back to article FORKING BitcoinXT: Is it really a coup or just more crypto-FUD?

Bitcoin is about to fork off. Too forking right, some of you may cheer. But a great many Bitcoin “users” – miners, developers, retailers and spenders – are against the idea. If you ask them about it, they’ll tell you they don’t like being forked about. Some of them say they couldn’t be forked. You thought Greece was in turmoil …

  1. DCLXV

    Biiiiig speculative play

    Bitcoin is so far proving itself to be practical as a money transfer service (like MoneyGram or Western Union) but liquidity doesn't seem to be great. I wonder if the black market vendors accepting it by the boatload are actually cashing out through dark pools or what, either way it feels like there are going to be a lot of people left holding the bag if there's a sudden crash in value. If Bitcoin flatlines, why would anyone bother buying it when everyone can just jump ship to another cryptocurrency?

    1. Sorry that handle is already taken. Silver badge

      Re: Biiiiig speculative play

      I don't even agree that it's practical.

      The network can handle fewer than three transactions per second. If everyone in the world was using it, they might be able to make one transaction in their lifetime.

      There's no guarantee that your transaction will be included in the next block.

      It effectively got DOSed recently by flooding the network with thousands of tiny transactions with fees large enough not to be ignored. It cost the person who did it only a few hundred dollars to do so.

      The network's energy consumption is on the order of hundreds of kilowatt-hours per transaction, and the miner subsidy is between $5 and $10 per transaction (although this tracks the exchange rate).

      To use it you either need to download and synchronise the blockchain (currently 40GB+ and several days), or trust some anonymous third party with your money.

      It's certainly good at teaching libertarians (the US sub-species thereof) and anarcho-capitalists exactly why we have banking regulations though.

      1. Sorry that handle is already taken. Silver badge

        Re: Biiiiig speculative play

        I forgot a really big one:

        If you send the money to the wrong address (either by accident or thanks to a bug in whichever poorly-tested software you're using), you'll never see it again.

        1. Doctor_Wibble
          Boffin

          Re: Biiiiig speculative play

          Worth noting this is what happens with real money too - certainly for direct transfers - the receiving account is not (unless the law changed?) under any legal obligation to give the money back because the mis-typed transfer was authenticated and the sender ticked a little box confirming they checked the details.

          Then again I'm just one of those luddites when it comes to money - do anything significant in-bank and by cheque if possible because then there's other provably-real people in the chain who sometimes even check what you did and there's papery stuff that everybody has to keep for whatever length of time. The ability to wave bits of paper is important because - heartbreakingly - you never get to see the actual money.

          1. Sorry that handle is already taken. Silver badge

            Re: Biiiiig speculative play

            For bank transfers that's simply not true. There are numerous examples of people receiving funds electronically, which were sent accidentally and to which they weren't entitled, and then getting into serious trouble when they withdrew and spent the money. If I fat-finger the account number or BSB when transferring funds electronically (fortunately to date I haven't managed to do this), and it ends up going to a location that doesn't exist, the transfer will eventually fail. There's no way to make it unspendable in this situation. If I instead accidentally send it to someone who does exist, my bank and their bank can at least attempt to sort it out. I've never done this so I couldn't tell you how it would go.

            The situation with bitcoin is quite different. If you mis-enter the address but it is still valid, even if nobody owns it, then the amount is lost forever. Calculating the private key for a wallet from its address is, by design, effectively impossible. If someone works out how to do that then the system collapses too. Anyway regardless of how likely this is, if it happens there is absolutely no recourse. Incidentally there are numerous novelty "burn" wallets out there (e.g. 1BitcoinEaterAddressDontSendf59kuE) which effectively destroy any amounts sent to them. If instead you send it to the wrong person you'll only get it back if 1) you know who you sent it to and 2) they're nice enough to return it.

            Also my bank is far less likely to accidentally send my money to the wrong place, or destroy it, as has happened numerous times with various poorly written pieces of bitcoin-related software.

