Bitcoins: It's all about cash, that is, the real stuff

From: Eric Wolf 
------------------------------------------------------
Mike R.,

I hope repeating what I said helps you feel better about yourself, knowing
that you getting suckered like us. You could make the same argument about
being conned by Nintendo for their fancy computers and expensive software
that just waste time.

As for public key cryptography, it's not intractable, it's just hard given
current computing power. If the cryptography were "truly intractable", you
would use the minimum length key because the length wouldn't matter. The
reason you want to use a longer key length is to increase the difficulty of
the problem.

-Eric



-=--=---=----=----=---=--=-=--=---=----=---=--=-=-
Eric B. Wolf                           720-334-7734




On Tue, Sep 3, 2013 at 10:23 PM, Mike Robinson wrote:

> Now, mining has largely become a matter of getting your hands on the newest
> miners [[ early enough to generate a profit (barring another bubble). ]]
> There
> are [[ very few ]] [[ technical ]] barriers to mining other than cash.
> Right now, that
> requires a minimum $5K [[ investment ]] and [[ may ]] not deliver returns
> [[ any time soon
> (if at all). ]] [[ That is, barring another bubble. ]]
>
>
> "There are none so blind as those who will not see."
>
> YES, "there are NO technical barriers to 'mining.'"  Other than the O-N-E
> ... T-H-I-N-G ... that actually matters to the clever mathematicians who
> conceived of it:
>
> UNITED STATES DOLLARS.
>
> You're paying $5,000 USD for "a magical money machine," and it's
> S-L-O-W-L-Y dawning on you that the words which I have enclosed in [[
> double brackets ]] can be omitted entirely from these sentences.
>
> You're being very cleverly suckered.  It's as simple as that.  And, you're
> pouring serious money ( >= $5000 USD ) into "the same damn con" that has
> been foisted upon "clever, smart" (sic) people, well, since time began.
>
> "Public-key cryptography" is designed around a truly-intractable (so far
> as we know ...) mathematical problem. Whereas "bitcoin" is designed around
> a =difficult= problem (at least, "difficult" in the way that all of you
> have been taught to approach it ...), yet "not so difficult that it cannot
> be, by sheer brute force, periodically solved."  A quarter has to drop out
> of the one-armed bandit now and then, just to keep the suckers going.
>  Obviously, there IS a "private key" to this puzzle, and, equally
> obviously, you don't have it.  All of this is plenty good enough to enable
> people to sell you(!) these mathematical one-armed bandits for $5,000 USD a
> pop.
>
> There is no "bubble."  There is only:  "sucker."
>
> " ... and two to take him."
>
>
> 

=============================================================== From: Lynn Dixon ------------------------------------------------------ Mike, Those one armed bandit machines have made myself a shit ton of cash. All of the intial investement I made several years ago, I have recovered multiple times over. I have made five figures in the last year alone on this "scam" as you call it. Since it has been so good to me these past 2 years or more, I have been faithful in investing a small portion of my profits back to keep up with the difficulty, but thats only been a SMALL portion of my profits. Again, I have lost aboslutely zero in the past 2 years. I can show a positive and ever steady gain in the high 5 figures. I have recently invested in the new technology since its increasingly effecient and I like having little boxes in my closet that poop out money. Call me a sucker, a fool, and poke fun all you care to. The fact is, I am substantially more "richer" because of my mining operation. At this point, $5000 is not serious money to me, its just a business expense like any other. Especially since it was money earned by bitcoin mining. I honesly don't see how I am being "suckered" when I have made $250 - $275 since Saturday morning, and I only paid $1350-ish for this little gem. Even if we examined the time-value of that money invested over the last 14 months, I can't see any better returns on any other investment. Now, excuse me while I dive into my pool of BTC that is flowing from my little data closet. :-) (Sorry for the ditribe, but I couldnt resist).

=============================================================== From: Matt Keys ------------------------------------------------------ Let them hate Lynn, it keeps the difficulty lower.

=============================================================== From: wes ------------------------------------------------------ I don't have a dog in the bitcoin fight, however I do want to bring to light one point which you did not address: the world needs a usable independent currency. as society moves inexorably towards globalization, more and more strife is coming from the varying values of money. people are going to war over inflation. even if bitcoin crashes and burns, it will serve as a learning experience to the next attempt to achieve a global currency. the lessons we're learning right now will be our education on the subject. if it's a scam, it will eventually come out, and we'll learn how to make the next one non-scammy. until then, people should be free to invest in this hobby, to win or lose money as they see fit. most of the audience your messages are reaching are very aware individuals who aren't easily fooled. every time you repeat "you're all being scammed!" you are insulting our collective intelligence. that doesn't mean I think you should refrain from commenting on the subject, but I would really like to see something more specific or substantial. most of what I'm seeing from you can be paraphrased as the above repeated statement. thanks, -wes -wes

