Bitcoin - Reality check for the naives out there

Brazil just gave us an example on how governments have virtually total control over regular peoples life.

The messaging app " whatsapp" got blocked for the whole country for about 48 hours.

Every time I comment about bitcoin been a scheme from the elites to give you a false sense of security some " expert" pop up to say I don't understand how bitcoin works.

Well, let me tell you that bitcoin can't exist without the internet. And since governments have total control over the internet, governments have total control over bitcoin.

I'm Tired of people like Max Kaiser and others so called " experts" trying to sell to the herd a false idea based on bogus theories.

If an emergent country like Brazil can easily put a cork on something the majority of their population use legally, imagine what America, Europe or Japan can do if they decide to go after bitcoin ?

I doubt it will ever happen because bitcoin is a tool designed to monitor underground markets, and if people lose confidence on it the scheme is gone.

So before you transact in bitcoin and feel safe about it, just contemplate the idea you may be fooling yourself !!

BitCoin will go away when economies recover.
It's already not so hot anymore ....

http://www.forexfactory.com/showthread.php?p=8651775

Your whole mindset about Bitcoin is wrong and negative! Y should governments became enemies of cryptocurrencies? The idea behind Bitcoin is to make online transactions easy, secure and cheap.
Be positive and as a Programmer I'm seeing a lot of potential on cryptocurrencies.

US economy already recovered enough it self and Bitcoin price against USD is still raising not falling!

LOL !!! I heard you bro !!

You are entitled to your opinion

If this is the only argument you have you might want to reconsider your opinion. The economy of an entire country can not exist without the internet in todays society. If any country decides to cut itself off of anyone else their currency is going to go diving south. This is not single handedly unique to bitcoins and currencies of a single country are much more easily manipulated by the government if they really want to.

Currencies used to represent the value of the goods being produced by the country but the relationship between the gdp and the exchange rates somehow diverged in the past few years. You still have trust a currency to be interchangeable for goods or some kind of service
and as no government with a stable economy is interested in a rapid inflation you can be sure that there is someone who will take action to secure the status quo.


Cryptocurrencies on the other hand lack a regulatory body which at least to some extend offers some kind of security or interest for the value of the bitcoin itself. Maybe such a self regulation is working fine maybe it is not but it's an interesting concept after all. I am not familiar enough with the forces acting behind everything but I will closely follow it's development.

Bitcoin is used to monitor the growth of the "economically discontent"

the simple minded first laugh an idea , then they fight it , then later on when its too late.. they accept it..

soon we will all be pissing bitcoins via numerous blockchains.

Everyone have a valid point, this is where we all go back to the basic economic of 'Supply and Demand'. Unfortunately bitcoin is too simple to be used in the global market, if it was effective the government would have seized it all, great example is the history of gold. The greatest threat of bitcoin is the absence of physical property, if it exist the world will be in hyperinflation.

numerous banks are creating there own block chains for securities settlements...soon it will be the main stream standard for payment processing etc

My apologies for being direct but this thread title is misinformation and the OP is speaking from sheer ignorance.

Firstly, good point, Kilian19.

The OP is proposing that Bitcoin's dependency on the internet is a core weakness and this is true. As Kilian19 points out government (centralized) control of networks applies equally to all dependent technologies - cellular, social media, ATMs, news (information), etc. Yet, to make a logical leap from this centralized control to saying that Bitcoin is a covert government tool is wild and is not supported by the facts.

Bitcoin's software and protocol has the qualities of being decentralized, trustless and censorship resistant.

To understand the decentralized and censorship resistant aspects, just think of BitTorrent. Bitcoin's network is a peer2peer network of nodes without hierarchy. Unlike Napster, which had a single centralized server, and therefore, was easily shutdown; Bitcoin has no center to attack. One government can attempt to block the protocol (or shutdown the internet thereby crippling their own economy, banking infrastructure and ability to communicate) but the Bitcoin network will continue to exist and function due to its decentralized network architecture distributed across many countries and in space. Whatever an authority in Brazil or China or the US does, your bitcoins continue existing and your transactions remain valid on a decentralized network and can be accessed by you or a person/application armed with your private key from anywhere in the network.

The fact that there is no center to attack, is part of what makes Bitcoin (and all blockchain apps) censorship-resistant. However, the algorithmic consensus mechanism at the heart of Bitcoin is what ensures that no single entity can dominate or alter the network's concept of history. So, no government or central bank or 3rd party can "control" Bitcoin or glean any information from the network that is not already available in its public ledger (the blockchain).

