Bitcoin has failed (from a former key Bitcoin developer, Mike Hearn, Jan 2016)

[ThePythonicCow]

Three days ago, one of the better known Bitcoin developers, Mike Hearn, announced that he had quit bitcoin, ceased all development activity on it, sold all his coins, and determined that the Bitcoin experiment had failed.

Two basic properties of Bitcoin technology and community led to this failure (in my summation of Mike's analysis):

Maintaining distributed control required that many users and miners downloaded and verified the entire chain of blocks that defined all bitcoin transactions. This becomes increasingly expensive to do, and is now limiting world-wide bitcoin transactions to a few per second, in total, with processing delays ranging from one to eighteen hours.
Proposed technical fixes (or even bandaids) to this problem are impossible, because a handful (as in two to ten or so) Chinese miners dominate the entire Bitcoin infrastructure and have chosen to ban, prohibit, attack with massive Denial of Service attacks, and otherwise, by all necessary means, block discussion or implementation of any such changes.

In my view, such block chain technology, requiring all participants to either actively maintain their own updating copy of a world-wide, eternally growing, database, or if they don't do so locally on their own smart phone, to trust some service or vendor company to do so for them, inevitably become centralized under the control of whichever participants acquire the dominant computing and communications infrastructure.

Bitcoin is now hitting this wall. It's a walking dead man.

With a recent change that allows someone who just sent a bitcoin to another to retract that transaction, up until whenever that transaction shows up on the master block list, hours later, Bitcoins are no longer even a reliable means of payment. You can buy something, pay for it with Bitcoin, walk away with the goods in hand, and then cancel the payment.

Mike Hearn writes up the details at The resolution of the Bitcoin experiment (https://medium.com/@octskyward/the-resolution-of-the-bitcoin-experiment-dabb30201f7).

Bottom line: Bitcoin is dead.

Other knockoff block chain payment methods would, from what I can see, suffer from similar vulnerabilities. The more successful anyone of them become, the more risk they will fail in similar ways.

[lucidity]

Three days ago, one of the better known Bitcoin developers, Mike Hearn, announced that he had quit bitcoin, ceased all development activity on it, sold all his coins, and determined that the Bitcoin experiment had failed.

Two basic properties of Bitcoin technology and community led to this failure (in my summation of Mike's analysis):

Maintaining distributed control required that many users and miners downloaded and verified the entire chain of blocks that defined all bitcoin transactions. This becomes increasingly expensive to do, and is now limiting world-wide bitcoin transactions to a few per second, in total, with processing delays ranging from one to eighteen hours.
Proposed technical fixes (or even bandaids) to this problem are impossible, because a handful (as in two to ten or so) Chinese miners dominate the entire Bitcoin infrastructure and have chosen to ban, prohibit, attack with massive Denial of Service attacks, and otherwise, by all necessary means, block discussion or implementation of any such changes.

In my view, such block chain technology, requiring all participants to either actively maintain their own updating copy of a world-wide, eternally growing, database, or if they don't do so locally on their own smart phone, to trust some service or vendor company to do so for them, inevitably become centralized under the control of whichever participants acquire the dominant computing and communications infrastructure.

Bitcoin is now hitting this wall. It's a walking dead man.

With a recent change that allows someone who just sent a bitcoin to another to retract that transaction, up until whenever that transaction shows up on the master block list, hours later, Bitcoins are no longer even a reliable means of payment. You can buy something, pay for it with Bitcoin, walk away with the goods in hand, and then cancel the payment.

Mike Hearn writes up the details at The resolution of the Bitcoin experiment (https://medium.com/@octskyward/the-resolution-of-the-bitcoin-experiment-dabb30201f7).

Bottom line: Bitcoin is dead.

Other knockoff block chain payment methods would, from what I can see, suffer from similar vulnerabilities. The more successful anyone of them become, the more risk they will fail in similar ways.

