Bitcoin woes

I went back to the site I was using after several months... because by now all of the satoshi owed to me in the small payments in compensation for the fact that the mining game was pulled should have been paid... and my account was emptied of all but a couple of hundred satoshi (which isn't even a penny). I then checked my e-mail, my junk folder, and there was details of the withdrawal, it happened sometime late december apparently. Seems I was hacked, and now around ten american dollars worth of bitcoin is down the fucking drain! I wanted to withdraw it and invest it for us.

I've set up a new account, but in my real name. Once I have once more built up enough to be actually worth anything, I'll transfer the money to another account and invest. It might take a little while but I will get there. I am NOT giving up because of some stupid thieving hacker. In a way it's my fault, I shouldn't have let my account go idle for so long... even so, it's annoying to be stolen from, especially when the money wasn't for me. Still very annoyed about this, and I know it isn't even a lot of money, but I'd built that up from absolultely nothing, and had the potential to do more with it.

I'm just aghast that someone could actually be arsed to hack me for the sake of ten dollars! So little reward for the effort.

You probably weren't the only person hacked. They probably had a list of people or the site itself was hacked and they probably hit tons of targets. Steal 10 dollars from 1,000 people and that's now worth a lot more.

Dad used to mine bitcoins but he said its become hard to make money off of mining it now. You need expensive specialized mining rigs and your own power generation to make it really profitable.

Sorry to hear of your loss JD. Luckily the pile had not built up much higher or you would have been 'out' much more and even more angry It is scary when organized crime goes into internet bank account robbing. I thought block chain was supposed to keep everything encrypted and safe.
When things get this complicated and things sound too good to be true I start to err on the side of caution. You are brave to dive in with all the sharks, but see how hungry they are? I wouldn't give them the satisfaction of letting them rip me off twice. I also don't swim in the sea any more. Once bitten, twice shy. I let the brave ones go surfing, but I'm too scared to:-) Best!

Slightly OT: I’ve always been suspicious of bitcoin. Even fiat currencies are backed by the power of one government or another. Bitcoin is like tulips, only there aren’t even any tulips.

https://en.wikipedia.org/wiki/Tulip_mania

Best,
UN

AbeSarah wrote:Sorry to hear of your loss JD. Luckily the pile had not built up much higher or you would have been 'out' much more and even more angry It is scary when  organized crime goes into internet bank account robbing. I thought block chain was supposed to keep everything encrypted and safe.
When things get this complicated and things  sound too good to be true I start to err on the side of caution. You are brave to dive in with all the sharks, but see  how hungry they are? I wouldn't give them the satisfaction of letting them rip me off twice. I also don't swim in the sea any more. Once bitten, twice shy. I let the brave ones go surfing, but I'm too scared to:-) Best!

Thats not exactly how blockchains work. The currency itself is based on encryption and is generated through solving super complex hashes. But your bitcoins are stored in a bitcoin wallet which is not encrypted by default unless you manually encrypt it.and that is just a datafile that can be lost or stolen. If you store your wallet online its incredibly vulnerable to hacks and theres been a number of such hacks and thefts. Dad keeps his in an encrypted thumbdrive.

Unowen17 wrote:Slightly OT: I’ve always been suspicious of bitcoin. Even fiat currencies are backed by the power of one government or another. Bitcoin is like tulips, only there aren’t even any tulips.

https://en.wikipedia.org/wiki/Tulip_mania

Best,
UN

Bitcoin is a weird beast. My dad understands it better then I do and hes equally cautious about it. He says its very volatile and very difficult to make money with unless you were in on it early like he was or can afford tens of thousands of dollars in expensive dedicated miming rigs and self generating power mining is not a huge money maker anymore. The people making lots of money on it have super computing clusters in solar powered facilities. Trying to run off commercial power will eat you alive in powerbills because of the power draw on these mining rigs.

