On 11/06/11 9:01 PM, Eugen Leitl wrote:

On Sat, Jun 11, 2011 at 03:58:07PM +1200, Peter Gutmann wrote:

...

"John Levine" writes:

...

I wouldn't call bitcoins digital cash. They're more like digital tulip bulbs,

Finally an analogy I can use to explain bitcoin to the masses (well, assuming they know about the tulip mania). I've been using Bartercard, which is a good analogy but somewhat limited in international recognition.

Tulips were an investment bubble, not means of payment.

A requirement for a bubble would be a promise of ever-growing value, the rest is just the marketing.

People are so quick to trust alternative local currencies and digital currencies because the official currencies have issues with being gamed (e.g. built-in inflation tax).

Yes, this is what I mean by the obsession against government monies, which makes people vulnerable to putting their value into alternate currencies. Their desire to thumb their nose against the government outweights their desire to manage value wisely. To the extent that people put their funtime income into this, it's the same as movies, gambling, porn. Fine, but some people will inevitably invest their fortunes in it... What is most extraordinary about the current thing -- and what tends to confirm "bubble" to me -- is that the same people who were desperate for the privacy promise of blinded bearer coins are projecting their old privacy beliefs on the nymous BitCoin: http://www.pcworld.com/article/230084/us_senators_want_to_shut_down_bitcoins... http://www.reuters.com/article/2011/06/08/us-financial-bitcoins-idUSTRE7573T... <blockquote> The biggest drive towards the use of Bitcoins on sites like Silk Road is that they supposedly cannot be traced [1]. However, a member of the Bitcoin core development team told Gawker that "...because all Bitcoin transactions are recorded in a public log, though the identities of all the parties are anonymous, law enforcement could use sophisticated network analysis techniques to parse the transaction flow and track down individual Bitcoin users." </blockquote> Such a comparison was denied vociferously in bearer days. Blinded transactions were the only way to do it, and the nymous architecture now seen in BitCoin was considered evil because the issuer could supposedly see "all". Worse than a private nymous system, this one is public?! What could be easier to datamine than a public database? Give me a public database and a handful of subpoenas, and this thing goes down. iang [1] Note confused terms there. BitCoin can be traced, but the holders aren't identified. This is called "nymous" in the trade. In contrast, bearer coins could not be traced, but typically the holders had identified accounts. "Untraceable." One system achieves privacy through a perpetual public key account mechanism, the other through an untraceable transfer between known persons. You can take these axes and combine them to create 4 spaces if you desire... ----- End forwarded message ----- -- Eugen* Leitl <a href="http://leitl.org">leitl</a> http://leitl.org ______________________________________________________________ ICBM: 48.07100, 11.36820 http://www.ativel.com http://postbiota.org 8B29F6BE: 099D 78BA 2FD3 B014 B08A 7779 75B0 2443 8B29 F6BE