The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: celerystalks on December 28, 2017, 08:51:09 AM
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Supports criminal enterprises, terrorists, and regimes such as North Korea. I'm surprised the govt hasn't cracked down hard on cryptos due to the North Korea angle due to the sanctions.
Rules can change at anytime. The limited number of bitcoin is a sham.
Any kid and their dog can start a new crypto currency again meaning the supply is limitless.
Use case is greatly greatly exaggerated.
Misunderstanding/confusion equating crypto currency and blockchain technology.
Sent from my SAMSUNG-SM-G930A using Tapatalk
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Re 5) yes , so are OTCBB, so?
Re 9) yes, cash can also be lost forever.
Re 10) hacking exists for cc and bank transactions also
Re 11) and 12) true for BTC, not so for Ripple
Re 13) check out Monero
Many ways to view crypto, skepticism is good.
Blockchain tech will impact the future and it is tough for most to distinguish between the utility and the tokens. It seems likely true that most coins/ICO's are silly shams, if someone wants to make a quick money off of someone else's silliness they can, indeed Wall St/churches/other orgs do it everyday.
Of course there a crypto bubble, this does not mean that all crypto or all blockchain tech should be tossed, it just means eyes should be wide open and money "invested" should have no strings attached. It can be like a long productive weekend in Vegas where you have more $ to dump into Vanguard on the Monday morning.....or not.
Disclaimer: put 10 k in cryptos last summer, pulled out 13k this fall ( original investment plus profit back) . Still have value of 22 k of coins in. Play money to just watch and speculate with. I view this as "not my hard earned money". It's fun to watch it grow so quickly.
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We have enough threads touting the supposed, real and/or imagined benefits of cryptos.
I want to start a thread devoted to debunking them.
I intend for this thread to be devoted to crypto-skepticism. I'd like to gather up all of the arguments against cryptos so that they are all in one place.
Although fact-based refutations of raised skeptical points based on actual evidence are welcome, I don't want to hear unsubstantiated prognostications, opinions, predictions, wild fantasy about the future of cryptos. Those sorts of posts will be welcome in other threads.
Here are a list, in no particular order, of things discussed in other threads that I think count against cryptos:
1. No government backing, cannot require tax authority or judgment creditors to accept cryptos
2. Not widely accepted as currency by merchants
3. Deflationary, money supply cannot easily be expanded when determined necessary by central banks
4. Treated as a capital asset for IRS purposes (transactions require basis recording and reporting, so cannot be easily used as cash)
5. Wildly volatile
6. Cannot effectively loan most cryptos
7. Not subject to seizure based on court order, so cannot easily be used as collateral and loaned against
8. Can be forked at any point in time, leading to confusion of contracts based on pre-fork crypto
9. Lost private keys means units of cryptos can be lost forever
10. Hacked exchanges happen all the time, and hodlers at exchanges are not fully insured against loss
11. Incredible, growing energy consumption needed to mine
12. High transactional costs needed to get miners to process transactions
13. Not truly anonymous
Feel free to add any that I missed or to bring up new ones.
All that, plus what happens if you have your "wallet" on your phone/computer (because clearly the exchanges can't be trusted to protect your "money") and the hard drive fails?
Aside from the above, Bitcoin, to me, looks like a major PITA.
I guess if you like the adrenaline rush you get from speculating/gambling, it's fine.
But at this point, it's not a currency. And it's not an investment.
I'll pass on this, just like I passed on the real estate bubble and the .com bubble.
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People don't fully appreciate the implications of items (1) and (13) on your list. It's not only that they don't carry the faith and backing of government, but also that governments are likely not keen on a black market currency competing with their state sanctioned currency.
I would be shocked if the NSA isn't already mapping out bitcoin addresses, transactions, likely owners and physical locations (https://www.forbes.com/sites/andygreenberg/2013/09/05/follow-the-bitcoins-how-we-got-busted-buying-drugs-on-silk-roads-black-market/#7f4df9bfadf7). Let's not forget that in the '30s the feds disallowed possession of gold, so there is precedent for such things. Governments could decide to prohibit origination of crypto transactions within their borders. Yes, some people will be able to work around this with proxies (assuming you actually trust these things) and such, but for the vast majority of citizens the legal risk would not be worthwhile (more on this later). People could be left with currency that is effectively unusable.
There is also risk in the underlying encryption being compromised. Encryption is never 100% secure...just needs to be secure enough to make it too expensive to crack relative to the award. Crypto currency is a huge target...this isn't like hacking into a bank where transactions are totally traceable with other security controls. This is cash equivalent just sitting out there on the ether. As computing power increases, say quantum computing (5-10 years off??), then things like the Bitcoin ledger are increasingly vulnerable to forged transactions. At present attacking any given address isn't worth it (too much computing power/energy required), but that cost will decrease and I would be surprised if botnets were/are not harnessed for this purpose. A well funded government that would like nothing more than to see cryptocurrencies go away could even fund efforts to crack select addresses in order to sow doubt in the system.
Which brings me to my final point: Currencies are only as good as the faith people have in them. If governments decide to crackdown, or the encryption risk becomes real, or a determined attacker starts forging transactions and emptying addresses, then people will lose faith in the currency and value will plummet.
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This article sums up my pov on the blockchain: https://hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100 (https://hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100)
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There is also a lost opportunity to invest in things that really matter, and for the greater good—
Like investing in a company that is working on bringing a new cancer drug to market.
Or investing in a clean energy company.
When investing in crypto, are you really helping the world become a better place?
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This article sums up my pov on the blockchain: https://hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100 (https://hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100)
Good article. Thanks toganet.
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Supports criminal enterprises, terrorists, and regimes such as North Korea. I'm surprised the govt hasn't cracked down hard on cryptos due to the North Korea angle due to the sanctions.
Rules can change at anytime. The limited number of bitcoin is a sham.
Any kid and their dog can start a new crypto currency again meaning the supply is limitless.
Use case is greatly greatly exaggerated.
Misunderstanding/confusion equating crypto currency and blockchain technology.
Sent from my SAMSUNG-SM-G930A using Tapatalk
how does it support criminal activity exactly? bitcoin leaves a trail that anyone can see (its anonymity is by far the biggest misconception) - cash is by far more "anonymous" than bitcoin. by sham, do you mean it's scarcity = perceived value??? otherwise, there's a finite #...
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I have a great reason to think that bitcoin is not going to work long term. I had something like $200 worth of bitcoin in my account stored on my computer. I tried to transfer that money recently to a wallet that I also owned. The transfer fee was something like $40-$50. That is a lot more expensive than a bank transfer and I couldn't justify that. I bought some bitcoin as a trial some years ago and it was fantastic. It simply hasn't scaled. At the moment I don't think bitcoin is going to be a long term viable cryptocurrency.
I think other crypto's might work but any crypto is going to have to function firstly as a medium of exchange and that means that transfer fees have to be exceptionally low.
So for a crypto to work well for me I require the following points:-
1. Secure for the individual holding a crypto - I don't think exchanges have to be secure but I need to be able to store a crypto on my computer or safe (via a paper wallet or whatever) securely.
2. Secure across the network. It needs to be a peer to peer currency that is secure across the network so that no miner or group of miners can hijack the currency.
3. It needs to have extremely low transfer fees. I should be able to transfer a dollar a pay a maximum of say 1 cent.
4. It needs to be private and free from the government. I don't want any government tracking my spending.
5. This is related to security but it needs to be immutable. Basically transactions need to be set in stone. There cannot be any reversing of a transaction.
6. I need to be able to see my transactions on a ledger but I need to be able to secure my transactions. I figure I should have a private key that I can use for transactions and I can set-up a bunch of different addresses to send or recieve money but only I get to view those transactions.
I think it's going to be hard to set-up a currency that can handle the above requirements and that is just off the top of my head. I'm not skeptical per se but I've gone from a believer in the concept to now being skeptical.
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But at this point, it's not a currency. And it's not an investment.
I'll pass on this, just like I passed on the real estate bubble and the .com bubble.
Yep. I wasn't even considering it as an investment because to last long term it has to be more than an investment. If something is just an investment it has to be speculation. Stocks pay dividends and bonds pay interest. Gold just sits there. It might be a hedge but even that is pushing it. Crypto's are meant to be a viable currency.
On the investment front so many people at my job are now speculating on cryptocurrencies and that means it's a bubble.
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When investing in crypto, are you really helping the world become a better place?
In fact, no. The power consumption alone is making the world a worse place. Where does the giant server farm get its power from? The internet and our need to store huge amounts of data is a similar problem no one seems to bat an eye at.
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The way I see it, cryptocurrencies don't solve any problem that any real person has, except maybe criminals. We want more, not less, ability to protect our assets against fraud and theft. And the learning curve is so steep that it'd be a miracle if they ever find broad adoption as a currency. Hell, I work in tech and even I find them forbiddingly hard to understand or use.
As investments, they're even worse. Unlike stocks and bonds, they neither have a revenue stream nor any tie to real assets. Their value is based solely on bigger-fool thinking.
With that said, though I'm a hardcore crypto skeptic, even I feel a tinge of regret seeing how the price of bitcoin has skyrocketed this year. If I'd bought or mined a few hundred early on, I'd be able to retire by now at a WR beyond my wildest dreams.
But when I ask myself when was a good moment to buy into bitcoin, I come to the conclusion that there never was one. They were always incredibly complicated, wildly volatile, besieged by all manner of hacking and scams. Knowing that hindsight is 20/20 and no one can see the future, I'm confident I did the right thing by staying out.
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I'll just point to this post (https://forum.mrmoneymustache.com/investor-alley/official-crypto-currency-portfolios-and-discussion/msg1831578/#msg1831578). I've been sitting on some XRP since they ran a promotion giving them away a few years ago. Its value has since gone up 100-fold, making it worthwhile to look into how to convert it into real usable money. I asked how to make this conversion.
Apparently Coinbase is the only exchange that reliably pays out USD balances, but they don't deal in XRP directly, so the best way to convert XRP to USD is to use a separate exchange to first convert the XRP into LTC (not Bitcoin because the transaction fees are ridiculous), and then send the LTC to Coinbase. That recommendation didn't really instill me with a bunch of confidence in the cryptocurrency ecosystem.
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My gym has a lovely lady at the front desk greeting members and passing towels. She can't stop talking to me about bitcoin. She just showed me that she was trading bitcoin AT THE FRONT DESK COMPUTER IN THE GYM!
I'm done! This is stupid! No way I will ever get involved in this crap.
I go now and watch The Big Short!
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My gym has a lovely lady at the front desk greeting members and passing towels. She can't stop talking to me about bitcoin. She just showed me that she was trading bitcoin AT THE FRONT DESK COMPUTER IN THE GYM!
I'm done! This is stupid! No way I will ever get involved in this crap.
I go now and watch The Big Short!
This sounds like how Joe Kennedy kept all his money right before the crash of 1929. When the shoe shine boy is giving out stock tips, you know it's time go get out.
To me, crypto is completely un-necessary for anything legitimate. Besides putting up something to bet on, what use is it? If I want to speculate on currencies, I'll speculate on Mexican Pesos, Japanese Yen and Russian Rubles.
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Here are a list, in no particular order, of things discussed in other threads that I think count against cryptos:
1. No government backing, cannot require tax authority or judgment creditors to accept cryptos
2. Not widely accepted as currency by merchants
3. Deflationary, money supply cannot easily be expanded when determined necessary by central banks
4. Treated as a capital asset for IRS purposes (transactions require basis recording and reporting, so cannot be easily used as cash)
5. Wildly volatile
6. Cannot effectively loan most cryptos
7. Not subject to seizure based on court order, so cannot easily be used as collateral and loaned against
8. Can be forked at any point in time, leading to confusion of contracts based on pre-fork crypto
9. Lost private keys means units of cryptos can be lost forever
10. Hacked exchanges happen all the time, and hodlers at exchanges are not fully insured against loss
11. Incredible, growing energy consumption needed to mine
12. High transactional costs needed to get miners to process transactions
13. Not truly anonymous
Full disclosure, I mine ETH and XMR, but I'm mostly a cryptocurrency skeptic. In specific I have never purchased any as an investment (I own a little BTC that I purchased to buy goods online). A couple responses:
1. I can't pay my US taxes with Euros either, but people have been trading currencies for centuries.
3. I think that you are completely correct, cryptocurrency is more like digital gold than a good stable currency.
4. Yes, just like any foreign currency.
5. Sure, see #3.
7. I think that you are wrong on this one. If it needs to be used as collateral, why not transfer it into an escrow wallet? Just because no one is doing it doesn't mean that it can't be done.
8. This is a very good point
9. Sure, print that shit out and store it in a safe deposit box. What happens if you lose your physical gold?
10. This point is pretty solid, I think it is one of the large problems with major adoption.
11. Ethereum is trying to solve this.
12. ETH is ~$0.80 right now, to transfer an arbitrary amount of money to an arbitrary location on the planet that seems pretty good?
13. I am not an expert at this, but Monero and ZCash are trying to solve that. ZCash in particular is using cutting edge "zero knowledge proofs."
I would like to echo a couple of your points above: there is a security/accessibility problem with cryptocurrencies at this point. You can keep everything in an offline wallet, but then it is hard to spend. You can keep everything in an online wallet, but then it is easier to hack.
I would also like to add my own:
14. As a retail investor, it is easy to buy a broadly diversified equities portfolio through any number of mutual fund companies (95% of my net worth is in VTWSX). The same can not be said for cryptocurrencies. Even if we accept that cryptocurrencies have utility and/or value, that doesn't make them a practical/good investment for the average retail investor.
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The way I see it, cryptocurrencies don't solve any problem that any real person has, except maybe criminals. We want more, not less, ability to protect our assets against fraud and theft. And the learning curve is so steep that it'd be a miracle if they ever find broad adoption as a currency. Hell, I work in tech and even I find them forbiddingly hard to understand or use.
How would you suggest that I send money to my brother in Singapore within the hour who is not a US citizen or resident and as such does not have a US bank account? Note: I'm not a Singaporean citizen or resident, and as such I do not have a Singaporean bank account. Because with ETH the fee is $0.80.
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The way I see it, cryptocurrencies don't solve any problem that any real person has, except maybe criminals. We want more, not less, ability to protect our assets against fraud and theft. And the learning curve is so steep that it'd be a miracle if they ever find broad adoption as a currency. Hell, I work in tech and even I find them forbiddingly hard to understand or use.
How would you suggest that I send money to my brother in Singapore within the hour who is not a US citizen or resident and as such does not have a US bank account? Note: I'm not a Singaporean citizen or resident, and as such I do not have a Singaporean bank account. Because with ETH the fee is $0.80.
We added red tape to moving money after 9/11 to combat trafficking, terrorism financing, and some other concerns. If cryptocurrency is a solution to this bureaucracy problem, you can count on the government finding a way to put it under the same laws which will likely take away some of that advantage.
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The way I see it, cryptocurrencies don't solve any problem that any real person has, except maybe criminals. We want more, not less, ability to protect our assets against fraud and theft. And the learning curve is so steep that it'd be a miracle if they ever find broad adoption as a currency. Hell, I work in tech and even I find them forbiddingly hard to understand or use.
How would you suggest that I send money to my brother in Singapore within the hour who is not a US citizen or resident and as such does not have a US bank account? Note: I'm not a Singaporean citizen or resident, and as such I do not have a Singaporean bank account. Because with ETH the fee is $0.80.
Cryptocurrencies can work great for this use case.
The price of any particular cryptocurrency token is pretty irrelevant when used as a short-term intermediate step for a conversion between two other currencies.
If I'm transferring $1,000 to another country, I'll buy $1,000 worth of that cryptocurrency, send it to my relative there, and she can sell that cryptocurrency for its current value in local currency. Whether $1,000 buys one unit of cryptocurrency or one million doesn't make a difference here.
For that reason I think it's important to distinguish between cryptocurrency as a payment technology and cryptocurrency as an investment. For most of the major use cases that cryptocurrency can enable, the actual price of a token is immaterial. You're not going to be holding onto large quantities of these tokens for months or years in order to do an international transfer or a drug transaction or whatever. Just like with traditional currencies, it's generally to your advantage not to hold on to a lot of raw currency, and instead put most of your wealth into income-producing assets.
