# Lifestyles & Discussion > Bitcoin / Cryptocurrencies >  What is with the bitcoin obsession?

## juvanya

It seems to be taking off like crazy with TIME and Forbes 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.

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## 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.

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## 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.

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## 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?

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## 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

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## 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

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## 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

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## 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.

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## 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.

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## 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:...ts/bitcoin.kml - google maps of all the network nodes across the world online right now
http://bitcoin.sipa.be/index.html

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## 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?

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## 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!

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## 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

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## 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.

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## 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.

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## 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.

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## 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.

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## 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?

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## 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.

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## 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).

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## 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.

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## 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.

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## 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.

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## 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?

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## 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.

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## 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

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## 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.

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## 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.

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## 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

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## 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.

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## 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.

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## 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.

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## 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.

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## 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.

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## 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?

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## 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.

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## 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.

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## 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.

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## 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.

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## Indy Vidual

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

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## 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.

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## 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.

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## 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

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## 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.

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## 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

> Originally Posted by pcosmar
> 
> 
> 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)


$#@! 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

----------


## farrar

> $#@! 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 $#@!ing 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 $#@!ing 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 $#@!ing 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
> ...


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-$#@!ing-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-$#@!ing-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

----------


## 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 $#@!s 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


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

----------


## FreedomProsperityPeace

I just learned about Bitcoins and my mind is blown.  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.  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%* 

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 $#@!load 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 $#@!load 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%* 
> ...


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

----------


## 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&p...thkey=CLi6ha0H)

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

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


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/Communi...nforcement_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 $#@! 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 $#@!.

----------


## 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

----------


## Kludge

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

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 $#@! out pimp-style. I don't take no $#@! -- I'm a tough guy on the Internet.





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

Ooooh -- Kludge uses his processors for profit, not curing cancer. $#@! 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 $#@! -- he say it's his purpose in life. $#@!, man - $#@! dem niggas.

----------


## Indy Vidual

> Yeah, I'm at 750 MH/s and'll be at 2.8 GH/s by next week. 
> 
> 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 $#@! out pimp-style. I don't take no $#@! -- I'm a tough guy on the Internet.
> 
> 
> 
> 
> 
> That's right - I consume 48 KWH every $#@!ing day to arbitrarily produce an ecurrency, and feels good, man. I don't give a $#@! about the environment. $#@! the environment, and $#@! you. I'm making big cash and playas be hatin'. F'real, $#@! you -- my mansion gun'ave so many $#@!ing trees, man... Gonna be DElluting the planet. $#@!.
> ...


In case anyone has any doubt:
Dr. Ron Paul does *not endorse* this message.

----------


## 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:

----------


## 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  ). 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 off Newegg -- great buy.

Once the hardware's assembled, get familiar with MSI Afterburner (free -- don't forget to downclock your mem speeds!), install ATI SDK - this enables OpenCL processing on graphics card, 2.1 recommended (free), and of course, the ATI graphics driver - 10.11 recommended (free). 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

----------


## hazek

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


lol

----------


## 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:


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  ). 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.
> ...


Can we see some pictures of the whole thing?

----------


## Kludge

> Can we see some pictures of the whole thing?

----------


## hugolp

> 


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



----------


## Kludge

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

http://freedomwatch.uservoice.com/fo...778101-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). 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 .  

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

----------


## Kludge

> Bitcoin is currently  the #2 choice for show topic on Freedom Watch.
> 
> http://freedomwatch.uservoice.com/fo...778101-bitcoin


Within 300 votes!

----------


## hugolp

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


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?:

----------


## 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 is pretty much foolproof. Phoenix offers slightly better performance (significantly more with phat kernal) Your card needs to support OpenCL or CUDA.





> What about his?:


 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/2011/03/5...ized-currency/

----------


## losinglife

> GUIminer is pretty much foolproof. Phoenix offers slightly better performance (significantly more with phat kernal) 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 . 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

----------


## 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...n_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 -- need address for payout)
*Firefox 4 (available here)
*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
> ...


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

----------


## 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.


 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
> ...


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 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 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 :

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## 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

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## 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

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## 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".

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## 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

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## 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.

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## 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

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## 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

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## Kludge

> you guys selling this on this forum should just leave


 Ciao.

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## 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!

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## 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.

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## 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.

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## 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. 

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.

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## 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?

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## 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?

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## 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.

DesirableDivisibleDurablePortableScarce

----------


## 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!

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## 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.

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## 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/201...obably-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.
> ...


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.

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## steve005

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

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## 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.
> 
> DesirableDivisibleDurablePortableScarce


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.

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## 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).
> ...


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 

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.
> 
> DesirableDivisibleDurablePortableScarceTangible





> 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

----------


## hazek

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


Now I understand that all you do is repeat some ridiculous accusation over and over in hopes of scaring people away. Bravo.

----------


## sirgonzo420

This is interesting.

I don't seem to be able to mine... is there another way for me to pick up a bitcoin or two?

Anybody interested in selling one, just for $#@!s and giggles?

----------


## hugolp

> This is interesting.
> 
> I don't seem to be able to mine... is there another way for me to pick up a bitcoin or two?
> 
> Anybody interested in selling one, just for $#@!s and giggles?


Post your address.

----------


## sirgonzo420

> Post your address.


1Dj79j7rCh23383CeGD7wZ2VquhzpWLqDx

----------


## kpitcher

Don't forget you can get a free micro transaction through the bitcoin faucet. Mainly it's used to show how it works, but it's about 20 cents worth. 
http://freebitcoins.appspot.com/

----------


## steve005

> Now I understand that all you do is repeat some ridiculous accusation over and over in hopes of scaring people away. Bravo


you won't address the point about today's money being a fiat and NOT WORKING, so why would another fiat work?

----------


## hazek

Bitcoin is not fiat money. Do you even understand what fiat means? 

Here's a translation:

fiat
v. do, let it be done (Latin)

n. decree, command 

Meaning people were forced to accept dollars as money by the government ergo the name "(government) fiat money". No one is forcing anyone to use Bitcoin, it's voluntary. 

The next big difference between fiat money and Bitcoin is that while the central bank can print fiat money willy nilly, no one can do the same with Bitcoin. Their amount is fixed and as good as set in stone.

----------


## sirgonzo420

> Don't forget you can get a free micro transaction through the bitcoin faucet. Mainly it's used to show how it works, but it's about 20 cents worth. 
> http://freebitcoins.appspot.com/


Thanks, but it seems it has run dry.


Is there anyone here who wants to sell a bitcoin to me perhaps via paypal?

----------


## hazek

> Is there anyone here who wants to sell a bitcoin to me perhaps via paypal?


I think it's best if you try http://bitcoin-otc.com/ but they are usually vary of people without any reputation and offering paypal. Next best thing would be mtgox.com but you'll need to wire the money there.

Be sure to check http://bitcoincharts.com/markets/ for the current rate.

Also I thought hugolp sent you some, check if your client has already downloaded the whole blockchain, it should be showing 127820 blocks because you're balance wont show them until it has.

----------


## hazek

Keiser Report:

----------


## hugolp

> 1Dj79j7rCh23383CeGD7wZ2VquhzpWLqDx


You should receive a few bitcoins soon.

----------


## hugolp

> Keiser Report:


The explanation of what bitcoin is was a bit messy, but that a guy that was forex chief of VISA and CEO of Hushmail (or something) has taken bitcoin so seriusly is another prove that its a revolutionary idea.

The last sentence was great: "Bitcoin will do to legal tender laws what torrents did to copyright laws". $#@!ing amazing!.

----------


## steve005

> The last sentence was great: "Bitcoin will do to legal tender laws what torrents did to copyright laws". $#@!ing amazing!.



what did torrents do to copyright laws besides making them stricter?

----------


## hugolp

> what did torrents do to copyright laws besides making them stricter?


Making them unaplicable.

----------


## steve005

> Making them unaplicable


how? most people have I phones and buy everything, and they're fining and putting people in jail for downloading without paying, so the fear factor alone stops people from doing it

----------


## hugolp

> how? most people have I phones and buy everything, and they're fining and putting people in jail for downloading without paying, so the fear factor alone stops people from doing it


The only thing is that it doesnt. Visit some torrent sites and check by yourself.

----------


## gregb

Thank you very much for this discussion - I live in Canada and am a member of the Pirate Party (we have no Ron Paul, maybe Justin Trudeau stands a chance later but we'll see) - in the recent federal election I was the official agent for a Pirate Party candidate (we lost) - altogether we ran 11 candidates out of 308, our first ever election. Right now I'm working on getting a BC provincial Pirate Party going.

The point is that because us Pirate Party types are supposed to be keeping up on things digital I've been following bitcoins for about a year, not in depth, just aware. During the election campaigning I made it a point to bring up bitcoin at the all-candidates meetings, discussing it with people - then the TIME and Forbes articles came out 3 days before the election and then I started following this thread.

So, the latest news from us Pirate Party people is Rickard_Falkvinge - Pirate Party founder puts all his money into bitcoins.

It probably isn't a lot of but he is quite influential in tech circles and this will of course pull in ThePirateBay people, the bittorrent crowd.

----------


## sirgonzo420

> You should receive a few bitcoins soon.


Thanks man I really appreciate it!

----------


## hugolp

> So, the latest news from us Pirate Party people is Rickard_Falkvinge - Pirate Party founder puts all his money into bitcoins.
> 
> It probably isn't a lot of but he is quite influential in tech circles and this will of course pull in ThePirateBay people, the bittorrent crowd.


Bitcoin publicity is good specially coming from a figure like him, but I did not like the way he framed it. No one should put all his/her savings in something, not gold, not bonds, not bitcoins. Some level of diversification is a must.

But I am glad that there is someone promoting Bitcoin among the Pirate Party in Canada. Good work.




> Thanks man I really appreciate it!


No problem. Just think on doing the same to someone else when you have more bitcoins.

----------


## hazek

Global map of Bitcoin users: http://www.weusecoins.com/globe-bitcoin/ (the higher a line, the more users it represents, firefox4 or google chrome required)

Also a very good map: http://maps.google.com/maps?q=https:...ts/bitcoin.kml

----------


## hugolp

Reason talks about bitcoin:

----------


## KingRobbStark

> you won't address the point about today's money being a fiat and NOT WORKING, so why would another fiat work?


Fiat is forced on people by a central authority. Bitcoins is voluntary. Regardless of that fact, I will wait and see what happens to bitcoins before I commit.

----------


## JWZguy

Bitcoin is the opposite of a fiat currency. Sheesh.

----------


## low preference guy

I read seriously about bitcoins for the first time today. At first my mind was blown. Now I think it makes sense and it might work.

I think it might work IF all the claims about the technology are correct and they stay true, i.e., some technology doesn't come around to make reverting transactions not prohibitively expensive.

The idea behind bitcoin, as far as I understand it is this:

They create a unique type of digital product, i.e., there are computer digits.
They can be safely and anonymously transferred using computers.
The bitcoins are scarce and there is a technological guarantee that its supply can't be increased at will.

We already have all the ingredients required for money, except one thing: people need to start using it. I did a mental experiment as to how someone could create a currency of this type and encourage people to use it. The mental experiment is not unique to bitcoins.

Suppose Walmart was behind this project. They could encourage people to start using the bitcoins by fixing their value to the goods they sell, and make their products a bit cheaper for using bitcoins instead of dollars. Once people started having bitcoins, they will trade outside of walmart. After some time passes, people get used to trading bitcoins, and their value is guaranteed by the expectation that other people will accept it. If the bitcoins are used massively, there is no need for the existence of walmart to keep their value, as long as the bitcoins remain scarce.

The thought experiment above was just to illustrate how a currency such as bitcoin might get started. The use of bitcoin was encouraged in a different way, but it doesn't really matter, people are already using it.

Just like gold had some attributes that made people want to use them as money, bitcoins also have a really nice unique attribute:
It can be used anonymously and transferred without intermediaries.

This is huge. So it shouldn't be so much of a surprise that people are starting using it.

One really nice thing about bitcoins is that at some point the supply will stop growing, which will make it appreciate tremendously over time.

There will be at most 21 million bitcoins, but they can be divided up to 8 decimal places, which means that in practice there will be 210 trillions of units of this currency. This seems like a good number of units to be used as a world currency.

One of the things that could make bitcoins fail is that their supply could grow much faster than the number of people who provide their services for bitcoins. This however seems unlikely, as the last of the 21 million bitcoins is expected to be created in about 2040.

It's a really nice experiment.

----------


## hazek

> I read seriously about bitcoins for the first time today.


Hallelujah! So fking hard to get people to actually sit down and do some research and not just instantly dismiss it based on their own layman and misconceived beliefs.

And yes the main question about whether or not Bitcoin will work is whether or not it can maintain it's properties. Right now it looks like as if it can, but only time will tell I guess.

----------


## hugolp

I think I found one of the reasons why bitcoins are keeping their 8$ price and are not coming down: people are using them to buy things. What tings exactly? Things that need you to be anonymous, like f.e. drugs. Btw, this is an example of the service that starts the "bitcoin avalanche" *Low preference guy* was talking about.

Keep in mind that the article sounds old because it says that 50 bitcoins are $150, so this has been going on for a long time. Bitcoin could make the agorist dream come true.

http://www.ronpaulforums.com/showthr...lkRoad-Bitcoin

----------


## Kludge

> I think I found one of the reasons why bitcoins are keeping their 8$ price and are not coming down: people are using them to buy things. What tings exactly? Things that need you to be anonymous, like f.e. drugs. Btw, this is an example of the service that starts the "bitcoin avalanche" *Low preference guy* was talking about.
> 
> Keep in mind that the article sounds old because it says that 50 bitcoins are $150, so this has been going on for a long time. Bitcoin could make the agorist dream come true.
> 
> http://www.ronpaulforums.com/showthr...lkRoad-Bitcoin


 "Mark's" trade was probably old, but the author later says "One bitcoin is worth about $8.67" which is from a few days ago. It was @ $9.4 when I looked ~6 hours ago. Dunno what it's at now.

Edit: ~$9.55

Edit2: Let me make a quick note, because I know this is going to come up and I may not be here to defend myself -- Why would people who are looking to elect Ron Paul to restore the Constitution engage in Agorism meant to disempower the government and possibly accel the government to collapse?

I'd like to first say that I'm still donating to Ron Paul and grassroots efforts where I can, and otherwise helping people on the forum -- I think a few people will vouch for me if demanded. However, I think it would be unwise to put all my eggs in the basket of political reform bringing the US back to a swallow-able amount of evil existence. My ideal is likely different from Ron Paul: I want to see the rule of Man, not Government - and not even "absolute law."

I was pretty offended at being told to leave the forum for promoting Bitcoin. I am still working toward getting the message about Ron Paul and liberty-related ideas out there, but I think the most expedient way to bring about my ideal country is by disempowering the government as much as possible until it collapses under its own weight and the weight of people like myself undermining the system. Even the sane liberals and conservatives call for massive expenditure cuts to bring national debt under control. Being 20, I can assure you I feel no tie to that debt and do not accept that I should be the one paying for the previous generations' government benefits. Under a fair system where the USG defaults on its debt to the point where it is erased, the currency is replaced with something sound, the Welfare state either doesn't exist or provides just enough for the disabled to live, the police exist to *prevent* violence, and the military exists in a reasonable capacity - used ONLY in response to legitimate aggressive threats, I will probably participate in that system. However, I do not foresee this happening, but it does not mean I am not working toward a Ron Paul presidency and liberty candidates in other offices. I believe the most likely way to end the USG in its current state is through active Agorism, not political reform, and thus believe the most efficient way to bring about a reasonable government is to undermine and otherwise disempower the current government until it collapses or enacts major political reform.

We're all working in the general direction of a Ron Paul ideal, and we have differences in how to go about it, but that doesn't mean we should be enemies, and I don't think that because I prefer Agorism over political reform (while still working on both fronts) I should be asked to leave the forum. I am by no means trying to suggest Ron Paul would endorse Agorism or Bitcoins. I am, however, suggesting Agorism is an effective way to disempower the USG and move closer to RP's ideal, one we should be seriously looking into, and a method I whole-heartedly support.

----------


## Paul Or Nothing II

> are you joking?
> 
> why don't you google gold?; jewelry, electronics e.t.c 
> 
> now that you know gold isn't just a shiny yellow metal; please retract your statements


You need to learn to read & understand other people's posts before posting your own; I've not said anything of the kind you're accusing me of. In fact, I've always maintained that the utility is what gives something "value" (face value) BUT the "intrinsicness" of that value is dependent on whether it is derived from its substance OR from its form, governmentt authority or other such extrinsic factors.

The whole "gold is better as money because it has other uses" argument can easily be refuted by any paper-money advocate by saying that paper-money is essentially paper & paper has plenty of uses, & that's why it's such a weak argument for gold or any other commodity-standard.

Again, if one really wants to make an argument for gold then one has to point out that gold's value is "intrinsic" in the sense that it is tied to its substance itself, & NOT to its physical form or government authority like paper-money where there's a vast gulf between paper-money's "intrinsic value" & "face value".

And as I've said before, if paper-money was created by using something which was very rare in nature then most of us anti-paper-money people wouldn't have bothered about it much as it'd have retained its purchasing-power over time just like gold does due to its rarity. The fact is that even if gold didn't have any practical use other than being used as money, it STILL would've been one of the best things to use as money because of its characteristics, important one of which includes the fact that its value is "intrinsic" in the sense that it's derived from its substance itself.