            1. Doctor_Wibble

              Re: Biiiiig speculative play

              That's a lot of typing just to say "actually you do have to give the money back, and a new code of practice means the banks might even help" to someone who wasn't even disagreeing. Your stress pills are on their way.

              p.s. the "simply not true" is more complicated than that.

              1. Androgynous Cupboard Silver badge

                Re: Biiiiig speculative play

                This does actually happen, by the way: http://www.bbc.co.uk/news/world-asia-19364838

            2. Brangdon

              Re: Biiiiig speculative play

              Bitcoin addresses have a 32-bit checksum. You'd have to be pretty unlucky to fat-finger a valid address by chance.

  2. Tromos
    Joke

    XT

    It's the start of a slippery slope! Before you know it there will be BitcoinAT and that will be followed by BitcoinPS/2...

    1. Fruit and Nutcase Silver badge
      Unhappy

      Re: XT

      could have been worse - if the fork was named "XP" - which led us to Vista and now 10.

  3. Anonymous Coward
    Anonymous Coward

    worth a farthing

    So long as exchange rate holds.

    If it goes horribly horribly (and possibly hilariously) wrong, you're left with what?

    Whereas an actual farthing might have residual value as an improvised washer...

    1. werdsmith Silver badge

      Re: worth a farthing

      Whereas an actual farthing might have residual value as an improvised washer...

      So, in 1923 Weimar Germany a Mark was worth what ?

      1. Anonymous Coward
        Anonymous Coward

        Re: worth a farthing

        For those too young to have collected postage stamps from the days of the Weimar Republic - here is a page that sums up the inflation spiral. It shows stamps for 1923 - when the price of a standard domestic postage stamp went from 20 Marks to 50,000,000,000 Marks - in only 12 months.

        http://www.stamp-collecting-world.com/weimarrepublic_hyperb.html

        1. Ralph B

          Re: worth a farthing

          For a more recent example, take a look at the Zimbabwe Dollar. Apparently you'll currently need 35 quadrillion Zimbabwean dollars to get you 1 US$.

          1. Hans Neeson-Bumpsadese Silver badge

            Re: Zimbabwe Dollar

            Indeed. If you go the the British Museum (and I recommend that you do, 'cos it's great) they have on display a Zimbabwean magazine that was printed on banknotes because that was actually cheaper than buying real paper.

    2. Trigonoceps occipitalis

      Re: worth a farthing

      Between £1 and £2750 apparently, if uncirculated. Duckduckgo is your friend.

  4. frank ly Silver badge

    This is generally applicable

    "In future, everyone realised, this stuff has to be done with greater care and attention."

    But nobody ever remembers!

  5. Dr_N Silver badge

    PoopCoin

    I'm convinced.

    This will tie-in nicely with my new mobile pay-app concept, "iPlopr"

    1. Anonymous Coward
      Anonymous Coward

      Re: PoopCoin

      PoopCoin

      I'm convinced.

      This will tie-in nicely with my new mobile pay-app concept, "iPlopr"

      I'm sure it will make a big splash..

      1. Electron Shepherd
        Joke

        Re: PoopCoin

        Now there's a log I don't want to look at!

        1. Dr_N Silver badge

          Re: PoopCoin

          Payment with iPlopr will use NFC via a process to be named coiling-off....

      2. Jonathan Richards 1
        Go

        Re: PoopCoin

        > I'm sure it will make a big splash..

        ... or maybe not, if it has improved liquidity. Contactless payment, I'm assuming (and hoping!)

  6. Alistair Dabbs

    Transaction charge

    Each Poopcoin transaction completes almost instantly in a matter of weeks, for which I charge just 0.2 per cent* per transaction.

    I forgot to include the explanatory footnote in my column, so here it is:

    [* of your projected life earnings]

  7. Fraggle850

    I guess that eventually...