The trustless aspect, is perhaps the most interesting because the blockchain removes the need for transacting parties to trust one another. Either a transaction is valid, and based on valid history, or it is not. Only the owner of a particular sending Bitcoin wallet can initiate a transaction and only the owner of the private key of the receiving Bitcoin address can unlock those bitcoins. Subversion (or cheating) of this cryptographic transaction process is impossible due to repeatable mathematical determinism and the code being Open Source, publicly verifiable and sanctioned by peer review.

In effect Bitcoin is no more anonymous than cash, but it allows all the independence of cash - government knows that and central banks know that - and the FBI found that out during their investigation of Silk Road. The authorities were able to arrest the operator and seize his bitcoin wallet, but none of the millions who were using the site to buy guns, smack, weed or whatever illicit goods with bitcoin could be traced. It does not make bitcoin more dubious than cash, nor is there any good reason to outlaw bitcoin over cash. Those who control fiat cash can outlaw paper notes, but they cannot practically outlaw (or censor) Bitcoin. In fact, bitcoins can just as easily be transacted as paper notes - although such an exchange will still require a cryptographic validation in the end - whether via the internet or via ham radio. The prospect of a global disruption to the power grid, therefore, presents a challenge - as with all forms of currency and electronic transfer.

Bitcoin, provably, does not belong to any government, nor can any entity stop it or effectively censor it. To say so just means you haven't done your homework. The blockchain is pro-freedom and promotes autonomy. If you study it enough and extrapolate where the decentralizing effect of the blockchain is heading, you will see that it means the end of central banking, and of many other self-appointed corrupt institutions of our time. But one cartel at a time, right?

Away from the social change and disruptive aspects, anyone can effortlessly use Bitcoin to transact with Dell, Overstock.com, and a multitude of merchants ranging from datacenters to cellphone service providers to 7elevens across SE Asia and many other countries. It is really just becoming passe due to its low cost, ease of use and utility to everyone involved. If the NSA wants to label anyone a rebel soldier for using Bitcoin then, by the number of bitcoin transactions happening everyday, they have an average of 180,000 candidates to tag and track each 24 hour period. And the market is driven from China, despite Citibank and others being fully active in the market.

Thoughts about Bitcoin being "naughty" or seditious are just out of touch with its pervasive adoption. The central banks brought this upon themselves, but they continue protecting their market share, because there will always be those who need a centralized stamp of authority to feel that what they are doing is acceptable.

You make two assumptions:

1) That economies will recover.

From what? The 40 year credit expansion experiment that has no self-evident off-ramp to recovery? If it does, according to you, then what are the practical steps?

2) Bitcoin is "already not so hot anymore".

Increased network usage and exchange volumes indicate the opposite of what you're saying. Or are you going by look-and-feel from the popular media - the mouthpieces of a corner-painted capital finance gang?

I think people are missing the point.

I have no doubt bitcoin is viable or that the concept behind it is sound.

And by the way I'm talking about crypto-currencies in general not only bitcoin.

The problem I see is that nothing digital is 100% secure.

I remember seeing a documentary a while back where Julian Assange and 2 or 3 other top hackers were discussing how the assumption of a perfectly secure encryption is an illusion.

How can somebody say for sure, with 100% certainty, the government is not behind crypto- currencies? Or even if they did not created it, if is not cracked already, and they are monitoring everything?

Than some "coders" come and say: " Oh, you say that because you don't understand how the blockchain works"

Well, I may not be a guru as a coder, but I do understand that there is always a better coder than you somewhere in the world, and the government has resources to find the best of the best to do what they want to be done.

Just like Brazil did with whatsapp governments can block crypto-currencies nationwide ( or worldwide ) or just keep monitoring it as I think they are doing.

So the privacy you believe to be enjoying may be an illusion, because somebody is peeping through the key hole !!

Do you have any clue about cryptography?
Do you know anything about it?
And If u don't why u still talking about things you don't know anything about them?
My recommendation for you just leave this things and stick to thing you know and you are professional on it.

Bitcoin - and to some extend, gold - is a tool that gauges the activity of the conspiracy nut jobs.

Just in case you can't read properly

I believe you don't understand how Bitcoin works:

Firstly, there is no encrypted traffic on the network. It all happens in the clear - as a bytestream that anyone can read.