But back to your international transfer example, the volatility of cryptocurrencies is a major problem for this use case. You're not paying 80¢ for the transfer, you're paying 80¢ plus or minus several percent of the total balance due to cryptocurrency volatility in between when you bought your ETH and when your brother was able to redeem it for local currency. Using more traditional methods of money transfer might involve a higher fixed fee, but your brother knows that he'll get essentially the whole balance you sent, minus predictable fees.
If you really support cryptocurrency as a technology more than cryptocurrency as an investment, you should hope for prices to stabilize so that people know that their bitcoin will be able to buy about the same tomorrow as it can buy today.
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1. No government backing, cannot require tax authority or judgment creditors to accept cryptos
1. I can't pay my US taxes with Euros either, but people have been trading currencies for centuries.
Not sure if this is a vaild argument. You can't pay your taxes or creditors in Euros, but anyone living in europe can . . . so there's a valid and widespread use case for the Euro which provides significant value to the currency. That's quite different from crypto currencies.
The way I see it, cryptocurrencies don't solve any problem that any real person has, except maybe criminals. We want more, not less, ability to protect our assets against fraud and theft. And the learning curve is so steep that it'd be a miracle if they ever find broad adoption as a currency. Hell, I work in tech and even I find them forbiddingly hard to understand or use.
How would you suggest that I send money to my brother in Singapore within the hour who is not a US citizen or resident and as such does not have a US bank account? Note: I'm not a Singaporean citizen or resident, and as such I do not have a Singaporean bank account. Because with ETH the fee is $0.80.
What is your brother in Singapore (who doesn't have a bank account) hoping to spend the money on in the next hour? Because there is very little stuff that can be purchased with Bitcoin and even less with Ethereum. (It has to be local of course, because otherwise you could just order it online and send it to him . . . no need to send him the money.) A useless store of "value" isn't of value if you can't actually buy anything with it.
But even assuming that sending virtual money has to be done . . . how is using crypto significantly better than using Paypal for this purpose?
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The way I see it, cryptocurrencies don't solve any problem that any real person has, except maybe criminals. We want more, not less, ability to protect our assets against fraud and theft. And the learning curve is so steep that it'd be a miracle if they ever find broad adoption as a currency. Hell, I work in tech and even I find them forbiddingly hard to understand or use.
How would you suggest that I send money to my brother in Singapore within the hour who is not a US citizen or resident and as such does not have a US bank account? Note: I'm not a Singaporean citizen or resident, and as such I do not have a Singaporean bank account. Because with ETH the fee is $0.80.
Wire transfer. Sure the fee is more than $.80 but I would gladly pay that for the security of dealing with reputable banks who can track the transaction and ensure the money ends up where it should.
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I just bought a soda from the office machine for $0.25. It was a trivial transaction.
I didn't have to get a digital wallet off of an offline secure hard drive. No internet connectivity was required. Hell, if the power went out I would have had the secretary unlock the machine or grabbed a warm one plus ice from the freezer. There were no transaction fees, it breaks a dollar with no crypto tax on top.
I see a long way for crypto currencies to go before I can casually grab a soda with them. With transaction fees of $20 for bitcoin and $0.80 for etherium they only make sense when dealing with roughly kilo-dollar magnitude or more. I don't make a lot of those. And of those I have yet to see a "Bitcoin accepted here" sign at any of them (my mortgage company comes to mind). So I see no point in figuring out digital wallets, secure offline storage for my life savings, even adding more crappy apps onto my phone.
Meh. I counter all the over caffeinated exuberance from all these crypto fan boys with "Meh." I hear every word and just can't work up more than a shoulder shrug for all the supposed use cases and value propositions. Someday I predict that peoples coins will end up in a pile in the corner with those old AOL CD's of precisely the same intrinsic value.
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My gym has a lovely lady at the front desk greeting members and passing towels. She can't stop talking to me about bitcoin. She just showed me that she was trading bitcoin AT THE FRONT DESK COMPUTER IN THE GYM!
I'm done! This is stupid! No way I will ever get involved in this crap.
I go now and watch The Big Short!
This sounds like how Joe Kennedy kept all his money right before the crash of 1929. When the shoe shine boy is giving out stock tips, you know it's time go get out.
This is precisely what I was thinking of. That and the scene in the movie Big Short when the stripper talks about her real estate investments right before the bubble bust.
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What is your brother in Singapore (who doesn't have a bank account) hoping to spend the money on in the next hour? Because there is very little stuff that can be purchased with Bitcoin and even less with Ethereum. (It has to be local of course, because otherwise you could just order it online and send it to him . . . no need to send him the money.) A useless store of "value" isn't of value if you can't actually buy anything with it.
But even assuming that sending virtual money has to be done . . . how is using crypto significantly better than using Paypal for this purpose?
He has a bank account, but he is not legally allowed to open a US bank account, so getting money from the US to Singapore is complicated. PayPal does work with Singapore, so that is an option. However, there are countries where PayPal won't send money (Myanmar, Iran, etc). Before you tell me that I'm probably not allowed to send money to Iran (or at least I wasn't until very recently), I know. However, neither my brother, nor his wife, nor his mother, nor his children, nor his in-laws are US citizens. This "just use some standard everyday service and currency" is a very western-centric view of the world.
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What is your brother in Singapore (who doesn't have a bank account) hoping to spend the money on in the next hour? Because there is very little stuff that can be purchased with Bitcoin and even less with Ethereum. (It has to be local of course, because otherwise you could just order it online and send it to him . . . no need to send him the money.) A useless store of "value" isn't of value if you can't actually buy anything with it.
But even assuming that sending virtual money has to be done . . . how is using crypto significantly better than using Paypal for this purpose?
He has a bank account, but he is not legally allowed to open a US bank account, so getting money from the US to Singapore is complicated. PayPal does work with Singapore, so that is an option. However, there are countries where PayPal won't send money (Myanmar, Iran, etc). Before you tell me that I'm probably not allowed to send money to Iran (or at least I wasn't until very recently), I know. However, neither my brother, nor his wife, nor his mother, nor his children, nor his in-laws are US citizens. This "just use some standard everyday service and currency" is a very western-centric view of the world.
Open a Citibank bank account. They have instant global transfers between international Citibank accounts in 20 countries, including Singapore & US.
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Open a Citibank bank account. They have instant global transfers between international Citibank accounts in 20 countries, including Singapore & US.
So, what do the people in the other 175 countries do?
3, 5, 9. Gold is not a currency. Comparing cryptos to gold actually cuts against their legitimacy as a currency since gold suffers from volatility, storage/transaction costs, inability to expand supply when needed.
We can agree that cryptocurrencies do not behave like good modern fiat currencies. How about this: just read "digital golds." But remember, this digital gold can be converted from your local currency, to digital gold, transferred overseas, and then converted out of digital gold into the local currency in a matter of hours. Or, at least that is the promise that people are willing to bet money on.
7. Placing cryptos in an escrow wallet is not the same as using an asset as collateral. Ordinarily a debtor will be allowed to retain possession and use of an asset pledged as collateral. Think: mortgage, car loan, securities in a margin account. Further, assuming placing in escrow is the same as using as collateral, who holds the keys? And is this secure? Probably not, and it is probably part of the reason no one does it.
No, the escrow wallet would be like a CD loan. How many banks will loan me money based on the gold in my house?
11 and 13. Trying to solve something means its still a problem.
I may have misrepresented the state of the art. 13 is solved.*
* - Until it isn't, because that's how cryptography and security research works.
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Open a Citibank bank account. They have instant global transfers between international Citibank accounts in 20 countries, including Singapore & US.
So, what do the people in the other 175 countries do?
You asked a specific question about transferring money to Singapore, so I gave you a specific answer. The people in the other 175 countries can work out which option suits them best, whether that be a international bank transfer, money transfer service or forex site. Unless both parties hold and use a particular crypto for regular transactions, I highly doubt using a crypto transfer would be the cheapest or quickest, as you still need to convert to fiat at one or both ends.
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Lots of good reasoning in this thread, but really we don't need it. This stuff doesn't pass the sniff test. Up 1,250% in one year? Nothing honest does that.
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Open a Citibank bank account. They have instant global transfers between international Citibank accounts in 20 countries, including Singapore & US.
So, what do the people in the other 175 countries do?
You asked a specific question about transferring money to Singapore, so I gave you a specific answer. The people in the other 175 countries can work out which option suits them best, whether that be a international bank transfer, money transfer service or forex site. Unless both parties hold and use a particular crypto for regular transactions, I highly doubt using a crypto transfer would be the cheapest or quickest, as you still need to convert to fiat at one or both ends.
I am not a crypto shill, but I happen to have Citibank accounts in two different countries (SG is not one of them).
Citibank transfers between accounts in different countries are convenient but pretty expensive. They don't charge transaction fees but screw you on exchange rates. It was cheaper for me to use a third party FX broker (I think I used XE.com a few years ago) than to transfer between two Citibank accounts.
If I had to make regular transfers from the US to a person overseas, I would try to add them as an authorized user to a Charles Schwab checking account or similar (no transaction fees and you get reimbursed for ATM fees worldwide) and send them a debit card.
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Open a Citibank bank account. They have instant global transfers between international Citibank accounts in 20 countries, including Singapore & US.
So, what do the people in the other 175 countries do?
You asked a specific question about transferring money to Singapore, so I gave you a specific answer. The people in the other 175 countries can work out which option suits them best, whether that be a international bank transfer, money transfer service or forex site. Unless both parties hold and use a particular crypto for regular transactions, I highly doubt using a crypto transfer would be the cheapest or quickest, as you still need to convert to fiat at one or both ends.
I am not a crypto shill, but I happen to have Citibank accounts in two different countries (SG is not one of them).
Citibank transfers between accounts in different countries are convenient but pretty expensive. They don't charge transaction fees but screw you on exchange rates. It was cheaper for me to use a third party FX broker (I think I used XE.com a few years ago) than to transfer between two Citibank accounts.
If I had to make regular transfers from the US to a person overseas, I would try to add them as an authorized user to a Charles Schwab checking account or similar (no transaction fees and you get reimbursed for ATM fees worldwide) and send them a debit card.
Actually that’s a really good idea. I have a Citibank debit card that I use solely for foreign cash withdrawals when traveling. It’s free (save for the local ATM fee if applicable) and the currency conversion is at Visa rates, which are fantastic.
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He has a bank account, but he is not legally allowed to open a US bank account...
Why not? I can open a US bank account, and I'm not American or US resident. Something specific here?
Sending money between different currencies is difficult/expensive between different people. Sending from one account to another account in your name via a forex house is less expensive.
It all depends on what is trying to be achieved. Just get 'money' there? Buy the whatever to be delivered in the foreign country using your home address/credit card as the billing address (eg from Amazon). Regular payments? Then some kind of joint bank/forex house transfer.
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He has a bank account, but he is not legally allowed to open a US bank account...
Why not? I can open a US bank account, and I'm not American or US resident. Something specific here?
Do you have a taxpayer ID number? I'm pretty sure that if you go to open an account post 9/11 they will demand one for "terrorism" purposes. In fact, I just opened bank accounts for my two kids last week and they told me that they couldn't do it without their SSNs (which are taxpayer ID numbers).
For people that have never been legally authorized to work in the US, and can not legally live in the US, do you expect them to be able to get taxpayer IDs? I'm curious if you know something that I don't.
EDIT - Also, this is why cryptocurrencies aren't going anywhere. Because we are having this conversation. Because two sophisticated intelligent people who routinely use banks can't even agree on what the US government banking regulations are to open an account, and the US Government is only one of the 195 world governments.
PS - I am a UK citizen and none of the UK banks that I can find will let me open an account overseas. They insist that I be a UK resident to open an account. If you know of one without this requirement, please let me know.
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http://www.mrmoneymustache.com/2018/01/02/why-bitcoin-is-stupid/
That says it all. Also:
http://www.themoneycommando.com/quick-analysis-investing-bitcoin-stupid/
http://www.themoneycommando.com/more-reasons-to-avoid-bitcoin/
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He has a bank account, but he is not legally allowed to open a US bank account...
Why not? I can open a US bank account, and I'm not American or US resident. Something specific here?
Do you have a taxpayer ID number? I'm pretty sure that if you go to open an account post 9/11 they will demand one for "terrorism" purposes. In fact, I just opened bank accounts for my two kids last week and they told me that they couldn't do it without their SSNs (which are taxpayer ID numbers).
For people that have never been legally authorized to work in the US, and can not legally live in the US, do you expect them to be able to get taxpayer IDs? I'm curious if you know something that I don't.
EDIT - Also, this is why cryptocurrencies aren't going anywhere. Because we are having this conversation. Because two sophisticated intelligent people who routinely use banks can't even agree on what the US government banking regulations are to open an account, and the US Government is only one of the 195 world governments.
PS - I am a UK citizen and none of the UK banks that I can find will let me open an account overseas. They insist that I be a UK resident to open an account. If you know of one without this requirement, please let me know.
I do, but as far as I know that is incidental. US banks will accept foreign TINs. Again, as far as I know. This *may* be a peculiarity with Canadian residents, as lots of Canadians own US property and hence need a true US bank account.
Try Alliant Credit Union - you can mail in an application with a foreign address, no problem.
The UK is different, it's always been impossible to open a normal high street bank account without a UK address. There are, however, offshore GBP accounts with Barclays, Lloyds and so on. Nationwide used to do it, but thet stopped. So yes you can get a UK/GBP current account, but not through the normal sites, you have to go to the special ones. These are domiciled on the Isle of Man or Jersey IIRC.
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The MMM article came along at just the right time!
I've just had to groan silently over the past few weeks while watching my hundredaire friends become thousandaires through crypto. Even as I type this, the group text is blowing up with two of my friends trying to get a hold of another friend who is now apparently the crypto guru. To his credit, he tipped us all off about two cryptos that went up by 3x or 4x over the past month, but all he's doing is picking the in vogue stuff with high momentum.
Furthermore, our crypto guru posted a manic Facebook status yesterday bemoaning that he is basically flat broke.
He badgered me a few weeks ago about why I don't just throw a thousand dollars into the latest crypto because I had more money to burn than any of us. I explained to him, and to everyone, about value investing and speculation and bubbles. That didn't work, so then I asked them what they thought the chances are that they, and all the other soccer moms and barbers out there, were out-thinking the room on this. Still nothing.
I kept my strongest argument in my pocket though because it's too uncouth to say. That is, that my net worth is probably greater than all of theirs combined, and I didn't get there by losing my head over to-the-moon investments that no one can really explain the underlying value of. So I just wished them the best.
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I own some BTC, ETH, and LTC just so in the event that it skyrockets, I am not the only friend who is left "coinless"
That being said, I wonder how many "me-too" buys exist like mine and are propping up prices. I fully expect to lose my entire sum.
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I own some BTC, ETH, and LTC just so in the event that it skyrockets, I am not the only friend who is left "coinless"
That being said, I wonder how many "me-too" buys exist like mine and are propping up prices. I fully expect to lose my entire sum.
I'd be less worried (well... doesn't sound like you're worried either way) about the folks like you who throw a few bucks in and will ride it to the top or the bottom.
I'm concerned with the people who put in money they can't afford to put it. It's all good now, when we're at 4% unemployment in the US. A recession hits and takes that to 6% though, and you're going to have a lot of people trying to cash out to buy shit while they find a new job.
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L.A.S. and mathlete,
I agree 100% that this is real problem for real people. That is, the SEC usually protects every day folks from risky bets and reserves them for "sophisticated investors." This is good and bad, but I definitely tell all my friends that I wouldn't "invest" in cryptocurrency before maxing out their 401(k).
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Couple of guys at work are apparently jumping in to davor coin tonight. Reading what little information they have on their website, it sounds like MLM meets crypto, so it must be great!
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A crypto-currency based on a dog meme is now worth over $1 billion (https://news.vice.com/en_us/article/8xvm93/a-crypto-currency-based-on-a-dog-meme-is-now-worth-over-dollar1-billion)
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I just bought a soda from the office machine for $0.25. It was a trivial transaction.
I didn't have to get a digital wallet off of an offline secure hard drive. No internet connectivity was required. Hell, if the power went out I would have had the secretary unlock the machine or grabbed a warm one plus ice from the freezer. There were no transaction fees, it breaks a dollar with no crypto tax on top.
I see a long way for crypto currencies to go before I can casually grab a soda with them. With transaction fees of $20 for bitcoin and $0.80 for etherium they only make sense when dealing with roughly kilo-dollar magnitude or more. I don't make a lot of those. And of those I have yet to see a "Bitcoin accepted here" sign at any of them (my mortgage company comes to mind). So I see no point in figuring out digital wallets, secure offline storage for my life savings, even adding more crappy apps onto my phone.