The anterminer s9 is one of the current top of line rigs it costs 3,000. At 14 terrahashes a second it still wont generate 1 bitcoin a year if we plugged it into our power and ran it off our commercial power we would lose 1,200 a year on powercosts. This is why dad doesnt do it anymore. Back when he started he could take a spare computer and run a mining program and generate bitcoins. But the hashes get harder to solve the more coins that are made and now its so hard the computing and energy costs have gotten absurd to solve 1 coin .

Mining costs aside, bitcoins have no intrinsic value. They are worth whatever you think they are worth. Hence very volatile. Too volatile to be useful as currency.

Facebook was going to bring out their own cryptocurrency that they claimed was more stable. I don’t know how Zuckerberg plans to pull that off.

Best,
UN

Unowen17 wrote:Mining costs aside, bitcoins have no intrinsic value. They are worth whatever you think they are worth. Hence very volatile. Too volatile to be useful as currency.

Facebook was going to bring out their own cryptocurrency that they claimed was more stable. I don’t know how Zuckerberg plans to pull that off.

Best,
UN

Like I said Dad gets it better then I do, and he's equally skeptical of it. All I know is that its value is supposed to come from the difficulty in creating one. Google is also creating a crypto currency

Okay, Celes, maybe your dad can weigh in here. Here are about two thousand words for him.

Difficulty of acquisition is not, by itself, a sound theory of value. It’s difficult to build a house of cards too. But a house of cards is not especially valuable. Which brings up the question, “where does value come from?”

Value mainly comes from utility, and utility comes in part from public perception of value. Public perception of value is a shared, subjective basis for value, but not an objective one. Diamonds are pricey because people think they’re rare. But it’s been possible to synthesize jewel-quality diamonds since the late 1940s — GE did it then. And de Beers suppressed the technology to keep their diamond monopoly. Eighty years later, after immense public outcry about the labor practices in their diamond mines, de Beers is throwing in the towel and setting up factories to do it themselves.

People have been trying to come up with sounder theories of value for some time. During the 1930s Great Depression,  a group called the Technocrats tried to correct the house of cards that had been built in the stock market during the Roaring Twenties. They created an alternative theory of value based on energy. It was a reasonable approach. Energy, unlike dollar bills, diamonds, or bitcoin, is objectively valuable because it has utility. You can do physical, real-world things with energy, like brew coffee, dig foundations, or unload trucks.

The Technocrats tried to create an alternative unit of currency called the “erg” based directly on energy. An erg is a physical unit of energy, and therefore ergs have an objective value. Unlike dollars, ergs have objective, not fiat, value. The Technocrats tried to translate that into currency. They hoped that, if a cup of coffee took fifty ergs of energy to produce, then people would pay for their coffee with a fifty-erg coin. The Technocrats never got anywhere, probably because they bored each other and everyone else to death. See https://en.wikipedia.org/wiki/Technocracy_movement

So, an unforgeable currency like bitcoin may have some intrinsic value. But not enough, because there are a lot of alternatives and not everyone perceives that a nicely-arranged pile of bits has objective value. I can’t unload a truck or dig a foundation with a pile of bitcoin. Not unless somebody with a forklift or a backhoe believes that bitcoin is valuable.

Worse, it’s vulnerable to technology changes that are believed to be unlikely, but may happen. If someone tomorrow invents an efficient prime-factorization algorithm, then forging bitcoin would become tractable and bitcoin, therefore, intrinsically worthless. (Along with our SSL certificate. ) There’s a movie about what kind of chaos would ensue if this were to happen: https://en.wikipedia.org/wiki/Travelling_Salesman_(2012_film)

Anyone who’d interested in going a little deeper can find a discussion on alternative theories of value here: https://en.wikipedia.org/wiki/Theory_of_value_(economics)

Best,
UN

There's things you can do with fiat currency you can't with backed. Whether you feel that's worthwhile is another matter.
Backed currencies are vulnerable to technology changes too; Napoleon's aluminium tableware set was something fantastic before the Hall-Heroult or Bayer processes.
My understanding was bitcoin hashes served a computational utility, but... I can't say for sure. I wish my sister's lectures had stuck better, she knows way more about this than me. Hopefully Mr. Reese knows more, if he chooses to weigh in ^_^

I like commodity baskets & currency competition myself. They're a good measure of our buying power! though I can see how they might be more complicated working with.

