Any Thoughts On Bitcoin ?

Discussion in 'Bullion Investing' started by goldcollector, Feb 21, 2017.

  1. micbraun

    micbraun coindiccted

    [sarcasm]

    Breaking news! Engineers at MIT are obviously years ahead of everybody else ;-)

    [/sarcasm]


    Sent from my quantum computer using Tapatalk
     
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  3. -jeffB

    -jeffB Greshams LEO Supporter

    Thanks; this does clear things up a bit, for me at least. Reading through the transcript, I can see how it says very different things to someone to people who do follow the field and people who don't.

    It boils down to Lloyd (the engineer, not the Back To The Future actor) using the wrong tense -- using "can" instead of "could". A certain type of quantum computer could, we're pretty sure, make short work of public-key encryption -- if we could build one, which so far we can't.

    The "small general-purpose" quantum computers he's talking about are the equivalent of building a "general-purpose" computer out of a small set of light bulbs and mechanical switches (something that students still do occasionally). They use the same principles as a full-scale general-purpose computer, but they aren't full-scale general-purpose computers, at least not yet. We're still trying to figure out how to scale them up to a useful size.

    There's one company that's been building machines for ten years now with the claim that they're quantum computers, but there's still broad disagreement over whether they are actually doing "quantum computation" at all, and if they are, whether it offers any actual advantages over classical computation. For now, it's slower than a desktop computer; the best it can offer is that when (someday) we can make much bigger quantum computers, they should solve some problems better than classical machines.

    Biggest ever quantum chip announced, but scientists aren't buying it

    D-Wave Systems -- Reception

    A key passage from the Nature paper quoted in Wikipedia:

    D-Wave's "general purpose quantum computer" is still a solution in search of a problem. Researchers (and marketers) are still hard at work on that search.
     
  4. -jeffB

    -jeffB Greshams LEO Supporter

    This is actually tangling up two different things. The Intel stuff is about optical communications between chips, and doesn't have anything to do with quantum computing. The NOVA stuff is about explorations in quantum computing -- and we're still in the exploration stage, far from commercial production and exploitation, D-Wave's claims aside.
     
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  5. Prime Mover

    Prime Mover Active Member

    I appreciate the reading sessions, I hadn't really done much of that on the quantum computing front before.

    In the end, quantum computing changes little, and still refers back to the point about lack of understanding of the underlying engine that drives the Bitcoin vehicle, and lack of understanding of the impact of a 51% attack and even were it possible to happen how easily it can be mitigated should there be one.

    It also highlights the fact that you cannot take a myopic look at the Bitcoin ecosystem and base your decision to invest in something on only that view, especially if you're working on what could happen much later, not what is actually happening and capable of right now, when you're trying to realize your gains. As is true of traditional investing, if you do not examine the whole picture of any form of investments you will lose.

    I'll leave the interested parties to research on their own, but instead of me pasting a few pages long worth of quotes, here's a few links which make reasonable debunking of your theory of being able to hijack Bitcoin by computing that does not yet exist, but even should it ever.

    http://bitcoin.stackexchange.com/qu...d-a-scalable-quantum-computer-have-on-bitcoin

    https://news.bitcoin.com/bitcoin-ready-quantum-computing/

    https://en.bitcoin.it/wiki/Quantum_computing_and_Bitcoin

    Furthermore, the troj... err worm theory (not only ASICs) is not plausible, no matter the type of computing power you think you can wrangle under it.

    Typically, compromising a system has been/is used to further 1 of 3 general goals - 1) band computers together to perform attacks on websites for service interruption requiring ransom payment to stop, 2) discovering information and sending it back to the "mothership" for whatever purpose, or 3) encrypting files and holding it for ransom (ironically usually paid in Bitcoin).

    A twist on the first type above is what I believe you're trying to get at, which can be used for 2 purposes - 1) to try to 51% the network (network effecting) or 2) redirect other users' hash power to an account of the hacker's own so they can "mine for free" (user affecting).

    I am aware of at least one attempt in the past at #2, which worked briefly while CPU power was still viable in mass millions of numbers (sometime in 2013/14).

