What is with the bitcoin obsession?

[juvanya]

It seems to be taking off like crazy with TIME (http://techland.time.com/2011/04/16/online-cash-bitcoin-could-challenge-governments/) and Forbes (http://www.forbes.com/forbes/2011/0509/technology-psilocybin-bitcoins-gavin-andresen-crypto-currency.html) mentions recently. It went from like $1 per to $2.50 per now.

The problem is that its completely based on faith of the users. Now, this is true of any currency, but unlike gold and silver, here its ridiculously volatile and unstable. The only place it differs from fiat is that the money supply cant surge (or be changed at all for that matter).

The only positive of it really is that its very secure and anonymous. But compared to the negatives...

A lot of people are so defensive about it, but I just cant buy into this hype. Part of it is my true feelings. Part is that I dont want to get sucked into it, so I take a harsh view. I honestly cant wait for it to collapse, and honestly, I think it will.

[Mahkato]

While not backed by a physical asset, it derives its value from not being directly manipulable by the governments and central banks of the world. To do so, they'd probably have to buy up all the BTC that exist. I have a small amount of BTC, but I'm not sure where it will go from here.

[Seraphim]

So long as it isn't protected by things like legal tender laws - have at it. I'm not inclined to accept it as payment but if others will - go for it.

[hazek]

I really don't understand what negatives you mean. It's a decentralized currency technology which provides freedom from government or any other entities control and with enough effort allows for pseudo anonymity.

So again, what negatives? That it's new?

[hazek]

Btw one of the outspoken lead developers of the BitCoin community has been invited by the CIA to give them a presentation on the technology.

You can read the discussion about it here: http://www.bitcoin.org/smf/index.php?topic=6652.0

[nayjevin]

Please correct me if you've studied this lately, IIRC:
- it's centrally planned with a built-in rate of inflation
- seems like the originators can have as many of them as they want
- no substantial and meaningful intrinsic value to the coin, i.e. gold and silver are scarce, have manufacturing applications, unique physical properties

[hazek]

Please correct me if you've studied this lately, IIRC:
- it's centrally planned with a built-in rate of inflation

The software was designed by a small group yes, but it's design and functionality is decentralized by nature meaning one central entity cannot change the core design anymore. You'd have to trick the whole network to use your altered client to do so which is impossible because the client is open source and anyone will see your bad intentions and will reject your client.


- seems like the originators can have as many of them as they want

They can if they "mine" them or buy them or sell goods and services for them. Just the fact of them being part of the original development hasn't given them any special privileges or rewards besides being the first to start "mining" BitCoins.


- no substantial and meaningful intrinsic value to the coin, i.e. gold and silver are scarce, have manufacturing applications, unique physical properties

In my view BitCoins intrinsic value is derived from it's design of the technology. I trust this technology to not screw me out of my purchasing power by staying secure, decentralized and open and therefor I assign it intrinsic value. If at any point signs of vulnerability should appear it will lose this assign intrinsic value in my eyes. Also by design, which as already mentioned cannot be altered anymore, there will ever be only 21million of BitCoins created which also makes them a scarce commodity.


I have spent a lot of my time researching this technology and I was highly skeptical at first and asked a lot of questions in regards of how the technology prevents various types of attacks possible and how it can maintain all the before mentioned valuable characteristics and I haven't found a hole yet. So right now I trust BitCoins the technology a lot I just don't know whether the price the market has set right now is too high or still low in relation to the size of the network and economy. But If I had a spare $5k laying around being able to forget about them if I lost them all I'd definitely buy as many BitCoins as I could. But because I don't I did a little mining instead and right now I own 0.54BTC :)

[Mahkato]

I did a little mining instead and right now I own 0.54BTC :)

Seems like you use up more $$$ buying the extra electricity your computer needs to do the mining than you gain in BTC.

[hazek]

My computer is always on anyways and it's a laptop with a at least 3 year old graphics card. I didn't even intend to make a profit I just wanted to test things and have some BitCoins so I mined as part of a mining pool for a week.

[hazek]

Btw I frequently post this because I really believe the BitCoin technology is something that could play a huge role in mankind moving away from governments and to anarcho capitalism type societies, so here are all my links I have bookmarked on BitCoins for you to explore and research:


http://bitcoinwatch.com/ - monitor tool
http://bitcoinmonitor.com/ - monitor tool
https://en.bitcoin.it/wiki/Main_Page - wiki
https://en.bitcoin.it/wiki/Category:Technical - wiki
https://en.bitcoin.it/wiki/Anonymity - wiki
https://clearcoin.appspot.com/
http://freebitcoins.appspot.com/ - free bitcoins to play around with
http://bitcoincharts.com/markets/ - BitCoin exchange market summary (if you check out anything, check out this)
https://www.bitcoinmarket.com/
http://coinpal.ndrix.com/ - exchange
http://coincard.ndrix.com/ - exchange
http://tradebitcoin.com/ - exchange
https://mtgox.com/ - most popular exchange
https://btcex.com/site/index/type/value - exchange
https://www.bitcoinusa.com/ - exchange
http://www.bitcoinmail.com/
https://en.bitcoin.it/wiki/Units
http://bitcoin-contact.org/
http://deepbit.net/ - mining pool
http://www.alloscomp.com/bitcoin/calculator.php
http://maps.google.com/maps?q=https://smsz.net/btcStats/bitcoin.kml - google maps of all the network nodes across the world online right now
http://bitcoin.sipa.be/index.html

[nayjevin]

Can you trade them out for something other than dollars? How big is the community selling products and services? If the dollar hyperinflates and my 1 bitcoin is worth $1trillion in dollars, but only 2 in Roast Beef Sandwiches, and I can't find a product or service I like, what do I do?

[Bodhi]

Can you trade them out for something other than dollars? How big is the community selling products and services? If the dollar hyperinflates and my 1 bitcoin is worth $1trillion in dollars, but only 2 in Roast Beef Sandwiches, and I can't find a product or service I like, what do I do?

Buy 2 roast beef sandwiches ;) They ARE yummy!

[hazek]

Can you trade them out for something other than dollars? How big is the community selling products and services? If the dollar hyperinflates and my 1 bitcoin is worth $1trillion in dollars, but only 2 in Roast Beef Sandwiches, and I can't find a product or service I like, what do I do?

Judge for yourself: https://en.bitcoin.it/wiki/Trade

[nayjevin]

Judge for yourself: https://en.bitcoin.it/wiki/Trade

Well I did look at that before and that's where my questions came from. The link made me not want to do BitCoins. Because I have a concern there would be no products I like when I cash out, and because people are openly selling drugs and porn. I see it as a dangerous thing to even be in support of, much less involved in.

[hazek]

Drugs and porn a victimless crimes being punished by fictitious laws made up by governments to empose their control over the governed. I'm sorry but I have zero sympathy with such a world view and am not bothered even in the slightest if the biggest drugs lords, weapons dealers or other "illegal" merchants trade their merchandise for BitCoins.

And I sincerely hope every single government of the world crumbles because of BitCoins.

[nayjevin]

I don't mean to prod a sacred cow, I see the intentions and admire the concept. Looks to me like there are safer places and ways to hedge against fiat currency. I'm not calling for 'regulation' of the system or anything. Just saying I'm not hanging around a barbershop when I don't need a haircut. I recognize the probability of winning in federal court if I were to be lumped in with the 'undesirables.' And so I won't personally be an early adopter. You've swayed me from 'debunked' to 'will watch the progress of this' though.

[hazek]

That's cool. I have to admit I pegged you wrong from your other #14 post in this thread. I'm glad that you'll keep watching it.

In the end it doesn't matter what you or I think about it, the market will decide. If it's a useful currency technology people will use it as money and if not they wont. Simple as that. :)

[nayjevin]

That's cool. I have to admit I pegged you wrong from your other #14 post in this thread. I'm glad that you'll keep watching it.

In the end it doesn't matter what you or I think about it, the market will decide. If it's a useful currency technology people will use it as money and if not they wont. Simple as that. :)

Yea verily. You caught me wanting to learn without researching more. But you're so good at this :)


They can if they "mine" them or buy them or sell goods and services for them. Just the fact of them being part of the original development hasn't given them any special privileges or rewards besides being the first to start "mining" BitCoins.

Are you sure that the first lump of bitcoins didn't just go straight to the developers? Is there anyone who has ever gotten a bitcoin who did not get it from trading, buying, or mining?


In my view BitCoins intrinsic value is derived from it's design of the technology. I trust this technology to not screw me out of my purchasing power by staying secure, decentralized and open and therefor I assign it intrinsic value. If at any point signs of vulnerability should appear it will lose this assign intrinsic value in my eyes. Also by design, which as already mentioned cannot be altered anymore, there will ever be only 21million of BitCoins created which also makes them a scarce commodity.

I'm down with this... the one thing is that I know one person in the world who could personally verify the programming - maybe. I've seen some cryptic use of spaghetti variables in my day, and I don't know jack. How many liberty minded experts are reviewing the code?


I have spent a lot of my time researching this technology and I was highly skeptical at first and asked a lot of questions

That's where I'm at right there.


So right now I trust BitCoins the technology a lot I just don't know whether the price the market has set right now is too high or still low in relation to the size of the network and economy. But If I had a spare $5k laying around being able to forget about them if I lost them all I'd definitely buy as many BitCoins as I could. But because I don't I did a little mining instead and right now I own 0.54BTC :)

This seems reasonable, I'd need about $5k to invest $100 though, cause of the other investments on my list. But I can see giving it a go if it's solid, and I can see it's at least close to what is needed - but based on confidence it's a tough sell vs. gold/silver in hand. Trust in peer to peer technology is no problem for me, but risk of the currency itself is.

In the other thread someone said it would go the way of the Liberty Dollar and eGold(?). Any insight on that?

[hugolp]

I have been promoting bitcoin since almost the beggining when nobody knew about it. I did not go into the mining frenzy because for me bitcoin really is about scaping the government money monopolly (and my home server is an Atom 330, so no much mining possible). The fact that it is anonymous and decentralized are the perfect qualities for this task.

There has been said a lot of stupid things about Bitcoin. The only valid criticisms (they have been mentioned here) are that the value is volatile and there are not many places that accept bitcoin (yet). But this is normal, because Bitcoin is a young project. As more people start adopting Bitcoin and its economy grows it will become more stable.

I have to say that I am worried about the recent fame and increase in price (against the dollars). I fear that a lot of people might be speculating and not adopting Bitcoin to commerce, that is what will give Bitcoin stability. Maybe its even possitive if the price collapses a bit, so bitcoin looses its appeal as speculating vehicle. Or maybe the rise in price convinces business owners to accept it. Who knows.

I encourage you all to give it a try. Its the perfect way to fight the government money monopoly. Its anonymous and de-centralized. We all saw what happened with the liberty dollars because they were not de-centralized. There are business who sell gold and silver for bitcoins, so if you feel you start having too many bitcoins you can change them for gold or silver for long term savings. If you are a business owner consider accepting bitcoins. If you dont own a business suggest some to start accepting bitcoin.

[hugolp]

I'm down with this... the one thing is that I know one person in the world who could personally verify the programming - maybe. I've seen some cryptic use of spaghetti variables in my day, and I don't know jack. How many liberty minded experts are reviewing the code?

The bitcoin community is heavily libertarian and anarcho-capitalists.


This seems reasonable, I'd need about $5k to invest $100 though, cause of the other investments on my list. But I can see giving it a go if it's solid, and I can see it's at least close to what is needed - but based on confidence it's a tough sell vs. gold/silver in hand. Trust in peer to peer technology is no problem for me, but risk of the currency itself is.

As I said in the previous post you can buy gold and silver with bitcoins, so if you feel you start to have too many bitcoins you can change them to gold and silver for long term savings.


In the other thread someone said it would go the way of the Liberty Dollar and eGold(?). Any insight on that?

Being decentralized (and anonymous) is the whole point of Bitcoin. The government could attack Liberty dollar and eGold because there was a central node. They just had to go after that central node and the whole thing went down. Bitcoin is completely decentralized. They could close any node and the system would keep working. The only way for the government to stop it is go full facist and start going home by home closing each node. Even if they tried you can use encription and Tor-like systems to disguise your bitcoin network (there are already people using bitcoin through Tor).

[nayjevin]

As I said in the previous post you can buy gold and silver with bitcoins, so if you feel you start to have too many bitcoins you can change them to gold and silver for long term savings.

I don't know how I missed that, but it's huge. I'd be interested in BitCoin's relative long-term stability against its silver and gold markets. If people are selling silver/gold for the same price as it cost me for the BitCoins it takes buy them, it'd be like a no profit, no loss hedge against inflation. With the additional benefit of supporting a viable system, that gets me pretty close. With assurances I'm not operating illegally (as I have no desire to learn to circumvent law or work anonymously), I might be a convert.

ETA: also, if I'm not mistaken, the transactions can't be refunded. So in theory I would need to profit enough to counteract failure to deliver. Is there any safeguard? Just knowing how many failures to deliver are reported would be something.

[hazek]

Are you sure that the first lump of bitcoins didn't just go straight to the developers? Is there anyone who has ever gotten a bitcoin who did not get it from trading, buying, or mining?
That's the beauty of the technology behind it. There's only one way BitCoins come into existence and it's through that process of "mining". Sure in the beginning when it started the only miners probably were the people who were involved and they mined a nice share of BitCoins. Right now there's 6mio of them already in existence and currently until half of the hard-coded total are created every approx. 10min or so 50 new ones are created. The technology prevents though for someone to just create some out of thin air and use them. They have to come about through that process of "mining".



I'm down with this... the one thing is that I know one person in the world who could personally verify the programming - maybe. I've seen some cryptic use of spaghetti variables in my day, and I don't know jack. How many liberty minded experts are reviewing the code?
As people spend more and more of their money on it I'm sure we'll get some large reputable firm to digest the source code but right now it's the community, which is constantly growing, that's in charge of checking the code for malicious intentions.



In the other thread someone said it would go the way of the Liberty Dollar and eGold(?). Any insight on that?

It's a decentralized currency, there's no one entity anyone could go after to shut it down, like they did with liberty dollars and eGold.


The best thing you can do is read the wiki through and through where all of this is explained. Trust me, if anything ever was worth your time, this research is it.

[hazek]

I have to say that I am worried about the recent fame and increase in price (against the dollars). I fear that a lot of people might be speculating and not adopting Bitcoin to commerce, that is what will give Bitcoin stability. Maybe its even positive if the price collapses a bit, so bitcoin looses its appeal as speculating vehicle. Or maybe the rise in price convinces business owners to accept it. Who knows.

I'm not worried about this issue at all. Even if people trade BitCoins as only a collectible item entirely, if the technology can maintain it's limited supply rules people should always value them. Then if the technology can also maintain a few other handy properties such as easy transfer, possibility for pseudo anonymity and security the market will pick them up as a means of facilitating trade.

I imagine that's how gold became money originally. First some people found it and thought it looked pretty and used it for decorative purposes or w/e and because it was limited in supply people who wanted it but couldn't find any were willing to trade other goods and services for it and eventually it got a market and a price.

[nayjevin]

I will do much reading before posting again, but I'll say this probably puts me out of the market:


The bitcoin community uses a few tools to help protect their privacy, and thus identity. The first and most important is a Secure Computer.

Before proceeding please make sure you have completed the Securing Your Computer guide, this guide assumes that your computer is secure both physically and in software.

I doubt it is, but how would I know?

[hugolp]

I don't know how I missed that, but it's huge. I'd be interested in BitCoin's relative long-term stability against its silver and gold markets. If people are selling silver/gold for the same price as it cost me for the BitCoins it takes buy them, it'd be like a no profit, no loss hedge against inflation. With the additional benefit of supporting a viable system, that gets me pretty close. With assurances I'm not operating illegally (as I have no desire to learn to circumvent law or work anonymously), I might be a convert.

ETA: also, if I'm not mistaken, the transactions can't be refunded. So in theory I would need to profit enough to counteract failure to deliver. Is there any safeguard? Just knowing how many failures to deliver are reported would be something.

The transactions can not be refunded as you said. Once you send money to someone its his/her money. There is no way to complain or undo the transaction. It has to be this way to be decentralized and anonymous. Think of it like cash. Once you give it to someone its not posible to get it back.

There are people working in a system of reputation for the bitcoin economy, like a web where merchats are rated so you can check if the merchant you are dealing with has a good reputation (something similar to ebay ratings).

It would be a real free market!


I'm not worried about this issue at all. Even if people trade BitCoins as only a collectible item entirely, if the technology can maintain it's limited supply rules people should always value them. Then if the technology can also maintain a few other handy properties such as easy transfer, possibility for pseudo anonymity and security the market will pick them up as a means of facilitating trade.

Im not complaining, Im just worried because if there is not real substance behind Bitcoin (and by real substance I mean real commerce) it can get very volatile since expectations can change quickly. I hope that the Bitcoin economy starts growing with more merchants accepting it.

[hazek]

I will do much reading before posting again, but I'll say this probably puts me out of the market:

Yep, your digital wallet is just a file on your computer. Same as paper money in your pocket. If you don't secure it at all times, someone can steal it! But I have no doubt services will be provided to secure your wallets. Digital safes of sorts :) such as mybitcoin.com or newly started www.instawallet.org

[hazek]

I'm not complaining, I'm just worried because if there is not real substance behind Bitcoin (and by real substance I mean real commerce) it can get very volatile since expectations can change quickly. I hope that the Bitcoin economy starts growing with more merchants accepting it.

I didn't think you were complaining. I understand your concern. I just wanted to chime in my view on it.

[nayjevin]

There are people working in a system of reputation for the bitcoin economy, like a web where merchats are rated so you can check if the merchant you are dealing with has a good reputation (something similar to ebay ratings).

But then there's no anonymity for sellers, right?


such as mybitcoin.com or newly started www.instawallet.org

hm very cool. Thanks for the responses.

[hazek]

Sure thing. All I want is to get the word out, what people do with the knowledge once they learn about BitCoins is up to them ;)

[juvanya]

I have spent a lot of my time researching this technology and I was highly skeptical at first and asked a lot of questions in regards of how the technology prevents various types of attacks possible and how it can maintain all the before mentioned valuable characteristics and I haven't found a hole yet. So right now I trust BitCoins the technology a lot I just don't know whether the price the market has set right now is too high or still low in relation to the size of the network and economy. But If I had a spare $5k laying around being able to forget about them if I lost them all I'd definitely buy as many BitCoins as I could. But because I don't I did a little mining instead and right now I own 0.54BTC :)

I understand the technology and have no qualms with that. I just dont trust it for other reasons related to it not being like gold and silver really. A few years of faith is nothing against millennia. But hey were all allowed our opinions and if you like bitcoins, thats fine. I just dont trust them and I dont think I ever will. The only value I see in them is anonymity.

[hazek]

I understand the technology and have no qualms with that. I just dont trust it for other reasons related to it not being like gold and silver really. A few years of faith is nothing against millennia. But hey were all allowed our opinions and if you like bitcoins, thats fine. I just dont trust them and I dont think I ever will. The only value I see in them is anonymity.

How is it not like gold or silver other then the obvious?

Also you are not guaranteed anonymity while using BitCoins. It's pseudo anonymity and even that only with the proper precautions. Aside from that it allows for easy transfer where compared to gold you can store a fortune of BitCoins on a USB key or send it around the world in a matter of seconds without anyone being able to stop it or steal them.

If you really understand the technology I really don't get what there is not to trust? My bet is that you don't fully understand and the unanswered questions you have are causing you to be suspicious which is fine. But if that's the case stop being lazy and start researching and learning if you really care. And if you don't then don't say you don't trust it but that you don't care about it enough to do your homework.

[juvanya]

I trust the technology fully. I just dont trust bitcoin. Its a similar concept to gold and silver, but its too shaky.

Remember, were all free to choose our currency. If someone wants to pay in wooden nickels, thats their business. I have no interest in bitcoin.

[Jordan]

FYI: I don't use bitcoin, don't plan to, and don't know all that much about it other than the fact that it was in my Forbes magazine recently after I spent all of one hour looking into it.

That said, I will be a very aggressive observer of how this comes together. The idea is very interesting, and should it be vertically integrated into some industry or service where it is redeemed for a product, then passed onto employees, it could become a very successful project. As it stands, its success will only come IF it is accepted from top to bottom of a single supply chain. For example: if a webhost accepts bitcoins and pays his employees with bitcoins, and much of his other expenses in bitcoins. Without that anchoring, bitcoins will necessarily be sold for US dollars when businesses that accept them have to have dollars (or any currency, for that matter) to pay their expenses, exerting downward pressure that can only be afforded if people then buy back the bitcoins that are sold.

The above scenario could also be removed if someone were to make a derivatives market for bitcoins. The ability to hedge between dollars and bitcoins easily, and without using a large amount of available capital, would make using bitcoins easier for people who have expenses denominated in other currencies.

[IDefendThePlatform]

Is there anyway to look up where the ip addresses of people who have bitcoins are? It would be awesome for small business owners such as myself to be able to start accepting them and marketing that directly to people who we know use bitcoins in our area.

Same with any other alternative currency.

[IDefendThePlatform]

Also, and I'm being half way serious, in light of the liberty dollar prosecutions, can i be sent to jail for the above post?

[Kludge]

I was interested in using Bitcoin, but the services to convert BTC to USD and back are way too expensive for me to be interested in using it as an alternative to USD. You generally have to (if you're interested in having your BTC within a reasonable amount of time) convert your bank money to Paypal, first (because the services to convert USD to BTC don't accept debit, credit, or direct deposits AFAIK -- Mt Gox does, but there's a $15 minimum fee for wires, $50 if international, which goes to his bank + whatever he charges for his own profit, which rules it out for many), then use a BTC seller to take your Paypal money. There are a few problems with this method:

1) Paypal charges fees (something like 1.9-2.4% -- I haven't sold using it in a long while) which get passed on to you
2) Paypal permits buyers to dispute the payment and have payment refunded, but once BTC is "sold" there's no way of getting it back - no dispute process possible. Because of this, BTC sellers impose harsh restrictions on how much BTC you can buy.
3) Paypal very recently (yesterday) shut down BTC's easiest-to-use (and fastest-to-receive, AFAIK) seller, Coinpal, and froze his funds.
4) Paypal's fee scheduling is not friendly to small purchases. Converting USD to BTC from Paypal will generally run you between 5-100% of conversion amount in fees ($1 from Paypal to BTC can cost ~$2, for instance, but $50 from PP to BTC may cost as low as $55), depending on how much you purchase.
5) You're hit with those fees again when you try to convert BTC to USD, and you'll probably take another hit of ~.65% transaction fee when you buy the "Mt. Gox USD" (primarily used for USD-BTC trading) with your BTC to then cash out for legal tender USD.
6) Finally, there's often a long waiting period from when you pay to when your money is accessible. BTC transactions can take anywhere from seconds to hours, and now that Coinpal has been shut down, you'll probably want to go through Mt. Gox which has a 7-day wait from when you pay to when you're credited if you use Paypal.