    The space required for the blockchain will grow to the point of unwieldyness if you assume that the use of the currency becomes increasingly widespread.

    E.G. Year 2025: bitcoin blockchain requires 1TB, I know storage costs shrink and pipes get fatter but I'd assume that the blockchain growth is exponential based on increasing numbers of users/miners/transactions

    That might be an interesting analysis to do...

    1. Fraggle850

      Unsurprisingly, it seems someone has

      It apparently currently stands at around 45GB and does appear to be exponential:

      https://blockchain.info/charts/blocks-size?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

      And it seems that there are currently 2/3 of all possible bitcoins in circulation: ~14 million out of an upper limit of ~21 million. This looks fairly linear:

      https://blockchain.info/charts/total-bitcoins?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

      The user numbers have also shown what looks like exponential growth too:

      https://blockchain.info/charts/my-wallet-n-users?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

      I know bugger all about this stuff; do all users have to have the total blockchain? Is it frequently stored locally? Are all the wallets in the cloud? Is the blockchain duplicated in each user's wallet?

      Not something I've paid much attention to but curious

      1. nuclearstar

        Re: Unsurprisingly, it seems someone has

        The blockchain doesnt duplicate to everyones wallet, since you can just have a wallet imprinted on a bit of paper, you can think of it just like an account number.

        But to get your current balance, you need to download the blockchain. This would take ages, for me when I found an old wallet I had on the D drive of my old laptop, I needed to redownload the whole blockchain, the quickest way I found was to download a recent snapshot of the blockchain from a torrent site, I cant remember the size at the time, probably like 25 gig. This was faster than downloading it via the bitcoin client. Then I just fired up the bitcoin client and got the latest updates to the block chain in an hour or 2 and finally saw my balance, 0.05 bitcoins :(

        This is why secure online wallets are probably better for the average joe user, no need to download the blockchain as the wallet host will keep it up to date on their servers. I don't know if you can download your wallet from the host or if it has to stay with them, but if it has to stay with them then there is no reason why you cant create a new offline wallet and just send the online wallet balance to that.

        I got out of all the bitcoin stuff a while ago though. I did have in total about £80 worth of bitcoins and just spent it on a new SSD on scan website.

        1. Fraggle850

          @ nuclearstar Re: Unsurprisingly, it seems someone has

          Cheers for the insight. I assume there was something that made you decide to divest your bitcoin holdings?

          I'm tending towards the 'pyramid scam' and/or 'ultimately doomed due to scaling issues' point of view so can't see a reason to get into it. Assuming the blockchain is duplicated in each online wallet and assuming it hits 1TB at some point then an online repository with 1000 users would require 1PB storage.

          I also wonder if the '~10 minutes for a transaction to process' figure that I've seen will grow over time too?

          1. nuclearstar

            Re: @ nuclearstar Unsurprisingly, it seems someone has

            I went in and out of bitcoin (and litecoin) a few times over the years. The most I ever had was 8 bitcoins

            But that was back when it was worth £10 per coin and that was home mining. I sold them because £80 to me then was a life saver when I was really struggling for cash, and then sold the gfx cards I used.

            That was also back when it was easier to sell bitcoins just via paypal. I know they were worth over a grand at some point but we all know what hindsight is, and besides they were worth less than a dollar just a few months before that.

            Now its much harder to actually sell your bitcoins for cold hard cash, you have to go through numerous different foreign exchanges and payment systems to eventually get to a bank transfer or paypal payment without having to pay a huge fee. YOu could just buy stuff with them but really there is no difference than buying it with normal money.

            There are UK exchanges where you can buy bitcoins really easily, but to sell them you need to have a lot to sell and send in loads of ID. I have been monitoring the price for ages and its really too volatile for me to be interested in spending my time trying to make a profit.

          2. Old Handle

            Re: @ nuclearstar Unsurprisingly, it seems someone has

            Assuming the blockchain is duplicated in each online wallet and assuming it hits 1TB at some point then an online repository with 1000 users would require 1PB storage.

