"Nearly every 256-bit number is a valid private key. Specifically, any 256-bit number between 0x1 and 0xFFFF FFFF FFFF FFFF FFFF FFFF FFFF FFFE BAAE DCE6 AF48 A03B BFD2 5E8C D036 4141 is a valid private key." -bitcoin wiki

If you know hexadecimal, then you can convert the above to hexadecimal and verify if it is a valid key with some (theoretical) private key associated with it.

Uh huh.  Nobody with $1m to burn will buy that you can make a $100k return in 1 year on a startup.  Most startups don't turn a profit until 5 years down the road.

This sounds like a joke, but I'll bite... I suppose he could be thinking you'll borrow to cover the difference when you don't meet your target, then learn a valuable life lesson when your investment fails and you're $400k in debt once you sell off your assets, and have to declare bankruptcy.

What he doesn't realize is that you're dumping it in something on purely speculative grounds and could double your money or lose it all by a difference of days.  It doesn't even sound like you understand how bitcoin works or what it even is.


That's your first problem.  Bitcoin is not a get rich quick scheme, especially if you know little about how it works.  Speculative bubbles always benefit the moguls, veterans, and hawkish traders at the expense of the young, new, and inexperienced.


This plan is insane.

Bitcoin always spikes in value after a media blitz via a speculative bubble, then crashes hard a few months later.  Those of us who have had their ear to the ground have seen it happen, first in May of 2011, then less so in Jan 2012, then again in August 2012.  Do NOT invest in $1 million in bitcoin unless you are prepared to lose $990,000 of it.

The recent media attention that bitcoin has received is the sole thing fueling this bubble.

See:

http://www.chrisnorstrom.com/wp-content/uploads/2013/11/mf_bitcoin6b_f.jpg


This is not a transaction you want to handle online with some random exchange.  Find a bunch then call them up and get a contract with a lawyer in tow, if you're crazy enough to do it.


I doubt there'll be enough sellers at any one point in time for you to drop $1 million into the market.  Dropping $1m in a day might actually cause the speculative bubble to burst, since you'd spike the value so quickly that the speculators will panic-sell.

You'd have to buy them up at a slower pace, but that just puts you at even greater risk.


They'd call up whatever exchange service you used and ask them for the information.  If you made a significant return, the bank will notice and report it.  You WILL pay taxes on this, governments proactively look for and try to snap up smaller sums than this.  They would look at what you are doing as free money because you simply could not contest the wealth of evidence they will have on you.  And they'll sit on it for a year so that you pay interest.


Just repeat this mantra: "Bitcoin is not a get-rich-quick scheme, Bitcoin is not a get-rich-quick scheme, Bitcoin is not a get-rich-quick scheme..." until you realize how you're letting the euphoria of naked greed cloud your judgment.

What you should do: return the money to your father and say your projections were flawed as you realized that there were some fundamental problems with your idea.


Basically this.  The gamble is the day the bubble pops; bet safe and you make nothing, get greedy and you lose it all.  If you don't have experience day-trading and aren't prepared to sit at a computer 24/7 monitoring any change in value, you aren't ready for this.

Out of curiosity... I take it this physical wallet isn't intended to be exchanged like currency?  But rather, it's designed to be a wallet to store incoming funds until such time as you wish to transfer these funds into a secure address?

In which case what's the point of it being tamper proof?  You can't use it as a medium of exchange anyways so there's no point in a tamper-proof private key.  If someone steals the wallet they can just steal the funds in it by opening the wallet anyways.  I guess this protects against someone finding it and writing down the key and leaving it where they found it, or photographic it, then?  But you can just leave the private key at home in a safety deposit box and carry around the QR code for the public address.

I can't imagine a scenario where the average person would need a wallet that can accept an unlimited number of coins until such time as you want to buy something with it, which you can only do once and only with certain technical knowledge (I'm thinking of the change, here) after which it's useless and you need a new one.

A tamper-proof private key is only useful when you want to use it as a medium of exchange, which this thing can't be used as since anyone can print off any nonsense private key they want to on the private key slot before they seal it off.

Not true.  Austrian's acknowledge that models can be useful (and have used them) for pedagogical purposes, they just aren't very useful for predictions.

