You know most money is sent electronically right? And even if that fails (like in the case above, where the banks were closed), you can still write a cheque, even for absurd amounts. BTW that amoutn above is $9 billion dollars.
Something having a market does not make it a viable currency. Gold and other precious metals fit your definition but they are not currencies. For it to be a currency, a critical mass of vendors need to accept it as payment, and that's where things like volatility/liquidity/etc matter.
Did you not read what I wrote? a) The above mentioned method surely used a 3rd party that charged out the ass b) a cheque is not instant and still requires the use of a 3rd party (the bank, the courier). Those 3rd parties cost and that was the whole point of the example. That's not even mentioning what different governments will take from you if you try to do this in dollars.
Sage Uncle Milton predicts the rise of Bitcoin in 1999! <iframe width="560" height="315" src="//www.youtube.com/embed/6MnQJFEVY7s" frameborder="0" allowfullscreen></iframe>
Turns out a few hackers can cause chaos within the whole ecosystem, in part because there's a core flaw with the technology: http://www.coindesk.com/massive-concerted-attack-launched-bitcoin-exchanges/
There isn't a "core flaw" with the technology. It even says so in the article. The ones that are getting attacked are the Bitcoin exchanges. Particularly, their bespoke accounting systems (which they made themselves) to handle customer coins are the ones vulnerable. Bitcoin, itself, isn't exploited whatsoever.
That's not true. Transaction malleability is a core flaw. Bitcoin people have found a work-around, but it IS a flaw. https://en.bitcoin.it/wiki/Transaction_Malleability This is a statement from the Bitcoin Foundation: https://bitcoinfoundation.org/blog/?p=422 You may have noticed that some exchanges have temporarily suspended withdrawals and wondering what’s going on or more importantly, what’s being done about it. You can be rest assured that we have identified the issue and are collectively and collaboratively working on a solution. Somebody (or several somebodies) is taking advantage of the transaction malleability issue and relaying mutated versions of transactions. This is exposing bugs in both the reference implementation and some exchange’s software. We (core dev team, developers at the exchanges, and even big mining pools) are creating workarounds and fixes right now. Except to be an efficient and useful currency, there has to be stability. While your specific bitcoins may not be affected in your own wallet, when the value of your bitcoins can drop 20% overnight due to a bug elsewhere in the system, that makes using it as a reliable currency problematic.
It really, really isn't a "core flaw", which I'm using to refer to something being broken in the Bitcoin protocol, itself(, not exchange wallet software or the whole issue of Bitcoin as a currency or anything else,) so as to actually prevent Bitcoins from being used as currency. Transaction malleability is a characteristic of the Bitcoin protocol and has been known since, at least, 2011, but more importantly, it's really only material because exchanges made their software under the assumption that there is no malleability. So what happens is that they cannot confirm their transactions. It all boils down to, and I quote this article from Quartz which provides an accessible explanation for the whole issue, [rquoter]This makes Mt. Gox vulnerable, at least in theory. A Mt. Gox customer could potentially withdraw bitcoins, have the hash changed, and then claim that she never actually received the bitcoins withdrawn. When Mt. Gox checks its records, it won’t find the hash that it recorded for the transaction anywhere in the block chain. The result could be that Mt. Gox ends up paying the customer more than once. [/rquoter] However, transactions are still correct in the sense that the person who sends, gets, and the amount are all correct. In fact, this isn't even an issue with regards to properly implemented wallet software (http://www.cryptocoinsnews.com/2014...bitcoin-core-developer-greg-maxwell-responds/). The Bitcoin Foundation article you quoted, actually, doesn't admit fault in the Bitcoin protocol. The wording isn't explicit (and, in my opinion, it's careless), which is why we have to take it in the context of the entire debacle. But to dissect it: What issue? It's not really pointed out to be some "core flaw" in the protocol, itself; but, from what we know, they're probably referring to the bespoke exchange software having problems with transaction malleability. I'll give you the benefit of the doubt that you know how software development works, particularly for open source and you know what he's referring to by "reference implementation". Anyway, it's odd he puts it in the same bugged bag as the exchange software but, again, he isn't explicit as to the nature of the bugs. It's probably the existence of transaction malleability. In some instances, code that does something more than it's designed to do or does something that it isn't supposed to do (but doesn't break the system) can be considered a bug. I'm assuming he just lumped it with the real bug in the exchange software. Like I said, I find the article carelessly worded. This is an issue that's been much put out in this thread already. Bitcoin is still in its infancy stage. Like how it's not even being used as a real currency atm (outside of purchasing drugs), a small scare can crash the price. It's a bubble right now, I agree, but that doesn't mean it'll never become stable enough to be actual currency.
Maybe we just have different interpretations of the idea of a core flaw. From your link, this is what the core developer said: <gmaxwell> The Gox press release seems a little ‘spun’ to me. They portray characteristics of the Bitcoin system well known since at least 2011 (which even have their own wiki page ) as something new. These characteristics are annoying but don’t inhibit basic operation. They are slowly being fixed – but fixing them completely will likely take years as they require changing all wallet software. Correctly-written wallet software can cope with the consequences, and I cannot understand why they would gate their withdraws on external changes. ... <gmaxwell> Oh there is a “problem” in the Bitcoin protocol, known since at least 2011 (see the link I gave). But for normal applications, not involving unconfirmed transactions, it shouldn’t cause any severe problems because wallets can handle it locally. I agree the exchanges' implementation makes this problem bigger, but it seems to me the core problem lies in the actual bitcoin structure and needs to be repaired. It seems that this is fixable - but this goes to the point of trust and reliability. Who knows what future flaw will show up? For a currency that doesn't have central authority, that's a huge potential problem.