Meh. I counter all the over caffeinated exuberance from all these crypto fan boys with "Meh." I hear every word and just can't work up more than a shoulder shrug for all the supposed use cases and value propositions. Someday I predict that peoples coins will end up in a pile in the corner with those old AOL CD's of precisely the same intrinsic value.
Ever heard of Raiblocks? It allows for instant transfer and $0 transaction fee. Someone on reddit showed a screenshot of sending / receiving around a million USD using XRB (Raiblocks) at no cost. Now that is powerful...
The point is that Bitcoin, Ethereum etc. are just the start , like 1st gen of crypto. As newer ones like Raiblock and others come out with newer advanced features it will only seek to further adoption of digital currencies and assets.
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I just bought a soda from the office machine for $0.25. It was a trivial transaction.
I didn't have to get a digital wallet off of an offline secure hard drive. No internet connectivity was required. Hell, if the power went out I would have had the secretary unlock the machine or grabbed a warm one plus ice from the freezer. There were no transaction fees, it breaks a dollar with no crypto tax on top.
I see a long way for crypto currencies to go before I can casually grab a soda with them. With transaction fees of $20 for bitcoin and $0.80 for etherium they only make sense when dealing with roughly kilo-dollar magnitude or more. I don't make a lot of those. And of those I have yet to see a "Bitcoin accepted here" sign at any of them (my mortgage company comes to mind). So I see no point in figuring out digital wallets, secure offline storage for my life savings, even adding more crappy apps onto my phone.
Meh. I counter all the over caffeinated exuberance from all these crypto fan boys with "Meh." I hear every word and just can't work up more than a shoulder shrug for all the supposed use cases and value propositions. Someday I predict that peoples coins will end up in a pile in the corner with those old AOL CD's of precisely the same intrinsic value.
Ever heard of Raiblocks? It allows for instant transfer and $0 transaction fee. Someone on reddit showed a screenshot of sending / receiving around a million USD using XRB (Raiblocks) at no cost. Now that is powerful...
The point is that Bitcoin, Ethereum etc. are just the start , like 1st gen of crypto. As newer ones like Raiblock and others come out with newer advanced features it will only seek to further adoption of digital currencies and assets.
Oooookaayyy.....
Are you going to come back and give us all a heads up before you plan to dump, too?
I think his actual point is valid and relevant to this thread. Even if there are actual use-cases for cryptocurrencies or blockchain that will cause one or the other to stick around, the long-term value of any particular cryptocurrency is zero. There will always be a newer, better iteration that is easier or faster or cheaper or whatever. And eventually everyone will jump ship from $currentThing to $newerBetterThing.
That to me is the biggest and most obvious reason why one should be skeptical about "investing" in a cryptocurrency. It's not investing, it's 100% buy-low-sell-high market timing.
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I just bought a soda from the office machine for $0.25. It was a trivial transaction.
I didn't have to get a digital wallet off of an offline secure hard drive. No internet connectivity was required. Hell, if the power went out I would have had the secretary unlock the machine or grabbed a warm one plus ice from the freezer. There were no transaction fees, it breaks a dollar with no crypto tax on top.
I see a long way for crypto currencies to go before I can casually grab a soda with them. With transaction fees of $20 for bitcoin and $0.80 for etherium they only make sense when dealing with roughly kilo-dollar magnitude or more. I don't make a lot of those. And of those I have yet to see a "Bitcoin accepted here" sign at any of them (my mortgage company comes to mind). So I see no point in figuring out digital wallets, secure offline storage for my life savings, even adding more crappy apps onto my phone.
Meh. I counter all the over caffeinated exuberance from all these crypto fan boys with "Meh." I hear every word and just can't work up more than a shoulder shrug for all the supposed use cases and value propositions. Someday I predict that peoples coins will end up in a pile in the corner with those old AOL CD's of precisely the same intrinsic value.
Ever heard of Raiblocks? It allows for instant transfer and $0 transaction fee. Someone on reddit showed a screenshot of sending / receiving around a million USD using XRB (Raiblocks) at no cost. Now that is powerful...
The point is that Bitcoin, Ethereum etc. are just the start , like 1st gen of crypto. As newer ones like Raiblock and others come out with newer advanced features it will only seek to further adoption of digital currencies and assets.
Oooookaayyy.....
Are you going to come back and give us all a heads up before you plan to dump, too?
I think his actual point is valid and relevant to this thread. Even if there are actual use-cases for cryptocurrencies or blockchain that will cause one or the other to stick around, the long-term value of any particular cryptocurrency is zero. There will always be a newer, better iteration that is easier or faster or cheaper or whatever. And eventually everyone will jump ship from $currentThing to $newerBetterThing.
That to me is the biggest and most obvious reason why one should be skeptical about "investing" in a cryptocurrency. It's not investing, it's 100% buy-low-sell-high market timing.
We all know today that social media as a technology and culture is worth billions of dollars. Imagine if 10 years ago we were bidding up the stock on Twitter or Myspace to the tune of 1000% in a single year. Look at where we are now. Blockchain may be revolutionary. Bitcoin may not. For all we know it will be the Pets.com of the internet boom. There's a fair bet that of these handful of cryptocurrencies on the market, only one will survive to the endgame. Best of luck picking it.
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Here's a little cautionary tale about crypto.
In mid December last year, a friend of mine mentioned that he had talked to a "crypto guru" who had made a fuck ton of money on cryto (or so he said). That guy offered my friend "investment" advice a fee of around $13K. Minimum investment was something like $130K (Red flag right there, can't you "invest" as little as you want in crypto? It's not like you're buying a house ffs), potentially doubling or tripling in value within a month or two.
My friend didn't have any details at the time but asked me for advice. I had been following the crypto space closely but had zero "investments" at the time (and still zero as of now), so I said to him that I wouldn't do if I were him it because my risk tolerance is too low for that, but who am I to stop him. I said, tongue in cheek, that maybe it was his chance to make a ton of money and get out of the rat race and I would still be riding the fucking subway to work shoulder to shoulder with other poor bastards with similarly low risk tolerance.
I talked to my friend again today. He paid the "guru" and "invested" either in some stupid crypto currency or a scam ICO. He still didn't tell me the details, but he said that he already lost most of the money he had put in. In December, he wanted to "invest" in Ripple, but the "guru" said it was stupid and talked him out of it. Instead he offered another "investment" idea which apparently didn't work out. My friend wants to get the "advisory fee" back, but good luck with that.
Luckily this story is not based on my own experience. Like the saying goes, smart people learn from others' mistakes, average people learn from their own, stupid people don't learn.
As for me, I'm sitting this one out. I don't care if I'm missing out on a once in a lifetime opportunity to get rich quick. I just hope that the crypto bubble bursts before it becomes big enough to drag the entire economy down with it into another recession.
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Padonak,
This is the sort of stuff that I am afraid of (more for the individuals, less for the market as a whole).
Since I am mining ETH and XMR people at my work come to ask me about cryptocurrencies. They are always super excited and think that they can only go up? I always explain to them that I've invested ~$3K in hardware in the last year (hardware that I will still have if cryptocurrency goes to zero) and ~$23K in stocks. That usually doesn't calm them down, but it at least eases my conscience.
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One of MMM's links in his blog post was particularly good: https://blog.chain.com/a-letter-to-jamie-dimon-de89d417cb80
The scariest quote:
"The basic model is to pre-sell some percentage of the crypto assets the proposed network will generate as a way to fund the development of the decentralized application before it launches. The project founders tend to hold on to some percentage of these assets. Which means that raising money for a project this way is a) non-dilutive as it is not equity and b) not debt, so you never have to pay anyone back. This is basically free money. It’s never been this good for entrepreneurs, even in the 90s dot-com boom. Which makes it incredibly tempting to try and shoe-horn every project that could perhaps justify an “initial coin offering” to go for it, even if they aren’t actually building a decentralized application. After all, an ICO lets you exit before you even launch."
This really looks like it means any yahoo can say, "Hey! I've got this great Killer App! Buy some of the crypto I'm selling to finance it!" But they're lying - there's nothing. No decentralized application, nothing. They just walk away with speculators' actual, real, money, and leave them with worthless crypto. It's fraud, and it's almost impossible, if not completely impossible, to prosecute.
The mind boggles. I just hope it only takes down the speculators, and doesn't kick off an actual recession.
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Just saw this. Prices being driven by speculation is clear, that's for sure! I got a giggle out of it.
https://arstechnica.com/tech-policy/2018/01/remember-dogecoin-the-joke-currency-soared-to-2-billion-this-weekend/?amp=1
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One recent report suggests bitcoin currently consumes 0.1% of all electricity produced on the planet. More than some entire nations.
Does anyone believe bitcoin represents 0.1% of the work done, or the value created, or the GDP of the planet? Because that seems like a colossal waste of (mostly carbon-burning) electricity for something that has approximately zero adoption rate or utility to the global economy.
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https://steamcommunity.com/games/593110/announcements/detail/1464096684955433613
Steam is no longer supporting Bitcoin
December 6, 2017 - Kurtis
As of today, Steam will no longer support Bitcoin as a payment method on our platform due to high fees and volatility in the value of Bitcoin.
In the past few months we've seen an increase in the volatility in the value of Bitcoin and a significant increase in the fees to process transactions on the Bitcoin network. For example, transaction fees that are charged to the customer by the Bitcoin network have skyrocketed this year, topping out at close to $20 a transaction last week (compared to roughly $0.20 when we initially enabled Bitcoin). Unfortunately, Valve has no control over the amount of the fee. These fees result in unreasonably high costs for purchasing games when paying with Bitcoin. The high transaction fees cause even greater problems when the value of Bitcoin itself drops dramatically.
Historically, the value of Bitcoin has been volatile, but the degree of volatility has become extreme in the last few months, losing as much as 25% in value over a period of days. This creates a problem for customers trying to purchase games with Bitcoin. When checking out on Steam, a customer will transfer x amount of Bitcoin for the cost of the game, plus y amount of Bitcoin to cover the transaction fee charged by the Bitcoin network. The value of Bitcoin is only guaranteed for a certain period of time so if the transaction doesn’t complete within that window of time, then the amount of Bitcoin needed to cover the transaction can change. The amount it can change has been increasing recently to a point where it can be significantly different.
The normal resolution for this is to either refund the original payment to the user, or ask the user to transfer additional funds to cover the remaining balance. In both these cases, the user is hit with the Bitcoin network transaction fee again. This year, we’ve seen increasing number of customers get into this state. With the transaction fee being so high right now, it is not feasible to refund or ask the customer to transfer the missing balance (which itself runs the risk of underpayment again, depending on how much the value of Bitcoin changes while the Bitcoin network processes the additional transfer).
So to buy a $40 video game might cost $20 in transaction fees! And if the BTC value changes before the (hours?) long transaction time you might have to add BTC funds, and pay it again! Wasn't this supposed to free us from the oppression and fees from the big, evil banks?? Everything I read about BTC (and others) it seems worse in every way, which is quite an achievement. It's slow, expensive, fraud-prone, and consume a household's worth of power to use!
Also hilarious how the comments are full of people touting other pump-and-dumb schemes, sorry; "alt-coins".
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So to buy a $40 video game might cost $20 in transaction fees! And if the BTC value changes before the (hours?) long transaction time you might have to add BTC funds, and pay it again! Wasn't this supposed to free us from the oppression and fees from the big, evil banks?? Everything I read about BTC (and others) it seems worse in every way, which is quite an achievement. It's slow, expensive, fraud-prone, and consume a household's worth of power to use!
This is what I said earlier. Bitcoin is now proven to not work. We may get an alternative but who knows what that will be.
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This really looks like it means any yahoo can say, "Hey! I've got this great Killer App! Buy some of the crypto I'm selling to finance it!" But they're lying - there's nothing. No decentralized application, nothing. They just walk away with speculators' actual, real, money, and leave them with worthless crypto. It's fraud, and it's almost impossible, if not completely impossible, to prosecute.
What's worse is the the yahoo doesn't even need to have bad intentions. The ICO's free money sets up a perverse incentive that increases their chance of failing to deliver. I've worked in the startup scene long enough to know that the only thing driving 99% of the folks is the promise of future payout. If they've already got their cash with no commitment to deliver, why would they do the incredibly hard work of building a business?
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Warren Buffet has officially joined this list!
https://www.cnbc.com/2018/01/10/buffett-says-cyrptocurrencies-will-almost-certainly-end-badly.html
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Warren Buffet has officially joined this list!
Yea, but he also avoided buying tech stocks for more than 30 years.
On a related note: Miami Bitcoin Conference Stops Accepting Bitcoin Due to Fees and Congestion (https://news.bitcoin.com/miami-bitcoin-conference-stops-accepting-bitcoin-due-to-fees-and-congestion/)
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At least one nation could be on the verge of banning crypto trading...
https://www.cnbc.com/2018/01/10/south-korea-official-reportedly-readying-bill-to-ban-all-cryptocurrency-trading.html
Hearing this from other people, supposedly it's more like they're suspending cryptocurrency use until they get some regulations on the books. This could take months though.
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The creator of Dogecoin, a cryptocurrency intended as a joke that now has a $2 billion market cap, says "something is very wrong" with crypto markets:
https://motherboard.vice.com/en_us/article/9kng57/dogecoin-my-joke-cryptocurrency-hit-2-billion-jackson-palmer-opinion
Given the immense price increases and media hype, there's a tendency to see 2017 as the best year for cryptocurrencies yet, but I would argue the opposite. In many ways, 2017 marked the year that cryptocurrency stopped being about technologically innovative peer-to-peer cash and instead essentially became a new, unregulated penny stock market.
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Aside from all these issues, the technology itself doesn't seem to be designed to scale to a world-wide, or even a national, state or municipal level. If the technical folks on the forum know different, please feel free to correct me. I don't claim to be an expert.
The original purpose of bitcoin was to address the problem of double-spending electronic currency. e.g. I have 10 BC, and I spend 8 BC with Joe followed by a few milliseconds later, I spend 8 BC with Bob. Somebody just lost 6 BC if these transactions clear. So how to prevent both transactions from clearing?
"Satoshi"'s solution to this was to log every transaction in a global distributed ledger, so that nobody could commit a transaction without having the purchasers current balance checked. He had some interesting economic incentives to convince people to participate in the system.
Then to determine my balance, you need to walk through all the transactions and add up every transaction that's been applied to me.
So there are a couple of scalability problems right here:
First, the ledger gets very very big quickly. There are billions of transactions every day in the world.
Second, to compute someone's balance, you need to walk through all of those transactions.
Third, you need to do this to verify every transaction.
Satoshi added a proof of work to ensure that it would be very difficult for an adversary to corrupt the ledger. The proof of work requires that somebody (i.e. a bitcoin node) execute a computationally intensive activity in order to sign a new block of transactions. The digital signature includes information from previous blocks in the chain - hence the term "block-chain" - all the blocks are chained together via their digital signatures.
The crypto stuff required for the "proof of work" just exacerbates the first 3 scalability problems.
Now I haven't been following the technology closely - so maybe someone has developed solutions for these. But I don't see them discussed in the usual web articles on scalability. Instead, everyone is complaining about limits on blocks per second & maybe we should make the blocks bigger so that they can contain more transactions and so on.
It seems to me that this won't help - it improves scalability linearly, but the scalability of the design deteriorates quadratically with the number of transactions. If we deal with the first order scalability problems, we'll just run into the more fundamental scalability problems a bit later.
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Aside from all these issues, the technology itself doesn't seem to be designed to scale to a world-wide, or even a national, state or municipal level. If the technical folks on the forum know different, please feel free to correct me. I don't claim to be an expert.
The original purpose of bitcoin was to address the problem of double-spending electronic currency. e.g. I have 10 BC, and I spend 8 BC with Joe followed by a few milliseconds later, I spend 8 BC with Bob. Somebody just lost 6 BC if these transactions clear. So how to prevent both transactions from clearing?