[IDefendThePlatform]

Wow thanks for the detailed info. That does sound like a lot of hoops to jump through and crappy fees to pay. You might have already answered this, but what if I just accept bitcoins from people who already have bitcoins, and then keep that money in bitcoin form for several months or more until I have enough built up to make it worthwhile to convert to USD? Then I gather that I would still need to pay the Paypal fees of ~2-3%, but that is comparable to what Visa, Mastercard etc. are charging me now. If I did that, then I would only really ever need to convert one way, from bitcoin to USD, right?

Would I just use Mt. Gox to accept the one-way bitcoin transaction?

I ask because I'm sure bitcoin would be a very small part of my business at first, and I wouldn't mind building up some reserves of it for a while as an investment against the dollar anyway.

I'm pretty sure I'm not understanding everything fully, but I really appreciate the help.

[Kludge]

You would be paying very little in fees if you did it that way, though it seems like it would be very difficult (I'm not sure how much BTC is actually being used for real transactions instead of just currency trading). Using Mt Gox, once you've accrued $800 worth of Mt Gox USD, you can have your money deposited directly into your bank account for just a 1% fee + .65% for transactions to sell your BTC for Mt Gox USD (I don't think you can convert from BTC to USD directly unless you spend the time to work out a deal with someone, but then you'll probably take a 1.9-2.4% hit from Paypal fees, anyway). So then, in total you'd only be paying 1.65% in fees, which is very reasonable.

[AZKing]

I'm not inclined to accept Bitcoins for my company...

I kind of like the idea, but I just don't see it being practical.

[Indy Vidual]

The USD almost constantly loses value, how "practical" is that?

[hugolp]

Is there anyway to look up where the ip addresses of people who have bitcoins are? It would be awesome for small business owners such as myself to be able to start accepting them and marketing that directly to people who we know use bitcoins in our area.

Same with any other alternative currency.

You can get the IP addresses of the people connected to your client. Also, right now there is a provisional channel where you can get all the IP's but that should not last. Also there is people that connects through Tor or similar system so you would not get them.

[fatjohn]

Uhm, maybe stupid but what are the chances that a "Bytecurrency" project comes along, looking alot like bitcoin but a bit better and will totally sweep bitcoin out of the market reducing the value of a bitcoin to zero. A bit like what facebook was to myspace.

[farrar]

Uhm, maybe stupid but what are the chances that a "Bytecurrency" project comes along, looking alot like bitcoin but a bit better and will totally sweep bitcoin out of the market reducing the value of a bitcoin to zero. A bit like what facebook was to myspace.

Thats a hard question, if you are looking for actual odds. If you are wondering if it is possible, then absolutely. If it were impossible, then it wouldn't be a decentralized currency. Bitcoin is still in testing now though. It is also the first application of it at this scale. Most people interested in bitcoin, are working towards streamlining the user side of things, and contributing. If someone goes rogue they will more than likely rely on the bitcoin source as a good starting point. If that were to happen, any exceptional innovative competitor will quickly find bitcoin taking similar measures. A little competition in the crypto currency market, might be a good thing for the whole of the market. (heh, but I don't have to tell you all that do I?)

Just my two cents

[IDefendThePlatform]

Thats a hard question, if you are looking for actual odds. If you are wondering if it is possible, then absolutely. If it were impossible, then it wouldn't be a decentralized currency. Bitcoin is still in testing now though. It is also the first application of it at this scale. Most people interested in bitcoin, are working towards streamlining the user side of things, and contributing. If someone goes rogue they will more than likely rely on the bitcoin source as a good starting point. If that were to happen, any exceptional innovative competitor will quickly find bitcoin taking similar measures. A little competition in the crypto currency market, might be a good thing for the whole of the market. (heh, but I don't have to tell you all that do I?)

Just my two cents

Absolutely. If someone else came up with an improvement over bitcoin, then bitcoin would start to lose some of its value until they adapted. A decent chunk of market share would help to stabilize the currency from any huge selloff over a competitor's slight improvement.

[pcosmar]

What happens to the "money" when the electric grid crashes or the internet is down?

What happens when folks have milked out enough cash and close shop?

Yes, I am skeptical of the whole deal. It screams scam.

[IDefendThePlatform]

You can get the IP addresses of the people connected to your client. Also, right now there is a provisional channel where you can get all the IP's but that should not last. Also there is people that connects through Tor or similar system so you would not get them.

Thanks for the info.


Next question, is there a way to contact people by email or even get a physical address based on an IP address? To send them an email or postcard about our business?

[Mahkato]

What happens to the "money" when the electric grid crashes or the internet is down?

Your wallet is safe on your computer until the internet comes back up and bitcoin service is restored by all the peers. This assumes that you have properly safeguarded your wallet.

[hugolp]

Thanks for the info.


Next question, is there a way to contact people by email or even get a physical address based on an IP address? To send them an email or postcard about our business?

Once you have the IP you can do an approximate location (usually only to city level), but its not necesarely accurate. It depends on the company managing each network.

You can no get the email with an ip.

[IDefendThePlatform]

Once you have the IP you can do an approximate location (usually only to city level), but its not necesarely accurate. It depends on the company managing each network.

You can no get the email with an ip.

Ahhh I see. That's actually more reassuring than anything. Just thought I'd ask.

[farrar]

What happens to the "money" when the electric grid crashes or the internet is down?

What happens when folks have milked out enough cash and close shop?

Yes, I am skeptical of the whole deal. It screams scam.

Do you mean your money or all the bitcoins in existence? anyone connected to the system, in essence is the system. In order for bitcoin to go down, every single user would have to disconnected. In order for the internet to go down, all of the computers on the internet would have to go down. If just your internet connection goes down, then when it is back up the bitcoin network will send you all the blocks you didn't download. Blocks are a data structure that contain a "copy" of every transaction that has happen up until its creation (which is roughly 8 an hour as of right now). In order for your transactions to go through the system and be approved it has to be verified by every single bitcoin user and then recorded onto the block. Because of this, Bitcoin is much safer than even bank transactions. The problem is it is still in beta and the economy is very volatile. Bitcoin shows promise for the future, but its not something you shud dump your paycheck in, at least not yet.

One of the neat things about bitcoin is it returns power to the user. You ever been automatically charged before, and without your consent? Bitcoin doesn't allow you to charge people. you can only send money. If you want to receive a payment you generate and send your customer a custom address for just them to use. If they agree to the terms they send the payment to you through that address. Programers are developing ways to automate that process and streamline it, while maintaining the non-negotiable limitation of forcibly charging customers. I am very hopeful for bitcoins future.

Well, its not really a scam. The source code is freely available for modification and reading. keep in mind, if you modify the source code which creates bitcoins, those coins won't verify against all the other bitcoin applications and will be inherently useless. But if you are changing features or just reading, the bitcoins are safe. Because it is open source and readable, figuring out exactly what the developers are up to is as simple as reading the code. If you can't read code, then you can either distrust it all together, or trust the many who can.

However, as I said earlier, the economy is volatile. If you check the statistics on the bitcoins value against the dollar, you will see that bitcoins first major rise in the last 30 days was around april 16th, the date of the time magazine article on bitcoins. It rises then again on april 20th or 21st, when Forbes releases their article. Now unless this media coverage persists, chancs are bitcoin will return to its pre-april 16th value. Before april 16th, bitcoins were trading at roughly 1:1 with the dollar now they are trading 1:3.25
Because of an influx in "noobs", the value has risen dramatically as they begin testing the waters. an economy that was once 5.5 million dollars in half a month has risen to roughly 17million. due to a higher demand on the currency and a low supply. Many speculators are selling off their bitcoins now, in hopes of buying them back at 3:1 in the coming weeks. Others began riding the media wave and if they are smart, they are probably selling off now or in the next few days.

I am no technical expert, and I expect someone more intimate with bitcoin and technology might correct some of what I have to say.

[hazek]

Wow thanks for the detailed info. That does sound like a lot of hoops to jump through and crappy fees to pay. You might have already answered this, but what if I just accept bitcoins from people who already have bitcoins, and then keep that money in bitcoin form for several months or more until I have enough built up to make it worthwhile to convert to USD? Then I gather that I would still need to pay the Paypal fees of ~2-3%, but that is comparable to what Visa, Mastercard etc. are charging me now. If I did that, then I would only really ever need to convert one way, from bitcoin to USD, right?

Would I just use Mt. Gox to accept the one-way bitcoin transaction?

I ask because I'm sure bitcoin would be a very small part of my business at first, and I wouldn't mind building up some reserves of it for a while as an investment against the dollar anyway.

I'm pretty sure I'm not understanding everything fully, but I really appreciate the help.

I think you're being a bit narrow minded here. The hoops described are only there for you to jump through if you want to use the easiest and fastest way of trading BitCoins.
But... there's absolutely nothing that could stop you from finding someone locally in person and just trade BitCoins with them at almost 0 expenses. Plus those fees mentioned sound a bit harsh to me and you should probably do your own research.

[hazek]

Uhm, maybe stupid but what are the chances that a "Bytecurrency" project comes along, looking alot like bitcoin but a bit better and will totally sweep bitcoin out of the market reducing the value of a bitcoin to zero. A bit like what facebook was to myspace.

Possible but less likely then the facebook myspace thing because it takes a lot longer before people trust a new currency technology especially a digital one.

[hazek]

What happens to the "money" when the electric grid crashes or the internet is down?

It would need to happen on the whole planet in order for BitCoin to shut down. I mean all of us who are spreading the info are constantly repeating the word -decentralized-. Why do you think that is? I'll tell you why in case you didn't figure it out! Because there's no single point of failure. You have to shut down all the nodes of the whole network for it to stop because every single node has the database downloaded and if part of the network should expirience an outage of internet or power all the harm that that does is prevent them from being able to use BitCoins until they regain their connection. Once they do, their coins are safe and can be used again.


What happens when folks have milked out enough cash and close shop?

Yes, I am skeptical of the whole deal. It screams scam.

You could ask the same question about the stock exchange now couldn't you?

[IDefendThePlatform]

I think you're being a bit narrow minded here. The hoops described are only there for you to jump through if you want to use the easiest and fastest way of trading BitCoins.
But... there's absolutely nothing that could stop you from finding someone locally in person and just trade BitCoins with them at almost 0 expenses. Plus those fees mentioned sound a bit harsh to me and you should probably do your own research.

The in person trading is kind of what I want. Say I own an antique store and a customer wants to pay me in bitcoins. Could they just send me bitcoins via paypal?

Just trying to get ahead of the digital currency curve here.

[hazek]

What happens to the "money" when the electric grid crashes or the internet is down?
Your wallet is safe on your computer until the internet comes back up and bitcoin service is restored by all the peers. This assumes that you have properly safeguarded your wallet.

Actually true but not exactly. The wallet file on your computer doesn't actually contain your coins. The database that your BitCoin client has downloaded when you ran it the first does. What the file contains is the public private key pairs that give you the "access" to use the coins you own. So your coins are safe but not stored in the wallet.dat file but rather in the block chain database that constantly grows in the network and is being updated even if you aren't connected. And once you reconnect and your client updates your copy of the database you can use your coins again.

[hazek]

The in person trading is kind of what I want. Say I own an antique store and a customer wants to pay me in bitcoins. Could they just send me bitcoins via paypal?

Just trying to get ahead of the digital currency curve here.

BitCoin IS the "bitcoin paypal" :) I mean online trading BitCoin is one of the primary functions of the BitCoin technology. So when you have a client installed, you create your BitCoin address which looks like this "1EofMsPEsmzFgPAqHpq8HatjgM8YEMuiFU" which is an actual address of someone I just randomly picked from http://blockexplorer.com/ where you can see the entire history of all the BitCoins in existence and how they were traded and which addresses own them.
Then you give the person who will trade with you your address and they go into their BitCoin client, type in your address and the amount and send the BitCoins and as soon as the network finds a new block in the block history chain that transaction is inserted and finalized and you own those BitCoins which they then show up in your client.

It's a decentralized peer to peer digital crypto currency. Being able to send and trade it peer to peer it's one of it's core features ;)

[farrar]

The in person trading is kind of what I want. Say I own an antique store and a customer wants to pay me in bitcoins. Could they just send me bitcoins via paypal?

Just trying to get ahead of the digital currency curve here.

There are several clever people who have come up with ideas for in store payment, via an electronic device, such as a phone app. Right now, with a 6-17 million dollar economy, internet commerce is the main struggle right now. There are ways that have been developed to send people bitcoins via email, even if they don't have the bitcoin app. However they would need to obtain some kind of bitcoin app or mybitcoin account to claim them.

Previously someone engineered a process to buy and sell bitcoins via paypal, for a small fee of course. Recently however, due to such a high demand via the forbes and time articles, the higher ups in paypal caught on and threw a fit, putting coinpal out of buisness (yesterday in fact). Paypal previously told him coinpal was a perfectly fine service, and the creator is appealing their recent decision now. He kept fraud incredibly low (at roughly 1%. compared to the 2-4% in lost sales via fraud during other online transactions, this is very well)

[hazek]

I am no technical expert, and I expect someone more intimate with bitcoin and technology might correct some of what I have to say.

Nope, you're pretty much spot on IMO. :)

[hazek]

Previously someone engineered a process to buy and sell bitcoins via paypal, for a small fee of course. Recently however, due to such a high demand via the forbes and time articles, the higher ups in paypal caught on and threw a fit, putting coinpal out of buisness (yesterday in fact). Paypal previously told him coinpal was a perfectly fine service, and the creator is appealing their recent decision now. He kept fraud incredibly low (at roughly 1%. compared to the 2-4% in lost sales via fraud during other online transactions, this is very well)

Fuck really? Those bastards.. Well I'm sure that we'll just have to wait until we get a better local exchange market going before BitCoins can really take off. And once we do, there's no stopping it. :) At least nothing I can foresee right now.

[hazek]

double post :p:o

[farrar]

Fuck really? Those bastards.. Well I'm sure that we'll just have to wait until we get a better local exchange market going before BitCoins can really take off. And once we do, there's no stopping it. :) At least nothing I can foresee right now.

Yes, i was a bit disappointed too. I was going to sell my bitcoins, since I believe they are overvalued right now. When I found out coinpal was down, i had to do it via mtgox. Made a 350% return on my initial investment about 2 months ago. back then 1BTC:0.85USD. BTC economy is expanding faster than Bitcoin preduction, and the currency is deflating rapidly. Once this recent media hype dies down, I will buy back in and continue riding the bitcoin train.

I had to post pone it, but I had plans to offer cpanel webhosting for 1.5BTC - 6BTC (which was 1-4 dollar at the time. I got a good deal on a VPS. unfortunately I got too busy with school and such.

[Kludge]

Anyone mind posting their results with GPU-accelerated Bitcoin mining?

I'm running an overclocked GTX 460 using m0mchil's miner, but only getting 27-28 Mh/s @ 95% GPU load. I was reading on another site where it was claimed two 5870s can achieve 680 MH/s, but this doesn't seem plausible as a single 5870 could only slightly outperform a 460 with a 2060 MHz memory clock speed, but I am not sure which specs I should be looking at for CUDA/OpenCL processing. Any help on that?

Edit: On that same site, they claim a $3.7k computer (three 6990s) can do 2 GH/s. I ran the numbers and came up with "2 GH/s translates to 2,000,000 khps, or around 65.5 hours per block, or around .763 BTC per hour. I think that's right. Okay, now the price of BTC jumps all over the fucking place, so let's just assume 1 BTC equals $2.50. You'd be making ~$1.91/hour, $45.80/day, ~$1374/month. Subtract from that your ~$240 in electricity bill (if you pay $.096/KWH), and you have ~$1134/month profit in exchange for plunking down $3.7k initially. It would take ~3 1/4 months to pay off (IF his calculations of GH/s are correct!!) because I'm absolutely sure his 2 GH/s estimate assumes you purchase 3 gfx cards. After 3 months, your RoI would be ~-.08, after 6 months, RoI would be ~.8439"

After fixing my calculations, this seems more reasonable, though I still doubt the GH/s calculations.

[nayjevin]

So is 'mining' essentially giving computer power to some sort of cloud that runs online gaming?

[Kludge]

Kind of. AFAIK, bitcoin mining is not actually productive. Bitcoins don't really represent anything except an amount of processing power (combined with efficient code) used to create them.

Bitcoins are produced in blocks of 50 each time a complex puzzle is correctly solved by your CPU or GPU. The puzzles become increasingly difficult with how many have been solved so there's a resistance to inflation from better data processing technology and also allows BTC to expand at a predictable pace. However, the formula appears to be flawed (either because the creators did not anticipate so many miners, hoarders, or trades) because BTC has deflated at a ridiculous rate.

In total, only 21m BTC will be created (assuming the formula is never changed). Currently, I believe there's just a bit over 6m.

This means "mining" will eventually have to shift from the unproductive form of solving puzzles to the productive form (where I think the cloud reference would be more applicable) of handling transactions and collecting on the tiny fee associated. It also suggests the volatility of BTC will start to mellow out once BTC becomes more difficult to earn than it's worth, but it may also discourage potential users of BTC.

[hugolp]

Anyone mind posting their results with GPU-accelerated Bitcoin mining?

I'm running an overclocked GTX 460 using m0mchil's miner, but only getting 27-28 Mh/s @ 95% GPU load. I was reading on another site where it was claimed two 5870s can achieve 680 MH/s, but this doesn't seem plausible as a single 5870 could only slightly outperform a 460 with a 2060 MHz memory clock speed, but I am not sure which specs I should be looking at for CUDA/OpenCL processing. Any help on that?

Edit: On that same site, they claim a $3.7k computer (three 6990s) can do 2 GH/s. I ran the numbers and came up with "2 GH/s translates to 2,000,000 khps, or around 65.5 hours per block, or around .763 BTC per hour. I think that's right. Okay, now the price of BTC jumps all over the fucking place, so let's just assume 1 BTC equals $2.50. You'd be making ~$1.91/hour, $45.80/day, ~$1374/month. Subtract from that your ~$240 in electricity bill (if you pay $.096/KWH), and you have ~$1134/month profit in exchange for plunking down $3.7k initially. It would take ~3 1/4 months to pay off (IF his calculations of GH/s are correct!!) because I'm absolutely sure his 2 GH/s estimate assumes you purchase 3 gfx cards. After 3 months, your RoI would be ~-.08, after 6 months, RoI would be ~.8439"

After fixing my calculations, this seems more reasonable, though I still doubt the GH/s calculations.

ATI/AMD video cards are way more capable of mining that Nvidia cards because of their design. There is a page in the bitcoin wiki with a list of video cards and mining capabilities (in case you have not seen it yet).

[hazek]

Anyone mind posting their results with GPU-accelerated Bitcoin mining?

I'm running an overclocked GTX 460 using m0mchil's miner, but only getting 27-28 Mh/s @ 95% GPU load. I was reading on another site where it was claimed two 5870s can achieve 680 MH/s, but this doesn't seem plausible as a single 5870 could only slightly outperform a 460 with a 2060 MHz memory clock speed, but I am not sure which specs I should be looking at for CUDA/OpenCL processing. Any help on that?

Edit: On that same site, they claim a $3.7k computer (three 6990s) can do 2 GH/s. I ran the numbers and came up with "2 GH/s translates to 2,000,000 khps, or around 65.5 hours per block, or around .763 BTC per hour. I think that's right. Okay, now the price of BTC jumps all over the fucking place, so let's just assume 1 BTC equals $2.50. You'd be making ~$1.91/hour, $45.80/day, ~$1374/month. Subtract from that your ~$240 in electricity bill (if you pay $.096/KWH), and you have ~$1134/month profit in exchange for plunking down $3.7k initially. It would take ~3 1/4 months to pay off (IF his calculations of GH/s are correct!!) because I'm absolutely sure his 2 GH/s estimate assumes you purchase 3 gfx cards. After 3 months, your RoI would be ~-.08, after 6 months, RoI would be ~.8439"

After fixing my calculations, this seems more reasonable, though I still doubt the GH/s calculations.

My 3 years old laptop with NVidia 8600M GT gets me only 4.5Mh/s :S

[hazek]

So is 'mining' essentially giving computer power to some sort of cloud that runs online gaming?

lol no.

Mining is solving a mathematical problem which you'll be able to solve randomly by luck only every so often in proportion to how good your processor in your computer is to the difficulty that the network has set in relation to how much total processor power there is across the network. And when you solve such a problem you create a new "entry" in the shared decentralized chain history of blocks that contain all the BitCoin transactions and therefor who owns any of them.

Basically it's a way to confirm and legitimize all the transactions and ownership of coins in a decentralized fashion without anyone being able to cheat the system and just make up a bunch of new entries. The mining process can't be cheated because it's hard to find a solution but it is super easy and fast to verify with the rest of the network if you do find one.

I mean ffs people, this might be the greatest invention human kind has come up with in regards to liberty and free markets and you're being fking lazy and wont even read the damn wiki?!

[nayjevin]

I mean ffs people, this might be the greatest invention human kind has come up with in regards to liberty and free markets and you're being fking lazy and wont even read the damn wiki?!

That's not it, it's that when I go to look for an answer I can't find it, and it's explained with assumptions of prior knowledge that I don't have.

Also, though it's easy to see that this one is unique, it also seems like one of those 'dime a dozen' things that come and go. You know the debate for linux. I support everything about it - but I just can't use it. Can't even find the man pages on an installation that doesn't have a network card driver...... knowhatimean?

[hazek]

knowhatimean?

Sure.. I'm sorry. I may have been to harsh.

