discovery that has changed humanity this did not happen in a vacuum. He/She/It/They were also just a product of genetics, proteins being programmed, environmental influence and the accumulation of changes that built humanity, social structure, language, electronics, internet and now algorithms living independently on the internet. Bitcoin could not have been born any earlier time and yet the birth was inevitable.

BTC is an idea that has taken on a life of its own.
Even if the creator/s wanted to stop it now, it would very likely be impossible.
If it survives or dies does not depend on any human or group of humans but purely on nature and the rules that govern any other living thing.

An idea that simmers to the top of the collective consciousness and manifests in the way that Bitcoin did, can not simply disappear,  it changes everything.

I am sure that this is the start of the greatest revolution I will see in my lifetime.
In essence it is nothing less than the whole organism that we know as human civilisation evolving into something new.
This happened before, maybe 10k years ago with drawings in a cave, language became more complex, then more recently with writing, printing.
Then telephones, internet.
Now it is happening over the matter of days, weeks and months. We can watch it in realtime. It is like watching an astronomical event that you expect should take a thousand years, except it is sped up like some BBC documentary and splashed on a 3d 60 inch curved OLED home TV for your viewing pleasure.

Nature does not care for people in love with the status quo. There is constant change, seeking the shortest path with least friction, least fragility.
If you have ever seen a lightning strike slowed down to ultimate slow motion and tendrils seeking and then finding the best pathway to consolidate in a blinding flash of light, you will understand how I see bitcoin and why the question about its survival seems ridiculous to me.

TLDR: read post above me

Any ideas or input appreciated.



Really.
Try me.
I will appreciate it.
I will appreciate it passionately.

Hello Bitcointalkers,

I live in a small university town that is crazy about coffee.

In a nutshell:
I would like to approach some coffee shops about buying credit with them.
Initially about 10 coffee shops $500 each. Alternatively fewer shops (depending on how many are interested) with larger amounts of credit.
The plan is to do a pilot study with about $5000. ($5k/6m seems reasonable.)
They then put a "Bitcoin Accepted Here" sign in the window.
People can then buy coffee on my credit with them and send bitcoin to my wallet at the point of sale.

The result:
Customers who want to spend their bitcoin can buy coffee.
I get bitcoin.
The coffeeshop gets money up front and carries no conversion risk.

Worst case scenarios:
1. no one wants to buy coffee with bitcoin and I need to drink $5000 worth of coffee.
2. people end up sending money to the wrong wallet/scam, they get free coffee, I lose money
3. bitcoin fails and I weep silently
4. I go to jail as a money launderer

I would like any feedback, ideas, etc. especially regarding how to avoid scenario 2.

Specifically: if there is anyone out there who owns a restaurant/coffeeshop/other merchant, how would you feel if someone approaches you with an idea like this?
Does anyone have a suggestion on how to handle the Point-of-Sale side of things?
Any lawyers who can give some pointers on what to expect with legal requirements when setting something like this up?
(I am hoping that keeping it small, i.e. 10 customers and sub $10 000, I won't have too many hassles or have to worry that I am technically a money transmitting service or something like that.)

My reasons for wanting to do this is firstly to do a small part in building the foundation of bitcoin economy and secondly to turn $ into bitcoin without using an exchange.

(Also:If this is not the right section to post this, please redirect me.)

This would also solve the other unspoken problem.
Which is the problem of Mintpal having so big % of the coin in the first place.
From what some have said: big enough to attack the network if they wish.
If people are concerned about ghash.io they should be concerned about this as well.

Can someone confirm this for me, it is something I asked earlier today:
Are we going through a rollback
or are we going through a fork?

pnosker: Successfully forked off the stolen #VRC. Wallets compiling. Linux users: Git is good. Clear everything but wallet.dat

Saying the stolen VRC were forked off makes it sound like they have been removed, not returned to Mintpal.
This would make way more sense to me.
But I was told earlier this is not possible.

I have more invested in Vericoin than any other coin apart from Bitcoin.
I really believe in the devs and think they are great.
I am very sorry that they got put in this position today.

But I believe a rollback is not the answer for numerous reasons posted and not refuted or answered and I will refrain from repeating them for fear of becoming monotonous.
I am afraid and I am uncertain, this is true, but so should you be when an exchange can get hacked. They can get away without explaining it. They can carry on functioning without consequence, they can lean on devs to fix their problem.
Part of the problem is that this is now being re-imagined as a good thing.

If you tell me: this is horrible but for me personally the lesser of two evils, then I will believe you.
I will also lose money if there was no rollback but perhaps I need it less than you.

I understand you feel passionate about Vericoin and feel that what you are doing by waging forum war against what you presume to be Fudders is a good thing. I have been involved in building crypto community and I know what it feels like when things go wrong.

