On May 29, 2013, at 8:24 PM, "S. Dale Morrey" <[email protected]> wrote:
> Todd you might want to double check that information.
> If you lose your wallet it's gone there's no getting it back.
> There are clients that let you use deterministic keys, however those keys
> are only as secure as your password.
> Also it is not a feature of the opensource bitcoin client, just some of the
> other clients like electrum.
>
> Bitcoin uses ECDSA to generate public/private keypairs. If your seed is
> random, your key is random. Your private key is private and yours alone,
> it is designed to be not recoverable.
>
> Satoshi envisioned attrition as a feature not a flaw. It makes the
> circulating currency more valuable if some coins eventually drop out.
No, it only diminishes the supply. Value depends on demand as well as supply,
and a slightly diminished supply of something there is little demand for will
not significantly change its value. Furthermore, if you were saving the
bitcoins in your wallet anyway, they were not circulating and were not
contributing to supply, and thus a lost wallet is equivalent in the valuation
of bitcoins to a wallet sitting idle.
> However I personally think he missed the greed aspect. Remember even
> though the keyspace may be 2^256-1 for any single key this size of this
> space is also divided by 2 for each key you are looking for. Once there
> are 2^32 keys in circulation I believe it becomes viable to run a brute
> force algorithm on a large enough bot net in an attempt to recover those
> keys so long as the price is over $100USD.
>
> The problem is that once this process starts, people will start seeing
> ancient keys resurrected realize that there is a significant flaw (their
> keys are no more secure than the lost keys), and this will cause people to
> lose confidence in the currency. Since Bitcoin like any currency trades
> pretty much exclusively on confidence, it stands to reason that this will
> devalue the currency when it occurs.
You are confusing currency exchange markets for currency value. If all you can
do with a bitcoin is exchange it for some number of dollars, it is not really a
currency, it is just a commodity. Commodity futures markets trade based on
confidence in the commodity production, but currency exchange rates depend on
the value of those currencies in the markets in which those currencies are the
native form of exchange. I.e., how much stuff can I buy in the market with a
dollar? This depends on prices denominated in dollars, which in turn depends
on the supply and demand for goods in those markets.
You can see here what separates a real currency like the dollar from a "wannabe
currency" commodity like the bitcoin. Without a sizable market in real goods
and services as a currency, calling bitcoin a currency and pretending it has
value like a currency does is utterly ridiculous. What bitcoin actually is,
despite its currency-like appearance, is a commodity. And its only intrinsic
value is based on anonymity and unforgeability. Anonymity is of limited
appeal, and other ways of exchanging value are generally secure enough. So the
only real thing driving the value of bitcoin as a commodity right now is hype
and speculation. Well, that's not enough for me to buy into it. If you'd like
to gamble on it, go ahead!
--Levi
/*
PLUG: http://plug.org, #utah on irc.freenode.net
Unsubscribe: http://plug.org/mailman/options/plug
Don't fear the penguin.
*/
