Thanks Garrett, there’s indeed a lot of nuance once you do a deep dive.
Nik Custodio
61

Very good response Nik. A block-chain does require a third party if only to enforce version control of the software. The incident in 2013 demonstrated that need as reported in this article http://arstechnica.com/business/2013/03/major-glitch-in-bitcoin-network-sparks-sell-off-price-temporarily-falls-23/

To quote from that article:

“It’s essential for all miners to enforce exactly the same rules about what counts as a valid block. If a client announces a block that half the network accepts and the other half rejects, the result could be a fork in the network. Different nodes could disagree about which transactions have occurred, potentially producing chaos.

That’s what happened on Monday evening. A block was produced that the latest version of the Bitcoin software, version 0.8, recognized as valid but that nodes still running version 0.7 or earlier rejected.”

As the article goes on to report, Bitcoin developer Pieter Wuille sent out an e-mail that stated “That is the only chain every client out there will accept. If you’re a miner, please revert to 0.7 until we at least understand exactly what causes this.”

In this case Pieter Wuilee acted as “Uncle Tommy” when he passed judgement on what version of the Bitcoin block-chain software people should consider the “valid” version.

On the question of subverting a block-chain, we have two instances in which it happened.

In the first instance Bitstamp was hacked http://www.reuters.com/article/us-bitstamp-cybersecurity-idUSKBN0KF0UH20150106

In the second instance Bitfinex was hacked http://www.forbes.com/sites/francescoppola/2016/08/06/theft-and-mayhem-in-the-bitcoin-world

We all know that counterfeiting poses a problem for any “physical” as opposed “digital” currency. However “digital” currency remains vulnerable to counterfeiting and theft as these instances illustrate.

By the way, for a fictional account of the creation of a crypto-currency, the novel “Cryptonomicon” by Neal Stephenson offers a great read. www.barnesandnoble.com/w/cryptonomicon-neal-stephenson/1100615818

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