Secondly, the details of every transaction are recorded in the blockchain - the origin, the amount, the time, the destination. Anyone can see that and there are websites that allow you to easily search and explore transactions and their entire history back to the first transaction in 2009:

https://blockchain.info/block/000000...b3f1b60a8ce26f

So the idea that Bitcoin is private or anonymous is a popular misconception. Its all public and there are many people who monitor the network traffic - either because they're providing some kind of network service - or "the government" as you call it, can monitor the traffic, but its boring - like monitoring the flow of customers and their transactions at a busy bank.

Where the encryption comes in is at the time of creating a transaction. The receiver's public key is included in the transaction, so that when they want to access the bitcoins included in the transaction - only their private key can unlock and access the bitcoins. So, the encryption is a means of securing the transaction and not a means of obscuring (encrypting) the details of the transaction - which are made public at the moment the transaction is made.

Bitcoin is under continuous collaborative development and has been since the beginning. Aspects of the protocol have changed and the developers have also changed the type of encryption used on occasion. The decision to do so was done by consensus - a popular vote - so whatever "the government" had supposedly baked in there, has been changed.

The idea that government created Bitcoin becomes irrational if one questions their possible motive for creating an alternate payment network over which they have no control (or hope of control) and which fundamentally undermines the operations of their paymasters - the banks. That's like government creating BitTorrent so that they can monitor digital pirates - yes they can monitor all they like but they've also increased piracy exponentially and decreased the attack surface as well as making a censorship resistant BitTorrent network with no center. That is not logical and there is no benefit to government in such an outcome. Same as Bitcoin.

It is perhaps the misunderstanding that Bitcoin is private and everything about it encrypted that makes people take the contrarian position that it must therefore be a government tool with a cryptographic backdoor. As explained above, the only "encryption" used is in transaction signing where cryptographic keys are used - not to obscure transactions (which are public anyway) but to prevent theft of the bitcoins.

Bitcoin and all blockchain apps are fairly cumbersome because of the peer2peer design and the consensus mechanism which takes time and consumes a lot of resources. There are instances where transacting in bitcoin is appropriate, but most of the time a bank (e.g. Visa) transaction is more convenient, or even just plain old cash. Where a transaction needs to be highly secure or complex (e.g. a contract) - Bitcoin comes into its own. Again: "secure" does not mean secret and heavily encrypted (obscured), but simply that only the intended recipient can access and use the transaction's included bitcoins because only they hold the unlocking private key.

Nice post venzen. I always respect people showing some facts instead of just trolling.

Now I don't see anything new on what you wrote. Anybody familiar with bitcoin is supposed to know the basics on how it works.

Of course i don't buy the idea of cryptocurrencies giving you any kind of privacy but thats the propaganda behind it.

I also don't buy the assumption that the so called " private key" as you name it to be so private.

I believe governments have total control on everything digital. Be it P2P. encryption, servers data, etc.

They have the resources and the best brains at their disposal. Everything out there is either created or already cracked by them

And I take as fools people who think they can outsmart such a powerful institution!

I also appreciate the fact that we can have a reasonable discussion, ForexOracle - this is how we can move toward understanding in respectful way. Glad you value that also.

Let's assume for a minute that you are correct: everything digital is the brainchild and the domain of some Big Brother who also may or may not have direct influence on people's genetics and their thoughts. So TCP/IP, SSL, cryptography, all networks and all communications are transparent to this Overlord and its agents. To boot they may perhaps have more subtle control of populations and individuals' minds.

In this dystopian version of reality, everything is a not what it seems. The Matrix. People are going through the false motions of working and living under the control of and for the benefit of a small all-powerful elite. The daily reality is a false reality: people think they have viable cryptography but its actually transparent to those who have the master key. We see PhD mathematicians and their formulae for stronger and weaker encryption algorithms, but that is just misinformation being promoted by the Overlords - to feed the illusion that there is privacy or the hope of a right to privacy.

By implication then, the fact that Assange and some hackers discuss encryption and privacy in the context of secure document transmission is strange. Either they don't know that the Overlords have a master key, since they continue to use encryption for the purpose of whistleblowing. Or their characters are part of a show to promote the idea that there are people engaged in whistleblowing and encryption and exposing corruption, but its misinformation, again. The Overlords know everything that is happening on all networks, they monitor the activity of all citizens and nothing surprises them because they look through the Matrix and everything and everyone is transparent to them. Assange and his sort are actors because they cannot possibly accomplish real covert information discovery against a superior opponent - the Overlord will not be able to be fooled by encrypted documents being transmitted or discussed.