My example of the immediate aftermath of post-Lincoln period clearly delineates what "intrinsic value" means. Lincoln created too many paper-dollars which meant that every $1 gold-coin was worth several paper-dollars because the gold-coins' "intrinsic value" (the value of its substance) had exceeded their "face value".

----------


## hazek

> I was pretty offended at being told to leave the forum for promoting Bitcoin.


Who told you that?!

----------


## hugolp

*Kludge*, haters gonna hate. Dont bother.

----------


## low preference guy

> *Kludge*, haters gonna hate. Dont bother.


Yeah, I just neg rep totalitarians like the guy Kludge is talking about. Don't let them bother you.

----------


## losinglife

i went to add funds to my mtgox account yesterday, then learned its a pain in the ass to do so. Mail a check to some dude who they takes 2% out and drops the rest in your account after 7+ days (maybe)... dunno bout that. I mean obv its legit as many do it, but i dunno if I trust sending a couple hundred via snail mail . Tried to get a liberty reserve account, but that is just as annoying to add money to. 

Of course for the past 2 weeks ive been wanting to purchase, and for the past 2 weeks ive been putting it off. Now its up to 10$/BTC, ffff. Even if i mail my $#@! in tomorow thats still about a week and a half before i get teh money in my account. By then it could be 20$/BTC   >:0

anyone know of a simpler, quicker way to get money to mtgox?

----------


## sirgonzo420

> i went to add funds to my mtgox account yesterday, then learned its a pain in the ass to do so. Mail a check to some dude who they takes 2% out and drops the rest in your account after 7+ days (maybe)... dunno bout that. I mean obv its legit as many do it, but i dunno if I trust sending a couple hundred via snail mail . Tried to get a liberty reserve account, but that is just as annoying to add money to. 
> 
> Of course for the past 2 weeks ive been wanting to purchase, and for the past 2 weeks ive been putting it off. Now its up to 10$/BTC, ffff. Even if i mail my $#@! in tomorow thats still about a week and a half before i get teh money in my account. By then it could be 20$/BTC   >:0
> 
> anyone know of a simpler, quicker way to get money to mtgox?


http://webchat.freenode.net/?channels=#bitcoin-otc

That is the "over the counter" bitcoin market.

Beware of fraud. Check ratings of people before doing business with them. Trusted sellers will have positive ratings.

You'll find people willing to buy and sell bitcoins in various currencies (including paypal) and at varying rates.

The free market at work.

----------


## Kludge

> i went to add funds to my mtgox account yesterday, then learned its a pain in the ass to do so. Mail a check to some dude who they takes 2% out and drops the rest in your account after 7+ days (maybe)... dunno bout that. I mean obv its legit as many do it, but i dunno if I trust sending a couple hundred via snail mail . Tried to get a liberty reserve account, but that is just as annoying to add money to. 
> 
> Of course for the past 2 weeks ive been wanting to purchase, and for the past 2 weeks ive been putting it off. Now its up to 10$/BTC, ffff. Even if i mail my $#@! in tomorow thats still about a week and a half before i get teh money in my account. By then it could be 20$/BTC   >:0
> 
> anyone know of a simpler, quicker way to get money to mtgox?


Use Dwolla. It's pretty much a Paypal clone without Paypal's bull$#@! and high fees. You'll need to tie it to a bank account just as you would with Paypal. Fee is a flat $.25 per transaction. Only major problem is that Dwolla is US-only. If you live outside of US, your best bet is probably using otc as sirgonzo posted or @ the official unofficial Bitcoin marketplace forum @ http://forum.bitcoin.org/index.php?board=5.0 where people are wiling to accept all sorts of different payments for BTC.

----------


## losinglife

I looked at dwolla very briefly, but at that point i had given up. Ill look at both tonight or tomorow, you know right when its teh wrong time to buy.... just like when i got into silver >< doh!

----------


## Uncle Emanuel Watkins

> It seems to be taking off like crazy with TIME and Forbes 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.


We can only control tyranny by persuading, manipulating, and coercing it to perceive its conscience.  When tyranny has been made sick or intoxicated on false power, it won't perceive the real power of the Truth.  When we believe those who tell us that we have more power than tyranny, this confuses matters and creates cruel situations.  When we believe we can control tyranny because we are smarter than they, we are delusional.  
In the end, when the necessary tyranny ruling over the United States understands how it will one day be held to a higher penalty under God's judgement, it will behave itself.

----------


## low preference guy

If bitcoin keeps working, I think it will become the most important monetary development since people started using money instead of bartering.

----------


## Mahkato



----------


## low preference guy

a bitcoin is at almost $23 bump

----------


## dannno

> a bitcoin is at almost $23 bump


Can you sell partial bitcoins, like bitpennies, or do they need to do a split here soon?

----------


## hazek

The technology support selling 0.00000001 of a Bitcoin at a time.

Man price is going ballistic.. almost $24

EDIT: nvm, approaching $25!

----------


## low preference guy

> The technology support selling 0.00000001 of a Bitcoin at a time.
> 
> Man price is going ballistic.. almost $24


Is this the Fed buying to create the impression of a bubble?

----------


## hazek

LOL!  No I think all the people who found out about it in past few days because of all the media attention finally managed to get their funds into mtgox, I mean just look at the bid/ask ratio:

----------


## low preference guy

why are the prices in bitcoincharts.com and bitcoinmarket.com so different?

----------


## hazek

Don't know but I suspect it has to do with the way lower volume.

----------


## PlzPeopleWakeUp

Can I put it in my safe and protect it with my AK? No?
Not worth a damn then.

See that solar explosion today? If the angle was right on that one it could have nearly erased all digital data on the side of the planet that would be facing the sun when the solar storm hits 3 day later. Bit coin virtual currency? yeah. Sounds great. Sounds great like a cashless society sounds great.

Also, you think the mob is going to let you all do transactions for very long without getting a piece of the action? Just a matter of time before some tax evasion cases start and they (the establishment) determine they need to regulate it. Maybe this is a hoodwink on you all? And yes I understand the dynamics of a peer based decentralized currency... looks like perfect timing with the coming currency crash and all the yellow journalists are promoting it. Was a concerted effort before this also to promote it by movers and shakers of certain communities... plants? Scum rises to the top?

----------


## low preference guy

I read some blogger today who is skeptical of bitcoins. He said it's a great idea but it should be implemented with something that backs up the currency. Reading him provoked some thoughts:

I think bitcoin has an advantage over any currency backed by metals: zero transaction costs. If you back a digital currency with a metal, say gold, you'll have to move the gold somehow. That's impractical or expensive for transactions across the globe.

The conclusion is that bitcoin has an advantage over *any* currency backed by real assets: zero transaction costs.

That is a very strong reason to use it. If the bitcoins don't crash in the coming weeks and months, it will likely be used by those whose businesses depend on having low transaction costs for transactions across great distances. So these people will have a very strong incentive to keep the currency functioning. They can encourage the use of bitcoins just by allowing payment in bitcoins. So here we have another group of people besides drug sellers who need a service that only bitcoins can provide.

I don't know if the bitcoin experiment will work, but it certainly is a much more powerful idea than I originally suspected.

----------


## Carson

> 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


From what you say it sounds as worthless as central banks notes. If it has built in inflation you never receive the amount agreed upon because by the time your paid it is *worthless*.

If they can print up what ever they want then it also mirrors the way central banks counterfeit against others wealth making their bits *worthless*.

----------


## hazek

I think most criticisms that mention the fictional nature of Bitcoin and the fact that it's not backed by anything are voiced by people who don't fully understand where it's value comes from.

Bitcoin in my view is backed by it's properties. The trust to maintain these properties is what gives it value.

Also most people who object to fiat currencies do so not because those currencies are fictional and printed on paper but because there's a central authority issuing them that can inflate at will. 

Obviously Bitcoins are not a scarce physical commodity but they are also not a fiat currency of which it's supply can be diluted at will by a central authority.

I see it as an invention. Something completely new, something we haven't had before in the history of human kind. It's a fictional currency but one which doesn't give anyone the power to dilute it's supply by design that is protected by the laws of math and physics.

----------


## hazek

> If they can print up what ever they want


They can't.

----------


## low preference guy

Another potential problem I was thinking about is what would happen when we reach 2040 and the production of bitcoins stop, and the supply of bitcoins decreases because they're lost or some computers break.

It turns out the solution is very simple: Allow bitcoins to be divided into smaller fractions, i.e., into more than 8 decimal places.

----------


## hazek

AFAIK that's the plan if the need should come..

----------


## low preference guy

> AFAIK that's the plan if the need should come..


Maybe by 2040 it would be technologically feasible to divide a bitcoin up to any fraction the owner wants to. That would solve the problem permanently. No further fixes would be required ever again.

----------


## gregb

As I've previously noted, I'm involved with the Canadian Pirate Party and therefore have to be aware of it - I'm also a computer programmer so I'm interested in it from that standpoint. So, a few thoughts ...

What bitcoin really is is software - bitcoin is a computer program. It is open source. It seems to me that it is therefore completely possible to go and get the source code, change a few of the values and have a completely operational program meant to do something. The question is what?

Probably a few minutes would have me a fully functional "RonPaulCoin" program. I don't know what it could be used for but I can't see it being hard to do. 

I've been mulling over its potential use as a voting mechanism. Bitcoin (the software) attributes are (supposedly) anonymity and security. Privacy and encryption. 

What about using it for a ticket distribution system? You would set total "concertcoins" possible to be the size of the venue, say 1000, and then people interested in tickets would start "concertcoinmining" to get tickets to ...... sell for bitcoins? I don't know.

If we can make "ronpaulcoins" then anybody can make a project with the bitcoin software. It doesn't have to be used to create an economy in much the same way as you can use wordpress to make a static website - it doesn't matter that it is "weblog" software. If we want to change the way that the code works we can and so maybe we want "ronpaulcoins" to be mined by, I don't know, doing volunteer work is a wild, unexamined idea, for an example. I don't know what use it might be to have a ronpaulcoin - maybe back the ronpaulcoins with actual meeting(s) with Ron Paul? Value it at 10 meetings at 100,000 ronpaulcoins a meeting so 1 million ronpaulcoins are needed - to get them you'd do volunteer work and I suppose that people would have to accumulate enough ronpaulcoins so maybe they'd pay actual cash for them and then we'd see what the market is - how much a ronpaulcoin is worth.

I just came up with that as I was typing so it is probably completely ludicrous and would encourage hoarding, etc but I was just imagining a fund raising vehicle that was driven by a volunteer economy built on bitcoin software.

Anyway, I just think that as we follow this extremely interesting experiment that we should not ignore other uses that the software may enable.

----------


## farrar

> 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.


......... #$%^$ 3$% $#%$#  %$#%  %$%$ @#$#@$ ^$#^%^ 8   78^%&^%&^%&%^&%^&^%&^% ......

$26.70 who would have guessed in such a short time.... my god I am so blowed. to think i alomst droped 200 dollars in these things when they were 89 cents a piece.... son of a gun!

----------


## Fox McCloud

Does anyone have a rough exchange rate or about how many bitcoins can be mined based on your processor power?

----------


## Kludge

> Does anyone have a rough exchange rate or about how many bitcoins can be mined based on your processor power?


It varies wildly. ATI cards can be dramatically more cost efficient depending on the model you purchase. Nvidia cards produce ~75-80% less hash/s than similarly-priced (and similarly-clocked) ATI cards. On top of that, overclocking with just a stock air cooler can increase hash rate by up to 40%. On top of that, difficulty is constantly fluctuating in huge #s, and how aggressive you let the miners run at has a big impact, as well -- trying out different flags for miners, and different kernals can lead to 15-20% increase in hash rate.

There is a really nice spreadsheet which takes into account a great number of variables @ http://forum.bitcoin.org/?topic=7531.0 but it won't provide what you asked for, and I don't think anyone's done the time to average processors' BTC production per clock speeds since clock speed is a poor indicator of BTC production and mining difficulty is constantly changing.

Or if you were talking about CPUs exclusively -- if your electricity costs over $.15/KWh, you'll probably see a loss. 4 Phenom IIs @ 3.4 GHz produce 12.2 MH/s fwiw. 14.4 MH/s when bumped up to 4 GHz. 14.4MH/s (using 140w CPU, excluding power draw of other components) translates to ~.7 BTC/month excluding pool operator fees (and transaction fees) at the current difficulty. That comes to about $20/month in revenue -- @ $.15 KW/h electricity, you'll be well into the red ($15/mo just to operate the CPU).

(12.2/4)/4= .7625 MH/s per GHz per core on Phenom II @ stock speed.
(14.4/4)/4= .9 MH/s per GHz per core on Phenom II w/modest OC.

Or, roughly .04865 BTC/month per GHz per CPU Core on Phenom II w/modest OC. Or, $1.26/mo in revenue per GHz per core (@ $25.9USD/1BTC).

----------


## Fox McCloud

Thanks for the information--my electricity costs are _listed_ at 9 cents per Kw/H...but if you include all the fees and other charges, it's actually 13 cents per Kw/H, so it doesn't sound as though it would be that economical to engage in, especially considering my primary computer is really the only one that could generate any decent amount, each month.

----------


## Texan4Life

my laptop stays on 24/7 my GPU used to run Folding@home. it now runs GUIminer. 145 Mhash/s.. It is a ATI mobility radeon 5870.

though I still run F@H on the CPU. for whatever reason my GpU mhash/s drops to like 40 when the cpu starts mining. and the CPU only does 2 Mhash/s anyway.

----------


## steve005

so why don't we discuss how it actually works, here and not just links

your computer solves problems, how are the problems generated? how do they get harder to solve? what if someone figures out a fourmula to solve the "problems" faster that normal mining?

----------


## low preference guy

> your computer solves problems, how are the problems generated? how do they get harder to solve? what if someone figures out a fourmula to solve the "problems" faster that normal mining?


then you'll solve a problem that hundreds if not thousands of researchers have been unsuccessfully trying to solve for many years. it's not impossible, but not expected.

----------


## Andrew-Austin

You can't buy anything with bitcoin. It seems the only reason people are buying is because the price is going up. Of course people have to value it and buy it before the price could get bid up, but I think this valuation is only rooted in future expectations. Future expections that seem, what is the word I am looking for, baseless. Reading the bitcoin forums, the users are like "true believers", its like a political cause for them to promote bitcoin, it just seems like a weird way for a currency to start. There isn't anything to buy, yet it seems a lot of the people on the bitcoin forum are wary of "hoarding". I mean if no one ever uses bitcoins to buy things, what happens? So I keep seeing people buy things like alpaca socks and things they ordinarily would never buy, to do "their part" for bitcoin. 

I'm only interested in buying, in order to hoard and (hopefully) watch the value of my bitcoins sky rocket. But I get the feeling there is something missing for bitcoin to become a viable currency, and thus I'm wary that if I buy and hoard it will just bite me in the ass one day. Maybe I'm just not used to doing something so very speculative? Thoughts?

----------


## low preference guy

> You can't buy anything with bitcoin. It seems the only reason people are buying is because the price is going up. Of course people have to value it and buy it before the price could get bid up, but I think this valuation is only rooted in future expectations. Future expections that seem, what is the word I am looking for, baseless. Reading the bitcoin forums, the users are like "true believers", its like a political cause for them to promote bitcoin, it just seems like a weird way for a currency to start. There isn't anything to buy, yet it seems a lot of the people on the bitcoin forum are wary of "hoarding". I mean if no one ever uses bitcoins to buy things, what happens? So I keep seeing people buy things like alpaca socks and things they ordinarily would never buy, to do "their part" for bitcoin. 
> 
> I'm only interested in buying, in order to hoard and (hopefully) watch the value of my bitcoins sky rocket. But I get the feeling there is something missing for bitcoin to become a viable currency, and thus I'm wary that if I buy and hoard it will just bite me in the ass one day. Maybe I'm just not used to doing something so very speculative? Thoughts?


it makes sense to buy drugs online only with bitcoins. there are many transactions  one wants to do anonymously. bitcoins are the best for that. 

so those merchants will accept bitcoins. that will give bitcoins some value. then others will want to take advantage of the low transaction cost. since bitcoins have some value, they can do it. so you have now more uses for bitcoins... and so on.

i'm not absolutely sure they will work. but it's worth trying.

----------


## hugolp

> so why don't we discuss how it actually works, here and not just links
> 
> your computer solves problems, how are the problems generated? how do they get harder to solve? what if someone figures out a fourmula to solve the "problems" faster that normal mining?


The difficulty adjusts to the network hashing speed to keep the generation ratio stable. If someone discovers a software that produces more with the same hardawre the difficulty will go up to keep production rate stable.




> You can't buy anything with bitcoin. It seems the only reason people are buying is because the price is going up. Of course people have to value it and buy it before the price could get bid up, but I think this valuation is only rooted in future expectations. Future expections that seem, what is the word I am looking for, baseless. Reading the bitcoin forums, the users are like "true believers", its like a political cause for them to promote bitcoin, it just seems like a weird way for a currency to start. There isn't anything to buy, yet it seems a lot of the people on the bitcoin forum are wary of "hoarding". I mean if no one ever uses bitcoins to buy things, what happens? So I keep seeing people buy things like alpaca socks and things they ordinarily would never buy, to do "their part" for bitcoin. 
> 
> I'm only interested in buying, in order to hoard and (hopefully) watch the value of my bitcoins sky rocket. But I get the feeling there is something missing for bitcoin to become a viable currency, and thus I'm wary that if I buy and hoard it will just bite me in the ass one day. Maybe I'm just not used to doing something so very speculative? Thoughts?