I think Rothbard put it best:


Charts, diagrams, models, and graphs with no quantity are an important feature of Economics 101 pedagogy.  Everyone can probably recall the supply and demand graphs of the very first few classes on economics: no units or explicit quantity, and probably with unlabeled axes.  If they had quantities, they were made up.  Austrians don't have a problem with models used in this manner.

But constructing an actual Supply and Demand graph is difficult because of the difficulty inherent in isolating demand & supply out of a list of historical measurements.  Inevitably you get a list of data from different times and maybe even different places, and the standard deviation can be substantial.
Making predictions within a reasonable degree of statistical error and margins is even harder.  This is the kind of modeling that Austrians reject… or at least have a healthy dose of skepticism towards.  I personally don’t mind models (nor do Austrian economists like Robert Murphy), but I am very skeptic of most economic statistics that people cite that are based off of models.

Two examples of this in action: Potential GDP and Fiscal Spending Multipliers.  Any time any claim is based off of either of statistics generated from either of those two, I take all conclusions with a massive grain of salt.  For illustration, see this video, specifically the part where it criticizes the CBO’s use of the Fiscal Multiplier.

What Austrians in the Rothbardian tradition recommend is to treat historical and modern economic events in the same manner one treats human history and other social sciences (again, see this article).



Disagree as well.  The Anarcho-Capitalist position is that no government is superior to any government, which relies in part on economic analysis but is not wholly dependent on a specific model.

The anarcho-capitalist position is not derived from the naïve perfect competition model (which is, as a model construct, useful for pedagogy, but not so when attempting to obtain a more nuanced understanding of the market).  In fact, to get to the anarcho-capitalist position from a mainstream economic model one must simply consider the following:


If you recall, Pareto efficiency means that no change to the situation can be made that isn’t at the expense of any particular individual.  Furthermore, economies tend towards equilibria over time due to trade, which is by definition mutually beneficial.

Therefore, a competitive market will result in improvements in the quality of life for all participants at the expense of nobody (because of trade), and will tend towards an equilibrium that is efficient and where no central planner could possibly improve the situation (because of the First Welfare Theorem), which is tautologically true under certain conditions.

The primary economic criticism of this position is the assumptions built-in to what makes a market competitive and why trade is mutually beneficial.  The former is usually expressed in terms of various points of “market failure”.  But criticizing the market for not being perfect is one thing; the question is, is it possible to create a sustainable system to address market failure?

The first criticism, that market failure can arise via imperfect information and therefore government is needed, is absurd.  Perfect information can be safely ignored without affecting an argument in favor of minimal/no government.  This is because both government and private actors face the same information constraints.  Information, in a sense, can be (and is, in Austrian economics) no different from any other good and service.  Consumers with superior information make more informed choices which leads to better gains from trade, just like producers with superior capital have lower costs which leads to better gains from trade.  There is an incentive to accumulate valuable, practical information in the same manner as there is an incentive to accumulate capital.

Economic accumulation of useful information leads to superior quality of life for the person in question.   Similarly, when it is not worth the cost to gather relevant information, the tendency to do so unnecessarily will be curbed.  As such information (or lack of it) is not a significant constraint on the market except to say that there are always improvements to be made and room for entrepreneurship.  This dynamism is what makes free markets a system and not a state; it has built-in tendencies towards resolving this problem over time since it rewards entrepreneurs who act on these information disparities.

Comparatively, there are less, and weaker, incentives for politicians, voters, and bureaucrats to be as informed, as Public Choice theory explains.  Big Government types invariably carry with them the belief that they know what’s good for you and can fix all the problems; in some (coincidental) cases they might, but there is no reason to believe it is a systemic feature of government (in fact, there is ample reason to believe otherwise when examining history).  People reason that because it’s possible for individuals to criticize a particular state of the market at a particular time (even a seemingly persistent state), this justifies inserting a system of government over top of it.  This is unfounded.  Those who propose such arguments rarely have a coherent and well-designed “system” in mind, only various states they wish to resolve through which they attempt to justify their impractical system.  The failures of the government system are legendary but no pro-government type has taken sufficient steps to resolve this.