    The main reason #1 would not work - even IF (and it's an implausible if) so many devices were compromised and a switch was turned on where they all came online and started hashing at once, the other network operators would notice the huge uptick in hash and peer-ban the mining pool node servers that start relaying any blocks from those machines.

    Furthermore, IF (and an exponentially larger IF) any blocks were released from the mining pool(s) the rogue nodes were using, the blocks would die on the vine so to speak.

    To understand why, you need to understand the blockchain and how blocks get relayed, confirmed, and accepted. There's a reason it's called a chain. Each block builds on the previous. But, that also means each block could turn the branch of the chain in a different direction, thus "forking" the chain along a different path. Each block needs confirmations from the other nodes in the chain that it's valid, and this is why you look at the 51%, as it takes a 51% majority of the voting shares (mining pools) to fully confirm each block (6 times), accept it and build the next block in the chain upon that one.

    However, that's not the end of the story. Even if a few blocks make it into the chain from rogue pools, when noticed by the other operators and the rogue pools are banned, they will drop in hash rate quickly, fall below 51%, and then the miners of the other pools, who were still working on the old chain who now have 51% majority back, will start building new blocks back on the original chain. In a short period of time, the rogue blocks will become orphaned as the voting share for those blocks has dried up, and the original chain wins, the takeover attempt fades away.

    Anywho, now to try to get back to somewhat on topic, i will post more thoughts next, so they don't get caught up in this debate (I can start a new one, yay! :) )
     
  6. Prime Mover

    Prime Mover Active Member

    This pretty much sums up the arguments against quantum computing affecting pretty much any cryptocurrency today. And, just like when the CPUs moved to GPUs and GPUs moved to ASICs, more computing power is just another step in the game.

    The main difference to realize is that crypto currencies use computing power to solve a _very specific_ mathematical problem, and which is why ASICs are good - they are sole-purpose built to work on the algorithm (SHA-256 for Bitcoin and clones and Scrypt for Alts like Litecoin and clones, and whatever comes next).

    With each launch of the next "nuclear arms" in the race, the software has adapted. There's a reason for the 10-minute block confirms, and there's a reason there's an auto-adjusting "difficulty". Amongst things it is to slow down the possibility of hijack and allow mechanisms to adjust in proper time to an ever-changing ecosystem.

    I keep saying it, but I can't say it enough - you need to understand the mechanism of the space, from all angles, to understand whether it's possible to enter into said space as an investment and hope to make money.
     
  7. Lesbian Cow

    Lesbian Cow Member

    Hi Guys & Gals, a picture of a bitcoin you may appreciate. One troy ounce silver, 2013 Casascius 1 btc. The private key for the digital btc is under the hologram.

    Cheers!
     

    Attached Files:

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  8. Michael K

    Michael K Well-Known Member

  9. goldcollector

    goldcollector Member

    Thanks for all the information. I am going into Seattle tonight and going to buy my fist BTC ever. Im just going to be getting a 1/4 BTC for about $300. Its gone up over $100 since this thread started.
     
  10. goldcollector

    goldcollector Member

    It seems that the recent run up in BTC price is at least partially due to the upcoming ETF possibility. Nearly everyone seems to agree that this ETF will not be approved and as such perhaps it would be smart to wait until after it is denied as I would expect that denial would surely lead to sell off and a drop in BTC prices back down towards $800 or so. But then again if it is approved perhaps it will challenge $2000 soon.
     
  11. InfleXion

    InfleXion Wealth Preserver

    The NOVA article clearly states that these computers, both small scale and medium scale, are all over the MIT campus as of 2011. So it's not the exploration stage at all. It's already well into the production phase, and that was 5 years ago so we're obviously far beyond that now. It's just not available for people like us to buy. You can continue to believe this is all imaginary if you want. I'm posting so other people hopefully do not make the same mistake.
     
    Last edited: Feb 27, 2017
  12. InfleXion

    InfleXion Wealth Preserver

    The architectural difference doesn't matter at all between PGP and BitCoin. You are focusing on an example, and ignoring the point.