I just bought some computer cables yesterday with bitcoins.

The quick rise is a bit scary but you have to think that its a new currency and the publicity has given it a incredible demand. Non conventional behaviour is expected at the beginning.

----------


## iGGz

So these bitcoins sound cool and all, but what can you actually buy with them?

----------


## low preference guy

> So these bitcoins sound cool and all, but what can you actually buy with them?


ecstasy and acid. it has the potential to let you buy anonymously, so porn is also a natural product to be traded in bitcoins.

----------


## Andrew-Austin

> ecstasy and acid. it has the potential to let you buy anonymously, so porn is also a natural product to be traded in bitcoins.


Too bad people don't buy porn. Heh, maybe bitcoiners should promote the currency to the owners of porn cites though.

----------


## Kludge

> So these bitcoins sound cool and all, but what can you actually buy with them?


 Silver rounds @ spot, Anything from Amazon with no fee using non-Amazon-affiliated service, anything from Newegg (believe that service has a fee), excellent roasted coffee beans @ bitbrew.net, all sorts of foodstuff @ bitmunchies.com, drugs off Silk Road ofc, other sites exist - and ofc there's the large # of listings of stuff for sale using BTC @ https://forum.bitcoin.org/index.php?board=26.0 - PDAs, Wiis, gfx cards, games, webhosting, etc.

----------


## Kludge

> Too bad people don't buy porn. Heh, maybe bitcoiners should promote the currency to the owners of porn cites though.


 You bet there's a BTC-accepting porn site! [nsfw obviously] http://www.bitcoinxxx.com/

----------


## low preference guy

> Too bad people don't buy porn.


lol!

there is a lot of free porn but you're very misinformed if you believe people don't buy it online.




> Heh, maybe bitcoiners should promote the currency to the owners of porn cites though.


your snarky posts usually come off well, but now you're just making yourself look like a fool. bitcoin was not designed to be used in a city. it's purpose is not to be used in every possible transaction. when it comes to transactions, bitcoins:

1. allow people to transact anonymously
2. allow transactions across great distances at a cost of zero

----------


## iGGz

So how do I mine for coins? Is there software that does this? What does mining for coins actually mean? What's the best software for this?

----------


## Rosenzweig

> So how do I mine for coins? Is there software that does this? What does mining for coins actually mean? What's the best software for this?


http://www.bitcoin.org/ 

Look here first. Check out the FAQ and then download the Bitcoin application, it's basically your wallet. Now how to mine coins you need to get either a CPU miner or GPU miner. I recommend the GPU miner, because CPU mining is becoming obsolete. Basically, go and download a GPU miner like this one, http://forum.bitcoin.org/?topic=1721.0, and then get everything set up and run. It will drain all the GPU power you have, so don't play any games.

----------


## low preference guy

> There isn't anything to buy


link

----------


## low preference guy

> http://www.bitcoin.org/ 
> 
> Look here first. Check out the FAQ and then download the Bitcoin application, it's basically your wallet. Now how to mine coins you need to get either a CPU miner or GPU miner. I recommend the GPU miner, because CPU mining is becoming obsolete. Basically, go and download a GPU miner like this one, http://forum.bitcoin.org/?topic=1721.0, and then get everything set up and run. It will drain all the GPU power you have, so don't play any games.


beware: your electricity costs might be more expensive that the value you gain from mining, because it has become more difficult

----------


## iGGz

> http://www.bitcoin.org/ 
> 
> Look here first. Check out the FAQ and then download the Bitcoin application, it's basically your wallet. Now how to mine coins you need to get either a CPU miner or GPU miner. I recommend the GPU miner, because CPU mining is becoming obsolete. Basically, go and download a GPU miner like this one, http://forum.bitcoin.org/?topic=1721.0, and then get everything set up and run. It will drain all the GPU power you have, so don't play any games.


What is that actually doing though? What is my GPU being used for? What is mining? I don't get it.

----------


## iGGz

http://gawker.com/5805928/the-underg...rug-imaginable




> Jeff Garzik, a member of the Bitcoin core development team, says in  an email that bitcoin is not as anonymous as the denizens of Silk Road  would like to believe. He explains that because all Bitcoin transactions  are recorded in a public log, though the identities of all the parties are  anonymous, law enforcement could use sophisticated network analysis  techniques to parse the transaction flow and track down individual  Bitcoin users. "Attempting major illicit transactions with bitcoin, given existing  statistical analysis techniques deployed in the field by law  enforcement, is pretty damned dumb," he says.

----------


## low preference guy

> http://gawker.com/5805928/the-underg...rug-imaginable


haha. PR. at least it seems to me.

what if you use a new pseudonym for each transaction in an anonymous network? how can they detect you? i don't think they can unless you give them your information. at least it seems that way to me.

----------


## iGGz

> Silk Road and Bitcoins could herald a black market eCommerce revolution.  But anonymity cuts both ways. How long until a DEA agent sets up a fake  Silk Road account and starts sending SWAT teams instead of LSD to the  addresses she gets? As Silk Road inevitably spills out of the bitcoin  bubble, its drug-swapping utopians will meet a harsh reality no  anonymizing network can blur.


I can see this happening

I'd buy some for the hell of it if they weren't $30 a coin

----------


## low preference guy

> PR?


if you give them your information is not anonymous, obviously. it's expected to be anonymous only when you don't give them your information.

----------


## low preference guy

> I'd buy some for the hell of it if they weren't $30 a coin


i think you can buy 0.00000001 of a bitcoin if you want to.

but bitcoin has many disadvantages also.  you need to back them up. they're just files. if you lost your files, you lost your bitcoins.

----------


## iGGz

> i think you can buy 0.00000001 bitcoin if you want to.


Hmm I see. I'll have to read up a little more I guess. Definitely sounds cool though

It appears the Senate is really not liking it though ...imagine that.

http://venturebeat.com/2011/06/08/go...wn-on-bitcoin/

----------


## low preference guy

> I can see this happening
> 
> I'd buy some for the hell of it if they weren't $30 a coin


the feds are probably infiltrating silk road (the drug store). there are some sellers which have high ratings and were working long before they got publicity. but maybe the feds infiltrated them too.

----------


## iGGz

> the feds are probably infiltrating silk road (the drug store). there are some sellers which have high ratings and were working long before they got publicity. but maybe the feds infiltrated them too.


Yeah it really is too bad, sounds like a nice place

----------


## Kludge

> the feds are probably infiltrating silk road (the drug store). there are some sellers which have high ratings and were working long before they got publicity. but maybe the feds infiltrated them too.


 Silk Road may have saved itself. It's totally closed registrations. The index page is just a box for un & pw. No other pages are viewable until logged in.

There's a "secret" backup server, too.


This help with your mining q, iGGz?

"But the second way of securing the system, called the blockchain, is where the real magic happens.  The blockchain is a *single, authoritative record*  of confirmed transactions which is stored on the peer to peer bitcoin  network.  Even with top-notch digital encryption, if there was no  central registry to show that certain bitcoins had already been "paid"  to someone else, you could sign over the same coins to multiple people  in what's called a double-spend attack,  like writing cheques for more money than you have in your account.   Normally this is prevented by a central authority, the bank, who keeps  track of all the cheques you write and makes sure they don't exceed the  amount of money you have.  Even so, most people won't accept a cheque  from you unless they really trust you, and the bank has to spend a lot  of money physically protecting those central records, whether they are  kept in a physical or digital form.  Not to mention, sometimes a bank  employee can abuse their position of trust.  And, in traditional  banking, the bank itself doesn't have to follow the rules you do--it can  lend out more money than it actually has.

The  blockchain fixes all these problems by creating a single master  registry of the already-cryptographically-secured bitcoin transfers,  verifying them and locking them down in a highly competitive market  called mining.   In return for this critical role, the BitCoin community rewards miners  with a set amount of bitcoins per block, taken from the original  limited quantity on a pre-agreed schedule.   As that original amount gradually runs out, this reward will be  replaced by fees paid to prioritise one transaction over another--again  in a highly competitive market to ensure the lowest possible cost.  The  transactions are verified and locked in by the computational work of  mining in a very special way so that no one else can change the official record of transactions without doing more computational work than the _cumulative_ work of _all_ miners across the whole network." http://forum.bitcoin.org/index.php?topic=7269.0

----------


## low preference guy

> Yeah it really is too bad, sounds like a nice place


i think watching this thing is really interesting. i read some other people are opening another black market. if the value of the coins doesn't collapse, maybe more similar places will appear. but the buyers still have the problem that the whole store might be run by the feds. but still, it could be cheaper for the drug mafia to risk using those stores.

----------


## losinglife

> Silver rounds @ spot, Anything from Amazon with no fee using non-Amazon-affiliated service, anything from Newegg (believe that service has a fee), excellent roasted coffee beans @ bitbrew.net, all sorts of foodstuff @ bitmunchies.com, drugs off Silk Road ofc, other sites exist - and ofc there's the large # of listings of stuff for sale using BTC @ https://forum.bitcoin.org/index.php?board=26.0 - PDAs, Wiis, gfx cards, games, webhosting, etc.


wtf did you buy silver rounds at with btc?

----------


## Kludge

> wtf did you buy silver rounds at with btc?


 http://forum.bitcoin.org/?topic=6497.0

----------


## hugolp

*Kludge*, I use your signature to keep updated in the bitcoin exchange value.

----------


## psi2941

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

i thought the point of bitcoins was to be anonymous?

----------


## hazek

Not it's not anonymous, that was a media hyped fabrication. 

Bitcoin with special precautions allows to be used pseudoanonymously but nothing more than that. And as soon as someone can link your pseudonym to your identity every past transaction you have made to or from that pseudonym is freely available for the whole world to see.

----------


## psi2941

> Not it's not anonymous, that was a media hyped fabrication. 
> 
> Bitcoin with special precautions allows to be used pseudoanonymously but nothing more than that. And as soon as someone can link your pseudonym to your identity every past transaction you have made to or from that pseudonym is freely available for the whole world to see.


what if let say a user, decides to open a bit coin software though a proxy server in china?
EDIT: NM got it

----------


## low preference guy

> Not it's not anonymous, that was a media hyped fabrication. 
> 
> Bitcoin with special precautions allows to be used pseudoanonymously but nothing more than that. And as soon as someone can link your pseudonym to your identity every past transaction you have made to or from that pseudonym is freely available for the whole world to see.


when can the feds link a pseudonym to a person? it seems to me there are cases they can't, so in those cases it's anonymous.

----------


## hazek

I disagree. You always know from where it comes and it doesn't matter whether or not you can link a public address to an identity. If you can't you still know the public address so at best it's pseudonymous.

But I agree that with proper precautions and in certain cases it should be virtually impossible to link a pseudonym in the form a public address to a specific personal identity.

----------


## CyberTootie

I'm really disappointed that they decided upon the term bit"coin". I can see law enforcement now...

"Well, only the U.S. Mint has the authority to make coins!"

----------


## low preference guy

> I'm really disappointed that they decided upon the term bit"coin". I can see law enforcement now...
> 
> "Well, only the U.S. Mint has the authority to make coins!"


I don't think it makes much of a difference. The reason is that they were going to try to destroy bitcoins no matter what, so deciding to just ignore all their laws is a good thing to do.

----------


## demolama

Confusion post #2:  if pools require a log in and password then isn't that a central database that could be used against users should the authorities come after users?

----------


## hugolp

> Confusion post #2:  if pools require a log in and password then isn't that a central database that could be used against users should the authorities come after users?


First of all, you can mine by yourself, joining a pool is just optional. What a pool does is just allow the miners to have a more constant rate of income, instead of getting 50 coins and then spend 2 months getting nothing.

Second, the pools are starting to accept encrypted connections.

Third, what would be the charges? Joining a pool?!?

----------


## losinglife

> http://forum.bitcoin.org/?topic=6497.0


i need to stop being lazy and join that forum

----------


## Brian Defferding

I find it amusing that Senator Chuck Schumer wants to crack down on it, because he doesn't like the fact the government cannot control it and, heaven forbid, people could use it to buy drugs and porn. Gasp. Good thing that doesn't happen with our trusted government-regulated fiat currency, backed with full faith and credit of Uncle Sammy hisself! That's a drug-and-porn-free dollar, gaa-ruhn-TEED!

----------


## IDefendThePlatform

Where is Mt Gox based?

If/when the feds attack, how much will I still be able to do overseas? Is there another MtGox type website somewhere else that I could use?

FYI I don't do drugs at all, I just like bitcoin.

----------


## Texan4Life

> Where is Mt Gox based?
> 
> If/when the feds attack, how much will I still be able to do overseas? Is there another MtGox type website somewhere else that I could use?
> 
> FYI I don't do drugs at all, I just like bitcoin.


there are many options... mtgox just seems to be the biggest/most popular

https://en.bitcoin.it/wiki/Buying_bitcoins

----------


## IDefendThePlatform

> there are many options... mtgox just seems to be the biggest/most popular
> 
> https://en.bitcoin.it/wiki/Buying_bitcoins


Thanks Texan! +rep

Next question,

If my bitcoins are all stored on my computer and not backed up, and it crashes, is there anyway to retrieve my bitcoins?

----------


## hugolp

> Thanks Texan! +rep
> 
> Next question,
> 
> If my bitcoins are all stored on my computer and not backed up, and it crashes, is there anyway to retrieve my bitcoins?


The sensible things to do is to back-up your wallet.dat. If you loose your wallet.dat and there is no copy the bitcoins are lost forever. Making a back-up of wallet.dat is a must, just copy it to some usb memory stick and lock it up.

PS: I believe MtGox is officially a company in Japan, but the main owner is an american living in the USA.

----------


## Kludge

I bought in for a few hundred USD @ $25. Not too worried, yet. Transferring a few hundred more to Mt Gox in case it dips to ~$16.

----------


## hazek

2nd flash crash........... 

Watch the horror here live: http://mtgoxlive.com/orders?oneaxis

----------


## Kludge

MtGox's trade server appears to be flooded with traffic. Taking 30-90s for an order to be placed.

Well. At least there's ~$100k of resistance @ $10. Though, $52k @ $20 didn't seem to make any difference.

----------


## hugolp

Jacob Appelbaum, the only known USA member of Wikileaks, said three days ago:




> Bitcoin prediction: Major bugs in the near future will mess with the "market"


http://twitter.com/#!/ioerror/status/78480502641803264

Maybe its what we are seeing now. Im ok with what its going on, the price increase was not normal.

----------


## hugolp

I dont know if this is true:




> Market manipulation. There were two big fake buy orders @ $20.10 & $20 trying to keep the price up. As soon as these were cancelled they price fell through the floor.
> 
> P.S. I suspect the big buy @ $10 is by the same manipulator, stay smart.

----------


## hazek

I did wonder whether or not orders that don't have the funds to support them show up as legit orders? I thought they didn't..

btw they guy who dumped 22k BTC 25min ago has got to be crazy.

----------


## hazek

Oh and I guess we could make a few buck here https://bitoption.org/?closedate=2011-06-16 off of outdated options

----------


## hugolp

> btw they guy who dumped 22k BTC 25min ago has got to be crazy.


Its too random that the wikileaks guy warns about an attack on bitcoins and 3 days later the exchange crashses with people dumping thousends of bitcoins.

Also, the bitcoin forum is down. And yesterday night the mining pools (all the big ones) received a DOS attack.

EDIT: Up again to 16.6, its going to be an fun day. Anyone willing to take the risk?

----------


## hazek

hmmmmmm I think I'm also starting to smell a rat..

EDIT: Looks like we're on a rebound 


Weeee goes the roller coaster, weeeeee

----------


## hazek

> EDIT: Up again to 16.6, its going to be an fun day. Anyone willing to take the risk?


Nope I just sold again at 17.89 a bit too prematurely as I can see right now 

EDIT: but absent of any dark orders there seems to be virtually no support and I expect another huge dip momentarily

EDIT2: LOL under 2k BTC buy orders, are you kidding me? are we about to go bid-less?

----------


## hugolp

> Nope I just sold again at 17.89 a bit too prematurely as I can see right now


Yep, up to 19 again. Too bad. I am no trader but I feel you will see 17 again today. Its going to be a fun day. I bet Kludge is trading like crazy.

----------


## hazek

Yeah he must be 

I wonder if it's this much fun trading in a real life stockexchange

EDIT: hey hugolp, did you read?: http://www.dailytech.com/Digital+Bla...ticle21877.htm

I wonder what they'll write today or tomorrow

----------


## hugolp

There seems to be a big small battle at 19. Is the trading volume that there is now normal? it seems a bit freezed to me but I dont really know the normal volume.

The bitcoin forum is still down. This is weird.




> hey hugolp, did you read?: http://www.dailytech.com/Digital+Bla...ticle21877.htm


Bah, the comments are the best part. People need to understand its a young project. Volatility is expected.

EDIT: Back again to 15.

EDIT: Now up to 18. Seems to me there is a lot of fear and some brave man are making a killing.

----------


## hazek

> EDIT: Now up to 18. Seems to me there is a lot of fear and some brave man are making a killing.