By this same token someone like Snowden is a red herring: him disclosing that there are certain things happening in the halls of power and in the secret police, and that there are certain encryption algorithms that present a challenge - that is intended misinformation too - to lure people into using those types of encryption precisely because it is vulnerable.

This kind of reality is fractured and every layer of appearance has deeper layers. We cannot know what is real and not real or what is true and to what extent, because the overlords control (and manipulate) the digital domain and the information that flows through it.

Now to the example of my reality - either way - whether the above is the case or not:

When I send out emails and documents to certain recipients and mailing lists, I sign it with my GPG public key, so that the recipients know the mail/documents came from me. If I want to obscure the content of the mail or documents I encrypt it with the recipient's public key. Only they (in theory) should have the private key (from which their public key was generated) and so, only they should be able to decrypt the information. It can be argued that all of the coders and mathematicians and PhDs who have worked on creating the GPG system and the public-private key technology it employs, are either actors (to give me the impression that I'm actually encrypting and securing information), or that they are misinformed - that the encryption algorithms will not really take 3 years to crack and require 3 trillion cycles to decypher. The mathematics, which is deterministic and repeatable, does not mean anything because an overlord knows of a shortcut that a team of encryption experts couldn't discover during their decades of work.

So, according to the dytopian reality, my encryption doesn't work against the overlord. Even if the overlord doesn't have a master key, the overlord has quantum computing to crack any encryption given enough time.

However, and here's practical reality, I'm not trying to hide anything from the overlord. Most people, myself included, don't encrypt to hide Rebel Alliance hyperspace rendezvous coordinates from an evil Empire. No, I just want the details of a bank account or a password in transmission to be obscured from casual prying eyes. If somebody (the police, for example) really want to know those details then they can just phone me and arrange an interview. If I'm satisfied why they want to know a bank account number I'll just tell them. They might not even need a warrant, or have to spend 3 months waiting for the GPG encryption to be cracked by a supercomputer somewhere. But the IT guy at the ISP where my email's delivery accidentally bounces, does not get to see that $1mil is going into such and such a bank account in the name of so-and-so. You see what I mean?

Similarly, a bitcoin private key, needed to access 5 BTC stored in a certain address, that private key can eventually be cracked - this is not a surprise - but the encryption used means that it will take a long time. So, even if someone is watching a blockexplorer and notices 1000 BTC being transferred into a certain Bitcoin address, they can kick-start their decryption supercomputer and get to work for the 3 to 5 years of continuous computing it will take to deduce a 256-bit Elliptic Curve generated private key based on the public key, which is public.

For government to monitor all bitcoin transactions they don't need to decrypt anything. In fact they can find out everything they want from the Bitcoin network itself or from public websites that make it possible to view any transaction, its content, its ancestors and so on. Bitcoin users and core developers don't regret this fact - that is the intended design: that all transactions should be public knowledge.

The only time that there is any cryptographic activity is when the transaction is created and when the recipient spends the bitcoins. Initially, their public key is used to sign (not encrypt) the transaction, and then (after they have received the bitcoins) when they want to spend those bitcoins, they have to provide their bitcoin wallet with the private key that matches their public key. This allows the bitcoins to be spent because they have proven ownership. Notice that none of what was described before happens on the Bitcoin network - all of the aforementioned happens on the users personal computer or device. The largest, most secure transactions can be created and signed "cold" - by a dedicated device that has never been connected to a network and can only be activated by the user's passphrase or some other biometric data.

Even casual bitcoin use, is nonetheless, fairly secure. This is demonstrated by the fact that of all the millions of Silk Road transactions in illicit goods, the authorities have never been able to track down even one of those people that paid with bitcoin. Yet, even if they could or ever did happen to somehow deduce my private key from any of my public keys out there, what they would have access to is a bitcoin address containing 0.1 BTC from which I paid the local mobile company for airtime. But then why spend the effort deducing the private key? They'd know already what the associated address contained because they can just go to a blockexplorer and see all those details in the public ledger, along with a note from me, included in the transaction: "0.01 BTC ($10) for airtime".

Bitcoin is convenient and secure but it is not private or anonymous. Like any other transaction method, to make a completely anonymous payment you have to do a lot of planning and use many covert techniques. This is where privacy and anonymity requires the person to depart from the digital realm to obscure their actions - and it is not something that Bitcoin pretends to make trivially possible as part of its normal operation.

I will never ever use bitcoin... but then again, I will never use facebook either (;
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