Similarly, the “complete markets” assumption can safely be dropped when advocating for a pro-market position.  The complete markets assumption basically boils down to the fact that to the extent that something isn’t traded on the market (particularly as it pertains to future speculations), calculations involving it will tend to be suboptimal and externalities will arise where one group can benefit at the expense of another.  The Austrian response to this is to eliminate said externalities by expanding the market to encompass such things, thereby resolving the problem.

The Statist response is to expand the role of government.  This is even less defendable than the prior position.  Whereas the preceding one is framed as an empirical or pragmatic position (“well if you just elect the right people to enact the right policies…”), this one is a solely deductive critique that fails to make any coherent sense.  In effect, it states: “The market fails to work efficiently when its actors cannot make wholly internalized profit-and-loss calculations over certain goods and services.  We fix this problem by making it harder, impossible, or illegal for actors to make wholly internalized calculations, since we hand the job over to an external party thereby magnifying the problems of externalization.”  The government is just as susceptible to critiques of externalization, given that a given government policy is generally the literal embodiment of externalized costs and concentrated benefits.

"Am I the only female nerd... ahem bitcoin user haha ?"

Right, because that's even a girl to begin with.

Sorry, let me clarify:

Either 15-year old girl's first time on internet and seeking attention because she just found out what her gender can do, or G.I.R.L. troll.  In the former case, "Tits or GTFO" is not derogatory; "Hi look at me I'm a girl" is self-depreciating in and of itself, and responding to it with "if you want me to do so I want to see your tits" isn't degrading the poster any more than they already did to themself.  In the latter case... who cares? It's a troll.

Do you ever see posts that begin with "Hey I'm a guy" on any forum that has nothing to do with gender?  No, you don't.  You see girls (or male trolls) doing it everywhere, though.  Why?  Who knows.  All I know is laughing at their buffoonery is amusing for me, though.

There's your problem.

What you don't realize yet is that Bitcoin is not a very good currency right now, but rather it is a speculative commodity.

See the following:

Workplace computers fail that way.

This is really annoying...

Spot on.  The role of a currency is to be both a long-term store of value, and a short term medium of exchange.  To be a store of value it needs to have stable prices, and to be a medium of exchange it needs to be easy to use and exchange.

If it's worth 0.01 US cent, it doesn't matter, as long as it retains that value over a long period of time and people use it in exchanges.

Right now we have neither:

The money supply is inflating, last I checked, by around +37% a year (as of a few days ago; obviously that number will converge to zero as the months go by, but 37% inflation is still significant).  At the same time, Bitcoin is getting all kinds of positive and negative publicity, resulting in fluctuating demand.  Right now we're in a deflationary period as a result of all of the bad publicity.  This rapid inflationary pressures and fluctuating deflationary pressures means the currency can't hold a stable price.  Security issues are also at the forefront as no significant third-party solutions have come forth and I haven't seen much commitment from the developers.  In the future when inflation dies down and demand stops fluctuating so wildly, we'll see significant price stabilization.

As a medium of exchange, it's also weak: there's little to actually buy and the services available to facilitate those transactions are untrustworthy at best, outright frauds at worst.  Basically what we have is a bunch of lone techies writing code in their basement, not professional companies creating products; this does not mean we won't have reliable facilitators in the future, but the fact is we just don't have any now (in my opinion). 

Bitcoin isn't useful as a currency now.  The most investment and focus by third parties is in BTC mining and exchange right now, as is to be expected and as is necessary, as developed mining and exchange is absolutely necessary for the short, medium, and long term prospects.  When the economy has developed enough to allow convenient BTC purchases in supermarket stores I think Bitcoin will be just about 'ready' to move from a mining-based, long-term investment to an exchange-focused currency.

See above, but replace BTC above with BitCoin, and append the following to the end in place of the period: ", with BTC as it's short form."

Bitcoin = client/project, BitCoin = currency (hence the emphasis on "Coin"), BTC = short form for BitCoin.  That's just my convention, anyways.

Also:

You know your legal opinions aren't worth anything, right?

Here are the facts:

-A BitCoin address allegedly owned by Ben Davis received 512 BitCoins in 1 BTC increments from an address allegedly owned by Intersango.
-Something or someone with access to the BitCoin address transferred these BitCoins to a different address.
-Intersango allegedly sent three emails to BenDavis requesting that 511 BitCoins be returned then threatening legal action when they were rebuffed.
-A conversation allegedly took place between Intersango and BenDavis on a chat channel.
-The same BenDavis allegedly logged onto bitcointalk.org and made statements.