We sure are 

I timed all the big moves almost perfect today, and am about to buy back at 16.31

EDIT: oops here we go with the press: http://news.slashdot.org/story/11/06...lue-Volatility

----------


## hugolp

The forum is back up and it seems that MtGox is delaying orders. Its probably why I was feeling things were so slow in the market. I have to say Im glad MtGox kept opened. Usually the markets close when there are such big moves.

----------


## hazek

Hmm you think it's a good thing to have these huge swing due to a shallow market? Wouldn't be better if the market closed on big moves to give people time to replenish the orders?

Btw bought back in at 17:05

----------


## Kludge

> Yep, up to 19 again. Too bad. I am no trader but I feel you will see 17 again today. Its going to be a fun day. I bet Kludge is trading like crazy.


 I'd be trading a lot more if I kept my BTC earnings in Dwolla or MtGox instead of putting it in the bank. D'oh! ~Three-day wait for buyers to get money in their MtGox account is a huge barrier to people trying to buy the dip. I did manage to grab a smidgin @ $13.

Silk Road has also been completely down the past day atop them closing registration a few days ago. Admin said they'll be up again with higher-powered, more secure servers today or tomorrow and I suspect they'll re-open registration. It's hard to overestimate the effect SR has had on BTC. Prices soared after that piece on SR was spread around and Senator Schithead from Dumbassistan was on video browsing the site. I'd guesstimate SR sees upward of $50k in BTC transactions every week, creating a lot of demand for BTC from people not particularly interested in BTC itself. BTC may very well be hooked on drugs, unregistered guns, and fake IDs.

----------


## hugolp

> Hmm you think it's a good thing to have these huge swing due to a shallow market? Wouldn't be better if the market closed on big moves to give people time to replenish the orders?
> 
> Btw bought back in at 17:05


I dont know. This measures really seem to counter the panic. When the markets close for a day, the next day people dont want to sell as much, and a similar effect might be happening with dealying orders. Some seem to say that the delaying orders in MtGox is unwanted and due to overloaded sytems. Who knows. But this kind of things do affect. Its psicological effect.

----------


## hazek

The most fascinating thing is that we are both going to certainly find out which is best or at least most preferred by the market seeing as mtgox is not regulated by anyone else but us 

Btw sold again at $18, not too happy about it am undecided where it's going next

EDIT: ooh, here we go, clearly down again next

EDIT: or not, damn dark orders

EDIT: back in at 17.20 :P

----------


## kpitcher

The new market Tradehill seems nice. If you're experiencing any slowdown on MtGox give them a shot. I've been happy with both, had no problems other than the MtGox -> Dwolla issue that delayed cashing out last week.  

Here's a handy link
http://www.tradehill.com/?r=TH-R12541

This includes a referral code. The normal commission is 0.25 - 0.75%. A referral lowers the commission fee by 10%
so worth keeping

----------


## abolitionist

I haven't read the past 38 pages.  But Deflation is good.   Those who oppose deflation are essentially advocating that we're better off if the government steals from us by devaluing our money.  Inflation is enslavement.

On the fence on Bitcoin.  Glad to see someone has taken this idea and run with it, though.

----------


## iGGz

Damn, I would have bought in at $15....

I'm going to put a buy order in for 1000 @ $10

----------


## hazek

Hmm I don't know.. I have a hard time believing will drop that low from here on forward. But it's absolutely possible.

----------


## hugolp

> Hmm I don't know.. I have a hard time believing will drop that low from here on forward. But it's absolutely possible.


Yes, it seems it has stabilized around 17-18. The fun has ended.

I am really surprised that anyone is really surprised by all ths volatility. Bitcoin is a young project, this was expected, and is still expected in the future.

----------


## iGGz

> Bitcoin is a young project, this was expected, and is still expected in the future.


Next stop $10

----------


## hazek

yeah I'm trading like mad right now  trying to catch every dip and every rally  

EDIT: man i feel sorry for people who are getting killed right now while I'm making a profit ..

----------


## iGGz

$10?

----------


## low preference guy

close! $11.98

----------


## iGGz

Are you guys using Dwolla and mtgox?

Or what's the best way to transfer $$ into the mtgox account?

----------


## hazek

They say Dwolla, I wouldn't know though.

And yep it looks like $10 - $10.5 will be the next floor, for now.

----------


## Andrew-Austin

Decided to try this. Just created a Dwolla and MtGox account. Now to wait three days for my dwolla account to be verified, and then possibly wait longer for me to be able to add funds.  Who knows what the price will be by then.

----------


## Texan4Life

> Decided to try this. Just created a Dwolla and MtGox account. Now to wait three days for my dwolla account to be verified, and then possibly wait longer for me to be able to add funds.  Who knows what the price will be by then.


+1 gonna put some play money into mt gox... I just hope I can get it there in time to buy before it goes up again.

----------


## Kludge

I notice my pool's hash rate has actually increased since BTC price went from $30 to $10 USD. That seems quite backward.

----------


## hugolp

> I notice my pool's hash rate has actually increased since BTC price went from $30 to $10 USD. That seems quite backward.


What pool are you in? BTCGuild? People went away from the bigger pool to the others because it was getting too big and people feared it wsa getting too powerful. It was discussed in the forums.

----------


## Kludge

> What pool are you in? BTCGuild? People went away from the bigger pool to the others because it was getting too big and people feared it wsa getting too powerful. It was discussed in the forums.


 Yeah. Though, Deepbit controlling nearly half the network's hashing power has been discussed ad nauseum since before I started mining.

----------


## Kludge

Silk Road came back up ~10h ago. Registrations are still closed.

----------


## hugolp

Is there something wrong with MtGox?. It seems like the trades have stopped.

----------


## hazek

Man this is disgusting I was trading so well yesterday and through the night and then bought at exactly bottom and went to bed and just for kicks and giggles set up a sell at $15 in case it bounced back that high one more time. Fk I'm pissed right now.

----------


## Napoleon's Shadow



----------


## iGGz

> Yeah. Though, Deepbit controlling nearly half the network's hashing power has been discussed ad nauseum since before I started mining.


Which would you do?

*Pay-Per-Share mode:*You get a  fixed amount for every share submitted. This method has zero variance  but slightly higher fee (because pool takes the risk). Recommended if you like steady payouts.

*Proportional mode:*You get a portion of every solved block proportional to your part in pool's hashing power. This payment method has a noticeable variance:  some days you can get less, some days you can get more. This is due to  randomness of searching for proof-of-work. The fee is 3%

----------


## hugolp

> Which would you do?
> 
> *Pay-Per-Share mode:*You get a  fixed amount for every share submitted. This method has zero variance  but slightly higher fee (because pool takes the risk). Recommended if you like steady payouts.
> 
> *Proportional mode:*You get a portion of every solved block proportional to your part in pool's hashing power. This payment method has a noticeable variance:  some days you can get less, some days you can get more. This is due to  randomness of searching for proof-of-work. The fee is 3%


You can get Proportional mode with no fees at other mining pools.

----------


## Texan4Life

> You can get Proportional mode with no fees at other mining pools.


yep here is a comparison for those interested. https://en.bitcoin.it/wiki/Comparison_of_mining_pools

----------


## sirgonzo420

I've tried to figure out how to mine, but can't quite figure it out... anyone wanna help?

----------


## hugolp

> I've tried to figure out how to mine, but can't quite figure it out... anyone wanna help?


Whats the problem? What mining program and what pool are you using?

----------


## Texan4Life

> I've tried to figure out how to mine, but can't quite figure it out... anyone wanna help?


I use GUI miner and bitcoin mining pool (bitcoinpool.com)

I used this guide to get me started: http://forum.bitcoin.org/?topic=3878.0

edit: and of course you will need the bitcoin program (bitcoin.org)

----------


## iGGz

> I use GUI miner and bitcoin mining pool (bitcoinpool.com)


Have you been successful so far with those 2?

----------


## iGGz

Alright ...what is a Wallet ID. Man I feel like such a noob. Is it the same thing as BitCoin address?

----------


## low preference guy

> Alright ...what is a Wallet ID. Man I feel like such a noob. Is it the same thing as BitCoin address?


(I think) that's your address where people send you bitcoins

----------


## iGGz

> I use GUI miner and bitcoin mining pool (bitcoinpool.com)
> 
> I used this guide to get me started: http://forum.bitcoin.org/?topic=3878.0
> 
> edit: and of course you will need the bitcoin program (bitcoin.org)


BTW, thanks a lot for this.

What Payment threshold are you using?

My MHash/s is maxing out at a measly 2.5 lol, is it even worth it?

----------


## hugolp

> BTW, thanks a lot for this.
> 
> What Payment threshold are you using?
> 
> My MHash/s is maxing out at a measly 2.5 lol, is it even worth it?


What hardware are you mining with? The answer is most probably no.

----------


## Texan4Life

> Alright ...what is a Wallet ID. Man I feel like such a noob. Is it the same thing as BitCoin address?


yeah its the string of numbers/letters in the bitcoin program where it says "Your Bitcoin Address"

edit: this will give you an idea of what you will earn at a specific hash rate - http://www.alloscomp.com/bitcoin/calculator.php

personally I wouldn't mine if I all I could use was my CPU. my CPU does 2 Mhash/s while my GPU does 145 mhash/s

----------


## hazek

What do you think guys, did I raise a valid concern?: http://forum.bitcoin.org/index.php?topic=16032

----------


## low preference guy

> What do you think guys, did I raise a valid concern?: http://forum.bitcoin.org/index.php?topic=16032


I think the instability has more to do with the fact that bitcoin is new.

----------


## hazek

So you think I went over the top and the way mtgox runs things right now is perfectly fine?

btw: I withdrew and switched to tradehill today

----------


## low preference guy

> So you think I went over the top and the way mtgox runs things right now is perfectly fine?
> 
> btw: I withdrew and switched to tradehill today


What one exchange company does doesn't matter that much .

----------


## hazek

Even if it's the exchange that has like 90-95% of all trades covered?

----------


## low preference guy

> Even if it's the exchange that has like 90-95% of all trades covered?


it's a matter of time before new ones appear and at this time the market is very volatile no matter what because bitcoins are new

----------


## iGGz

Well I was originally posted here about possibly building a rig, but I realized I might as well just buy a new GPU for my desktop .. duh. Mine is going out anyway and I need a new one.

Which GPU would you guys recommend? I hear the 5850 is a good choice for the money.

The 5850 ranges from 240-382 MH/s

I only have 1 PCI-e slot

Using the calculator and putting in 300 MH/s gives me:

------------Coins-----Dollars
per Day-----฿0.53----$10.88
per Week----฿3.88----$79.31
per Month---฿16.17---$330.63

So according to this (if the price stays around $20) I could pay off the GPU in a little less than a month. Is this still fairly accurate?

----------


## hazek

Sure, I don't see why it wouldn't be.. Just be careful calculating the price of Bitcoins given the volatility and fluctuations we had in the past week or so, you know.. it might go up or it might go way down.

----------


## iGGz

> Sure, I don't see why it wouldn't be.. Just be careful calculating the price of Bitcoins given the volatility and fluctuations we had in the past week or so, you know.. it might go up or it might go way down.


Yeah that's the thing. But I figure what the hell. Could you recommend a GPU? What are you using? I have around $200 I could spend.

----------


## hazek

Oh I'm not mining. It's best if you ask Kludge and/or check this: https://en.bitcoin.it/wiki/Mining_hardware_comparison

----------


## hugolp

*iGGZ* the exchange price changes but also the difficulty changes, so you will generate less bitcoins in the future. Its expected that the difficulty will go up around 45% in 2 or 3 days. It has gone down only once, it usually goes up to adjust for new people mining.

The 5850 is a good card for mining, but the best are the 5870 and 5970 because they have better Mh/J ratio (consume less energy for the same work). 5970 are more expensive and no where to be found, but you can still find some 5870 for a little more of what you want to spend. If you can afford it, it might be worth it for the energy bill. I would say that after those two the 5850 is probably one of the best.

----------


## hugolp

From the Bitcoin forum

----------


## Texan4Life

> from the bitcoin forum :d


lmao!!

----------


## kpitcher

The ATI 5xxx series has officially ended but you may be able to find some equipment still out there. The 6x series has nicer heat venting - it goes out the back of the case instead of into the case.  It comes down to finding a good price and things in stock. But it's easy enough to plug in the hash rate from the mining hardware comparison with the generator to see how long your investment pays off.  The electric cost isn't that huge of a difference, if it's just your one primary computer go for the best you can afford in the payoff time period you're comfortable with.

----------


## Bodhi

Poor guy, looks like an early adopter had 25,000 bitcoins stolen (hacked) from him.  http://forum.bitcoin.org/index.php?topic=16457.0

I guess he did not secure his "wallet"?  Anyways, that 25,000 bitcoins is worth about half a million dollars.  I feel bad for that guy.
Also, it worries me that your account can be hacked and have no recourse to get your bitcoins back.  I think the average person
would not even think about encryption or securing their files let alone backing them up (wouldn't save you from being hacked but
would save you if your computer crashes).  Seems like a chink in the bitcoin armor.

----------


## ClayTrainor



----------


## hazek

FKING FINALLY STEF DOES A PODCAST ON THIS.

You'd imagine that the potentially greatest invention for the anarchist and agorists of our time would have them worship it to death and yet this guy needed this long and around 500btc in donations to finally publicly talk about it.

Watching now..

----------


## hugolp

> Poor guy, looks like an early adopter had 25,000 bitcoins stolen (hacked) from him.  http://forum.bitcoin.org/index.php?topic=16457.0
> 
> I guess he did not secure his "wallet"?  Anyways, that 25,000 bitcoins is worth about half a million dollars.  I feel bad for that guy.
> Also, it worries me that your account can be hacked and have no recourse to get your bitcoins back.  I think the average person
> would not even think about encryption or securing their files let alone backing them up (wouldn't save you from being hacked but
> would save you if your computer crashes).  Seems like a chink in the bitcoin armor.


If you dont feel comfortable securing your wallet because you dont have enough computer skills (which is the usual) and you dont want to start learning about encripting and such, there is a couple of things you can do:

1) You can use a system like https://www.mybitcoin.com/ , so you dont have to worry.

2) If you dont want to trust a third party with your money, you can still do something very simple that gives you security. If you are a windows user you can create a new user or even better install Ubuntu in the same computer (its almost automatic). Then create a new bitcoin wallet in this new windows user or Ubuntu and transfer the majority of your funds. Just keep some bitcoins in the system you usually use to buy stuff. This way, if you get hacked they can only steal a small part.

But keep in mind that the forum has been fulled with trolls, even 150+ message trolls, so I would be carefull at believeing anything. This could be real, but I just dont believe anything I read in an internet forum. Bitcoins in this sense is like gold. If someone comes to your house and steals your gold, there is little chance of getting it back, so you have to secure it.

----------


## Andrew-Austin

> FKING FINALLY STEF DOES A PODCAST ON THIS.
> 
> You'd imagine that the potentially greatest invention for the anarchist and agorists of our time would have them worship it to death and yet this guy needed this long and around 500btc in donations to finally publicly talk about it.
> 
> Watching now..


Nothing especially interesting, besides that it is a FDR podcast on bitcoin. I expect there will be more bit-podcasts in the future however.

----------


## hugolp

> Nothing especially interesting, besides that it is a FDR podcast on bitcoin. I expect there will be more bit-podcasts in the future however.


Yeah, I felt Bruce was a bit nervous and was throwing too much information all together. I follow him in his youtube channel about Bitcoin and he is much more calmed down there.

----------


## tremendoustie

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


Wrong ... or mostly wrong. Bitcoins are solutions to difficult computational problems. There are something like 21 million such mathematical solutions in existence, with some easier to find than others. This mimics metal mining -- it is mined more easily at the beginning, with new discoveries becoming more expensive as time goes on.

You can use your computer to mine bitcoins yourself if you'd like -- but unless you've got a supercomputer sitting idle in your basement, it'd probably not be worth it.




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


Wrong. They don't have the solutions any more than anyone else does.




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


These are scarce, and they have many unique properties, such as being extremely hard to shut down by governments, anonymous, almost instantly transferable, easily storable, etc.

----------


## hugolp

> These are scarce, and they have many unique properties, such as being extremely hard to shut down by governments, *anonymous*, almost instantly transferable, easily storable, etc.


Bitcoin is pseudo-anonymous, that means is as anonymous as you want it to be (or know how to do it). Lets keep the information real because Bitcoins are already a new concept and therefore a bit confusing, so lets try to keep it as real as we can.

----------


## hazek

> Originally Posted by Andrew-Austin
> 
> 
> Nothing especially interesting, besides that it is a FDR podcast on bitcoin. I expect there will be more bit-podcasts in the future however.
> 
> 
>  Yeah, I felt Bruce was a bit nervous and was throwing too much information all together. I follow him in his youtube channel about Bitcoin and he is much more calmed down there.


Yeah I was a bit disappointed myself. At times it really did seem like Bruce was a bit nervous or just too excited and mashed together a whole bunch info without really explaining and I felt he spent way too much time on presenting it like an investment instead of a payment system.

----------


## hazek

> Wrong ... or mostly wrong. Bitcoins are solutions to difficult computational problems. There are something like 21 million such mathematical solutions in existence, with some easier to find than others. This mimics metal mining -- it is mined more easily at the beginning, with new discoveries becoming more expensive as time goes on.


