Quote:
Originally Posted by ECTAE
The code. Bitcoin is not a magic black box. It's a complicated piece of open-source software, written by a community of volunteers and hobbyists with various degrees of ability. IT CONTAINS BUGS. What these bugs are and how serious their symptoms will be remains to be seen, but we have already had a few serious problems (such as the 0.7/0.8 fork) and it's likely there will be more to come.
Yes, there are bugs. And the system has been shown to be resilient when they occur. The core developers do not rush changes and have been overly cautious making sure they do not disrupt the system before pushing them out. It is no longer maintained by hobbyists and volunteers, and most are very skilled. Many are paid (either by the foundation, or through getting involved in Bitcoin related businesses).
Quote:
Originally Posted by ECTAE
The value of exploits. With the soaring value of Bitcoins, it is likely that it will increasingly become a target for attack. If someone can find and exploit a flaw, they can make a fortune. Due to the nature of Bitcoin, it would be almost impossible to discover the culprit or recover any losses. This was already happening when there was almost nothing to gain from it!
The idea that you can't roll back a serious flaw is flawed. If such a flaw was detected, it's easy to get a vast majority to agree to roll back to a certain point in time. The likelihood of such a flaw is also low due to the amount of researchers and audits occurring.
Quote:
Originally Posted by ECTAE
Government intervention. Currency manipulation is one of the core economic controls of government. Mass adoption of Bitcoin would render this tool ineffective, or even unusable. It's certainly conceivable that the US or EU could implement a blanket ban on Bitcoin trades, which would utterly cripple the currency's expansion. As we're now hitting the point where large-scale funds are buying into Bitcoin, such a move would cause a rapid exodus of significant funds, by a few small high-worth individuals over a very short timescale. This, combined with the effect of legislation, would almost inevitably trigger a large-scale panic sell-off, and there would be no market remaining to allow for the currency's revival.
A real threat. Fortunately, the response from governments has been overall positive. A drastic change of course would have to occur for this to be a real threat.
Quote:
Originally Posted by ECTAE
Corporate sabotage. Moneygram, Western Union, Paypal. Just three examples of multi-billion dollar multinationals with business models which would be rendered obsolete should Bitcoin achieve widespread adoption. Bitcoin, despite its rapid expansion and long-term potential, is tiny compared to many large organisations which have a vested interest in seeing the currency fail. At its current size, the Bitcoin economy could be toppled for a handful of million dollars- enough to buy and sell large volumes specifically to cause huge price swings, to undermine confidence with smear campaigns, or to directly attack flaws in the software or the network that underpins it.
Or these entities can change their business model and adapt. These companies are not stupid. It would be far cheaper to try to exploit advantages presented by Bitcoin than try to destroy it.
Quote:
Originally Posted by ECTAE
Fundamental flaws. The design of Bitcoin is not perfect. We're already seeing the blockchain becoming bloated by the micro-transactions of SatoshiDice. What if the volume of these were to rise a thousandfold, through deliberate flooding or simply through the natural expansion of the currency? We're already worried about mining guilds which have control of too much computing power. 51% is quoted as the minimum level required in order to subvert the Bitcoin transaction system successfully. This is not strictly true- 51% is simply the point at which an attack becomes more likely to succeed than to fail. It's perfectly possible that an entity with a significant non-majority of mining power could succeed in poisoning the blockchain with dishonest blocks. This can be attempted over and over again by a motivated group or individual, and it only needs to succeed once to cause irreparable damage to Bitcoin's credibility.
Just some of the many problems Bitcoin may face.. sell while its high.
More handwaving or pointing to things that aren't a problem. The block chain is a scarce resource, and spam will simply be priced out. 51% attack is very expensive compared to opportunity cost.
You simply cannot publish "dishonest blocks". They are ignored.
Surprised you didn't roll out the laughable Selfish Miner attack paper into this.
You seem to understand just enough to know enough terms to throw out there without thinking any deeper about the situation, or without thinking how people with more invested or smarter than you have already thought about such situations.