patrick.net

It all depends on no one ever being able to figure out how to reverse the md5 or whatever hashing algorithm they are using.

That is, if someone figures out a quick way to say "given this input block, what unknown string must I tack on to the block to get the hash of the string to come out with a certain number of zeros at the end?"

It's totally possible someone might figure that out, then it's game over and all bitcoin will belong to that person. It will then take about zero energy for that person to mine coins, and it will be very fast. Whoever can do the calculation first gets the vig from the validation of that block.

Currently, people who want to mine coins have to just try all possible unknown strings until they get a hit. That's what's using up all the energy and making it slow.

Patrick says

That's what's using up all the energy and making it slow.

By design.

If people start mining too fast the puzzles get harder, by design.

"Mining", "coin", "digital gold" it's all a big scam to lure in the gullible, by design

FJB says

If I buried it I couldn't make 100,000 $10 loans which expire in 24hrs and automatically irrevocably retrieve the interest and principle I charged as per the smart contract.

So you rent out your digital gold? You've got to explain that one.

Onvacation says

So you rent out your digital gold? You've got to explain that one.

No I don't personally do that but that's an example of what someone can do.

Patrick says

It all depends on no one ever being able to figure out how to reverse the md5 or whatever hashing algorithm they are using.

https://www.movable-type.co.uk/scripts/sha256.html?source=patrick.net

"SHA-256 is one of the successor hash functions to SHA-1 (collectively referred to as SHA-2), and is one of the strongest hash functions available. SHA-256 is not much more complex to code than SHA-1, and has not yet been compromised in any way. The 256-bit key makes it a good partner-function for AES. It is defined in the NIST (National Institute of Standards and Technology) standard ‘FIPS 180-4’. "

This is upgradeable if say, super duper computers become common. Reality that's what everyone has been trying to do for the past decade - break it. Nobody has. There is something called a 51% attack that is more likely but it would require a nation state to buy up all of the high end compute over maybe a 6 month period costing billions. People would notice and the network could be hardened.

FJB says

Onvacation says

So you rent out your digital gold? You've got to explain that one.

No I don't personally do that but that's an example of what someone can do.

Crypto allows you to lend out your funds (peer-to-peer lending) for an interest payment and/or to stake your crypto for a reward.
I stake my ADA and Dot and earn between 5% for ADA and 12% for DOT (on Kraken). But I get the staking reward payout every 5 days, so the staking rewards are like an compounding interest payment (staking rewards on staking rewards) :)

If you burry your gold, you dont earn any staking rewards. You can also not lend buried gold to anyone. You might also not find your gold again if you lose your map. Also, your gold does not really appreciate in value. Bitcoin is up more than 10,000% in the last few years. Gold has remained at the same value. Gold is a terrible inflation hedge. Stocks, Crypto and RE are an excellent inflation hedge.

Its no surprise to me that the guy (Bill) who pays 10k for a matchbox car also thinks about buying gold to burry it.

Bitcoin for Corporations:

https://www.youtube.com/watch?v=XdgP25UcHB0&source=patrick.net

It's long and I haven't watched it all but the last segment starting at 3:00:00 is Saylor and Lyn Alden and can bring people up to date with the latest. Lyn has great macro analysis for lots of things not just bitcorn.

FJB says

This is upgradeable if say, super duper computers become common. Reality that's what everyone has been trying to do for the past decade - break it. Nobody has. There is something called a 51% attack that is more likely but it would require a nation state to buy up all of the high end compute over maybe a 6 month period costing billions. People would notice and the network could be hardened.

spot on. Its more likely that we will see a zombie outbreak or an alien invasion before someone hacks Bitcoin. But, if someone manages it, more power to that person (pun intended). That would be a nice way to go down in the history books. So, get on it, hack Bitcoin! Best of luck and let us know how it goes!

I mentioned it elsewhere but I bought some of an ETF of Swiss stocks, which I consider my defensive investment, rather than gold or similar.

I have no doubt that the Swiss Franc will be a strong currency, and the few Swiss companies in the index are likely to be around for a long time (e.g. Nestle).

FLSW has a low expense ratio.
The time I visited Switzerland 🇨🇭 I bought 3 Swiss Francs for $1 USD. Today $1 USD doesn’t buy 1 Swiss Franc.

