i dont think a 51% attack on the network would be considered "taking over". however some influence would be possible. well funded would mean over 10 million and with this hardware would benefit more by supporting the network, hence why this type of attack has never happened.

For moderately well funded read several hundred million dollars (and the hash rate is still rising with an exponential-like function, so this is a moving target) . And for a 51% attack, the result is the destruction of the network (i.e. the attacker can't reliably make money from it - it's pure vandalism). If it's noticed (which it surely will be), the blockchain can be forked with a new algorithm and the arms-race starts again.

Of course, the end result for a proof-of-work cryptocurrency that becomes a major financial player (say on par with the dollar or euro), is that it has to consume at least 50% of the global energy production - this is the fundamental flaw in bitcoin.

There are experimental coins which get round this (using distributed proof-of-stake) but, in the end, they would also be vulnerable to a government-sized entity which had purchased at least half of the capital (which, of course, is quite a lot if you're dollar-scale). But is there anything which is protected against such entities if they decide to be malevolent...?

It hit $275 on Sunday afternoon. It's now trading at close to $350 (a totally predictable bounce whether dead-cat or not). Anyone who didn't buy into the $300 "whale-wall" at Bitstamp in anticipation of the bounce needs to hand their geek-trading card in at the door...

And, interestingly, this pops up in the news:

http://www.wired.com/2014/10/oversto...-stock-market/

Money quote: "The ultimate aim of the project is to create a stock system that operates, in large part, outside the control of the big incumbent banks. A stock system based on math, the thinking goes, would eliminate loopholes maintained and exploited by interested parties. Byrne, for instance, has long railed against a Wall Street practice known as naked short selling—where banks and funds essentially sell shares that don’t exist—and a system based on the blockchain, where all transactions are public, would eliminate such a thing."

This concept is actively being pursued by other projects which either work on top of the bitcoin blockchain or make a new blockchain (a technique called 'merged mining' means they can leverage already existing mining resources without starting from scratch). Some examples are Colored Coins, MasterCoin, Etherium and Syscoin.

Where Overstock are doing things slightly differently, is to concentrate on getting regulatory approval to run such a parallel stock market - this is a much bigger hurdle than just developing the technology.

For more than one year I believed that SF Hosing Market was in a bubble, so I didn't buy. AND I quoted Marketwatch. Marketwatch is now to me a prostitute of the finance news world, it will tell you whatever you want to hear- like a self-fulfilling prophecy. I lost out big time. Like Statman says Bitcoin lovers believe because they cannot accept that their vision has failed.


"That makes hard truths particularly difficult to accept, he says. After all, divesting from a stock is easy. Divesting from a world view, ( or in my case a SF bubble belief) well, that’s a lot more painful."


Statman advises investors of all types to avoid confirmation bias and “ideological” investing by talking to people with different perspectives. For example, he jokes, Bitcoin buyers should have asked his opinion of the currency before last weekend. His take: “I think it’s a scam.”


It is hard for me to swallow that I was wrong about the SF bubble just as I guess it is hard for Bitcoin advocates to stop believing.
But Marketwatch, Oracle, be careful what you read there when you do searches that just reinforce your belief and ignore contrary views. http://time.com/money/3479199/why-bi...e-in-bad-news/

Hoppy, you're back! I bet you've been waiting like a coiled spring for this thread to revive...

Would that be the weekend where its value rose by 25%? I think buyers should look elsewhere for advice.

Statman is another great example of an "old-school" economics professor caught on the wrong side of a paradigm shift in his subject. (Others include Krugman and Greenspan (although, to be fair, Krugman understands (or has been told) that bitcoin's value lies in its solution of the Byzantine Generals Problem, he just doesn't see the monetary value in that solution - his objection to bitcoin is also more from a Keynesian point of view)).

Perhaps the funniest one this year was Mark T. Williams (Boston University) who confidently predicted that bitcoin would have a value of less than $10 by mid-2014. (He was only 60-fold out...). Williams is another elderly academic who probably sees modern technology in a similar way to the kids who keep getting on his lawn.

Statman (being involved in behavioral finance) actually has a chance to make some insights into bitcoin and its very tight interaction with social media (bitcoin was essentially born out a forum group). But, unfortunately, (and like the study he links to) he doesn't make the leap.

One thing I've been pursuing in "20% work" is market price prediction based on continuous social media scraping and automated semantic analysis to gauge market sentiment. We've never been in a situation before where so many people trading a market are wearing their hearts on their sleeves in a global talkshop.

Based on the old Buffet quote "Be fearful when others are greedy and greedy when others are fearful" (which is itself paraphrasing Baron Rothschild's "Buy when there's blood in the streets"), if you can identify inflexion points where overall market sentiment changes, then this can be used as inputs to a trading engine.

One major inflexion point happened last Sunday night where after a slow bear market slide for several months, sentiment rapidly turned around from utter despair ("blood on the streets") to mildly bullish. This was even after an event (a 36,000 XBT sell wall at $300 dollars) which should have been extremely bearish. Talk on the forums changed within minutes to reflect this bullish sentiment (my system gauges this as a move from "blood" to "smug" and started suggesting a long position). We even had an example of that on this thread, where Shorrick Mk2 revived it with a "peak blood" comment. (Slightly late, but there's a reason I don't bother scrape EF in this exercise...)