[Kludge]

ATI/AMD video cards are way more capable of mining that Nvidia cards because of their design. There is a page in the bitcoin wiki with a list of video cards and mining capabilities (in case you have not seen it yet).
Thanks. I hadn't seen that yet. The Nvidia card I'm using is getting ~1/3 the performance it ought to. I'll look into that later - probably outdated drivers.

The ATI card (4670) I have in this computer I got for $30 is performing significantly better.

Edit: that bumped performance from 27-28 MH/s to 47-48 MH/s, and after bumping up clocks, ~58 MH/s, which is much more in line with what others were getting. Thanks.

[jclay2]

Gold/Silver > Bitcoin >= $

Anyone who is hoarding bitcoins as oppose to Gold/Silver is just plain crazy.

[hugolp]

Gold/Silver > Bitcoin >= $

Anyone who is hoarding bitcoins as oppose to Gold/Silver is just plain crazy.

I actually think that Bitcoin and gold/silver can have a symbiotic relation. I have been thinking about a theory between them based on the ideas of free banking of White and Selgin.

It needs more thought, but basically the idea is that there is a demand for cahs and the financial system needs to change the amount of money substitutes (cash) to accomodate the changes in that demand so it does not affect the rest of the prices. I have been wondering how bitcoin can manage changes in the demand for cash, assuming bitcoin would be used as cash. My idea is that gold and silver traders could perform that task. F.e. someone would use bitcoins and save some bitcoins but save long term in gold and silver. But when there is more demand for bitcoins, the price would rise giving incentives to sell more bitcoins for gold and silver, increasing the supply of bitcoins. When demand for bitcoins reduces, the price would tend to go down, giving incentives to buy bitcoins with gold/silver, thus absorving again the "excess liquidity".

I need to think more about it. It feels still a bit more restricted than fractional reserve, I dont know if it would be responsive enough to changes in demand for cash.

[reduen]

Here is my concern about all this...

http://www.bitpenny.com/
CLOSED

and

http://www.bitcoinpool.com/
We got hit again. Only 4 users were compromised...READ MORE HERE
CHECK YOUR ACCOUNT TO MAKE SURE EVERYTHING IS OK.
Change your PASSWORD IF YOUR WALLET ID IS DIFFERENT!!!
** MAKE SURE YOU ARE NOT REUSING PASSWORDS YOU USE WITH OTHER POOLS! **

Etc.....

[Kludge]

Here is my concern about all this...

http://www.bitpenny.com/
CLOSED

and

http://www.bitcoinpool.com/
We got hit again. Only 4 users were compromised...READ MORE HERE
CHECK YOUR ACCOUNT TO MAKE SURE EVERYTHING IS OK.
Change your PASSWORD IF YOUR WALLET ID IS DIFFERENT!!!
** MAKE SURE YOU ARE NOT REUSING PASSWORDS YOU USE WITH OTHER POOLS! **

Etc.....
Those are both mining pools which only miners would be interested in, not normal users of BTC. Their unsecure servers are not the problem of BTC in the same way it isn't the fault of credit card companies' for Sony's massive potential leak of CC #s through its PlayStation Network. It isn't necessary to use a mining pool to mine, anyway (unless you're trying to CPU mine). Eventually, mining will become obsolete as the BTC pool nears 21m. Bitcoin Pool also appears to be operating.

BTC itself has never been compromised, and the users in those pools were almost certainly compensated for their work.

[reduen]

Those are both mining pools which only miners would be interested in, not normal users of BTC. Their unsecure servers are not the problem of BTC in the same way it isn't the fault of credit card companies' for Sony's massive potential leak of CC #s through its PlayStation Network. It isn't necessary to use a mining pool to mine, anyway (unless you're trying to CPU mine). Eventually, mining will become obsolete as the BTC pool nears 21m. Bitcoin Pool also appears to be operating.

BTC itself has never been compromised, and the users in those pools were almost certainly compensated for their work.

I just meant security and reliability of the system in general. I am not really knocking the idea here it is of course intriguing. The only way that I personally would get involved right now is in the mining process and it appears that so far I am inept.

I could not even get the miner that I chose to work…. How can I possibly keep everything secure on my end even?

[hazek]

How can I possibly keep everything secure on my end even?

Find someone who is better capable of setting it up then you?? I don't attempt to fix my fridge when it breaks, I call a repair guy.

[Kludge]

BTW, I was reading a thread on a mining pool, and it was compared to Communism and I have to admit, my mind was blown. A central man takes profit off of thousands of people doing work who receive a share of it. He gives them work, tells them what to do, and how much their work is worth. Isn't that supposedly exploitation?

"Ah yes, but now everyone can receive BTC, not just lucky people with GPUs."

Wot?! That's a free-fucking-market solution, man!

"Ah yes, so I suppose it's just voluntary communism."

!!!

[hazek]

BTW, I was reading a thread on a mining pool, and it was compared to Communism...

trololololol .............

[hugolp]

BTW, I was reading a thread on a mining pool, and it was compared to Communism and I have to admit, my mind was blown. A central man takes profit off of thousands of people doing work who receive a share of it. He gives them work, tells them what to do, and how much their work is worth. Isn't that supposedly exploitation?

"Ah yes, but now everyone can receive BTC, not just lucky people with GPUs."

Wot?! That's a free-fucking-market solution, man!

"Ah yes, so I suppose it's just voluntary communism."

!!!

Next thing you know is that they will invent voluntary rape.

[RonPaulIsGreat]

I looked into this quite a while ago, the problem with these things, is that they don't focus on the most important aspect, which is the marketplace. It's like the relationship between paypal and ebay, one would be diminished without the other. Ease of shopping is paramount in these currency schemes. I've thought about setting up a market place, but decided against it, as it's not something I'm passionate about.

However, if someone was inclined and "passionate" about bitcoins, they should go purchase a good auction script for a couple thousand dollars, then modify it for easy integration with bitcoins, as that is the only way it will work in the long term. There are some basic "classified" type sites, but those aren't the same.

Anyway, some things only work well if both ingredients are present, IMO, and in this case that means a means of exchange (bitcoins), and a means to conveniently shop and purchase (very, very, very much in need of a decent integrated solution).

I'd of thought with all the die hards out there for bitcoins someone by now would have visions of being the ebay of bitcoins, but it doesn't look like it.

[hugolp]

I looked into this quite a while ago, the problem with these things, is that they don't focus on the most important aspect, which is the marketplace. It's like the relationship between paypal and ebay, one would be diminished without the other. Ease of shopping is paramount in these currency schemes. I've thought about setting up a market place, but decided against it, as it's not something I'm passionate about.

However, if someone was inclined and "passionate" about bitcoins, they should go purchase a good auction script for a couple thousand dollars, then modify it for easy integration with bitcoins, as that is the only way it will work in the long term. There are some basic "classified" type sites, but those aren't the same.

Anyway, some things only work well if both ingredients are present, IMO, and in this case that means a means of exchange (bitcoins), and a means to conveniently shop and purchase (very, very, very much in need of a decent integrated solution).

I'd of thought with all the die hards out there for bitcoins someone by now would have visions of being the ebay of bitcoins, but it doesn't look like it.

You mean like this http://www.biddingpond.com/ ?

People is also working in a Drupal module to allow anyone to easily add bitcoin payment option, etc... There is work being done.

[RonPaulIsGreat]

Well, that would be a start, but the information up there for newbies is sparce to say the least. The site looks to be using a free script (or a variation of a free script, I have installed before). The https while active, on the login pages also loads non secure resources on the page, thus showing the insecure icon.

I've been there a long time ago, and while I get, that it is probably a one man show, there is a lot to be done there if it wants to extract an audience beyond the diehards.

Also, I know that script does not scale well (if it is the same one, I'm thinking of, forget the name right now though), so while it may be a "good" beginning it just doesn't scale well. When I test loaded it with several thousand auctions it became very laggy. And if successful attracted a good size following the site would quickly become unusable. Like 10's of thousands of listings.

But I'm not trying to be a critic, but that is not a long term solution.

[hazek]

Well, that would be a start, but the information up there for newbies is sparce to say the least. The site looks to be using a free script (or a variation of a free script, I have installed before). The https while active, on the login pages also loads non secure resources on the page, thus showing the insecure icon.

I've been there a long time ago, and while I get, that it is probably a one man show, there is a lot to be done there if it wants to extract an audience beyond the diehards.

Also, I know that script does not scale well (if it is the same one, I'm thinking of, forget the name right now though), so while it may be a "good" beginning it just doesn't scale well. When I test loaded it with several thousand auctions it became very laggy. And if successful attracted a good size following the site would quickly become unusable. Like 10's of thousands of listings.

But I'm not trying to be a critic, but that is not a long term solution.

You know when they first invented a car it wasn't a 911 Porsche..

I hope you stop criticizing because you aren't doing anyone any favors. It's a young grassroots technology and all the projects are grassroots driven. You shouldn't possibly expect everything to already be perfect. As always it will take some time before the market figures out all the services that are needed and the best way to offer them. Instead of your criticism how about you make a better service yourself or at least join their forums and offer constructive criticism and your own ideas on how to improve and if you can't be arsed to at least do that, how about you stfu and gtfo.

[RonPaulIsGreat]

LOL, you take attempts at objective criticism far to personally.

However, I wish Bitcoins all the best.

[Indy Vidual]

...at least join their forums and offer constructive criticism and your own ideas on how to improve and if you can't be arsed to at least do that, how about you stfu and gtfo.


LOL, you take attempts at objective criticism far to personally.

However, I wish Bitcoins all the best.

It's been a great year for Bitcoins, but a really rough last couple of days. hazek's sig does warn us "may be insensitive at times..."

[Kludge]

Bitcoins (+Mt Gox USD) are exchangeable for silver @ kitco spot price. https://www.bitcoin.org/smf/index.php?topic=6497.0

I have not used the seller and do not know his shipping rates.

[hazek]

Yep it's growing and spreading.

There's also already been an attempt to sell Bitcoin bonds and as far as I know the auction was successful and the bond bought, and at maturity paid out: http://www.bitcoin.org/smf/index.php?topic=5214.0

[IDefendThePlatform]

My question is still are we at risk of persecution like the liberty dollar people or was that different?

[hazek]

My question is still are we at risk of persecution like the liberty dollar people or was that different?

Liberty dollar had a central authority which was issuing the currency and could be and was targeted in order to shut it down. All the state could do to fight Bitcoin is to go after every single user across the globe. Anything less than that would be meaningless because it's a decentralized currency with no single point of failure.

So yes, there's a risk I'd say of you personally getting targeted for using Bitcoins but Bitcoin itself can't be shut down if just one user gets targeted.

[Kludge]

Successfully traded first two BTC for $7.50 :cool:

[Kludge]

My question is still are we at risk of persecution like the liberty dollar people or was that different?
The other major difference is that Bitcoin isn't committing fraud. Liberty Dollar was slammed so hard because they sold $5 of silver and said the MSRP is $20 and that's what you should trade it for in USD, which fucks the person who's accepting the LDs. The value of Bitcoins is legitimate as its value is determined by the market, not set arbitrarily by someone making a profit. ... Well, I guess it could if someone tried to "corner" the BTC market, but that probably won't be even remotely possible for another year or two when BTC mining is near-impossible.

[steve005]

what happens when the internet gets shut down?

[Kludge]

Mining protip: Setting mem clock on GPU low may have a positive effect on your hash rate and will definitely lower your GPU temp & power draw. http://www.bitcoin.org/smf/index.php?topic=4292.0

I set the mem clock on my Nvidia card as low as I could (which is still too high, but the workaround to set mem clock lower on Afterburner only works for ATI cards) and consistently saw a temp drop of 3*C which means a decreased power draw. My hash rate remained unchanged.

[hazek]

what happens when the internet gets shut down?

It would have to happen on a global scale for Bitcoin to stop. And if it only happens to you then your Bitcoins are safe and you'll be able to trade them as soon as you regain a connection from anywhere with your wallet.dat file.

[Indy Vidual]

The other major difference is that Bitcoin isn't committing fraud. Liberty Dollar was slammed so hard because they sold $5 of silver and said the MSRP is $20 and that's what you should trade it for in USD...

Fraud is too harsh, IMO. I bought a 1 OZ silver Liberty Dollar for $10 when silver was ~$6.50/OZ, and if I could do it over I would have bought several more at the same time.


Successfully traded first two BTC for $7.50 :cool:

Nice going Kludge :)
You figured out how to get some...

[FreedomProsperityPeace]

I just learned about Bitcoins and my mind is blown. :eek: The ramifications of this are huge. If this blows up fast like other internet phenomena like Twitter, couldn't Crypto Currency destroy the dollar and send the economy into a tailspin?

I mean, who wouldn't rather have a Bitcoin than a dollar that is rapidly losing value? The world is demanding another reserve currency right now.

[hazek]

I just learned about Bitcoins and my mind is blown. :eek: The ramifications of this are huge. If this blows up fast like other internet phenomena like Twitter, couldn't Crypto Currency destroy the dollar and send the economy into a tailspin?

I mean, who wouldn't rather have a Bitcoin than a dollar that is rapidly losing value? The world is demanding another reserve currency right now.

That's exactly what I thought when I first learned about Bitcoins back in February and I really hope it delivers. So far so good too!

[Kludge]

Difficulty of mining has just soared something like 50%, and interestingly, so has the price of BTC (from ~3.7 USD per BTC to ~4.7 USD per BTC). I'm quite impressed with how quickly the market responded to this change.

Knowing when the difficulty will increase and by how much is somewhat privileged information as many involved with bitcoins are not involved with mining. People who hoarded BTC prior to the recent difficulty increase are seeing a very, very quick value increase of ~33%. This presents an odd inefficiency (and arguably unfair advantage) in the market until BTC mining becomes impossible.

It's also somewhat interesting to know that the hundredth column generally thought to be the lowest usable denomination of BTC will probably end up being way too large due to "difficulty deflation." A "penny" in BTC is worth a "nickel" in USD. This also means the cost per transaction will be extremely high by 2013 as it's generally accepted you should pay .01 BTC (you can't set it any lower ATM, I believe) per transaction so it gets priority in network traffic (rather, your transaction will be confirmed in a timely manner). Products which used to run 1 BTC are now worth ~.66 BTC (though I doubt many will be adjusting for deflation...) which means the transaction fee % of a formerly 1 BTC transaction becomes ~1.5% instead of 1%.

[hazek]

Yeah the difficulty jump was quite severe and worse yet I don't see it slowing down especially with the exponentially growing enthusiasm around it.

But the price of Bitcoins in terms of dollars readjusting as fast as it did I think is only understandable. I mean the higher the difficulty less the number of people who can still mine profitably with their current hardware. So their only chance of getting some becomes either to earn some or buy some which pushes the demand and consequently the price up. And although I understand your "inefficiency (and arguably unfair advantage)" comment I think it's a bit misguided. Sure those who have a lot of Bitcoins saw an almost instant increase in their value but the rest of us should experience lower prices because of it. I disagree with you about prices staying the same and I think the merchants will factor in deflation as much as they'll have to if they want to keep their customers.

But all of that aside I can't express how excited I am about Bitcoin and this socio-economical experiment where we have no authority but merely the market regulating it's self. It's beautiful and fascinating to watch!

[jclay2]

Why would someone need bitcoins when they can have gold/silver? A bird in the hand is worth two in the bush.

[hazek]

Why would someone need bitcoins when they can have gold/silver? A bird in the hand is worth two in the bush.

It's a secure digital currency without a central authority or anyone else having the power to take your money or counterfeit(print more) meanwhile you can store it on for example a USB stick and send whatever amount you want via peer2peer network to anyone else around the world within seconds at almost no costs and with no middlemen and no one being able to stop it. Are you starting to get the picture why it might be appealing to some?

EDIT: Basically if the state that wants to have a monopoly on money were to have dreams, Bitcoin would be it's worst nightmare :)

[farrar]

Why would someone need bitcoins when they can have gold/silver? A bird in the hand is worth two in the bush.

why would someone need gold or silver when they have dollars or euros? Why would someone need a Dollar when they could have an acorn?

Its preference, It is not just about gold and silver, it is about competing currencies. If bitcoins don't float your boat thats fine. Doesn't mean they are unnecessary or that others don't find them enchanting. Bitcoin right now, is just a child. If it is something one likes, they often do what they can to contribute to the economy to help it grow. It may not be viable as a major currency today, but it never will be if no one tries to use it.

Bitcoins also offer a greater kind of anonymity. thats why one of the first businesses to emerge from bitcoin was selling pot and other drugs of the sort. Not that, that is the only industry, just highlighting a capability.

[hazek]

Btw:

Summary

Last Trade $5.10229

Change +1.30229 34.27%

Previous Close $3.8

Open $3.81

Best Bid $5.1018

Best Ask $5.1479

Trade Time May 10, 2011, 17:55:56

Day's Range $3.81 — $5.2

# of Trades 957

Weighted Price (30d) $2.05

Day's Volume 38,911.737 BTC

Day's Volume (Currency) $173,168.36 USD

Symbol mtgoxUSD

CurrencyUSD / Liberty Reserve

Website https://mtgox.com/



EDIT: Oh and let's not spread any myths about it either. It doesn't offer anonymity but pseudonymity and even that only if with the proper precautions.

[Indy Vidual]

When I first saw Bitcoins they were at $0.05/btc ~5 cents each
They had recently increased 10x up from $0.0045 / less than 1/2 a penny each

I didn't buy any since they were up 10x they "looked a bit too high"

Today:
Last Price: $5.70/btc High:5.99 ...Volume: 56299


In a little over a year, Bitcoins have increased over 1,200x (not 1,200%, 1,200 times)
The increase is over 120,000% :eek:


An investment of $10,000 would be worth over $12,000,000 today.

I think that math is ~ correct, let me know if I'm wrong.

[Michael P]

What if I have a shitload of Bitcoins on my computer and it craps out, or is stolen or my house burns down... would i then be SoL?

[hazek]

What if I have a shitload of Bitcoins in my wallet and my dog eats it, or is stolen or my house burns down... would i then be SoL?

There, I fixed your question into a rhetorical one.

EDIT: of course unlike a wallet for fiat paper money you can have your wallet.dat file encrypted and uploaded onto a server, USB stick or other data storage devices.

EDIT2: or you can use an online wallet service where your wallet.dat file is on a secure server to begin with ;)

[jclay2]

When I first saw Bitcoins they were at $0.05/btc ~5 cents each
They had recently increased 10x up from $0.0045 / less than 1/2 a penny each

I didn't buy any since they were up 10x they "looked a bit too high"

Today:
Last Price: $5.70/btc High:5.99 ...Volume: 56299


In a little over a year, Bitcoins have increased over 1,200x (not 1,200%, 1,200 times)
The increase is over 120,000% :eek:


An investment of $10,000 would be worth over $12,000,000 today.

I think that math is ~ correct, let me know if I'm wrong.

Has anyone tested the liquidity of the bitcoin market. My guess is that any order for bitcoins, even in the thousands of dollars would push bitcoins into haywire territory.

[japes]

...So yes, there's a risk I'd say of you personally getting targeted for using Bitcoins but Bitcoin itself can't be shut down if just one user gets targeted.

First of all, I'm totally fascinated by bitcoin. I think it's an amazing idea and I'll probably start mining some coins when I have a minute to set things up. But the government does not needs to go after every user individually to kill it. If bitcoin currency was made illegal to own (just like gold under FDR) it would be pretty easy to shut it down. The transactions are broadcast in a well defined format and it would be trivial to block them on any port. It would only take blocking this traffic at some of the major hubs in the US to cause severe disruption. Add to that a law that requires all ISP's to block this traffic and it's over. I'm sure the bitcoin developers could try to outsmart the network sniffers by modifying the software but this would begin a technology war and cause endless cycles of disruption. The one consolation I have with owning physical gold and silver is if outlawed (again) the government will REALLY have to come to me to get it. If I manage to hang on to it, I can still use it as a barter item in a black market. I don't see how the bitcoin network can work in a black market (call it bit-con) very effectively. As much as I love the idea from a free market perspective I prefer a currency where the only way it can be taken from me is when it's pulled from my cold, dead hands.

[Indy Vidual]

First of all, I'm totally fascinated by bitcoin. I think it's an amazing idea and I'll probably start mining some coins when I have a minute to set things up. But the government does not needs to go after every user individually to kill it....

Using Tor helps make Bitcoin unstoppable (we'll see, I don't know for certain)



Has anyone tested the liquidity of the bitcoin market. My guess is that any order for bitcoins, even in the thousands of dollars would push bitcoins into haywire territory.

Liquidity has gotten somewhat good.
The volume*price in the example I posted = $320,904 (which is based on the new record highs in price)
So "Yes" the market can easily handle thousands of dollars. Truly large orders you would want to break into smaller amounts.

/I'm not trading yet, just watching, so far.

[hazek]

But the government does not needs to go after every user individually to kill it. If bitcoin currency was made illegal to own (just like gold under FDR) it would be pretty easy to shut it down. The transactions are broadcast in a well defined format and it would be trivial to block them on any port. It would only take blocking this traffic at some of the major hubs in the US to cause severe disruption. Add to that a law that requires all ISP's to block this traffic and it's over.

If they could have they would have done it with bittorrent. Bitcoin is using the same method to run it's network. It's impossible to stop unless you kill all the nodes running the network or the internet across the globe. There's just no other way.

But you're right. Governments could make owning Bitcoins illegal just like they made drugs illegal for example. I'm wondering about this part myself. Because I keep trying to come up with ways to trade Bitcoins locally, in person and for cash without giving away my identity or getting setup by government thugs. But I bet people would find ways just like they do for selling and getting drugs. We might have street corners with Bitcoin traders and you'll drive up your car like you do right now to buy drugs lol :D

[Michael P]

There, I fixed your question into a rhetorical one.

EDIT: of course unlike a wallet for fiat paper money you can have your wallet.dat file encrypted and uploaded onto a server, USB stick or other data storage devices.

EDIT2: or you can use an online wallet service where your wallet.dat file is on a secure server to begin with ;)

You answered my question with your edits thanks. I was going to say I don't keep all my cash in my wallet but the online wallet service could be like a checking or savings account. Sounds pretty good, I might sell some old baseball cards for Bitcoins just to mess around with it.