"Satoshi"'s solution to this was to log every transaction in a global distributed ledger, so that nobody could commit a transaction without having the purchasers current balance checked. He had some interesting economic incentives to convince people to participate in the system.
bitcoin works by tracking "unspent transaction outputs" (UTXO). so for example if you owned a single 10 BTC UTXO and sent 8 BTC to Joe, you'd then get a change UTXO of 2 BTC. then your wallet wouldn't let you spend 8 BTC with Bob because you don't have 8 BTC worth of UTXO.
if you wrote your own client to try to double spend like that, bitcoin nodes wouldn't allow the second transaction because it's already been spent.
Then to determine my balance, you need to walk through all the transactions and add up every transaction that's been applied to me.
So there are a couple of scalability problems right here:
First, the ledger gets very very big quickly. There are billions of transactions every day in the world.
Second, to compute someone's balance, you need to walk through all of those transactions.
Third, you need to do this to verify every transaction.
Satoshi added a proof of work to ensure that it would be very difficult for an adversary to corrupt the ledger. The proof of work requires that somebody (i.e. a bitcoin node) execute a computationally intensive activity in order to sign a new block of transactions. The digital signature includes information from previous blocks in the chain - hence the term "block-chain" - all the blocks are chained together via their digital signatures.
The crypto stuff required for the "proof of work" just exacerbates the first 3 scalability problems.
Now I haven't been following the technology closely - so maybe someone has developed solutions for these. But I don't see them discussed in the usual web articles on scalability. Instead, everyone is complaining about limits on blocks per second & maybe we should make the blocks bigger so that they can contain more transactions and so on.
It seems to me that this won't help - it improves scalability linearly, but the scalability of the design deteriorates quadratically with the number of transactions. If we deal with the first order scalability problems, we'll just run into the more fundamental scalability problems a bit later.
rather than re-calculating all address balances for every transaction, each bitcoin node just maintains a (big) list of UTXOs. whenever a transaction is broadcast, then all nodes can quickly check their UTXO set without checking all past transactions, and then each transaction just modifies the overall set of UTXOs slightly (destroying one or more previous UTXOs and resulting in one or more new UTXOs). you can see data on the current UTXO set here:
http://statoshi.info/dashboard/db/unspent-transaction-output-set
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I believe the ledger is the system of record, and all the blocks are validated before being accepted.
The UTXO's are in effect a high performance cache. In database speak this is similar to a materialized view? So a node could go back to the ledger to recreate or to validate the UTXO's if there was a need to do so.
Since the UTXOs are maintained on the full nodes, they are hopefully not hackable. But more software == more bugs so I think you raise a valid concern.
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yes the blockchain/ledger is the final authority on transactions, and the UTXO set is a performance measure. if one miner's UTXO set is corrupted, the other miners wouldn't accept any invalid blocks produced by that miner. and i don't think the UTXO set is periodically recomputed, but i may be wrong on that.
so then on the point of exponentially-increasing burdens on nodes for processing transactions, i don't think validating transactions against the ledger is a concern. there may be a problem with validating cryptographic signatures requiring an exponentially-increasing amount of work as the number of transactions increases. i believe this is a concern with the current bitcoin implementation (with fixes proposed), and not of all cryptocurrencies in general.
scalability in general is definitely a huge problem.
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Researchers find that one person likely drove Bitcoin from $150 to $1,000 (https://techcrunch.com/2018/01/15/researchers-finds-that-one-person-likely-drove-bitcoin-from-150-to-1000/)
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Researchers find that one person likely drove Bitcoin from $150 to $1,000 (https://techcrunch.com/2018/01/15/researchers-finds-that-one-person-likely-drove-bitcoin-from-150-to-1000/)
tl;dr: Bitcoin prices were fraudulently manipulated by trading bots at Mt. Gox, and this fraud appears to be the only reason prices went up ~800% in two months, in 2013.
The bots traded publicly, using fake ids for coins they did not own. Their activity was publicly logged, so we can compare the price changes on the days they traded (way up) to the days they didn't (slightly down). Market manipulation was relatively easy because trading volume was so low.
Also, as an aside, the owner of Mt. Gox tried to cover up a 600k coin theft several years ago, because he feared public acknowledgment would undermine confidence in his exchange. Shady as hell, if you ask me.
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Researchers find that one person likely drove Bitcoin from $150 to $1,000 (https://techcrunch.com/2018/01/15/researchers-finds-that-one-person-likely-drove-bitcoin-from-150-to-1000/)
I came here with the intent to post this article.
Blockchain usage is going to grow exponentially into all kinds of new areas beyond financial transactions: passports/border security, logistics, intellectual property rights, regulatory compliance, insurance, legal contracts, etc. Blockchain as a technology is worthy of study, it’s the speculation on the value of the earliest forms of crypto currency that warrants the skepticism.
Currently we are just repeating Internet 1.0 which resulted people making and losing millions speculating on shares of webvan.com and petfarts.com. Eventually we’ll move through this period and see applied innovation. I believe the current buzzworthy crypto currencies will be superseded with something better. I’m not much of a speculator anyway so won’t speculate in a currency today whose long-term value (probably) eventually approaches zero.
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Researchers find that one person likely drove Bitcoin from $150 to $1,000 (https://techcrunch.com/2018/01/15/researchers-finds-that-one-person-likely-drove-bitcoin-from-150-to-1000/)
I came here with the intent to post this article.
Blockchain usage is going to grow exponentially into all kinds of new areas beyond financial transactions: passports/border security, logistics, intellectual property rights, regulatory compliance, insurance, legal contracts, etc. Blockchain as a technology is worthy of study, it’s the speculation on the value of the earliest forms of crypto currency that warrants the skepticism.
Currently we are just repeating Internet 1.0 which resulted people making and losing millions speculating on shares of webvan.com and petfarts.com. Eventually we’ll move through this period and see applied innovation. I believe the current buzzworthy crypto currencies will be superseded with something better. I’m not much of a speculator anyway so won’t speculate in a currency today whose long-term value (probably) eventually approaches zero.
I'm skeptical of the Internet 1.0 comparisons and the potential for most future blockchain applications. Back in the day everyone had a rough idea of what the Internet was for, even before the heady days of bubble 1.0. The early web companies were poorly executed and startup costs were extremely high. This was before OSS, before cloud computing, and Sun made a killing selling high end software and servers and even small companies were burning through cash at a tremendous rate. However, the basic idea is unchanged 20 years later: Go to browser, add items to your "cart," and purchase. Everyone understood the value proposition.
Blockchain on the other hand...still not clear what it's really for. If we look beyond the buzzwords, the underlying tech of Merkle trees (the blockchain ledger) has been around for a long time and is already put to good use in many applications such as Git source control and certain file systems. These are important applications, but these are solutions to very specific technology problems. It's a huge leap to say that blockchain (Merkle trees) are somehow the magic sauce for a bunch of problems that are primarily social (physical border security, logistics, contracts, etc.).
For example, the latest announcement from IBM and Maersk (https://www.forbes.com/sites/rogeraitken/2018/01/16/ibm-forges-global-joint-venture-with-maersk-applying-blockchain-to-digitize-global-trade/) about applying blockchain tech to the supply chain. One gets the sense that "blockchain" is shoehorned in there just because it's a hot term right now, and blockchain is but a small part of a larger overall agenda. But is blockchain even really solving a core problem? One conspicuous thing missing, which I could not find in any articles, is what consensus method is proposed. The proof-of-work consensus method was really the key contribution from Bitcoin, but this is wildly inappropriate and inefficient for a global supply chain application. My best guess is that it will use a proof-of-authority method to manage the distributed ledger. This effectively just kicks the problem from maintaining a shared ledger into key management and deciding who to trust. The distributed ledger is only as secure as the weakest link (pun intended). And it creates a huge new headache - the private key used by Customs becomes a massively valuable target for smugglers/drug cartels. Someone has to have access to these keys, not hard to imaging a cartel bribing one of these people with a large amount of Bitcoin for a copy of the key...once they have the key they can alter the distributed ledger as the Customs agency, and there's very little traceability (whereas if someone's breaking into your centralized system you can detect this). So they will probably need to add additional layers of protection, at which point the blockchain is essentially providing zero value add because it's not actually trusted.
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1. No customer service department
2. Bitcoin is a bubble
(http://investingadvicewatchdog.com/images/bubble-phases.jpg)
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https://www.vox.com/energy-and-environment/2018/1/18/16901422/bitcoin-price-crash-energy-emissions
This particular quote from the article caught me:
"And coin holders are rattled — one of the top posts this week in the cryptocurrency Reddit community was a post on suicide hotlines."
The quote (of a quote) that really popped for me:
Or, as the Guardian’s Alex Hern wrote, it’s “a competition to waste the most electricity possible by doing pointless arithmetic quintillions of times a second.”
The waste is staggering - amazing what some will do for wealth.
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Blockchain allows or will people to do things they couldn't before: transparent digital smart contracting, peer-to-peer tamper-proof exchanges, decentralized exchanges, etcetera.
It all sounds awesome and I'm serious as well. I am a massive fan of peer to peer applications that are now available due to the Internet. Blockchains are amongst the greatest things I've seen invented in my life. I honestly think they could change money in massive ways.
None of my comments though change the fact that this is a massive bubble and Bitcoin is a massive mess at the moment. It isn't scalable.
For blockchains to really work we have to start realising they are just a means of exchange and they aren't a store of wealth or a way to speculate financially.
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https://www.nytimes.com/2018/01/13/style/bitcoin-millionaires.html
Ick! This isn't going to end well. Most of the arrogant crypto-anarchists will be fine. They'll ride the wave until it crashes (some may cash out in time), but they are mostly young and have time to recover. If nothing else they'll have fond memories and a good story to tell. Incredibly sad for Maria Lomeli and the many others like her who will never recover after getting wiped out.
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I think it was Warren Buffett who said, it is just like a 'cheque'. Allows for transaction to take place. Doesn't have any intrinsic value of its own and doesn't not produce anything. Both Charlie M. and Warren B's advise was to say away from cryptos.
Even if crypo are the next best thing, they are just a currency (yet to mature but lets assume they become mainstream) even then they are just a new currency. How are they worth 10's of thousands of dollars per bitcoin? People say there are only a 'set number' of bitcoins in existence. That to me is just a joke. Everyday a new crypto currency can be launched. The block-chain technology is not patented. It is open source.
If anyone wants to speculate with play money then I would invest 'against crypto' and see how things turn out.
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What is your brother in Singapore (who doesn't have a bank account) hoping to spend the money on in the next hour? Because there is very little stuff that can be purchased with Bitcoin and even less with Ethereum. (It has to be local of course, because otherwise you could just order it online and send it to him . . . no need to send him the money.) A useless store of "value" isn't of value if you can't actually buy anything with it.
But even assuming that sending virtual money has to be done . . . how is using crypto significantly better than using Paypal for this purpose?
He has a bank account, but he is not legally allowed to open a US bank account, so getting money from the US to Singapore is complicated. PayPal does work with Singapore, so that is an option. However, there are countries where PayPal won't send money (Myanmar, Iran, etc). Before you tell me that I'm probably not allowed to send money to Iran (or at least I wasn't until very recently), I know. However, neither my brother, nor his wife, nor his mother, nor his children, nor his in-laws are US citizens. This "just use some standard everyday service and currency" is a very western-centric view of the world.
Open a Citibank bank account. They have instant global transfers between international Citibank accounts in 20 countries, including Singapore & US.
Citi is on the Zelle network, so you probably don't even need to open a Citi account - you just need to have an account with a participating bank (Chase, CapOne, WellsFargo, Bank of America, Ally, Comerica, Fifth Third, PNC, USAA and a bunch of regional and smaller banks)
Typically a Zelle transfer clears within a couple of minutes with participating banks. Free. Traceable. No using 3rd party exchanges to buy and sell crypto.
Note: I haven't actually tried this.
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The dump starting again. This shall be interesting to see as BTC lowers by 10-20% each week, how do the other smaller company coin/tokens fair.
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The median transaction value is returning to pre-December levels. Looks like the whales are done for now. Will be interesting to see what price the minnows set, as most of the fresh ones have already been netted.
https://bitinfocharts.com/comparison/bitcoin-mediantransactionvalue.html#3m
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https://bitinfocharts.com/comparison/bitcoin-mediantransactionvalue.html#3m
404 ?
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Why bother being skeptical of something that you believe is truly worthless? A worthless, junk item will be tossed into the dumpster soon enough. For example, who would bother to pick up a used condom?
Cryptos are disruptive to the traditional vested interests, and disruptive to people's pre-conceived notion of reality. I started out being unimpressed with cryptos, but I kept an open mind and learned. Now I think crypto innovations have the potential to deliver great advances to humanity if we would just give them a chance.
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Why bother being skeptical of something that you believe is truly worthless? A worthless, junk item will be tossed into the dumpster soon enough. For example, who would bother to pick up a used condom?
Cryptos are disruptive to the traditional vested interests, and disruptive to people's pre-conceived notion of reality. I started out being unimpressed with cryptos, but I kept an open mind and learned. Now I think crypto innovations have the potential to deliver great advances to humanity if we would just give them a chance.
I don't like to find used condoms in my neighborhood. They are unsightly, harm wildlife, and are a biohazard. They are worse than worthless because they have a net negative value. I started out without any opinion about cryptos, but the more I read the more I agree with you that they are the used condoms of the financial world. I just happen to think this is bad rather than merely neutral. They are used to facilitate illicit trade, drugs but also human trafficking and arms. Scammers and ransomware have started using BTC because it's difficult to trace. And a bunch of unsophisticated "investors" will lose everything along the way - these will largely be the most vulnerable folks who have the least time and/or ability to recover.
Real progress for society would be a low-fee public banking option at all USPS locations. The big vested interests are terrified of this and do their best to stop it. The time and resources literally wasted on BTC (remember, energy equivalent of New Zealand doing nothing but random guesses of cryptographic hashes) would have been put to much better use lobbying and organizing for something like this.
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Why bother being skeptical of something that you believe is truly worthless? A worthless, junk item will be tossed into the dumpster soon enough. For example, who would bother to pick up a used condom?
Cryptos could be are disruptive to the traditional vested interests, and disruptive to people's pre-conceived notion of reality. I started out being unimpressed with cryptos, but I kept an open mind and learned. Now I think crypto innovations have the potential to deliver great advances to humanity if we would just give them a chance.
By all means, give cryptocurrency and the underlying technology a chance. My hair-stylist friend on Facebook dumping a shit load of money she doesn't have into Bitcoin and thinking it's awesome that a barely-understood technology should go up several hundred percent in value in a year with little to no justification is not that chance. That's what venture-capitalists and investors with deep pockets are for.
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I agree that the block chain technology may have great positive effects on the internet.
Beyond the Bitcoin Bubble
https://nyti.ms/2FIP4RE
But I don't think investing in Bitcoin is the way to go for the reasons spelled out on this thread.
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I made a small purchase of crypto last year. The value tripled, the creator sold his loot and I followed. It's never been back up since. Unlike a stock, the currency isn't rising in price because it's linked to a profitable business. It's only value is the ability to sell higher to the next buyer. Whoever bought my coins is down and will stay down until someone pays more.
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I agree that the block chain technology may have great positive effects on the internet.
Beyond the Bitcoin Bubble
https://nyti.ms/2FIP4RE
But I don't think investing in Bitcoin is the way to go for the reasons spelled out on this thread.
I'm not so sure that block chain technology will amount to anything significant. Look at the applications being promoted by protocol labs in that NY times article.
IPFS - the inter-planetary file system. It aims to replace HTTP and build a better web. What's the incentive for hundreds of millions of web sites to switch from a mature, server based environment to an immature, fully distributed environment?
Filecoin - a crypto currency powered storage network. This one actually has a use case - store your stuff in the cloud where advertising companies can't get at it. But... there are already mature paid services you can use for this (eg Amazon S3). What's the compelling reason to move to a new unproven system? Why would someone say, "This is really cool. You *have* to try this!"?
libp2p - a library of p2p protocol software. Hmmm.
ipld - IPLD is a single namespace for all hash-inspired protocols. The trouble with hashed based namespaces is that you can't search them (efficiently), the same way you can't search a hash table.
multiformats - a library of self describing protocol things that aim to future proof protocols. Except future proofing requires that you know something about the future.
The block chain thing reminds me of all the hype around p2p networking back in the 2000's. And what's left of that? Cassandra and BitTorrent?
If someone has a use case they feel strongly about, I'd be interested in discussing it. I'd *like* to see a good application of block chains.
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I agree that the block chain technology may have great positive effects on the internet.
