[cryptography] Bitcoin in endgame

Moritz Bartl moritz at hackerbus.eu
Thu Feb 23 04:44:48 EST 2012

On 23.02.2012 10:24, Eugen Leitl wrote:
> In general so far I fail to see the validity of most criticisms
> against BitCoin. So far I see the only real problem is government
> crackdown on exchanges, which only makes BTC free-floating
> and slows down the growth of the underlying economy.
> Sorry if this is off-topic to cryptography. We can take the
> thread offlist at any time. 

This was an offtopic discussion from the start. The original paper does
not include anything about crypto.

Anyway, the problem you mention is exactly the one described in the paper.

"Using Mancur Olsen's rationale that a prince is a bandit that stops
roving, the notion of the mining franchise being captured by the botnets
might have been an acceptable compromise to the economy growing up
around bitcoin mining, if it went no further [Olsen].  However,
criminals are rarely satiated.  Several things happen: (a) incentives
for easy money naturally cause an increase in criminal participation at
all levels, such as direct theft of bitcoins.  This increase across the
board encourages (b) honest users to pack up and leave.  Both of these
effects combine to create rising criminality, and (c) at some stage the
Feds get involved.  Finally, (d) the system collapses."

Moritz Bartl

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