[hazek]

A new decentralized local exchange is launching today -> http://ubitex.org/
(their business plan: https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0B9nmvtGhqxJfNTBjZjhiZTQtNjI1ZS00MGIyLWI5OGI tODQwNTFhZjJlMGFm&hl=en&authkey=CLi6ha0H)

Still in beta though but if this takes off the problem of bootstrapping to the local economies will be gone forever :D

Also they launched a Bitcoin stock exchange: http://glbse.com/

I really believe that if this technology can withstand all the attacks and can maintain all the promised integrity it will change the world as we know it. It could be our next step in the evolution as a society moving away from the state and towards anarcho-capitalism. Oh how I wish I did just that.

[japes]

If they could have they would have done it with bittorrent. Bitcoin is using the same method to run it's network. It's impossible to stop unless you kill all the nodes running the network or the internet across the globe. There's just no other way.

But you're right. Governments could make owning Bitcoins illegal just like they made drugs illegal for example. I'm wondering about this part myself. Because I keep trying to come up with ways to trade Bitcoins locally, in person and for cash without giving away my identity or getting setup by government thugs. But I bet people would find ways just like they do for selling and getting drugs. We might have street corners with Bitcoin traders and you'll drive up your car like you do right now to buy drugs lol :D

It's easy to block bittorrent traffic. I owned and ran a small ISP for years. I managed hundreds of routers. We could identify bittorrent traffic and give it more or less priority. We could even block it. In fact we were required by the FBI to have the ability to sniff and retain ANY traffic from any customer on our network at a moments notice. Every ISP in the USA must comply with CALEA laws: http://en.wikipedia.org/wiki/Communications_Assistance_for_Law_Enforcement_Act

Please don't misunderstand me on this one. I really like bitcoins as a currency. I think you came up with a good solution. You need to be able to trade bitcoins in person because if a transaction goes through a router it can be identified and blocked. And no, Tor does not help here. Tor makes you anonymous but the traffic can still be blocked. I'm not sure how the in-person thing will work since every transaction is supposed to be propagated out to the whole network. This will need to be resolved because if bitcoin continues to grow like this it will compete against the banking cartel and their fiat. The government hates competition and they will outlaw it. We'll see how the bitcoin development community handles this. They've been pretty damn clever so far.

[hazek]

I appreciate your open mind but..

.. let me get this straight. It's possible to block torrents and yet we still have a web full of torrents of illegal coppies of various data working? How am I suppose to process that? I also have a bit of ISP knowledge myself since I worked at a phone support desktop of the 2nd largest ISP in my country so forgive me for not taking your word for it but you'll have to show me how in the technical sense someone can block peer2peer communication before I'll believe you.

[hazek]

You need to be able to trade bitcoins in person because if a transaction goes through a router it can be identified and blocked.

Trading locally only means that you pay with cash fiat money but the Bitcoin side of the transaction still needs to happen online.

[japes]

I appreciate your open mind but..

.. let me get this straight. It's possible to block torrents and yet we still have a web full of torrents of illegal coppies of various data working? How am I suppose to process that? I also have a bit of ISP knowledge myself since I worked at a phone support desktop of the 2nd largest ISP in my country so forgive me for not taking your word for it but you'll have to show me how in the technical sense someone can block peer2peer communication before I'll believe you.

I don't expect you to take my word for it. I'm glad you don't.

In my business we used Mikrotik routers mostly. A very simple filter rule could be applied to drop all bitTorrent traffic. See this forum for a short discussion on it: http://forum.mikrotik.com/viewtopic.php?f=7&t=19613

I can delve into more technical details, as deeply as you want on this.

The reason bitTorrent traffic is not blocked everywhere is because it is not illegal. In fact, because of net neutrality laws an ISP can face legal challenges for blocking or slowing bitTorrent traffic (or any other traffic). I know Comcast has been challenged on this in the past and lost (http://news.cnet.com/8301-13578_3-10004508-38.html). Yes, bitTorrent is used for illegal purposes but the copyright lawyers have chosen to go after individuals or ISP's rather than try to change net neutrality laws. I can't tell you how many "Cease and Desist Infringement of Copyrights" notices I received as an ISP. The last one I got was from the "Zappa Family Trust". Some guy on my network was illegally downloading a song by Frank Zappa called "Titties & Beer". That's the kind of ridiculous crap you have to deal with as an ISP. Don't get me started. Anyway, in that particular case if I didn't remedy the situation the lawyers would target my upstream provider who would then cut me off. My whole business could be wiped out by one asshole downloading "Titties and Beer".

I don't think Bitcoin and bitTorrent will be treated the same by the FCC. Bitcoin is a challenge to the government's power and they will hammer it if they feel threatened. Can Bitcoin survive in a black market scenario? I think so but it will be an arms race. Bitcoin will need to constantly modify their network traffic to get around the traffic filters. This might be tolerable by the market if the rest of the world has gone to shit.

[hazek]

Interesting. I think you should make a post about it on the bitcoin forums and see how people respond. I already made one but I don't think I fully captured your point as I spent only 5 sec on it:P

http://www.bitcoin.org/smf/index.php?topic=7963.0

[hazek]

This Week in Startups: TWiST #140: Bitcoin, with Gavin Andresen and Amir Taaki


http://www.youtube.com/watch?v=TwNfBgwbqng

[Kludge]

Yeah, I'm at 750 MH/s and'll be at 2.8 GH/s by next week. :cool:

All the lesser nerds be like "gimme yo BTC" and I'm like "no," because I'm too cool. I walk down the street with a shirt which displays my current BTC balance and hash rate via LEDs and people be in awe. Man, I shell this shit out pimp-style. I don't take no shit -- I'm a tough guy on the Internet.

http://www.motleycrow.com/ImageHost/E-thug.jpg



That's right - I consume 48 KWH every fucking day to arbitrarily produce an ecurrency, and feels good, man. I don't give a shit about the environment. Fuck the environment, and fuck you. I'm making big cash and playas be hatin'. F'real, fuck you -- my mansion gun'ave so many fucking trees, man... Gonna be DElluting the planet. Shit.

Ooooh -- Kludge uses his processors for profit, not curing cancer. Fuck cancer -- I hear the other day some niggas get a "warm fuzzy feeling" because they killin' aww planet for marginal (if any) contribution to curing illnesses which rightfully thin our herd. I hear one -- no shit -- he say it's his purpose in life. Shit, man - fuck dem niggas.

[Indy Vidual]

Yeah, I'm at 750 MH/s and'll be at 2.8 GH/s by next week. :cool:

All the lesser nerds be like "gimme yo BTC" and I'm like "no," because I'm too cool. I walk down the street with a shirt which displays my current BTC balance and hash rate via LEDs and people be in awe. Man, I shell this shit out pimp-style. I don't take no shit -- I'm a tough guy on the Internet.

http://www.motleycrow.com/ImageHost/E-thug.jpg



That's right - I consume 48 KWH every fucking day to arbitrarily produce an ecurrency, and feels good, man. I don't give a shit about the environment. Fuck the environment, and fuck you. I'm making big cash and playas be hatin'. F'real, fuck you -- my mansion gun'ave so many fucking trees, man... Gonna be DElluting the planet. Shit.

Ooooh -- Kludge uses his processors for profit, not curing cancer. Fuck cancer -- I hear the other day some niggas get a "warm fuzzy feeling" because they killin' aww planet for marginal (if any) contribution to curing illnesses which rightfully thin our herd. I hear one -- no shit -- he say it's his purpose in life. Shit, man - fuck dem niggas.

In case anyone has any doubt:

Dr. Ron Paul does not endorse this message. :p

[Kludge]

BTC now up to $7.40 USD. Been skyrocketing all day.

I wonder how many people are caught in trap hoarding BTC. Let's say you earn 50 BTC every month, and every two months, mining difficulty increases 10-50% (as well as the price for BTC). You could cash in at any time, but know that in a couple months, your cache of BTC will dramatically increase in value because the difficulty of mining has increased.

I wonder how many people are not mining, but purchasing BTC as much as they can now just to hold it while prices and difficulty skyrocket.

I wonder at what point they dump their BTC.

Trading, really, does not appear to make up a very significant portion of BTC's existence. All the trading forums/sites accepting BTC appear very barren, and (with a few excellent exceptions) many are overpriced. While acceptance of BTC may increase, it's very difficult to sell for it because of how rapidly the price fluctuates.

[hazek]

it's a true free market in action. We'll just have to wait and see it play out :P It's very interesting for me to watch this pure demand/supply working towards the right price.

[Kludge]

The idea that I'm effectively making $50 per day and once my other graphics card arrive, will possibly hit over $200/day for an initial investment of $2k and roughly $115/mo in electricity is mind-boggling.

[Omphfullas Zamboni]

I've been trying to transfer funds from my savings account to dwolla so that I can buy BitCoins from mtgox exchange. I've been waiting for the funds to transfer since these things were $5.50. It's killing me.

[hazek]

I've been trying to transfer funds from my savings account to dwolla so that I can buy BitCoins from mtgox exchange. I've been waiting for the funds to transfer since these things were $5.50. It's killing me.

Argh uff that sucks for you :S

[Omphfullas Zamboni]

Argh uff that sucks for you :S

With the full understanding that you are pro-BitCoin, an anonymous person from the Internet, and not presuming to give any financial advice – how bullish are you on BitCoins? I find it peculiar that these have risen to seven dollars but the amount of retail outlets that will sell you goods based on BitCoin payments is still few. What do you make of that?

[hazek]

I think it's overpriced probably and in a mania state. I suspect people are buying Bitcoins because they speculate they'll be able to sell them for more later on. I think we still have a way to go before the bubble pops, especially with the exponentially growing awareness. So yea I'm bullish, trying to buy some right now with my pokerstars currency.

I think the biggest risk with Bitcoins is if it's integrity gets compromised by an attack. If it can maintain what it promises from a technical standpoint I feel it will only spread and grow and it's price rise until the demand is met. At that point the price will probably overshoot but I don't believe it will ever be worth less then at least $2 IMO anymore unless of course as I said something goes wrong from a technical standpoint..

I own 0.49BTC right now and I'm looking to buy 10 and just hold onto them. Maybe day trade a bit :) I also am thinking about setting up an exchange service website.

And that's as honest and open I can be on this topic.

[Kludge]

BTC's bubble may finally burst. More than doubled in value to USD in a week from ~$3.50 to ~$8.75 yesterday. Now down to $7.50 and there isn't much bid resistance until it hits ~$6.80. Also not much ask resistance up to ~$8.35. Could swing either way, but it will be a big swing.

From Mt Gox:
http://imageshack.us/m/7/6617/btctradedata.jpg

[hazek]

yep yep, the supply is overwhelming the demand right now..

[hugolp]

About time. This increase was insane. Hopefully the speculation will stop a bit now.

[Omphfullas Zamboni]

My Dwalla account was verified on Thursday and I have to wait three more business days to get the funds into the account from my bank. Stupid ye-olde-fashioned financial system. I missed the bubble, altogether. :-(

[hazek]

You and me both buddy. Worst thing yet, someone payed be 2BTC for a favor and I got them just as it was poping so I quickly sent it to mtgox to make a few free cents speculating and the time it took to confirm and get added to my balance the price bottomed and I was in such a rush I didn't notice the support so I sold at the bottom of 5.8 :( and am now still waiting to buy back at 5.6

[Churchill2004]

Tried to convince my roommate to put $5,000 in when they were at 0.80. We're all kicking ourselves pretty hard right now over that one.

Thinking we'll buy in now if they get down to ~5.50-5.00.

[Kludge]

About time. This increase was insane. Hopefully the speculation will stop a bit now.

I've already made a small purchase @ $6.5 & if I can get my Dwolla account tied to my bank account soon, I plan on keeping the price at most as low as $7. I think the market's over-corrected at this point and we'll be seeing a lot of over-leveraged "professional" BTC miners backing out because of it. It's an unpopular opinion on the Bitcoin forum, but I'm convinced the price of BTC is tied almost exclusively to how much USD it costs to produce the average BTC. I think simply because of that and how quickly difficulty increases in BTC mining, BTC will always be rising at a pace of at least 15% per month.

There're a lot of really inefficient miners out there, purchasing $700-900 graphics cards which put out the same hash rate as 2 $160 cards and manage to draw even more electricity. I mean... there was actually someone who was talking about how they put 12 gb of RAM in their mining rig. Someone thought they needed a 1.2KW power supply for two 5970s. -- Just inexcusable wastes of money on their builds. I think because the market is adjusting for those cost-inefficient kinds of people, profit margins of efficient miners will always remain high.

[steve005]

You guys are throwing your money away, its a marketing scheme, and going up because your telling all your friends. You would be way better off getting some 100 dollar boxes of nickels, they are already worth around 130% more than face value in melt value, which would be the perfect barter item in a shtf senerio, or pre 1982 pennies, just sort with scale or buy sorter, they are worth almost 300% face value, and around 25% of all pennies are pre 1982

[Kludge]

You guys are throwing your money away, its a marketing scheme, and going up because your telling all your friends. You would be way better off getting some 100 dollar boxes of nickels, they are already worth around 130% more than face value in melt value, which would be the perfect barter item in a shtf senerio, or pre 1982 pennies, just sort with scale or buy sorter, they are worth almost 300% face value, and around 25% of all pennies are pre 1982
One of the more remarkable things I've been noticing lately is the greatly increased offering of products and services.

Silver can be bought @ spot using BTC now. There are other services offering, for example, the purchasing of computer components through sites like Newegg using BTC. People are very willing to part with their bulky metals for a convenient, secure, anonymous currency.

PMs do not allow for the type of convenience Bitcoins do which is necessary in a digital age. Trying to exchange silver for programming services, for example, adds days (weeks, possibly, if international) of wait as it ships, on top of high shipping charges. It's especially problematic because markets operate most efficiently when as large as possible, which just can't happen when you're restricted to local markets due to the weight and relative inconvenience of PMs. BTC, with the help of mature laundering services, is now truly anonymous, too.

[Omphfullas Zamboni]

Kludge
There're a lot of really inefficient miners out there, purchasing $700-900 graphics cards which put out the same hash rate as 2 $160 cards and manage to draw even more electricity. I mean... there was actually someone who was talking about how they put 12 gb of RAM in their mining rig. Someone thought they needed a 1.2KW power supply for two 5970s. -- Just inexcusable wastes of money on their builds. I think because the market is adjusting for those cost-inefficient kinds of people, profit margins of efficient miners will always remain high.

If I am correct in thinking that you do some BitCoin mining, would you mind posting the specifications for a cost-friendly mining rig? I was looking at some prebuilt systems which tend to cost between $1000 and $2000. That seems high…

Furthermore, I won't suppose you would know approximately how long it would take mining BitCoins before you recovered your initial investment/the cost of the rig? Let's say I was using a system with two graphics cards. I'm sort of inclined to try out this whole mining thing.

[hazek]

Furthermore, I won't suppose you would know approximately how long it would take mining BitCoins before you recovered your initial investment/the cost of the rig? Let's say I was using a system with two graphics cards. I'm sort of inclined to try out this whole mining thing.

Find the wiki page where they have all the graphic cards listed and their hashing speeds and then go to http://deepbit.net/stats.php and enter it at the top right side, see how much you'll get per day and multiply with the price.

[Kludge]

If I am correct in thinking that you do some BitCoin mining, would you mind posting the specifications for a cost-friendly mining rig? I was looking at some prebuilt systems which tend to cost between $1000 and $2000. That seems high…

Furthermore, I won't suppose you would know approximately how long it would take mining BitCoins before you recovered your initial investment/the cost of the rig? Let's say I was using a system with two graphics cards. I'm sort of inclined to try out this whole mining thing.

I've put together 4 rigs with 8 5850s @ $2k (no cases or OSes are being used) for a mining output of 14-22 BTC (at current price of $8.70, translates to $121.80-$191.40 per day -- you can figure out time to pay off initial investment ;) ). I'd give you my list but 3/6 of the parts I used are out of stock. All that matters is the video cards. They consume the majority of the build budget, and almost the entirety of the electricity budget. Here's what you'll want for mining with 2+ cards:

*2Ghz+ dual-core processor. Don't bother considering Intel.
*MoBo with crossfire support (and on-board power/reset button for convenience's sake if you opt out of using a case)
*Suitable power supply. Should be Active PFC with 80+ efficiency. 550w+ is suitable for a mining rig with 2 OCd 5850s (and nothing else!).
*ATI graphics card. I got my 5850s at $145 through MIRs making it a no-brainer, but stock issues with ATI cards are becoming pretty difficult to work with. Whatever you do, don't buy Visiontek. I'm using ASUS cards which have excellent build quality. It OCs very high and stays under 60*C even on the hottest days (with the help of two window fans and another high velocity fan on the desk with them :p ). Sapphire cards also have excellent build quality and performance. Check out https://en.bitcoin.it/wiki/Mining_hardware_comparison for the essential gfx card stats.
*A suitable line going up to your mining rigs. Seriously, don't neglect to understand what your breaker's rated at. Had I put all 4 computers (and fans) on the one 15a-rated line going to the room they're held in, I'd either have tripped the breaker or burned down the house.
*No more than 1gb of RAM.
*Any hard drive with at least 10gb capacity (20gb+ if you use Vista/Win7). Don't pay retail for tiny hard drives. See if you can buy used off Craigslist or Ebay first. The hard drives will hardly be used. Alternately, you can run Ubuntu (and any other Linux distro) off a USB drive.



Outside of that, you'll want a reliable Internet connection where the PCs are, probably VNC software (I've been testing with UltraVNC with decent success), as well as a good 4+ port KVM switch to make installation super-easy. I grabbed a $30 4-port Rosewill switch (http://www.newegg.com/Product/Product.aspx?Item=N82E16817182158) off Newegg -- great buy.

Once the hardware's assembled, get familiar with MSI Afterburner (free (http://event.msi.com/vga/afterburner/download.htm) -- don't forget to downclock your mem speeds (http://www.bitcoin.org/smf/index.php?topic=4292.20)!), install ATI SDK - this enables OpenCL processing on graphics card, 2.1 recommended (free (http://developer.amd.com/gpu/AMDAPPSDK/downloads/pages/AMDAPPSDKDownloadArchive.aspx)), and of course, the ATI graphics driver - 10.11 recommended (free (http://support.amd.com/us/gpudownload/windows/previous/10/Pages/radeon.aspx?os=Windows%20Vista%20-%2064-Bit%20Edition&rev=10.11)). You'll need to find a miner to use, too. If you don't want to mess around with a command line, GUIminer's very easy to use.

Another quick note -- if you mine in Crossfire, set the -f parameter on your miner to a minimum or 80. Play around with it. Setting that parameter high may improve performance if the cards are working independently, too. You'll probably want to join a pool, too. I personally use BTCmine.com due to the pool features, ability to set pool owner's cut, and owner's very watchful eye to prevent scoring system exploiters, but there's a good list @ https://en.bitcoin.it/wiki/Pooled_mining

P.S. I now claim .5% of whatever you mine. Don't forget to make regular payments to 1H8wCNyS1m7Zu1fCyfQbCDALJcQ2VCU5Ho :p

[hazek]

P.S. I now claim .5% of whatever you mine. Don't forget to make regular payments to 1H8wCNyS1m7Zu1fCyfQbCDALJcQ2VCU5Ho :p

lol :D

[EndDaFed]

A room full of hot video cards would be nice for the winter :O Making bit coins might prove more useful in climates that are cold almost year round. Free heating if you can make enough coins. lol

[hazek]

LOL it being in a digital form is so much fun. So many new interesting tools are popping up.

Look at this ticker:
http://oneminuteslow.com/bitcoin/180-240.png

from: http://forum.bitcoin.org/index.php?topic=8895.0

[hugolp]

I've put together 4 rigs with 8 5850s @ $2k (no cases or OSes are being used) for a mining output of 14-22 BTC (at current price of $8.70, translates to $121.80-$191.40 per day -- you can figure out time to pay off initial investment ;) ). I'd give you my list but 3/6 of the parts I used are out of stock. All that matters is the video cards. They consume the majority of the build budget, and almost the entirety of the electricity budget. Here's what you'll want for mining with 2+ cards:

*2Ghz+ dual-core processor. Don't bother considering Intel.
*MoBo with crossfire support (and on-board power/reset button for convenience's sake if you opt out of using a case)
*Suitable power supply. Should be Active PFC with 80+ efficiency. 550w+ is suitable for a mining rig with 2 OCd 5850s (and nothing else!).
*ATI graphics card. I got my 5850s at $145 through MIRs making it a no-brainer, but stock issues with ATI cards are becoming pretty difficult to work with. Whatever you do, don't buy Visiontek. I'm using ASUS cards which have excellent build quality. It OCs very high and stays under 60*C even on the hottest days (with the help of two window fans and another high velocity fan on the desk with them :p ). Sapphire cards also have excellent build quality and performance. Check out https://en.bitcoin.it/wiki/Mining_hardware_comparison for the essential gfx card stats.
*A suitable line going up to your mining rigs. Seriously, don't neglect to understand what your breaker's rated at. Had I put all 4 computers (and fans) on the one 15a-rated line going to the room they're held in, I'd either have tripped the breaker or burned down the house.
*No more than 1gb of RAM.
*Any hard drive with at least 10gb capacity (20gb+ if you use Vista/Win7). Don't pay retail for tiny hard drives. See if you can buy used off Craigslist or Ebay first. The hard drives will hardly be used. Alternately, you can run Ubuntu (and any other Linux distro) off a USB drive.



Outside of that, you'll want a reliable Internet connection where the PCs are, probably VNC software (I've been testing with UltraVNC with decent success), as well as a good 4+ port KVM switch to make installation super-easy. I grabbed a $30 4-port Rosewill switch (http://www.newegg.com/Product/Product.aspx?Item=N82E16817182158) off Newegg -- great buy.

Once the hardware's assembled, get familiar with MSI Afterburner (free (http://event.msi.com/vga/afterburner/download.htm) -- don't forget to downclock your mem speeds (http://www.bitcoin.org/smf/index.php?topic=4292.20)!), install ATI SDK - this enables OpenCL processing on graphics card, 2.1 recommended (free (http://developer.amd.com/gpu/AMDAPPSDK/downloads/pages/AMDAPPSDKDownloadArchive.aspx)), and of course, the ATI graphics driver - 10.11 recommended (free (http://support.amd.com/us/gpudownload/windows/previous/10/Pages/radeon.aspx?os=Windows%20Vista%20-%2064-Bit%20Edition&rev=10.11)). You'll need to find a miner to use, too. If you don't want to mess around with a command line, GUIminer's very easy to use.