=============================================================== From: Mike Harrison ------------------------------------------------------ knowing that you getting suckered like us. You could make the same = argument about being conned by Nintendo for their fancy computers and = expensive software that just waste time. I have a real interest in BitCoin, I just don't have time for another = hobby. It might be one that can be short-term profitable, possibly even = long term useful. and I have respect and admiration for the issues it is = generating and addressing publicly. But I don't, as yet, have a use for = it.=20 In some ways, it;s like Beanie Babies for geeks. Some people will make = some serious scratch off of it, and some, like my beloved mother-in-law, = will have a cabinet full of little furry animals. Or in this case, some = exotic computing hardware. If they have fun doing it, enjoy the process, = the learning, the mind-numbung concepts involved, I think it's the = greatest thing in the world. I think it's the first major break in an = evolution that needs to happen eventually to "money".=20 http://chugalug.org/widget/category/BitCoin and=20 http://chugalug.org/widget/keyword/BitCoin It now has it's own topic/keyword on the Chugalug list=85=20 For comparison: I just blew a bunch of cash making an RC (linux powered robot later?) = lawn mower.. it makes more sense to pay a guy $50 to mow my little lawn=85= =20 But building this has been a blast, cut out motor mounts last night, the = motor controller should show up today=85 but at least I'll be able to = mow the lawn with it. Practical: Hardly. Useful. Yes. Fun and = Interesting: Yes.=20 I toss BitCoin in the same category for now.=20 If I had gotten in when Daniel Applegate first opened my eyes to it=85 = I'd probably be raving about it.=20 =20

=============================================================== From: John Aldrich ------------------------------------------------------ Quoting wes : I, too, don't have a dog in the fight. I have considered getting into the "game", but I don't have an extra $5K to plunk down on something that won't even begin to pay me back until next year at the earliest. I guess I'll have to wait until the knock-offs start coming out and the price for these things drops. Right now it's a seller's market and Butterfly Labs is making a mint because there's a shortage of machines capable of doing this. One has to wonder if it's an intentional shortage or they just can't make 'em fast enough? Either way, the fact of the matter is they're getting rich as they are the only ones I know of producing the equipment.

=============================================================== From: James Nylen ------------------------------------------------------ In a gold rush, the people who really make money are the ones selling the shovels. Especially if they can create bigger and better shovels before anyone else, which gives them the opportunity to use them exclusively for a while... Having said that, there are still people who will buy shovels and make a lot of money by using them wisely.

=============================================================== From: Rod ------------------------------------------------------ So who is the central bank? One problems overlooked in the euro crisis is that those countries no longer have soveriegn currency that is managed by a central bank. Even the alleged Central Bank of the European Union lacks the basic authority that our Fed. has. What is the equivalent in bitcoins?

=============================================================== From: Lynn Dixon ------------------------------------------------------ there is no central authority in bitcoin. the entire network of peers functions to keep the currency managed.

=============================================================== From: wes ------------------------------------------------------ That is an excellent point - I believe having a central bank is a bad solution to an artificial problem. hopefully we can someday create a system that doesn't require one. -wes

=============================================================== From: Rod ------------------------------------------------------ A decentralized currency hasn't worked for the Euro.

=============================================================== From: James Nylen ------------------------------------------------------ Rod - The Euro is the EXACT OPPOSITE of decentralized. Wes - I think Bitcoin is an excellent "first attempt" at a decentralized currency.

=============================================================== From: Rod ------------------------------------------------------ I suggest you study what constitutes a sovereign currency.

=============================================================== From: James Nylen ------------------------------------------------------ Mike, I can't speak to what you said about "getting suckered" - you and I simply have a difference of opinion there. I'd advise people to steer clear of the However, your point about there being a "private key" to the Bitcoin "puzzle" is factually incorrect. Here, it may be helpful to have some background on the algorithm used to create new bitcoins. Bitcoin relies on a chain/tree of repeated SHA-256 hashes, and the "difficult" part of the "mining" process is finding a string which, when hashed by SHA-256, yields the required number of zero bits at the beginning of the hash. (This is very different from the algorithms underlying public/private key cryptography.) The only *known* way to create new bitcoins is to do a brute-force search over the solution space. There are several known ways in which Bitcoin could be broken or subverted: - A single entity controlling >50% of the network's total hashing power - they would still be obeying the cryptographic rules in place, but they would have some measure of control over which transactions are approved. - An attacker finding a flaw in the SHA-256 algorithm, which would enable them to gain a significant advantage in terms of earning new bitcoins. Much more intelligent people than I have taken apart the Bitcoin algorithms (after all, it's all open-source), and to my knowledge, these are the only significant vulnerabilities of Bitcoin that have not already been addressed in software updates. The first is being watched closely (for example, https://blockchain.info/pools). I'm not sure what consequences the second would have, but the SHA-256 / SHA-2 algorithm has been around for a long time without showing signs of cracking.

=============================================================== From: "Daniel L. Appleget" ------------------------------------------------------ HAHHAHAHAHAHAH (lol) -- Daniel Appleget Chattanooga Computer Service http://www.chattanoogacomputerservice.com/ 423-760-0879 Tu ne cede malis, sed contra audentior ito

=============================================================== From: "Daniel L. Appleget" ------------------------------------------------------

=============================================================== From: Mike Harrison ------------------------------------------------------ On Sep 5, 2013, at 3:09 PM, Daniel L. Appleget = wrote: bitcoin at Phreaknic this year. if I'm in country, I'm hoping to be there.=20 I love hacker cons.. Show up, pay cash, they hand you a blank badge.. :)