I will lose a lot of money personally in what happened here today and it saddens me, but I like to think that I am not involved here for short term gain but because I see potential for long term gain for everyone.

Part of that gain is not having to rely on central authorities to protect us.
What this would need is a redesigned system that excludes them and middlemen.
This is why I am interested in crypto.
We can build a world where we don't need middlemen, this would be more efficient and more beneficial for everyone.

This event today is not on my roadmap towards this world.
It maintains the status quo of the old.
We are in a race for survival at the moment where all alternative currencies are competing.
A rollback threatens the existence of the whole race.
I will lose money either way and unfortunately so will you. But more importantly, so will everyone potentially in the long run unless this truly is a once-off event never to be replicated.

Also: why is it that the hacker did nothing to profit from this event?

There are ways they/it/them/he/she could've turned this to advantage.
I don't think they are dumb. Doesn't add up.

It took me a while to realize that in the world of crypto I lose more by listening to Hypers than I do by listening to Fudders.
This fact I find so shameful that I had to create a new forum account.

Please actually read my post if you are going to quote parts of it.
Also, if you follow anything of what I have said today you will see that I am not rooting for the hacker.
Criminals are a cancer on society.

I do believe that we need a system that can't be hacked in this way though, otherwise it will keep happening.
By saving the exchange we allow its survival and the environment in which this happened.
It is good Mtgox is dead.
If you have cancer on your body, sometimes you need to cut your leg off.
If you just put a bandaid on it, the cancer grows.

Wow.

I'm not someone for conspiracy theories and such.
But... please tell me that VeriCoin and VeriChip is just a very unlucky coincidence?

Hell maybe I have something wrong here...
someone here thinks that a coin like this is in keeping with Satoshi ideas?

Today we saw the bailout of an exchange.
I am sorry for the devs. It is not their fault they got put in this situation.
But the fact remains: they bailed out an exchange.

To the people saying: "they had to! so many coins too much for one person to own! they can attack the network!"
Just think about it.... those coins are being rolled back and going back to one entity.. Mintpal.
If it is unsafe in one entities hands, what does it matter if that entity is the hacker or Mintpal when it comes to the security of the network.
If the system inherently protects itself, as Bitcoin and all crypto's are allegedly designed to do, then it will protect itself in hands of hackers as well as exchanges. If more is to be gained by holding the stake than abusing the stake then all is safe.

If I was the hacker this is what I would do:
(Hacker take note)
I would send most of the coins to a ridiculous and inaccessible wallet called something like Mintpalsucksandhasnosecurity.
In that way you would destroy the coins, keeping a fee for showing this flaw to the community.
This would also negate the main reason for a rollback.

The purists are worried for valid reasons buy4crypto.
I know you are worried about your money, but they are as well.
They are worried about it on longer term, you are focussed short term.
If you can understand the concern then it will lead to less argument and more constructive discussion.

I think the rollback was a bad thing but I would probably do the same in dev position.
It is a shitty place to be in between rocks and hard places.

What might sounds like cruelty to you might be logical to others.
Here is an analogy: you make a baby. You find out the baby is deformed and will never be able to live by itself.
For the aims of the exercise you can only have one baby. What do you do? Keep this one or try for another one that can survive by itself?
There is no right answer.
It might feel right to save it but who are you doing the favor for?

The problem is the system is broken.
We are seeing it again and again. Mtgox, mintpal, different names, same game.
What we need is a different way to do all of this.
This is why peer to peer exchanges are needed.
If peer to peer exchanges are impossible then what we need is a level of education among that masses that stops people leaving money on exchanges.
If daytraders realize they can lose all of their money then maybe we will have less daytraders, this won't be a bad thing in my opinion.
Maybe by letting enough people get hurt, it will lead people to learn the lesson from the pain.
Don't leave money on exchanges.

It is a bit like helping a gambling addict. You don't cure him by giving him more money to play with.

Um.. what do you mean? Mintpal is a 3d party that kept 8mil in one hotwallet.
Hence our problem here.


Edit for clarity:
If 8mil belonging to one person is too dangerous, then Mintpal with or without the hack is dangerous.
A kindof ghash.io situation isn't it?

No no, you misunderstand.
People are saying a rollback is needed to save the coin because 8mil is too much for one person to hold (regardless of how they got it.)
Yet we are rolling back to a time when one person is holding this coin (Mintpal).
How is this different?
Is it because we are trusting Mintpal won't attack the network?

Just so I understand correctly:
Are you saying that Mintpal (forgetting about the hack at the moment) already had the power to do a majority attack against the VRC network?
How is it different from the hacker owning the coin or Mintpal owning it?
Isn't the whole problem that it is just one entity owning the coin and able to attack the system?
If it isn't dangerous if Mintpal holds it, how is it suddenly dangerous now?