            Sure, but there would be no need for that. If we're talking about general purpose "cloud" hosting being used for bitcoin, than I guess it would work out like you said (unless they used dedupe). But a purpose built bitcoin service would certainly not work that way. A "wallet" is really just a collection of private keys used to prove ownership of an address when spending coins from it. Mine weighs in at 96kb. Since the blockchain is the same for everybody, all the users could share one copy.

        2. Anonymous Coward
          Anonymous Coward

          scan.co.uk

          Ah, Scan's website. I've never bought off the website but I do go to their cool store for all my HW purchases (I live in Bolton).

          Twenty years or so ago they used to be in Little Lever. They had a sign behind the counter that said: 'You've tried the cowboys, now try the Indians.' They've not stopped growing and had to move to their present location.

          Brilliant! A super Bolton success story!

          1. Jan 0

            Re: scan.co.uk

            > 'You've tried the cowboys, now try the Indians.'

            Hmm, that reads like a sign on the side of builder's vans in the East End (of London), back in the '80s. Which Indians copied it?

      2. Jason Bloomberg Silver badge

        Re: Unsurprisingly, it seems someone has

        Wasn't there also an earlier El Reg article noting some limit on bitcoin transactions per second?

        It all seems to me like a typical pyramid scheme where the early adopters get rich while those last off the starting block are left holding the baby.

        1. Sorry that handle is already taken. Silver badge

          Re: Unsurprisingly, it seems someone has

          I'd assume that the blockchain growth is exponential based on increasing numbers of users/miners/transactions

          It's pretty much only the number of transactions that governs the growth. It does look vaguely exponential, but that's only because the network hasn't consistently hit the block size limit yet.

          Wasn't there also an earlier El Reg article noting some limit on bitcoin transactions per second?

          It can theoretically handle about seven transactions per second, but in practice (i.e. real-world transactions) the limit's about 2.7/s with the current 1MB blocks. Many of the big Chinese miners use a soft limit of ~750kB, which brings that down to 2/s. There is no guarantee that any particular transaction will be included in a block, and some miners don't even bother to include any transactions in their blocks.

          I also wonder if the '~10 minutes for a transaction to process' figure that I've seen will grow over time too?

          The mining rate of one block every ten minutes is hard coded (other cryptocurrencies have different rates). The network periodically adjusts the difficulty of the cryptographic hashing that "secures" it, such that regardless of the total hashrate of the network, the time between blocks averages out to ten minutes. Because it's all probabilistic, in practice there are occasionally periods of less than one minute and greater than an hour between blocks.

        2. Robert Grant

          Re: Unsurprisingly, it seems someone has

          the early adopters get rich while those last off the starting block are left holding the baby

          True, although that holds for all currencies.

    2. Dani Eder

      Re: I guess that eventually...

      Not every client needs to keep the complete transaction history. You can prune all addresses that now have zero balances (which is most of them) and are left with ~1 GB of transactions and addresses that are non-zero.

      When the block chain gets too big for home computers, you can set up subscription servers at data centers, with lots of hard drives. This was always a planned-for evolution. As long as there are many of these servers, and they are independent of each other, you can ensure the integrity of the transaction history

      My credit union, for example, has 73,000 members. They could easily host a 4U server with 36 x 4 TB hard drives. That allows for 3200 times growth over today's block chain size.

  8. JeffyPoooh Silver badge
    Pint

    Copy-and-Paste

    The Bitcoin concept (and reality) can be copied and pasted.

    PS. 'Requirement for computation', meet Moore's Law.

    1. Anonymous Coward
      Anonymous Coward

      Re: Copy-and-Paste

      If I remember correctly, someone made a framework for creating cookie cutter crypto-currencies. Scrypt? Something like that. Then people made gimmick currencies like Dogecoin with it.

