Question- is this accurate - Forbes bitcoin classic hard fork fatal flaw

[nandibear]

I was reading Jason Bloomberg's recently published (feb 7 2016) Double Your Money? Looming 'Hard Fork' Uncovers Fatal Bitcoin Flaw at Forbes.com

For the most part I've stopped reading negative press from the news outlets because I prefer to think positive. However, this particular article captured by attention because it specifically indicates a potentially fatal flaw with:

(a) Bitcoin Classic

(b) the hard fork process itself

The article at Forbes indicates that one (anyone) could potentially double (or more) one's Bitcoins BTC by 'tricking the system' (?) ... 'with a process insiders call tainting'.

It appears that Forbes' hypothesis hinges upon contentious proclamations which have been recently posted in a thread a Reddit:

Anyone else planning on doubling their coin on hardforks?

Here are a few excerpts of the comments at the Reddit thread which are cited in the Forbes article:

(1) We’ve never gone through a planned hard fork, so we don’t really know exactly how this will all play out ... If you can borrow prior to the hard fork you can then taint those coins with newly mined ClassicCoin and use that to repay the loan ... The result is you’ll have satisfied repayment of the loan and you’d still end up with those pre-fork bitcoins you had borrowed...

(2) Even a window of only minutes can and will be used by enterprising types to profit on the hard fork scenario...

(3) If there are 5 forks, you will have coins valid on 5 chains, i.e. 5 times the amount of coins. If there are 100 forks, you will have coins valid on 100 chains...

Lastly, there is one passage in the Forbes article that I find to be very suspicious:

And even though that potential may never actually be realized, simply the fact that it is possible should disqualify Bitcoin from being treated as a serious cybercurrency contender.

It is my position that that statement is much too subjective (even if the article was an editorial, which it doesn't appear to be). At very best Jason Bloomberg's statement in the Forbes' article is an overstatement, and at worst it categorically defies logical thinking.

All of the above (aside from quotes in italics) was written in my own words.

Please see the following articles and threads for source material:

Double Your Money? Looming 'Hard Fork' Uncovers Fatal Bitcoin Flaw
Forbes
Feb 7, 2016
by Jason Bloomberg

Anyone else planning on doubling their coin on hardforks?
Reddit
Feb 6, 2016
by Digi-Digi


EDIT by nandibear (2:47 PM - Feb 9, 2016)

[Acidyo]

This just seems like more FUD spreading.

Couldn't even bother reading the whole thing cause how ridiculous it sounds.

[arnoudk]

All this FUD about doubling your coins is just crazy. It means that the author does not understand the concept of value in a currency.

In a hard fork scenario, you will have coins on two chains, for as long as two chains exist. But that does not mean that you have doubled the value of your coins, as only one chain will have value and the other chain will be valueless.

In the brief period that two chains exist, you could trade coins. My CoreChainCoin for your ClassicChainCoin. To pull this off, the transactions will have to be 'tainted' with newly mined coins. Otherwise, you cannot distinguish between the two chains.

If you swap coins with someone who ends up being on the losing chain, he has in effect given you his coins. There are no additional coins introduced, and nobody got scammed.

Newly mined coins cannot be spent for 120 confirmations. I doubt very much that it will take 120 blocks before one of the chains is a clear winner / loser. Let's assume (unrealistically) that hash rate is distributed 50/50 (unrealistically, because there is a 75% threshhold for the fork). In this scenario, it would take the equivalent time of 240 confirmations to get 120 confirmations on each chain. That is 120 (blocks) * 20 (minute per block due to hash power split) = 2400 minutes. That's 40 hours. Almost 2 days. And that assumes that whoever wants to pull off this so-called attack will spend their newly mined coins as soon as possible. I guess they'll have to pay whoever mines the first post-fork block a nice premium for sending that specific transaction their way a.s.a.p., or they would have to be very lucky to mine it themselves.

All I see is FUD.

[nandibear]

All this FUD about doubling your coins is just crazy. It means that the author does not understand the concept of value in a currency.

