For a long time it has been becoming more and more difficult and dangerous to perform international transactions in fiat money. It has suddenly become a lot more difficult and dangerous. Crypto currency is replacing fiat currency. The breakdown of trust and trustworthiness means that there is no alternative. That is why crypto currency scaling problems are now biting hard, and will soon be biting a great deal harder. Bankers …
Tag: cryptocurrency
How to do cryptocurrency right
Proof of work tends to be inherently slow, has inherently high transaction costs, and the miner’s interests are not identical with those holding currency as a store of value and those using currency as a medium of exchange. Proof of stake is nontrival to get right. It is a form of the infamously difficult to understand (and infamously difficult to program correctly) Paxos protocol. The Paxos protocol has the great …
A bad time to invest in Bitcoin
Back in 2013 I urged people to invest in Bitcoin. Yesterday someone asked my cleaning lady to invest in Bitcoin. Now if someone had asked her to accept payment in Bitcoin, or send payment in Bitcoin, then this would be compelling evidence that one should invest in Bitcoin. But when cleaning ladies are asked to invest in Bitcoin, not a good investment. When Bitcoin began, everyone was a miner, and …
Cryptocurrency
Our financial system is corrupt and oppressive. Cryptocurrencies represent an opportunity to route around that system, and make lots of money doing so. Cryptocurrency is real, and presents the opportunity to make enormous amounts of money. Also, cryptocurrency scams are real, and present the opportunity to lose enormous amounts of money. Like the dot-com bubble in the 90s, you can add the concept of blockchain to just about anything and …
The bitcoin crisis
There can only be one. There can only be one money, at the root of all others. Money is a measure of value, a store of value, and a medium of exchange, and you want to uses the same medium of exchange and measure of value as everyone else. At the very beginning, I said the trouble with bitcoin, as originally designed, is that it does not scale. Everyone, to …
Bitcoin crisis
Back in the beginning, I argued bitcoin would not scale. The counter argument was that we could muddle our way through somehow with ad hoc solutions, which could be sort of true, in principle. The scaling problems started to bite in 2013. They are now biting really hard. The scaling problems are now well and truly here. Downloading the blockchain is slow and expensive. Doing transactions is slow, unpredictable, expensive, …
Silk Road 2.0 goes down
“This hidden site has been seized” We are going to need a heavily decentralized solution, so that if a relatively small number of nodes get shut down or taken over by law enforcement, the network continues to function correctly, and, because no single node is central, no single node has traffic patterns that make it stand out. The Tor hidden site system will always fail if a hidden site generates …
Bitcoin failure
For bitcoin to work politically, authority over the currency needs to be distributed over a large group of peers. If power is concentrated at a single point, the state can dominate that point, whoever controls that point can steal other people’s currency and do a variety of bad things. Bitcoin was designed so that “voting” depended on computing power and network connection. Initially, almost everyone who had a client was …
Technological failure of the silk road system
Silk Road servers stored all messages in the clear forever. The government placed malware on Tor exit nodes, located the Silk Road servers, raided servers, game over. Private messages should have been end to end encrypted, existing in the clear only on the computers of the sender and recipient, and should have been deniable, except for messages containing money, where the sender needed to be able to prove that the …
On ripple
Ripple is a scam cryptocurrency. Pity, since the alleged design is more scalable than bitcoin. A cryptocurrency is mainly worth its speculative value, worth the possibility it could replace the US$. Obviously Ripple is not going to replace the US$, being a wholly controlled muppet of Cathedral minions. If Ripple was funded by Baidu rather than Google, I would be on it like a tomcat on a pussy in heat.