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

Mike Frank michael.patrick.frank at gmail.com
Sat Jun 18 19:15:58 PDT 2011


Left the mailing list out of the reply line again...

---------- Forwarded message ----------
From: Mike Frank <michael.patrick.frank at gmail.com>
Date: Sat, Jun 18, 2011 at 7:14 PM
Subject: Re: [EM] A secure distributed election scheme based on Bitcoin's
Proof-of-Work protocol
To: Warren Smith <warren.wds at gmail.com>


Well, I suppose it's possible that banks/governments would want to prevent
their national central-bank-backed currencies from being overtaken by the
Bitcoin, and try to amass the computing power to try to stop it.

On the other hand, the banks may eventually come to realize that it's simply
another currency that they can build their industry upon.  For example,

1) Banks can operate secure online "vaults" with sophisticated computer
security to keep their customers' private keys safe (preventing theft, like
the case recently in the news where someone with lousy security on their PC
got $500,000 in Bitcoins stolen from them).

2) Banks could provide demand-deposit accounts (including consumer &
commercial loan accounts) that were denominated in Bitcoins, and rebuild the
entire infrastructure of fractional-reserve banking on top of that basis.
 So, the entire money supply might not end up being "real" bitcoins (any
more than than the USD money supply today is in physical bills & coins) but
rather Bitcoin-demonated bank accounts.  Thus, Bitcoins don't actually usurp
banks' de facto power to largely control the money supply - but they do
provide a competing mechanism for carrying out secure electronic transfers.
 Banks may lose some profits in wire-transfer fees, but also gain by not
having to handle as much physical currency.

3) Similarly, national governments might lose in terms of not controlling
their own currency, but gain in terms of reducing barriers to trade and
having the world economy grow.

So, it's not clear to me that there is really an incentive for anyone to try
to take down the system (after they realize all this).

-Mike


On Sat, Jun 18, 2011 at 6:13 PM, Warren Smith <warren.wds at gmail.com> wrote:

> > Barring algorithmic breakthroughs (like a discovery of a way to find
> SHA-256
> > collisions that is much faster than brute search), it seems extremely
> > implausible to me that any one entity would ever amass enough advanced
> > technology to out-compute the entire Bitcoin mining community - or would
> > even want to if they could.
>
> --you say this, and in practically the same breadth you also post you
> consider it reasonably likely the ENTIRE WORLD MONEY SUPPLY will be
> bitcoins.
> I dunno, does that sound like a little incentive to misbehave and
> outcompute, to you?
>
> Not want to?
>



-- 
Full name:       Michael Patrick Frank
Email addr.:     michael.patrick.frank at gmail.com (pers. email)
Snail mail:      820 Hillcrest Ave., Quincy, FL,  32351-1618
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-- 
Full name:       Michael Patrick Frank
Email addr.:     michael.patrick.frank at gmail.com (pers. email)
Snail mail:      820 Hillcrest Ave., Quincy, FL,  32351-1618
Phone/voicemail: (413) 842-6670 (main number, uses Google Voice)
Webpage URL:     http://www.facebook.com/M.P.Frank (pers. profile)
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