Schneier has a blog. On this blog he discusses things, such as Bitcoins. These discussions attract commenters, who then comment. I quote :
Bitcoin is doomed, in at least two different ways...
First, because it is based on ECDSA, if and when someone invents a sufficiently powerful quantum computer, Shor's algorithm will enable someone with such a computer to steal bitcoins at will.
Second, if no one ever does create a sufficiently powerful quantum computer, there is a fixed upper limit on the total number of Bitcoins (21 million), and no one has the authority to make more. So if you lose your private key/wallet (and don't have a quantum computer) then the bitcoins in that wallet are lost forever.
In other words, the bitcoin system can be thought of as an absorbing Markov chain. Bitcoins leap from wallet to wallet (the non-absorbing states), but there is always a chance they will leap to the absorbing state of being lost. As an absorbing Markov chain, it is inevitable that eventually most and then all the bitcoins will become lost, and the bitcoin system will break down.
So you see, Bitcoin is doomed because Quantum Computers. Why Bitcoin and not, persay, pears ? Or woollen breeches ? Or Impressionist painting ? Why Quantum Computers and not the second coming of Abdullahi ?
In the end, a fine example of educated stupidity, as the entire "reason" boils down to a circular argument. Sure, an instrument capable of calculations out-of-time (since this is pretty much what the vulgus seems to understand QC as) might in principle eventually appear. Just as well, it might not, or not in a finite time interval.
That instrument, should it appear, could conceivably render some encoding schemes useless. At that point it may be possible or it may not be possible to come up with new encoding schemes, based on the new instrument. If it is possible then Bitcoin will simply switch (as it has this capacity built in by its very design), much like many other systems will switch (such as telecom channel partition systems, banking and military comm infrastructure etc). If it's not possible we will have to deal with a naked world, some novel place where no secret is possible, and so... property is doomed, government is doomed, marriage is doomed, Bitcoin is doomed. But there's quite the space between something like this and the magical instrument with no properties or effects other than those the educated idiot posits, a magical item somehow existing suspended out of the chain of causality, like an object fallen upon us straight from junior high fiction.
Overhormonal pubescent boys sometimes conjure this imaginary girl that has no family, no emotions, no expectations, needs no food or water, spends her entire day nude in a closet somewhere eagerly awaiting the amorous attentions of the young magician. The Bitcoin-killing quantum computer seems to share most of its traits with that magnificent dream of early teen years. Maybe it's actually the same thing.
As to the Markov chain... Well, I need to pause. I need to pause and regret that we spend money to educate idiots. It's a waste of resources, some people do not belong literate. There's no need for more empty heads in the Imbecilitarian party.
So, pause over. There's twenty million bitcoins, all mined and shiny. The year is 2100. The next day there's only ten million bitcoins left. Markov chains came out of Quantum Computers floating in midair and ate ten million bitcoins. Woe unto us.
Bitcoin price doubles, nothing else happens. Oh noes.
More Markov chains sprouting forth from Ellen DeGeneres' degenerate cunt and eat more bitcoins. There's one million left, barely. Woe cuntos!
Bitcoin price increases tenfold. Nothing else happens. Oh noes!
Even More Markov chains fall from the very sky in a rain of Markov chains. They devour most of the bitcoins, specifically 99999999999998 satoshis. That's nine hundred and ninety-nine thousand nine hundred and ninety-nine bitcoins and some change. We're woed now, aren't we ?
Not really. The protocol allows for numeric expansion. Bitcoin adds another integer, and the two satoshis left now become further divided into 12 digits worth of new Degenereses. A satoshi is worth half a million old bitcoins, and the Degenereses are worth something under an old satoshi (which is to say not much - apparently not even Quantic Cataclysm (tm) can make that degenerate worth something of note).
Whoa, how very doomed Bitcoin was! Doomed to attract educated idiots who feel compelled to opine as if their asinine imbecility isn't something both painful to the audience and shameful to themselves.
But undaunted we continue,
Bitcoin is fundamentally flawed because it is a deflationary system, period.
a little inflation is a good thing for (useful) currencies. It discourages hoarding and therefore increases money velocity; the more money changes hands for goods or services, the better off everyone is.
The first quote is amusing, in that it's a bit of a "The Roman army is doomed because they wear skirts. Period!" Obviously the mores of the period didn't consider skirts that unmanly, and obviously mores change, and moreover human society is held to adapt to the restrictions imposed upon it, not the other way around. Money isn't going to change so it's convenient for us. We're going to change, as we have each and every time before, as we will forevermore.
So, yes, Bitcoin is fundamentally inconvenient for a certain ideological slant because it does not allow either the financing of big governments or welfare programs, and indeed will do away with both in short order. But this isn't to say Bitcoin is flawed. The other end is flawed : big government is a bad idea and welfare a horror unspeakable, not just to sane people today but also to a majority of thinking, educated people at all times and in all places. Of course, recently we've undertaken to teach asses letters, and this shows, but outside of this post-WW2 folly the record is pretty straight. Other than that inconvenience for the perennially stupid, Bitcoin is doing just fine.
As to the second quote, the idea that "a little" inflation is a good thing is not much unlike the ideea that "a little" sloppy coding is a good thing. After all, if people wrote good code how'd all the various "experts", antivirus makers et all pay their mortgages ? Not too much sloppy code, so whatever software we're trying to write sorta works, but a little, to ensure that we're never going anywhere with it. Pretty insane, wouldn't you say ?
I'm not going to bother with the "money changes hands for goods or services, the better off everyone is" too much. Clearly it's something strongly predicated on voting for change. If you're not of the sort that votes for change just because it's change you're neither likely to find yourself owning nothing but change nor inclined to agree with stupidity of this caliber. What's next, "the faster cocks move in and out of the vagina, the stronger the orgasm". No consideration of girth, no consideration even if it's the right cock. Just, you know... speed. "Velocity".
- Who is Abdullah, you ask ? I have no idea. Some guy. [↩]