In a hard fork scenario, you will have coins on two chains, for as long as two chains exist. But that does not mean that you have doubled the value of your coins, as only one chain will have value and the other chain will be valueless.

In the brief period that two chains exist, you could trade coins. My CoreChainCoin for your ClassicChainCoin. To pull this off, the transactions will have to be 'tainted' with newly mined coins. Otherwise, you cannot distinguish between the two chains.

If you swap coins with someone who ends up being on the losing chain, he has in effect given you his coins. There are no additional coins introduced, and nobody got scammed.

Newly mined coins cannot be spent for 120 confirmations. I doubt very much that it will take 120 blocks before one of the chains is a clear winner / loser. Let's assume (unrealistically) that hash rate is distributed 50/50 (unrealistically, because there is a 75% threshhold for the fork). In this scenario, it would take the equivalent time of 240 confirmations to get 120 confirmations on each chain. That is 120 (blocks) * 20 (minute per block due to hash power split) = 2400 minutes. That's 40 hours. Almost 2 days. And that assumes that whoever wants to pull off this so-called attack will spend their newly mined coins as soon as possible. I guess they'll have to pay whoever mines the first post-fork block a nice premium for sending that specific transaction their way a.s.a.p., or they would have to be very lucky to mine it themselves.

All I see is FUD.

@arnoudk

Wow! Thank you for your detailed exposé of the Forbes FUD article.

If I ever again hear anyone talking about potentially doubling bitcoins (and collapsing the value of BTC ) during hard fork I will cite to them your comment here at the bitcoin forum.

(Btw, I'd like to upvote your comment but it appears that I've already used all my currently available rating power here at the bitcoin forum)

[arnoudk]

(Btw, I'd like to upvote your comment but it appears that I've already used all my currently available rating power here at the bitcoin forum)

You're welcome. It's the thought that counts! (And there's always tomorrow's stash of upvotes!)

[iFixBTCmemoryIssues]

(Btw, I'd like to upvote your comment but it appears that I've already used all my currently available rating power here at the bitcoin forum)

You're welcome. It's the thought that counts! (And there's always tomorrow's stash of upvotes!)

You did extremely well, keep spreading the positivity and back it up with fact.

Journalists are paid to write stories, they are also paid to swing sides.

[nandibear]

Jason Bloomberg at Forbes is back with more hate - Illegal hard fork

Is The Looming Bitcoin 'Hard Fork' Illegal?
Forbes
February 13, 2016
by Jason Bloomberg


Excerpt:

As the Bitcoin community struggles to reach a broad consensus over how to expand the blockchain’s block size, thus allowing Bitcoin to scale, a pro-Bitcoin attorney has sounded an important alarm: any hard fork of Bitcoin may be illegal, and furthermore, exposes the developers of the newer code to substantial liability.

“The creators of the new software face potential liability and criminal sanctions unless they register with the Feds,” according to Daniel Friedberg, a principal at the law firm of Riddell Williams PS in Seattle. Furthermore, “the implementation of a ‘hard fork’ would require exchanges to differentiate between bitcoin and ‘Bitcoin Classic’ or ‘Bitcoin XT’ Bitcoin, as its customers would inherently have rights to either one or the other.”

...

The first issue: the potential liability of the software developers working on Bitcoin Classic or Bitcoin XT, two contenders for the new fork of the Bitcoin platform code. “Unlike Satoshi, the mysterious creator of the original Bitcoin software who has remained anonymous and therefore outside the reach of law enforcement, the developers of both Bitcoin Classic and Bitcoin XT are publicly named,” Friedberg explains. As a result, “the creators of Bitcoin Classic or Bitcoin XT would need to register with FinCEN [the US Treasury’s Financial Crimes Enforcement Network] as a Money Service Business (MSB). Failure to register can result in imprisonment of not more than 5 years, as well as civil penalties.”

...

Read more at:

http://www.forbes.com/sites/jasonbloomb ... c3cc624b13

NOTE: Bold and red-underlined emphasis mine

[Acidyo]

“The creators of the new software face potential liability and criminal sanctions unless they register with the Feds,”

Sometimes I hate media so much...

