[OmarIsmail]

Mining is what makes the bitcoin network secure. The higher the hashrate, the more secure the bitcoin network. As I mentioned in another comment, if you compare the resources required to secure the bitcoin network vs the resources required to secure any other financial networks, it's miniscule.

[Nursie]

It's only required because of the decentralisation fetish of coiners.

Perfectly secure systems exist that don't require this lunacy.

[dasil003]

First of all, there's no such thing as a perfectly secure system, second of all, you tar people who are interested in decentralization at your own peril. The type of power that is being consolidated in multinational corporations is greater than anything that's ever existed in the history of the world. If we don't want to wake up as serfs one day we should be taking decentralization and other technological democratic aids seriously while we have the chance.

[betterunix]

As opposed to the power Bitcoin exchanges, Bitcoin mining pools, and Bitcoin developers have over Bitcoin? The supposed decentralization in Bitcoin is theoretical at best; in practice, power is concentrated in a few key places.

So really, we could make a better system, one that uses far less power, by just accepting that some things cannot be decentralized and designing a system accordingly.

[dasil003]

Right, so because there are emergent power structures of some sort, it's all equivalent and there's nothing actually decentralized about it. I mean, Linux might be "open source", but really Linus is calling the shots, so it's really no different than Windows at the end of the day.

[betterunix]

You had said that we should criticize decentralization at our own peril because power in the current finance system is being concentrated on a small set of corporations. The only difference between that and Bitcoin is the scale -- the amount of money involved with Bitcoin is nowhere close to the amount of money that multinational banks are dealing with.

The difference is that with Bitcoin, we are also pouring otherwise useful energy down the drain as part of the security model. The is purely because of a fantasy about an ideal kind of money that requires no central authority. If we were to drop that fantasy and accept the existence of authorities in the system, we could create a digital cash system that:

* Has the same kind of payment security properties as Bitcoin

* Actually allows for anonymous payments

* Supports offline transactions

* Requires many orders of magnitude less power than Bitcoin

Of course, as soon as you say "central authority," the Bitcoin crowd dismisses the idea entirely, regardless of its merits and regardless of the existence of concentrated authority in Bitcoin.

[Nursie]

True. Perfect was the wrong word to use. Perhaps I should have said "as good or better than BTC"

The main point stands though - without thw decentralisation fetish, this thrashing would be unnecessary.

[datphp]

They aren't perfectly secured. They seem secure for two reasons:

Try to hack a bank, or exploit credit cards, or even break in a vault, and you'll see what kind of external measures governments and private agencies put into protecting the system (hint: you'll get locked forever, or shot, or worse)

Now imagine you succeed, and somehow don't leave any exploitable trail, do you think a story will pop somewhere? I don't.

Centralized money systems are the reason today, what you make in a month working 16 hours a day in some country will buy you a drink in another. This allows rich countries to straight up buyout any poor country's production, and for trivial amounts. It leaves them in a state where people are starving, even though they produce enough to feed 10x their population.

Imagine a world where a bag of rice costs the same in every country. Yeah, currencies are awesome.

Edit: just to be clear, I'm not saying rich countries are evil(er), because this would not work without the cooperation of poor countries leadership.

[zby]

I would add to that that the only part that requires this proof of work when decentralized is the timestamping. We can have a system where everything is decentralized with a timestamping subsystem (that can also be composed of many computers for a balance of power) that blindly timestamps transaction hashes without even knowing what it is timestamping so that it cannot censor it. This would be a perfectly reasonable system for me and one that would spare that huge cost of electricity burned on proof of work.

[celticninja]

first of all perfectly secure systems do not exist. but lets say for a minute you mean visa or mastercard are perfectly secure, do you think that the electricity use of the bitcoin network exceeds the electricity use of VISA all over the world? They run their own always on computer network and offices, which need people and computers that require electricity to be able to function properly. Then factor in that this is repeated in almost every country they operate in, sometimes more than once depending on the size of the country. So the electricity use of bitcoin is just a drop int he ocean compared to what the current banking industry uses.

[betterunix]

"do you think that the electricity use of the bitcoin network exceeds the electricity use of VISA all over the world?"

That is the wrong comparison. The right comparison is this: does Bitcoin require more electrical energy per transaction than VISA?

If the answer is not "yes" today, it will eventually be "yes." Here is a thought experiment:

Suppose that a new technology is developed that halves the energy required to process a VISA transaction and check for fraud. VISA has every incentive to adopt that technology, and thus reduce its power consumption.

Now suppose that a new technology halves the energy required to process Bitcoin transactions i.e. to compute hashes. Since miners profit by computing more blocks, their incentive is to adopt the new technology, compute hashes at twice the rate, and their net power consumption remains constant.

[celticninja]

I concur.

However Visa has no incentive to search formore efficient technologies where are you in bitcoin my name is constantly being developed to become more efficient and it isn't necessarily the number ofhashes you are getting but thenumber of hashes you get per watt of electricity used. so the incentive is there for minors always, this is not the case with visa

apologies for paul wording Ion phone

[sickpig]

Decentralization is needed if you want bitcoin to be censorship-resistant.

[betterunix]

Wrong. You can have a central authority that issues money and still have a censorship resistant system -- this is what paper cash is, and this is what is possible with the digital cash systems academic cryptographers have been studying since the 1980s.

[sickpig]

Really? So what happens if I shut down the central authority?

[betterunix]

This was already addressed by the research comminuty:

http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.105...

In other words, you can set things up so that no single authority can fail in a way that would cause the entire system to fail. You can have N authorities such that a minimum of K are needed to keep the system working.

[inoop]

> The higher the hashrate, the more secure the bitcoin network.

wat

edit: clarification, the total hash rate has zero bearing on the overall security. The question is about how hard it is to gain majority, in other words, how that hashing power is distributed.

At the time of writing, the two largest pools have 50% of the hashing power: https://blockchain.info/pools. If they decide to work together and perhaps DDOS a smaller third pool, they can have 51% pretty easily.

Inb4 'they wouldn't do that', the largest pool (ghash.io) is known to have attempted double spends before. Besides, surely one wouldn't argue that Bitcoin's security is a matter of confidence in a few pool operators being friendly?

[ninthfrank07]

What do you think of Nxt? It's 100% proof of stake. http://www.nxtcrypto.org