Another quick note -- if you mine in Crossfire, set the -f parameter on your miner to a minimum or 80. Play around with it. Setting that parameter high may improve performance if the cards are working independently, too. You'll probably want to join a pool, too. I personally use BTCmine.com due to the pool features, ability to set pool owner's cut, and owner's very watchful eye to prevent scoring system exploiters, but there's a good list @ https://en.bitcoin.it/wiki/Pooled_mining

P.S. I now claim .5% of whatever you mine. Don't forget to make regular payments to 1H8wCNyS1m7Zu1fCyfQbCDALJcQ2VCU5Ho :p

Can we see some pictures of the whole thing?

[Kludge]

Can we see some pictures of the whole thing?
http://img839.imageshack.us/img839/73/rigsa.jpg

[hugolp]

http://img839.imageshack.us/img839/73/rigsa.jpg

Nice. Very nice.

Is that your kitchen (and your dog in the bottom right?). Wonder what your wife thinks of all this. Which OS are they running?

PS: Are you still missing one video card on one motherboard (bottom right) or is there only one for some reason? I also wonder why you decided to go without cages since they are quite cheap and helps keeping out the dust.

[Kludge]

Nice. Very nice.

[1]Is that your kitchen (and your dog in the bottom right?). [2]Wonder what your wife thinks of all this. [3]Which OS are they running?

PS: [4]Are you still missing one video card on one motherboard (bottom right) or is there only one for some reason?[5] I also wonder why you decided to go without cages since they are quite cheap and helps keeping out the dust.
1 - Upstairs unused space. (and yes :) )
2 - Room's pretty much on the opposite side of the house and on a different level from where she usually resides. The sound of the fans when at full blast is audible throughout, however.
3 - Windows. Had a copy on a disc and it's pretty much just plug-n-play, with no hash rate dip vs. Linux except that I need to get dummy plugs set up (waiting for resistors to ship -- Radio Shack doesn't carry anything worthwhile anymore) so I can get out of Crossfire which does cause a minor performance hit.
4 - Waiting on a cable to arrive which will provide the 2nd gfx card with enough power to run. Somehow, I managed to lose the cables included with the power supply.
5 - They restrict airflow, take up space, are often heavy, cost money, and make installation significantly more tedious and frustrating. I've got a can of air on hand to clean components up real quick. Only one of the motherboards (the one I'm using for general computing as well as mining) has a power and reset button on it. It makes things move quicker during installation, but all the PCs are perfectly stable now, so I don't need them anyway. I am considering buying a case for the two near the window only because I'm worried I may be sleeping when a very windy rainstorm comes in.

[EndDaFed]

http://www.youtube.com/watch?v=FThX1cDg-tg

[Kludge]

Bitcoin is currently the #2 choice for show topic on Freedom Watch.

http://freedomwatch.uservoice.com/forums/16625-freedom-watch-show-ideas/suggestions/1778101-bitcoin

[hazek]

I think it's been 2nd for a while now.

[Kludge]

I think Silk Road makes a very strong argument in favor of BTC being here to stay for a long while. No currency can do its job more efficiently nor anonymously as BTC in evading USG drug prohibition laws. The (tor required!) address for Silk Road is http://ianxz6zefk72ulzz.onion . I believe Bitcoin will open up many, many new people to both evading USG drug prohibition laws and tax evasion, which I believe makes this the tool all agorists should be paying a lot of attention to. With Bitcoin, you can now easily evade taxes as a productive citizen, shipping product worldwide. The freedom facilitated by Bitcoin poses a serious threat to the legitimacy of the USG's belief that it has authority over its citizens.

[IDefendThePlatform]

I think Silk Road makes a very strong argument in favor of BTC being here to stay for a long while. No currency can do its job more efficiently nor anonymously as BTC in evading USG drug prohibition laws. The (tor required!) address for Silk Road is http://ianxz6zefk72ulzz.onion . I believe Bitcoin will open up many, many new people to both evading USG drug prohibition laws and tax evasion, which I believe makes this the tool all agorists should be paying a lot of attention to. With Bitcoin, you can now easily evade taxes as a productive citizen, shipping product worldwide. The freedom facilitated by Bitcoin poses a serious threat to the legitimacy of the USG's belief that it has authority over its citizens.

I'm prob misunderstanding, but doesn't every bitcoin include the info for where every other bitcoin is? Couldn't the government just buy 1 bitcoin and then "interrogate" it for the location of all the others, and hence, their owners?

What if the justice department raided the Mt. Gox servers like they've done with other cases?

I like bitcoins, I just bought some, but I'm kinda paranoid.

[Kludge]

[1]I'm prob misunderstanding, but doesn't every bitcoin include the info for where every other bitcoin is? Couldn't the government just buy 1 bitcoin and then "interrogate" it for the location of all the others, and hence, their owners?

[2]What if the justice department raided the Mt. Gox servers like they've done with other cases?

I like bitcoins, I just bought some, but I'm kinda paranoid.
[1] Short answer: No.

Long answer: A bitcoin is just a number which can be moved around through encrypted channels and are verified repeatedly (6 times by other members' Bitcoin clients after the transaction's block has been solved is generally the minimum before funds become available to you). However, information for where all bitcoins have been sent (not who has how many Bitcoins) is stored on "the network" which is available for view @ http://blockexplorer.com/ . With that said, you can create new Bitcoin addresses on demand (takes just a simple click of the mouse in the Bitcoin client), and people generally make a new address for each new transaction they make. As well, there are Bitcoin laundering services which break up transactions and move them around on the network to obfuscate what's going on. The only way to possibly identify all your addresses if someone took your wallet.dat file which would show (though the data on the file alone means nothing to a human reader) which addresses are yours. But even then, nothing's tied to your name. On top of that, there are many different BTC services which include their own e-wallet tied to your account. Silk Road and MtGox are two examples of sites which store your Bitcoins on their own servers (and MtGox is thoughtful enough to give a new receiving address each time you add Bitcoins to your MtGox wallet). It would be exceedingly difficult trying to figure out someone's assets and transactions without their wallet.dat file. And even then, the uber-paranoid use multiple wallets to make it an enormous chore to attempt to figure out the transactions and current holdings of a user even if they did manage to steal their wallet.dat. It's not a perfect system, but the government would have to use a crippling amount of resources and illegally steal data from users' computers to figure who has what and where it's going.

[2] There are other exchanges set up (most can be viewed here (http://bitcoincharts.com/markets/)). The community's gone over different scenarios where the USG bans USD<->BTC transactions as Paypal recently did, and the consensus is that we'd simply use other exchanges and continue with normal BTC<->goods/services transactions. - And a ban would probably be pretty ineffective anyway. It's easy to get around the Paypal ban, for instance, by simply not stating you're paying for Bitcoins, though this is unnecessary for US residents because a new (and better, IMO) service rose to the challenge called Dwolla which MtGox now uses instead of Paypal.

It is an eventual goal to have BTC completely independent of USD (that is, not being able to convert BTC to USD would not cause BTC to collapse), and because of the great leaps BTC is making in being adopted by traders, I don't think it's far off, if not already possible. Silk Road's popularity, for example, may stop BTC primarily being compared to the value of the USD, and instead have it compared to the value of a "basket of drugs," which I think is probably already doable if someone wants to put the time and effort into creating such a system. Beyond that, the community's exceptionally intelligent, and I don't think any hurdle could stop them. Everything would move to tor and the government would have even more trouble trying to regulate the web. Everything the government could do to these people would backfire on them.

Keep in mind that while I've read a lot about Bitcoins and talked to "professional" miners/traders, I am no expert on the matter. I have only been seriously interested in Bitcoins for ~3 weeks.

[losinglife]

Just found out about bitcoins about a week ago. Been running the program, no BTC yet tho :p.

I would love to see this be a sticky on here. Wich could include all info on BTC and how to set it up, how to keep it secure, reliable servers that can host the wallet file, ect. A nice easy 1-2-3 set up guide for everyone on here :).

Wish i had known about BTC when it started, just like everyone else :D

[Kludge]

Bitcoin is currently the #2 choice for show topic on Freedom Watch.

http://freedomwatch.uservoice.com/forums/16625-freedom-watch-show-ideas/suggestions/1778101-bitcoin
Within 300 votes!

[hugolp]

Just found out about bitcoins about a week ago. Been running the program, no BTC yet tho :p.

I would love to see this be a sticky on here. Wich could include all info on BTC and how to set it up, how to keep it secure, reliable servers that can host the wallet file, ect. A nice easy 1-2-3 set up guide for everyone on here :).

Wish i had known about BTC when it started, just like everyone else :D

Actually the bitcoin surge is only 3 or 4 months old, when the MSM started to publish some articles about it and people started to use it more.

If you are mining with your CPU it will probably take more than a year before you get any bitcoin. With the GPU's being used to mine and with some people buying dedicated equipment for it, you either go the same route or you forget about mining and try to work or sell in bitcoins to get any. I am not mining right now. Its useless without a good GPU.

[Omphfullas Zamboni]

is there still time to get into BitCoins before another surge? I just bought $700 worth of BitCoins at $6.68 and then, (sadly) flushed it down the toilet on coin toss games. I have never gambled before and I won't, again. Anyway, I will not be able to commit to more BitCoins until August. I hope I'm not too late. It's a really interesting idea, these coins.

[hazek]

I'm thinking about making a bitcoin for dummies video presentation because I still feel most people who come across articles about it or videos about it are left clueless.

What do you guys think, is there a need for such a video/presentation or do you think there's enough stuff out there already?


And LOL:

.. then, (sadly) flushed it down the toilet on coin toss games. I have never gambled before and I won't, again.

[Omphfullas Zamboni]

I'm thinking about making a bitcoin for dummies video presentation because I still feel most people who come across articles about it or videos about it are left clueless.

What do you guys think, is there a need for such a video/presentation or do you think there's enough stuff out there already?


And LOL:


Yes, I know. I'm not going to be able to live this down. If any of you would like to toss a spare coin to the whoops-I-spent-all-my-money-before-the-rapture strict financial prudence fund, here is my receiving address for BitCoin:
1Vit7GwPua7NEodASFiPn6h6nJhBWacDh

And I just noticed it's my 1000th post. Go figure.

[Kludge]

If you are mining with your CPU it will probably take more than a year before you get any bitcoin. With the GPU's being used to mine and with some people buying dedicated equipment for it, you either go the same route or you forget about mining and try to work or sell in bitcoins to get any. I am not mining right now. Its useless without a good GPU.
Mining pools are pretty popular ATM. Blocks are broken up into many shares, and every share counts for some BTC. Every time someone in the pool finds a block, the BTC reward is split up amongst everyone in it. Fees range from 0% (though transaction fees are generally withheld) to 5%. This greatly lessens the "luck" involved in solo mining (for example, thanks to being in a pool, I've received 90 BTC in payout so far but haven't found a single block) and allows even CPU miners to earn BTC.

I'm fond of BTCmine.com -- It has all the critical features, a nice webGUI, operates on the "score" system to prevent exploiters from "pool jumping," allows you to choose how much of your reward to donate to the pool operator as a fee, and sends email alerts if a miner goes down.

[Kludge]

is there still time to get into BitCoins before another surge?
For now, it seems primarily when the media covers Bitcoins that there's a huge boost to the price. BTC's been surprisingly stable the past few days, chilling out @ $6.90-$7.10. I bought in at the last "crash" a few days ago @ $6.08 :) -- I think it's at a pretty fair price right now for both miners and buyers. The stable price will hopefully encourage even more people to accept BTC for goods/services.

You seriously spent $700 on Internet coin toss games?

& yeah, couldn't hurt, hazek. I haven't found a video I like yet.

[losinglife]

Actually the bitcoin surge is only 3 or 4 months old, when the MSM started to publish some articles about it and people started to use it more.

If you are mining with your CPU it will probably take more than a year before you get any bitcoin. With the GPU's being used to mine and with some people buying dedicated equipment for it, you either go the same route or you forget about mining and try to work or sell in bitcoins to get any. I am not mining right now. Its useless without a good GPU.


Not sure wich i am mining with! I need to do more research or figure out how to make sure i am mining thru my gpu and not cpu. I figured it was auto on gpu from the second you run the program.

[hazek]

If you're mining from the official client it's 100% through your CPU.

[JamesButabi]

I wouldn't mind some resources on how to get started. This is intriguing

[losinglife]

son of a..... guess i gotta find another client then

[Bruno]

Just heard an NPR segment on bitcoins

[hugolp]

I'm thinking about making a bitcoin for dummies video presentation because I still feel most people who come across articles about it or videos about it are left clueless.

What do you guys think, is there a need for such a video/presentation or do you think there's enough stuff out there already?


& yeah, couldn't hurt, hazek. I haven't found a video I like yet.

What about his?:


http://www.youtube.com/watch?v=Um63OQz3bjo

[hugolp]

Mining pools are pretty popular ATM. Blocks are broken up into many shares, and every share counts for some BTC. Every time someone in the pool finds a block, the BTC reward is split up amongst everyone in it. Fees range from 0% (though transaction fees are generally withheld) to 5%. This greatly lessens the "luck" involved in solo mining (for example, thanks to being in a pool, I've received 90 BTC in payout so far but haven't found a single block) and allows even CPU miners to earn BTC.

I'm fond of BTCmine.com -- It has all the critical features, a nice webGUI, operates on the "score" system to prevent exploiters from "pool jumping," allows you to choose how much of your reward to donate to the pool operator as a fee, and sends email alerts if a miner goes down.

Yes, but if you are using the CPU your share of the thing would not be worth the electricity the CPU is consuming.


I wouldn't mind some resources on how to get started. This is intriguing

http://www.bitcoin.org

Lots of resources in the wiki. If you still have doubts there is a forum with a great community. If you ask here someone will answer too.


Just heard an NPR segment on bitcoins

I have not listened but someone said there were mistakes on what they said.

[Kludge]

son of a..... guess i gotta find another client then
GUIminer (http://forum.bitcoin.org/?topic=3878.0) is pretty much foolproof. Phoenix (http://forum.bitcoin.org/index.php?topic=6458.0) offers slightly better performance (significantly more with phat kernal (http://forum.bitcoin.org/?topic=7964.0)) Your card needs to support OpenCL or CUDA.



What about his?:


http://www.youtube.com/watch?v=Um63OQz3bjo
It doesn't explain why Bitcoins are secure, which I suspect is the most pressing issue for most people considering BTC.

[hazek]

Yeah that video IMO is only good to catch someones interest but it doesn't really explain how exactly it works and what it is. I was more thinking in the line of several analogies explaining various parts of the technology and how it then all ties together everything strictly in layman's terms.

I think I'll go for it. If I waste some time, so be it :P

[JohnRego]

This podcast explains how it works

http://omegataupodcast.net/2011/03/59-bitcoin-a-digital-decentralized-currency/

[losinglife]

GUIminer (http://forum.bitcoin.org/?topic=3878.0) is pretty much foolproof. Phoenix (http://forum.bitcoin.org/index.php?topic=6458.0) offers slightly better performance (significantly more with phat kernal (http://forum.bitcoin.org/?topic=7964.0)) Your card needs to support OpenCL or CUDA.

Ah! Thanks for the tip. Downloaded and am running GUIminer. Running about 35Mhas/sec right now. No idea if that is good or bad tho :p. Still dont understand what all the lingo means on the comparison charts either.

Sp Clk W Mhash/s Mhash/W
GTS250 128 1836 145 35.39 0.244


Better than the CPU tho, minus the now added fan noise :D

[hazek]

Top right side of page: http://deepbit.net/stats.php you can see how much that speed would yield you in 24h if you participated in their pool.

35Mh/s isn't bad, my laptop GPU is capable of only 4.5Mh/s..

[RonPaulIsGreat]

I relaunched my bitcoin stuff, as I was curious what my numbers where compared to those listed.

A 6 core AMD at 3 GHZ running 5 processes which pegs my CPU's to 83 percent (still usable for normal usage) results in about 7.2 Mhash/s or as it read 7207 Khash/s of course the processor is 125 Watts.

My not new Video card a GT240 running on a different computer results in 20.7 Mhash/s according to the GUIMINER program I just installed as suggested above.

I'm just wondering what the new integrated on chip Graphic CPU's (APU) will do,AMD llano, as if the name of the game is watt/hash then the new line of Cpu's AMD is launching may be a good cheap option as in theory they should use much less electricity, and they are supposed to be pretty good for graphics, and since the graphics are integrated on the same die as the actual CPU, well they should be highly energy efficient.

[hugolp]

I relaunched my bitcoin stuff, as I was curious what my numbers where compared to those listed.

A 6 core AMD at 3 GHZ running 5 processes which pegs my CPU's to 83 percent (still usable for normal usage) results in about 7.2 Mhash/s or as it read 7207 Khash/s of course the processor is 125 Watts.

My not new Video card a GT240 running on a different computer results in 20.7 Mhash/s according to the GUIMINER program I just installed as suggested above.

I'm just wondering what the new integrated on chip Graphic CPU's (APU) will do,AMD llano, as if the name of the game is watt/hash then the new line of Cpu's AMD is launching may be a good cheap option as in theory they should use much less electricity, and they are supposed to be pretty good for graphics, and since the graphics are integrated on the same die as the actual CPU, well they should be highly energy efficient.

AMD/ATI cards are the ones that mine most. The desing of the NVidia is not appropiate for mining (dont ask me why). You can check the Bitcoin wiki for a list of hardware mining performance.

[Kludge]

AMD/ATI cards are the ones that mine most. The desing of the NVidia is not appropiate for mining (dont ask me why). You can check the Bitcoin wiki for a list of hardware mining performance.
There's a post about why ATI cards perform so significantly better @ https://en.bitcoin.it/wiki/Why_a_GPU_mines_faster_than_a_CPU#Why_are_AMD_GPUs _faster_than_Nvidia_GPUs?
"...AMD designs GPUs with many simple ALUs/shaders that run at a relatively low frequency clock, whereas Nvidia's microarchitecture consists of fewer more complex ALUs and tries to compensate with a higher shader clock... This translates to a raw ALU performance advantage for AMD...


AMD Radeon HD 6990: 3072 ALUs x 830 MHz = 2550 billion 32-bit instruction per second
Nvidia GTX 590: 1024 ALUs x 1214 MHz = 1243 billion 32-bit instruction per second

... another difference favoring Bitcoin mining on AMD GPUs instead of Nvidia's is that the mining algorithm is based on SHA-256, which makes heavy use of the 32-bit integer right rotate operation. This operation can be implemented as a single hardware instruction on AMD GPUs, but requires three separate hardware instructions to be emulated on Nvidia GPUs... Combined together, these 2 factors make AMD GPUs overall 3x-5x faster when mining Bitcoins."

[Kludge]

Web-based GPU mining utilizing OpenCL is now available. An alpha version can be found @ http://kradminer.com/ -- it performs 25-50% slower than top-tier miners currently available, but for those not-sure-if-want in Bitcoin, this may be a fun, relatively easy way to start out.

You'll need:
*Official Bitcoin Client (available here (http://www.bitcoin.org/) -- need address for payout)
*Firefox 4 (available here (http://www.mozilla.com/en-US/firefox/fx/))
*WebCL (link @ kradminer.com)
*Gfx card capable of producing at least .05BTC/day (minimum req'd for payment -- virtually all discrete cards will do this if left on all day, most if only for an hour or so)
*Windows or 32-bit linux

Edit: there are reports of it not working on all systems which meet stated reqs. This will hopefully be worked out as the service is developed.

[farrar]

my rig produces 235mh/s. I can't wait to get this sucker with crossfire enabled!

Good $$$. for now atleast, will see how long it lasts.

[hugolp]

my rig produces 235mh/s. I can't wait to get this sucker with crossfire enabled!

Good $$$. for now atleast, will see how long it lasts.

I though crossfire was not recomended for mining. Dont take my word, I am not a miner anymore, but I read it somewhere.

[hazek]

Man there are a lot of hillbilly paranoid retards on Dailypaul: http://www.dailypaul.com/comment/reply/160149

They won't even read about it before writing some obnoxious comment contrived from their own "common sense" layman knowledge. Pisses me off.

[wizardwatson]

I'm not a fan of Bitcoin. Then again, I also think there's better solutions than a strict gold standard as well. If all that was needed for a currency to work is some artificial scarcity and divisibility, we could use a mutual credit model (like Michael Linton's Letsystem, or Ryan Fugger's RipplePay) and just evenly distribute a fixed number of "points" evenly to the initial participants, it's as arbitrary as the Bitcoin model, I think the idea that "miners" are somehow being rewarded for their "investment" as the rationale for unequal distribution of the coins is kind of contrived.

Plus I hate the idea that it isn't asset-backed (saying that they are "backed" by what they can buy on the Bitcoin market is a Bernanke-ism). I think an ideal currency would be one that's asset-backed, has a finite amount of money, but is unbounded in its ability to add new money. Having a permanently fixed supply of money will only lead to hoarding, deflation, and an ever-increasing tendency for all the Bitcoins to be "loaned" out.

That said, I'm glad that experiments like these are being done in the online world, I'm just more partial to an asset-backed system with multiple currencies using something similar to RipplePay's algorithm for clearing payments across currencies. I don't have a definitive "idea" or "plan" at the moment but I have spent a lot of time thinking and researching in this area.

[hazek]

I'm not a fan of Bitcoin. Then again, I also think there's better solutions than a strict gold standard as well. If all that was needed for a currency to work is some artificial scarcity and divisibility, we could use a mutual credit model (like Michael Linton's Letsystem, or Ryan Fugger's RipplePay) and just evenly distribute a fixed number of "points" evenly to the initial participants, it's as arbitrary as the Bitcoin model, I think the idea that "miners" are somehow being rewarded for their "investment" as the rationale for unequal distribution of the coins is kind of contrived.
What you think is a contrived is actually very smart since the miners ensure that unlike with the systems you mentioned no one can cheat and double spend or counterfeit or decide to print more as it was agreed upon at the conception of the first Bitcoins. I think that's rather important difference and feature in a currency system, don't you think?



Plus I hate the idea that it isn't asset-backed

Bitcoins are the asset.


Having a permanently fixed supply of money will only lead to hoarding, deflation, and an ever-increasing tendency for all the Bitcoins to be "loaned" out.

Is that a statement? mises.org disagrees with your statement and I tend to believe them over you.

