enmaku

Former Verifone employee here: While it's technically true that pay-by-reference is a thing most payment processors offer it's not supported by most payment processing software and most processors treat it like a premium service. The vast majority of recurring credit card payments are sadly still done by storing an encrypted card number and decrypting it every time payment is made.

Adding insult to injury, most payment processing software also only conforms to the bare minimum encryption requirement meaning your credit card information is only encrypted using 3DES, keying 3 (meaning a whopping 56 bit key). You can attribute this poor security to laziness since that's the same encryption mechanism PINpads use so the CC co devs already had that code laying around to repurpose.

Of course I have no idea what software Dish uses, who their processor is and what those two things allow/support. Dish may actually be using proper pay-by-reference transactions or they may not, I have no idea.

None of this changes the fact that a payment system where you must reveal your secret key (cc#) in order to spend is inherently flawed, poorly designed and will be frequently compromised at every link in the chain. It's just a bad security design from the ground up.

Hah, yes "eating the mic" is a common error. Welcome to the wonderful world of audio production :P

Though, to be fair, the audio tech should have turned the gain down on your mic - it's a common error that's easy to compensate for.

The price chart looks a lot like the transaction volume chart, which is usually how I make my guesses as to whether we're in a bubble or not - increase in price without similar increase in usage = bubble. That said, it's anyone's call.

As it does for most Bitcoiners, just gotta be careful how you use Dwolla now, apparently, unless you don't care if they close your account any more.

The site's been up less than a day and it's still very early beta. I've been informed that the shipping estimates being provided at checkout are not even close to correct for non-U.S. customers and that's something they're working hard to fix. Give them time :)

Momentary glitch, it's back up now.

It's not really looking like that's an option too many folks care about anyway, given the survey results so far.

As for the concerns:

1) The original audio did mention that there would be difficulties on the hardware side of that fence - leasing a car may have been a poor example, but it was just an idea of one kind of transaction a "smart property" system would be capable of.

2) There is actually one big benefit of adding Bitcoin to that mix: You gain the benefits of a publicly published block chain that's not reliant on any centralized source as is the case with traditional key signing. A bank could implement this for their loans right now, but it would be reliant on some centralized source to enforce the payment schema. With the bank as that source it would be a very lop-sided relationship with one central point of failure. With the Bitcoin protocol as the source of contract enforcement the balance of power between you and the bank is even and your single point of failure is now a distributed transaction network with tens of thousands of nodes.

http://soundcloud.com/david-perry-17/the-future-of-bitcoin-n...

That's the best I could do - I'm not exactly an audio engineer but I can remove noise and normalize at least. Not much I can do about the echo, but if someone else knows a way, downloads are enabled so feel free.

It should be noted that this is similar to the way SSL works for encrypting HTTPS browser sessions - there is a root authority that has the right to sign other peoples' keys. Some of those keys can sign other keys and so on - if the string of signatures doesn't authenticate all the way back to a root authority, your browser warns you that something is wrong.

By way of a functional example:

I have a lock, it knows it has a unique ID of 123.

I have a keypair A, the lock is programmed to trust messages signed by keypair A.

My friend has a keypair B. I encode a message in the block chain signed by A that says something equivalent to "lock 123, you may open for whoever controls public key B"

When either I or my friend come to the door and scan at the lock, we send it our public key. If the public key matches one that the lock has been told to trust, it sends back some random data. We sign that random data with private key A or B, thus proving that we actually own that keypair, and the lock opens.

If someone else sends a message to lock 123 that isn't signed in an appropriate way by some key the lock has been told to trust it ignores the encoded message. If someone sends it a public key that it doesn't trust, it ignores that too.

I need to give access to my wife, who holds keypair C. I send another message to the lock saying "allow access for keypair C but also make keypair C an administrator so she can grant access to others too"

All of this happens transparently in milliseconds with a simple application that could run on your smartphone.

Sure it is. If the devices speak Bitcoin I can say "only open the door if someone has a key that I (and only I) have sent this kind of transaction to" - when I sign the transaction I prove that I am the holder of the "root key" that lock is programmed to trust and I'm certifying permissions to the holder of a second key. They can then use sign some random arbitrary data the entry system sends to them (handshake) to prove that they control a key I've signed off on. Bitcoin is distributed by nature but it's based around split-key cryptography and using ECDSA to prove the ownership of keys. You're not using secret data encoded in the key to open the door, you're using the key itself and a signed transaction to establish trust.

I believe I did mention this in the article, but I agree that it's vitally important to understand that the one or two times I used those terms I was knowingly using the popular definitions, not the clinical definitions. Good catch!

Exactly. We can all find the patterns of personality disorders in ourselves, but diagnostic criteria require WAY more than "you act this way" - your actions actually have to be severely detrimental.

Personally I'd say that if your particular behavioral patterns lead to costumed vigilante crime fighting you probably meet criteria C.

I actually liked the original squid ending better, but that's another one of those personal opinions that some asshole guy always has to chime in with. There were definitely some good differences that made each a unique and worthwhile experience, but I would say that the differences more or less left the mental disorders untouched.

Point taken. That last bit was just my personal opinion - I'd rather enjoy the suspension of disbelief than analyze every action in-depth, but that's just me. If this article gave you greater enjoyment of the movie then that makes me a very happy camper.

Funny that the "Diagnostic and Statistical Manual of Mental Disorders" isn't considered a "Diagnostic Manual" given that a) those words are in the title and b) it's commonly and constantly used by professionals as a manual for diagnosis. It doesn't really matter what your one prof said, it matters how the profession as a whole uses it. I also cited the ICD-10 in the article for several of the disorders, and there absolutely is not any arguing that the ICD-10 is a valid diagnostic tool.