  9. Tim Worstal

    What's always puzzled me is, where are the fraudsters?

    In the alt-coin world, just where are they?

    I've still not worked out whether Karpeles was simply gloriously incompetent or what and of course there's been a few standard ponzi schemes like bitcoin hedge funds and the like. But where are the real financial fraudsters?

    Given my interest as a connoisseur in financial "schemes" I can think of a couple of ways in which a small team (someone who actually understands the psychology of financial markets and a couple of tech heads) could wander off with a couple of $10s of millions by Christmas.

    It would even, probably, be legal. And yet I can't see this being done, or at least we're not hearing about it. And I really cannot work out why.

    And I don't mean running the usual scams just using alt-coins. The basic design of the very systems is an open invitation to anyone willing to try. So, why aren't they?

    Just don't get it myself.

    1. Sorry that handle is already taken. Silver badge

      Re: What's always puzzled me is, where are the fraudsters?

      For alt-coin fraudsters look up "Alex Green" (Ryan Kennedy) and Josh Garza (and his brother Carlos).

      Or anyone associated with a cloud mining operation...

    2. S4qFBxkFFg
      Go

      Re: What's always puzzled me is, where are the fraudsters?

      Given my interest as a connoisseur in financial "schemes" I can think of a couple of ways in which a small team (someone who actually understands the psychology of financial markets and a couple of tech heads) could wander off with a couple of $10s of millions by Christmas.

      It would even, probably, be legal. And yet I can't see this being done, or at least we're not hearing about it. And I really cannot work out why.

      Well, what are you waiting for?

    3. Don Dumb
      Terminator

      Re: What's always puzzled me is, where are the fraudsters?

      @Tim Worstall -

      I can think of a couple of ways in which a small team (someone who actually understands the psychology of financial markets and a couple of tech heads) could wander off with a couple of $10s of millions by Christmas.

      It would even, probably, be legal. And yet I can't see this being done, or at least we're not hearing about it. [emphasis mine]

      If you assume that there is a small team of people, well versed in psychology and technical matters, smart enough to game (legally or otherwise) a market to make several million. Why would you assume that you *would* hear about it?

      If these people are that smart they would hardly make a song and dance about it would they? Especially as soon as the cat is out of the bag they wont make any more money.

      Also the relevant cryptocurrency and exchange markets would hardly want to make a big deal of how their systems can be gamed so comprehensively, so they aren't likely to be giving press releases either.

      Could it not be quite possible that these 'big clearout wins' have happened and the winners have simply not advertised the fact or have deliberately kept quiet to avoid the authorities? Let's face it, someone did well out of Mt Gox and I can't imagine they are keen on anyone knowing whether legal or not.

      Lottery winners with brains don't inform the press how rich they suddenly are.

    4. auburnman

      Re: What's always puzzled me is, where are the fraudsters?

      Perhaps they are put off by the BlockChain being a very 'public' place to run a scam, and/or the people with the prerequisite knowledge of bitcoin to scam it have a vested interest in keeping it running - why walk off with £20M and leave the system in ashes behind you, when you could skim e.g. £1M/month for as long as the system runs?

    5. asdf Silver badge

      Re: What's always puzzled me is, where are the fraudsters?

      @ Tim Worstal

      Wow you are only a silver badge too? There goes my dreams of ever getting the gold star lol.

  10. Anonymous Coward
    Anonymous Coward

    All hail PoopCoin

    As long as we get to snort coke off the breasts of our female users, we will adopt this currency.

    I for one will begin working on an In-App-Purchase PoopCoin plugin for the Pooductive app.

  11. Mage Silver badge
    Devil

    Steve Bong?

    I smell collaboration.

    Bitcoin isn't a currency. It's a speculation medium.

  12. This post has been deleted by its author

    1. Alistair Dabbs

      Re: nice work there

      Indeed, I plan Poopcoin as dirty money. If I can get my hands on enough Poop, it'll make me filthy rich.

