I do not want a national currency, but I cannot think of a way to create a block chain in which there is an authority that can enforce an even distribution of the initial set of coins without a government to enforce it.  If you can think of a way to have a block chain that intrinsically distributes the coins over everyone in the world (so that everyone starts out even, you can make your fortune with your skill and luck after that), without requiring a government to enforce the distribution, by all means, please tell me, I would adopt that proposal over my own.

No, my thick headed friend, if I had thought that people born after a certain date should get a share of the virtual currency, I would have said that.  If you're born after the cutoff date, you are, just as for every other aspect of your young life, dependent upon your parents to provide the resources that you need.  You will inherit your 'share' of the virtual currency that was awarded back in 2013 from them.  If they leave you nothing, well, you should have picked better parents ...

If the U.S. government accepts bitcoin as legal tender, then they are in essence awarding a very large amount of money to the bitcoin early adopters.  On the other hand, it seems inevitable that the government will have to eventually accept some form of virtual currency.  I am simply proposing a way for the government to create a form of virtual currency for the use by U.S. citizens which does not START OUT biased towards early adopters.

I do realize that most people on this forum will be hostile to this idea because they'd rather be rich than fair; but I am hoping that there are other like minded people who will contribute meaningfully to the discussion.

And there is something you may never heard of before called "letting the perfect be the enemy of the good."  My proposal is not perfect so arguing against the places where it is not perfect and could not be made perfect is pointless; but my proposal is better than bitcoin, at least from the average person's perspective.  There are alot of people who have never heard of bitcoin and I really think it would be lame to start out a new virtual currency already putting them at a disadvantage when we have the capability to do things fairly instead.  Alot of things that happened in the past and could be considered analogues of bitcoin (gold etc) didn't really have a planning period or a technical basis that could have allowed it to start out fairly.  But virtual currency does.  There is no reason whatsoever that the U.S. Government couldn't start their own block chain and only accept transactions from that block chain as valid legal tender.  NONE AT ALL.

Well dude, with a tinfoil hat that thick, I am not sure any reason could get through.  But thanks for your contribution!

I do realize that this is a pretty bad forum for reasonable discussion, being roughly half full of get-rich-quick schemers just hoping that their post will influence the bitcoin market in a way to make them money, and the other half being tinfoil hat wearers ... but I am hoping for just a little signal in the noise.

Thank you for a reply that actually has some worthwhile content!

I agree that the U.S. government does not perfectly represent the interests of all citizens equally, but it's the best thing we've got now, and like it or not, it decides what is legal tender for transactions with itself, and to a large degree, between private individuals.  Therefore it must establish some policy with regards to virtual currency, which is why there are Senate hearings now.  The only remaining question is, what policy will it establish?

It can choose to accept Bitcoin as legal tender.  Then it will have essentially pre-assigned a large amount of the currency to those people who created bitcoin or heard about it early, which is a very, very small fraction of the U.S. population.  That just seems inherently unfair to me.   I think it's much better to act on behalf of all citizens - which is the point of the government, isn't it - and ensure the fairest possible scheme from the outset.  Hence my proposal.

The early adopters of Bitcoin are already rich, or at least well rewarded, according to the timeliness and veracity of their participation.  I don't feel too badly about cutting off their cash cow now, leaving them with the profits they have, and moving on to a better system that is fairer for everyone.

Also your comments equating these U.S. virtual currency coins with Bitcoins and saying that I should just give away my Bitcoins because they are the same as the coins I propose and thus I would end up with only 0.3 of these new coins instead of the 1.5 bitcoins I have unfortunately indicate that you are either deliberately or inadvertently being obtuse.

Finally, you don't know me.  I don't care that much about being rich, I value certain things alot more than money, the future of my country and fairness to all citizens being more important to me.  I am not writing to my Senator because I am angry that I didn't get to be a Bitcoin millionaire.  I am writing because I want the best for everyone, not just myself.

Absolutely everything that you said can be said about Bitcoin also.  So I don't know why you are even here if you don't accept the fundamental tenents of what makes a virtual currency like Bitcoin viable.

No one else in the world has to use this currency.  But by making it the only virtual legal tender acceptable by the U.S. Government, it will have an immediate legitimacy.  Once people start paying for government services with it, it will have value and an infrastructure.