Edit: also Celes is write about bitcoin wallets and all that. Something small like unsalted passwords on their server would be enough... I think. I'd be suspicious about the whole thing, there's too many scams out there.

Moved this thread to Off Topic. Don’t know why Jane had it in Announcements, since it didn’t seem to have a lot to do with running KS, but maybe I missed something.

sleepingrain wrote:There's things you can do with fiat currency you can't with backed. Whether you feel that's worthwhile is another matter.

I suppose so. Like start a hyperinflation cycle through excessive government borrowing.

Sleepingrain wrote:Backed currencies are vulnerable to technology changes too; Napoleon's aluminium tableware set was something fantastic before the Hall-Heroult or Bayer processes.

Not only technology changes. Anything that changes the availability of the backing will do. After Spain and Portugal sacked the New World In the 16th Century, the value of treasure plummeted.

Best,
UN

Celes asked me to weigh in. On this.

SO to understand bitcoin you need to understand the Blockchain. In laymens term the Blockchain is a datafile thats a ledger of every Bitcoin, Bitcoin wallet, and Bitcoin transaction in existence. The Blockchain is hosted on nodes in a highly decentralized network. The nodes are your Bitcoin miners. And for hosting a node you get a chance of a bitcoin being created. The more Bitcoins that exist in the block chain the harder it is to create knew ones. So sleepy is right that the "value" comes from computations. The "value" is from data processing that makes the entire system work.

Uowen is also right. It has no "intrinisc value" it cant be traded for a certain amount of gold. And its only valuable as long as people use it. If everyone stopped using it it would be worthless.

Now the strength of Bitcoin as a currency is that there's a limited supply, its hard to make new ones and its nearly impossible to counterfeit. I couldn't go into my bitcoin wallet and change the value because as soon as soon as my wallet was connected back to the blockchain the other nodes of the blockchains would have my values the checksum wouldn't match my altered value and the counterfeit would be corrected. To counterfeit it you would have to overwrite every node in the block chain which is practically impossible. Cash can be counterfeited by sophisticated fakes. A hacker can break into a bank and change the values in his account, but hacking or counterfeiting a block chain is next to impossible.  But it's extraordinarily volatile and I dont believe its worth getting into mining at this point. The energy costs to run these miners will outweigh what you make and it can take years to make a single coin.

Personally I think Blockchains are the future but not crypto currency blockchains. I favor a global energy backed blockchain and  I feel this gives you the strengths of all currency's value backed fiat and crypto. By blockchaining the currency you make it next to impossible to counterfeit and you can choose as many nodes as you want. Maybe only banks host the nodes, maybe anyone can who knows. The more nodes you have the harder it is to counterfeit but the less centralized and controllable it is. By pegging it to energy you get an intrinsic value but heres the important part, fiat currencies exist because value backed currencies put a cap on how large an economy can grow. You cant grow your economy larger then the store of gold you have, and economies cant grow faster then the rate of gold you're digging out of the ground. When the US economic growth outpaced the amount of gold it had and the amount of gold we could dig we switched to a fiat currency. The beauty of an energy backed currency is that as an economy grows the energy needs naturally grow, and more energy is created to meet that demand, so an energy backed currency would naturally scale as the economy grows.

Now right now every bitcoin is traceable through every transaction back to its point of creation. So bit coin 51f2 will show its in wallet 6179 and every transaction and wallet its ever been part of is part of the block chain. The problem is the wallets themselves are not tied to anyone. Its a just a datafile tat sits on a server or a thumbdrive or wherever. Nothing ties wallet 6172 to MR Reese. So while no one can spend the bitcoin in my wallet. Someone can take the wallet. Now Imagine this, E-coin. An energy based block chain currency and your wallet is tied to your social security number as part of the blockchain So Mr Reese's e-coin wallet is tied to my social security number xxx-xx-xxxx and tying it into the block chain makes it next to impossible for someone to steal it. And since all block chain transaction are recorded in the block chain stealing the e-coins from the wallet is also next to impossible. If we de-centralize this network we can make banks obsolete and if we tie it to energy we have an intrinsically valuable currency tied to you in a way thats next to impossible to steal or counterfeit.

