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buddhavista
Member since Jul 2012
3543 posts

re: Iranian's discover bitcoin


quote:

There is no code or security system they can't break given enough time and monetary incentive.


the computing power to crack the digital signature in bitcoin is absolutely huge. Think hundreds of computers working for weeks or months to crack ONE account.

They can be cracked but there is much easier things to hack now, and likely in the future.

Definitely a risk though.
quote:

All it would take is for one of them to break into the bitcoin vault (or wallets) and either steal what's there or inject an enormous amount of counterfeit bitcoins and disperse those coins among hundreds or thousands of zombie PC's around the world that they would use to buy goods, both legal and illegal, for their benefit unbeknownst to the individual PC users.

well they would have to crack a bunch of digital signatures to really bring it down. So several thousand computers working for years, assuming people don't rotate accounts.

It would be much easier to hack into PCs and steal bitcoins than it would be crack the system.

it definitely has risks though, but I think hackers cracking into a citibank and transfering funds is wayyyyyy more likely and lucrative than trying to crack bitcoins.

For now at least.






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GumboPot
LSU Fan
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Member since Mar 2009
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re: Iranian's discover bitcoin


quote:

The free market. Supply and demand. Right now, bitcoins are valued at about $12.52.


This is still the problem with bitcoins, it seems to still be coupled with a government issued currency.

Also, I'm confused about the supply of bitcoins. How are bitcoins "printed"? When you exchange dollars for bitcoins who gets the dollars and where are the bitcoins created? In other words is there a bidcoin "federal reserve" bank to control the supply of bitcoins?



This post was edited on 11/30 at 1:04 pm


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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
76106 posts
 Online 

re: Iranian's discover bitcoin


quote:

well they would have to crack a bunch of digital signatures to really bring it down. So several thousand computers working for years, assuming people don't rotate accounts.
Yeah, I'm gonna say maybe to that...






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WikiTiger
LSU Fan
Member since Sep 2007
40721 posts

re: Iranian's discover bitcoin


quote:

the computing power to crack the digital signature in bitcoin is absolutely huge. Think hundreds of computers working for weeks or months to crack ONE account.


try millions of years






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el duderino III
Texas Fan
austin
Member since Jul 2011
1506 posts

re: Iranian's discover bitcoin


what do u mean by "coupled". its not correlated with US exchange rates, if thats what you mean. its just priced in terms of dollars, same way any currency can be expressed in terms of any other currency.





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WikiTiger
LSU Fan
Member since Sep 2007
40721 posts

re: Iranian's discover bitcoin


quote:

How are bitcoins "printed"?


They are mined by miners performing complex mathematical operations.

There will only ever be 21,000,000 bitcoins mined.

Bitcoins are, however, infinitely divisible (currently set at 8 decimals, but can be easily extended)

quote:

When you exchange dollars for bitcoins who gets the dollars and where are the bitcoins created?


Individuals or businesses sell their Bitcoins for currencies and/or in exchange for goods and services.

quote:

In other words is there a bidcoin "federal reserve" bank to control the supply of bitcoins?


No, but as stated before, bitcoins will never exceed 21,000,000.




This post was edited on 11/30 at 1:12 pm


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el duderino III
Texas Fan
austin
Member since Jul 2011
1506 posts

re: Iranian's discover bitcoin


except, computer processing power grows exponentially, while whatever required capability is locked in place





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WikiTiger
LSU Fan
Member since Sep 2007
40721 posts

re: Iranian's discover bitcoin


quote:

I still don't see where the security exists to prevent some very bright computer people from highjacking the bitcoin concept and flooding the market with, in effect, 'counterfeit' bitcoins.


It's the cryptography. It will not be cracked, no matter how enterprising or smart those russians are.

And even in say, 20 years, when the computing power available is much greater, then bitcoin can simply be extended to utilize newer cryptography that can't be cracked by modern hardware.






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WikiTiger
LSU Fan
Member since Sep 2007
40721 posts

re: Iranian's discover bitcoin


quote:

except, computer processing power grows exponentially, while whatever required capability is locked in place


see my post above






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GumboPot
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Member since Mar 2009
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re: Iranian's discover bitcoin


quote:

They are mined by miners performing complex mathematical operations.


Help me to understand this better please.

Here are some stupid questions:

Where is the mine of bitcoins?

What tools are used to mine bitcoins?

If the tool to mine bitcoins is "complex mathematical equations" who is the author of these equations?







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buddhavista
Member since Jul 2012
3543 posts

re: Iranian's discover bitcoin


quote:

Yeah, I'm gonna say maybe to that...


you would be wrong.

Wiki - my understanding and I am no crypto wizard by any means is that cracking a digital signature is much simpler than cracking encrypted text due to the complexity of the keys.






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el duderino III
Texas Fan
austin
Member since Jul 2011
1506 posts

re: Iranian's discover bitcoin


you have yet to really explain how this market would continue to function if the gov't decided to completely outlaw the currency, and a)prosecute merchants who continued to accept the currency (which can be done while bypassing the technology fairly easily, whether by just basic tax evasion investigation and hunting down missing revenue streams, or something as simple as offering rewards for info on merchants engaged in bitcoin trade) and/or b)begin shutting down and prosecuting those involved with the exchanges.

as soon as any noticeable number of arrests are made, both exchanges and merchants would have to raise fees to account for the increased risk to remain profitable, instantly wiping out whatever economic benefit that was there.

the more i think about it now, the less concerning it is. there are just too many weak spots a gov't could exploit if it needed to.