I am not sure that everyone understands my proposal.  My proposal is that the exact same protocol (ok well maybe with some very minor tweaks to the block schedule) as Bitcoin be used for this.  The only difference is in the initially seeded block chain.  Instead of Satoshi getting it all, and then the early adopters of Bitcoin getting a huge chunk of the rest ... it starts out fairly distributed to all U.S. citizens.

Also as to an earlier poster's point, I am not calling this Bitcoin.  I don't think I have ever called it Bitcoin, although it uses the exact same protocol.  I call it the U.S. government legal virtual tender, of course they'd have to come up with a better name.

Anyway, I'm done replying to naysayers without any actual technical input to give.  I'll be back when someone has something interesting, relevent, and informed to say.  Thanks.

It's the same software man.  It's just a new initially seeded block chain.  YES, you have to trust to government to follow its own laws and give out the coins according to the schedule that it proposes when it creates the chain.  But you already have to trust them for just about everything already, don't you?  And even then, you don't actually have to USE your U.S. virtual coin if you don't want to.  Anyone who doesn't want to participate doesn't have to use the coins at all.  But you won't have any other way to conduct virtual coin transactions with the government since it would be the only virtual currency they would accept.  But that's OK, once all of the non-paranoid people have actually started using the currency for years, you'll eventually accept it too.

I already addressed that in my original post.  Did you read it?  This would be a U.S. backed currency, just like dollars are.  The Chinese would have their own such digital currency.  EU countries could do the same.  I realize that this doesn't satisfy the same 'it's the same currency for everyone' strategy that Bitcoin does but ... Bitcoin will still exist!  You could still use that for your global currency if you want!


And you do realize that all of those early Bitcoin adopters could cash out *right now* and make their profit, which I believe they should be quite happy to get.  Also many of those early adopters built up mining capacity, and will still be rewarded when that capacity can be used to mine coins officially accepted as legal virtual tender by the U.S. government.


There is absolutely nothing in any of my posts that deserves this comment.  I am not a troll, I have pretty clearly come here with a reasonable idea that I am asking for reasonable discussion about.

Meaning what?  My proposal should be very enticing to the government as it gives them an immediate windfall of 1/4 of the currency.  What do they get by endorsing Bitcoin instead?  Basically nothing.  Unless Satoshi was the NSA ...

Actually, even if Satoshi *was* the NSA, why not 're-set' the currency and give themselves even more while they still can?  Once they distribute 1/2 of the currency to everyone in the USA, they can't take it back anymore, like they can't just start printing red dollars now and declare all of the green ones obsolete, without risking revolution ... once the currency is sufficiently spread around, they can't take it back.  The could take Bitcoin back now, given that it's a) not officially endorsed as a currency anyway, and b) only used by a niche of people.  But give some of the currency to everyone ... then it can never be taken away again (except by the usual means - taxes )

Also, full disclosure: I own ~1.5 bitcoins now; I bought 3 bitcoins a couple of years ago just so that I could play around with writing my own bitcoin client (I am a software developer), got bored, gave it up, and shelved them.  I lost 1 bitcoin to my own software that I was writing (I used my software to try to send that bitcoin out as an initial test of my software and somehow 'lost' it ), but managed to retain the other 2.  I sold ~ 0.5 bitcoin recently on eBay just to recover my initial investment and guarantee a small profit.  I am holding the other 1.5 bitcoins because I don't really care that much about ~$1,000 now versus what might be a life-changing amount of money later should Bitcoin really take off.  But really, I would rather my Bitcoin value go to 0 because the government took my advice and created a virtual currency with a fairer initial distribution.  I'd happily pay $1,000 for that.

I got a database error and lost all of my hard-typed content!  AAH!  Here goes again ...

Here is a letter that I sent to both of my U.S. Senators regarding Bitcoin.  I urge anyone who feels the same to send the same or a similar letter to their own Senator or anyone else in government who might be able to take action:

-----

Hello - as you know, Bitcoin, the virtual currency, is now a hot topic, and is being discussed in the senate.  There is some indication that the U.S. Government may lend its approval to the circulation of Bitcoin as a virtual currency.  I would like to propose an alternative:

The major problem that I see with Bitcoin is that a large percentage of the available coins have already been 'mined' by early adopters.  The creator of the Bitcoin protocol him/herself almost certainly hoarded a large percentage of available Bitcoins in the first year of its existence.