Here's your opinion, which is worth nothing in a court of law unless you're a practicing lawyer:

"Intersango didn't intend to create a legal relationship and didn't consent to the release of his BTC."

Are you an expert in the legal interpretation and application of law?  i.e. are you a practicing lawyer?  Can you quote me the legal definition of "intent to create a legal relationship" and "consent" on the spot?  Yes?  Then great, go ahead and represent Intersango before a judge and earn a fee, then your legal opinions will be "worth something".  No?  Then take your armchair lawyering somewhere else, the law is not cut and dry as your statements suggest it is.

Now, for my legal opinion, which you can all take with a grain of salt:

In reality, simply making up an ex post facto excuse like "whoops, I accidentally sent you a cheque for $500 in the mail last year because it fell into the envelope I sent you when I wasn't looking, you owe me $500 plus interest" is about as trustworthy as "nuh uh, you told me in a private, unrecorded conversation with no witnesses you were giving it to me for free so I spent it".  Lack of "intent" and "consent" must be proven to have existed ex ante.  I don't even recall what reason Ben and Phantom were interacting for, but if it was a verbal agreement you can't claim that the excess 511 BTC wasn't verbally agreed on (you can't really claim that it was, either, but that's irrelevant; neither party has a case, in my mind, to either show an agreement or demonstrate that they acted as though there was an agreement).  You need to demonstrate the so called 'bug' was, in fact, 'real'.  The fact of the matter is, Phantom allegedly sent 511 to Ben BTC and then cried foul; if there was an actual signed agreement of what or at least an ex ante record of something, somewhere that shows that Phantom meant to send 1 instead of 512, then sure.

With an ATM, it's simple: you ask to withdraw $50, it stores this fact on a database and deducts $50 from your account, then spits out $500, that's clear cut and dry what you both consented for was $50 and what you accidentally received was $500.  They can probably point out the programming error and show that somewhere it converted the $50 into $500 internally even though it clearly doesn't do this with any other amount.

In actual fact, the "intention" to "create a legal relationship" occurs when two parties make any sort of attempt to agree to any sort of exchange; the legal relationship may not be finalized but the intent to create it is there.  The real Ben can claim that he purchased something for 512 BTC via a verbal agreement and he had no contact from Intersango.

The "consent" clause is muddier.  If you can show that there was 1. an actual bug, and then 2. that Ben should have known it was a bug, then you can proceed to 1. claim lack of consent as the reason contract was made and that Ben owes the BTC back, and then 2. claim that there's a case for a criminal prosecution of Ben.  If they've already fixed the bug and kept no copies... I'm not liking their case.  If they have no supporting documentation that shows what the agreement was, if any, then I'm not liking their chances of getting Ben prosecuted, either.

And they've got to prove that the people claiming who they are on the forums and in the chats are who they claim they are.  Why?

It's pretty easy for me to make an account called "Joe Schmoe" then use this account to "admit" "Joe Schmoe" "stole" money from me.  Then try to get the real Joe Schmoe prosecuted.

Haha...

Anyways, this sounds like a sweet idea.

That seems extremely cumbersome and inefficient, and certainly not for Joe Average.  How is hand-typing addresses going to be useful at a grocery store?  Or is this just a temporary measure?  And is he going to hold all of his money in paper slips?  He'll have to print new money every time he gets paid, and how is he going to do that without either a third party or a client hooked up to the internet?

A far better long-term solution is a piece of hardware that acts as a client, imo.

Right now?  There's no real reason.  Later, maybe, but not now.

1. BitCoin security is weak.  Joe Average is using Windows, and *will* have his BitCoins stolen by malware (it's not an 'if', it's just a matter of time).  If he knows enough about security or bitcoin to keep it secure, he ain't Joe Average.  An ideal situation for Joe Average would probably be a two tier system: an iPhone app for making purchases with a client that handles your "chequing account" and day-to-day purchases, plus a separate, password-protected, handheld device stored in a secure location in your house that handles your "savings account" by wirelessly communicating with your router.