The conclusion here isn't credible... even remotely.
We've had 'bitcoin is dead' stories before. Google "bitcoin is dead" or "bitcoin is dying"
These stories seem to surface just before bitcoin surges in popularity and value.

As previously, this is a propaganda attack on bitcoin.
The only thing threatened by bitcoin is the *monopoly* of the big banks.
It's their power and their resources which has been targeted against bitcoin.
Probably it's the threats and/or bribery of the banksters that have lead to Mike Hearn's attack.

Bitcoin has been gaining it's momentum recently.
Bitcoin started 2015 around $225 and finished at $350... That's better than a 50% gain on the year!
In the last few days it reached up to $400.
Both the value of bitcoin and it's trading volume has been increasing steadily over the last 2 years.
And the number of websites and merchants that have adopted facilities for accepting bitcoin
has grown steadily since 2013.

I strongly suspect that it's because bitcoin has been showing signs of steady growth
that this attack is being launched against it. The point of-course is to shake confidence
in the currency and retard it's growth.

We don't know the circumstances behind Mike Hearn's actions.
Maybe the banksters have bribed him.
Maybe the banksters have threatened him (or his family)
Maybe he's just going through a rough emotional time.

The issue with the length of the blockchain is nonsense.
(a) There is already a well known fix available which is to declare an arbitrary recent block as
the new genesis block. Instead of having to build a 60 gig blockchain we start a new block chain.
(b) A sizeable number of people use bitcoin via the online blockchain.info wallet -- this doesn't
require you to build a blockchain. And even using a client at home, on your own computer, you
can use the electrum wallet, which requires only that you build a partial blockchain, 6 gig not 60.

Remember that the world is going through a economic downturn as the US economy is
going through a depression (courtesy of the fraudulent banksters) .
This is very good news for bitcoin. Bitcoin is a safe haven, no bankers can inflate the
bitcoin supply or otherwise manipulate it for political purposes. It will gain value
when other world currencies are losing theirs... via the usual 'capital flight' mechanism
(in this respect bitcoin has become like gold and silver .. though gold and silver markets
are now rigged by central banks)

There's currently a 2% gap between bid and ask prices. This means for anyone trading
bitcoin on the markets you're looking at a notional 2% profit. For people trading bitcoin
via localbitcoins.com the gap between buying and selling prices varies between 5% and 15%.
It's profitable business.

The bitcoin price and bitcoin adoption are heading north and will continue to do so for the rest of the century.

Bitcoin's going to $1000 (probably within the next 5 years)
If there is a massive banking collapse the value of bitcoin could
go to the moon... take a guess £2000 or £5000 ... anyone's guess.

My advice is buy and hold as a long term investment.

be happy

lucidity

[Morbid]

yeah claiming that bitcoin failed while promoting his own fork is rather intelligent move. if i wanted a crypto that can handle more transactions i would surely not choose bitcoin xt - there are much more advanced generation 3 protocols out there that each written for a specific task. i personally see bitcoin in long term as an equivalent to digital gold. how many physical gold transactions do we have per minute around the world? - not that many, so the existing protocol can handle it into future without any problems. if i wanted to have some pocket money i would have another fast coin on my device to shop in supermarkets etc.. why would i ever shop using savings account?

edit:
all i have to say dont draw your conclusions prematurely. before being definitive with your thought try to at least understand the big picture here. dont fall into fear and speculation. so instead of going ahead and following someone's opinion, at least try to construct your own. if its too difficult for you then ask me any question regarding the matter i'll try to reply in an unbiased manner.

times move on. systems change. better to be informed to adapt quicker.

[ozmirage]

BITCOIN, like all other forms of non-commodity mediums of exchange (aka "money") suffer from the paradox they represent.

In BARTER, all parties to the trade are satisfied. No money is exchanged.

But for trades other than barter, a means to pass value to a future trade is needed. Most people believe that "money" is, but remember, the money remains AFTER the trade, so if money has intrinsic value, it did not pass value.

