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Letter: Bitcoin warning

Re “Bitcoin catching on in N.H.” (front page, Jan. 13):

The Monitor’s brief but lucid article on bitcoins raised a question in my mind.

Bitcoins were invented in 2011. Since then, they have shot up in “value” from 0.003 cents to $848 each. My calculations show that at their inception it would have taken 333 bitcoins to make 1 cent, and 33,300 would have made a dollar. Since they are now going at $848 apiece, the “value” of a bitcoin is more than 28 million times greater than it was in 2011.

This currency has no physical existence and is not backed by any government. No one knows who invented it, but it seems reasonable to assume that the inventor has the power to break the encryption on any bitcoin.

My advice: Let the buyer beware.



Legacy Comments3

I’ll echo the sentiment, already expressed, that you should do your homework before you “warn” people of your neuroses. It makes you sound just silly to those who understand what you’re talking about, and does a disservice to those who don’t, that is completely at odds with your intent. I will also argue (slightly) with what has been said about bitcoin being unhackable. Technically it is hackable, and it is hacked 10 times every hour on average. Part of the genius of bitcoin is that its creator[s] understood this would happen and integrated it as an intrinsic part of the program. The activity is called mining rather than hacking, and it assures that whomever wants to “hack” bitcoin will need more computing power than all of the computers in the world that are mining bitcoins. Do a little research on THAT and you will very quickly gain a vivid picture of how secure bitcoin encryption is.

Well, first of all, bitcoin was invented in 2008, not 2011. It has been around for over 5 years. And it is not reasonable to think the "invetor" Satoshi Nakamoto can "break" the encryption because it is based on encryption standards that he did not himself invent. Keep researching, try using it before you bash it.

Bitcoin uses SHA256 encryption. This is the same encryption that WikiLeaks uses to keep the US government from compromising its data. It impossible to hack. The combination of public and private keys outnumber the grains of sand on every beach in the world. To quote Satoshi Nakamoto (the enigmatic creator or creators of bitcoin) SHA256 is not going to be broken by Moore’s law computational improvements in our lifetimes. If it’s going to get broken, it’ll be by some breakthrough cracking method. An attack that could so thoroughly vanquish SHA256 to bring it within computationally tractable range has a good chance of clobbering SHA512 too. If we see a weakness in SHA256 coming gradually, we can transition to a new hash function after a certain block number. Everyone would have to upgrade their software by that block number. The new software would keep a new hash of all the old blocks to make sure they’re not replaced with another block with the same old hash.

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