My problem is I don’t have new money coming in so I will have to sell something to buy more.

clambo says

My problem is I don’t have new money coming in so I will have to sell something to buy more.

unemployed, looking for work or are you retired?

I’m retired from working.

clambo says

I’m retired from working.

Congrats!
Knowing you are retired I am even less surprised that you haven't looked too much in crypto and Bitcoin. As others said before, its a tool for younger generations to generate life changing wealth (catch up). I plan on using my crypto gains to buy more stocks and investment properties to retire early.

If i am retired that means I already made enough money and can just live off of my portfolio. In my retirement I don't want to invest in high volatile assets.

I love all this talk about "securing bitcoin". Can't make more of it.. lol.. while ignoring the 15k other digital currencies that everyone simply makes more of. AHAHAHAHAHAHAAHAAHAHA

Zak says

I love all this talk about "securing bitcoin". Can't make more of it.. lol.. while ignoring the 15k other digital currencies that everyone simply makes more of.

@Zak
Exactly! You just gave the most bullish argument for Bitcoin!
So, we have 15k other cryptos but countries and Elon Musk are only buying Bitcoin. They dont hold just any crypto on their balance sheet. Only Bitcoin. Have you asked yourself why?


....not expecting a cogent answer.

Bitcoin says

FJB says

This is upgradeable if say, super duper computers become common. Reality that's what everyone has been trying to do for the past decade - break it. Nobody has. There is something called a 51% attack that is more likely but it would require a nation state to buy up all of the high end compute over maybe a 6 month period costing billions. People would notice and the network could be hardened.

spot on. Its more likely that we will see a zombie outbreak or an alien invasion before someone hacks Bitcoin.

I don't see how you can be sure of that.

Maybe it won't take any significant computing power, but just one person clever enough to figure out how to reverse the hash quickly and with low compute time.

The question is, how much you are willing to bet that there is no one smart enough to do it?

https://www.nsf.gov/discoveries/disc_summ.jsp?cntn_id=100029&org=NSF&source=patrick.net

350 Years Later, Fermat's Last Theorem Finally Proved

I'm not talking about the 51% attack, but instead the ability to hash each block instantly.

Patrick says

Bitcoin says

FJB says

This is upgradeable if say, super duper computers become common. Reality that's what everyone has been trying to do for the past decade - break it. Nobody has. There is something called a 51% attack that is more likely but it would require a nation state to buy up all of the high end compute over maybe a 6 month period costing billions. People would notice and the network could be hardened.

spot on. Its more likely that we will see a zombie outbreak or an alien invasion before someone hacks Bitcoin.

I don't see how you can be sure of that.

Because it has been "hack-proof" for >10years now. If people who are a lot smarter and richer than me invest billions into Bitcoin why should I worry about something that we have zero evidence for? The reason why THEY invest in Bitcoin is because they know how secure it is. If there would be evidence that suggests it can just be hacked, nobody would invest a dollar in it.

IMO its more likely a meteor will hit me swimming in my pool than Bitcoin to be hacked by a clever person. I gladly take my chances and are willing to bet anything on it. I am happy to agree to disagree.

"No one can hack bitcoin"

-- read 15 articles per week about various forms of peoples bitcoin being hacked

"but that's not bitcoin, it's just the ECOSYSTEM!"

BWAHAHAHAHAHAHAHA

Zak says

"No one can hack bitcoin"

-- read 15 articles per week about various forms of peoples bitcoin being hacked

"but that's not bitcoin, it's just the ECOSYSTEM!"

BWAHAHAHAHAHAHAHA

That's exactly right @Zak, and thats the reason why people believe in Bitcoin's security. Since its existence there was not one incident where the Bitcoin code has been hacked. Thats why its considered "hack-proof".

That is fundamentally different from a hacker stealing bitcoin. If you leave your Bitcoin (or any other crypto) on an exchange, then it can be stolen through hacks.
There is a saying: not your keys, not your crypto.

To dumb this down: move your crypto to a cold storage/hardware wallet. Nobody can steal, hack or confiscate Bitcoin that is stored on a hardware wallet. Even if someone finds your hardware wallet, they can not access it without the private keys. :)

The fact that Bitcoin has no intrinsic value is not a problem. It is bought and sold for fiat currencies.