[nandibear]

This is the article recently cited by Forbes from the 'pro-Bitcoin attorney' Daniel Friedberg -

Hard Fork Conspiracy Treacherous
Riddellwilliams.com
February 11, 2016
by Daniel S. Friedberg


Excerpt:

...

The Financial Crimes Enforcement Network (“FinCEN”) is a bureau of the United States Department of Treasury that is charged with combatting domestic and international money laundering, terrorist financing, and other financial crimes. FinCEN has issued numerous guidance and interpretations of the applicability of regulations implementing the Bank Secrecy Act (“BSA”) to persons creating virtual currencies.

Bitcoin Classic and BitcoinXT (meaning in this case the new resulting currency itself rather than the software) would likely be considered by FinCEN to be a new convertible virtual currency. FinCEN has made it clear that a creator of such convertible virtual currency, who issues such currency in order to sell those units for either real currency or its equivalent (including presumably an exchange with current bitcoin), is deemed to be a money transmitter. In the case of BitcoinXT, a website names the specific developers who have final say over the currency. The Bitcoin Classic development team is also publicly named. Under this approach, the creators of Bitcoin Classic or BitcoinXT would need to register with FinCEN as a Money Service Business (“MSB”). Failure to register can result in imprisonment of not more than 5 years, as well as civil penalties. 31 U.S.C. § 5330(e) and 31 C.F.R. § 103.41(e); 18 U.S.C § 1960(b)(1)(B). This is in addition to potential state penalties, as certain states also regulate virtual currency creators.

...

In addition to the registration requirements, an MSB is required to maintain effective anti-money laundering (AML) programs, recordkeeping, and reporting of suspicious activities. In order to do so, the MSB must know who its customers are.

These requirements will require the replacement Bitcoin protocol to maintain the personal identifying information of its users. This can presumably be done through the software code, and is similar to the current information and processes currently maintained by exchangers of bitcoin.

...

Miners who unilaterally adopt the new replacement software could face liability under either tortious or statutory claims. A tort is a wrongful act or an infringement of a right leading to civil legal liability. A trespass to chattels is a tort whereby a party intentionally interferes with another person’s personal property. To the extent that a recipient of bitcoin expects normal bitcoin but instead receives “Bitcoin Classic” or “BitcoinXT” virtual currency due to the actions of a miner, that recipient could argue that the actions of the miner resulted in a dispossession. To the extent that the market value of the two types of virtual currency differ, damages would be easy to prove.

...

Read more at:

http://www.riddellwilliams.com/blog/art ... reacherous


NOTE 1: Bold and red-underlined emphasis mine

NOTE 2: This article by 'pro-Bitcoin attorney' Daniel Friedberg ends with a 'Conclusion.'

It's been my experience that one should avoid publishing conclusions.

Publishing 'observations' and/or 'hypotheses' is a much better idea and it will help keep your credibility intact.

[arnoudk]

Forbes's Mr Bloomberg really does not seem to like Bitcoin all that much!

So when his previous article full of non-argument FUD did not work out, he is trying a new approach: legal threats.

I don't know how legal, or illegal, a bitcoin classic chain is in the eyes of some judges in the USA. The problem with the USA legal system, is that they seem to think their opinion is applicable to the world. Talk about arrogance. I don't expect any judge to really understand bitcoin, so why would the opinion of an uninformed person in a costume have any value?

It has value, only because a law is an opinion, backed by the threat violence. If a judge decides that you broke some law, he will kidnap you and lock you up in a cage. Or they will steal your possessions. Or both.

A law is just a piece of paper with someone's opinion on it, stamped and signed by someone else. The law could be anything, and just because something is law does not make it right, or moral. Nazi Germany was legal. Killing people is legal (if you call it war). Locking people up indefinitely in a cage without charging them of anything is legal (if you call them terrorists). Stealing people's property is legal (if you call it taxation). Limiting people's freedom to move around is legal (if you call it a border crossing). Feeding the homeless is illegal, even though the homeless person is grateful and the sender is doing it out of free will. Drugs are illegal, even if the person taking the drugs is only damaging his own body and is not hurting anyone else. Defending your property against theft is illegal (if the thief is wearing an IRS costume).