I believe that if the United States Government is to endorse a virtual currency, it should begin its own Bitcoin-like currency, using the same protocol, but with a new block chain that it creates in which:

* 1/4 of the initial coins are allocated for the U.S. Government
* 1/2 of the initial coins are allocated to be fairly and evenly distributed among all U.S. citizens
* The remaining 1/4 of the coins are left for 'mining' just like the current Bitcoin system (this is critical as it provides incentive for miners to use the virtual currency, which is what builds the infrastructure necessary to support the currency)
* The U.S. Government should enact law that only this new virtual currency will be accepted as legal virtual tender by the U.S. Government and no other virtual currency.  This will provide legitimacy of the currency.

I believe that this is a critical juncture for virtual currency, which is an inevitability in the world of modern technology, and that the U.S. Government will be doing its citizens a great disservice if it does not enforce this much fairer currency scheme now, before Bitcoin becomes the de-facto virtual currency standard.

I personally have nothing to gain from this proposal, as I would have no more of this virtual currency at the outset than anyone else; I make this proposal only from a deep desire to see our country provide all people with an equal footing in the world of virtual currency rather than leaving the lion's share to the "early adopter cabal" of Bitcoin.

I can discuss the more technical details that would enable the fair distribution of this virtual currency if you would like to contact me.

Thank you, and best wishes!
Bryan Ischo

------

Since this is a technical forum I can discuss the more technical details here:

- The major technical hurdle would be tracking which of the initial bitcoins is assigned to which U.S. citizen.  Assuming that social security numbers can be used for this, I would propose that the initial block chain be seeded by the U.S. government with a social security number embedded in each block, thus assigning that coin to that citizen.  Citizens would have 10 years to 'claim' their bitcoin by presenting proof of personage to a government agency (the U.S. mint?  whoever is trusted with the starting block chain keys ...); upon presentation of this proof, the government would send the coin to an account of the person's preference.

- After 10 years, any coin not claimed becomes property of the U.S. government and thus, in the ideal world where the government represents every citizen equally, evenly distributed in value amongst all citizens by its common ownership by all citizens via the government

- This would be a U.S. only currency, although it could be used by other people around the world just like the U.S. dollar sometimes is.  I would expect every country to enact their own virtual currency in this way, with the resulting currency arbitrage etc, and maybe someday, in a distant future perfect world, all governments could cooperate so as to merge all virtual currencies into one ... but in the real world of now, a virtual currency per country is the only thing achievable.

- The government should announce this scheme months ahead of time (perhaps while the NSA is using their supercomputers to generate the initial block chain?) so that everyone has a chance to buy into mining companies to further help the even distribution of the remaining coins.  This is meant to alleviate some of the early adopter advantage that mining companies already set up for mining Bitcoin have.

I paid ~$100 for 3 bitcoins on eBay back when that was the going rate a few months ago.  I did it mostly out of enthusiasm for the bitcoin concept.  If you can understand the white paper you cannot help but be impressed by the genius of it.  I don't really care about lost value, $100 is not alot of money for me and I consider it all having been spent on "entertainment" so if I never get anything out if it, that's fine with me.

I have lost a little bit of the three bitcoins already by playing around with the bitcoin client; I hacked it to try to send out thousands of transactions to see if I could DOS the network, just for fun, and the 0.5 bitcoin I had in that wallet is probably gone forever since the client choked completely and mucked up the wallet file so badly that I am not sure it's recoverable.  Well I am sure it is but I don't think I'll ever bother to spend the time necessary to recover that 0.5 bitcoin.

In the intervening months my enthusiasm for bitcoin has waned considerably.  While it is a cool concept and well thought-out, the implementation leaves alot to be desired.  I think that Satoshi should have made a much more robust piece of software before unleashing it prematurely on the world.  As it is, there are so many technical limitations and difficulties with using bitcoin, mostly due to the immaturity of the software, that it's hard to believe that it will ever gain major traction.

I think that as long as bitcoin can be used for transactions in which pseudo-anonymity has extreme value (e.g. buying illegal goods), there will be a positive pressure on the value of bitcoin.  But I don't ever expect it to 'take over the world' or to make up a significant fraction of any financial transactions.  There are just too many other financial instruments with built-in advantages over bitcoin as well as having decades/centuries of a head start.