Yeah I agree with hugo let's try and stick as close to facts as possible. "Mining" bitcoins does mimic metal mining but Bitcoins themselves aren't a solution to anything, they are a reward for a random solution. There are not 21million solutions but rather a mathematical problem of which difficulty is automatically and continuously adjusted to the total network speed so that on average every 10min a solution is found and a reward issued. That's how all Bitcoins come into existence.

This mathematical problem always stays the same and to find a solution it requires your CPU or GPU to repeat the same function over and over and over again, there is no shortcut to the solution because it's random and the average time it takes to find a solution for a single computer in the network depends on the difficulty set by the network.

So it indeed has an arbitrarily set and centrally planed rate of inflation that has been hardcoded into the client everyone is using. This rate is such that every 10min on avarage a reward is issued and the rewards start at 50 Bitcoins and will be halfed once half of all Bitcoins are rewarded and halfed again once half of the other half is rewarded and halfed again once half of the other half of the other half is rewarded and so and so forth until it will reward almost 21milion but never actually reach it. It exponentially decreases and the most important part is no one person or a group of people can change this as long as the vast majority of the network is using the current client code. And since the client code is open source and reviewed by the whole wide world it's hard to imagine the network will ever allow the change of these hardcoded rules.



> You can use your computer to mine bitcoins yourself if you'd like -- but unless you've got a supercomputer sitting idle in your basement, it'd probably not be worth it.


Yes, the difficulty has adjusted so far high and it's still projected to go higher that unless you have a decent graphics card and join what they call a mining pool you will probably spend a whole lot on your electricity bill and most likely get no Bitcoins.

----------


## hugolp

> Yes, the difficulty has adjusted so far high and it's still projected to go higher that unless you have a decent graphics card and join what they call a mining pool you will probably spend a whole lot on your electricity bill and most likely get no Bitcoins.


The difficulty is going to skyrocket. Is expected that tomorrow night it will go almost 50% up. Its going to hurt.

----------


## hazek

Well we're bound to hit a difficulty where it will only be marginally profitable to mine and you're right I don't think we're anywhere close to that point just yet.

----------


## hugolp

This is a good chart from the Bitcoin forum:

----------


## hazek

I think this is typical of a bubble which is what we IMO had when the price went from $20 to $31. Just like Schiff always says that once prices get out of whack in one direction they don't just correct back to right price but it's more like a pendulum that has to overshoot and swing in the other direction first before it can return to equilibrium.

Perhaps that's what happened this weekend and we're back to a healthy price.

----------


## NinjaPirate

I installed the bitcoin software the other day, but when I tried to run it my Anti-virus quarantined and flagged it as identity protection/fraud.  I use AVG, did anyone else have this issue?? =/

----------


## aravoth

how do you mine bitcoins? I don't get it...

----------


## hazek

> I installed the bitcoin software the other day, but when I tried to run it my Anti-virus quarantined and flagged it as identity protection/fraud.  I use AVG, did anyone else have this issue?? =/


I honestly wouldn't know cause I haven't heard something like this happen before. What I'd say is make sure to go to www.bitcoin.org and download the client only from there.. and then if you still have problems go to the official forum and ask for help here: http://forum.bitcoin.org/index.php?board=4.0

----------


## hazek

> how do you mine bitcoins? I don't get it...


You'll find all the answers here: https://en.bitcoin.it/wiki/Category:Mining

----------


## hugolp

> how do you mine bitcoins? I don't get it...


Hey Aravoth I love your videos. I could not stop watching "The Philospher Stone" when you released it. If you give me your Bitcoin address Ill send a couple of bitcoins your way.

To mine bitcoins you basically need an ATI/AMD video card and some open source program whose intruction you will find in the forums.

----------


## NinjaPirate

> I honestly wouldn't know cause I haven't heard something like this happen before. What I'd say is make sure to go to www.bitcoin.org and download the client only from there.. and then if you still have problems go to the official forum and ask for help here: http://forum.bitcoin.org/index.php?board=4.0


hmmm...I followed your link, downloaded the program and installed the software with no problems this time... How weird!

----------


## hugolp

The Bitcoin forum has been down for a while now. I know there was a DOS attack on MtGox, does anyone know anything about the forums?

EDIT: Never mind. They are working now.

----------


## hazek

I think the forums also getting ddosed..

EDIT: actually scratch that, the forum just hit a new all time users online record, so maybe that's what's going on.

----------


## hazek

WOW:

Adam vs The man - Stefan Molyneux: Bitcoins: digital currency of the future?

----------


## iGGz

> Yes, the difficulty has adjusted so far high and it's still projected to go higher that unless you have a decent graphics card and join what they call a mining pool you will probably spend a whole lot on your electricity bill and most likely get no Bitcoins.


In your opinion, or anyone else... what is the lowest Mhash/s you could have to be profitable?

----------


## hugolp

> In your opinion, or anyone else... what is the lowest Mhash/s you could have to be profitable?


Being profistable does not depend of the Mhash/s rate, although if it is too low you just wont get almost bitcoins. Being profitable depends on the Mhas/J rate, that is the electricty you consume to generate an amount of bitcoins. Electricity is the only fixed expense. If the difficulty goes up a lot and the price does not follow, at some point people will spend more in electricity than what they get in bitcoins (this has happened already once), thus mining becoming unprofitable for the least efficient.

----------


## Wesker1982



----------


## iGGz

So once all the BTCs are found ....will a new algorithm be started to create more BTC? Or how does that work?

----------


## iGGz

Well I just purchased a new Radeon HD 5850 GPU and power supply

----------


## low preference guy

> So once all the BTCs are found ....will a new algorithm be started to create more BTC? Or how does that work?


that will be in 2040 so we don't know that will happen, if anything.

i hope new bitcoins aren't created and the bitcoin community just allows to divide bitcoins into smaller units. today you can divide them up to 8 decimal places.

----------


## hazek

> So once all the BTCs are found ....will a new algorithm be started to create more BTC? Or how does that work?



There will be no more than just under 21mil Bitcoins, ever. For this rule to change you'd have to convince the vast majority of Bitcoin users to switch to a new client with new rules, when it's in their best interest not to do so.

The way the current rule is enforced is by the validation of the whole network. 

Say you and I decided to change the algorithm that decides how many Bitcoins you get as a reward for finding a new block and we rewarded ourselves 100BTC instead of the 50BTC reward right now. When either your or my client finds a new block and creates the transaction for the reward that transaction is initially only stored on our computer in our version of the public ledger copy. And the way the public ledger works is that we need to send this new block to the rest of the Bitcoin users so they can also update their copy of the public ledger with this newest block that you or me found. But because the rest of the network is using the old rule our newly found block will simply get ignored by everyone else because of the violation of that rule and we achieved nothing because unless everyone adds it, we can't spend those 100 coins with anyone else.

Also the client code is open source which means it's impossible to hide any type of change of the rules.



But if you were wondering how mining is going to be payed for once there wont be any reward anymore, it's going to happen through fees. Those big mining pools will through competition between each other and their own expenses of mining decide what kind of a fee people will need to pay in order to get their transactions prioritized and quickly confirmed. What exactly will happen and what kind of rates we'll have is still up to debate and no one really knows although many have made their own speculations and theories.

----------


## iGGz

Thanks for all the info!

What is the best way to exchange BTCs into dollars that you have found (smallest fee)?

----------


## hugolp

Big difficulty increase today. Anyone wants to speculate if that will stop new miners or will the mining frenzy continue?

----------


## hazek

IMO as long as miners can make a profit they'll do it. But if we're at the threshold of it not being profitable anymore I have zero idea.

----------


## iGGz

> Big difficulty increase today. Anyone wants to speculate if that will stop new miners or will the mining frenzy continue?


Where do you see this information?

----------


## hazek

IMO this is the best site to follow anything about Bitcoin: http://bitcoinwatch.com/

----------


## Andrew-Austin

http://forum.bitcoin.org/index.php?topic=17573.0f

Posted a ^question on the bitcoin forum that I wanted answered as soon as possible.. That is not happening so I'll post it here..

And yes that is my forum account over there, for anyone else on that forum.

----------


## losinglife

i like how AS SOON as i get money into mtgox, BAM ddos attack and ic ant do $#@! 

WTFFF!!

----------


## hugolp

> i like how AS SOON as i get money into mtgox, BAM ddos attack and ic ant do $#@! 
> 
> WTFFF!!


I dont know what the $#@! is going on. The pools are getting DOS attacks regularely. The Forum as well. MtGox too. A guy jus opened a pool and suddenly he starts to get a DOS attack. Its insane.

I would like to know who and why is doing this.

----------


## losinglife

i jsut wanna see the price crash to 10$ again so i can buy in finally as i keep missing out on it due to fund transfers being slower than snails

----------


## kpitcher

> I dont know what the $#@! is going on. The pools are getting DOS attacks regularely. The Forum as well. MtGox too. A guy jus opened a pool and suddenly he starts to get a DOS attack. Its insane.
> 
> I would like to know who and why is doing this.


So many possibilities. It could be some random group just being an idiot, a large mining operator or botnet trying to kill the competition as they mine, anyone with a vested interest in making sure decentralized currency fails (Banks, governments), anyone who wants alternative online payment systems to fail (paypal, credit card companies)

I don't need a tinfoil hat to think that any of these are likely candidates.

----------


## hugolp

> So many possibilities. It could be some random group just being an idiot, a large mining operator or botnet trying to kill the competition as they mine, anyone with a vested interest in making sure decentralized currency fails (Banks, governments), anyone who wants alternative online payment systems to fail (paypal, credit card companies)
> 
> I don't need a tinfoil hat to think that any of these are likely candidates.


I know. I have though on the posibilities of mining pools attacking each other with DOS attacks. The same to MtGox. Without more evidence is a pausible posibility. But what about hte DOS attack to the forum? Why would anyone keep attacking the forum?

----------


## low preference guy

> I know. I have though on the posibilities of mining pools attacking each other with DOS attacks. The same to MtGox. Without more evidence is a pausible posibility. But what about hte DOS attack to the forum? Why would anyone keep attacking the forum?


FBI/CIA/China?

----------


## swiftfoxmark2

Remember what the Feds did to the Liberty Dollar?

Look for similar actions with this in the next five years or so, unless Ron Paul wins the Presidency of course.

----------


## hugolp

> Remember what the Feds did to the Liberty Dollar?
> 
> Look for similar actions with this in the next five years or so, unless Ron Paul wins the Presidency of course.


Think about it. What company are they going to close to go after Bitcoin?

They can even try to close any node in the Bitcoin network and the network would keep working. Its completely decentralized.

----------


## Kludge

> IMO as long as miners can make a profit they'll do it. But if we're at the threshold of it not being profitable anymore I have zero idea.


 I think the vast majority of miners who took efficiency into any consideration and don't have electricity rates above $.20/KWH while being on the corporations' grid will have no problem staying profitable until BTC reaches ~$5. I'm still profitable until ~$2 at this difficulty (thanks mostly to .$07/KWh electricity). BTC mining won't be a proper job replacement because once miners are set up, they need no maintenance, so for miners to demand 2000% mark-up over electricity costs (which is what I was at when BTC was near $40) is ridiculous -- anyone buying instead of mining at that point is either a dedicated speculator or a rube (or electricity is prohibitively expensive where they are, I suppose). I've only had to do "work" mining because I didn't install (or have) all the hardware I needed the first time. Needed to replace a hard drive I knew was faulty and reinstall W7 + all the programs needed, un-brick two graphics cards I messed up a BIOS flash on, re-do the networking infrastructure in the house, purchase resistors to make dummy plugs with on graphics cards, buy a few adapters so I could get the PSU to power the graphics cards -- all of that stuff could have been avoided had I set the boxes & network up properly the first time.

I don't think we'll see the mining frenzy die off any time soon. This is a fun way for kids (and adults) to learn about business, cost analysis, why government is evil (just a few examples currently, but that will change), computer hardware/software, judging peoples' trustworthiness, and cryptography, among other topics they'll need to think critically and build character to understand well. I think a lot of younger people are mining just to "do something" in a world where they generally have few hands-on opportunities to actually change something in a positive way. They rarely work before high school anymore, often have very few responsibilities in their suburban or urban home, and charity is usually just raising money for a "non-profit" with no tangible presence in their community which skims 50% for admin costs.


P.S. Dwolla's pretty frustrating. After today, Dwolla will have taken a full week to process a transfer from my bank. By the time it gets to Mt Gox, it will probably be Tuesday or Wednesday. Ten days to get money in an account on the largest market for the currency is not the sign of an efficient market. ramble ramble ramble ramble...........

----------


## IDefendThePlatform

> Think about it. What company are they going to close to go after Bitcoin?
> 
> They can even try to close any node in the Bitcoin network and the network would keep working. Its completely decentralized.



I hope you're right, but even still the Fed's attacking bitcoin will greatly lessen the number of people willing to use it and restrict its future growth. We need to get Ron's Competing Currencies Act moving again in the House:
http://www.facebook.com/CompetitionInCurrency

----------


## IDefendThePlatform

Here's an article from Bitcoin Weekly on Dr. P's Competition in Currency Act:
http://bitcoinweekly.com/articles/ro...n-currency-act




> Ron Paul's Free Competition in Currency Act
> 
> author: Vitalik Buterin 
> published: 2011-04-08 09:58:11 UTC
> On March 15, 2011 Ron Paul has introduced - or rather, re-introduced the Free Competition in Currency Act, which intends to repeal legal tender laws and prohibit taxation on the exchange of gold, silver and several other precious metals. Ron Paul has brought up this bill before but so far it has been pushed back until it got discarded, as all undebated bills are, when the time for the next election comes. However, the recent surge in popularity of the idea of gold and silver currency ensures that it is far more likely to pass this time than previously. Let us consider what this means for Bitcoin.
> 
> Here is part of Ron Paul's speech:
> 
> A medium of exchange should satisfy certain properties: it should be durable, that is to say, it does not wear out easily; it should be portable, that is, easily carried; it should be divisible into units usable for everyday transactions; it should be recognizable and uniform, so that one unit of money has the same properties as every other unit; it should be scarce, in the economic sense, so that the extant supply does not satisfy the wants of everyone demanding it; it should be stable, so that the value of its purchasing power does not fluctuate wildly; and it should be reproducible, so that enough units of money can be created to satisfy the needs of exchange.
> ...

----------


## hugolp

> I hope you're right, but even still the Fed's attacking bitcoin will greatly lessen the number of people willing to use it and restrict its future growth. We need to get Ron's Competing Currencies Act moving again in the House:
> http://www.facebook.com/CompetitionInCurrency


Obviously there would be a psicological effect, but the same can be said from p2p music sharing. What happened? And keep in mind that there is Bitcoin nodes all over the world.

The other day I was talking with a friend and he told me that people would not accept it because it attacks government. I told him the story of the uncle of one of my best friends. His uncle is very social-democrat and always talks about the need of paying taxes. The other day the uncle told my friend that he had bought a tv through the internet that was very cheap. The tv was very cheap because the shop was in another country where there is almost no taxes. So basically he avoided paying taxes here. Why did he leave his ideology apart? Because it was cheaper and convinient. Same with Bitcoin. Some people will adopt it because they agree with the philosphy, but the rest will adopt it because its cheaper and convinient, even if they disagree philosophically. Exaclty like p2p music sharing. It was cheaper and convinient. So it stayed no matter what the government did. Bitcoin (or at least cryptocurrency) is here to stay.

----------


## hazek

Couldn't agree more with hudo.

----------


## low preference guy

> I hope you're right, but even still the Fed's attacking bitcoin will greatly lessen the number of people willing to use it and restrict its future growth. We need to get Ron's Competing Currencies Act moving again in the House:
> http://www.facebook.com/CompetitionInCurrency


Bitcoins will have value and will work as a currency even if a very tiny fraction of the world population use it. That's enough to make it a usable currency.

----------


## losinglife

best i can tell, BTC is staying below the 50 and 150 moving avg. Hopefully it continues to drop for a bit

----------


## Andrew-Austin

I now $#@!ing hate Linux. I've spent hours and hours trying to get my network adapter card to work on Linux. I've momentarily given up on that, but when I tried to boot my Windows 7 partition from my hard drive I got this message "error: no such device: (bunch of numbers and letters) grub rescue> _  

(typing on my laptop, its my PC that won't boot)

Apparently trying to install linux $#@!ed up my Windows partition, even though I wasn't trying to install it on that hard drive?

This is beginning to be way too much of a hassle. If I can't keep my bitcoins safe, then I don't want to buy them. I've read the recommended way to keep bitcoins safe on a computer is to firstly have them on linux partition. But this $#@! is either too complicated, or the paid meds I got from the hospital are $#@!ing with my head.

----------


## IDefendThePlatform

All I'm saying is I'd rather have it legal and gain a lot more popularity than allow it to be condemned to the underground online market.




> The first section of the bill, the repeal of legal tender laws, would allow all currencies to operate on an equal footing, without the US dollar being propped up by law, causing a boom in the use of alternative currencies in general. As Ron Paul argued, "if people are free to reject debased currency, and instead demand sound money, sound money will gradually return to use in society."

----------


## Dreamofunity

I received my first bitcoin yesterday for selling some stuff to my friend. Now bitcoin just needs to jump up to $50+.