The fact that the dollar, euro, yuan, etc. have no intrinsic value, that's the problem.

Patrick says

I'm not talking about the 51% attack, but instead the ability to hash each block instantly.

Could happen. Never underestimate the power of a programmer.

Currently miners just solve the hash by brute force. I am sure some miners have already tried to tweak the basic algorithm to be the first. Like Enigma in WW2 it is a battle of cryptographers.

But Bitcoin is set up so the coins are released at a "Halvening" rate so that the scam can go on well beyond the lifetime of the HODLers.

Here's a narrative of the algorithm.

When the mining a block the Bitcoin mining algorithm works like this:

1. A block starts out with a header and a single transaction to pay the miner reward. This transaction has a special name (called the “coinbase”).

2. Transactions are added to the block.

3. A block “header” of fixed length is formed by doing cryptographic hashes of the transactions (called the Merkle root).

4. Mining uses SHA256 cryptography which breaks the data up into 64 byte chunks and operates on each chunk so there are 2 chunks and 2 steps to the SHA256 algorithm in this case.

5. The first sha256 step is performed on the first chunk of the header and that does not change. This is called the “midstate” because it is partway through the SHA256 process which is 2 steps in this case. The “midstate” is sent to the ASIC processor,

6. The second step of SHA256 is done on the second chunk of the header. This includes the nonce field. This is done on the Application Specific Integrated Circuit (ASIC) chip.

7. The entire solution is run through a second round of SHA256 and the solution compared to the difficulty (that is part of the block header). The nonce is returned if it meets the difficulty. This is done on the ASIC chip.
8. The nonce is incremented and the last 2 steps (6 and 7) are done again 2**32 times to exhaust all possible nonce values. This is done on the ASIC chip.

9. If no solution is found another nonce contained within the coinbase transaction is incremented. This changes the hash of the coinbase transaction and the merkle root

10. The process goes back to step 5 and continues until a solution is found.

https://cointext.com/glossary/mining/what-problem-is-solved-by-bitcoin-miners/?source=patrick.net

Currently the price is basically set by whatever the miners can get for the artificially scarce "Coin". I suspect the system will crash when a couple HODLer whales die and their heirs try to cash out only to find there is no there there.

Onvacation says

Currently the price is basically set by whatever the miners can get for the artificially scarce "Coin".

That's why this thread is called Bitcoin misinformation :)

Bitcoin's price is set by the market. Supply and demand. If there are more buyers than sellers the price goes up. Over time Bitcoin's price trends higher due to a supply shortage and high demand.

https://www.coindesk.com/markets/2022/02/01/hackers-move-383m-worth-of-bitcoin-from-2016-bitfinex-hack/?source=patrick.net

BWAHAHHAHAHAHA


yup.. no bitcoin hacks ever... the "code" is secure.

BWAHAHAAHAHAHA

Zak says

up.. no bitcoin hacks ever... the "code" is secure.

Thats 100% correct. Bitcoin's code has never been hacked. Bitcoin can be stolen from exchanges. Just keep your precious coins (digital gold) on a cold storage and they will be safe!

Bitcoin says

That's why this thread is called Bitcoin misinformation :)

LOL so true!

Patrick says

The question is, how much you are willing to bet that there is no one smart enough to do it?

Now THAT'S the real question. Not that it's a scam or pyramid scheme.

My answer: 3%

Patrick says

350 Years Later, Fermat's Last Theorem Finally Proved

I don't think bitcorn will be around in 350 years.

Onvacation says

The fact that Bitcoin has no intrinsic value

False... But I get it, you're thinking in the physical world....

Onvacation says

It is bought and sold for fiat currencies.

Typically yup, but it doesn't have to be. In the US for sure.. Nothing stopping someone from trading a nice fat pig for a bit-o-bitcorn in Truckistan though.

Alright, I'm out of this thread for a while. @onvacation thanks for the banter/fun and not betting bugged at me for calling you Bill.

I hope everyone makes a tidy sum in the fucked up markets we're looking at whatever they get into.

FJB says

Bitcoin says

That's why this thread is called Bitcoin misinformation :)

LOL so true!

This chart, or one like it, was introduced by user bitcoin.

