[Cryptography] Securing cryptocurrencies

[Phillip Hallam-Baker]

On Wed, Mar 11, 2015 at 6:30 PM, Bill Cox <waywardgeek at gmail.com> wrote:

> On Tue, Mar 10, 2015 at 10:26 PM, Peter Todd <pete at petertodd.org> wrote:
>
>> It's worth considering that Bitcoin's SHA256 proof-of-work *is*
>> performing some very usful mathematical research with real-world
>> implications that answers the following question:
>>
>>     Is SHA256 broken?
>>
>>
> BitCoin has also shown that the typical PBKDF2-SHA256(1000) is essentially
> broken.
>

There is a much more interesting result in social engineering: It is not
necessary for a Ponzi scheme to be orchestrated by a profit seeking
individual. A group of highly intelligent people are quite capable of
constructing a private reality and commit roughly a billion dollars of real
money to it despite abundant evidence that what they are doing makes no
sense.

The Euro recently declined by 25% in a year and people are wondering about
its viability because price stability is an essential property of a
currency. Meanwhile we are told that bitcoin is great because of the
volatility.

This result is important because it provides an explanation of the workings
of Wall Street and other financial markets that would otherwise be
inexplicable.


On the plus side, BitCoin fever has brought a lot of new folk into the
crypto field which remains understaffed. But in the short term a lot of the
new entrants have let to learn than running a BitCoin wallet app on your
phone and reading the literature on it does not make a person an expert in
security.
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