I don't much care if there are laws that make bitcoin legal, or illegal. If it is illegal, it is a good warning to the developers to leave the USA and go live in a less dictatorial regime. But if something is written down in a law or not, by itself, is irrelevant for a morality discussion.

Thus, referring to a law is a threat. At the very least a threat to your freedom and to your property. It is very much like a death threat - in that they steal years of your life.

So the author is resorting to personal threats. That's all there is to this article. More scaremongering.

If the USA becomes the USSA and locks up bitcoin programmers - they show clear as day what kind of people they are. It will not kill bitcoin, others in other countries will take over. Anonymity will be improved. And the next iteration is that much harder to threaten.

[arnoudk]

Nothing further to add:

https://twitter.com/jgarzik/status/633097876877348864

Yes it is an old tweet, but I'd say it is quite relevant today.

[nandibear]

Forbes's Mr Bloomberg really does not seem to like Bitcoin all that much!

So when his previous article full of non-argument FUD did not work out, he is trying a new approach: legal threats.

I don't know how legal, or illegal, a bitcoin classic chain is in the eyes of some judges in the USA. The problem with the USA legal system, is that they seem to think their opinion is applicable to the world. Talk about arrogance. I don't expect any judge to really understand bitcoin, so why would the opinion of an uninformed person in a costume have any value?

It has value, only because a law is an opinion, backed by the threat violence. If a judge decides that you broke some law, he will kidnap you and lock you up in a cage. Or they will steal your possessions. Or both.

A law is just a piece of paper with someone's opinion on it, stamped and signed by someone else. The law could be anything, and just because something is law does not make it right, or moral. Nazi Germany was legal. Killing people is legal (if you call it war). Locking people up indefinitely in a cage without charging them of anything is legal (if you call them terrorists). Stealing people's property is legal (if you call it taxation). Limiting people's freedom to move around is legal (if you call it a border crossing). Feeding the homeless is illegal, even though the homeless person is grateful and the sender is doing it out of free will. Drugs are illegal, even if the person taking the drugs is only damaging his own body and is not hurting anyone else. Defending your property against theft is illegal (if the thief is wearing an IRS costume).

I don't much care if there are laws that make bitcoin legal, or illegal. If it is illegal, it is a good warning to the developers to leave the USA and go live in a less dictatorial regime. But if something is written down in a law or not, by itself, is irrelevant for a morality discussion.

Thus, referring to a law is a threat. At the very least a threat to your freedom and to your property. It is very much like a death threat - in that they steal years of your life.

So the author is resorting to personal threats. That's all there is to this article. More scaremongering.

If the USA becomes the USSA and locks up bitcoin programmers - they show clear as day what kind of people they are. It will not kill bitcoin, others in other countries will take over. Anonymity will be improved. And the next iteration is that much harder to threaten.

Well stated!

Thank you tremendously for taking the time to share your insightful thoughts regarding law in general and law in the USA.

I'm an American (although I've spent a lot of time outside of the country) and I couldn't agree with you more. Your words are extremely inspiring and thought-provoking.

[arnoudk]

Well stated!
Thank you tremendously for taking the time to share your insightful thoughts regarding law in general and law in the USA.

I'm an American (although I've spent a lot of time outside of the country) and I couldn't agree with you more. Your words are extremely inspiring and thought-provoking.

Wow, thank you for this wonderful compliment! It is comments like these that really make my day.

I've personally spent many years going from statist (just because that's what you are taught when you are little and you never question it), to libertarian/minarchist (well you at least need a government for defense, otherwise the country will get run over by bad guys!), to voluntaryist/anarchist (wait a minute, a country border is an imaginary line that everyone pretends is there, it is a shared delusion. And it's morally wrong to steal from someone, through taxation, even if the goal is mutual defense). It is a long journey, and one that can be challenging. It can be hard to entertain the possibility that maybe, just maybe, a world without government is superior. There is so much programmed fear. When you reach that phase, you realize that government itself is also a delusion and that the very concept of a government is self-contradictory. There is just so much programming to undo, and so many words to define clearly. I'm just so glad to be able to pay it forward now.

