[Cryptography] BitCoin bug reported

ianG iang at iang.org
Thu Feb 13 18:36:34 EST 2014

On 10/02/2014 16:03 pm, Phillip Hallam-Baker wrote:
> The MtGox people are claiming that the reason they have been offline is a
> bug in the BitCoin protocol:
> https://www.mtgox.com/press_release_20140210.html
> Does anyone with deep knowledge of the protocol know if this is a credible
> explanation?

It's partly credible, although I say it from a knowledge of payment
protocols, not Bitcoin.


> I am getting mighty fed up of a group of people who mouth off constantly
> that we can't trust the government but take great offense and try to bully
> anyone who asks questions about the scheme.

That's the market place.  We saw this with the first wave, based on
Digicash.  As a personal anecdote, we were doing psuedonymous payments
with a confidential accounting;  but we were consistently hammered
because this was alleged to be a privacy disaster.

In comparison Bitcoin is a psuedonymous payment system with a public
accounting.  Strictly worse from a privacy perspective.

The real thing that is going on (both times) is that the 99% fanbase
cannot actually analyse anything at the level of people in say this
mailgroup, no matter how you try.  They fixate on some token.  In the
earlier wave, it was the blinding formula that offered untraceability
(which wasn't, but that's a sort of insider secret).  In this latter
wave it is the blockchain to mediate without centralised control (which
again has some limitations, but sigh.).

The vast 99% of the people there have no clue except "blockchain".  Of
the remaining, 99% of them haven't the experience of the alternates to
be able to debate or analyse the edge cases.  For the most part, most of
the people involved are new to the payment systems biz.

It's sad.  I see sooooo many repeated mistakes, I really don't care anymore.

> There are some people in the community that I trust completely. But some of
> the names involved in the BitCoin world are people that I know I can;t
> trust and neither can anyone else. They have lied to and cheated me, they
> have lied to and cheated others.

Ah. That's a different thing.  We saw the same thing with e-gold.  Where
money is involved, so come the scammers.  The arbitrageurs.  The fast
business types.  The used car salesmen.  The believers.  The
quick-buckers.  The missionaries.

The victims.

The problem is more one of, how do you work your way through these to
get to the sort of people we are more used to dealing with.  And a sort
of mental dissonance we have to deal with, which is, just because
bitcoin is based on crypto, this isn't a crypto community.

> They are currently using as much electricity as the nation of Cyprus. This
> is way beyond a science project. If it continues then in a few years
> BitCoin will be taking all the electricity generated by the Three Gorges
> Dam project. Which is why I suspect China will soon be introducing condign
> punishments for mining.

Yes, it doesn't scale.  Oh well.

> Its not a Ponzi scheme,

That depends... on your definition.

> but the design of the blockchain it pretty
> interesting. Since the upper limit on the value of a bitcoin is set by the
> cost of electricity to mine it, the value increases as the difficulty of
> mining increases. Since that is exponential, there is a built in bubble
> factor.

Yeah, it has built in bubble mechanics.  I would see it more as an
amplification of changes in supply and demand.  With some upper limits
that will hit at times unexpected.

The thing is, crypto doesn't really solve everything.  Once you get
people involved, things change.  The events of the last week are really
about people, not crypto.


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