I have BitCoins, so this only is of benefit to me; but I have the feeling that stories about BitCoins are being promoted on HN, not only for the community's interest in BitCoin, but in an effort to pump the exposure to increase awareness and value of their stock.<p>I don't mind the effect too much, as I personally find the Bitcoin phenomenon to be endlessly interesting, but I feel compelled to point out what might be a small elephant in this room.
Small problem, he says "They cannot be taxed, which would remove yet another source of power the state has over individuals."<p>I hate to inform everyone, but Bitcoins CAN be taxed. Anything that is normally taxable in USD transactions are also taxable as a BTC transaction.<p>Remember people, pay your damned taxes.
Bitcoin uses a distributed timestamping server. The paper literally states that "new transactions are broadcast to all nodes". This effectively means that they need a global broadcast to the majority of nodes for every bit coin transfer.<p>This doesn't scale in terms of number of nodes, and it doesn't scale in number of transactions. They can not compensate for an increase in the number of transactions by adding more nodes because instead of distributing the work load over the nodes, they are in fact replicating it.<p>The rationale seems to be that as long as you have more honest nodes than malicious ones the system will not be hijacked. Of course, the chance that a Russian botnet has more CPU power than you do is quite real. They go on to say that if an attacker has more computational power than everyone else they would do better to use it mining coins than to break the system, and they seem to leave it at that. Counting on the rational behavior of potential attackers does not seem like a good strategy to me.<p>Maybe I'm missing something here, but I'm pretty sure this thing will simply not scale. It reminds me of Gnutella, which implemented search through scoped flooding and somehow promised both scalability and coverage. I have the same feeling here. Scalability _and_ security in a peer-to-peer network? Surely you jest.<p>When something sounds too good to be true it probably is.<p>edit: link to the paper: <a href="http://www.bitcoin.org/bitcoin.pdf" rel="nofollow">http://www.bitcoin.org/bitcoin.pdf</a>
Governments aren't governments because they control currency. They control currency because the people gave them to power to do so. They were already governments before that.