----------


## iGGz

I've asked this before but never got a response, what's the best way to exchange BTCs into $ (cheapest fees)?

----------


## hugolp

> I've asked this before but never got a response, what's the best way to exchange BTCs into $ (cheapest fees)?


Here you go:




> There are several ways of buying bitcoins:
> 
> One of the safests ways is using an exchanger, the most famous and used is MtGox: https://mtgox.com/. To get dollars to them you need to use Dwolla, wich can take 2 -3 days to validate your funds.
> 
> Then you can buy them from someone you trust, or use the "Over The Counter" market: http://bitcoin-otc.com/ . There is a web of trust so you can check the reputation of the person you are dealing with (ebay style). Also, for added security you have the scrow system: https://clearcoin.appspot.com/ .


The quickest way is the "Over The Counter" market, but be carefull, always check the web of trust and use clearcoin.

----------


## hugolp

> I now $#@!ing hate Linux. I've spent hours and hours trying to get my network adapter card to work on Linux. I've momentarily given up on that, but when I tried to boot my Windows 7 partition from my hard drive I got this message "error: no such device: (bunch of numbers and letters) grub rescue> _  
> 
> (typing on my laptop, its my PC that won't boot)
> 
> Apparently trying to install linux $#@!ed up my Windows partition, even though I wasn't trying to install it on that hard drive?
> 
> This is beginning to be way too much of a hassle. If I can't keep my bitcoins safe, then I don't want to buy them. I've read the recommended way to keep bitcoins safe on a computer is to firstly have them on linux partition. But this $#@! is either too complicated, or the paid meds I got from the hospital are $#@!ing with my head.


This is a better option:




> To secure such an amount you just have to install Ubuntu in a USB (which is trivial, there is a graphic program for that), then create a new wallet in there and send the bitcoins, leaving some in your day to day wallet. Now you get the USB with your "rich" wallet and keep it safe.
> 
> Whenever you need to access the funds you just turn off the computer, plug the usb in and turn it on again to load the operating system in the USB. You transfer the funds you want to your day to day account and shut down again.


This way you dont have to touch a hard-drive. I would recomend also saving the "rich wallet" in some other usb, just in case.

In case you have doubts the ubuntu website has a tutorial on how to install Ubuntu on usb from ubuntu, windows or mac: http://www.ubuntu.com/download/ubuntu/download (option 2).

What linux distribution were you trying to install in your hard drive?

----------


## Andrew-Austin

> This is a better option:
> 
> 
> 
> This way you dont have to touch a hard-drive. I would recomend also saving the "rich wallet" in some other usb, just in case.
> 
> In case you have doubts the ubuntu website has a tutorial on how to install Ubuntu on usb from ubuntu, windows or mac: http://www.ubuntu.com/download/ubuntu/download (option 2).
> 
> What linux distribution were you trying to install in your hard drive?


Unbuntu 11.4. Should I go with Unbuntu 10.4 or what?

I fixed my Windows 7 partition with a recovery disk. 

I just made a unbuntu 11.4 boot disk (not a usb). Going to run it off that, and then try installing on to a USB like you said. It only has 3.7 gigs of space though, is that enough?

----------


## hugolp

> Unbuntu 11.4. Should I go with Unbuntu 10.4 or what?
> 
> I fixed my Windows 7 partition with a recovery disk. 
> 
> I just made a unbuntu 11.4 boot disk (not a usb). Going to run it off that, and then try installing on to a USB like you said. It only has 3.7 gigs of space though, is that enough?


I dont know about the size. Im going to do this myself today or tomorrow, but the Ubuntu page recomends 4gigs as minimum. I will get 8 gigs just to be sure. But trying does not hurt. It will probably work in the 3.7Gigs usb, but I dont know how much free space you will get. Keep in mind that anything you install or save goes into the USB too.

Also, think about keeping a copy of the wallet (just a copy not a whole operating system) in some other places sepecially if you are sending an important amount of money. Some people in the Bitcoin forum are suggesting encrypting the wallet and storing it in a online storage system, but I dont trust it.

I was thinking about 10.04 and 11.04 too. I guess I will go with 10.04 and upgrade to the next LTS. Also you can install Ubuntu into the usb with Windows.

----------


## Andrew-Austin

> I dont know about the size. Im going to do this myself today or tomorrow, but the Ubuntu page recomends 4gigs as minimum. I will get 8 gigs just to be sure. But trying does not hurt. It will probably work in the 3.7Gigs usb, but I dont know how much free space you will get. Keep in mind that anything you install or save goes into the USB too.


Hmm... Well I have it installed on this 3.7 usb, now have it running. I first tried it on my pc, and after I typed in my password the GUI never appeared, and all I saw was the desktop bacground. Tried again a couple times, same thing happened. On a hunch I tried booting the usb on my laptop, and its working on my laptop. Weird. 

I also find it strange that I can access all the files that are on my windows 7 partition. So with that and an eternal hard drive, all I think I need to keep on the USB is the bitcoin files.




> Also, think about keeping a copy of the wallet (just a copy not a whole operating system) in some other places sepecially if you are sending an important amount of money. Some people in the Bitcoin forum are suggesting encrypting the wallet and storing it in a online storage system, but I dont trust it.


Yeah I wouldn't want to keep it on something like dropbox myself, encrypted or not. I think I'll just put some copies on CDs and or another USB then throw them in a safe. You can have multiple wallets right? Not just one? So you don't have to keep updating the wallet copies?




> I was thinking about 10.04 and 11.04 too. I guess I will go with 10.04 and upgrade to the next LTS. .


Yeah I don't know why I picked out the version of ubuntu that does not have LTS. 
Suppose I should switch.

edit: huzzah! I even managed to install the drivers for the network adapter! now typing this on linux. 

Anyways if I have anymore questions for you, I'll send them via PM so I don't clutter up this thread with linux stuff. Don't think I will have any more questions though, I got it going now thanks.

----------


## hazek

I have a feeling Bitcoins will get a lot cheaper before they get a lot more expensive again. 

And yes Andrew-Austin you can have more then 1 wallet. You can have as many as you want. (and I don't mean copies)

----------


## hugolp

> Yeah I wouldn't want to keep it on something like dropbox myself, encrypted or not. I think I'll just put some copies on CDs and or another USB then throw them in a safe. You can have multiple wallets right? Not just one? So you don't have to keep updating the wallet copies?


This is important. The wallet.dat file is not really where your bitcoins are. The bitcoins are information in the whole network. Your wallet contains the private keys that are the only ones who can use your bitcoins (because those bitcoins are marked by those private keys). The wallet.dat does not get updated when you spend bitcoins. You can copy a wallet.dat, use it in another computer and spend the bitcoins you have. Those bitcoins are spent for any other copy of wallet.dat, even if its not connected to the internet. Does this makes sense?

So the system I am proposing is to have two different wallets, one with the bitcons you need to spend day to day, and the other with bitcoins stored for the long term. This are different wallet.dat files, they should NOT be a copy of each other. Basically, you want to download the bitcoin client in the USB OS and install it. It will automatically create a new wallet.dat. Then you send as many bitcoins as you want there and keep the USB safe.

And secondly, when I say keeping copies of your walet.dat I mean literal copies of the file, so in case the USB fails for whatever reason you can load the wallet.dat file in another client and access your funds. Keep in mind that if the USB fails and you dont have a copy of that wallet.dat, you loose your bitcoins (they are lost forever), so havin copies is a must. You might want to have security copies of the day to day wallet as well, depending on the money you have there.

----------


## Kludge

Silk Road appears to be down entirely?

----------


## hazek

Someone posted this in the bitcoin forum:



> The Silk Road is down for back-end accounting maintenance.  They will be back up in a few days.  Don't worry, they haven't been seized and are simply being proactive by working to eliminate unscheduled downtime in the future.


Btw check this out; Some guy managed to flush 365btc (~$5500USD worth) down the toilet by toying with two wallets and testing stuff: http://forum.bitcoin.org/index.php?topic=18371

Who needs viruses when you have human stupidity 

EDIT: Btw anyone wanna call a bottom to this sale we're just witnessing? I want to know when to buy back at the cheapest

----------


## JP2010

I have 131484 blocks and not a single bitcoin, ie my balance is 0.00

I'm going to have to go with Bitcoins are bull$#@!.

Time to uninstall the software.

----------


## no representation

> EDIT: Btw anyone wanna call a bottom to this sale we're just witnessing? I want to know when to buy back at the cheapest


Well, from the stuff I've been reading, it looks like we may be heading under $10 again.  I'm guessing we'll bottom at 9, but who the heck knows! 

This guy at the Bitcoin Daily Investor blog  says that 13 is a good buy and the bottom. I agree - good time to buy, but I think I'd wait until it drops under 10.  And I think I agree that the recent news is scaring people into selling.  This market has been crazy!

----------


## no representation

> I have 131484 blocks and not a single bitcoin, ie my balance is 0.00
> 
> I'm going to have to go with Bitcoins are bull$#@!.
> 
> Time to uninstall the software.



That brings up a good point - something I think I read on the bitcoin forum ... is it even worth mining anymore?

----------


## One Last Battle!

> I have 131484 blocks and not a single bitcoin, ie my balance is 0.00
> 
> I'm going to have to go with Bitcoins are bull$#@!.
> 
> Time to uninstall the software.


You're doing it wrong. You need a miner to mine bitcoins, it isn't done automatically

----------


## brandon

> That brings up a good point - something I think I read on the bitcoin forum ... is it even worth mining anymore?


From what I've read - no. It's cheaper to buy them with USD than mine them.  Of course this will change as either technology increases, electricity costs decrease, or the value of B increases.

----------


## hugolp

> I have 131484 blocks and not a single bitcoin, ie my balance is 0.00
> 
> I'm going to have to go with Bitcoins are bull$#@!.
> 
> Time to uninstall the software.


Do you realize you are just downloading the blocks and not mining? Its impossible for you to get bitcoins this way.

And as no representation said, mining is becoming something more and more specialized and also non-profitable so its not for everybody. You should just use bitcoins as currency.

----------


## JP2010

> You're doing it wrong. You need a miner to mine bitcoins, it isn't done automatically


I downloaded the software, got the stupid 'blocks' and clicked generate coins.  

No coins.

Been doing it for 3 weeks on work computer to try things out.  Now I know it's not worth trying.

EDIT:  Now uninstalled.  Complete waste of time.

----------


## hugolp

> I downloaded the software, got the stupid 'blocks' and clicked generate coins.  
> 
> No coins.
> 
> Been doing it for 3 weeks on work computer to try things out.  Now I know it's not worth trying.


Mining with the cpu (as you are doing) is not worth it anymore. Nobody does it, and the option to mine has been removed from the client in the new versions.

If you want to have some results you should mine with the GPU (ATI/AMD are way better for mining than Nvidia) and *join a pool*. Mining with the CPU solo like you were doing can take years to get any bitcoins.

----------


## swiftfoxmark2

> Think about it. What company are they going to close to go after Bitcoin?
> 
> They can even try to close any node in the Bitcoin network and the network would keep working. Its completely decentralized.


The government will find a way, if they want to.  Keep in mind that they can shut down subversive activity if they want to.  Remember how they managed to shut down Iran's nuclear program, which was on a closed network?

----------


## low preference guy

> The government will find a way, if they want to.  Keep in mind that they can shut down subversive activity if they want to.  Remember how they managed to shut down Iran's nuclear program, which was on a closed network?


let me know when the powerful movie and music industries close down bittorrent.

----------


## Dreamofunity

Bitcoins aren't suppose to go down after I get my first one

----------


## losinglife

13$... good buy. Im lookin to see 10$ be the bottom, tho not today it looks like. I wanna see it bounce between 13(10)$ and 19(25)$ for a couple months

----------


## hazek

I switched to tradehill because I wanted to lead by example in hopefully getting people to diversify between all the exchanges but now I'm seriously kicking myself for not staying there and profiting on all of these swings. Tradehill namely doesn't have enough liquidity for such high volatility. When I buy back I'll probably switch back

----------


## losinglife

muahahaha glad i didnt follow you. Tho the price on other exchanges varies so much it may not be a bad idea to buy on one and sell on another

----------


## hugolp

With this kind of volatility even I am starting to thinking to go into trading. I dont understand how people fall for this big swings.

----------


## hugolp

Hohoho. The press is getting desperate. The hit pieces are coming one after the other: http://forum.bitcoin.org/index.php?topic=18494.0

I can smell the fear.

----------


## One Last Battle!

> I downloaded the software, got the stupid 'blocks' and clicked generate coins.  
> 
> No coins.
> 
> Been doing it for 3 weeks on work computer to try things out.  Now I know it's not worth trying.
> 
> EDIT:  Now uninstalled.  Complete waste of time.


Except (A) you won't generate anything if you are using a CPU, (B) you won't generate very much if you are using an NVIDIA GPU, and (C) You won't notice the generation of anything if you aren't in a pool

----------


## mediahasyou

> All I'm saying is I'd rather have it legal and gain a lot more popularity than allow it to be condemned to the underground online market.


It will not become popular until a software arises that makes it quick and easy to protect large amount of bitcoins.  Or press like this might scare average people from ever going into bitcoins:  http://forum.bitcoin.org/index.php?P...5996#msg215996

----------


## hugolp

I just discover you can play poker with bitcoins: https://betco.in/




> It will not become popular until a software arises that makes it quick and easy to protect large amount of bitcoins.  Or press like this might scare average people from ever going into bitcoins:  http://forum.bitcoin.org/index.php?P...5996#msg215996


Encripted and password protected wallet is coming. In fact, its already in the bitcoin repository and its being tested and perfected by the developers. It will be in the next version of the client.

Btw, that story is unconfirmed.

----------


## kpitcher

Too bad the ability to swap things from one exchange to another isn't instant. When you see a few dollar difference between two exchanges it'd be great to buy one on one, sell on the other. There's some delays with swapping bitcoins or dollars between exchanges so you'd almost need a pool of both on each exchange and then balance them out at the end of the day.

Weekends have been always down on fri, building back up by monday. So I'll have to give it a shot next Fri.

----------


## hazek

Hugo I'd be careful on other than heads-up tables cause that site has no collusion safeguards and anyone can have as many accounts as they want.

----------


## hugolp

> Hugo I'd be careful on other than heads-up tables cause that site has no collusion safeguards and anyone can have as many accounts as they want.


Its ok. Im not playing seriously. But thanks.

EDIT: Wonder how the other poker places do it. Guess they block proxies and vcn and stuff, but it must be difficult.

----------


## hazek

kk, just wanted to let you know there's a high chance you're getting cheated 

heads-up tables are legit thou :P

----------


## hugolp

> kk, just wanted to let you know there's a high chance you're getting cheated 
> 
> heads-up tables are legit thou :P


Thanks. I actually though I had lost 1 bitcoin in my final All in with a Queen and a ten  but it turns out I only lost 0.01 bitcoins. The place is cheap.

Someone should start a serious bitcoin poker business.

----------


## hazek

I thought about it but then I figured I wanted it be an illegal poker room not subject to any regulations so I couldn't just run it from a known server an in a centralized fashion and I didn't have any ideas how to even begin thinking about a decentralized poker room..

----------


## kpitcher

A tor server would be as anonymous as possible. It does cut down on the user base a lot tho

----------


## hazek

Well that was fun, some psychopath just dumped 500k btc, took out all the bids and sold at least 261k btc at $0.01 which I have a screenshot of.

----------


## hugolp

> Well that was fun, some psychopath just dumped 500k btc, took out all the bids and sold at least 261k btc at $0.01 which I have a screenshot of.


It seems to me that there is some problem with MtGox (hacked maybe?). It makes no sense that someone that wanted dollars would drop the price down instead of selling slowly to get the most of it. Why would you sell thousends of bitcoins at $0.01 when people is willing to buy them at $17?

----------


## hazek

If you were nut's you could do it... He still probably got like a cool million out of it..

EDIT: screenshot of the 261k sold at $0.01

----------


## hazek

Check at the right bottom side for the 261k order and then check the 1h volume at the top..

----------


## hugolp

People in the Bitcoin forum is reporting they can not access MtGox. Seems to be hacked. Honestly, I hope this makes people go away from MtGox. This is not serious.

----------


## Kludge

Hm.... I put a few weeks' mining haul and $400 into MtGox which finally got in late last night. Displeased I am, but pleased I am -- Silk Road has open registrations again. http://ianxz6zefk72ulzz.onion

----------


## Kludge

> If you were nut's you could do it... He still probably got like a cool million out of it..


Nobody with any sense would sell such an enormous load of coins all at once as a dump instead of slowly streaming them into the market, unless he was looking to destabilize the market and crush confidence in BTC.

Doesn't matter long-term. BTC is in the hands of nerds everywhere, and until a comparable rival comes up, it will be used in trade. The advantages of BTC have nothing to do with how much USD it's worth.

----------


## hazek

Kludge did you have any really low buy orders booked?  If you didn't you missed one hell of an opportunity.

----------


## Kludge

> Kludge did you have any really low buy orders booked?  If you didn't you missed one hell of an opportunity.


I put $400 worth in @ ~$12 but never expected anything like what happened... to happen.

----------


## Vessol

Put 50$ into MtGox via Dwolla a week ago, does it take this long to normally go through?