Onvacation says

FJB says

Bitcoin says

That's why this thread is called Bitcoin misinformation :)

LOL so true!

This chart, or one like it, was introduced by user bitcoin.

Yep, and its still valid today :) thanks for re-posting it.

FJB says

Onvacation says

The fact that Bitcoin has no intrinsic value

False... But I get it, you're thinking in the physical world....

It has no intrinsic value.

It has some utility if you are laundering money, paying a ransom, trafficking humans, or like to gamble, but no intrinsic value.

You can't make a cogent argument against the facts I have laid out.

FJB says

Alright, I'm out of this thread for a while.

And you won't even try.

A pump and dump scheme unfolds like this:

The scammers behind the pump and dump buy a random cryptocurrency or token cheaply

When they have bought enough of the crypto, they will hype the purchased crypto on social media, often through popular finfluencers (aka financial influencers)

The people who are being reached by this hype think they can get rich by buying the cryptocurrency

People get excited and buy the crypto

Because the cryptocurrency is now hyped and people are buying, the value of the crypto goes up

When the crypto reaches a certain target value, the scammer then sells all their cryptos

This creates lots of supply, and causes the value/price to drop

Many people who have stepped into the pump and dump see the price drop, and also sell their cryptocurrencies in a panic, trying to minimize loss

The later you stepped in, the more you paid for the crypto, the greater your loss

FJB says

Bitcoin says

That's why this thread is called Bitcoin misinformation :)

LOL so true!

I'm still trying to understand why you 2 guys are hyping bitcoin so much? To what point?

komputodo says

I'm still trying to understand why you 2 guys are hyping bitcoin so much? To what point?

Bitcoin doesnt need hype. Inflation and institutional demand is driving the price up + limited supply.

All we do is correct the misinformation that OV spreads. Correcting someone on false statements isnt hyping.

If you steal $1 billion. They will find you.

https://www.msn.com/en-us/news/us/feds-arrest-married-couple-seize-3-6-billion-in-hacked-bitcoin-funds/ar-AATCpkY?ocid=msedgdhp&pc=U531&source=patrick.net

Yet another shortcoming of bitcoin / blockchain: there is a transaction history that is globally available of the transfer of funds between each wallet. No anonymity is possible.

Lets say you buy a survival food ration kit from survivalkits4less.. your bitcoin wallet is now tied to that sellers wallet via a completely historically logged transaction.

In 2 years when shit breaks loose, there is your global log of everyone who has food. just look for the transactions publicly available on the blockchain. Now you have wallet ID's, just start searching other wallet purchases, and you can build a profile of everything purchased from that wallet. Now you can just cross off all of the wallets that also purchased from guns4less, and here is your scrubbed list of easy targets.

Or worse, lets say you are selling something.. You get a big purchase of $10k.. But oops.. 3 days later, here come the feds, and it turns out that transaction was using a wallet that had stolen $75M from one of the crypto exchanges... Your wallet is seized, and you are forced to return the funds to the "rightful" owner. The log is clear that you received stolen bitcoin. OOPS!!

So now to be protected in a transaction, you either have to use a transaction broker that agrees to check flagged wallets for you, or you have to write your own software to ensure you don't get a downchain transaction off a flagged wallet. Oh bitcoin transactions are SOOOO easy.. LOL!!!

Zak says

No anonymity is possible

you Bitcoin haters should make up your mind.....on the one hand side you are saying only criminals use Bitcoin on the other side you say when you use Bitcoin your identity gets revealed. So which one is it? Maybe only dumb criminals use Bitcoin? I would agree with that....its much better to use cash if you plan on doing something shady :)

Yeah.. so which is it.. Has bitcoin never been hacked, or did bitcoin hackers with 3 billion in bitcoin just get caught and have their wallets confiscated and forced to return the money? I'm confused. I thought it was so secure it could never be hacked, and so secure that the government could never force anyone to give up their bitcoin.That makes this msn story so strange, doesn't it!?!

It looks like the wallets that the hacked bitcoin got transferred to were anonymous... until they weren't, right!?!? AHAHAHAHA. And its not like China can shut down bitcoin mining in the country in an authoritarian manner.. oh wait.. that happened. .

Yes, I do it for the lolz