Beyond the Bitcoin Bubble
https://nyti.ms/2FIP4RE
But I don't think investing in Bitcoin is the way to go for the reasons spelled out on this thread.
I'm not so sure that block chain technology will amount to anything significant. Look at the applications being promoted by protocol labs in that NY times article.
IPFS - the inter-planetary file system. It aims to replace HTTP and build a better web. What's the incentive for hundreds of millions of web sites to switch from a mature, server based environment to an immature, fully distributed environment?
Filecoin - a crypto currency powered storage network. This one actually has a use case - store your stuff in the cloud where advertising companies can't get at it. But... there are already mature paid services you can use for this (eg Amazon S3). What's the compelling reason to move to a new unproven system? Why would someone say, "This is really cool. You *have* to try this!"?
libp2p - a library of p2p protocol software. Hmmm.
ipld - IPLD is a single namespace for all hash-inspired protocols. The trouble with hashed based namespaces is that you can't search them (efficiently), the same way you can't search a hash table.
multiformats - a library of self describing protocol things that aim to future proof protocols. Except future proofing requires that you know something about the future.
The block chain thing reminds me of all the hype around p2p networking back in the 2000's. And what's left of that? Cassandra and BitTorrent?
If someone has a use case they feel strongly about, I'd be interested in discussing it. I'd *like* to see a good application of block chains.
Oh I admit I just looked at the article without the in depth knowledge you have.
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If someone has a use case they feel strongly about, I'd be interested in discussing it. I'd *like* to see a good application of block chains.
Ditto. So far you can color me unimpressed, but I'm probably just being unimaginative.
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I agree that the block chain technology may have great positive effects on the internet.
Beyond the Bitcoin Bubble
https://nyti.ms/2FIP4RE
But I don't think investing in Bitcoin is the way to go for the reasons spelled out on this thread.
I'm not so sure that block chain technology will amount to anything significant. Look at the applications being promoted by protocol labs in that NY times article.
IPFS - the inter-planetary file system. It aims to replace HTTP and build a better web. What's the incentive for hundreds of millions of web sites to switch from a mature, server based environment to an immature, fully distributed environment?
Filecoin - a crypto currency powered storage network. This one actually has a use case - store your stuff in the cloud where advertising companies can't get at it. But... there are already mature paid services you can use for this (eg Amazon S3). What's the compelling reason to move to a new unproven system? Why would someone say, "This is really cool. You *have* to try this!"?
libp2p - a library of p2p protocol software. Hmmm.
ipld - IPLD is a single namespace for all hash-inspired protocols. The trouble with hashed based namespaces is that you can't search them (efficiently), the same way you can't search a hash table.
multiformats - a library of self describing protocol things that aim to future proof protocols. Except future proofing requires that you know something about the future.
The block chain thing reminds me of all the hype around p2p networking back in the 2000's. And what's left of that? Cassandra and BitTorrent?
If someone has a use case they feel strongly about, I'd be interested in discussing it. I'd *like* to see a good application of block chains.
I tend to agree. That article is, IMO, projecting its hopes for the future onto the past. What it calls InternetOne was no egalitarian utopia. It was the age of expensive (and crappy) proprietary platforms and open protocols stretched to the limits. Linux was still in childhood, so server side options were very expensive and completely proprietary (Sun, IBM, HP). Same for routing equipment. Hell, Windows didn't even come with TCP/IP back then...you had to install and configure it yourself. Sure once on, you could get a "free" webpage at geocities to post photos of your dog and animated gifs, email, and do a few things. Or you could be part of AOL's walled garden. But purely open standard website would be completely lacking in utility...your options were pretty much a Java Applet, ajax wasn't a thing yet. Oh, and people actually *sold* web browsers, and they all sucked and all fragmented the web by making their own extensions (because plain HTML was so limiting).
Also (this from a long-time fan of Open Source Software) most OSS is really crappy. Some if it is excellent, as good or better than commercial software. The good OSS is almost all funded by large internet companies. Software is difficult to write, maintain, debug, and fix. It takes deep pockets to do this well. The real value of OSS is that it plays a vital role in the commodification of platforms and APIs. Similar to how other IP eventually moves into public domain. People used to pay good money for compilers in the 80s and 90s, now these are very often OSS. Same with operating systems. And networking software. The author completely misses this because they are stuck on centralized vs. distributed architectures as an explanation of the world.
The reason InternetTwo is so heavily dependent on large internet companies that these are services rather than software. Software is zero cost to replicate whereas services take vast amounts of hardware and electricity and expertise to keep them running. I'm not convinced that quasi-crypto-currencies can pull in enough outside value to cover these costs without something that looks and behaves like a corporation that can create value for shareholders, or without behaving like a massive get rich quick Ponzi scheme (aka BTC). The reason almost everything is ad based is that most people are not willing to fork over money for services like search and social media, so ads.
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Also (this from a long-time fan of Open Source Software) most OSS is really crappy. Some if it is excellent, as good or better than commercial software. The good OSS is almost all funded by large internet companies. Software is difficult to write, maintain, debug, and fix. It takes deep pockets to do this well.
You had me until here. I've been using Linux at home and Windows at work for years. I much prefer Linux.
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Also (this from a long-time fan of Open Source Software) most OSS is really crappy. Some if it is excellent, as good or better than commercial software. The good OSS is almost all funded by large internet companies. Software is difficult to write, maintain, debug, and fix. It takes deep pockets to do this well.
You had me until here. I've been using Linux at home and Windows at work for years. I much prefer Linux.
Linux is great, been using it since the 90s - remember installing it from piles of 3.5" floppies. But it's also funded by many companies, which makes sense because so many companies benefit from making Linux great. Lesser known (and unfunded) projects are, by and large, crappy software.
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Ouch. I don't know what it's like to crash from the newly euphoric high of making $5 million by just as quickly losing it all but I'd guess it's something along the lines of being punched in the balls every minute for a month.
https://www.ccn.com/bitcoin-trader-made-millions-trading-on-margin-and-then-lost-it-all/
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If someone has a use case they feel strongly about, I'd be interested in discussing it. I'd *like* to see a good application of block chains.
Here is an upcoming use-case for blockchain from a payment processor. Straight from the whitepaper https://cdn.omise.co/omg/whitepaper.pdf:
The primary role of blockchains are to solve coordination problems among multilateral
<snip>...</snip>
By shifting these business processes traditionally placed into a single corporation, it
is possible to provide eWallet providers an entire interchange process in a decentralized
high-performant open network.
I know I cut alot of stuff out of the quote... the point I'm want to look at here is the "high-performant open network"
Let's talk about performance. When I started studying BitCoin last week, I though "hey, another peer to peer network. i know how this works - add another node, the capacity goes up." Horizontal scalability, right?
But that's not quite how it works. When you add another node, the trust in the BitCoin network goes up with the capacity of the node, at least for some definition of trust. However, the capacity of the bitcoin network, in terms of transactions per second, actually goes down a bit. Every time someone creates a transaction, that transaction is delivered to every node in the network. Every time a new block is created, that block has to be delivered to every node on the network. So increasing the number of bit coin nodes actually *decreases* the aggregate capacity of the network, because it takes a little bit longer to handle these broadcasts.
This suggests that people who advocate using bitcoin on an internet scale just don't understand the mechanisms. Even though BitCoin is a p2p system, it doesn't scale the way BitTorrent does (for example).
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the network doesn't stop operating while blocks are propagated. new transactions are still collected and processed.
there are several solutions in the works for dealing with the efficiency of larger block sizes, like "compact blocks" and "xthin blocks" and "graphene."
if these new nodes are mining nodes, assuming the mining difficulty doesn't change (it only changes every ~two weeks) then the capacity, in terms of transactions per second, actually (slightly, and temporarily) increases because the average time to find a block is slightly statistically lowered with the new mining power.
then after two weeks the difficulty is adjusted in an attempt to restore the average 10 minute block time.
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I completely get it - the design was based around mining capacity. So we tend to think about scalability in terms of mining capacity. This is natural - the mining is where all the computation takes place.
But the scalability problem isn't the time to mine a block nonce. The scalability problem is the time to propagate the block through the network. As you pointed out, Bitcoin can adjust mining difficulty. If mining capacity goes down instead of up, Bitcoin adjusts the problem difficulty to make mining easier.
Do you think a 10 minute (or even 1 minute) block time is fast enough to scale to the whole world?
The reason the block time is so long is to minimize forks in the block chain. If the block chain starts forking regularly, the whole network will collapse.
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Bitcoin May Split 50 Times in 2018 as Forking Craze Mounts
https://www.bloomberg.com/news/articles/2018-01-23/bitcoin-may-split-50-times-in-2018-as-forking-craze-accelerates
Bitcoin has already forked at least 19 times (splitting into two new currencies, each with their own blockchain), but dozens more forks could happen this year. Most of them, as the article says, are pure cash-ins, attempting to capitalize on Bitcoin's popularity by creating a new cryptocurrency with "Bitcoin" in the name. There's Bitcoin Cash, Bitcoin Gold, Bitcoin Diamond, Bitcoin Private, Bitcoin Pizza (?!)...
Who the hell actually uses any of these ridiculous cryptos to buy anything? Does anyone? Even Bitcoin is being accepted by fewer and fewer places these days.
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But the scalability problem isn't the time to mine a block nonce. The scalability problem is the time to propagate the block through the network.
correct, and those 3 solutions i named are some examples of work being done on this problem of block propagation and orphan blocks. scaling problems are a legitimate concern and a good reason to be skeptical of the whole idea.
Do you think a 10 minute (or even 1 minute) block time is fast enough to scale to the whole world?
as you said, a 1 minute block time would lead to even more orphaned blocks regardless of block size. the limiting factor for scaling is block size (regardless of "layer 2" solutions), and as i said there are ongoing efforts in this area.
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There's another interesting flaw in Bitcoin which, I believe, is the cause of high fees on transactions. One start-up hired most of the Bitcoin engineers. So you have most of the people who control Bitcoin's future all focused on becoming rich from stock options at a start-up. That start up, no surprise, benefits from high fees.
The performance of Bitcoin last year combined with everyone wanting to speculate on it's future worth suggests a bubble to me. What people speculating don't realize is that eventually those in the know have bought enough Bitcoin. At some point, everyone who likes Bitcoin is done buying, and price of BTC has no upwards pressure.
Although I'm skeptical of Bitcoin, it has two uses besides online transactions. First, criminals don't just want anonymity. They want ways to move large sums of cash across borders, and Bitcoin accomplishes that. If you have large amounts of money, the fees are low and avoiding banks is worth the transaction delays.
And second, I've heard a story of someone in South America who put all his money in Bitcoin. When asked if he was worried about losing it all, he said that he's already lost everything because of his local currency (hyper inflation or bankruptcy, forgot which). So for some countries, Bitcoin may be more stable than their local currency.
I think Bitcoin will continue to be handicapped by the high fees and slow transactions. But online merchants accept it more than any other crypto currency, so I suspect when they drop Bitcoin they will be wary of replacing it.
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There will be more of this.
Hey hey heyyyyyyyyyyyyy... :-)
https://www.youtube.com/watch?v=EhL2OWXZ26s
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If someone has a use case they feel strongly about, I'd be interested in discussing it. I'd *like* to see a good application of block chains.
Here is an upcoming use-case for blockchain from a payment processor. Straight from the whitepaper https://cdn.omise.co/omg/whitepaper.pdf:
The primary role of blockchains are to solve coordination problems among multilateral
<snip>...</snip>
By shifting these business processes traditionally placed into a single corporation, it
is possible to provide eWallet providers an entire interchange process in a decentralized
high-performant open network.
I know I cut alot of stuff out of the quote... the point I'm want to look at here is the "high-performant open network"
Let's talk about performance. When I started studying BitCoin last week, I though "hey, another peer to peer network. i know how this works - add another node, the capacity goes up." Horizontal scalability, right?
But that's not quite how it works. When you add another node, the trust in the BitCoin network goes up with the capacity of the node, at least for some definition of trust. However, the capacity of the bitcoin network, in terms of transactions per second, actually goes down a bit. Every time someone creates a transaction, that transaction is delivered to every node in the network. Every time a new block is created, that block has to be delivered to every node on the network. So increasing the number of bit coin nodes actually *decreases* the aggregate capacity of the network, because it takes a little bit longer to handle these broadcasts.
This suggests that people who advocate using bitcoin on an internet scale just don't understand the mechanisms. Even though BitCoin is a p2p system, it doesn't scale the way BitTorrent does (for example).
I finally had time to get through the white paper, press releases, and peruse their website a bit. Not convinced this is a good example of a generally useful blockchain application, or that OMG solves a problem uniquely suited to blockchain. The "problem statement" in the white paper starts with a description of what blockchains can do and how this might be applied in certain situations. Starting with what technology can do rather than a strong focus on a problem is a huge red flag, not a good start.
Lacking clarity on the precise problem being addressed, the rest of paper meanders and is difficult to track (the entire time, asking myself, "but why?"). Also, the white paper and descriptions on their website struggle to communicate what exactly is being proposed and how it all works. It has the air of someone trying to impress using acronyms and dense terminology. As a software engineer/computer scientist I've read my share from Journal of the ACM and other academic journals - if someone cannot clearly explain something they probably don't really understand it. There are hints of this in the white paper, with hedging (we may do such and such) and areas that are yet to be defined (e.g. "It may be on our roadmap to allow for delegating validation to third-parties, whereby a limited amount can be slashed at a time before re-delegation is required (the exact mechanism is not yet specified for security modeling)") which gives the overall impression of being highly speculative.
One problem the paper touches on a bit is the unbanked, mostly in Asia, with discussion about difficulty of establishing credit history for credit cards. Yet it's a huge logical leap to assume that blockchain is the magicsauce for this specific problem. What a about cash cards, micro banking, pay by text....there are many viable solutions that don't require a Rube Goldbergesque distributed blockchain solution. In other words, what does blockchain uniquely address for this problem that nothing else can, or not as well? Not at all clear.
Also, odd that the organization's focus now seems to be "unbanking the banked" - e.g. a non-bank solution for those who already have banking. But again, for those who already have banking, what's the value proposition for this new platform?
Finally, they are making the vast assumption that eWallets and payment platforms are difficult and/or fragmented only because integration requires "bespoke contracts" and/or because there is no incentive to cooperate with others. This is a partial explanation at best. Payment platforms are mostly difficult because there are tons of financial regulations, and these vary by locale. No sane legitimate business wants to violate these regs or they risk having their network being used for money laundering, fraud, funding terrorism or rogue states, and so on. The barriers to payment systems are largely legal rather than technical, and the legal safeguards are a good thing.
IMO, OMG appears to primarily be a blockchain solution to a cryptocurrency problem. Namely, why cryptocurrencies remain largely unused for commerce. I don't think it's going to be successful in addressing this. I do think they will create a system that handles lots of transactions, but my prediction is that it will primarily be used to exchange cryptocurrencies - essentially people speculating on relative cryptocurrency values.
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There will be more of this.
Hey hey heyyyyyyyyyyyyy... :-)
https://www.youtube.com/watch?v=EhL2OWXZ26s
Now I can't get that guy's voice out of my head.
Edit: I just spent the last hour reading about this company. They ceased operations a few days ago after a pile of lawsuits and investigations started. I can't believe these things don't get shut down faster.
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There will be more of this.
Hey hey heyyyyyyyyyyyyy... :-)
https://www.youtube.com/watch?v=EhL2OWXZ26s
Now I can't get that guy's voice out of my head.
Edit: I just spent the last hour reading about this company. They ceased operations a few days ago after a pile of lawsuits and investigations started. I can't believe these things don't get shut down faster.
His voice is pretty catchy eh? :-) Class action lawsuit was issued against the company and the YouTubers that were actively promoting it. Will be interesting to see how it shakes out.
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There will be more of this.
Hey hey heyyyyyyyyyyyyy... :-)
https://www.youtube.com/watch?v=EhL2OWXZ26s
@8:37
Now I can't get that guy's voice out of my head.
Edit: I just spent the last hour reading about this company. They ceased operations a few days ago after a pile of lawsuits and investigations started. I can't believe these things don't get shut down faster.
His voice is pretty catchy eh? :-) Class action lawsuit was issued against the company and the YouTubers that were actively promoting it. Will be interesting to see how it shakes out.
https://www.youtube.com/watch?v=nTet0iu4I-0 (https://www.youtube.com/watch?v=nTet0iu4I-0) @2:25
when an investment promoter and a con artist are using the same argument, it's time to go home.