      1. Fraggle850

        Re: nice work there

        You should head on over to Westminster, I gather that they produce significant quantities of bullshit and some of them are well into dirty money - should be a rich seam to tap.

      2. Uncle Slacky Silver badge

        Re: nice work there

        Where there's muck, there's brass...

  13. Charles Manning

    Expending energy does not give bitcoin value.

    Any currency is only a share in something of value.

    A physical coin can either be exchanged for its value in metal (by melting it down) - a practice that is illegal in many countries, or it is a symbol for a share in an economy. Thus, the value of USA goods and assets is $x and $1 is 1/x of the value of that.

    That is inherently why printing more money causes inflation. If the money is printed faster than the value of the economy increases, then inflation occurs.

    Many have said that Bitcoin gets its scarcity value because it takes a lot of energy to mine one. Yes, it is true that making a new bitcoin takes increasing amounts of energy. But that is not enough. The resulting product still needs to have value.

    If I drive 300 miles to get a pebble from the beach, I cannot say that pebble is worth 300 miles of fuel, wear and tear and driver time. It is just a pebble, no more valuable than the thousands of pebbles in my driveway. It is only worth what I can con someone to believe a pebble is worth.

    That's the same with bitcoins. They are just a sequence of bits. Your CD collection has billions of sequences of bits. What makes these bits special?

    There is no legal framework (like there is with national currencies) that gives bitcoin value. Basically people have picked up pebbles and started trading with them. That's all fine until either:

    A) People get bored with the game.

    - or -

    B) Someone tries to change the game. We're now trading with acorns and not pebbles.

    History is littered with alternative currencies that have failed and bitcoin is just going to end up being one of those.

    1. Gordon 10 Silver badge

      Re: Expending energy does not give bitcoin value.

      It doesn't require a legal framework. Like every other currency to it just requires enough people buy into the consensus. That's why we get runs on banks and currencies when the consensual illusion breaks down.

  14. STZ

    Bitcoin and blockchain - not necessarily the same ...

    As has been pointed out, the current blockchain mechanism has severe bandwidth limitations (only a few transactions per second) and hence, is pretty unusable for a cryptocurrency meant to serve the masses - at least as long as many millions of end users need to be informed about each and every single transaction happening in the system. A cryptocurrency like Bitcoin could only work on a large scale if based on trusted intermediataries - so again, you would have to trust the banker.

    It has also been pointed out that a currency needs to represent something of value. Most people would be reluctant to see anything of value in a bunch of moot calculations and used-up electric energy. Furthermore, the average person would want a currency to be pretty stable - only speculators would want such high volatility as Bitcoin has shown in the past. But the average person would not want to be at the mercy of speculators ...

    However, the blockchain technology seems to have significant potential in other financial application areas, such as international money transfers between banks or clearing and settlement of stock transactions. These are applications serving smaller communities where bandwidth requirements and data volumes are moderate, hence blockchain could be a feasable technology.

  15. Joerg

    Bitcoin is just a huge criminal fraud by bankers!

    Bankers created the whole Bitcoin fraud.

    The same criminal bankers that caused the worldwide economic crisis.

    The same criminal bankers that keep stealing and cheating worldwide everywhere.

    1. Alistair Dabbs

      Re: Bitcoin is just a huge criminal fraud by bankers!

      It does have a hint of "pyramid scheme" about it, doesn't it?

  16. Henry Wertz 1 Gold badge

    Not a lesson for bankin regs

    "It's certainly good at teaching libertarians (the US sub-species thereof) and anarcho-capitalists exactly why we have banking regulations though."

    Given the terrible financial condition of many banks, and the corruption of the banking system, I don't take the few Bitcoin problems as a "teachable moment" to teach anything about why we have banking regulations. Don't get me wrong, I think it's a great idea to have enough regulation to make sure a bank actually holds onto deposits, and doesn't just blow everyone's money on bad investments... but that is not what is happening now.

