Jon Callas identifies a potential weaknesses in a digital currency system such as bitcoin – [cryptography] Bitcoin observation:
I was sitting around the other weekend with some friends and we were talking about Bitcoin, and gossiping furiously about it. While we were doing so, an interesting property came up.Did you know that if a Bitcoin is destroyed, then the value of all the other Bitcoins goes up slightly? That's incredible. It's amazing and leads to some emergent properties.
If you have a bunch of Bitcoins and you want to increase your worth, you can do this by one of three ways:
- Create more Bitcoins.
- Buy up more Bitcoins, with the end state of that strategy being that you've cornered the market.
- Destroy other people's Bitcoins. The end state of that is also that you've cornered the market.
(Via Bruce Schneier)