re: Predict the 12/31/2014 bitcoin price (plus 2013 year in review)

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This thing has the potential (at least according to the article) to crumble right before our eyes.

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I did.

Can someone please clarify for me what the issue is?

Is it if, according to the set protocol, someone or some group can control more than 50% of the mining computing power, that group can override the protocol and rewrite the "rules" for bitcoin?

If that's it, and if a group of amateurs can band together enough to threaten btc, how difficult would it be for a government, say China or the U.S., to provide the resources and plug in and control the mining or rules making process?

Isn't that the ultimate threat to bitcoin?

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Isn't that the ultimate threat to bitcoin?

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Seems to me Bitcoin may have all the protocols in place to protect itself from "outsiders," but may have more than a few weak spots if the government wants to become an "insider."

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" but may have more than a few weak spots if the government wants to become an "insider."

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Wiki just provided some info in the OT thread about these "weak" spots.

From reading his explanation, a government could not exploit the weak points to the extent that it could nullify all of the btc transactions that have already taken place by others or even take ownership of bitcoins owned by someone else.

But what a 51% miner could do tells me if the government ever perceives btc as a threat to it, that government can foul up the process enough to make it impractical for btc to continue for most users:

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-Reverse transactions that he sends while he's in control. This has the potential to double-spend transactions that previously had already been seen in the block chain.

-Prevent some or all transactions from gaining any confirmations

-Prevent some or all other miners from mining any valid blocks

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So the government could just start double spending some of the bitcoins it has confiscated or mined on its own and it can prevent future mining by other miners.

That sounds like a fatal control over bitcoin for a well motivated and well funded entity.

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Is it if, according to the set protocol, someone or some group can control more than 50% of the mining computing power, that group can override the protocol and rewrite the "rules" for bitcoin?

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I have no fricking clue... I'd like an explanation. The article also talked about being able to use a bitcoin twice in that scenario.

Again, if I mined the bitcoin, stored it in my wallet, how could it be used again by someone else

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Yeah, I would think that would have caught my attention.

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But still, how does someone possessing more than 50% of the "Mining" power affect all of the bitcoins that have already been mined?

And if being over 50% can kill bitcoin, what is stopping a govt with supercomputers from shutting it down now?

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But still, how does someone possessing more than 50% of the "Mining" power affect all of the bitcoins that have already been mined?

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Wiki posted in his explanation on the O-T:

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An attacker that controls more than 50% of the network's computing power can, for the time that he is in control, exclude and modify the ordering of transactions. This allows him to:

-Reverse transactions that he sends while he's in control. This has the potential to double-spend transactions that previously had already been seen in the block chain.
-Prevent some or all transactions from gaining any confirmations
-Prevent some or all other miners from mining any valid blocks

The attacker can't:
-Reverse other people's transactions
-Prevent transactions from being sent at all (they'll show as 0/unconfirmed)
-Change the number of coins generated per block -Create coins out of thin air
-Send coins that never belonged to him

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That's all I know.

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Don't you just love his stab at me? He thinks I care. How sweet.

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Are you the "academic economists to pontificate and give their worthless opinions"???

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"Oh, look! The government just destroyed most of our wealth we had in bitcoin so let's go put what we have left in another play-like, funny money The government won't dare do it again!"

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Yes. I am the worthless academic economist. But at least I have something to gauge my opinions on instead of I have some amount of this and I can read, so I'm the expert.

Is it just me or is this a "win at all costs" mentality with this group of people? If Bitcoin succeeds who cares. I will do my trades in Bitcoin. I don't give no fricks.

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Is it just me or is this a "win at all costs" mentality with this group of people?

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Yes. About 8 or 9 months ago when I first got really interested in the concept I spent some time reading the bitcoin message boards. 99% of the posters on those boards are just like wiki....."the government is out to get us, we must destroy the government, central banks are the devil and anyone who disagrees is stupid. We are the world's only visionaries."

One message I chuckled at for a while said something like, "I don't care if I lose all the money I have in bitcoin. I do it just because I know it pisses Ben Bernanke off."

Bitcoin is definitely a cult. It's a religion. That's why I wrote back then after I saw the fanaticism of the BTC true believers that bitcoin would be around for a while. Religions die hard.

But with this new revelation that any entity with enough resources can nuke the whole process enough to destroy confidence in it, it's only a matter of time if bitcoin truly becomes a threat to any big government.