    The fact of the matter is that as much processing power as there is behind BitCoin miners, that processing power can be overwhelmed, and a 51% attack is plausible regardless of how tailored those ASIC miners are for what they do. Even the most awesome firearm ever doesn't hold a candle to a nuclear weapon. That is the magnitude of advancement we are talking about here.

    I'm guessing you missed the part where they said it would take a classical computer the entire age of the universe to do what a quantum computer can do in a matter of seconds. Even if that is with the assistance of a wave pattern, it's far beyond impressive, and this is only the tip of the iceberg. This is 5 years old information to boot. The idea of how to build this technology only came into existence in 2005, and they were doing it 6 years later. Imagine what they've done with another 5.
     
    Last edited: Feb 27, 2017
  13. desertgem

    desertgem MODERATOR Senior Errer Collecktor Moderator

  14. -jeffB

    -jeffB Greshams LEO Supporter

    Good catch, Jim! A couple of key observations from the article:

    They hope to demonstrate a computation that exceeds the capabilities of classical computers. It hasn't happened yet. It may happen soon. Probably.

    That's a 20-qubit computer. Startups are targeting 32 or 64 qubits Real Soon Now.

    Cracking 2048-bit RSA, the currently recommended standard, will require a machine with thousands of qubits. Building a machine with that many qubits, that will keep them all superposed long enough to perform the computation, is really really hard -- probably even beyond the resources of the NSA at present.

    If someone (perhaps one of Them) does develop a machine capable of that kind of computation, a decade or more ahead of its expected arrival... well, Bitcoin is beyond small potatoes at that point. More like a single stray grain of rice.
     
  15. InfleXion

    InfleXion Wealth Preserver

    Here is a link from MIT that is relatively recent. They brought up the risk to encryption already. This is specific to factoring.

    Regardless of anything else anyone says: quantum computers are real, they have been in use for years, and there is nothing to stop anyone with enough resources from mass producing them in ways to make far more qubits than is being publicized.

    We'll probably never know that for certain just how easily these can crack other encryption methods, because whoever has that power isn't likely going to advertise it openly.

    There's a reason the US made it illegal to outsource high bitrate encryption protocols to foreign countries.

    http://news.mit.edu/2016/quantum-computer-end-encryption-schemes-0303

    The beginning of the end for encryption schemes?
     
    Last edited: Feb 27, 2017
  16. InfleXion

    InfleXion Wealth Preserver

    Wishful thinking. People have strung together tons of PS4 systems to perform complicated computations as an aggregate system. It is not uncommon at all to use numerous systems for the same purpose. SETI was doing it years ago with home computer users. Nobody needs one super quantum computer. All the smaller ones can work together to achieve the same end. And this is how BitCoin would be overwhelmed. It is strictly a function of total processing power at the disposal of a single user regardless of the number of computers. Whether you have 20 quantum computers at 5 qubits each or one super computer at 100 qubits it makes no difference.
     
  17. -jeffB

    -jeffB Greshams LEO Supporter

    Quantum computers that can factor the number 15 are real. I have no doubt that there are a number of them on the MIT campus. Perhaps some of them can factor other numbers, like 12, or even 120 -- given tens or hundreds of thousands of dollars to build them, thousands of dollars a month to maintain them at cryogenic temperatures, and minutes or hours to set up the calculation, run it, and extract the results. Results that any conventional computer can produce in microseconds.

    That's entirely false, and that's the point you're missing.

    The "special sauce" in quantum computing is that a quantum computer's qubits are all entangled with one another. That entanglement is what allows quantum computation in the first place. That entanglement is what's so hard to establish and maintain, and it's why nobody has taken a hundred five-qubit computers and combined them into a single 500-qubit machine.

    It's even worse than the old project-management joke of hiring nine women to produce a baby in one month. At least nine women can produce nine babies in nine months. Doing what you propose is the equivalent of giving nine women nine months, and expecting them to produce 512 (two to the ninth power) babies.
     
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  18. Prime Mover

    Prime Mover Active Member

    Oh, this is rich. Did that sentence really just get written by you?

    Yes, yes, that previous sentence really did get written by you.

    You clearly have no understanding of how Bitcoin works with what you have said above. You keep going back to distributed computing power "overwhelming" Bitcoin.