I'd recommend reading Larken Rose's book The greatest superstition - his clarity of thought is just amazing. If the above sounds out-of-this-world (but you are curious to explore), reading that book will change your life, because it will change the way you look at the world and it will change the decisions you make. It is a Matrix red pill moment.

"You take the blue pill, the story ends. You wake up in your bed and believe whatever you want to believe. You take the red pill, you stay in Wonderland, and I show you how deep the rabbit hole goes."―Morpheus, to Neo

I don't know what is a greater threat to governments - people being able to use sound money (that they cannot print for their own purposes), or people thinking about these concepts.

Welcome to the rabbit hole.

[nandibear]

Wow, thank you for this wonderful compliment! It is comments like these that really make my day.

I've personally spent many years going from statist (just because that's what you are taught when you are little and you never question it), to libertarian/minarchist (well you at least need a government for defense, otherwise the country will get run over by bad guys!), to voluntaryist/anarchist (wait a minute, a country border is an imaginary line that everyone pretends is there, it is a shared delusion. And it's morally wrong to steal from someone, through taxation, even if the goal is mutual defense). It is a long journey, and one that can be challenging. It can be hard to entertain the possibility that maybe, just maybe, a world without government is superior. There is so much programmed fear. When you reach that phase, you realize that government itself is also a delusion and that the very concept of a government is self-contradictory. There is just so much programming to undo, and so many words to define clearly. I'm just so glad to be able to pay it forward now.

I'd recommend reading Larken Rose's book The greatest superstition - his clarity of thought is just amazing. If the above sounds out-of-this-world (but you are curious to explore), reading that book will change your life, because it will change the way you look at the world and it will change the decisions you make. It is a Matrix red pill moment.

[quote]"You take the blue pill, the story ends. You wake up in your bed and believe whatever you want to believe. You take the red pill, you stay in Wonderland, and I show you how deep the rabbit hole goes."―Morpheus, to Neo

I don't know what is a greater threat to governments - people being able to use sound money (that they cannot print for their own purposes), or people thinking about these concepts.

Welcome to the rabbit hole.[/size][/quote]

@arnoudk

You're welcome and thank you very much for recommending the book by Larken Rose. I am positively going to check it out!

[arnoudk]

@arnoudk

You're welcome and thank you very much for recommending the book by Larken Rose. I am positively going to check it out!

Cool! Why don't you post your favorite quote from that book here on the forum, once you are done reading it?

As you live in the USA, you could use purse.io to order it on Amazon for a discounted price

[Acidyo]

Btw, since you were talking about Forbes, this is kinda interesting:

https://www.youtube.com/watch?v=FaFk9ppFVTU

They use the cover of her being on Forbes even though it's proven to be fake and they just continue along with it and lure people into their company's "business".

What a scammy world we live in these days.

[arnoudk]

Oops. I got the title of Larken Rose's book wrong. It is The Most Dangerous Superstition.

[nandibear]

Cool! Why don't you post your favorite quote from that book here on the forum, once you are done reading it?

As you live in the USA, you could use purse.io to order it on Amazon for a discounted price

@arnoud

I will do that and perhaps even better I might do a video book review of Larken Rose's book (if I can work up the courage to go in front of the camera again!).

Oops. I got the title of Larken Rose's book wrong. It is The Most Dangerous Superstition.

@arnoud

Not a problem. I noticed this last night (title was slightly incorrect) after searching online for the book but I didn't want to point it out here on the forum because I didn't want to come across as the type of person who always wants to correct everyone else's small errors.

[nandibear]

Some very helpful and related information has been posted in a new thread (feb 16 2016) by arnoudk -

CoinDesk: No, you won't go to jail for supporting Bitcoin Classic