In contrast, if one tendered a coupon (promissory note) for a "Micky D burger", once discharged, the coupon would be extinguished, having facilitated a trade. Ditto, for a check or draft.

Summed up : Money madness is the belief that money has an intrinsic value independent of the marketplace, which defeats the function of a medium of exchange - to pass value to a future trade. By retaining value, after all trades are complete, leads people to hoard it and thus impairs trade. There is no correlation between the whole set of money tokens and the marketplace of goods and services.

This is true for government protected currencies, as well as experiments in money like BITCOIN.

As the economy grows, eventually it outpaces the supply of money tokens, regardless of the velocity of money, and triggers collapse.

Moneyless societies (aka "primitive cultures") are not fooled by money madness.

Reality is based on goods and services, not abstract representations of "value" (price) denominated in yellow metal coins.

Prosperity is not based on money tokens, no matter what their form is.
Prosperity is based on production, trade and enjoyment of surplus usable goods and services. Doing more with less so more can enjoy is superior to doing less with more so few can enjoy.

Money madness has nothing to do with prosperity, except throttle it by scarcity and usury.

[Daozen]

There is enough brainpower in the BTC pool for them to get over all these problems. Interesting thread....

BTC is still trading at 378USD to 1 BTC. I remember when it was at 6.

I think it'll be around a while yet.

[giovonni]

The Anarchast Ep. 265
Roger Ver: Rumors of Bitcoin's Death Have Been Greatly Exaggerated



Jeff interviews top Bitcoin expert, Roger Ver, to counter the mis-information about the death of Bitcoin that has been circulating recently. Topics include: Mike Hearn's declaration on the death of Bitcoin, this is actually another buying opportunity, it is Bitcoin's popularity that is causing the congestion, the block size situation is about to be resolved anyway, the rising fees issue is greatly exaggerated, banks charged Roger $80 to move dollars while the same transaction in BTC would be 4 cents, Mike Hearn's motivations and conflict of interest, the arguments around increasing the block size, the censorship of dissenting opinion in BTC forums, BTC is actually the opposite of dead!

Bitcoin.com: https://www.bitcoin.com/

Forum.bitcoin.com: https://forum.bitcoin.com/

Published on Jan 17, 2016


http://www.youtube.com/watch?v=25DO6H8T7eU&feature=em-uploademail

[tomfellows]

We don't know the circumstances behind Mike Hearn's actions.
Maybe the banksters have bribed him.
Maybe the banksters have threatened him (or his family)
Maybe he's just going through a rough emotional time.


Mike Hearns has taken a job with a start-up company 'R3'
selling the blockchain technology to the banking sector!
(so the startup is probably financed by one or more banks)
Perhaps Hearns will earn more at his new role.

This makes it look as if Mike Hearns knew in advance that
he was going to be leaving and hence planned to bring this
negative media attention upon bitcoin. That is, sabotage.

His fork of bitcoin is called "Bitcoin XT".
Perhaps this is a trojan horse.

tom

[ozmirage]

Addendum:
The fixation on money as a form of madness is easy to demonstrate.

Let us end poverty and need by granting everyone 22 billion billion quatloos, making them "Set for Life," with more money than they can ever spend.
No one “needs money” ever again. Poverty abolished. Wealth equality for everyone.

Uh, no.

If no one needs money, ever again, would anyone wish to go work? What happens if no one bothers to go to work, labor, manufacture, transport, and trade?

What is the worth of that money if there’s nothing to buy with it?

Unless people engage in useful labor to produce surplus goods and services, civilization collapses.

Humanity has to learn that being productive is what civilized people do, to generate prosperity.

Otherwise, we'll self destruct from the predators who use money madness to prosper at the expense of others.

[ThePythonicCow]

Bitcoin might suffer from the same problem as the Internet.