    Bitcoin's very design is to prevent any single user (or single group of users) from doing what you state above. And there are numerous failsafes built into the system to either prevent an overwhelming attempt, or be able to rollback and recover from it very quickly.

    You keep espousing "51% attack", but you do not seem to understand exactly what happens with a 51% attack, which I described above, but a simple Google search will bring you enough articles and info to educate you. A 51% attack has been possible from day 1, is possible today, and could be possible tomorrow. It is VERY much less possible today given what Bitcoin has grown into, and with advances in computing and cryptography, it will most likely continue to keep pace.

    You have not yet once explained in detail _exactly how_ someone with that much processing power (which doesn't exist today in useful practicality) could overwhelm Bitcoin. And, please don't go back to the PGP analogy, whether you think it or not there is a very pointed difference between being able to crack a PGP keypair, and being able to do anything of value with a Bitcoin address keypair (which, even if it were to be cracked, there is very little that can be done. Go ahead, research it, or not as you've proven).

    You have not mentioned anything about how mining works, how nodes function, and the criticality of mining pools and how they can easily thwart such an attack. THIS is the key to all your answers. Mining pools are what controls the _entire_ Bitcoin ecosystem, and are the kryptonite to all the computing power that is, or ever can be.

    You keep going back to a future technology's ability to crack security standards and algorithms from current day, which is certainly not based in any sort of reality, and security will grow and evolve as it has over the past decades to keep pace with future computing technology.

    I get it, you want metals and something that might have "real" value, and you prefer to invest in those. Fine, to each their own, I like shiny metal and own quite a bit of it myself.

    But the reasons you give for fearing Bitcoin are not valid, and the technology and its risks are clearly misunderstood, fueling those fears. There are plenty of reasons why investing in Bitcoin may be bad, may be good, but unless you are willing to do the proper research and understand the functions, you are doing a disservice to those who are looking for valid information.
     
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  19. yakpoo

    yakpoo Member

    In 2010, I bought two (2) physical bitcoins a one (1) bitcoin and a five (5) bitcoin. They were $19/bitcoin and I fully expected (and still expect) to lose all my money.
     
  20. Prime Mover

    Prime Mover Active Member

    Aside from this going back and forth between InfleXion and I, the root of his concerns are valid questions. Both of his concerns are what beginning investors should be asking, researching, and getting answers to in order to make sound decisions with their money. That is, after all, part of the OP's original question about whether they should invest or not.

    I will not tell you to invest, or not to invest. I will however, as briefly as I can, answer the two main questions/concerns - the "brute force Crypto attack", as well as the "brute force 51% mining attack" - in hopes that it will at least help you understand what could be possible, and how it could affect Bitcoin and your money.

    1) The Brute Force Crypto attack

    PGP encryption and Bitcion are similar - they use the concept of a "keypair", one public that you give out, and one private that you keep.

    With PGP, you "sign" anything you want - lets use a typical thing like an e-mail as an example - with your private key. Say I have an e-mail recipient whose name is Joe. I give Joe a copy of my public key. When I want to send a private e-mail to Joe, I "sign", or encrypt, my e-mail message with my private key, and send it to Joe. Joe gets the encrypted message, and with the public key I gave him, decrypts it and is able to read it.

    With PGP, you make a single private key, and can send out your public key to anyone you want. The private key is meant to identify you now and forever to whomever you exchange encrypted information to. If someone were to have enough computing power to reverse-engineer the private key from the public address, you would be able to duplicate the private key, and unlock everything that I had from outside.

    It's really no different than your house front door lock. You can make as many copies of your front door key and hand them to people, but if a thief came by and was able to make a mold of the inner cylinder, he could make his own key and gain access to your house and steal everything. Very basic analogy, take it for concept.

    Bitcoin uses a very similar concept for transactions, with a twist. You have a digital wallet. This wallet when it's created has an initial "address keypair", with a priivate key in the wallet, and a public address that you can give anyone to make a payment. If you only ever use one wallet, and one address, its like PGP where you have only one private key, and one public address.