This post was edited on 11/30 at 1:31 pm


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el duderino III
Texas Fan
austin
Member since Jul 2011
1506 posts

re: Iranian's discover bitcoin


the details of the math really dont matter. Basically, they needed a method to steadily but gradually increase the supply of coins as demand increases over time. since there is no central body to do this, they instead invented an extremely time and resource intensive process by which people could invest in banks of computers necessary to do the math calculations to unlock new coin for themselves. It's actually a pretty low profit margin enterprise, but if you've got a bunch of computers, why not.





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WikiTiger
LSU Fan
Member since Sep 2007
40721 posts

re: Iranian's discover bitcoin


quote:

Where is the mine of bitcoins?


in the ether. it's all based on math.

quote:

What tools are used to mine bitcoins?


mining software
electricity
GPU's
coming soon: ASIC's

in other words, it takes a significant investment in hardware, electricity consumption and time to mine bitcoins.

quote:

If the tool to mine bitcoins is "complex mathematical equations" who is the author of these equations?


go read the white paper i linked to earlier. it explains it way better than I ever could







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WikiTiger
LSU Fan
Member since Sep 2007
40721 posts

re: Iranian's discover bitcoin


quote:

the more i think about it now, the less concerning it is. there are just too many weak spots a gov't could exploit if it needed to.


This is why bitcoin is going to be my favorite topic on this board for the next 5-10 years






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WikiTiger
LSU Fan
Member since Sep 2007
40721 posts

re: Iranian's discover bitcoin


quote:

you have yet to really explain how this market would continue to function if the gov't decided to completely outlaw the currency, and a)prosecute merchants who continued to accept the currency (which can be done while bypassing the technology fairly easily, whether by just basic tax evasion investigation and hunting down missing revenue streams, or something as simple as offering rewards for info on merchants engaged in bitcoin trade) and/or b)begin shutting down and prosecuting those involved with the exchanges.



So then all they will have done is stopped commerce in the US.

they will not have stopped people from using bitcoin as a store of wealth (to avoid inflation, death taxes, etc.)

they will not have stopped people from using it to transact internationally.



and what if the international bitcoin economy really gains momentum while the US is cracking down internally.....do you think it would be sound policy to prevent US businesses from engaging in that commerce?


you're essentially arguing that our government will have to go totalitarian in order to stop this, and well, i don't deny that could happen, but if it does, then bitcoin will likely be the least of our concerns.






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buddhavista
Member since Jul 2012
3543 posts

re: Iranian's discover bitcoin


quote:

This is why bitcoin is going to be my favorite topic on this board for the next 5-10 years


The threat of bitcoin to gov't is almost as large as the threat of social media to gov't. Twitter was the engine behind the arab spring.







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WikiTiger
LSU Fan
Member since Sep 2007
40721 posts

re: Iranian's discover bitcoin


Further reading for people that are interested in the guts:

http://en.wikipedia.org/wiki/Public-key_cryptography






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WikiTiger
LSU Fan
Member since Sep 2007
40721 posts

re: Iranian's discover bitcoin


discussion on cracking bitcoin:

http://bitcoin.stackexchange.com/questions/2847/how-long-would-it-take-a-large-computer-to-crack-a-private-key

quote:

"how long in bytes the private key is"

32 bytes, or 256 bits

"then how many combinations of numbers it will contain"

There are 2^256 different private keys. That's a little larger than a 1 followed by 77 zeroes.

"what is the fastest computer or network of supercomputers"

At its peak around August 2011, the Bitcoin network was checking 15 trillion sha256 hashes per second. (See http://bitcoin.sipa.be/)

"how long it would take to crack a private key using that computer"

If we assume it takes the same time to run an ECDSA operation as it takes to check an sha256 hash (it takes much longer), and we use an optimisation that allows us to only need 2^128 ECDSA operations, then the time needed can be calculated:

>>> pow(2,128) / (15 * pow(2,40)) / 3600 / 24 / 365.25 / 1e9 / 1e9
0.6537992112229596

It's 0.65 billion billion years.

That's an very conservative estimate for the time taken to break one single Bitcoin address.

Edit: it was pointed out that computers tend to get exponentially faster over time, according to Moore's Law. Assuming computing speed doubles every year (Moore's law says 2 years, but we'll err on the side of caution), then in 59 years it'll only take 1.13 years. So your coins are safe for the next 60 years without a change to the algorithms used to protect the blockchain. However, I would expect the algorithms to be changed long before it's feasible to break the protection they provide.




of course, things like quantum computing could change that....but you also have to remember that bitcoin can adopt better cryptography as well



This post was edited on 11/30 at 2:03 pm


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HubbaBubba
USA Fan
Bloemee, TX
Member since Oct 2010
6937 posts

re: Iranian's discover bitcoin


If it ever became any serious threat to a stable taxable base, wouldn't a government be in it's right to consider it an act of economic war, and then stratgically take matters in to their own hands through targeted denial of service and possibly even military action?





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