Also, while I agree the mis-dignosis is common and many of the elements read like a horoscope/fortune cookie, you can't say that Nite Owl II was a narcissist or that Ozymandius had avoidant personality disorder.

I don't have data going back that far. My earliest data I have on-hand goes back to 1997 at which point about 2% of the world (11% in the developed world) had internet access. I do have host count data, though and can tell you that in August of 1983 there were a whopping 562 web sites in existence. In July 1997 when only 2 (or 11) percent of people had access, there were about 19.5 million. As of January of this year there are almost 900 million.

So let's extrapolate: There were about 5.84 billion people in the world in 1997, 2% of which is about 117 million people on the internet (round numbers). Thus, in 1997, we can estimate one in every 6 internet users had their own web site.

Today there are about 6.97 billion people in the world and about 35% of them have internet access (74% in the developed world, but I digress). This means that about 2.4 billion people are responsible for about 900 million web sites - that's one web site per 2.7 internet users. If we work backwards from this imaginary (and probably wrong) line, we can estimate that there were about 3,000 internet users back in 1983.

There are currently estimates that the Bitcoin network is made up of between 15 and 20 thousand users. Let's call it 15, just to be pessimistic. Adjusting for world population that puts us about on-par with the internet's adoption level in 1987. Bitcoun is about 4 years old, while the 1987 internet was about 6 years old, which means we're growing 50% faster than the internet did. Assuming nothing gigantic implodes along the way, Bitcoin is on its way to greatness.

Of course that's assuming you can compare Bitcoin to the internet, which you probably can't ;-)

"Which brings us full-circle back to my original point."

It still doesn't make your claim correct. Your claim that Bitcoin can't achieve widespread adoption because of the complexity of mining doesn't even make sense.

Not every user has to mine and mining is what this article was about, not the parts of Bitcoin that everyone will use, but the parts that only a few will use but everyone seems curious about.

This article was akin to "How the printing presses the Fed uses works" combined with "How the Visa/MasterCard payment system works" - again, something you don't need to know to use the consumer end of that system, but which quite a lot of us are curious about anyway.

1% was a completely arbitrary example, it wasn't meant to set a goal or anything. I was just illustrating the point that Bitcoin isn't ONLY good if you convert it to USD/EUR/whatever, it's just not adopted as widely as those currencies.

Exactly. The integrity of the chain is kept not by including every transaction since the dawn of time in each block, but by simply including the hash of the previous block. This simultaneously shows where in the chain each block belongs and verifies that nothing about the previous block has changed.

Each block validates the block behind it, so if you've got 0 confirmations it means your transaction hasn't made it into a block yet. If you've got 1 confirmation it means your transaction is in the most recent block. If you've got 2 transactions it means that after your transaction made it into a block, another block was found that signed off on the block containing your transaction. At 3 transactions, the most recent block has signed off on the block before it, which in turn has signed off on the block before it, which contains your transaction and so on.

This is important because once a newer block has signed off on the block before it, you can't change that old block without invalidating every block after it. If I want to rewrite the most recent block it's astronomically difficult, but still technically possible, to do so. The deeper each block is buried in the chain, the more blocks I would have to rewrite history on to undo transactions in that block.

To my knowledge no one has ever successfully re-written history and the amount of processing power required to do so is beyond astronomical at this point. This is also why the standard client does not consider transactions to be "confirmed" until it's 6 blocks deep - that's the point at which the likelihood of rewriting history becomes so low that it's effectively zero.

Bitcoin replaces that layer. I've personally transacted business in Bitcoin without converting it back to traditional currencies and it works pretty damn well, actually. At the moment the primary reason Bitcoin "needs" to be converted back into traditional currency to be useful to the masses is that they haven't started using it yet.

Think about it: if 1% of people are using Bitcoin then that means there's only a 1 in 100 chance that any given transaction you make can be made with Bitcoins. That's an admittedly low degree of usefulness. If you can get 2% of the people to start using Bitcoin it just became twice as useful and half as many transactions will now require you to convert funds back to traditional currencies. At some "critical mass" adoption level, Bitcoin becomes just as useful as any other currency without such a constant need to move in or out of traditional currencies.

It's called the Network Effect and it's a hell of a market force.

Also your argument is invalid because you could say the exact same thing about holding a bank balance in USD while living in Europe: "But I have to exchange these dollars for Euros in order to even use them at all, man this U.S. Dollar is just completely worthless and unnecessarily complex because no one around me will accept it."

Exactly. For the statisticians in the room, it's a Poisson process. That means that over time your results should average out to meet certain expectations but each individual hash either solves the problem completely or doesn't solve it at all - no in-betweens and no teamwork.

More to the point, they won't actually have to cash out until they're ready to make a purchase with their proceeds. This means more money kept in Bitcoin for longer instead of being cashed out to sit in a USD/EUR/GBP bank account somewhere.

And since then, nearly every major upgrade, feature request, etc. has been scheduled as "6 to 8 weeks" or occasionally some variant like "6 to 8 months"

These are exactly the kind of thoughts I like to see people having about Bitcoin.

<ThomasV_> bitinstant: is there an option to keep the deposit as BTC until the card is used to make a payment or withdrawal?

<bitinstant> ThomasV, yes

Then later...

<sharpfocus> so the card can have fiat and btc on it concurrently presumably

<bitinstant> sharpfocus, yes precisly

Extra lines redacted to reduce noise :)

LMAO I thought the exact same thing, actually...

Not sure if it was lifted either - it's a 3 word title for a very short blog post, entirely possible that it's coincidence.

Card balance can be kept in BTC, according to the IRC logs at least. It's an international card so it can apparently hold balances in multiple currencies at once. Also, according to the logs, BTC transactions < $1,000 USD will be accepted on the first confirmation, so about 10 minutes to load the card.