    The MAJOR difference, and what makes Bitcoin insulated from the ability to hack it by breaking the encryption, is that you can make countless new address keypair for your wallet. It is actually recommended that you do this for every single transaction you perform, as this also leads to the anonymity part. There's enough unique addresses available in Bitcoin that you could create 1,000,000 new address every second, and not run out for 2^116 years.

    On top of that, even if it were possibly to break the crypto, which inevitably it probably will, the best thing you could do is gain the private key to a SINGLE PERSON's wallet or to a SINGLE TRANSACTION and be able to get the bitcoins in that wallet, or spent in that one transaction. However, if the bitcoins are moved again, which again is best practice and recommended, there will be nothing to steal.

    So, back to the front door analogy. Bitcoins built in protocols make it so that you could do the equivalent of changing your front door locks with every single transaction you make. What good is an available door lock to a thief if it's sitting on the lawn, already replaced with a new one?

    2) Brute Force Mining 51% attack.

    As mentioned in a previous post, there's possibility of a 51% attack - where enough mining power could "take over the network". I explained a little above what could happen, but here's a better explanation - https://learncryptography.com/cryptocurrency/51-attack

    But, even beyond that, a 51% attack of the type InfleXion is trying to advocate should fail very quickly. To understand why, a little explanation of how mining actually works.

    Back in 2009, any user could mine bitcoins on their home computer with a CPU or GPU (high-end graphics card). Each computer was a "node" - a full part of the Bitcoin network, which the miner used. Each node was also considered a "mining pool", basically for that user. Every miner needed to attach to a mining pool in order to "get work" to do to mine Bitcoins.

    Fas forward to today, and the concept of a mining pool hasn't changed, just the size and scope. Because there's so much processing power needed to mine bitcoins, many smaller miners attach to larger pools. The bigger the pool, the larger the chance of "finding a block" and getting the BTC reward. When one is found, it is proportionally distributed to the miners based on how much processing they contribute on average.

    While Bitcoin is "decentralized", meaning that there is no one computer, server, or person controlling it, it is NOT "distributed". This is an enormous distinction - and exactly the reason why something like Quantum Computing is for the most part marginalized.

    Distributed computing, such as SETI, or large-scale weather models (typical uses of current supercomputers, and one which QC would excel at as a replacement) use a "puzzle" methodology. Each computer is given a piece of the overall end goal, it works on processing it, and returns the completed puzzle piece back. It then grabs another puzzle piece to work on. Once all the computations are done, all answers given, and all pieces returned, your work is done, it's been completed.

    Bitcoin is NOT a puzzle-piece based end game. It is a competition. It is completely "client-server", in that a server gives everyone (the miners) a piece of work to do, and when it's done the miner responds with an answer. If the answer is correct, that miner wins, gets the reward, the block is processed, and you move on.

    The major difference is that ALL MINERS work on the SAME problem. Each miner is trying to solve the same exact block with the same exact calculations, and eventually one miner gets lucky.

    It is logical that if you brought a faster miner to the party, your chances of finding the answers and getting the rewards are obviously greater. This is to a degree true, but there's also technical things built into Bitcoin to introduce variance and luck to mitigate it slightly.

    However, that being said, if you brought so much processing power to the party, you could garner a higher share.

    Except for one thing - PROFIT.

    Miners are greedy and selfish, they want to solve the blocks and get the rewards.

    If someone brought a nuclear weapon to a gun fight, it would be found out quickly. Being a distributed system, it would self-regulate.

    Because miners need to funnel through a smaller number of mining pools, anyone with that much power would be found out quickly, and back to being selfish and self-regulating, the mining pools supporting the nuclear weapons would be blacklisted, and no one would accept any solved blocks from those addresses. They're in essence diffusing the bombs at the source.

    I've left a lot out technically, as this post has become too long already.

    However, at the core of it, there are many reasons why a simplistic set of attack theories would fail today, and would also fail tomorrow. More computing power will arise, as it has already, and failsafes will kick in and adapt as they come in.

    I hope this helped at least some understand better a little more about Bitcoin as a technology, and the things that help keep it from falling to some of the technical and social challenges present today.
     
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  21. Michael K

    Michael K Well-Known Member

    6 bitcoins is over $7,000 right now. Why not sell them?
     
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