Both instantaneous digital communication and instantaneous digital money exchange could have been the key to humanity's freedom from the bastards who have ruled this planet for far too long. However both are subject to being used for even greater control of humanity, if sufficient compute and communications capability is concentrated in the hands of too few.

In the case of Bitcoin, as Bitcoin expert, Roger Ver, noted in a post above, transfer of wealth is cheap and fast, within the Bitcoin walled garden, but getting wealth in and back out of that walled garden is subject to the same fees and regulations as money transfers in general are. We ordinary humans will only prey the control of that capability from the cold dead hands of the bastards ruling over us.

So Bitcoin becomes little more than a trial balloon, on the way to world-wide digital currency, administered and controlled by large institutions under the control of the same bastards controlling us now. Sure, transfer will be easy, as transferring information is easy on the Internet ... until when and if the controllers monitoring all this have some reason to exercise greater specific control over some individuals or groups in particular.

Control of food, travel, information, money and violent force goes to those with the greatest concentrations of power and capability ... and that's not you or me.

The weakness of the bastards is in their inability to similarly concentrate power over the higher levels of human awareness and being, other than by continuing to keep us sufficiently "dumbed down" and toxic that we cannot function well at such higher levels.

[Heartsong]

Thank you Paul for your explanations of things way beyond my knowing. I don't always agree with your politics but you explain your perspective in words I understand. Again, thank you.

[risveglio]

I am very interested in where this discussion leads. Bitcoin has been good to me and with the release of services like purse, I figured it was a no brainer but I don't know if I would be comfortable putting in $400 for 1 btc. But if you are planning to make a big purchase on Amazon, it seems like a no brainer

[ponda]

Interesting Keiser Report.They touch on Mike Hearn quitting BitCoin and a bit more.



Every week Max Keiser looks at all the scandal behind the financial news headlines. In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss whiny ragequitting in order to join a banking system with life-or-death power but where no real auditing is possible. In the second half, Max interviews investor Stephen Kendal and his terrifying derivatives model which shows the debt bubble growing larger and larger before each of the last two financial crises, whilst the markets stay the same size.



http://www.youtube.com/watch?v=ILAvlQsgeno

[ThePythonicCow]

More evidence that Bitcoin is in trouble ... from my new heart throb, Amanda B. Johnson at The Daily Decrypt:
ckRPUqnFlIs
Nodecounter.com is complaining, in a biting public notice about Blockstream corruption and crippling Bitcoin. Someone posted an image copy of Nodecounter's public notice here http://imgur.com/gallery/obew7mE.

In other Bitcoin news, transaction confirmation times are getting longer, as their system is being overloaded, and their key developers have been unable for over a year now on how to address the problem, which involves expanding the number of transactions (size of a block holding newly submitted transactions) that can be handled each cycle.

In my (not very well informed) opinion, crypto currencies will become a battle between (1) other separate (not Bitcoin) efforts that are better managed and engineered than Bitcoin is (was), and (2) the major banks and central banks, who are rumored to have substantial efforts underway to develop block chain technology (in a way that they control of course.)

Of course, only one of these two efforts will defend our Fundamental human right to transact money anonymously, physically, "off the grid". (http://projectavalon.net/forum4/showthread.php?89512-A-fundamental-human-right-To-transact-money-anonymously-physically-off-the-grid-.)

[ThePythonicCow]

Here's more details on the increasing dominance of large banks in block chain technology and cryto-currencies. Blockstream, funded by major corporations, is working to meet their needs, and is funding and assuming control of the underlying Bitcoin code base.
6oowBF70HxM
Bitcoin Development Now Funded by Several Multinational Corporations

[mgray]

Don't know about its death, but the tech behind Bitcoin -- block chain is behind many new alternative banking firms.

Blythe Masters formerly of JPM silver price suppression fame is leading a startup that has backing of Wall St. including JPM.