    Many banks in the US, as well as abroad, are in absolutely terrible financial condition. The banking regulations are not being enforced in any meaningful way, and in fact (in the US) instead of letting some very incompetent banks go bankrupt (and having FDIC back whatever of the depositor's accounts is not covered once the bank is liquidated), the feds backed these incompetent banks financially (printing money, diluting the money suply and so reducing the value of EVERYBODY ELSE's), and those responsible for the incompetence got fat bonuses instead of being fired and/or imprisoned. These same incompetent banks are now re-investing in EXACTLY the types of investments that bankrupted them the first time (things like mortgage backed securities), since there is no penalty for doing so. This screws everyone else over, everyone else loses money if they lose money, the banks can make as ridiculously high-risk investments as they want, leverage everything, and the feds will just cover their loses for them, but of course they get to keep the profits.

  17. Henry Wertz 1 Gold badge

    Up and downsides

    To me, Bitcoin has several upsides and downsides.

    Upsides: 1) Secure transactions, it's proveable a transaction took place and to what wallet. 2) Limited bitcoin production rate. You know in the US, these jackasses were actually going to mint a $1 trillion platinum memorial coin, and just deposit that in the treasury so they could claim the feds had plenty of money on hand? They somehow think creating $1 trillion out of nothing whatsoever would not affect the inflation rate or people's perceptions of the currency. This can't happen with bitcoins.

    Downsides: 1) Scalablility. a) Number of bitcoins circulating is rather low if it becomes very widely used, it's a bit ridiculous to have to deal with like .000001BTC to make smaller transactions. b) The blockchain problem discussed.. 2) Possible market manipulation. The whole bitcoin market really is small enough that a few (or possibly just one) wealthy investor could manipulate values of the entire market; "buy low and sell high" is pretty easy when you can individually manipulate the price. 3) Volatility. I was shocked to see 1BTC is back down to like $228.28. It was like $800+ apiece a matter of months ago, and peaked at $1100 per BTC. 4) Exchanges. This is a concern of any currency, but due to Bitcoin's extreme volatility and size of the market could be a particular concern. If people are buying bitcoins low and selling them high, would this not eventually end up with exchanges with large amounts of bitcoins but few dollars? If someone actually wanted to cash in, say, 4,000 BTC (a bit over $900,000), would an exchange have enough money? Even if they had 1,000,000 BTC, could they *exchange* 4,000 BTC with any other exchanges to raise that much money in a reasonable length of time?

    Exploring the scalability problem, it really is tricky, even if a lot of bitcoin'ers agree on a new specification, there's the trick of "mining rigs", as well as making sure everyone who CAN switch over does so fast enough. I don't know for sure, but I have this suspicion that mining rig builders make take this as an opportunity to say "no software updates for you" for anything but the very latest model, and mining activity will somewhat drop off. If they rush a change, they'll use a lot of users, and if they don't rush it it'll probably never get done. Tricky.

  18. magickmark
    Alien

    DNA of Course

    The Obligatory Douglas Adams quote of course:

    “Thank you. Since we decided a few weeks ago to adopt the leaf as legal tender, we have, of course, all become immensely rich. [...]

    "But we have also," continued the management consultant, "run into a small inflation problem on account of the high level of leaf availability, which means that, I gather, the current going rate has something like three deciduous forests buying on ship's peanut." [...]

    "So in order to obviate this problem," he continued, "and effectively revalue the leaf, we are about to embark on a massive defoliation campaign, and...er, burn down all the forests. I think you'll all agree that's a sensible move under the circumstances.”

    Life, the Universe and Everything

  19. Urh
    Paris Hilton

    Safe? I think not

    "It means anyone and everyone can spend and receive Bitcoins in a sensible, safe and self-managed way"

    Yes, Bitcoin is incredibly secure and safe, which is why chargebacks are impossible and the acronym SFYL is part of the bitcoin lexicon.

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