Of course, there's the risk of a break in robbing you of every last penny if the private keys to your bitcoins are stored only on a physical object.  I can imagine that there's methods out there that can read the flash drive (or whatever) of the device, meaning backups won't help against theft.  I suppose if the data in the object is kept mostly encrypted and sent through a third party decrypter or something via the internet...

Then there's the reliability of the trading hubs, online accounts, and Mining Pools.  Look at MtGox getting hacked, MyBitCoin disappearing, and everyone was moaning and groaning about the fact that one mining pool had over 50% of the network (plus the fact that DDoS attacks against the weaklings could give a heavyweight majority control).  The systems are just not there, or just not reliable.

2. BitCoin is unstable.  We're inflating at a rate of what, 50 bitcoins every 10 minutes?  So an increase of 2,629,800 bitcoins per year?  That's 36.4% of the current bitcoin supply.  And yet waves of Joe Averages keep hearing about bitcoin; even Paul Krugman recently commented on it (he dismissed it, sure, but the fact that he's commenting on it is something).  This is driving up speculation: people are buying in to speculate, not to use the currency.

Then again, the currency has been stable-ish the past few months... as compared to its history of $0 to $30 to $5 to $20 to... and so on.  So we could see a future where people hold bitcoins to buy.  Right now they usually just trade fiat for btc on a trading site, buy something from a merchant, then the merchant converts it back into fiat.  Bitcoins are held to speculate, and traded to purchase.  They aren't being held to make purchases, not by anyone smart anyways.

3. BitCoin isn't useful.  All of it's major features, like security, anonymity, and instant online transactions of anything are yet to be actually developed.  The potential is there, yes: it has the potential to be trustworthy without needing a central authority, and it has the potential to be anonymous if you're smart about it, and you can theoretically buy anything you want (eventually)... but we just don't have that yet, or to a lesser degree than is advertised to the Joe Average joe, which *will* cause backlash.  Right now the profit is in mining; in a decade the main income for miners will be transaction fees, and that's when we'll see transactions.

So from what I understand, you're saying that the private key to the wallet of major exchanges should be split up in several small chunks and handed to trustees who would get together to withdraw the funds to a secure location if anything worrisome happened?  Or are you saying that just one of the people with access to a part of this broken key could halt the whole business?  When you say 'many people across a network', is that just anyone who uses the exchange?  Or an elected/selected group of people?

I just don't see how that enhances wallet security.  It seems like it makes it more vulnerable to attack because now its hackable by targeting either the trustees or the business.  Solid wallet security occurs when the individual takes effort to make it secure by storing the key in one spot that can't be accessed except physically.  This suggestion may make the eWallet institutions more accountable to customers but it opens up security holes at the same time.

I don't see how to implement it either.  If it's just a select group of people, then it's just good business sense for the exchange site to have access to a kill switch that shuts it all down, and for them to distribute it among a few of their top management and/or with a few trusted third parties.  If it's open to the community, than any attacker just needs to control one of the chunks to prevent the whole process.  And if the chunks aren't exclusive to each person (if more than one person can hold the same chunk of key), I don't see how you can prevent an automated attacker from spawning a whole bunch of fake clients/accounts/whatever and eventually gaining access to the entire key.  And if its hard or impossible for the attacker to reconstruct the key by having access to all the chunks (say the chunks are of different sizes and can overlap each other so its impossible to tell which part of the key a particular chunk is), how is the community going to be able to do it?  And, of course, what about if the funds are stored under multiple keys?  And, of course, once the plug is pulled, who has access to the second account and how do you trust them to return the bitcoins properly?

I can see it maybe happening but I just see no clear way to implement it.

If you could provide more detail that would be best.  Are you more worried that the business will get hacked by outside agencies or that the business will do something underhanded?

Hi!

I've lurked this forum for a few months and I've come to like the amount of debate and discussion that goes on so I figured I'd join in on the growing community.  Bitcoin was really intriguing for me when I first heard about it, since I've studied a bit of econ, business, and computing.  I'm not one to trust on blind hope that bitcoin works and I don't like to leave any stones unturned if I don't fully understand something, so I'd like to think I know more than the average newbie about bitcoin.

I've since discussed bitcoin with people on other forums, but never really made an account here because I saw that newbies had restricted access.  I haven't looked at the source code or contributed any services to the bitcoin community, or even used bitcoin at all at this point, but maybe that will change in the near future...