[ThePythonicCow]

Don't know about its death, but the tech behind Bitcoin -- block chain is behind many new alternative banking firms.
Yes - the block chain lives on. I'd guess that Bitcoin is being turned into the failed early popular version, that gains attention and enthusiasm, only to fail miserably, thereby justifying a more centrally regulated variant.

I predict that most major financial transactions involving nations, corporations, central banks and financial institutions, a decade from now, will be settled using block chain technology.

[mgray]

Maybe sooner. Or perhaps the $100M Bangladeshi cash stolen from the NY Fed was the first transaction. LOL

[Anchor]

I used Bitcoin just a few days ago to buy some intangible assets for which Mastercard is no longer an option. (Quota on a premium fileshare service).

Pretty sure I will be using it in a year as well to do the same.

Bitcoin (and technology like it) is here to stay, it needs work, but I doubt it is "dead" - I read about that Mike Hearn piece when it happened and concluded it was a dummy spit because he didn't get his own way.

I think DASH is a pretty good model for the way forward.

[PathWalker]

Hfunding and assuming control of the underlying Bitcoin code base.


As I stated before, bitcoin and other crypto currencies. Are regulated by controlling the software code (program).
Therefore the "Open Source" paradigm is just an illusion. The person who controls the software patching (what is accepted/rejected) actually controls the currency.
She can decide about change the crypto algorithm, distribution, top limit and other "scared" assumptions about the "Public Open" crypto currencies.
It is easy to take over such a code base.

After all it is not the technology innovation it is about the interests/politics behind it.

[ThePythonicCow]

Therefore the "Open Source" paradigm is just an illusion.
I have a different view of Open Source. I have been heavily involved in Open Source for over twenty years :).

The point of Open Source is not that its control is open, for yes, as you observe, he who controls the source for something controls what it can or cannot do.

The point of Open Source is that the source is available for others to understand and adapt, whether in minor ways to fix some problem or in major ways as the base for something quite different.

For example, one of the up and coming success stories of cryptocurrencies, at present, is a project called Dash. It started, as did many cryptocurrencies, with the Bitcoin source, and continues to leverage that source heavily. But it is driven by someone else, making different choices.


After all it is not the technology innovation it is about the interests/politics behind it.
Both are major elements here - the block chain technology and the substantial financial/monetary politics.

[ThePythonicCow]

Bitcoin (and technology like it) is here to stay
Technology like it is definitely here to stay.

However the particular implementation called Bitcoin is at risk of becoming a train wreck, I suspect by the deliberate sabotage of some minions of the Bastards in Power.

[waves]

....In my (not very well informed) opinion, crypto currencies will become a battle between (1) other separate (not Bitcoin) efforts that are better managed and engineered than Bitcoin is (was), and (2) the major banks and central banks, who are rumored to have substantial efforts underway to develop block chain technology (in a way that they control of course.)....
[/url]

That's my question. Is it inevitable that there's going to be more than one cryptocurrency? I tried to caution a friend recently from buying a block of OneCoin that looked like an MLM to me from a surface search. Does anyone know of any other legitimate competitors on the horizon?

[ThePythonicCow]

That's my question. Is it inevitable that there's going to be more than one cryptocurrency? I tried to caution a friend recently from buying a block of OneCoin that looked like an MLM to me from a surface search. Does anyone know of any other legitimate competitors on the horizon?
There are some 300 to 500 CrytoCurrencies that have sprung up in the last couple of years, and I'd wager that some 290 to 490 of them are reasonable facsimiles of an MLM :).

Correction - there are currently 703 cryptocurrencies in the roster at http://coinmarketcap.com

I'd stick to the top 10 or 20 most of the time (if I actually had any reason to use any of them, which I don't happen to at the moment.) Over time, I have seen more substance to Ethereum, Litecoin, Dash and Dogecoin ... but that's just my casual impressions from my superficial and infrequent surveys of the space.

The big battle, in my view, will be over whether they are outlawed, except for those used and controlled by Banksters.

[Anchor]

My local fiat to bitcoin conversion service is provided by btcMarkets in Australia. They only deal in Bitcoin, Litecoin and Ethereum.