[wizardwatson]

Is that a statement? mises.org disagrees with your statement and I tend to believe them over you.

Well, my opinion of course. I argued with Mises.org "intellectuals" about a non-gold asset-backed system to no avail. They only support Rothbard's solution of having the dollar be a fixed weight of gold (do they like Bitcoin?). I'm all for that solution for a national currency, but I think there are other more creative ways to solve the currency problem on a local level outside of a gold standard, or this Bitcoin solution which seems to me to be a strict gold standard digitized.

[hazek]

but I think there are other more creative ways to solve the currency problem on a local level outside of a gold standard,
There might be, but until we discover it why not try the next best thing? :)


or this Bitcoin solution which seems to me to be a strict gold standard digitized.
It sorta kinda is :P

[Kludge]

I thought crossfire was not recommended for mining. Don't take my word, I am not a miner anymore, but I read it somewhere.
That is correct. You will see a performance hit of ~2-15% running the cards in CFX. However, overclocking tools like Trixx & ASUS Smartdoctor won't let you overvolt both cards unless they start in CFX, so what I do is start the cards in CFX, overvolt them with my tool, take them out of CFX (the overvolting still holds), then overclock them with MSI Afterburner... every time the computer reboots.

For Nvidia cards, that generally isn't a problem -- I think you can overvolt Nvidia cards in MSI AB.

[Jordan]

So, Kludge, including liquidation value of your electronics, it's probably safe to say that you're in the black by now?

[Kludge]

So, Kludge, including liquidation value of your electronics, it's probably safe to say that you're in the black by now?
Yep. I have $710 "safe" in USD from BTC, ~$200 in BTC right now, and can resell the 8 cards I have @ $150 each easy for a total of $1200, and probably get $300-500 out of the remaining parts. On top of that, I've spent ~$230 using BTC. This was with an initial investment of ~$2300 total, and I'll probably have a monthly electricity bill right around $100 excluding normal home use of electricity. So I'm looking @ (1500+710+200+230)-(2300+100)=$240 ATM with expected monthly income of $1000-4000. Difficulty is rapidly increasing as more come onboard with BTC, but so is price/BTC.

That >$1000 is from just over two weeks of mining, with lots of interruptions in the first 1.5 weeks as I was tweaking everything for max performance. I'm now getting over 380 MH/s out of each 5850. Very pleased with how this is going, and the future of BTC. I've purchased things I'd never have access to without BTC. It's really been a great journey. I've learned a lot about economics (particularly how people function in markets), computer technology, and other stuff. I've also been extremely encouraged by the community on the state of humanity. The people there are incredibly intelligent, technically inclined, helpful, creative, and knowledgeable -- and many are very libertarian. Plenty of BTC-related software is open-source or at least free, and I'm getting pretty generous with my donations (didn't include in my profit calculations, so it's probably ~$200 higher than I gave) to developers, my pool operator, and others doing related work. There's a LOT of experimentation over there -- all the ideas being put out are very refreshing to read.

-- I'd go so far as to say the development of Bitcoin and work/ideas of the community has turned me into an optimist. I am very excited about the agorism-related possibilities of Bitcoin and strongly encourage all agorists (and certainly anyone interested in alternative currencies and fun underground communities -- or profit ;) ) to explore Bitcoin.


Edit: I ended up selling one of my 5850s I didn't have cables for @ $150 an hour ago, so bump me up to $390 in the black with well over if you include donations.

[steve005]

money needs to have intrinsic value, hence gold, silver, copper, tobacco(used as money for hundreds of years in america), food, etc etc

good luck with your ones and zero's lololol

I'd bet money(real money(not numbers)) that you'll never be able to buy anything useful with your zero's and ones

[steve005]

of course that guy is going to say its good, he's invested

[Kludge]

money needs to have intrinsic value, hence gold, silver, copper, tobacco(used as money for hundreds of years in america), food, etc etc

good luck with your ones and zero's lololol

I'd bet money(real money(numbers)) that you'll never be able to buy anything useful with your zero's and ones
You already owe me whatever you bet.

[hugolp]

money needs to have intrinsic value, hence gold, silver, copper, tobacco(used as money for hundreds of years in america), food, etc etc

good luck with your ones and zero's lololol

I'd bet money(real money(not numbers)) that you'll never be able to buy anything useful with your zero's and ones

Gold does not have intrinsic value. Tobacco does not have intrinsic value. Silver does not have intrinsic value. Bitcoin does not have intrinsic value.

You know why? Because value is subjective.

[Zippyjuan]

I haven't followed this much so excuse me if this has been explained. As I gather, you create bitcoins by usuing your computer. That gets converted to real money you can spend on things. So where does the real money come from? What is somebody paying you to create which adds value in exchange for this money? Thank you for responces. If Kludge has "earned" $1000- where did the money come from?

[efiniti]

I haven't followed this much so excuse me if this has been explained. As I gather, you create bitcoins by usuing your computer. That gets converted to real money you can spend on things. So where does the real money come from? What is somebody paying you to create which adds value in exchange for this money? Thank you for responces. If Kludge has "earned" $1000- where did the money come from?

Bitcoins don't get converted. When you buy or sell, you pay in bitcoins which are transferred anonymously through the network. Nobody is paying you to create anything. Bitcoins are just used as a medium of exchange.

[Kludge]

I haven't followed this much so excuse me if this has been explained. As I gather, you create bitcoins by usuing your computer. That gets converted to real money you can spend on things. So where does the real money come from? What is somebody paying you to create which adds value in exchange for this money? Thank you for responces. If Kludge has "earned" $1000- where did the money come from?
Bitcoins are created when a "block" is solved using a computer. The person's computer who solved the block receives a 50BTC reward (+ fees collected in the block since blocks also include the data of the latest BTC transactions). Blocks will no longer reward for solving after 21m BTC is created. Currently, there are around 6.1m in circulation. Blocks become progressively difficult to solve the more they are solved. Bitcoin itself is the currency created and traded. Bitcoins are somewhat anonymous, and ship instantly without a fee (unless you opt-in to pay a fee or send a low amount in which case there is a .01BTC fee).

"Real money" (USD, that is) is earned from using MtGox or another trading medium to quickly and easily convert BTC to and from USD. Miners produce BTC and traders then buy that BTC for USD (or Euros, or whatever) to use it as a currency.

[hazek]

Yep I'm definitely making that video I was talking about. I see the same questions popping up all the time.

[Zippyjuan]

SO what exactly are you receiving bitcoins for doing? If they can be exchanged for goods and services, what sort of good or service are you producing? What is "solving a block"? Some scientific problem?

[Kludge]

SO what exactly are you receiving bitcoins for doing? If they can be exchanged for goods and services, what sort of good or service are you producing? What is "solving a block"? Some scientific problem?
Block-solving (has two purposes: 1) It's a relatively fair method of distributing the currency while giving necessary incentive to early adopters 2) Blocks contain all of the latest transactions, and when a block is solved and then confirmed, it ensures all the transactions within are legitimate. Every block contains all of the information about where Bitcoins should be. If a transaction is attempted in which the block does not have sufficient bitcoins allocated to the address making the transaction, it is voided. So, block-solving provides network security and decreases the time for transactions to be confirmed.

[LibertyRevolution]

This whole Bitcoin thing sounds like a pyramid scheme to me...

The creators and the early miners make the most, they convince other to mine bitcoins, which increase the value of their original bitcoins.

The more people they can get to buy in on the pyramid below them, the more money the guys at the top make when they sell.

[Paul Or Nothing II]

Gold does not have intrinsic value. Tobacco does not have intrinsic value. Silver does not have intrinsic value. Bitcoin does not have intrinsic value.

You know why? Because value is subjective.

I'm afraid, gold does have "intrinsic value" in the sense that one can coin it, melt it, etc and it still retains its value, the value is contained in within itself; on the other hand, paper-money doesn't have "intrinsic value" in the sense that if you tear it into tiny pieces it's not valuable anymore; bit-coins don't even have a REAL, TANGIBLE existence so they also don't have an "intrinsic value", they're just numbers on computers which have no value by themselves.

in·trin·sic   
[in-trin-sik, -zik] Show IPA
–adjective
1.
belonging to a thing by its very nature: the intrinsic value of a gold ring.
2.
Anatomy . (of certain muscles, nerves, etc.) belonging to or lying within a given part

http://dictionary.reference.com/browse/intrinsic

[Kludge]

This whole Bitcoin thing sounds like a pyramid scheme to me...

The creators and the early miners make the most, they convince other to mine bitcoins, which increase the value of their original bitcoins.

The more people they can get to buy in on the pyramid below them, the more money the guys at the top make when they sell.

That's somewhat accurate. The early miners were selling their BTC for $.02. Now, as difficulty is remarkably higher to solve blocks, BTC is worth ~$8.50. I don't think many people are interested in holding Bitcoins long-term as would have been necessary for the earliest miners, but there certainly are a fair number of speculators.

Also note that when more people mine, the more difficult blocks become to solve. While the USD price of BTC does appear to be slightly influenced by difficulty (BTC costs more $ to produce, so perhaps miners are less willing to sell so low when they know it's become x% more resource-consuming to mine), it never increases as much as block difficulty. So - more miners = less profit.

What's really important to the value of BTC is the trade which is going on with them.What would be most profitable for me is to have more traders and less miners. I think BTC does stand on its own as a currency, offering a unique secure way to offer non-local payment instantly, anonymously, and at no fee which is particularly important when the transaction is not lawful - but that certainly doesn't mean most BTC trades are unlawful.

[hugolp]

I'm afraid, gold does have "intrinsic value" in the sense that one can coin it, melt it, etc and it still retains its value, the value is contained in within itself; on the other hand, paper-money doesn't have "intrinsic value" in the sense that if you tear it into tiny pieces it's not valuable anymore; bit-coins don't even have a REAL, TANGIBLE existence so they also don't have an "intrinsic value", they're just numbers on computers which have no value by themselves.

in·trin·sic   
[in-trin-sik, -zik] Show IPA
–adjective
1.
belonging to a thing by its very nature: the intrinsic value of a gold ring.
2.
Anatomy . (of certain muscles, nerves, etc.) belonging to or lying within a given part

http://dictionary.reference.com/browse/intrinsic

You are not using the economical meaning of value. All value is subjective, never intrinsic. No matter if it is gold or bitcoins. Gold does not have value in itself, because if nobody in your community wants your gold then you can do nothing with it as money. Its a yellow stone.

Now, using your defintions bitcoins are numbers in a computer that have a meaning in a community. Therefore they are real and tangible, exactly as gold.

You dont have to like bitcoins, but what you are saying is wrong.

[Paul Or Nothing II]

You are not using the economical meaning of value. All value is subjective, never intrinsic. No matter if it is gold or bitcoins. Gold does not have value in itself, because if nobody in your community wants your gold then you can do nothing with it as money. Its a yellow stone.

Now, using your defintions bitcoins are numbers in a computer that have a meaning in a community. Therefore they are real and tangible, exactly as gold.

You dont have to like bitcoins, but what you are saying is wrong.

"Value" & "intrinsic value" are somewhat different issues. "Value" is determined by whether a people perceive something to be valuable or not while "intrinsic value" is determined by whether IF a people perceive something to be valuable then is its value resident to itself or not. In the case of gold, it is because IF a people perceive gold to be valuable then they'll value every gold valuable because they perceive value in the SUBSTANCE of gold. But this isn't true of paper-money for example, because the SUBSTANCE, the paper, doesn't give it value, it's the govt print & its form gives it value; that's why it loses its value if we tear it apart into pieces.

In the same way, bitcoins are represented by a sequence of 1s & 0s but the fact they're made up of (the substance) 1s & 0s in itself doesn't give it value.

As for bitcoins being "tangible", how can they be "tangible"? Can we touch them? No, they're a fictional thing represented by generic 1s & 0s which don't have value by themselves.

Again, the definition of intrinsic is "belonging to a thing by its very nature"; the paper of a $100 bill doesn't make it worth $100, its form & govt print on it do; the question of "intrinsic value" doesn't even arise in the case of bitcoins because they're represented by GENERIC 1s & 0s which also represent everything else in the world of computers, bitcoins don't have a fixed, tangible existence in space & time.

[hugolp]

Paul or Nothing II, lets accept your definitions. In reality what you are saying is that you want your money to have another utility apart from being money. For example, the 0's and 1's that are part of bitcoins are useless outside of being money. The federal reserve note is (almost) useless outside of being money. Instead, silver or gold can have uses outside of being money (but keep in mind that if they had no use as money they would be valued a lot less than they are now, specially gold). EDIT: I dont really get why you make this separation of being useful as money and being useful for anything else, but lets go with it.

Now that we agree in that part (I think), why does something has to have an extra utility for being good money?

[hazek]

Ok here's what I have so far for my Bitcoin for dummies video:
---------------------------------------------------------------------------------------

Bitcoin for dummies

draft:
-goal of the video
-basic description
-basic explanation of terms
-basic explanation of how it works, security
-advantages, appealing features


Goal of the video

So there are already these countless articles out there, explaining in detail what exactly Bitcoin is and how exactly it works in the technical sense, but I still get the sense that people don't really understand it. That's why I decided to make this short Bitcoin for dummies video, where I'll explain in very simple layman terms roughly what it is and how it works and perhaps why you should research it further.

Basic description

And having said that, lets get right to it. Now before I get into anything else I just want to clarify what Bitcoin is. And the best way to sort of describe it is by comparing it to money in a video game. Just like say gold in World of Warcraft Bitcoin is a fictional, basically made up money on the computer. It's using it's own software for generating, maintaining, securing and transferring of Bitcoins and even though you can already transfer them physically they do not exist outside of a computer chip in a physical form.

Terms:
Next I want to look at the terms that are most often used to describing Bitcoin: a decentralized digital p2p crypto-currency

Let's start with decentralized. Unlike WoW gold which you can earn while playing the game Bitcoins are not being created and regulated by a main server or a central authority. With our example WoW the central authority is Blizzard, the producer of the game, who owns the servers, which you as a player connect to when you play the game. And it is these servers that decide how much of gold there is at any point in time and how players can earn it. With Bitcoin on the other all the rules are already embedded into the client you install on your computer. These rules were preset when Bitcoin was developed and cannot change anymore. If someone connects to the network they have to use a client that obeys these rules or they'll get ignored by the rest. So the only way to ever change the rules is to have the entire network switch to your client with your new rules.

I don't want to delve into the economical or political implications of this type of a design, I just want you to be able to understand how it works.

The next term is digital, which we already covered and as we said it means it exists solely on computers just like WoW gold.

Next we have peer to peer which is what p2p stands for. This term describes how the Bitcoin network communicates. A peer is someone in the network who is running the Bitcoin client. This client acts both as a client and as a server, which means that unlike in a centrally run network like the WoW game, where the clients all connect to a central server, in the peer to peer network clients form a network by connecting to each other.

And then theres crypto which is short for cryptography which describes how Bitcoin is secured. Basically it's a way of hiding and securing data, which among other things is used with securing online banking, protecting government secret digital data, securing secure communication lines ect.

How it works:

Now that we have a basic understanding of it's main features and what Bitcoin actually is let's look at how it all ties together and why it works.
As we said Bitcoins are fictional, made up digital "coins" so you are probably asking yourself why couldn't someone just make up how many Bitcoins they have and cheat everyone else, especially if there is no central authority keeping track and keeping everyone honest. Well the reason they can't cheat lies in the next important part of it. In our WoW example it's the server which keeps track of every player's gold in it's own private database. Because Bitcoin is decentralized the database is public and a copy of it is downloaded on every single client. This in of itself does not keep everyone honest or secure but if you want to add a new entry to the database that says you received some coins, there are rules you have to follow or else when you send the new entry to the rest of the people for them to update their version of the database they'll reject it as invalid. These rules are really easy to check if they were followed and extremely hard or practically impossible to cheat. So in essence everyone is keeping everyone else honest.
In order to comply with one of those rules you have to sacrifice your processor speed for solving a difficult mathematical problem, so there is a reward system in place for those who contribute. Anyone who wants to add a new entry to the database has to first solve that problem. It's a meaningless problem, but with our current technology can't be cheated and is very easy to verify.
The solving of this problem is what the Bitcoin community dubbed as mining. It is also random which means it's impossible to know how fast someone will find a solution. The faster your computer, the less time it will take but it's still random which means someone with a way slower computer can get lucky and beat you to it. Who ever finds this solution first, can then make a new valid entry to the database and as a reward receive some Bitcoins. When a solution is found and new entry made, that entry also called a block, is then sent to everyone in the network to verify and add to their version of the database. This process is also how all the Bitcoins that will ever exists are going to get created and distributed.
Basically all these virtual fictional coins are within that database. The database is constantly updated by people who participate in the "mining" process. Every time a new entry or a block is added someone received some brand new Bitcoins. These blocks also contain all the transactions between people which happened since the last block was created.
Every coin in that database is attached to a pair of a public and private key. The person who owns a Bitcoin must have both the public key to which the Bitcoin is attached and the private key. It is these pairs of keys in a separate file on your computer called wallet.dat that determine the ownership. If you lose this pair of keys you lose your Bitcoin.

This hopefully roughly explains how Bitcoin works. Now let's look at why someone would value these "coins" and use them as money online:

- they are extremely secure and are becoming increasingly so with the growing network of Bitcoin users.
- you can store your wallet.dat file anywhere you'd like: USB stick, DVD, CD, online email account, ect ect
- they are like cash which means no chargebacks are possible, once you send them, you can't get them back unless someone sends them back voluntarily
- the supply of Bitcoins is limited to just under 21mio, so thievery through the invisible hand of monetary inflation is not possible
- unless someone gets a hold of your wallet.dat file, no one can stop you from using them
- even if all transactions are public in the distributed database there is no way for anyone to know by just looking through the database who those "coins" belong to
- with proper precautions it is possible to remain pseudo-anonymous while using Bitcoins
- the Bitcoin network is practically impossible to shutdown by anyone
- no need for middlemen gobbling up expensive fees


------------------------------------------------------------

I was thinking of doing a presentation and using the above script for narration. Comments?

[IDefendThePlatform]

Looks like a good script to me

maybe include a link to get started with bitcoins at the end of the video?

[Paul Or Nothing II]

Paul or Nothing II, lets accept your definitions. In reality what you are saying is that you want your money to have another utility apart from being money. For example, the 0's and 1's that are part of bitcoins are useless outside of being money. The federal reserve note is (almost) useless outside of being money. Instead, silver or gold can have uses outside of being money (but keep in mind that if they had no use as money they would be valued a lot less than they are now, specially gold). EDIT: I dont really get why you make this separation of being useful as money and being useful for anything else, but lets go with it.

Now that we agree in that part (I think), why does something has to have an extra utility for being good money?

I'm afraid, you're still misunderstanding what I'm trying to say; I'm NOT saying that money should necessarily have another utility other than being used as money or anything like that.

When I talk about "intrinsic value", I'm referring to the fact that when people perceive gold to be valuable, its value is derived from its SUBSTANCE, that is, the chemical element called Aurum or Au, which is a REAL, TANGIBLE asset having a PHYSICAL EXISTENCE. On the other hand, a $100 bill does NOT derive its value from its substance but from its form & govt print while bitcoins DON'T even have a PHYSICAL, TANGIBLE existence in space & time (as hazek has said they're FICTIONAL) & that's why neither bitcoins nor paper-money have "intrinsic value" but gold does.

I don't know how can I be any more descriptive than I have been in the posts so far.

[hugolp]

I'm afraid, you're still misunderstanding what I'm trying to say; I'm NOT saying that money should necessarily have another utility other than being used as money or anything like that.

When I talk about "intrinsic value", I'm referring to the fact that when people perceive gold to be valuable, its value is derived from its SUBSTANCE, that is, the chemical element called Aurum or Au, which is a REAL, TANGIBLE asset having a PHYSICAL EXISTENCE. On the other hand, a $100 bill does NOT derive its value from its substance but from its form & govt print while bitcoins DON'T even have a PHYSICAL, TANGIBLE existence in space & time (as hazek has said they're FICTIONAL) & that's why neither bitcoins nor paper-money have "intrinsic value" but gold does.

I don't know how can I be any more descriptive than I have been in the posts so far.

Well, then you are wrong.

Gold does not derive its "value" from the fact that its a piece of rock. It has value (outside of being money) because people liked its properties for its utility. A rock in a river is also a piece of rock, but people does not find it as valuable as gold. By the way, in a way bitcoins are physical as well. The electric state of some transistors is physical. The magnetic charge in a hard drive is physical.

You have no way of defining the value of gold outside of their utility for some human. Until you dont realize that value is subjective you wont understand what is going on. Btw, I dont oppose gold. Im a big fan of gold (just for the right reasons). I have been advocating that bitcoin and gold complement each other for a long time.

[hazek]

Well, then you are wrong.

Gold does not derive its "value" from the fact that its a piece of rock. It has value (outside of being money) because people liked its properties for its utility. A rock in a river is also a piece of rock, but people does not find it as valuable as gold. By the way, in a way bitcoins are physical as well. The electric state of some transistors is physical. The magnetic charge in a hard drive is physical.

You have no way of defining the value of gold outside of their utility for some human. Until you dont realize that value is subjective you wont understand what is going on. Btw, I dont oppose gold. Im a big fan of gold (just for the right reasons). I have been advocating that bitcoin and gold complement each other for a long time.

I agree with this 100%.

Btw hugolp what did you think of my script draft?

[JWZguy]

This is a very encouraging movement, especially now that we're living in the age of Atlas Shrugged and 1984. I really hope it gains even more momentum.

I'm still a little fuzzy on some of the implementation details, though. You said that every transaction is stored in a db that is maintained and must be confirmed by every client? Won't that have some huge scalability problems?

[hazek]

I'm still a little fuzzy on some of the implementation details, though. You said that every transaction is stored in a db that is maintained and must be confirmed by every client? Won't that have some huge scalability problems?

Short answer: no

Long answer: somewhere in here: http://forum.bitcoin.org/?topic=286.0

[JWZguy]

Ok, I've been reading some incorrect information, according to that thread. It says they will only maintain the latest transaction of a bitcoin, not it's entire transaction history. That makes it a lot more feasible. I didn't see any posts about confirmation by every client. From what I know about distributed algorithms, that wouldn't make any sense. I'm guessing it's also just not true.