One of the few things I enjoy about catching episodes of Shark Tank. They shut up anybody who tries to substitute emotion for cold hard numbers and verifiable facts.
Nothing says "just trust me, it works" like your billion dollar business operating out of a rented mailbox. And some dude shouting your name a lot.
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So there might be a reason the price of cryptocurrency is so volatile.
https://www.youtube.com/watch?v=QxkvbaCTELQ (https://www.youtube.com/watch?v=QxkvbaCTELQ)
https://www.youtube.com/watch?v=XVfBnthj4BQ (https://www.youtube.com/watch?v=XVfBnthj4BQ)
I don't know if this is saying something about the quality of YouTube personalities or the crypto market. Probably both.
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I missed this news. Nope, not a bubble at all....
https://arstechnica.com/tech-policy/2018/01/blockchain-announcement-sends-hooters-parent-company-stock-soaring/
Here's the buzzword vomit:
"Mobivity Merit is real cryptocurrency, leveraging the same infrastructure and principles of bitcoin, Ethereum, Ripple, litecoin," Chanticleer CEO Michael Pruitt says in the company's press release. Rather than being locked into one specific rewards program, customers will be able to transfer their reward points across multiple restaurants. Meanwhile, the Mobivity blockchain will help companies track their customers' preferences, allowing them to provide more personalized service.
"Each brand owns the data about [its] interactions with a consumer, but the consumer owns the data about ALL of their transactions across all brands, stored in the distributed ledger of blockchain technology," according to the company statement.
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In other interesting bitcoin news of the day, the coincheck exchange was hacked for even more than mt gox, something like half a billion dollars and arguable the largest single hack/theft in history. But blockchain is so secure!
Then a team of researches from the middle east published a paper where they text searched the blockchain to correlate people's public wallet IDs with illegal drug deals from the silk road days. But blockchain protects your privacy!
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Did anyone make the point: Do cryptos actually believe MasterCard, Visa, and PayPal are just gonna roll over and play dead if it becomes a genuine threat? Hahahaha.... Hahahahaha!!! "They have their old-school heads in the sand and don't see this coming"? Hahahaha.... Oh man, people are funny in their delusions. If the ant every really bothers the elephant, it's game over. McDonald's is shakin' in their boots over Five Guys. Earning blockchain rewards by eating at Hooters? Oh, surely that will topple the whole fiat system. I've travelled to something like 40 countries and never had any issues with cash withdrawals or credit transactions. Or, if there was, certainly not enough for inconvenience and me to think, "Shit, I wish there was a new currency!" Creating an answer to a problem which doesn't really exist is truly nonsensical.
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Zuckerberg has said "no thanks" to crytpo-currency advertising.
https://www.cnbc.com/2018/01/30/facebook-ban-on-bitcoin-ads-latest-in-very-bad-day-for-cryptocurrencies.html (https://www.cnbc.com/2018/01/30/facebook-ban-on-bitcoin-ads-latest-in-very-bad-day-for-cryptocurrencies.html)
If you go on FB and click on the "trending" headlines pertaining to this announcement, peruse the various retweets and links to this story. It'll make you quickly lose your faith in humanity.
Apparently the Zionist Liberal Fat Cat Banksters pressured Mark to keep you from getting wealthy! Apparently the currency that is to take over from the "petro-dollar" is being suppressed and requires FB advertising in order to succeed.
And that's not hyperbole, those are the words thrown about on FB today to explain who is to blame for this development.
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There are alot of areas Crypto can help, I am just not sure Bitcoin is the one that can solve those problems. As a matter of a fact, this might usher in a new era of standardization between banks to adopt a common transfer platform like zello. So there should be some company that can emerge out of this like a Xapo exchange and transfer platform.
The only part I havnt figured out is whether a Crypto can be allowed to fluctuate. If there is too much volativity then it's not good for a storage of value, and that defeats the purpose of countering volatility of gov backed fiat's.
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46% of Last Year’s ICOs Have Failed Already (https://news.bitcoin.com/46-last-years-icos-failed-already/)
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Good thread LAS. It's imperative to be aware of the risks, which will hopefully prevent speculation.
In addition to being skeptical of ICOs, which are mostly money grabs, in the event that you are trying to punt off some money on one:
beware that hackers will replicate an ICO webpage with ever-so-slightly different URL, or use forum links as bait, but change the deposit addresses. Funds sent to the wrong address can never be recovered.
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Good thread LAS. It's imperative to be aware of the risks, which will hopefully prevent speculation.
In addition to being skeptical of ICOs, which are mostly money grabs, in the event that you are trying to punt off some money on one:
beware that hackers will replicate an ICO webpage with ever-so-slightly different URL, or use forum links as bait, but change the deposit addresses. Funds sent to the wrong address can never be recovered.
I'll take it even further to the logical conclusion... One can avoid being ripped off in the crypto space by avoiding it entirely!
Seriously. Like asking which Ponzi scheme is the safest.
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Good thread LAS. It's imperative to be aware of the risks, which will hopefully prevent speculation.
In addition to being skeptical of ICOs, which are mostly money grabs, in the event that you are trying to punt off some money on one:
beware that hackers will replicate an ICO webpage with ever-so-slightly different URL, or use forum links as bait, but change the deposit addresses. Funds sent to the wrong address can never be recovered.
I'll take it even further to the logical conclusion... One can avoid being ripped off in the crypto space by avoiding it entirely!
Yup.
ICOs are a financial blight:
https://blockgeeks.com/guides/why-most-icos-will-fail/
They may eventually produce a couple gems, but the odds of picking the gems(if they even materialize) are so small that it's like playing the lottery.
Traditional markets have no shortage of wildly volatile, misunderstood mechanisms too:
https://www.vox.com/business-and-finance/2018/2/27/17014082/market-crash-inverse-volatility-vix-xiv-svxy
Everyone needs to do their homework and avoid things that are too good to be true.
It's a (financially) dangerous world out there.
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Let's keep the news going. TIL:
-There's a conference for bitcoin believers/enthusiasts
-It does not accept bitcoin
http://www.businessinsider.com/bitcoin-conference-stops-accepting-bitcoin-network-fees-congestion-2018-1
"The North American Bitcoin Conference will be held in Miami on January 18-19, with last minute tickets going for $1,000 a pop. But would-be attendees can no longer pay for a ticket in bitcoin or in any other cryptocurrencies.
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Apparently someone decided to encode a child porn image on the Bitcoin blockchain (http://www.bbc.com/news/technology-43485572), meaning everyone who runs a full node has unknowingly been in possession of child porn for some time.
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Apparently someone decided to encode a child porn image on the Bitcoin blockchain (http://www.bbc.com/news/technology-43485572), meaning everyone who runs a full node has unknowingly been in possession of child porn for some time.
Are we supposed to act surprised that cryptography has been used for child pornography? Cryptography was practically invented for child pornography.
Bunch of computer nerds sitting around saying "how do we send secret information back and forth in a way that the cops can't see what we're doing?" Sure, maybe they're plotting to overthrow a dictator, but by the numbers they're far more likely to be up to something nefarious and illegal.
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Apparently someone decided to encode a child porn image on the Bitcoin blockchain (http://www.bbc.com/news/technology-43485572), meaning everyone who runs a full node has unknowingly been in possession of child porn for some time.
Are we supposed to act surprised that cryptography has been used for child pornography? Cryptography was practically invented for child pornography.
Bunch of computer nerds sitting around saying "how do we send secret information back and forth in a way that the cops can't see what we're doing?" Sure, maybe they're plotting to overthrow a dictator, but by the numbers they're far more likely to be up to something nefarious and illegal.
Lol what? Cryptography is also necessary for little things like "communicating with your bank" and "telling your soldiers what they're supposed to do" (the actual reason cryptography was invented). There are lots of reasons to be skeptical of cryptocurrencies, but "cryptography is inherently evil" isn't one of them.
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There are lots of reasons to be skeptical of cryptocurrencies, but "cryptography is inherently evil" isn't one of them.
It's not that cryptography itself is evil, it's that applying it to financial transactions is evil.
I agree that there are legitimate (governmental and sometimes corporate) uses for encryption. Legitimate and legal private individual uses are harder to think of.
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There are lots of reasons to be skeptical of cryptocurrencies, but "cryptography is inherently evil" isn't one of them.
It's not that cryptography itself is evil, it's that applying it to financial transactions is evil.
I agree that there are legitimate (governmental and sometimes corporate) uses for encryption. Legitimate and legal private individual uses are harder to think of.
What the fuck are you smoking, man? Look at the address bar of the website you are currently visiting. "https://forum.mr...."
That little 's' after the 'http' indicates this website is using encryption. All requests from your computer to the server are encrypted across the internet so as to make them more difficult to intercept and read. This is standard practice for almost any website anywhere.
You don't see any legitimate reason for a private individual to have secure, confidential communication with another private individual? That is insanity.
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You don't see any legitimate reason for a private individual to have secure, confidential communication with another private individual?
Encryption that the government can't break? No. https is very breakable.
I think of it like a deadbolt for your front door. I like deadbolts. I have deadbolts. I use them to lock my house to deter robbers and murderers and whatnot, but I understand and accept that the US military can bring a breaching team to my door and storm my house, if they want to. I do not want a perfectly impenetrable deadbolt on my door, because I recognize the necessity of my home being invadable. Yours too.
If I'm organizing a terrorist cell. If I'm running a child sex slave ring. If I'm torturing animals, laundering money, building bombs, planning a school shooting, heck even if I'm evading taxes. The government has a right and an obligation to seek out and stop criminal activity, and a perfect deadbolt on my house's front door would give me free reign to break any law, at any time, for any reason. If you made every single person's house totally impenetrable with perfect deadbolts, civilization would collapse. The social contract would be voided. No one would be accountable, and laws would have no meaning.
Perfect encryption in the hands of private citizens is like a a perfect deadbolt. I want the US military to have perfect deadbolts, because they have a chain of command that ends with a democratic electorate and foreign competitors they need to keep out, but I don't want every rando in the US to have one. For identical reasons, I'm okay with the US government having perfect encryption. But for us normal citizens, the ones who can use it to break laws, I want that encryption to be a useful deterrent to thieves and murderers but not so good that it can be used to protect child pornographers and terrorists from arrest and prosecution by our government.
Ultimately you have to put your faith in democracy, not privacy. It's no coincidence that the hardcore crypto community is mostly anarchists.
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You don't see any legitimate reason for a private individual to have secure, confidential communication with another private individual?
Encryption that the government can't break? No. https is very breakable.
I think of it like a deadbolt for your front door. I like deadbolts. I have deadbolts. I use them to lock my house to deter robbers and murderers and whatnot, but I understand and accept that the US military can bring a breaching team to my door and storm my house, if they want to. I do not want a perfectly impenetrable deadbolt on my door, because I recognize the necessity of my home being invadable. Yours too.
If I'm organizing a terrorist cell. If I'm running a child sex slave ring. If I'm torturing animals, laundering money, building bombs, planning a school shooting, heck even if I'm evading taxes. The government has a right and an obligation to seek out and stop criminal activity, and a perfect deadbolt on my house's front door would give me free reign to break any law, at any time, for any reason. If you made every single person's house totally impenetrable with perfect deadbolts, civilization would collapse. The social contract would be voided. No one would be accountable, and laws would have no meaning.
Perfect encryption in the hands of private citizens is like a a perfect deadbolt. I want the US military to have perfect deadbolts, because they have a chain of command that ends with a democratic electorate and foreign competitors they need to keep out, but I don't want every rando in the US to have one. For identical reasons, I'm okay with the US government having perfect encryption. But for us normal citizens, the ones who can use it to break laws, I want that encryption to be a useful deterrent to thieves and murderers but not so good that it can be used to protect child pornographers and terrorists from arrest and prosecution by our government.
Ultimately you have to put your faith in democracy, not privacy. It's no coincidence that the hardcore crypto community is mostly anarchists.
Ok. Our worldviews are sufficiently different that it is not worth engaging in further discussion on this topic. Cheers.
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Our worldviews are sufficiently different that it is not worth engaging in further discussion on this topic.
You are never obligated to engage, with me or anyone else on the forum.
How do you feel about cryptography being used to distribute child pornography, like the bitcoin blockchain recently was? Are you okay with accepting the exploitation of children in exchange for whatever perceived benefit bitcoin provides to society?
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You don't see any legitimate reason for a private individual to have secure, confidential communication with another private individual?
Encryption that the government can't break? No. https is very breakable.
I think of it like a deadbolt for your front door. I like deadbolts. I have deadbolts. I use them to lock my house to deter robbers and murderers and whatnot, but I understand and accept that the US military can bring a breaching team to my door and storm my house, if they want to. I do not want a perfectly impenetrable deadbolt on my door, because I recognize the necessity of my home being invadable. Yours too.
If I'm organizing a terrorist cell. If I'm running a child sex slave ring. If I'm torturing animals, laundering money, building bombs, planning a school shooting, heck even if I'm evading taxes. The government has a right and an obligation to seek out and stop criminal activity, and a perfect deadbolt on my house's front door would give me free reign to break any law, at any time, for any reason. If you made every single person's house totally impenetrable with perfect deadbolts, civilization would collapse. The social contract would be voided. No one would be accountable, and laws would have no meaning.
Perfect encryption in the hands of private citizens is like a a perfect deadbolt. I want the US military to have perfect deadbolts, because they have a chain of command that ends with a democratic electorate and foreign competitors they need to keep out, but I don't want every rando in the US to have one. For identical reasons, I'm okay with the US government having perfect encryption. But for us normal citizens, the ones who can use it to break laws, I want that encryption to be a useful deterrent to thieves and murderers but not so good that it can be used to protect child pornographers and terrorists from arrest and prosecution by our government.
Ultimately you have to put your faith in democracy, not privacy. It's no coincidence that the hardcore crypto community is mostly anarchists.
This is like the whole iPhone problem. Law enforcement seizes iPhones from terrorists, but can't break the encryption. So they want apple to add in a back door for them. Apple refuses because they know that once a back door has been added, it's just a matter of time until a hacker breaks into it, thereby making every phone they sell poorly encrypted for all the legitimate uses you have for a phone. Either encryption is shit, or it's great. There's no real middle ground.
I don't know if you can put the cryptocurrency cat back in the bag at this point.
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Either encryption is shit, or it's great. There's no real middle ground.
In practice, the "middle ground" for the past decade is for the US government to exploit unknown weaknesses in encryption that is otherwise pretty good. With enough resources (say, siphoning up the entire internet for data mining of texts and emails) you can work around crypto that is good enough for banks and corporations, but still catch terrorists. Eventually, hackers will figure out what Uncle Sam already knows, but so far Uncle has been keeping ahead of the hackers on most fronts. In most recent cases I think it's been end-runs around the encryption (like going in through the window when the house has a perfect deadbolt) rather than picking the deadbolt lock.
And as we learned last month, every CPU in the entire world has a speculative execution memory fault that basically voids all encryption, if exploited properly. I have no idea if the US military had already developed tools to exploit this weakness, but I think they'd be remiss if they hadn't developed them by now, a month after public release. This is what your tax dollars are for.
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You don't see any legitimate reason for a private individual to have secure, confidential communication with another private individual?
Encryption that the government can't break? No. https is very breakable.
I think of it like a deadbolt for your front door. I like deadbolts. I have deadbolts. I use them to lock my house to deter robbers and murderers and whatnot, but I understand and accept that the US military can bring a breaching team to my door and storm my house, if they want to. I do not want a perfectly impenetrable deadbolt on my door, because I recognize the necessity of my home being invadable. Yours too.
If I'm organizing a terrorist cell. If I'm running a child sex slave ring. If I'm torturing animals, laundering money, building bombs, planning a school shooting, heck even if I'm evading taxes. The government has a right and an obligation to seek out and stop criminal activity, and a perfect deadbolt on my house's front door would give me free reign to break any law, at any time, for any reason. If you made every single person's house totally impenetrable with perfect deadbolts, civilization would collapse. The social contract would be voided. No one would be accountable, and laws would have no meaning.
Perfect encryption in the hands of private citizens is like a a perfect deadbolt. I want the US military to have perfect deadbolts, because they have a chain of command that ends with a democratic electorate and foreign competitors they need to keep out, but I don't want every rando in the US to have one. For identical reasons, I'm okay with the US government having perfect encryption. But for us normal citizens, the ones who can use it to break laws, I want that encryption to be a useful deterrent to thieves and murderers but not so good that it can be used to protect child pornographers and terrorists from arrest and prosecution by our government.