Thank you for attending my Ted Talk

Mr Reese wrote:The nodes are your Bitcoin miners. And for hosting a node you get a chance of a bitcoin being created.

The code around Bitcoin is open source. How are people prevented from hacking it and forging bitcoins? Digital signatures based on the executable as a key, with a public authentication value?

Best,
UN

Unowen17 wrote:

Mr Reese wrote:The nodes are your Bitcoin miners. And for hosting a node you get a chance of a bitcoin being created.

The code around Bitcoin is open source. How are people prevented from hacking it and forging bitcoins? Digital signatures based on the executable as a key, with a public authentication value?

Best,
UN

Because every bitcoin transaction and creation is checked agaisnt every node of the block chain.

Ok lets say theres 15,000 nodes. I decide to open up my wallet and hack my coin. I originally have 2 coins and thats what the block chain ledger shows. Now I hack it and give myself 3. As soon as I connect my wallet back to the block theres 15,000 nodes that all have the value of my wallet recorded at 2. those 15,000 nodes see my wallet shows 3 bitcoins when their ledgers say 2 bitcoins and they overwrite my value with theirs. To hack it I would have to hack 7,501 nodes and update my value on a majority of the nodes to get the nodes to update my value. Theres 100,000s of nodes.

I guess the computation for mining credits toward bitcoin creation is likewise distributed? If it wasn't, then I could forge mining activity too.

Best,
UN

Open-source codes aren't intrinsically easier to hack. My experience is dated, but I recall them being more robust than closed-source cryptography.

That's all ^_^ I liked your Ted Talk Mr. Reese. It's in interesting currency idea.

Moving the thread back to Announcements. Just saw that it was global. I need to check why with Jane.

Best,
UN

AbeSarah wrote:Sorry to hear of your loss JD. Luckily the pile had not built up much higher or you would have been 'out' much more and even more angry It is scary when  organized crime goes into internet bank account robbing. I thought block chain was supposed to keep everything encrypted and safe.
When things get this complicated and things  sound too good to be true I start to err on the side of caution. You are brave to dive in with all the sharks, but see  how hungry they are? I wouldn't give them the satisfaction of letting them rip me off twice. I also don't swim in the sea any more. Once bitten, twice shy. I let the brave ones go surfing, but I'm too scared to:-) Best!

No, it wasn't stolen from a blockchain account, it was stolen from my cointiply account. I had purposely left the money in there because the site offers 5% interest. But, as you said, it is a good thing it was only ten dollars stolen, if it had been more I'd have been REALLY mad.

This thread was a global announcement becasue I was trying to raise money for the community, so we could have a bigger and better website. Places exist where you can use bitcoin to buy hosting or even a server in countries like the netherlands... anonymously. My intention was to create a fortress for us and use the bitcoin to pay for it. I knew it would take a while, and this is a massive setback. I had almost enough to invest elsewhere and get more money that way. I wanted to build enough to pay for that infrastructure and also to send money to people who are being unfairly prosecuted on incest charges. That is why.

Jane, how much money do you need to raise for the improved site? Who’s the site host you’re looking at?

I’m concerned, not only because of the difficulty of raising the money, but also because a lot of the trading in bitcoin is to finance illegal activity like credit card fraud.

Best,
UN

If i were to go buy an open-loop gift card with cash, can i just send you the card info and let you use it to make the online purchases you need to make?

Its one way of sending money anonymously... for online purchases, you would be able to just use the card information, which can be sent to your anonymous email. I could create a throwaway email account, send you the card info, and then you could use it online, without either of us knowing any of each others personal information. The card also wouldn't be able to be traced back to me if i paid for it in cash. For smaller amounts of money, no personal information is required to purchase one...

Olek wrote:If i were to go buy an open-loop gift card with cash, can i just send you the card info and let you use it to make the online purchases you need to make?