Bitcoin is not going away and while digital currencies may not be the future, they will always be around. Anyone who says Bitcoin is dumb, probably hasn't taken the time to understand it and really understand the technology and global impact of it. Like Major pointed out, there is a flaw they are fighting with right now but the flaw isn't with bitcoin itself, it's with the exchanges. You can read a discussion about it by a bunch of smart people on hacker news here: https://news.ycombinator.com/item?id=7219060 I personally have quite a bit of experience with Bitcoin. When I was traveling globally doing the digital nomad thing, it was used often in our circles. At the time, a bitcoin cost around $15 dollars. I worked with one of the guys who was an early proponent of bitcoin and he got in really really early and had thousands of coins which he got for less than a dollar each. I know for a fact that when bitcoin went over 1k, he sold about 1500 of his coins. You do the math. That's real money. A lot of vendors in the software/IT world DO accept bitcoin and more and more ecommerce sites are starting to accept it. A lot of the hotels in asia take it and we had apps on our phones where we could zap bitcoins to one another to pay each other for services. To dismiss bitcoin would be a fatal flaw... You should get in where you fit in.
The key phrase is "These characteristics are annoying but don’t inhibit basic operation." There isn't something inherently broken in the system to prohibit it from functioning as currency as intended. The fix he's saying that can take years is with regards to updating all the wallet software. I.e. everyone's wallets. That's a whole lot. Still, I don't think it'll be that long. Scientists can sometimes be so prudent and conservative about describing things that what they're describing can seem worse off that it really is. "Years" can just mean two years. Likewise, he might be referring to applying the fix (quote, "fixing them completely") to the degree that the issue is stamped out completely - that everybody's wallets have been updated. Chances are, after one year, most will probably have updated and only late adopters will still be experiencing the problem. Heck, their ETA for a fix on the exchanges is Friday but, this time, I'll be the devil's advocate and say that's rather optimistic.
Mt.Gox site disappears, Bitcoin future in doubt By Jose Pagliery @Jose_Pagliery February 25, 2014: 9:45 AM ET NEW YORK (CNNMoney) What was once the world's largest trading platform for bitcoins is now a blank page. The Bitcoin-trading website Mt.Gox was taken offline late Monday, putting at risk millions of dollars put there by investors who gambled on the digital currency. The exchange also deleted all of its tweets, and Mt.Gox CEO Mark Karpeles resigned from the Bitcoin Foundation's board of directors on Sunday. The news frightened Bitcoin investors elsewhere, knocking the price down about 3% to $490 -- its lowest level since November. For now, there's no telling what's behind the shutdown. Mt.Gox did not respond to requests for comment. However, an unverified document called "Crisis Strategy Draft" that is being circulated online claims Mt.Gox has lost 744,408 of its users' bitcoins, worth nearly $367 million. It also claims Mt.Gox is planning to rebrand itself as Gox. Mt.Gox has been mired in problems ever since Feb. 7, when it halted withdrawals from its trading accounts. The company's computer programmers hadn't accounted for a quirk in the way Bitcoin works, allowing cyber attackers to dupe Mt.Gox with a scheme resembling receipt fraud. When Mt.Gox discovered it was under attack, it stopped any investors from pulling their money out of their trading platform -- but it has yet to allow them access to their money. .... -- Charles Riley contributed reporting from Hong Kong. To top of page http://money.cnn.com/2014/02/25/technology/security/mtgox-bitcoin/ <blockquote class="twitter-tweet" lang="en"><p>It's almost like currencies should be issued by governments and flow through regulated banks and exchanges. <a href="http://t.co/GvhuZ5zdJf">http://t.co/GvhuZ5zdJf</a></p>— Josh Barro (@jbarro) <a href="https://twitter.com/jbarro/statuses/438189117386801152">February 25, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>
People wanted an unregulated currency, and boy do they have one. No way it (or any other digital currency) will survive with the level of corruption the market has shown as of late. You can exchange Bitcoins for dollars, but the currency is generated by people "mining" data for a shot at unlocking a partial share of the coin.
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That was hilarious, they didn't pull any punches. The best part was "it isn't a BitCoin" problem. They'll do anything to keep their remaining BTCs valuable. The market is CLEARLY being manipulated daily. BitCoin isn't the issue, greedy bastards are the issue. No regulation just opens you up for this. This type of crap isn't going away.
I honestly have no idea whether or not the ride has ended. I still don't think Bitcoin has a software problem. But, if this sticks, and the people who bought into Bitcoin get part of their money back and still want in, the guys who still have Bitcoins in their wallets will get rich. There will only be 21m BTCs mined. Every BTC lost is like a donation to the rest of the economy. The only question is how big that economy is.