I suspect they do not deal in Dash due to its anonymizing features - features that bitcoin lacks :)

[Morbid]

at the end of the day the exchange medium is as good as it can be used and implemented into day to day life. currently the bitcoin is the only one which is widely accepted (comparing to other cryptos). there is even a company that gives you a card which sets up an account with whatever you throw into your wallet address. i mean i can shop anywhere i want just like with any other plastic.

www.xapo.com

[ThePythonicCow]

Another take on bitcoin, and the potentially catastrophic stresses it might encounter when it halves again, expected to happen in July 2016:
_NgFIj9dBkQ

[PathWalker]

Bitcoin Cryptography Broken in 2016
https://www.betmoose.com/bet/bitcoin-cryptography-broken-in-2016-1337

The digital signature scheme of bitcoin with SHA256+secp256k1 ECDSA will be broken before 18 December 2016 by cryptography researchers.
The attack should allow to forge digital signatures for at least a proportion of 1/1 million bitcoin users and steal money from them.
It should be done faster than 2^100 point additions total including the time to examine the data.
I doubt this is for real. Seems like another FUD to the blockchain technology.

[ozmirage]

I am skeptical of any medium of exchange that is created by those who did not produce goods nor services to trade.

And Then There Were None
http://www.abelard.org/e-f-russell.php
Synopsis: A short story that contrasts the authoritarian / totalitarian police state with the total freedom and sovereignty of people who will not consent. Also delves into the use of non-money (liberty money) to facilitate equitable trade.

[ThePythonicCow]

Bitcoin Cryptography Broken in 2016
https://www.betmoose.com/bet/bitcoin-cryptography-broken-in-2016-1337

The digital signature scheme of bitcoin with SHA256+secp256k1 ECDSA will be broken before 18 December 2016 by cryptography researchers.
The attack should allow to forge digital signatures for at least a proportion of 1/1 million bitcoin users and steal money from them.
It should be done faster than 2^100 point additions total including the time to examine the data.
I doubt this is for real. Seems like another FUD to the blockchain technology.

The participants in the BetMoose site you found that at agree with you -- unlikely.

They are currently betting at odds of 28 to 2 that that (blockchain breakage) will not happen by then.

[PathWalker]

Founder of Bitcoin reveals himself?
Craig Wright revealed as Bitcoin creator Satoshi Nakamoto
http://www.bbc.com/news/technology-36168863

Signed blocks

Mr Wright has revealed his identity to three media organisations - the BBC, the Economist and GQ.

At the meeting with the BBC, Mr Wright digitally signed messages using cryptographic keys created during the early days of Bitcoin's development. The keys are inextricably linked to blocks of bitcoins known to have been created or "mined" by Satoshi Nakamoto.
I do not believe this is the person, I believe he is an imposter who cracked the keys.
Any key can be cracked with time and ample computing power.
I would investigate this persons motives and the organizations operating/handling him. Money does not seems to be the motive here. Consider extortion or financial wars.

[Redstar Kachina]

..........

[Morbid]

https://www.reddit.com/r/Bitcoin/comments/4hflr3/craig_wrights_signature_is_worthless/

https://news.ycombinator.com/item?id=11609707

[Hughe]

Summed up : Money madness is the belief that money has an intrinsic value independent of the marketplace, which defeats the function of a medium of exchange - to pass value to a future trade. By retaining value, after all trades are complete, leads people to hoard it and thus impairs trade. There is no correlation between the whole set of money tokens and the marketplace of goods and services.
Well said. I totally agree with.

[Morbid]

zerohedge posted two articles today which this thread might benefit from:

http://www.zerohedge.com/news/2016-06-11/bitcoin-spikes-above-600-2-year-highs-sudden-massive-chinese-buying
http://www.zerohedge.com/news/2016-06-11/everymans-guide-understanding-cryptocurrencies