I think that mining bitcoins is probably the only really valuable way to acquire them, because that is the only way to have true psuedoanonymity.  The bitcoins I bought on eBay can be traced to my Paypal account so I couldn't use them for 'illegal' transactions even if I wanted to.  I have never mined bitcoins and don't know if mining pools guarantee pseudoanonymity (seems like they could since they don't need any way to identify pool members to function properly), but I think that self-mined bitcoins will always have intrinsic value above and beyond market-bought bitcoins for that reason.

This thread is not about transactions that have received 6 confirmations, so don't even bring that up as it only confuses the issue.

What we are talking about here is 0 confirmation transactions, and if you really trust 0 confirmation bitcoin transactions more than a credit card transaction, then your enthusiasm has definitely outrun your business sense.


And what are you going to do if someone shows you an ID and then double-spends anyway?  Are you really going to go through the trouble of trying to track them down and sue them?  Are you going to report it as a crime, an action that will with 100% certainty never get you your money back but maybe at least give you some personal satisfaction?  If you do, how would you ever prove that the customer double-spent?  The bitcoin address that was paid from is anonymous and cannot be tied definitively to the user.  Furthermore, the payment address paid to (via the double-spend) cannot be proven to not be yours either.

Accepting bitcoins with zero transactions is just about the same, from a vendor risk standpoint, of accepting cash that has a significant chance of being counterfeit, and without any way to assess whether the cash is counterfeit at the point of accepting the money.


Awesome.  Where are you located?  I like free computers.

I think that's incredibly premature and pollutes the wiki space.  Numerous reasons have been pointed out here why this idea is better served by other mechanisms.  This "satoshi codes" idea will never make it into bitcoin and having it on the wiki before it's even an agreed-to concept is, like I said, premature and polluting.

This assumes that if I send out my double-spend attempt immediately after the vendor has convinced themselves that no double-spend has been attempted so far, that my second transaction won't 'win'.  The chances of this happening are a function of both the amount of delay between my initial transaction going out and the vendor accepting it at face value, and the average delay of transactions propogating through the network.  I guess vendors could wait like 30 seconds (probably about as long as customers would tolerate waiting for their payment to be confirmed) and hope that this is enough of a "head start" for the first transaction to have a very, very high chance of beating any subsequent transactions into a block.

Also the vendor has to keep track of all outstanding transactions not yet in blocks to be sure that I didn't already spend the coin a few minutes before presenting the a transaction for the same coin to the vendor.  This would be incredibly costly for vendors when bitcoin is very big, and I guess they'd have to consolidate their costs into a single data center, or buy that service from someone they trust, both of which add to the cost of processing transactions.  Of course they wouldn't have to pay credit card fees either so that may be a wash.

I guess that's the only way I could see vendors trusting unconfirmed transactions; they could pay a third party to act as an insurer against double-spends.  That third party would be heavily connected into the bitcoin network to try to minimize their chance of a double-spend occurring that they would have to pay the insurance on, and they would set a transaction fee that the vendor would then either eat (and if it's as low or lower than credit card transaction fees this should not be a problem) or directly charge the customer (unlikely once bitcoin was well-accepted enough to be an expected form of payment, just like vendors don't typically charge extra for credit card payments (although some very low-margin vendors do)).

Once all of that infrastructure is in place, it makes little or no sense to have this satoshi code idea.  The customer would just submit their transaction to the vendor, who would submit it to the network and then ask their double-spend insurer to let them know when it can validate that the transaction is on the network and that it appears valid.  The insurer might have an implicit delay before they will answer in the affirmative to give the transaction time to get the 'head start' that they believe improves its chance of being accepted without being a double-spend.


Having an account implies trust between you and the account holder.  So far trust has not gone very far in the world of bitcoin.  The only thing you can really trust with bitcoin is the validated transactions 6 or so blocks back in the block chain.  Which is why the block chain exists and why trying to get around it kind of defeats the purpose of bitcoin ...

Nobody has any proof that the transaction will be included in 'the next block' just because the vendor has seen it on the network.  Nobody knows how the network will work when bitcoin is big enough to be used in point of sale.  It's quite possible that some transactions will never even make it to every miner, so I can easily send out two conflicting transactions and nobody could be certain that they, or any particular miner, would see both transactions, and could not prove which one would end up in the next block; or even if there will be a block chain fork resulting from my two transactions that take a few blocks to resolve.