----------


## hazek

https://support.mtgox.com/entries/20...count-rollback

Huge Bitcoin sell off due to a compromised account - rollback

Mark Karpeles
posted this on Jun-20 04:07
The bitcoin will be back to around 17.5$/BTC after we rollback all trades that have happened after the huge Bitcoin sale that happened on June 20th near 3:00am (JST).

Service should be back by June 20th 10:00am (JST, 01:00am GMT) with all the trades reversed and accounts available.

One account with a lot of coins was compromised and whoever stole it (using a HK based IP to login) first sold all the coins in there, to buy those again just after, and then tried to withdraw the coins. The $1000/day withdraw limit was active for this account and the hacker could only get out with $1000 worth of coins.

Apart from this no account was compromised, and nothing was lost. Due to the large impact this had on the Bitcoin market, we will rollback every trade which happened since the big sale, and ensure this account is secure before opening access again.

----------


## hazek

Superbly handled if you ask me. Big test for Bitcoin and mtgox.

----------


## hazek

> Put 50$ into MtGox via Dwolla a week ago, does it take this long to normally go through?


yeah it does

----------


## Andrew-Austin

Wow, crazy. So no one was able to take advantage of the extremely low price because they are reversing all sales since the dump? Well good now I won't feel bad that I missed out. 

Hopefully this happens again (except its a legit dump) so I am able to take advantage of it.

----------


## hugolp

*Important*

MtGox user data, including password hash, have been hacked and are up in a cvs file in rapidshare: http://ifile.it/a3kl16j People with history in the forum says its legit.

Bitcoin forum thread: http://forum.bitcoin.org/index.php?topic=19543.0

Anyone with a MtGox account should check it out.

EDIT: Btw, this leaves MtGox in very bad place, since MtGox is blaming the client for letting someone hack his password, but if this list is confirmed as legit, it seems it was MtGox that was hacked.

----------


## hazek

I doubt anyone in their right mind would do something likes this for real. Only someone in a hurry, like a hacker looking to pull off a heist for example..

I wonder how much $1000 worth of Bitcoins they got away with, cause it could have been as much as 10000btc and as little as 100btc

----------


## hazek

> Anyone with a MtGox account should check it out.


Yep I'm in there 

EDIT: on the bright side we now know exactly how many accounts there are: 61k

Mine's 2875th  

<- early adopter :P

----------


## hugolp

I honestly think MtGox should be over. If people go back to that place they deserve what they will get.

And it is very low (although kind of expected) to blame the constumer and accuse him of being the one hacked, when its MtGox fault.

EDIT: Hazek if you are using the same password somewhere else you might want to change it since "Ive heard" GPU's hash very quick and can perform a break those hashes by brute force quite quickly.

----------


## hazek

Nope I don't.

----------


## hugolp

The speculation is going like this: MtGox limits the withdral of both $ and BTC to the amount of $1000 (in the case of BTC the limit is the equivalent of $1000 in present prices). The hacker decides to drop the price to 0.01 by selling like crazy, so he can withdral a big amount of bitcoins... because MtGox does not have a limit in Bitcoins only in dollar equivalence...

----------


## hazek

> The speculation is going like this: MtGox limits the withdral of both $ and BTC to the amount of $1000 (in the case of BTC the limit is the equivalent of $1000 in present prices). The hacker decides to drop the price to 0.01 by selling like crazy, so he can withdral a big amount of bitcoins... because MtGox does not have a limit in Bitcoins only in dollar equivalence...


Yeah pretty much. Btw someone developed a site where you can check which password was in the lead db and they had my old one.

DB: ask me in private for the patebin of the leaked db
PW check: https://secure701.hostgator.com/~snipanet/hash.php

EDIT: removed the db link

----------


## hazek

LOL this is how it went down in realtime:

----------


## RonPaulIsGreat

I apparently had an account there, i didn't even remember setting it up. Fortunately I used my throw away password for it. 

Another thing, I'm not so good at php, but I went to that site that will try to match the hash for you, and it seems they are using a straight forward hash. You are supposed to salt the hash, by incorporating some form of variable in with the password when you hash it. 

As if you don't and someone got your database, it makes it easier to break. Like adding aekekwodi9jf to the beginning of every password and 893lkjksvDADVi to the end of every password, would make every password much harder to break, you incorporate that into your code when they submit their password as well, so instead of having to guess. BartSimpson for the password now they have to guess aekekwodi9jfBartSimpson893lkjksvDADVi. Now if the code got jacked as well, then it wouldn't help much, but you could incorporate some other obtuse obfuscated method of creating the Salt, that would be applied via some arbitrary methodology, that would apply individually if you wanted to. 


Point is they could have had a better hash method. I'm no expert at all, and the method they were using is not the best method by far.

----------


## hazek

Yeah definitely a huge slip by mtgox and I expect it to have pretty significant consequences for their user base.

----------


## AminCad

> Another thing, I'm not so good at php, but I went to that site that will try to match the hash for you, and it seems they are using a straight forward hash. You are supposed to salt the hash, by incorporating some form of variable in with the password when you hash it.


They did salt all the hashes for the passwords of the accounts that have been active in the last two months. Any thing that has been inactive longer than that hasn't been salted.

----------


## hazek

http://www.schiffradio.com/ Today's guest is Donald Norman, co-founder of Bitcoin Consultancy, on why an online digital currency is the monetary system of the future. Peter is looking forward to your calls on politics, finance, and the economy.


Coming up live now, after commercials!!

----------


## Texan4Life

> http://www.schiffradio.com/ Today's guest is Donald Norman, co-founder of Bitcoin Consultancy, on why an online digital currency is the monetary system of the future. Peter is looking forward to your calls on politics, finance, and the economy.
> 
> 
> Coming up live now, after commercials!!


thanks... kinda odd the donald keeps saying he wants regulation for bitcoins

----------


## hazek

i think he meant for the exchanges.. but yea certainly.

I rate his performance with 6.5/10. He did excellent on the future value argument but then butchered the one on mining and failed to explain the complexity argument. Oh well at least Peter said he was skeptical instead outright ridiculing it.

----------


## hugolp

TradeHill has restarted trading and the price of bitcoins is around $15: https://www.tradehill.com/MarketData/

----------


## hazek

Yep, surprisingly the people still have faith in Bitcoin, who would have thunk it right? 

Btw you can follow the trading live here: http://mtgoxlive.com/orders?volumeon;oneaxis (usually mtgox live feed, but shows TH right now)
and here: http://bitcoinity.org/markets

----------


## hugolp

> Yep, surprisingly the people still have faith in Bitcoin, who would have thunk it right? 
> 
> Btw you can follow the trading live here: http://mtgoxlive.com/orders?volumeon;oneaxis (usually mtgox live feed, but shows TH right now)
> and here: http://bitcoinity.org/markets


The Hill is even more volatile than MtGox... Less volume I guess.

----------


## hazek

Yeah I think I spoke too soon

----------


## hugolp

> Yeah I think I spoke too soon


TradeHill has no liquidity. The trades happen from minute to minute. I wonder what will happen when MtGox opens tomorrow at 17'5.

I dont understand how people still trusts MtGox and dont go to TradeHill (or somewhere else).

----------


## hazek

Well first off, when mtgox opens in about 8 and a half hours, trading will still be frozen. All anyone will be able to do is reclaim their account and change their password and withdraw money. I suspect a lot of people will leave but I also expect a lot of people to stay. I personally will most likely stay as well because I feel like now that mtgox has gone through such a fiasco they'll be better off because of it and they'll have a even better security in place then anyone else out there.

As for the price the owner of mtgox has said that they aren't going to enforce anything, any they don't know yet what they'll do with the orders that were active shortly before the hacker dump. So we'll just have to wait and see I guess. :P

----------


## hugolp

TradeHill is starting to have some volume. Will see how it works.

But it makes sense what you say that people have the funds blocked at MtGox. Hopefully a lot of people will leave. What I dont understand is that TradeHill has oficially higher rates than MtGox (although you can get discounts and they become cheaper) when they are the underdog. What do you think will happen when MtGox opens tomorrow?

----------


## hazek

Nothing yet tomorrow because the owner said he will give at least a 24hour notice before he'll open up his site for trading again and even that will only happen once according to his judgment a sufficient users have reclaimed their accounts.

But when it does I honestly don't know but I suspect the price will be what we'll have on TradeHill.

----------


## Michael P

After much research and assuming we have some pullback now I am going to buy some Bitcoins in the near future. The upside is to the moon and I'd rather put some money in and lose it all then miss out on what could be huge.

----------


## Kade

I'm not a goldbug, in fact, I was often on here verbally beating goldbugs. However, I will point out that many of the valid arguments for GOLD also apply to bitcoin. Myself being a rather technologically progressive person find bitcoin to be wildly more relevant and useful in terms of currency. Every currency is based on the "faith" of the users. Some will argue about utility of some currencies, ie gold in jewelry, electronics, etc.. 

The truth is, unlike gold, bitcoin cannot be manipulated so heavily by hoarding and it is impossible for any authority to manipulate the quantity. It is limited and easily traded anonymously and without issue. You will not see "Bitcoinplus" advertisements anytime soon, you will not see people scamming people from their jewelry or otherwise, and you will not see ridiculous inflation hedging against it... 

The amount of bitcoins currently is at around 6.49 million. This number is easy to look up and viewable by all the users. When Bitcoin goes down, if it does, it will be because a Government took it down, not for any other reason. 

It is valued by people who have valuable services to offer in the real world and digitally... it is the currency of the underworld.

----------


## hugolp

According to the Bitcoin forums the problem is that TradeHill is unable to handle the volume of people that is trying to access their platform. If there was some day that they needed to spend a bit more it was today. They are missing their big chance.

EDIT: I dont know if they are starting to get their $#@! together or what but it seems a lot of buys orders are appearing in TradeHill, while before there was mostly sells.

----------


## hazek

Yeah they do seem to have dropped the ball on that a little bit but still their site is up and running, they have new much harsher security measures in place and there's already bit more volume then usual.

Btw if anyone wants to create an account they can do so through my referral link: http://www.tradehill.com/?r=TH-R12935

----------


## hazek

CNBC with their own take on things(a few factual errors are of course mandatory):




EDIT:

Bloomberg news video(almost entirely positive):


Virtual Currency Bitcoin Rises in Usage, Value

----------


## hugolp

Do you guys realize that Bitcoin is the first alternative currency that hackers pay enough attention to as to hack one of its exchanges? It had never happen before (if I am not mistaken). No other non-government currency has achieved something similar.

Hazek I posted the videos in the Bitcoin forum.

----------


## psi2941

so whats the value of bitcoins now? if its less then 50 cents i'm willing to put in 500 dollars

----------


## hazek

No such luck I'm afraid. See for yourself: http://bitcoinity.org/markets?theme=light

At the time of my post it shows spot to be $15.

----------


## kpitcher

With the recent bad rap and media blitz against bitcoin, and the value still holding, I feel pretty good about having coins. If it can survive this and keep going strong, it should keep going that way.

----------


## mediahasyou

If you are looking for a low, get in after mt gox goes back online.

----------


## vita3

http://www.youtube.com/user/pjt03?fe.../5/7nD7dbkkBIA

----------


## hugolp

> If you are looking for a low, get in after mt gox goes back online.


yeah, when mtgox opens there will probably be a lot of volatility.

----------


## hazek

> http://www.youtube.com/user/pjt03?fe.../5/7nD7dbkkBIA


Completely irrelevant because no one is in control of Bitcoin. I actually wouldn't mind a microchip inplant that would have Bitcoins on it and I'm someone who believes I'm a slave to the current fiat monetary system and the banks/state.

----------


## hugolp

> Completely irrelevant because no one is in control of Bitcoin. I actually wouldn't mind a microchip inplant that would have Bitcoins on it and I'm someone who believes I'm a slave to the current fiat monetary system and the banks/state.


Ohhh... Now I get why that video is related to Bitcoin. I did not get it. I guess now chips are bad, throw your computer through the window, quick!

----------


## Kludge

MtGox's claim website is now up. Claim forms can be filled @ claim.MtGox.com ATM. You need to be able to provide identifying information such as IP address, current balance, and/or make a deposit (which will be credited to your account) using a service as Dwolla.

I'm wondering why someone would trust Tradehill when the MtGox hacker(s) sent massive spam to MtGox users promoting Tradehill with a referral ID they even suggest removing -- just signing up with and using Tradehill instead of MtGox. That's pretty shady, but I doubt Tradehill staff had anything to do with the MtGox hack. Still, I hope Tradehill will at least release information on the person who's referral link is being given in the hacker spam and definitely close his account and ban his IP. I've been pretty out of the loop on the whole thing - this is my first time on a computer over 15m at a time in about a week.




> I'm not a goldbug, in fact, I was often on here verbally beating goldbugs. However, I will point out that many of the valid arguments for GOLD also apply to bitcoin. Myself being a rather technologically progressive person find bitcoin to be wildly more relevant and useful in terms of currency. Every currency is based on the "faith" of the users. Some will argue about utility of some currencies, ie gold in jewelry, electronics, etc.. 
> 
> The truth is, unlike gold, bitcoin cannot be manipulated so heavily by hoarding and it is impossible for any authority to manipulate the quantity. It is limited and easily traded anonymously and without issue. You will not see "Bitcoinplus" advertisements anytime soon, you will not see people scamming people from their jewelry or otherwise, and you will not see ridiculous inflation hedging against it... 
> 
> The amount of bitcoins currently is at around 6.49 million. This number is easy to look up and viewable by all the users. When Bitcoin goes down, if it does, it will be because a Government took it down, not for any other reason. 
> 
> It is valued by people who have valuable services to offer in the real world and digitally... it is the currency of the underworld.


Wow. Welcome back, Kade. Very glad to see you, especially here.

----------


## hugolp

> I'm wondering why someone would trust Tradehill when the MtGox hacker(s) sent massive spam to MtGox users promoting Tradehill with a referral ID they even suggest removing -- just signing up with and using Tradehill instead of MtGox. That's pretty shady, but I doubt Tradehill staff had anything to do with the MtGox hack. Still, I hope Tradehill will at least release information on the person who's referral link is being given in the hacker spam and definitely close his account and ban his IP. I've been pretty out of the loop on the whole thing - this is my first time on a computer over 15m at a time in about a week.


It does not have to be the hacker. The list of emails and password hashes from MtGox was released publicy, so anyone could have sent those emails of TradeHill, maybe themselves. In fact, TradeHill had to suspend trading because of the MtGox fiasco for a while, because some people had the same password in both places.

----------


## Andrew-Austin

> I'm wondering why someone would trust Tradehill when the MtGox hacker(s) sent massive spam to MtGox users promoting Tradehill with a referral ID they even suggest removing -- just signing up with and using Tradehill instead of MtGox. That's pretty shady, but I doubt Tradehill staff had anything to do with the MtGox hack. Still, I hope Tradehill will at least release information on the person who's referral link is being given in the hacker spam and definitely close his account and ban his IP. I've been pretty out of the loop on the whole thing - this is my first time on a computer over 15m at a time in about a week.


Yeah I don't think it was the hackers that sent out those emails, anyone could have gotten them. Also, on the bitcoin forum someone from Tradehill said they removed the referal codes of the spammers: http://forum.bitcoin.org/index.php?topic=20762.0

----------


## hazek

Yep TradeHill made a statement that they do not condone any type of spamming especially to emails leaked in the mtgox fiasco and that any such action would be punished with a removed referral code and suspended trading account.

----------


## hugolp

So the question is: Is the people going to move to TradeHill (or somewhere else) or are they going to stay at MtGox? TradeHill is getting some action while MtGox is gone. What are you guys going to do?

PS: I got my 4th 5870 up and running. Im doing 1765Mh/s with 805W. I think its quite good.

----------


## hazek

wow nice hugo 

Personally I'm probably going to stay on mtgox because I like their site functionality better, I also believe they will be the most secure now and I believe they'll remain the most liquid.

----------


## Kludge

Ah, thanks -- didn't know there was a public dump of MtGox data. Glad to know Tradehill is terminating the spammers' referral accounts.

Tradehill accepts Dwolla, so I'll probably use both MtGox & Tradehill, keeping ~half my assets in each and using MtGox's trade data.

BTCGuild needs to get their $#@! together soon. Switched from USEast to USWest because USEast was overloaded and refusing connections. Now USWest is the problem server and dropping connections :| -- BTCguild.com is dropping connections, too. Wonder if it's the 1000th DDoS attack on a Bitcoin-related service or something else. Edit: Oh -- nm, it was BTCGuild getting their $#@! together

----------


## iGGz

> PS: I got my 4th 5870 up and running. Im doing 1765Mh/s with 805W. I think its quite good.


Wow nice. I got my 5850 in the mail the other day and instantly said "Oh $#@!" lol I forgot how big the new cards are. Won't fit in my case, CPU in the way, so I'll have to return it (never opened). I was too excited and never thought about dimensions. Oh well I guess it's not for me right now. Good luck

----------


## hugolp

Wow. In the Polish exchange, that has quite some volume, bitcoins are reaching the equivalent of 17.96. This is higher than the last TradeHill price of 14.76 or even the last MtGox price, 15.51 . It seems the east europeans do believe in Bitcoin.

----------


## hazek

C'mon anyone still saying this was the end of Bitcoin is clearly trolling.  If people deemed Bitcoins worthless after this fiasco I guarantee they would have sold all their positions by now.

Of course I could be jumping the gun just a little bit because there might still come some selling once people regain their funds locked in mtgox but still it's a pretty clear sign Bitcoins won't go to $0 anytime soon if ever again.