Thank you very much for responding to my mental exercise of option 2.
If it is truly impractical or impossible and it was between option 1 and 3, if I was dev I would probably go with 3 as well.
Option 1, although more honest and safe for the ideology of cryptos would be too risky for devs.

It would be similar to Mintpal losing the keys to their wallet.
They made a mistake. Responsibility belongs to them,
if they admit the hack and there is fear that coins end up with an immoral entity that could harm the infrastructure, this would be a way to protect the infrastructure.

Intuitively it might feel wrong but think about it a bit more.
This option exists because it is a compromise.
In the compromise, people will not be able to call it a chargeback or a bailout hence the reputation of VRC will be spared.
VRC devs feel they have to act out of 51% attack fear. This will negate it.
The community will support this decision if it is either this or option 1, denying hacker the coin or letting the hacker have the coin.
The only people who will feel very strongly against this decision are not VRC holders in general, just those who left a lot of their money on an exchange. This will also be a lesson for them then.

Actually in my perfect world, all 3 options would be created by devs and then community can decide which blockchain to support and build on.

nvminer: I don't think there is much rational discussion going on in this thread at the moment.
There are a few who are posting their concern for what this means in the light of what cryptos mean to them.
There are a few who are concerned about their private investments and trying to keep the hype and spin up by silencing what they think is FUD.
The problem is they don't see that it could also be investors who see this from a different angle in longer term game and are actually trying to protect the infrastructure.

We have not had a discussion from the dev team, just and update on their plans.
I have a lot of sympathy for them and I'm glad I'm not in their shoes.
If you were dev, how do you think you would handle this?
Personally I think I would probably capitulate and make a blockchain change but go with option 2 as mentioned above.

As stated before, there are 3 choices here.

1. Do nothing and let it play out as it plays out.
Vericoin could die. Price could crash if hacker sells and then rebound. Hacker could keep the coin and stake or attempt a majority attack.
Mintpal could die. Customers will expect to be reimbursed.
If either survives it will be because they deserve to.

2. Fork the blockchain to block the stolen coins and effectively destroy them.
Vericoin will survive. Hacker has no coins. No threat to system. Coin amount reduced, value goes up.
Mintpal customers lose, this is Mintpal and the hackers fault. Mintpal needs to reimburse.
Mintpal could die.

3. Roll back the blockchain to before the theft.
This seems to be the plan at the moment.
Mintpal bailed out. Customers happy in the short term.
Long term consequences? This is effectively a charge back and a bailout of a central authority that messed up.
It is not their fault they got hacked but just like it is never your fault if you get robbed. It is the criminals fault.
But if you are an exchange that advertises security and deals with other peoples money then you are accountable.



I personally would prefer option 1 even though I will lose money.
As soon as you mess with this you set a precedent.
I can imagine devs don't want to take this chance with something they have spent a lot of money and time on.
It is also not their fault. Fault here lies with customers who left so much on exchanges to day trade (mostly from greed).
Fault is with Mintpal for lax security. Fault is with the hacker for being a criminal and a cancer on society.

If option 1 is unthinkable for dev, then option number 2 makes way more sense to me.
They lose nothing. Community who did not keep all their money on Mintpal lose nothing.
Mintpal loses, hacker loses.

Option nr 3 concerns me and I think a lot of people in cryptocurrency.
If you consider it in contrast to option 2, it is obviously a move to save Mintpal more than anything else.
It puts the legitimacy of the currency in question to save a single business entity.

The solution rests on designing a system without possible points of failure like Mintpal.
Effectively they would be decentralized peer to peer.

Solution for Vericoin handling of Mintpal fiasco?
1. Do nothing. Let it play out and if it survives then it should survive.
2. Fork to make stolen coins disappear.
3. Go back in time to pre-theft.


This was discussed a few pages back.

At the moment it seems hacker will not gain anything from this.
If I was hacker I would destroy majority of the coins which would make a rollback more difficult to justify.


But like stated first: the solution is a better system.
This is why crypto in the first place.
Exchanges are legacy from a prior broken system.
What happened here today is leftovers from that system.
What we should aim for is a system not vulnerable to this.
If VRC is not that system or a part of that system and in fact helping to survival of the broken system by splinting it, then it is not the answer.

If I was VRC dev I would say:
Sorry people, we got forced into making a hard decision.
We promise we won't fork coin again for this reason so please don't leave your money on exchanges.
Put it in your wallet and stake. This way you support the network.
We are also working on a decentralized exchange system that will hopefully make Mintpal and its like obsolete and offer peer to peer exchange.