[hazek]

Well in a sense it does get confirmed by every client when every client updates their copy of the database with the latest block. When that block meets the requirements and is added to the DB it is essentially confirmed to be valid.

And there will always some copies of the entire database maintained somewhere in a dedicated place, which shouldn't be a problem. But they will be able to modify the clients of ordinary users to use just the most recent and relevant part of it so ordinary users won't have a problem.

At least that's how I understand it. Could be wrong :p

[Kludge]

Ok, I've been reading some incorrect information, according to that thread. It says they will only maintain the latest transaction of a bitcoin, not it's entire transaction history. That makes it a lot more feasible. I didn't see any posts about confirmation by every client. From what I know about distributed algorithms, that wouldn't make any sense. I'm guessing it's also just not true.
I'd never read that and was operating on false assumptions. Please pardon my misinformation.

Blocks contain the latest transactions. Block-chains hold all the transactions. Each time a block is solved, the previous blocks are confirmed (so, as the Bitcoin client considers 6 confirmations as truly being confirmed, 6 blocks [including the block with the transaction] need to be solved). This is not done by the client specifically (though it would be true if using the client to mine), but is done through solving blocks.

P.S. The way it's currently designed, all users of the Bitcoin client do indeed download the entire block chain (~200mb ATM). That'll probably change within a few months.

[hazek]

I think it's best to read Satoshi's paper on Bitcoin: http://www.bitcoin.org/bitcoin.pdf if we really want understand how exactly it works :)

[kpitcher]

Ah Satoshi, the guy that doesn't exist. I like the little air of mystery about the creator - was he some NSA insider who wanted to use his crypto knowledge for good, some banker programmer who despises his job, an academic who dislikes the limelight, or any of the other theories. But since it's totally open source and dug through by many, and holds up, he's a nice sort of mystery.

[Andrew-Austin]

Can't believe I never heard of this before now, can't stop reading the bitcoin forum.

[hazek]

Can't believe I never heard of this before now, can't stop reading the bitcoin forum.

:D That's how I was for a few days when I found out about it back in mid February. Just couldn't read enough of it.

[Andrew-Austin]

I'm afraid, gold does have "intrinsic value" in the sense that one can coin it, melt it, etc and it still retains its value, the value is contained in within itself; on the other hand, paper-money doesn't have "intrinsic value" in the sense that if you tear it into tiny pieces it's not valuable anymore; bit-coins don't even have a REAL, TANGIBLE existence so they also don't have an "intrinsic value", they're just numbers on computers which have no value by themselves.

in·trin·sic   
[in-trin-sik, -zik] Show IPA
–adjective
1.
belonging to a thing by its very nature: the intrinsic value of a gold ring.
2.
Anatomy . (of certain muscles, nerves, etc.) belonging to or lying within a given part

http://dictionary.reference.com/browse/intrinsic


Those are intrinsic properties, not intrinsic values. lol

If I were completely new to this subject and read your post, I wouldn't have a clue what you meant by "intrinsic value", so long as you differentiate it from subjective value. Is that some kind of mystical energy contained in the gold that magically makes all people value it no matter what? You can turn gold in to coins, but what would I want a gold coin for? You can melt gold, and it will look even prettier in a liquid state, but I don't care for such idle wonders.

The only definition of value that has any importance in economics is the subjective kind.

But I think what you mean is that it should be subjectively valued for some reason prior to it becoming a medium of exchange, and I think this link (http://forum.bitcoin.org/?topic=583.0) answers that question.




Ok here's what I have so far for my Bitcoin for dummies video:
---------------------------------------------------------------------------------------

draft:
-goal of the video
-basic description
-basic explanation of terms
-basic explanation of how it works, security
-advantages, appealing features




For the last part of the video you should include criticisms, name as many as you can find out there on the internet and try and debunk them. Sorry I didn't read that whole post if you have already included that.

I'm still reading about the idea so I'm not in the "sold" stage, just in the "interested" stage. I've seen some criticisms out and I haven't completely wrapped my head around the subject to know if they are valid or not yet. A few criticisms I came across on the mises forum for example. Some are simple like "bitcoin is still in the experimental phase and something better will likely be invented by the market to make bitcoin obsolete" or "it can't work because for legal reasons it has to be traceable".

This thread (http://forum.bitcoin.org/?topic=583.0) seems to have at least debunked the objection that it has to have "intrinsic value" and the "regression theory paradox".

[hazek]

For the last part of the video you should include criticisms, name as many as you can find out there on the internet and try and debunk them.

Maybe in a separate video. My goal with this one would only be to explain in layman terms what Bitcoin is and roughly how it works.

Talking about criticism(c/p from bitcoin forums):
I am too beginning to think it's a ponzi scheme :D:

http://www.youtube.com/watch?v=GDcdE9ngx08

[steve005]

Gold does not have intrinsic value. Tobacco does not have intrinsic value. Silver does not have intrinsic value.


Yes. They do have intrinsic value; you can use them for things other than money. what can you use bitcoins for other than money? oh and lets not forget you need a computer to use them.. no wait two computers, one for buyer and one for seller, and not only that you need a internet connection. I'm not so sure the world wide web will last forever, but my gold and silver will, for many many generations to come

[steve005]

This thread seems to have at least debunked the objection that it has to have "intrinsic value" and the "regression theory paradox".


I read that thread; lolol is my response

[Andrew-Austin]

I read that thread; lolol is my response



That is funny I laughed at your "gold has intrinsic value" post. How you could type up such a poor argument and think you are in position to laugh at that thread is beyond me.







Yes. They do have intrinsic value; you can use them for things other than money. what can you use bitcoins for other than money? oh and lets not forget you need a computer to use them.. no wait two computers, one for buyer and one for seller, and not only that you need a internet connection. I'm not so sure the world wide web will last forever, but my gold and silver will, for many many generations to come

And are you predicting the collapse of civilization and the rise of some technophobic age? That seems to be about what it would take for the internet to go away, yet you can't even be sure it won't just fade away as if it were some trendy fashion. The internet isn't going anywhere. Its here to stay, permanently. Computers will only get more prevalent as time goes by (in ways that would seem fantastic to us now, and so will the internet. If I had billions of dollars I would bet all of it on that. I would type up a lot more to debunk your post, but its midnight and I would just be wasting my breath. Most people here can see through the "but money must have some mystical intrinsic value like Gold does" argument. Value theory is basic stuff. And really I've only seen your willingness to type "lol".

[steve005]

You have not proved anything, that post is beyond you? well you must think really highly of yourself(sike)

look what that thread is based on. a study that is based on a fraud(federal researve notes) I still run in to people THESE DAYS AND THEY THINK MONEY S BACKED BY GOLD STILL! bait and switch its as old as the game itself

[Paul Or Nothing II]

Well, then you are wrong.

Gold does not derive its "value" from the fact that its a piece of rock. It has value (outside of being money) because people liked its properties for its utility. A rock in a river is also a piece of rock, but people does not find it as valuable as gold. By the way, in a way bitcoins are physical as well. The electric state of some transistors is physical. The magnetic charge in a hard drive is physical.

You have no way of defining the value of gold outside of their utility for some human. Until you dont realize that value is subjective you wont understand what is going on. Btw, I dont oppose gold. Im a big fan of gold (just for the right reasons). I have been advocating that bitcoin and gold complement each other for a long time.

I'm NOT talking about "value", I'm talking about "INTRINSIC value" (I don't know what am I supposed to do to clarify that)

Value = people perceive something valuable for whatever reason, whatver it may be, I'm NOT talking about "value" here (& YES, "value" IS subjective, I recognize that but I'm trying to talk about "intrinsic value" here)
intrinsic value = whatever thing that people find valuable for whatever reason they find it valuable; having "intrinsic value" means that thing DERIVES ITS VALUE from its SUBSTANCE

Gold's SUBSTANCE = chemical element Aurum which is SPECIFIC;
IF people perceive gold to have value (for WHATEVER reason) THEN they perceive it in this SPECIFIC ELEMENT called Aurum, they value it for its SUBSTANCE ie THE ELEMENT ITSELF; NOT gold's picture on a computer screen, NOT the numbers that may represent it, NOT gold-certificates but THE ELEMENT Aurum which is its SUBSTANCE so it has "intrinsic value" since its value is derived from the SUBSTANCE ITSELF & not necessarily from its form or anything else

Paper-money's SUBSTANCE = processed paper;
paper-money does NOT DERIVE its value from its substance, its form & govt print gives it value so it's value is SYBOLIC, NOT "intrinsic". If we tore apart a $100 bill & people still valued it as much THEN it could be said to have "intrinsic value" but that's NOT the case.
When people exchange $100 bill for goods, its NOT because the paper itself (the SUBSTANCE) is worth that much but because of its form & govt print while when people generally exchange gold (for dollars or whatever the heck it is, it's irrelevant to the point), they perceive gold ITSELF to be worth something. It does NOT mean that it has "value" (I was NEVER talking about "value", I hope that's clear by now) but it does mean that WHEN it has value then it is INTRISIC ie derived from its SUBSTANCE
A $100 bill's "intrinsic value" would be whatever the paper itself is worth on the market if it's just traded on the markets as mere paper,whether in its complete form or if it was torn into tiny pieces.
Let's say, if there was a gold-coin which supposedly belonged to Jefferson, obviously it'd be worth much more than the market value of gold contained in it so its value will NOT be "intrinsic" as it largely derives from the fact that it belonged to Jefferson & not necessarily because its made of gold so its value is "SYMBOLIC", not "intrinsic"; just like paper-money & bitcoins.

Bitcoins's SUBSTANCE = GENERIC 1s & 0s;
people DON'T value bitcoins because they're made up of 1s & 0s so it does NOT DERIVE its value from its substance so it does NOT have "intrinsic value" because its substance itself is GENERIC, NOT SPECIFIC (unlike Aurum), not to mention it's FICTIONAL & its NOT a physical, tangible asset. Bitcoins' "intrinsic value" would be whatever generic intangible 1s & 0s are worth which is.......

And to be clear, I'm NOT necessarily debating bitcoins' feasibility as money, I'm NOT talking about "value" (which IS subjective) but rather I'm talking about the concept of "INTRINSIC value"

NOTE: I'm NOT making the same argument as steve005, I'm making a DIFFERENT argument on "intrinsicness" of gold's value so please don't conflate our arguments.

[steve005]

first of all your whole logic is flawed, what gives a chair value? the wood it's made from(or metal, etc etc), or the fact that you can sit in it?

what gives gold value?; not it's substance but what it can be used for

what gives dollars value? it was gold, then it was the biggest world super-power saying you must keep using this paper even though it's worthless in and of itself. so in other words we've been tricked into using fiat and now your using that to sell your idea about a new money that you can't even see hold or touch, and no-one could print them(yeah right, what if bill gates or the government decides to get into it, you really think it would be any better than a fiat that at least they cant track

[steve005]

this is very un-ron paul, we are trying to get back to sound money, not farther away from it, you guys selling this on this forum should just leave and this thread should be closed

[Kludge]

you guys selling this on this forum should just leave
Ciao.

[hazek]

this is very un-ron paul, we are trying to get back to sound money, not farther away from it, you guys selling this on this forum should just leave and this thread should be closed

Yes master! As you command master! :rolleyes:

[hazek]

Paul Or Nothing II you are making a big mistake because you are asking the wrong question.

Your question is "what has intrinsic value" when it should be "why does something have intrinsic value" and the answer to this question is "because of it's inherent properties".

Gold has properties that are intrinsic. It's those properties that give it intrinsic value.

Bitcoin has properties that are intrinsic. It's those properties that give it intrinsic value.

Now you could argue that while golds intrinsic properties that give it intrinsic value cannot change and Bitcoin's can that it's unsafe to use Bitcoin for it's intrinsic value. But you can't argue they don't have it, even if it's artificially created and could potentially but unlikely change.

[RonPaulIsGreat]

I have a question.

Since only like 21 million bitcoins will be created, and all bitcoins are tied at any given time to a particular wallet. And if I understand correctly, wallet.dat is not a retrievable item if one were to lose it, what happens to the bitcoins that will inevitably be lost, in irretrievable wallet.dat files, that are just erased by mistake or whatnot.

It seems a lot of people will try this, get a bitcoin, or a fraction of a bitcoins, then just simply lose interest. Well, that 1 bitcoin, .05 bitcoin, or whatever amount, after that point will never reenter circulation.

So, in theory after a certain point, the total number of bitcoins in circulation will decline, as in those stuck in lost wallet.dat files, that are no longer retrievable, due to the owner reformatting a drive, or drive failure, or lack of interest.

It seems to me that if indeed the total number of bitcoins will decline (after a certain point, due to loss of access), then the system has a serious flaw.


As in 21 million bitcoins are created, someones house burnt down, they lost their wallet.dat containing 3 bitcoins. They neglected to back it up, now there are 21 million -3 bitcoins in circulation, with no means to replace them. Or teeny bopper george, sets up a bitcoin account, he goes to that bitcoin faucet site, then after meeting sally down the street loses all interest in bitcoin, forgets about and eventually reformats his hard drive to make room for his love song collection. So, .05 bitcoins out of circulation.

You can make any scenario, but at some point the number of bitcoins in circulation will permanently decline at some rate, and the consequences of that don't seem good.

So, unless there is some means of replacing lost bitcoins, it seems doomed. As with gold, we always find some new amount of gold, or paper money, well they just print a replacement up. It seems with bitcoins, that it has no tolerance for lost, or permanently locked up bitcoins, as would be the case with a lost wallet.dat file.

I know, it's up to people to watch their wallet, but at the same time, a functional means of trade cannot be predicated upon something that will become automatically rarer with time, as that sets up a system by which you are rewarded for simply holding a bitcoins, as opposed to using it as stable means of transacting. And this rarity is not a matter of increased population participating which in theory would increase demand anyway, but would occur even if the user base remained relatively unchanged.

[hazek]

You are correct. Eventually when all almost 21mio are generated there will probably be a constant monetary deflation because of lost Bitcoins which cannot be retrieved in any way.

However I'm very unhappy when you make statements about what this means for Bitcoin as a whole. You statements carry zero weight. What you think is good or bad is irrelevant unless you can find facts to prove it.

I suggest you read: http://forum.bitcoin.org/index.php?topic=10426.0

[steve005]

However I'm very unhappy when you make statements about what this means for Bitcoin as a whole. You statements carry zero weight

lol. you're the guy who came up with this aren't you?


What you think is good or bad is irrelevant unless you can find facts to prove it.

ditto

[IDefendThePlatform]

But even if bitcoins get lost at a certain rate, they are still divisible up to 8 decimal places so they would just rise in value as they became rarer.

As long as eventually they could become divisible by more than eight decimal places then they could continue to function effectively indefinitely.

[psi2941]

lol. you're the guy who came up with this aren't you?


i been trying to figure out his angle. even gold backers will not this much time defending their position and they will just give up.

i personally think his on the level of someone like Jonathan lebed, the more people that gets suckered into this bit trash project the more value the bit trash go up. so i'm thinking his one of those geeks who has like 20 computers in his house computing those hashes and saved up a sizable amount of bit trash. so his going all over the internet and hyping up these worthless bits to sell at one point.

EDIT: come to think of it, its Jonathan Lebed!

[hazek]

Oops, you got me. :rolleyes:

No but seriously I have already fully explaining my involvement with Bitcoin within this thread somewhere I believe.. I don't really care what you think of me anyway. But I do want to fully disclose my intention which is to spread awareness of Bitcoin as far and as wide as possible and let the market decided if it's useful or not.

The reason why I'm so viciously attacking anyone who makes statements about it is because that's what they are. No facts, just opinionated statements derived from their own beliefs which are divorced from the fact based reality. I have zero problem with anyone raising a valid concern or making an argument either for or against Bitcoin as long as they back it up with facts. I myself have spent at least a week on the bitcoin forums and in their irc chatroom when I first found out about it asking questions and raising issues until I got satisfied and acquired the belief that Bitcoin is a technologically and economically sound project.

Unfortunately I also understand how human nature works and how everyone has an ego and everyone has learned certain beliefs from their circle of trusted people which I think is the main reason we have this problem where so many things in the world are believed that are completely fabricated and irrational such as religion of any kind, certain socio-economical and political beliefs, ect.. And I just can't help myself but to only see RED when someone spouts their bs especially if it's a topic I think is important.

[abolitionist]

Bitcoin uses mathematical calculations to discover the coins.

What's to stop me from copying this open source software, and starting a new currency that works exactly the same way. Call it "abolitionistCoin"?

It would be a separate network from bitcoin, a separate currency, would take all the same amount of time to find....

Thus, while inflation is controlled by the bitcoin software for bitcoin, parallelizing the system and making a competing currency is another form of inflation, and it seems the barrier for entry to do that would be pretty low.

I've not studied the bitcoin system in significant detail, so I may be missing something.

[iddo]

What's to stop me from copying this open source software, and starting a new currency that works exactly the same way. Call it "abolitionistCoin"?

It would be a separate network from bitcoin, a separate currency, would take all the same amount of time to find....

Thus, while inflation is controlled by the bitcoin software for bitcoin, parallelizing the system and making a competing currency is another form of inflation, and it seems the barrier for entry to do that would be pretty low.

I've not studied the bitcoin system in significant detail, so I may be missing something.

You aren't missing anything.
If you can find other people who would participate in your new parallel system, and those people agree to use the coins in your new system as a medium of exchange, then everybody is happy... isn't this anarcho-capitalism at it's finest?:)

[Paul Or Nothing II]

The thing is you guys are merging the two concepts of "value" & "instrinsic value" so let me substitute the word "face value" for the word "value", may be it'll help.


first of all your whole logic is flawed, what gives a chair value? the wood it's made from(or metal, etc etc), or the fact that you can sit in it?

what gives gold value?; not it's substance but what it can be used for

what gives dollars value? it was gold,

Please read my previous comments again, I've never said utility doesn't matter neither have I said "intrinsic value" always equals "face value", in often doesn't.

The simple fact is that if the paper (the SUBSTANCE) of $100 bill was worth $100 & the paper (the SUBSTANCE) of $10 bill was worth $10 & so on (may be due rarity of such paper in nature for example), then none of us here would be moaning about such a monetary-standard; the only reason we don't like it is because the "intrinsic value" (the value of the paper itself ie substance) of dollar-bills is next to nothing compared to their "face value", which allows for almost limitless production so you obviously do believe that substance matters even though you don't realize it. At the same time, the only reason a lot of us support gold as money because the "intrinsic value" & "face value" of such money will be equal due to such money deriving its value from its substance & not from its form or govt authority.

As for the chair, I've never said utility provided by a thing doesn't matter so obviously chair's "face value" is determined by the fact that we can sit in it, so it is its FORM that gives it its "face value" but its "intrinsic value" will be equal to whatever its scrap metal/wood would be worth after its broken irreparably or no longer desirable by anyone for the utility it provides.


Paul Or Nothing II you are making a big mistake because you are asking the wrong question.

Your question is "what has intrinsic value" when it should be "why does something have intrinsic value" and the answer to this question is "because of it's inherent properties".

Gold has properties that are intrinsic. It's those properties that give it intrinsic value.

Bitcoin has properties that are intrinsic. It's those properties that give it intrinsic value.

Now you could argue that while golds intrinsic properties that give it intrinsic value cannot change and Bitcoin's can that it's unsafe to use Bitcoin for it's intrinsic value. But you can't argue they don't have it, even if it's artificially created and could potentially but unlikely change.

Again, you're merging "face value" & "intrinsic value", they may be equal but mayn't always be, just like in the above example of dollar-bills where there's vast disparity between "instrinsic value" & "face value".

During civil war, when Lincoln created too much paper-money, every $1 gold-coin was worth many "paper-dollars" so people started hoarding gold-coins or melted & sold them because their "intrinsic value" had exceeded their "face value" & Gresham's Law took over. If we experience very high inflation then even we might've a situation where some of our coins' "intrinsic value" (value of the metals contained in them) may exceed their "face value".

I hope these examples clarify at least a little about what I've been trying to say all this while.

Anyways, I think I've offered enough explanation on what I mean by "intrinsic" ("belonging to a thing by its very nature"), I don't think this discussion is going to go anywhere, I guess we all have our convictions so I'll leave it at that.

P.S. : Can someone here (may be Collins or someone who can get in touch with Ron) request Ron to issue a somewhat detailed explanation about "intrinsic value of gold"? Afterall, economics, gold-standard, etc are his main issues & a lot of his detractors (as well as supporters as is obvious here) make him look like an idiot by "discrediting" him & his "intrinsic value of gold" theory so if he can release something to explain it in detail then there'll be a lot less confusion among his supporters & we'll be able to handle his detractors a lot better. Is anyone here who can request him for this?

[RonPaulIsGreat]

But even if bitcoins get lost at a certain rate, they are still divisible up to 8 decimal places so they would just rise in value as they became rarer.

As long as eventually they could become divisible by more than eight decimal places then they could continue to function effectively indefinitely.


That's not the issue.

The issue is if you have a permanently deflationary currency, it puts a permanent drag on the economy. As in if the scenario was that we would not let any new houses get built after 21 million, and sometimes old houses get destroyed for whatever reason, and at the same time more people are being born, and demand for housing will rise, then the obvious path for everyone to take is simply hoard (never sell there house, whenever possible), as as long as the system exists the value will forever rise (AFTER 21 Million), thus less reason to invest, or spend, which might sound good if you are in the hoarder class, but it will lead to a situation that does not look inviting to a new user. As in the market will not be as liquid as it would be if the system matched "housing demand" with "actual housing", which would not result in a defacto gain for simply holding assets.

However, once it dawns on people that there is no reason to not build more houses(bitcoins, or other currency), people will start building them in another system that is more sustainable. As increasing the currency(housing) is not bad, as long as it does not increase at a greater rate than additions into the economy. Bitcoin fails on that count. As it promotes hoarding from the inception, which is destructive to any economy.

Anyway, I like the general bitcoin concept but I've now looked into it for the Second Time, and feel it's flawed from inception, Maybe someone will take the code, and make another version that incorporates a rational mechanism for coin creation. As the current mechanism is less than ideal.

Of Course, that's all my opinion, just like it's everyones opinion on this subject.

But all you have to evaluate is the consequences of a currency that will become more rare all the time. It's seems obvious to me, but hazek will disagree, I'm sure, and not offer a reason why a currency that always dwindles in availability is good.