I tried that already to finance the SSL certificate. The problem is that to use the gift cards online, you need a confirmation phone number. Jane would need to use her cell number, or a number on someone else's phone or a burner phone, to spend the card. Maybe not insurmountable, but complicating.

If we can work that out, I'd be willing to kick in too.

Best,
UN

Could she activate a card using the address verification system online?

To do so, she would register the card online with a fake name and address. They usually have a website where you can go online and do this. So long as she uses the same name and address when she pays for a service, it would go through. Those systems dont verify that the information is actually true, its only there to make sure the person using the card actually owns the card.

If online verification is possible, it would be pretty easy to make up a name and address and send that information with the card info as well.

Olek wrote:To do so, she would register the card online with a fake name and address.  They usually have a website where you can go online and do this.   So long as she uses the same name and address when she pays for a service, it would go through.  Those systems dont verify that the information is actually true, its only there to make sure the person using the card actually owns the card.

Did that too. Used the name of a dead politician and his office as the address. The problem comes when you try to use the card online. The clearing site wanted to send a verification code to a real phone number.

Best,
UN

It doesnt have to be her burner phone that receives the code...

Thanks for the offer guys, but I am thinking of funding the community for decades ahead, for anything and everything we may need or want, not just for the short term. I cannot and will not ask others to make this kind of committment for me.

UN, do not worry, I was not planning to do anything illegal, bitcoin is legal in my country, the only restriction is that people playing bitcoin casinos may be breaking the law if said casino is not approved by the government. This is because the government is having a crackdown on maximum allowed bets, to try to stop people with gambling problems from running up so much debt and destroying their lives. But since I am not planning to either gamble massive quantities nor launder money, I can't see how I could fall afoul of the law.

Now, the sort of places we could host at, would be something like these places:

https://vsys.host/vps-hosting-bitcoin?gclid=EAIaIQobChMIwvG8iofI5wIVh7HtCh213AeXEAAYASAAEgIxvfD_BwE
https://libertyvps.net/

A further list of potentials is here:

https://greycoder.com/a-list-of-privacy-friendly-vps-providers-and-web-hosts/

Now, naturally, we will only have a small amount of money to start with, not enough to pay for things. As strange as this may sound, I need just over seven British pounds to get going, and use the multiplier. I can raise this on cointiply and withdraw immediately on getting my target:

https://doubler.to/?gclid=EAIaIQobChMIotzt2onI5wIVB7LtCh1lKQ2-EAAYAyAAEgLTSPD_BwE

Seven pounds is not much, but multiply it, and multiply it again and again, and pretty soon it becomes a lot of money. This site allows doubling to the value of 50 Bitcoins invested.

Now, lets go again, we can get EVEN MORE, remember, this is all starting from that paltry £7-8 investment, when the amount outgrows the site listed above.

http://www.genuinebitcoinmultiplier.com/

By this point, we will be talking about not just raising hundreds, or thousands, or even hundreds of thousands for our cause, but MILLIONS. This will be enough to pay every memeber of staff a full time wage and then some, enough to pay for not just our fortress, but our campaign, our legal fees for said campaign, pay to protect those unfairly prosecuted...etc. I am absolutely determined not to let us down. I may have been gone for a while, but I have not, and I will not give up, the community, our people mean to much to me to allow that to happen.

I'm dirt poor at the moment, but our community needs a wealthy investor. Since I cannot find one, I need to become one. Millions of people every year make money from nothing, why not me... why not our people? Why should I be content to let us be the ever suffering community? It's not fair and it's not right, it has to be made right for all our sakes.

Bitcoin is only going to become more valuable as time goes on, as there is a finite amount left to be mined. I could also look into other cryptocurrencies such as litecoin, dogecoin and etherium. Whichever one I use, I get the feeling payments will likely be made in bitcoin so I'll need to exchange to BTC whenever needed.

I will need to set up a community account seperate from my personal account, so that I can give all community leaders joint access to that account. Things will not happen immediately of course, but give us a couple of years and we should be moving to a more secure place, after then, the sky is the limit.