Saturday, April 07, 2012

More on Hacking Bitcoins

In Bitcoin – Hacking Digital Currency I discussed the idea of increasing the value of bitcoins by buying more, creating more or destroying other people's bitcoins.

A couple of readers (both anonymous) rightly commented:

LOL this is true of all monies and currencies and goods of any type. If some are destroyed, others are more valuable. If some are created, others are less valuable. This is supply and demand. It's not at all unique to nor a special property of Bitcoin.


Same could be said for any commodity. If I simply destroy the global gold reserves, my gold will skyrocket in value. It's a pretty stupid "weakness".

While this weakness is inherent in any currency, monies, goods, gold, etc – what makes this sort of hack unique is the digital nature of bitcoins. Destroying or hoarding the reserves of gold is an entirely different thing than destroying, hoarding or even creating digital currency.


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