Hot answers tagged

14

Here's a list of the most notable scams, thefts, and hacks: https://bitcointalk.org/index.php?topic=83794


12

Any of those things can happen. Likely, there will be some "hot potato" going on as people rush to offload any IOUs they hold to people who haven't yet gotten the news. It's unlikely other gateways would honor the IOUs unless they were contractually obligated to. This would likely harm their customers as they'd have to make up the losses somehow -- likely ...


10

This question actually gets at the fundamental nature of Ripple. Ripple is essentially an online P2P implementation of free banking. Free banking is somewhat similar to how banking worked in the United States for much of the 19th Century (with a few major caveats) prior to the Federal Reserve and FDIC systems, and indeed back then banks would sometimes just ...


10

Here all famous scammers/sites: List of Known Bitcoin Scams: Beware of Fraudsters! Bitcoin Scammers list


10

Is the safety of bitcoin dependent on the creator of it being a trustworthy person? No, the safety of Bitcoin is not at all dependent on the identity of its creator. The source code is public. The paper is public. Or would it be safe to use even if it turned out the creator's day job was working at the NSA? Again, the genesis of Bitcoin is unrelated ...


10

Proof of work does not create trust. It creates incentive. Miners are paid if their block is eventually part of the main version of history ("blockchain") that the network accepts. They must irrecoverably burn electricity in order to create blocks, which costs them money; money they only get paid for if their block "wins". These factors together mean that ...


8

The majority needs to be trusted, but not weighted by their number of software instances, but by either computational power or economic power, depending on the context. The main technical assumption is that the majority of hashrate is not trying to attack the network. So an attacker would need to purchase and operate more hashrate than the rest of the ...


8

You can't get money on the Ripple network unless you trust someone to owe it to you. To have $100 in the Ripple network, someone must owe you that $100. If you haven't chosen to trust anyone to owe you money, nobody can owe you $100 and thus you can't have any money. So when you give money to a gateway, you must allow them to pay you in IOUs. And if someone ...


8

But then the next problem is transaction order and validity to prevent double spending. I don't understand completely why a timestamp can't just be included for every broadcasted transaction, and the transaction could have the correct, universally agreed upon time, and each ledger gets sorted chronologically. Is this because it requires a centralized system ...


7

So far as I know, there's no conceivable attack model if you're going to use the block chain to seed the regular Bitcoin client. It won't accept an invalid block. And it understands that the "longest" block chain wins. So a compromised file that was longer than the official block chain cannot exist, and a compromised file that was shorter would just be ...


7

A block is just an arbitrary grouping of transactions. It makes a convenient chunk of data for a proof-of-work to be performed on. You could hypothetically do the proof-of-work on the transactions themselves, and then chain them one after the other. This, however, would fail miserably. Blocks must reference the previous block, so if you just go by single ...


5

Trust must be public because other people can use it. I agree, this can be awkward. I don't see community/private credit as a major use case for Ripple in the short term because of issues just like this. But I hope that in the future, and maybe even with changes in social conventions, this may change the way people think about money. Look at how ...


5

[Update: With the Bitcoin client v0.7, -loadblock= will allow the client to import blockchain data, securely, from a local blockchain archive rather than from the network. The blockchain download from BitcoinCharts.com can be used for this. Copy the blk*.dat from that download to a temporary directory and start Bitcoin-qt -loadblock=temp/blk0001.dat and ...


5

It doesn't differ. Gateways are just issuers that you somehow have more trust for, so much trust that their IOUs can basically be treated like cash. This is what happens in the current financial system, when you see $100 on your bank account it doesn't mean that you actually have $100. It just means that you hold your bank IOUs. From what I understand ...


5

We start out with the exchange having two things. It has a set of Bitcoin addresses that it owns, each of which has some balance. It also has a set of accounts, each of which it owes some number of Bitcoin to. The objective is to prove that the exchange controls each Bitcoin address on that list and that the total of all account debts is less than the total ...