Ultimately you have to put your faith in democracy, not privacy. It's no coincidence that the hardcore crypto community is mostly anarchists.
Where have I heard that exact argument before..... oh yea for EVERY FREAKING THING that those in power (or super rich) don't want the "Average" person to have access to. (See the history of Crossbows and Guns for a start and watch it avalanche from there.) Please get a less weak argument. (Won't say it isn't true though.)
Don't get me wrong, I (and everyone else) gets your point. There are things the average citizen should not have access to. But you can't keep them locked up forever. Hell if you had the cash and the drive you could probably get a Nuke or the materials to make the nuke, if nothing else. The real question you should be asking is why do we need these things. If the answer is cause the other guy could use it on me, your doing it wrong. (Also that usually is the answer. Sorry!)
To my knowledge, there is no "Perfect" encryption. We can make it VERY VERY (etc) hard to crack, but not impossible. If we ever figure out the prefect encryption, which I doubt we will, well I almost guarantee someone, some where will make it available for the "rando" person cause $Profit$. You know that as well as I do.
As for Crypto/bitcoin technology (Which at this point, are interesting but that is about it.) yes, people will use them for good and bad things. Fire (you know that AMAZING invention) was the same way. It could keep you warm, cook your food, or it could burn you or others to death, yet it's still here. I am sure the technology behind cryptos will do very interesting things. Will it change lives? Maybe, we haven't gotten there yet. But until then yea we are going to see it used for possible good (The legit Western Union type cases, tracking of goods, etc, and bad (Terrorists, porn, etc)
Am I skeptical of the currency, hell yes. (Full disclosure I have played with it in the past but I fully understood the risks.) The tech behind it, not as much. Just takes time to figure out what we can do with it other then trade fantasy coins.
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Sol, why do you say https is breakable?
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Sol, why do you say https is breakable?
Because it's been hacked like ten different ways? Go ahead and google "https hacked" and read all about it.
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You don't see any legitimate reason for a private individual to have secure, confidential communication with another private individual?
Encryption that the government can't break? No. https is very breakable.
I think of it like a deadbolt for your front door. I like deadbolts. I have deadbolts. I use them to lock my house to deter robbers and murderers and whatnot, but I understand and accept that the US military can bring a breaching team to my door and storm my house, if they want to. I do not want a perfectly impenetrable deadbolt on my door, because I recognize the necessity of my home being invadable. Yours too.
If I'm organizing a terrorist cell. If I'm running a child sex slave ring. If I'm torturing animals, laundering money, building bombs, planning a school shooting, heck even if I'm evading taxes. The government has a right and an obligation to seek out and stop criminal activity, and a perfect deadbolt on my house's front door would give me free reign to break any law, at any time, for any reason. If you made every single person's house totally impenetrable with perfect deadbolts, civilization would collapse. The social contract would be voided. No one would be accountable, and laws would have no meaning.
Perfect encryption in the hands of private citizens is like a a perfect deadbolt. I want the US military to have perfect deadbolts, because they have a chain of command that ends with a democratic electorate and foreign competitors they need to keep out, but I don't want every rando in the US to have one. For identical reasons, I'm okay with the US government having perfect encryption. But for us normal citizens, the ones who can use it to break laws, I want that encryption to be a useful deterrent to thieves and murderers but not so good that it can be used to protect child pornographers and terrorists from arrest and prosecution by our government.
No, you're wrong. I assume you're not a programmer. I am.
There is no such thing as a backdoor that only the government can use. If you bother to look you'll see that several of the most significant security problems in recent history were discovered by (or created by) the government first, used "for national security purposes" instead of fixed, and then eventually leaked (or reverse-engineered) by the bad guys for their own nefarious purposes. Either crypto works, and it's possible to have private and secure communications over the internet, or it doesn't, and the bad guys will eventually figure out ways to get in to everything. Yes, like any tool it can be used for good or evil. Cryptography does in fact make the FBI's life harder when they are trying to prosecute child pornographers (not impossible, just harder). But it really truly is a choice between that and giving up on this whole "computer" business and going back to in-person paper-based transactions. And if the FBI and other agencies weren't so blatant and relentless in their desire to undermine and circumvent the fourth amendment I might feel a little bit sorry for them, but I'm not.
Ultimately you have to put your faith in democracy, not privacy. It's no coincidence that the hardcore crypto community is mostly anarchists.
Privacy from the government - according to our constitution - is a fundamental human right that can only be abridged by a judge granting a sufficiently narrow search warrant that is necessitated by the situation and evidence. Even if a search warrant is granted it is permission to search, not a guarantee to find. There are plenty of other levers the government can and does employ to find and prosecute the bad guys. If the government "requires" us to give up our fundamental human rights in order to "ensure our safety" in the safest period of all human history, then it's no longer a government worth keeping. That's not anarchy, that's "fundamentals of America 101".
Edit to say: privacy from the government is also a fundamental requirement for a functioning democracy. Unless of course you want "purge everyone who disagrees with me" Trumpian-type politicians to have a complete list of who voted for them and who didn't. Privacy is no different and no less fundamental just because we're talking about the internet and not the ballot box.
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Privacy from the government - according to our constitution - is a fundamental human right that can only be abridged by a judge granting a sufficiently narrow search warrant that is necessitated by the situation and evidence.
Which part of the constitution says anything about privacy being a fundamental human right? The fourth amendment is directed to searches and seizures and enumerates a list of places and things that are to be secure against unreasonable searches and seizures.
Perhaps you are referring to constitutional interpretation instead? If that is the case, then yes, there have been Supreme Court cases which have interpreted a right to privacy in certain circumstances.
Further, the constitution does not prescribe any remedy for a infringement of fourth amendment rights. The remedy to violations of fourth amendment rights have been judicially created.
I guess I don't understand why you think "right to privacy from the government" and "right to be secure against unreasonable searches and seizures" are different. I am using the terms to mean the same thing. I've openly admitted that the right to privacy is not absolute and can be abridged by a search warrant. The right for you to keep your personal effects secure from unreasonable searches from the government is the right to keep them... private from the government.
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No, you're wrong. I assume you're not a programmer. I am.
Unless you have some numbers to back up that claim, I'm going to assume we're talking about your opinion vs my opinion. In which case nobody is ever really "wrong". Wrong is something you can prove with an equation, everything else is subjective.
If you bother to look you'll see that several of the most significant security problems in recent history were discovered by (or created by) the government first, used "for national security purposes" instead of fixed, and then eventually leaked (or reverse-engineered) by the bad guys
Yes, I'm well aware. I like this system. I think it provides the best of both worlds, because it offers relatively good security from almost everyone, but still doesn't protect criminals from the government. Just like virtually everything else we rely for security.
Either crypto works, and it's possible to have private and secure communications over the internet, or it doesn't, and the bad guys will eventually figure out ways to get in to everything.
I disagree with this statement, coming from your or from GSV. Lots of crypto is good unless you have physical access to the device or complete capture of network traffic, which are both cases in which the government can hack you but I cannot. Because the government has the right to seize all of your physical property, and listen in on all internet communications (encrypted or otherwise).
Privacy from the government - according to our constitution - is a fundamental human right
I think you must have failed civics. Because every college sophomore in the US knows that the "right to privacy" isn't explicitly in the Constitution anywhere, and is only loosely supported by one possible interpretive reading of various unrelated sections. We WANT there to be a right to privacy, but the Constitution doesn't provide it.
And even if it did, it would still be limited. You don't have an unabridged right to free speech when shouting fire in a crowded theater, and you don't have an unabridged right to bear arms if you want to collect nukes or artillery. All Constitutional rights are necessarily limited, and even if privacy was an enumerated right I'm pretty sure "I rape children on live internet video feeds" would be a sufficient reason to have your privacy revoked by the government.
Privacy is no different and no less fundamental just because we're talking about the internet and not the ballot box.
It's a key distinction, and the primary reason why we still vote with paper. Electronic voting is inherently less secure, and less private, than paper voting. Paper voting is also not really private either, in the sense that the government certainly can find out how you voted if they wanted to (stakeout, covert surveillance, interrogation, etc) if there were a reason to suspect your vote was somehow integral to a crime. Like most forms of privacy, the best defense here is being uninteresting.
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Either crypto works, and it's possible to have private and secure communications over the internet, or it doesn't, and the bad guys will eventually figure out ways to get in to everything.
I disagree with this statement, coming from your or from GSV. Lots of crypto is good unless you have physical access to the device or complete capture of network traffic, which are both cases in which the government can hack you but I cannot. Because the government has the right to seize all of your physical property, and listen in on all internet communications (encrypted or otherwise).
They have the right to try to listen in - if they obtain a search warrant, I agree and I've said so.
Privacy from the government - according to our constitution - is a fundamental human right
I think you must have failed civics. Because every college sophomore in the US knows that the "right to privacy" isn't explicitly in the Constitution anywhere, and is only loosely supported by one possible interpretive reading of various unrelated sections. We WANT there to be a right to privacy, but the Constitution doesn't provide it.
See my response to L.A.S directly above. This is a distinction without a difference.
And even if it did, it would still be limited. You don't have an unabridged right to free speech when shouting fire in a crowded theater, and you don't have an unabridged right to bear arms if you want to collect nukes or artillery. All Constitutional rights are necessarily limited, and even if privacy was an enumerated right I'm pretty sure "I rape children on live internet video feeds" would be a sufficient reason to have your privacy revoked by the government.
I agree and I've said so. And you don't have to get all emotionally manipulative about it, any reason that is sufficient for a judge to grant a search warrant is good enough for me. I still disagree that cryptography as a discipline can ever have a "secure except the government can get in" provision. Cryptography is an exercise in applied mathematics, and as such it is one of the most black-and-white things in existence. Either it is secure, or it is not. If our government can break it then so can China and Russia and Google and Comcast and any number of other actors, and at least one person at one of those institutions will be willing to use the information they have access to for unethical / illegal / improper reasons.
Privacy is no different and no less fundamental just because we're talking about the internet and not the ballot box.
It's a key distinction, and the primary reason why we still vote with paper. Electronic voting is inherently less secure, and less private, than paper voting. Paper voting is also not really private either, in the sense that the government certainly can find out how you voted if they wanted to (stakeout, covert surveillance, interrogation, etc) if there were a reason to suspect your vote was somehow integral to a crime. Like most forms of privacy, the best defense here is being uninteresting.
The old "if you have nothing to hide then you have nothing to fear" excuse. That's awfully interesting coming from someone that I know offhand from their previous post history:
1) Works somewhere in the federal government.
2) Is a Trump detractor.
Do you really think there is such a thing as "enough uninteresting"? Even if you think you personally are safe, don't you want journalists to be able to do their jobs? What about in countries where journalists run a very real risk of losing their life? Privacy from the government is important, now in the big-data information age more so than ever before.
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You don't see any legitimate reason for a private individual to have secure, confidential communication with another private individual?
Encryption that the government can't break? No. https is very breakable.
I think of it like a deadbolt for your front door. I like deadbolts. I have deadbolts. I use them to lock my house to deter robbers and murderers and whatnot, but I understand and accept that the US military can bring a breaching team to my door and storm my house, if they want to. I do not want a perfectly impenetrable deadbolt on my door, because I recognize the necessity of my home being invadable. Yours too.
If I'm organizing a terrorist cell. If I'm running a child sex slave ring. If I'm torturing animals, laundering money, building bombs, planning a school shooting, heck even if I'm evading taxes. The government has a right and an obligation to seek out and stop criminal activity, and a perfect deadbolt on my house's front door would give me free reign to break any law, at any time, for any reason. If you made every single person's house totally impenetrable with perfect deadbolts, civilization would collapse. The social contract would be voided. No one would be accountable, and laws would have no meaning.
Perfect encryption in the hands of private citizens is like a a perfect deadbolt. I want the US military to have perfect deadbolts, because they have a chain of command that ends with a democratic electorate and foreign competitors they need to keep out, but I don't want every rando in the US to have one. For identical reasons, I'm okay with the US government having perfect encryption. But for us normal citizens, the ones who can use it to break laws, I want that encryption to be a useful deterrent to thieves and murderers but not so good that it can be used to protect child pornographers and terrorists from arrest and prosecution by our government.
No, you're wrong. I assume you're not a programmer. I am.
There is no such thing as a backdoor that only the government can use. If you bother to look you'll see that several of the most significant security problems in recent history were discovered by (or created by) the government first, used "for national security purposes" instead of fixed, and then eventually leaked (or reverse-engineered) by the bad guys for their own nefarious purposes. Either crypto works, and it's possible to have private and secure communications over the internet, or it doesn't, and the bad guys will eventually figure out ways to get in to everything. Yes, like any tool it can be used for good or evil. Cryptography does in fact make the FBI's life harder when they are trying to prosecute child pornographers (not impossible, just harder). But it really truly is a choice between that and giving up on this whole "computer" business and going back to in-person paper-based transactions. And if the FBI and other agencies weren't so blatant and relentless in their desire to undermine and circumvent the fourth amendment I might feel a little bit sorry for them, but I'm not.
Ultimately you have to put your faith in democracy, not privacy. It's no coincidence that the hardcore crypto community is mostly anarchists.
Privacy from the government - according to our constitution - is a fundamental human right that can only be abridged by a judge granting a sufficiently narrow search warrant that is necessitated by the situation and evidence. Even if a search warrant is granted it is permission to search, not a guarantee to find. There are plenty of other levers the government can and does employ to find and prosecute the bad guys. If the government "requires" us to give up our fundamental human rights in order to "ensure our safety" in the safest period of all human history, then it's no longer a government worth keeping. That's not anarchy, that's "fundamentals of America 101".
Edit to say: privacy from the government is also a fundamental requirement for a functioning democracy. Unless of course you want "purge everyone who disagrees with me" Trumpian-type politicians to have a complete list of who voted for them and who didn't. Privacy is no different and no less fundamental just because we're talking about the internet and not the ballot box.
Thank you. You made basically my argument much more eloquently than I could.
Bottom line - I don't trust the government. Sol does. Beginning with that trust or lack thereof changes the foundation of your opinions on cryptography and privacy.
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Thank you. You made basically my argument much more eloquently than I could.
Bottom line - I don't trust the government. Sol does. Beginning with that trust or lack thereof changes the foundation of your opinions on cryptography and privacy.
You're welcome, but I wouldn't say it's that simple. I mostly trust the government. But the government's power is not and should not be absolute. That's the whole point of our enumerated rights, to limit the government's power (and let's not forget the 10th Amendment, the "this is not a complete list of freedoms and if a power is not explicitly granted to the government you should assume it doesn't have it" Amendment). The government exists to serve the people, not vice versa. And "serve" primarily means "protect the rights and freedoms of", if it's not doing that then there's no point.
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Sol, I'm having a little trouble reconciling something:
First your comments suggest that the commonly used crypto systems can be broken at will by the government.
Second the FBI periodically demands "adult conversations" about cryptography back doors.
If the government is able to break non-military crypto systems at will, why do they need back doors? Or am I not understanding correctly?
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Https is not breakable by any easy means, government or private sector. The kevel of encryption we are at today will only be breakable years down thr line if moors law stays true.
The type of https decryption via man in the middle or commercial ssl decrption products will require the endpoint to be pwned in thr first place.
Your boring brown cissp.
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Https is not breakable by any easy means, government or private sector. The kevel of encryption we are at today will only be breakable years down thr line if moors law stays true.
The type of https decryption via man in the middle or commercial ssl decrption products will require the endpoint to be pwned in thr first place.
Your boring brown cissp.
Military IT guy here. The only times I've seen https "broken" was when the computer on the receiving or sending end was already compromised by a virus or someone was at the ISP. Even then all they could see was where the traffic was going, not what was in it. The biggest vulnerability to https is if someone gains access to the server where the particular website certificate's private key is generated. That takes some effort, but it's not impossible.
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Yep, root certificate leaks are definitely a weak spot.
Many companies have proxy servers that mitm HTTPS. Another big weak spot, especially if you're using the company's network for something personal.
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They have the right to try to listen in - if they obtain a search warrant, I agree and I've said so.