I don't know why vendors will expose themselves to the risks of a system that everyone can attempt to game without any negative consequence to themselves since they are anonymous.  Everyone will just use clients that constantly try to double spend and get away with it; what's the harm in trying?  Every once in a while you'll get lucky and get free goods without any chance of being identified as the perpetrator of the fraud.

You may believe that the risk of chargebacks on credit cards are higher, but until this is proven in practice nobody will know for sure.

What do I think credit cards are?  They are a way for me to promise to pay a vendor, where that promise has some credibility because the credit card companies act to insure the validity of the transaction.  Back in the 1950s or whenever credit cards came along, you could have made the argument that credit cards were no more trustworthy than end users because they hadn't been proven yet and hadn't been established as a form of payment that vendors could trust.  But not anymore; vendors *know* that they can trust credit card transactions; they know who the credit card companies are and the credit card companies know who the customers are.  The vendors know that as long as they follow the credit card companies' rules, they will get paid; the cost to VISA of not being trustworthy to vendors would be way too high for VISA (it would take them out of a multi billion dollar market) and VISA knows that and vendors know that VISA knows that.

In short, vendors know they can trust credit cards.  They do *not* know they can trust anonymous random joe customer who can so easily game bitcoin to their advantage.

I am getting a little tired of explaining this because it keeps coming up over and over again in the forums.  So I'll be brief.  Quite simply, a vendor cannot trust an unconfirmed transaction because they cannot know if a double spend attempt for that transaction will succeed.  They can trust that such a double-spend has not been attempted if a) they believe that they know every transaction that has ever been attempted for the bitcoin in question, which requires that they see every, or almost every (enough to have confidence that very rarely will they not see a transaction) transaction that goes across the bitcoin network, which, once the bitcoin network is big enough that it's being used at point of sale (in theory, like I said that will never happen), is no small feat; and b) they *remember* every transaction for an indefinite amount of time to protect against double spends, which is no small feat once again in the hypothetical world where bitcoin is so big that it's being used at point of sale; and c) they have to believe that if you submit a double-spend attempt the second after they accept your unconfirmed transaction, that whoever solves the next block will have seen the first transaction first and the second transaction second, if at all, and will produce a block with the "valid" transaction in it instead of the "attempt to cheat the vendor" transaction.

That is alot of ifs.  If you really think vendors are going to trust such a system, well then, you are wrong, plain and simple.

Even if the chances of the transaction validation going the way of the vendor is very high, well, it is perfectly free for customers to always attempt the double spend since they are anonymous and it doesn't hurt them at all to try.  If they succeed 1% of the time, then that means that 1% of all of the transactions that the vendor accepts are going to leave them without the bitcoins they thought they got.  Will vendors trust a system where people can attempt to defraud them without any fear of any negative consequence whatsoever?  And can you convince vendors that the chance of this fraud succeeding is as low as 1% and not higher?  I don't think they will, and I don't think you can.

First: bitcoin will never be used for point-of-sale transactions.  It requires a minimum of 30 minutes - 1 hour (depending on the vendor's level of paranoia) to verify transactions and such a payment delay will never work in a point-of-sale setting.  Lots of people propose ideas to try to get around this but they all require vendors to accept unvalidated transactions, which is equivalent to taking someone's word that they will pay, and if they're going to accept that level of trust (which no vendor will), then they might as well not request that you issue any kind of transaction at all at the point of sale and just allow you to leave with the promise to submit a transaction to the network at your convenience later.

Second: if a vendor ever were foolish enough to accept bitcoin at point-of-sale, and if they stayed in business long enough with all of the free goods they will end up giving out as a result, then I would expect that the easiest thing would be for the customer to submit a transaction to the vendor for the vendor to validate and then submit to the network on the customer's behalf.  This customer-vendor exchange would be enough to establish that the payment was from the customer for the specific service or good being paid for, and there would be no need for tags within the transaction itself.

Every client talks a a few supernodes and only trusts results that are confirmed by all.

Yes.  I believe that if bitcoin flourishes, this is inevitable, and it will happen this way.

You don't do a vending machine with bitcoin, period.  If you can't wait ~ 1 hr for 6 block confirmations, then you are at extreme risk of being scammed, and vendors will not rely on promises (i.e. uncomfirmed transactions) to deliver goods.  Nobody is going to use a vending machine that you have for wait 1 hr to prove you've paid for your chocolate bar, ergo, there will be no bitcoin vending machines.