Of course, none of this tells us anything about the future of bitcoin, but it does indicate some interesting technical directions the new technology is taking us. (What it also indicates to me is that Statman is wrong with his belief that people are irrationally attached to bitcoin - most people will drop it like a hot potato if starts going down the pan).

Admitting you're wrong is great and is the sign of a rational mindset. The SF bubble isn't over yet, is it? Of course, its cause is obvious: a sea of hipster startups caused by VCs spraying money caused by cheap credit caused by quantitative easing. (Love it, but, then again, I am a keynesian). VCs are already warning about the "burn rate" of all the startups they're funding, so it's a market that could get interesting...

I'm a leftie but not Keynesian, which some find contradictory, I think I am fiscally conservative. But I do hope you are right, I like new structures that challenge the old. I will be buying in to the SF market soon, much to my chagrin, and buying a terribly expensive house (expensive to me), so I'll be screwed if, or rather when the market tanks. An Englishwoman's home is her castle.


I got a job so have been busy and hubby is pushing e to find a house, we need a bigger place. Yes I have heard the same about the start-ups here and dependency on the Chinese market. But it seems like everyone who's anyone wants to be here at present. It feels like an apple that is rotten at the core, the people working in support services are having to move further out, unable to afford the rents. Some after moving to other states. The only people who can afford to stay are those techies at the top of their game. It is as an anathema to the flowers in the hair brigade, people fear that SF will lose all its creativity and it's rather hypocritical for such a leftie city, leaves a bad taste in my mouth. However, I went was in LA last w/e and couldn't wait to get back to Berkeley and its intellectual snobbery..


Ya never know, with the European Markets wobbly people might invest in Bitcoin, but not me. But then I won't invest in stocks, ( even though I know where to invest) I like to invest in people.

I so hope the gold vote wins, It will keep the central banks from devaluing the currency.
I will especially like to see the private owners of the central banks to scramble. If the Swiss can get an honest election I don't know.

200ish dollars and dropping.

The gift that keeps on giving huh ^^

How was that "buy below 400" "strategy" again?

It would appear the "traders" have gone mum as of late.

The whole point of bitcoin is that the block chain is definitive. If you cant then it is broken. If you have to override it then you might as well have those people overriding deciding things and forget the block chain.

I am Pretty sure that Howard will get his man Ulbricht. I'm not sure what effect this will have on Bicoin, but don't think it will be good. AL I do know is that there is a stack of money hastily being dumped into defense of Bitcoin here in SF.( at least according to info that I dug up while Googling!) http://www.wired.com/2015/01/isilk-r...ng-statements/

The full quote was: "In the meantime, for a certain kind of trader it's the gift that keeps on giving". Where "certain kind of trader" ∈ "swing traders". This market is simply beautiful.

You show a lot of interest in the price of bitcoin and you should have made a metric f**kton of money by now or you're not doing it right.

The block chain is definitive but it's also based on consensus (i.e. a majority of the users accept it). A fork that's accepted by most people and derives from the old block chain is fine. This has already happened with bitcoin.

If a fork is within the defined rules and mathematics, then it is not really a fork, but the correct branch of the blockchain.

If you have a group of people deciding to make changes e.g. when they rolled back the blockchain, then the power is actually with the people and developer deciding this and it is little better than having a committee of people within a bank deciding on which transactions are valid or not.

"The certain kind of trader" who says the bearish 36000xbt wall is in fact bullsh!t - pardon me, bullish?

You do realise that we're supposed to post here in English only, don't you?

At that point, it went from 270 to 420 in ten days. "Certain kinds of traders" (actually, really their trading bots) were coining it in. (And subsequently shorting down to 320 and then back up to 450...)

A fork is basically a snapshot of the current block (or the last 'good' block), which is just taking its Merkle chain hash (hashes of hashes all the way down), combined with a client that uses different rules.

That's not the case; there is no such committee in bitcoin. While there is a non-profit entity called the 'Bitcoin Foundation' which develops the reference client and proposes a development roadmap, nobody has to do what they say. The bitcoin protocol is totally open and the reference client is open source. You could make a client that uses PhilHash and PhilDSA and forks the blockchain - good luck getting anyone to use it. (Forget the forking, though, and you may have a successful altcoin...).

This is different from the case of a central bank where you have no choice but to follow the committee's decision. We have such a situation now, where some brainiacs at the SNB sit behind closed doors and cripple Switzerland's export base by failing to solve the world's easiest problem (how do you reduce the market price of a product with effectively zero production costs).

what about when people were told to revert back to the 0.7 version of the client?

the developers of the software are de facto in charge.

This was a perfect example of consensus working.

The bitcoin developers introduced version 0.8 which had a corner case where a miner could build a block that wasn't recognized by previous versions. Such a block was, of course, built and the blockchain forked. In such a case the tallest blockchain wins and you have to get on a client that is compatible with it to get your transactions booked.

Miners were advised to revert back to 0.7 to minimize the hassle with the fork. (No transactions are lost in a fork, they're just retried when you get back on to the tallest blockchain). Everyone agreed that this was a good idea and it was done.

This was intensively discussed at the time and nothing happened behind closed doors. If people thought that the bitcoin devs were starting to look incompetent, nothing stops another team of developers from building up a reputation and becoming the go-to group for the client. (Kind of like MySQL/MariaDB. Try doing that with the SNB...).