You have made this point several times, so I'm sure you've thought this through. With cryptography, THERE IS NO SEARCH WARRANT. Perfect encryption equals immunity from criminal investigation. The whole point of a government back door into common encryption programs is that the government and only the government, with a search warrant, can break the encryption. Eventually the hackers figure out the back door and it has to get patched (and thus voided), so they try a different back door or other method of investigation.
I don't want to live in a world where perfect encryption is widely available, because that makes everyone immune from investigation. Everyone could break the law. You could launder mob money without any evidence. You could distribute illegal photographs without any evidence. You could buy or sell drugs or sex or slaves or murders without evidence. You could evade taxes, sanctions, regulations, disclosure requirements etc. without evidence. You can sell top secret military information to the Russians without evidence. Perfect encryption perfectly hides information from anyone and everyone, and in an age when so much of our economy is information exchange, that power would allow you to commit a wide variety of criminal activity without evidence. No thanks.
Just like the dead bolt on your front door, I think decent encryption should be good enough to be a sufficient deterrent to most people, but not perfectly impenetrable by the US military. If you're doing something horrible behind that deadbolt, you should not be protected.
I agree and I've said so. And you don't have to get all emotionally manipulative about it, any reason that is sufficient for a judge to grant a search warrant is good enough for me.
THERE IS NO SEARCH WARRANT with encryption. If you believe that there are cases in which the US government should be allowed to review your information, then we agree and you don't want perfectly impenetrably encryption either. You just want the penetration to be restricted to cases where there is cause for a warrant, which is the exact scenario we currently have: the government uses a secret back door and everyone else gets kept out. You know about FISA warrants, right? Did you assume that "electronic surveillance" didn't include breaking encryption?
I still disagree that cryptography as a discipline can ever have a "secure except the government can get in" provision. Cryptography is an exercise in applied mathematics, and as such it is one of the most black-and-white things in existence. Either it is secure, or it is not.
Well that's a gross simplification, isn't it? A perfect deadbolt does not make your house secure, because a breaching team can come straight through the walls if they want to. They can also peer through your windows or monitor you with cameras that see right through walls. They can bug your phone or internet line at the junction, put a laser mic on your window glass, fly a drone over your airspace to keep tabs on who comes and goes 24/7, open all of your mail, bribe your bodyguard, and set up a perimeter and then set your house on fire ala David Koresh. Encrypting your data stream, like a deadbolt, is only one kind of protection and ignores lots of other vectors. Perfect encryption may seem black or white, but you only protect one single point of access. Your privacy can and does get violated a thousand other ways. The anarchist hard-on for cryptography as panacea has always seems woefully misplaced to me.
The old "if you have nothing to hide then you have nothing to fear" excuse.
That is definitely not the argument I am making. Deliberately appearing to be uninteresting so as to not draw attention is a strategy you can employ to protect your privacy, and is probably more effective than putting up a big sign saying "I'm a billionaire criminal, hack me if you dare!" and then relying on your encryption. See the difference? It's not that I don't think anyone deserves any privacy, it's that you get more privacy by being smart than you do by relying on software. If you draw enough eyeballs, eventually someone will find a way around your encryption.
That's awfully interesting coming from someone that I know offhand from their previous post history:
1) Works somewhere in the federal government.
2) Is a Trump detractor.
This is a straight up ad hominem attack and undeserving of this forum. You can disagree with my arguments, and that's fine. I will not attack you as a person and I request that you do the same. Deal?
So disappointing.
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They have the right to try to listen in - if they obtain a search warrant, I agree and I've said so.
You have made this point several times, so I'm sure you've thought this through. With cryptography, THERE IS NO SEARCH WARRANT. Perfect encryption equals immunity from criminal investigation. The whole point of a government back door into common encryption programs is that the government and only the government, with a search warrant, can break the encryption.
But that's not what a search warrant entitles them to do. As a particularly relevant example, current legal thought is that you cannot be compelled to give them the combination to your safe. And as you correctly point out it largely doesn't matter for the government anyway. Once you are physical possession of the computer or have a complete record of the network traffic a lot more becomes possible. Not to mention things like server logs and other data that they can subpoena. And that's all as it should be, the government has the ability to prosecute criminals without "backdooring" encryption. And no they don't really have a backdoor now, or else they wouldn't throw such a hissy fit over Apple refusing to help them break into iPhones for example (Apple claims not to be able to, which is also as it should be). They may have found a flaw in Apple's security model and been able to break this particular phone, but that's a far cry from a general encryption backdoor that absolutely would break the internet that the FBI is so intent on demanding.
I don't want to live in a world where perfect encryption is widely available, because that makes everyone immune from investigation. Everyone could break the law. You could launder mob money without any evidence. You could distribute illegal photographs without any evidence. You could buy or sell drugs or sex or slaves or murders without evidence. You could evade taxes, sanctions, regulations, disclosure requirements etc. without evidence. You can sell top secret military information to the Russians without evidence. Perfect encryption perfectly hides information from anyone and everyone, and in an age when so much of our economy is information exchange, that power would allow you to commit a wide variety of criminal activity without evidence. No thanks.
You more or less live there now and the world has not ended. Humans are always the weak link when it comes to security. Criminals get caught because they screw up and do something dumb, not because the government supposedly has a magic crypto backdoor that allows them to unconditional access to all information.
I agree and I've said so. And you don't have to get all emotionally manipulative about it, any reason that is sufficient for a judge to grant a search warrant is good enough for me.
THERE IS NO SEARCH WARRANT with encryption. If you believe that there are cases in which the US government should be allowed to review your information, then we agree and you don't want perfectly impenetrably encryption either. You just want the penetration to be restricted to cases where there is cause for a warrant, which is the exact scenario we currently have: the government uses a secret back door and everyone else gets kept out. You know about FISA warrants, right? Did you assume that "electronic surveillance" didn't include breaking encryption?
Nope, I do want "perfectly impenetrable encryption", aka "actually working encryption". There is still plenty of other information the government can use to build a case and prosecute even with perfect encryption.
I still disagree that cryptography as a discipline can ever have a "secure except the government can get in" provision. Cryptography is an exercise in applied mathematics, and as such it is one of the most black-and-white things in existence. Either it is secure, or it is not.
Well that's a gross simplification, isn't it? A perfect deadbolt does not make your house secure, because a breaching team can come straight through the walls if they want to. They can also peer through your windows or monitor you with cameras that see right through walls. They can bug your phone or internet line at the junction, put a laser mic on your window glass, fly a drone over your airspace to keep tabs on who comes and goes 24/7, open all of your mail, bribe your bodyguard, and set up a perimeter and then set your house on fire ala David Koresh. Encrypting your data stream, like a deadbolt, is only one kind of protection and ignores lots of other vectors. Perfect encryption may seem black or white, but you only protect one single point of access. Your privacy can and does get violated a thousand other ways. The anarchist hard-on for cryptography as panacea has always seems woefully misplaced to me.
No, I'm telling you as someone who knows what they're talking about that it's not a gross simplification, that is how it is. And as to the whole rest of the paragraph, I think that's kind of undermining your own point? And that is semi-how-it's-supposed-to-be? Working encryption is not the end of the criminal justice system, and so there's no reason not to have working encryption.
That's awfully interesting coming from someone that I know offhand from their previous post history:
1) Works somewhere in the federal government.
2) Is a Trump detractor.
This is a straight up ad hominem attack and undeserving of this forum. You can disagree with my arguments, and that's fine. I will not attack you as a person and I request that you do the same. Deal?
So disappointing.
How on earth is that an ad hominem attack?! What part of that is attacking you as a person?! For the record I am also a Trump detractor, as I think all sane people are. I'm not saying you're bad in any way for working in the government or being a Trump detractor, I'm pointing out the perfectly valid point that there are people in the government who cannot be trusted with absolute power or knowledge, and that you are in a particularly relevant position to understand that. I agree this has been a disappointing conversation though, as I think you have not been arguing in good faith.
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Privacy from the government - according to our constitution - is a fundamental human right that can only be abridged by a judge granting a sufficiently narrow search warrant that is necessitated by the situation and evidence.
Which part of the constitution says anything about privacy being a fundamental human right? The fourth amendment is directed to searches and seizures and enumerates a list of places and things that are to be secure against unreasonable searches and seizures.
Perhaps you are referring to constitutional interpretation instead? If that is the case, then yes, there have been Supreme Court cases which have interpreted a right to privacy in certain circumstances.
Further, the constitution does not prescribe any remedy for a infringement of fourth amendment rights. The remedy to violations of fourth amendment rights have been judicially created.
I guess I don't understand why you think "right to privacy from the government," and "right to be secure against unreasonable searches and seizures" are different. I am using the terms to mean the same thing. I've openly admitted that the right to privacy is not absolute and can be abridged by a search warrant. The right for you to keep your personal effects secure from unreasonable searches from the government is the right to keep them... private from the government.
Okay... Since it does not say "right to privacy from the government," then that is your constitutional interpretation of what the fourth amendment means. You are using different terms in order to say something which is not actually said in the constitution.
You didn't answer the question. How are they different? Because the constitution only describes keeping things private but doesn't use the word "privacy"? What's the point of this distinction? That everyone has to say "right to be secure against unreasonable searches" all the time instead of "right to privacy"? That's the whole thing?
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Yep, root certificate leaks are definitely a weak spot.
Many companies have proxy servers that mitm HTTPS. Another big weak spot, especially if you're using the company's network for something personal.
As long as everyone understand for someone to "break" https, the endpoint has to be Pwned. A proxy does not decrypt https traffic, only a trusted Cert authority allows this.
Which ultimately means the endpoint is Pwned whether by being hacked, or enterprise cert deployed via GPO. The encryption negotiated with todays browsers means HTTPS is not "Breakable" with today's hardware and computing power.
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Just like the dead bolt on your front door, I think decent encryption should be good enough to be a sufficient deterrent to most people, but not perfectly impenetrable by the US military. If you're doing something horrible behind that deadbolt, you should not be protected.
This was tried by the US government in the 1990's with the Clipper chip and key escrow and it was never adopted. Cryptography even used to be controlled under export regulations for weapons. It's like trying to stop the tide with a sand castle, never going to happen.
The status quo seems to be that government agencies horde vulnerabilities and use them, along with other means, to eavesdrop on people trying to secure their communications. Eventually the vulnerabilities are discovered by the larger community and fixed.
I'd never heard anyone espouse that this is a good state of affairs before. It's an interesting point of view. I don't think I agree with it, but thank you for bringing it up, it's a good thought exercise.
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Yep, root certificate leaks are definitely a weak spot.
Many companies have proxy servers that mitm HTTPS. Another big weak spot, especially if you're using the company's network for something personal.
As long as everyone understand for someone to "break" https, the endpoint has to be Pwned. A proxy does not decrypt https traffic, only a trusted Cert authority allows this.
Which ultimately means the endpoint is Pwned whether by being hacked, or enterprise cert deployed via GPO. The encryption negotiated with todays browsers means HTTPS is not "Breakable" with today's hardware and computing power.
All the corporate proxy servers I've run into *do* decrypt HTTPS traffic. They don't break HTTPS though. The enterprise will install the proxy's certificate on the enterprise computers and the proxy will pretend to be the endpoint you're connecting to. All of your traffic gets decrypted in the proxy and re-encrypted before going out on the internet.
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As long as everyone understand for someone to "break" https, the endpoint has to be Pwned. A proxy does not decrypt https traffic, only a trusted Cert authority allows this.
Which ultimately means the endpoint is Pwned whether by being hacked, or enterprise cert deployed via GPO. The encryption negotiated with todays browsers means HTTPS is not "Breakable" with today's hardware and computing power.
All the corporate proxy servers I've run into *do* decrypt HTTPS traffic. They don't break HTTPS though. The enterprise will install the proxy's certificate on the enterprise computers and the proxy will pretend to be the endpoint you're connecting to. All of your traffic gets decrypted in the proxy and re-encrypted before going out on the internet.
Right, he said that, and without that critical step it's not possible so it's not something that can be applied to the generalized internet because you can't force everyone to install your software. Furthermore things like browser cert-pinning (which may be the next step) would keep that from working. I agree with Ben, in general things are not "broken" now, and the process of "breaking" things requires "the good guys" from acting indistinguishably from "the bad guys" (through exploiting security vulnerabilities and installing what can only be described as malware).
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Ben also said this:
A proxy does not decrypt https traffic, only a trusted Cert authority allows this.
Cert pinning actually isn't sufficient to stop this as I found out at work last week when I was struggling with access to github through our proxy server.
But I'm not arguing with you guys, just picking nits on the details. You're right, HTTPS is not broken right now and the best way to attack it is through the end points.
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Sherr is spot on, the only way https can be broken is by the endpoint being compromised. There is no outside products that can intercept and decrypt without the endpoint being pwned. The good guys are staying ahead of the bad guys on the encryption space. Endpoint is a different story. Https is not where an attacker would start.
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Sherr is spot on, the only way https can be broken is by the endpoint being compromised. There is no outside products that can intercept and decrypt without the endpoint being pwned.
Agreed and "endpoint", for clarification, being either the computer you are talking to (vanguard.com or whatever) or your own computer. "Your own computer" being the most likely of the two, usually, considering how tech-clueless the average person is and how infrequently people read the EULAs and how the average joe doesn't care about things like "security breaches" so the press dosn't care about things like for example Lenovo's blatant and completely inexcusable subversion of all things important for internet security (https://www.wired.com/2015/02/lenovo-superfish/) (and I say this as a person who has a Lenovo work laptop, but of course I don't run any piece of their software).
The best advice I can offer is, if you care about privacy and security and the US 4th Amendment (this is an ordered list by importance):
- Vote for people who also care (IMHO, the political lines in the US are currently drawn between the 2nd Amendment and "all of the others without any other exclusion." Pick your side I guess.)
- Use an ad blocker like "uBlock Origin" or similar for all websites regardless of the manipulative language they use to beg you to not
- Stay up-to-date on security updates (also use open source whenever possible (like maybe linux as an operating system for example, and all the way down the stack (I may be biased, but I work for a company I believe in (intentionally, I am on this forum and have been for a while, I can afford to work wherever I want))))
- Pay attention to a "tech news" source like arstechnica or similar and at least listen for things that may be relevant to you
- Use a javascript blocker like NoScript or similar (Yes it's a pain, Yes it makes a bunch of stuff not work right, Yes it's important)
- Learn to recognize and reject the totalitarian propaganda of "no really our government is different, we only want to spy on the bad guys, not you the patriotic freedom-loving(?) anti-pedophile anti-terrorist good-citizen" (Note: I am specifically not saying "sol" is part of this, in my lifetime the biggest spewer of this nonsense has been G.W.Bush and I have a feeling sol would not like to be associated with him (nor would I). Sol is merely incorrect.)
I think this will be my last post on the subject.
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Solid points Sherr, add to that maybe a proxy software.
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Solid points Sherr, add to that maybe a proxy software.
Well, there's also security through obscurity. But in that case, I guess that you would probably (erroneously) be counted among those who don't care about security.
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Well that's a gross simplification, isn't it? A perfect deadbolt does not make your house secure, because a breaching team can come straight through the walls if they want to. They can also peer through your windows or monitor you with cameras that see right through walls. They can bug your phone or internet line at the junction, put a laser mic on your window glass, fly a drone over your airspace to keep tabs on who comes and goes 24/7, open all of your mail, bribe your bodyguard, and set up a perimeter and then set your house on fire ala David Koresh. Encrypting your data stream, like a deadbolt, is only one kind of protection and ignores lots of other vectors. Perfect encryption may seem black or white, but you only protect one single point of access. Your privacy can and does get violated a thousand other ways. The anarchist hard-on for cryptography as panacea has always seems woefully misplaced to me.
The deadbolt analogy is flawed. First of not only the government can break in, also anyone with a battering ram or other tools. Including criminals. But they have to be there, risk getting spotted, caught later etc.
Government-mandated back doors in encryption will be found by hackers, and this means every person on the planet with a computer can break into all your devices! Drain your bank, randsomware your PC/phone, spy through your cameras/blackmail, track your family, scam your grandmom, etc etc. They can do this from the comfort of a Moscow office, attempting hundreds of times a day, with virtually zero risk. That's not comparable to knocking down your physical door.
Even the consequences are not the same. Someone break your door and steals all your stuff; sucks but get insurance and buy new stuff.
Someone steals your ID, falsify your government records, claim your taxes, plant criminal materials on your PC, and/or drain your assents? That's an insane mess that can take years to fix!