Or if this helps, imagine a currency backed by Gold, but the difference is in this alternate world, no new gold could ever be mined. What would the consequences of that be? They aren't good. Hoarding is the obvious consequence, and hoarding has a negative impact on investment activity, which has an negative effect on all those participating in the system, except for the hoarders.

Anyway, I'm done, but I think the system is broken, in a meaningful way, that will limit bitcoins from being anything more than a sideshow in the world of currencies. Maybe someone will take the source and tweak the method of coin introduction, to account for such things, but I can't see investing real money, and time, into what is designed to suck all the money in one direction.

If you could hold a dollar, and know 100% it would be worth(more purchasing power) more every year, would you be more likely or less likely to invest that dollar into a productive enterprise? The answer is for most less likely, as if the dollar just maintained value, then you want to chase profits to some degree, and under the current system, which is way bent to the inflationary side, you have to invest just to maintain your purchasing power. The idealized goal of a currency is to simply maintain purchasing power all things being equal over a period of time, then there is no extreme impetus to hoard, nor forced investment, which leads to bubbles and such.

I just see the 21 million limit as a bad idea,for the reasons above. And the only reason I'd participate in bitcoins is if I thought it could replace the current flawed system. As is it's trading one gross flaw for another.

Bitcoins 2.0 ?

[Travlyr]

How well does Bitcoin compare to gold & silver? PM's have made it to the top of the money chain throughout the centuries because they master the following characteristics.


Desirable
Divisible
Durable
Portable
Scarce

[hazek]

You aren't missing anything.
If you can find other people who would participate in your new parallel system, and those people agree to use the coins in your new system as a medium of exchange, then everybody is happy... isn't this anarcho-capitalism at it's finest?:)

Yep exactly. Feel free to copy and start your own and good luck!

[hazek]

How well does Bitcoin compare to gold & silver? PM's have made it to the top of the money chain throughout the centuries because they master the following characteristics.


Bitcoin check list:

Desirable check ($8.3/1BTC today)
Divisible check (currently up to 0.00000001, with further technological advancement practically infinite)
Durable check (you can store them online, on USB sticks, dvds, cds and anything short of a nuclear holocaust they will survive, just like the rest of the digital data)
Portable check (around the world via the internet within seconds)
Scarce check (arbitrary limit set to just under 21mio which cannot be changed unless everyone on the network decides to start using a new client with new rules)


This is in a nutshell the reason why I really think it has tremendous potential.

[Travlyr]

This is in a nutshell the reason why I really think it has tremendous potential.

Interesting!

[hazek]

LOOOL

In the currency wars, the nerds are winning. The value of a Bitcoin — a digital currency trading over peer-to-peer networks — has rocketed more than nine-fold in two months to $8.74. The preordained supply and decentralization of Bitcoins have intrigued geeks and paranoid inflationistas alike. But this abstract gold may not survive what looks like a bubble...

By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Read more at: http://blogs.reuters.com/columns/2011/05/27/virtual-bitcoins-are-appealing-but-probably-doomed/

[IDefendThePlatform]

That's not the issue.

The issue is if you have a permanently deflationary currency, it puts a permanent drag on the economy. As in if the scenario was that we would not let any new houses get built after 21 million, and sometimes old houses get destroyed for whatever reason, and at the same time more people are being born, and demand for housing will rise, then the obvious path for everyone to take is simply hoard (never sell there house, whenever possible), as as long as the system exists the value will forever rise (AFTER 21 Million), thus less reason to invest, or spend, which might sound good if you are in the hoarder class, but it will lead to a situation that does not look inviting to a new user. As in the market will not be as liquid as it would be if the system matched "housing demand" with "actual housing", which would not result in a defacto gain for simply holding assets.

However, once it dawns on people that there is no reason to not build more houses(bitcoins, or other currency), people will start building them in another system that is more sustainable. As increasing the currency(housing) is not bad, as long as it does not increase at a greater rate than additions into the economy. Bitcoin fails on that count. As it promotes hoarding from the inception, which is destructive to any economy.

Anyway, I like the general bitcoin concept but I've now looked into it for the Second Time, and feel it's flawed from inception, Maybe someone will take the code, and make another version that incorporates a rational mechanism for coin creation. As the current mechanism is less than ideal.

Of Course, that's all my opinion, just like it's everyones opinion on this subject.

But all you have to evaluate is the consequences of a currency that will become more rare all the time. It's seems obvious to me, but hazek will disagree, I'm sure, and not offer a reason why a currency that always dwindles in availability is good.

Or if this helps, imagine a currency backed by Gold, but the difference is in this alternate world, no new gold could ever be mined. What would the consequences of that be? They aren't good. Hoarding is the obvious consequence, and hoarding has a negative impact on investment activity, which has an negative effect on all those participating in the system, except for the hoarders.

Anyway, I'm done, but I think the system is broken, in a meaningful way, that will limit bitcoins from being anything more than a sideshow in the world of currencies. Maybe someone will take the source and tweak the method of coin introduction, to account for such things, but I can't see investing real money, and time, into what is designed to suck all the money in one direction.

If you could hold a dollar, and know 100% it would be worth(more purchasing power) more every year, would you be more likely or less likely to invest that dollar into a productive enterprise? The answer is for most less likely, as if the dollar just maintained value, then you want to chase profits to some degree, and under the current system, which is way bent to the inflationary side, you have to invest just to maintain your purchasing power. The idealized goal of a currency is to simply maintain purchasing power all things being equal over a period of time, then there is no extreme impetus to hoard, nor forced investment, which leads to bubbles and such.

I just see the 21 million limit as a bad idea,for the reasons above. And the only reason I'd participate in bitcoins is if I thought it could replace the current flawed system. As is it's trading one gross flaw for another.

Bitcoins 2.0 ?

1) Incentive to hoard is counterbalanced by goods and services becoming cheaper and cheaper, incentivizing spending. Also counterbalanced by interest rates lowering when people have a lot of money that they want to invest/lend. People will still seek profit, so rather than hoard their bitcoins, they will be more likely to lend/invest them at a higher rate of return (especially when they are scarce). Hoarding would lead to higher interest rates, which then spurs lending, which then lowers interest rates, etc... which leads to a natural equilibrium. I think this is our main disagreement. Your example seeks equilibrium by attempting to match increases in efficiency with increases in the money supply, whereas my example seeks equilibrium between borrowing and investing and between spending and hoarding via changing interest rates and investment returns and changes in purchasing power.


2) House analogy is not accurate, IMO, because houses are not infinitely divisible, whereas bitcoins are as you just increase the number of decimal places. If houses could be subdivided endlessly without any cost, then that would be an apt analogy cuz the owner's investment would become more valuable over time with increasing demand. Then people could sell whatever % of their house they want as the value increased and it made sense to sell. Then the next generation could repeat the process, indefinitely. If a lot of people didn't want to sell (hoarding) the value of housing would go up significantly, giving other people incentive to sell.



I definitely think other currencies would compete with bitcoin (PMs, fiats, whatever) which is good. People will gravitate towards the currencies that fit their goals (long term safe returns, or whatever) and give them the best buying power in whatever area they tend to use their money the most.

I think its a mistake to think any single currency or entity can successfully match increases in economic efficiency with precise increases in the money supply, but the closest we can hope for is multiple currencies, some inflationary, some deflationary, with a net effect of equilibrated interest rates and returns on investment guiding people's decision making as to what to do with their money.

[steve005]

Now I understand why this is 25 pages long; anytime anyone questions bitcoins, its buried with long and boring off topic mumbo jumbo

[Paul Or Nothing II]

How well does Bitcoin compare to gold & silver? PM's have made it to the top of the money chain throughout the centuries because they master the following characteristics.


Desirable
Divisible
Durable
Portable
Scarce


I'd also like to add "tangible" to that list, I think its an important characteristic; afterall, what's the point in replacing one "fictional currency" with another?

In fact, complete digitization of currency will sooner or later would mean complete enslavement of the masses. Because once people get used to a completely digital currency, sooner or later, govts/rulers will come up with their own version by the time people would find a physical/tangible currency very annoying & inconvenient to use & with nothing to strap the govt currency down, we can only imagine the state of the future enslaved masses. Once people get used to a completely digital currency, returning to a tangible currency would be considered idiotic, well, to an extent it already is the case as most people already consider a return to a gold-standard idiotic due to lack of understanding of economics.

On the other hand, if people are convinced of the need to strap a currency down to something TANGIBLE & go for the gold-standard (or any other commodity-standard for that matter), people will be most likely to resist govt takeover of commodity-currency in the future as they'll know how they were fooled by govts & banks in the past with "fictional currency" standard.


Can someone here (may be Collins or someone who can get in touch with Ron) request Ron to issue a somewhat detailed explanation about "intrinsic value of gold"? Afterall, economics, gold-standard, etc are his main issues & a lot of his detractors (as well as supporters as is obvious here) make him look like an idiot by "discrediting" him & his "intrinsic value of gold" theory so if he can release something to explain it in detail then there'll be a lot less confusion among his supporters & we'll be able to handle his detractors a lot better. Is anyone here who can request him for this?

Can someone please guide me as to how I might be able to get the above petition across someone who can reach Ron? Should I start my own thread? If so, which section of the forum would be most likely to yield a positive response?

I think it's a very important issue that needs to be addressed, I've met too many RonPaul detractors who'll mock him on the issue of "intrinsic value of gold", not to mention there needs to be more awareness about what he means by that among the RonPaul supporters as well to avoid all the confusion that goes around with it.

[steve005]

Can someone please guide me as to how I might be able to get the above petition across someone who can reach Ron? Should I start my own thread? If so, which section of the forum would be most likely to yield a positive response?

are you joking?

why don't you google gold?; jewelry, electronics e.t.c
Use and applications

Monetary exchange

Gold has been widely used throughout the world as a vehicle for monetary exchange, either by issuance and recognition of gold coins or other bare metal quantities, or through gold-convertible paper instruments by establishing gold standards in which the total value of issued money is represented in a store of gold reserves.

However, production has not grown in relation to the world's economies. Today, gold mining output is declining.[11] With the sharp growth of economies in the 20th century, and increasing foreign exchange, the world's gold reserves and their trading market have become a small fraction of all markets and fixed exchange rates of currencies to gold were no longer sustained. At the beginning of World War I the warring nations moved to a fractional gold standard, inflating their currencies to finance the war effort. After World War II gold was replaced by a system of convertible currency following the Bretton Woods system. Gold standards and the direct convertibility of currencies to gold have been abandoned by world governments, being replaced by fiat currency in their stead. Switzerland was the last country to tie its currency to gold; it backed 40% of its value until the Swiss joined the International Monetary Fund in 1999.[12]

Pure gold is too soft for day-to-day monetary use and is typically hardened by alloying with copper, silver or other base metals. The gold content of alloys is measured in carats (k). Pure gold is designated as 24k. English gold coins intended for circulation from 1526 into the 1930s were typically a standard 22k alloy called crown gold, for hardness (American gold coins for circulation after 1837 contained the slightly lower amount of 0.900 fine gold, or 21.6 kt).

Investment

Main article: Gold as an investment

Many holders of gold store it in form of bullion coins or bars as a hedge against inflation or other economic disruptions. However, some economists do not believe gold serves as a hedge against inflation or currency depreciation.[13]

The ISO 4217 currency code of gold is XAU.

Modern bullion coins for investment or collector purposes do not require good mechanical wear properties; they are typically fine gold at 24k, although the American Gold Eagle, the British gold sovereign, and the South African Krugerrand continue to be minted in 22k metal in historical tradition. The special issue Canadian Gold Maple Leaf coin contains the highest purity gold of any bullion coin, at 99.999% or 0.99999, while the popular issue Canadian Gold Maple Leaf coin has a purity of 99.99%. Several other 99.99% pure gold coins are available. In 2006, the United States Mint began production of the American Buffalo gold bullion coin with a purity of 99.99%. The Australian Gold Kangaroos were first coined in 1986 as the Australian Gold Nugget but changed the reverse design in 1989. Other popular modern coins include the Austrian Vienna Philharmonic bullion coin and the Chinese Gold Panda.

Jewelry

Main article: Jewellery





Moche gold necklace depicting feline heads. Larco Museum Collection. Lima-Peru
Because of the softness of pure (24k) gold, it is usually alloyed with base metals for use in jewelry, altering its hardness and ductility, melting point, color and other properties. Alloys with lower caratage, typically 22k, 18k, 14k or 10k, contain higher percentages of copper, or other base metals or silver or palladium in the alloy. Copper is the most commonly used base metal, yielding a redder color. Eighteen-carat gold containing 25% copper is found in antique and Russian jewelry and has a distinct, though not dominant, copper cast, creating rose gold. Fourteen-carat gold-copper alloy is nearly identical in color to certain bronze alloys, and both may be used to produce police and other badges. Blue gold can be made by alloying with iron and purple gold can be made by alloying with aluminium, although rarely done except in specialized jewelry. Blue gold is more brittle and therefore more difficult to work with when making jewelry. Fourteen and eighteen carat gold alloys with silver alone appear greenish-yellow and are referred to as green gold. White gold alloys can be made with palladium or nickel. White 18-carat gold containing 17.3% nickel, 5.5% zinc and 2.2% copper is silvery in appearance. Nickel is toxic, however, and its release from nickel white gold is controlled by legislation in Europe. Alternative white gold alloys are available based on palladium, silver and other white metals,[14] but the palladium alloys are more expensive than those using nickel. High-carat white gold alloys are far more resistant to corrosion than are either pure silver or sterling silver. The Japanese craft of Mokume-gane exploits the color contrasts between laminated colored gold alloys to produce decorative wood-grain effects.

Medicine

In medieval times, gold was often seen as beneficial for the health, in the belief that something that rare and beautiful could not be anything but healthy. Even some modern esotericists and forms of alternative medicine assign metallic gold a healing power.[15] Some gold salts do have anti-inflammatory properties and are used as pharmaceuticals in the treatment of arthritis and other similar conditions.[16] However, only salts and radioisotopes of gold are of pharmacological value, as elemental (metallic) gold is inert to all chemicals it encounters inside the body. In modern times, injectable gold has been proven to help to reduce the pain and swelling of rheumatoid arthritis and tuberculosis.[16][17]

Gold alloys are used in restorative dentistry, especially in tooth restorations, such as crowns and permanent bridges. The gold alloys' slight malleability facilitates the creation of a superior molar mating surface with other teeth and produces results that are generally more satisfactory than those produced by the creation of porcelain crowns. The use of gold crowns in more prominent teeth such as incisors is favored in some cultures and discouraged in others.

Colloidal gold preparations (suspensions of gold nanoparticles) in water are intensely red-colored, and can be made with tightly controlled particle sizes up to a few tens of nanometers across by reduction of gold chloride with citrate or ascorbate ions. Colloidal gold is used in research applications in medicine, biology and materials science. The technique of immunogold labeling exploits the ability of the gold particles to adsorb protein molecules onto their surfaces. Colloidal gold particles coated with specific antibodies can be used as probes for the presence and position of antigens on the surfaces of cells.[18] In ultrathin sections of tissues viewed by electron microscopy, the immunogold labels appear as extremely dense round spots at the position of the antigen.[19] Colloidal gold is also the form of gold used as gold paint on ceramics prior to firing.

Gold, or alloys of gold and palladium, are applied as conductive coating to biological specimens and other non-conducting materials such as plastics and glass to be viewed in a scanning electron microscope. The coating, which is usually applied by sputtering with an argon plasma, has a triple role in this application. Gold's very high electrical conductivity drains electrical charge to earth, and its very high density provides stopping power for electrons in the electron beam, helping to limit the depth to which the electron beam penetrates the specimen. This improves definition of the position and topography of the specimen surface and increases the spatial resolution of the image. Gold also produces a high output of secondary electrons when irradiated by an electron beam, and these low-energy electrons are the most commonly used signal source used in the scanning electron microscope.[20]

The isotope gold-198, (half-life 2.7 days) is used in some cancer treatments and for treating other diseases.[21]

Food and drink
Gold can be used in food and has the E number 175.[22]
Gold leaf, flake or dust is used on and in some gourmet foods, notably sweets and drinks as decorative ingredient.[23] Gold flake was used by the nobility in Medieval Europe as a decoration in food and drinks, in the form of leaf, flakes or dust, either to demonstrate the host's wealth or in the belief that something that valuable and rare must be beneficial for one's health.
Danziger Goldwasser (German: Gold water of Danzig) or Goldwasser (English: Goldwater) is a traditional German herbal liqueur[24] produced in what is today Gdańsk, Poland, and Schwabach, Germany, and contains flakes of gold leaf. There are also some expensive (~$1000) cocktails which contain flakes of gold leaf.[25] However, since metallic gold is inert to all body chemistry, it adds no taste nor has it any other nutritional effect and leaves the body unaltered.[26]

Industry





The 220 kg gold brick displayed in Jinguashi Gold Museum, Taiwan, Republic of China.




The world's largest gold bar has a mass of 250 kg. Toi museum, Japan.




A gold nugget of 5 mm in diameter (bottom) can be expanded through hammering into a gold foil of about 0.5 square meter. Toi museum, Japan. Gold solder is used for joining the components of gold jewelry by high-temperature hard soldering or brazing. If the work is to be of hallmarking quality, gold solder must match the carat weight of the work, and alloy formulas are manufactured in most industry-standard carat weights to color match yellow and white gold. Gold solder is usually made in at least three melting-point ranges referred to as Easy, Medium and Hard. By using the hard, high-melting point solder first, followed by solders with progressively lower melting points, goldsmiths can assemble complex items with several separate soldered joints.
Gold can be made into thread and used in embroidery.
Gold produces a deep, intense red color when used as a coloring agent in cranberry glass.
In photography, gold toners are used to shift the color of silver bromide black-and-white prints towards brown or blue tones, or to increase their stability. Used on sepia-toned prints, gold toners produce red tones. Kodak published formulas for several types of gold toners, which use gold as the chloride.[27]
As gold is a good reflector of electromagnetic radiation such as infrared and visible light as well as radio waves, it is used for the protective coatings on many artificial satellites, in infrared protective faceplates in thermal protection suits and astronauts' helmets and in electronic warfare planes like the EA-6B Prowler.
Gold is used as the reflective layer on some high-end CDs.
Automobiles may use gold for heat dissipation. McLaren uses gold foil in the engine compartment of its F1 model.[28]
Gold can be manufactured so thin that it appears transparent. It is used in some aircraft cockpit windows for de-icing or anti-icing by passing electricity through it. The heat produced by the resistance of the gold is enough to deter ice from forming.[29]

Electronics

The concentration of free electrons in gold metal is 5.90×1022 cm−3. Gold is highly conductive to electricity, and has been used for electrical wiring in some high-energy applications (only silver and copper are more conductive per volume, but gold has the advantage of corrosion resistance). For example, gold electrical wires were used during some of the Manhattan Project's atomic experiments, but large high current silver wires were used in the calutron isotope separator magnets in the project.

Though gold is attacked by free chlorine, its good conductivity and general resistance to oxidation and corrosion in other environments (including resistance to non-chlorinated acids) has led to its widespread industrial use in the electronic era as a thin layer coating electrical connectors of all kinds, thereby ensuring good connection. For example, gold is used in the connectors of the more expensive electronics cables, such as audio, video and USB cables. The benefit of using gold over other connector metals such as tin in these applications is highly debated. Gold connectors are often criticized by audio-visual experts as unnecessary for most consumers and seen as simply a marketing ploy. However, the use of gold in other applications in electronic sliding contacts in highly humid or corrosive atmospheres, and in use for contacts with a very high failure cost (certain computers, communications equipment, spacecraft, jet aircraft engines) remains very common.[30]

Besides sliding electrical contacts, gold is also used in electrical contacts because of its resistance to corrosion, electrical conductivity, ductility and lack of toxicity.[31] Switch contacts are generally subjected to more intense corrosion stress than are sliding contacts. Fine gold wires are used to connect semiconductor devices to their packages through a process known as wire bonding.

Commercial chemistry

Gold is attacked by and dissolves in alkaline solutions of potassium or sodium cyanide, to form the salt gold cyanide—a technique that has been used in extracting metallic gold from ores in the cyanide process. Gold cyanide is the electrolyte used in commercial electroplating of gold onto base metals and electroforming.

Gold chloride (chloroauric acid) solutions are used to make colloidal gold by reduction with citrate or ascorbate ions. Gold chloride and gold oxide are used to make highly valued cranberry or red-colored glass, which, like colloidal gold suspensions, contains evenly sized spherical gold nanoparticles.[


now that you know gold isn't just a shiny yellow metal; please retract your statements

[losinglife]

Since my mining skills suck i am looking into purchasing BTC outright and play the game. Well thinkin of doin this with BTC and silver to see how my luck plays out. Looks like BTC may be at a peak for right now, but as i am still new to it i cant really tell :p

I wanna jump in and buy a few hundred USD, but with my like 8$/1 BTC is probably the top and i will lose out.. blah! Wish i woulda known about it 3 months ago!

[Travlyr]

How well does Bitcoin compare to gold & silver? PM's have made it to the top of the money chain throughout the centuries because they master the following characteristics.


Desirable
Divisible
Durable
Portable
Scarce
Tangible



I'd also like to add "tangible" to that list, I think its an important characteristic; afterall, what's the point in replacing one "fictional currency" with another?

In fact, complete digitization of currency will sooner or later would mean complete enslavement of the masses. Because once people get used to a completely digital currency, sooner or later, govts/rulers will come up with their own version by the time people would find a physical/tangible currency very annoying & inconvenient to use & with nothing to strap the govt currency down, we can only imagine the state of the future enslaved masses. Once people get used to a completely digital currency, returning to a tangible currency would be considered idiotic, well, to an extent it already is the case as most people already consider a return to a gold-standard idiotic due to lack of understanding of economics.

On the other hand, if people are convinced of the need to strap a currency down to something TANGIBLE & go for the gold-standard (or any other commodity-standard for that matter), people will be most likely to resist govt takeover of commodity-currency in the future as they'll know how they were fooled by govts & banks in the past with "fictional currency" standard.
Good point. Tangible is required because food is tangible and food is real money too.

[steve005]

Now I understand why this is 25 pages long; anytime anyone questions bitcoins, its buried with long and boring off topic mumbo jumbo