Manuel, lets address the scenario where several powerful groups want to destroy bitcoin (not simply manipulate it one way or another).

Under this scenario, the goal of all groups is the same, so the "the enemy of my enemy is my friend" principle would apply. Why compete if we can cooperate? It does not matter if there is one or many powerful groups that want to destroy bitcoin, the result would be the same, as long as they have enough combined power.

...Which takes us to the obvious conclusion: bitcoin cannot survive in its current configuration without the support (implicit or explicit) from a decent percentage of the worlds economic powers (establishment).

Why? Because a successful attack on bitcoin cannot be prevented if the attacker (or attackers) have enough economic resources.

Why? Because the whole paradigm of the integrity of the system is based on brute force hashing. I.e. mine is bigger than yours paradigm. As long as successful attacks can be carried out simply by the means of brute force, Bitcoins will never deliver the promise to subvert the current economic powers.

So for one; to all anarcho capitalists out there, bitcoin is not the answer to your prayers. Bitcoin is not a resilient decentralized system per-se, and probably never will in its current incarnation, until the brute force paradigm is replaced for something else, that is really resilient to attacks by the means of force.

This is the greatest misconception in bitcoin right now, as I see it. It is sold as being the solution for the corruption of the banks and governments, which it is not. Banks and governments can render bitcoin unusable at their whim any time, if they ever perceive bitcoin as a real threat.

Better wake up.

By merging ongoing threads into a long and not totally related thread, mods accomplish the objective of cutting off ongoing conversations, confusing posters, and diluting the ideas they dont like into incoherent eclectic neverending and unfocused threads that nobody will read.

A dishonest way to handle the situation, in my opinion.

So you are essencially admitting that such an attack would render the system useless, as long as the attack is sustained.

.

Answer: It took me 15 minutes to find out that the mod hugolp deleted an ongoing thread and merged it into another one. If he wants to merge ongoing threads at his whim, it would be polite to at least pm the participants of the thread to not leave them confused and wondering what happened to the thread.

Also I posted a second thread asking what happened, and he deleted this thread too, without notice.

Honestly, better moderation practices would be appropiate.

Hugolp, a pm to the participants of an ongoing thread that suddenly dissapears would be polite. I lost 15 minutes and had to pm theymos to find out that you deleted an ongoing thread and merged it here.

Hi, recently two ongoing threads were deleted from the bitcoin subsection. On thread was called "Biggest threat to bitcoin" and the second one was called "Deleted ongoing thread?" or something like that.

Can someone explain who deleted them, and what was the reason?

Thanks.

Did mods just deleted an ongoing thread called "Biggest Bitcoin threat" or something similar?

[Mod edit: It was merged into this one here: http://forum.bitcoin.org/index.php?topic=25026.0]

Yes, I get your point too, and I agree, but the problem is that liquidity is also a relative metric. Assets can be more or less liquid, but there is no precise cut line for "liquidity".

This is a common misconception. A supercomputer is not efficient for hashing. Its too expensive. Hashing is a very simple computing process that does not requiere a supercomputer.

Any government or organization can pwn bitcoin by building a specialized hashing hardware factory, for a couple of millions of dollars. No actual supercomputer required.

I am not using the wrong metric. You can convert any asset to money given enough time. I am not saying they have to make an attack within a certain deadline. And I am being conservative, because you could even get a loan to make the attack, so even more people would qualify.

It is a problem in fact. The only way bitcoin can survive in the long term, is with governments or powerful organizations protecting it. We should wake up to that reality.

This, of course is not an impossibility. In fact I see many governments allready supporting bitcoin indirectly.

Of course it can.

Thiago, a related answer is here


Related thread:

Bitcoin's kryptonite: The 51% attack
http://forum.bitcoin.org/index.php?topic=12435.0

Right now you dont need a government, only a couple of tens of millions of dollars.

To put that in perspective, only in the USA right now, there are 1 million people that have a net worth of more than 10 million dollars. If a handfull of those wanted to harm bitcoin, they could.

Also the supercomputer argument is a known fallacy. Its a catchy phrase but does not make bitcoin less vulnerable to brute hashing attacks for the moment. The supercomputer argument is debunked in the thread above.

Already discussed here:

Bitcoin's kryptonite: The 51% attack
http://forum.bitcoin.org/index.php?topic=12435.0

And 50% is not a magical number, hashing is a probability issue. For an effective sustained attack, you would need a high percentage of hashing power though.

1-July-2011
20:34 UTC
MtGox USD 41339
TH  USD 3452
B7 USD 399
Source: Bitcoin Watch (volume in the last 24hrs)

MtGox 91%
Tradehill 8%
Bitcoin7 1%

Warning: I strongly suspect the data in Bitcoin Watch or Bitcoin Charts is wrong. Right now, Bitcoin charts shows a MtGox Volume of 17799 since 0:00 UTC. Yesterday the volume was very low, so its impossible that the 24 hrs volume that Bitcoin Watch shows right now (41339) can be right.

The trades at MtGox in the last 4 hours of yesterday were not 140% of the trades in the 20.5 hours of today. Whoever manages those sites, check your algorithms, as something is not adding up here.

EDIT: I checked the charts of the last 48 hrs, and in fact there was a strange anomaly in trading precisely in the last 3 hours of yesterday, so it is perfectly possible that 70% of the daily trading could happen in mere 3 hours. This kind of trading activity does not happen very often though, and to me it was just an artifact caused by bots reacting to a sudden big sale, and it does not reflect a human buying pattern.

http://i.imgur.com/6JhwY.png

I wonder if looking at traded volumes makes any sense at all, when automatic trading is present. The volume could mean nothing. Any thoughts from more experienced traders?

You cannot understand bitcoins isolated from its context. This is a typical mistake I see over and over in this forum. Most people are so corrupted by the fiat monopolic currency mentality, that they cannot see beyond that reality.

Bitcoin will not grow in value for ever, that is impossible in a free market. If the bitcoin concept prooves to be succesful, many other similar crypto currencies will come along. As long as there is enough incentive to mine, there is no problem for other currencies to come along. Of course right now nobody knows if bitcoin will last, so no serious contender has come along yet. But expect more currencies (wich means more crypto currency supply) will come along in a not very distant future. As there is more competition and supply, bitcoin price will eventualy drop or become stable.

Bitcoin is an experiment in free markets; bitcoin and its philosophy are inseparable. You cannot understand one, without the other. If you see bitcoin through the lens of a monoplistic currency (that has to dominate the whole economy), you will invariable come to false conclusions. Instead, if you see bitcoin in the context of free market in currencies, you will start think more clearly.

People are not buying goods and services with gold, ergo gold it is a pyramid scheme too. So what?

You cannot send gold over the internet though, so bitcoins has more potential to become a currency for goods and services.

So you basically say people are not forced to use fiat, because they can violate their "legal obligations" ?