5

The short answer is that the "verification" done on every transaction by every node is preliminary and incomplete. It guarantees that the tx more-or-less makes sense, but it doesn't guarantee that the tx is in sync with the network and that it doesn't contradict other txs. Synchronizing the transactions to make sure there are no contradictions - in other ...


5

But then the next problem is transaction order and validity to prevent double spending. I don't understand completely why a timestamp can't just be included for every broadcasted transaction, and the transaction could have the correct, universally agreed upon time, and each ledger gets sorted chronologically. Is this because it requires a centralized system ...


5

Whoever made that example doesn't seem to understand how the lightning network works. I think the creator of this scenario is confusing how the lightning network functions with how traditional deferred net settlement functions. With the LN, you don't hold accounts with the people you have open channels with. Instead, you have money tied up in the channel ...


5

If most users are honest, then they would voluntarily enforce the prohibition to rewrite the blockchain. Without proof of work, this is just not possible. There would be no limit to the number of blocks that could be created at about the same time, there could be thousands of them created every minute. Different servers might receive them in different ...


4

If I understand correctly, IOUs issued by different gateways are not mutually fungible, even if denominated in the same underlying fiat currency. So basically I you were to hold IOUs from a gateway and that gateway vanished, or simply refused to honour its IOUs you'd be out of your money.


4

If you look at a graph of the value of 1 bitcoin, that huge spike and drop was caused by someone hacking Mt.Gox and selling everyone's bitcoins to him/her for $0.00, dropping down the value to $0, and it stayed low as more people sold their bitcoins to make sure it wouldn't happen to them. It's been slowly rising since then.


4

There is already three rating systems in existence from different trading platforms: #bitcoin-otc , Bitmit and Silk Road. Bitcoin users actively using their rated OTC identity to make their words more trustworthy. I believe integration of rating system into Bitcoin Network won't be beneficial and developers will not ever try to implement that. It is ...


4

You slightly misunderstood the concept of majority here. Bitcoin relies on the majority of trusted computational power. So it does not matter if there will be billions of small clients controlled by the same owner if they are not powerful enough. The main idea in the beginning was that each client is running independently. So if there will be a lot of ...


4

This is ultimately a question where you may have to choose between liquidity and control. Traditional VC investments are a lot more liquid, in other words, they likely have a lot more money to offer, than any bitcoin stock market. At the current exchange rate, the amount you'd like to raise is equivalent to roughly 15,000 bitcoins (on the 1.5 million end ...


4

Now I am looking for advices what would be pros and cons of both options: VC investment vs. bitcoin crowdfunding. LocalBitcoins provides an escrow that facilitates person-to-person transfer of cash in exchange for bitcoins. The U.S. regulator FinCEN has provided guidance that clearly describes that as being a money transmitter service. If LocalBitcoins ...


4

Zcash the currency requires the generation of parameters that must then be securely destroyed. If this data is not securely destroyed by Zcash the company they could undermine the currency, by being able to create new money. For a more thorough discussion, see also the Zcash blog post on the problem and one by Greg Slepak discussing the potential risks. The ...


3

I don't understand what kind of advice you expect to receive without providing even a hint about what is it that you are trying to develop. How can you possibly get any "fans" without explaining the idea. 0,7M - 1,5M USD investment???? Nothing in this industry costs that much, unless you spend most of that on massive business promotion. But, if that's the ...


3

"We" are volunteers running Electrum servers. There's almost no trust in them, the absolute worst they can do is feed you false negatives about the balance of your wallet, or they can also choose not to broadcast your transactions and pretend that they have. You trade some privacy in that they can see the contents of your entire wallet and associate it with ...


3

Knowing won't help You are effectively looking for a centralised entity to provide you with a prediction of the future behaviour of a decentralised entity (asking a mining pool to predict the blockchain). Even if one or more mining pools share this information, I do not believe it will provide you with a significant risk reduction in accepting transactions ...


3

Okay, I will bite. No, I don't think it would be useful to publish software hashes in the blockchain. As you recognize, a hash of a software package is useless unless it is somehow authenticated. Currently, the most popular way to do this is to make the hash available on a "well-known" website which uses HTTPS, and provides an X.509 certificate signed by ...


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