[EM] A secure distributed election scheme based on Bitcoin's Proof-of-Work protocol

[Jameson Quinn]

2011/6/18 Mike Frank <michael.patrick.frank at gmail.com>

> On Sat, Jun 18, 2011 at 11:30 AM, Jameson Quinn <jameson.quinn at gmail.com>wrote:
>
>> I agree, though again, I don't believe bitcoin are a worth what they go
>> for today. I would happily nakedly short bitcoin up to 10% of my net worth
>> today, on a 2 year option period, if I could do so conveniently and without
>> risk of getting called prematurely. I understand that by capping my downside
>> at 10x that's not technically a fair bet, but since my utility for
>> bankruptcy is more than 10x worse my utility for losing 10%, I think it is
>> fair in utility terms.
>>
>
> Well, I disagree with your assessment of its value.  Supposing that
> Bitcoins may eventually take over the world economy (whose totoal money
> supply today in all national currencies is approx. $100 trillion), given
> that the total supply of BTC is limited to at most $21M, this means the
> equilibrium price of 1 BTC after the market stabilizes will be the
> equivalent of ~US$5M today (assuming the world economy doesn't shrink
> drastically in the meantime).
>
> Even if you assess that there is only a 1% chance of that particular
> scenario coming to pass, that still means the expected eventual-equilibrium
> value of a Bitcoin is at least ~$50,000 in today's dollars.  So, at the
> current price of $15, Bitcoins are under-valued by a factor of over 3,000,
> at least.  That's the way I see it...  I expect it to increase by several
> more orders of magnitude before it maxes out.
>
> -Mike
>

And suppose bitcoin take over the intergalactic economy? Even if that's just
a 1-in-a-billion longshot, each bitcoin is actually worth more than the
entire solar system.

Sorry. Let's not discuss this here. The point here is whether bitcoin are
cryptographically secure. I agree with you that they are, to >99%
probability, against the combined efforts of all the bad guys, as long as
they remain valuable. (The point is that as technology advances, that does
not tend to reduce the good guys' advantage.) I also agree with Warren that
it is impossible to eliminate risks - which I'd class as being on the order
of 0.1% - such as a secret, dramatically improved algorithm or a temporary
51% takeover, and that it would therefore be unwise to make the consequences
of such risks be catastrophic.
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