----------


## newyearsrevolution08

Want to look more into this, anything that anyone is trying to prop up in place of other currencies is doing it for some reason. Easy way to remove the collapse of one currency is to move into a new currency before it happens. It would be different, fresh, CHANGE and all that fun jazz for folks.

I just can't wait until they use the "lets stop killing trees printing our money and use this" allow people to get a higher conversion rate if they trade their usd's in for them.  It would then take a few years for that currency to end up like the many before it.

Now I might just be medicated but man anytime I think of bitcoins I think of geocaching. Anyone do that?

Virtual currency just leaves so much room for fiddling but bitcoins look like the only viable alternative than any main stream currency worldwide though. It would make me feel more safe than holding funds in a paypal account for sure.

----------


## losinglife

Annoyed mtgox still isnt up... i wanna check on my monies and btc already

----------


## My First Name Is Paul

> PS: I got my 4th 5870 up and running. Im doing 1765Mh/s with 805W. I think its quite good.


You are aware that once someone comes out with an FPGA for mining BitCoins, everything else is instantly and woefully obsolete?

----------


## hazek

Looks like a new exchange platform is opening up that will also offer advance order execution, margin trading and short selling based in USA.

They started the site in a test mode and they give everyone who registers in this period some play money to test it out against testnet Bitcoins to iron out any potential bugs.

I like it so far, it's pretty slick and fast but I'm very turned off by their TOS that looks like it was written by wall street lawyers and is so vicious you as a user don't have any rights but you also have a few obligations.

Read more about here: http://forum.bitcoin.org/index.php?topic=20777.0





> You are aware that once someone comes out with an FPGA for mining BitCoins, everything else is instantly and woefully obsolete?


He can still sell the hardware, it's not like a GPU is good only for mining Bitcoins

----------


## Kludge

> You are aware that once someone comes out with an FPGA for mining BitCoins, everything else is instantly and woefully obsolete?


When I last checked a couple weeks ago, FPGA progress was coming along fairly quick and they had a suggested device to use with a for-FPGA mining application they produced, but it was way too expensive in initial cost and still expensive in terms of BTC/KWh to rival the cheap efficiency of ATI cards.

----------


## My First Name Is Paul

If that's the case, then those developers are not the greatest.  If you compare almost any other application where only a specific task is needing to be performed (decode h.264, for example), an FPGA is far more efficient than a GPU.

----------


## Kludge

> If that's the case, then those developers are not the greatest.  If you compare almost any other application where only a specific task is needing to be performed (decode h.264, for example), an FPGA is far more efficient than a GPU.


The original miner release is @ http://forum.bitcoin.org/index.php?topic=9047.0

80 MH/s for $595 ($295 if academic use proven) + shipping which could otherwise buy an 800+ MH/s ATI card. One person serious about starting a KickStart (similar to ChipIn) project suggests people pre-order higher-risk yet-unproven possibly-far-into-the-future kludgey 2 GH/s boards @ $1k each.

- And ofc, it's not just the cost -- These aren't consumer products at all. Using FPGA would require a knowledgeable and technically-skilled individual. It seems their other major hurdle is that the chips currently run extremely hot when even only utilized 50%.

My note on being expensive for BTC/KWh, however, was bull$#@!.

----------


## hugolp

> You are aware that once someone comes out with an FPGA for mining BitCoins, everything else is instantly and woefully obsolete?


FPGA will never overtake GPU's for mining. Too expensive for what they can produce. ASIC's on the other hand will take over GPU's. I know a company has annouced bitcoin mining ASIC's for the end of this year and some other guy has announced them for the beggnning of the next year. But as always with this projects they will be a little late probably. Will see how this turns out. I actually had bought this card two weeks ago, but came through mail from another country so it took a while. The motherboard I have could handle two more cards, but I would need to buy an extra PSU for them, and I am holding that back precisely because I am not sure I could recover the investment.

----------


## Kludge

MtGox relaunch delayed until tomorrow so they can approve/deny the majority of account claims filed.

"We realize that it will take many steps and vastly improved security to regain the trust of our users and the bitcoin community, but for now as a token of our gratitude for the extreme patience our users have shown, and as a way of saying we sincerely sorry for the breach of security that lead to the sell-off, we will be reducing trade fees to 0.3% (from 0.65%) for two weeks following Mt.Gox's reopening.

Users whose trades were effectively cancelled during the the sell-off will be able to trade for free for 1 month following the reopening, and will also receive a free subscription to our upcoming 2-Step SMS security authentication feature for as long as they hold their account."


Mining difficulty continuing to increase at an incredible rate.

----------


## hazek

Well, difficulty just jumped to 1379192.28822808 which is just insane..

This is nice though:



> Account recovery request submitted at 2011-06-21 16:47:19 GMT.
> 
> Your account recovery request has been accepted.
> 
> You will be able to access your Mt.Gox account once the site opens again.

----------


## hugolp

> Well, difficulty just jumped to 1379192.28822808 which is just insane..


I though it was supposed to change in one or two days... I hope the new difficulty stops people from adding new hardware. If this keeps going like this there is going to be a bloodbath.

----------


## hazek

Well depends how urgent it is for people to repay their costs of mining. Maybe some of them are willing ti mine with a loss just to stock up on Bitcoin speculating that they'll make a lot more on them in the future..

I hope that's not the case and we got some difficulty stability.

----------


## hazek

Oh wow, just read this extremely good blog on Bitcoins which we can use to educate people:

Another Take on Bitcoins
By Gary Kinghorn

I just read Doug and Louis’ weekly Conversations with Casey on Bitcoins. I had a very similar take initially, but I think Bitcoins are much more interesting than they are giving them credit for. I’ve actually spent a good amount of time understanding how this system is different than other alternative currency systems, and why it could have some merit at some point in the future, even if there are a number of “implementation details” to work out on the way to viability.

The first common misperception about Bitcoins is that they are backed by nothing, and hence that Goldmoney (also digital money, but backed by gold) must be superior. Or that Bitcoin is another form of fiat currency. This is a flawed argument if you flip it around and compare Bitcoins, not to Goldmoney, but to gold itself.

Continue at: http://porquenoargentina.blogspot.co...n-bitcoin.html

----------


## hugolp

^^

The writting is ok, but there were a couple of mistakes IMO. First, saying that the value of gold comes from the work that has to be done to mine it. The value of gold comes from the utility the people give it (as money, as jewelery, etc...). The mining part influences the supply and hence the price.

Second, he said that Gresham law is what is stopping gold, silver or bitcoins to be used as money. Not so. Gresham law does not apply in this moment. Gresham law only applies when there is a fixed artificial exchange rate. If two currencies are allowed to freely float Gresham law does not apply. Fiat currencies are used because they are imposed by the government with regulations, plain and simple.

But the last pharagrah is very good:




> Earlier in my career as a network security guy, I worked at RSA, which designed and produced many of the foundational cryptographic algorithms used in these kinds of applications, which was what initially attracted me to study bitcoin, along with my interest in alternative currency systems, of course. Upon cursory research, the design is incredibly elegant and well thought out. From an engineering perspective alone, bitcoin is something like looking at the Hoover Dam for an industrial engineer. It’s a testimony to somebody’s great design and the belief in that design of a large and growing community of talented programmers in the open source community, and throughout the world.


Satoshi, whoever he/she is, had really a brilliant idea. People dont realize how clever it is from an engineering point of view. When this guy says that his solution is like the Hoover Damm of cryptography is no exageration.

----------


## hugolp

TradeHill is at $16.5 and the sellers are few.

And this sunday a spanish newspaper is going to publish a favorable article on Bitcoin. 

By the way, someone picked my idea and made this comic:

----------


## hazek

HAhahahahah  you have to post that on the bitcoin forums!

----------


## hugolp

> HAhahahahah  you have to post that on the bitcoin forums!


Its from Bitcoin forum: http://forum.bitcoin.org/index.php?t...6520#msg266520

The guy that makes the daily Bitcoin comic asked for ideas, I gave that one and someone picked it up.

----------


## Kludge

MtGox relaunch postponed... again -- back 11 more hours due to inconsistencies in db.

15GMT, so 11a EST tomorrow, noon when trading resumes - I think.

----------


## hazek

Even though it's annoying I think it's good they aren't willing to reopen shop until they are 100% sure everything is as it's suppose to be.

----------


## hugolp

> Even though it's annoying I think it's good they aren't willing to reopen shop until they are 100% sure everything is as it's suppose to be.


So, bets on what the USD-BTC exchange will do when it opens again? TradeHill has been going up and now rounding the $17.

----------


## hazek

My bet is an immediate sell-off that will be short lived and without a lasting effect.

----------


## hazek

mtgox is up again. Trading still not enabled though.

----------


## steve005

so the things don't even work right now? lol,

----------


## hazek

> so the things don't even work right now? lol,


You just can't stop trolling huh?

----------


## hugolp

MtGox was supposed to resume trading in some minutes and they reopened the tradding platform so people could start placing orders... and the avalanche was so big that the server is down. These people...

----------


## hazek

Seems like it works again now, although at the moment there have been very few trades and the orders are getting queued.

----------


## losinglife

looks like BTC has been just sideways on Gox

----------


## hugolp

> looks like BTC has been just sideways on Gox


Yep. A lot of people in the Bitcoin forums is deceived because everybody was predicting a collapse and they wanted to buy cheap. But it did not happen.

----------


## losinglife

well it better happen! im bored with this sideways stuff. I see no opp to trade with a 2% fee. Pfff give me wild swings!

----------


## hugolp



----------


## hazek

Awesome effort! Can't wait to see these types of professionally made ads!

----------


## hugolp

Bitcoins come to Android Market http://drippler.com/htc_evo_4g/bitco...#ixzz1RMVv3kUT

This is what was needed. It uses 3d bar codes to automatically read the addresses.

----------


## Kludge

> Bitcoins come to Android Market http://drippler.com/htc_evo_4g/bitco...#ixzz1RMVv3kUT
> 
> This is what was needed. It uses 3d bar codes to automatically read the addresses.


Link didn't really explain -- what is it? I don't have a smartphone.

I'm guessing it's not just a miner/MtGox stat app -- we've had plenty of those.

----------


## hugolp

> Link didn't really explain -- what is it? I don't have a smartphone.
> 
> I'm guessing it's not just a miner/MtGox stat app -- we've had plenty of those.


Its a Bitcoin wallet: https://market.android.com/details?i...bitcoinandroid The problem is that it has to download the whole Bitcoin transaction history. Nobody has developed yet the thin Bitcoin client.

----------


## Texan4Life

was checking bitcoin charts and noticed a RP ad...

----------


## Kludge

> was checking bitcoin charts and noticed a RP ad...


Haha, awesome. I wonder if the owner of BTCCharts even charged them for it. Bitcoin is inherently (at least, in the present environment) libertarian, and I've never seen such a libertarian group of people in an organization not dedicated to any specific ideology - even online poker. 


On BTC, though, I am admittedly concerned it is indeed going to be a fad currency. Due to how BTC is created, amount produced remains (very) roughly the same... costs to produce increase, but price has been consistently and slowly dropping. I do not see enough people enthused about Bitcoins and even myself, an ideological miner, have been losing interest in the actual Bitcoins, becoming more interested in my computer hardware and how it interacts with the software. With prices low, I do not want to engage in the marketplace, feeling like I'm not getting my entitlement-minded "worth" out of them. Simply, I don't want to spend them because I think they're worth more. At least, they *were* worth more. I wonder how much the BTC economy suffers because of people with the same mindset as I, with over 100 BTC accumulated in their "banks."

----------


## hazek

I think it's the summer.. People are on vacations or outdoors and don't really care about trading Bitcoins. I myself haven't been paying attention to it all that much in the last few days.

Plus I think that as long as there is some economy, and there is, Bitcoin, although it may go lower in price and force some people to stop mining, won't die.

----------


## hugolp

> Haha, awesome. I wonder if the owner of BTCCharts even charged them for it. Bitcoin is inherently (at least, in the present environment) libertarian, and I've never seen such a libertarian group of people in an organization not dedicated to any specific ideology - even online poker. 
> 
> 
> On BTC, though, I am admittedly concerned it is indeed going to be a fad currency. Due to how BTC is created, amount produced remains (very) roughly the same... costs to produce increase, but price has been consistently and slowly dropping. I do not see enough people enthused about Bitcoins and even myself, an ideological miner, have been losing interest in the actual Bitcoins, becoming more interested in my computer hardware and how it interacts with the software. With prices low, I do not want to engage in the marketplace, feeling like I'm not getting my entitlement-minded "worth" out of them. Simply, I don't want to spend them because I think they're worth more. At least, they *were* worth more. I wonder how much the BTC economy suffers because of people with the same mindset as I, with over 100 BTC accumulated in their "banks."


I have been buying stuff with bitcoins. I like checking the deals at http://metaco.in . Just got my alpaca socks two weeks ago, and now I am going to start buying my cat food with bitcoins. There is someone I know that is going to start a food cooperative (vegetables and fruit mostly) and they want to accept bitcoins. I will buy the food from them. I try to buy all I can with bitcoins, its the only way to develop the economy. If I lived in the USA I would be buying lots of stuff with bitcoins, specially meat: http://www.bitucopia.com/ But here there are not a lot of merchants yet.

I actually think its good that the speculative frenzy is gone and Bitcoin has become "boring" because that way the people that want to develop the trading side of Bitcoin will stay.

----------


## UWDude

I am starting to see the genius of this system via wiki wandering.

Just two numbers I don't understand.  21 million and 2016.  What is to stop these numbers from ever being changed?
Why did they choose such a low number?  21 million will mean if it catches on, surely common prices will be in the .0000001 range.  This will make so many transactions difficult to compute to the common person, I would think.

My biggest concern is this:
The value of paper currency has been more or less enforced by threat of physical violence if one were to try create it, adn have the counterfeit items on their person.

But bitcoin is encrypted, and the value is based upon diminishing returns of computations.  This leads to me to three problems, two technical, and one philosophical:
1. incentive to build bot-net armies to pool mine, without the knowledge of the owner.
2. A new technological breakthrough, be it encryption breaking or computational efficiency, or free energy, or a combination, could destroy the value of bitcoins.  I would say, this means bitcoins have 20 years to be a viable currency. 
3.  Philosophical:  it seems a part of the value of bitcoins is their scarcity.  The more valuable they are, the harder they are to mine.  However, does this not mean that soon we may be dedicating a very large portion of our energy supply simply to the mining and transaction of bitcoins?

----------


## hazek

> Just two numbers I don't understand.  21 million and 2016.  What is to stop these numbers from ever being changed?
> Why did they choose such a low number?  21 million will mean if it catches on, surely common prices will be in the .0000001 range.  This will make so many transactions difficult to compute to the common person, I would think.


The 21million is arbitrary but if need be a bitcoin can be devided up to 8 decimal places and potentially even further. I don't know what 2016 is suppose to be. If you are talking about the estimated time when most (something like 90-95%) of Bitcoins will be mined, that's just how it comes out from the 6 blocks per hour enforced difficulty rule and is again completely arbitrary..

I suspect Bitcoin is not the last crypto-currency and if these two rules, the supply limit and supply expansion rate are flawed I'm sure we'll get better ones if this one doesn't work.




> My biggest concern is this:
> The value of paper currency has been more or less enforced by threat of physical violence if one were to try create it, adn have the counterfeit items on their person.
> 
> But bitcoin is encrypted, and the value is based upon diminishing returns of computations.  This leads to me to three problems, two technical, and one philosophical:
> 1. incentive to build bot-net armies to pool mine, without the knowledge of the owner.
> 2. A new technological breakthrough, be it encryption breaking or computational efficiency, or free energy, or a combination, could destroy the value of bitcoins.  I would say, this means bitcoins have 20 years to be a viable currency. 
> 3.  Philosophical:  it seems a part of the value of bitcoins is their scarcity.  The more valuable they are, the harder they are to mine.  However, does this not mean that soon we may be dedicating a very large portion of our energy supply simply to the mining and transaction of bitcoins?


1. it doesn't matter if someone has a bot army because even if they did, with so many GPU miners they'd come no where near the hashing power needed to compromise the integrity and if their goal is to simply mine, well then that's perfectly fine. Maybe this would even cause some people to finally learn about PC security and get rid of a few infections when they notice their electricity bill and CPU overheating 
2. new encryptions are being constantly developed, usually before the old one is cracked so people and especially governments and banks can replace them before they suffer a breach, same can be done with bitcoin
3. I doubt it. Mining is lucrative only until there's a profit in doing it so for more and more people trying to mine the price would have to keep rising and rising to coincide with the rising difficulty which clearly it's not

----------


## hugolp

> I am starting to see the genius of this system via wiki wandering.
> 
> Just two numbers I don't understand.  21 million and 2016.  What is to stop these numbers from ever being changed?


The decentralized nature of Bitcoin. The clients will refuse transactions from a client that has changed the protocol.

What it is posible is that some people want a different system and start their own currency using the same idea or even fork the current chain. In any case there would be two (or more) currencies and merchants and clients could decide which ones they want to use. My prediction (and history is on my side) is that under competition the inflationary currency would die quickly: People would refuse to accept it as it depreciates. Inflationary currencies only survive when imposed by force.

But this one of the great things about Bitcoin. Its a voluntary currency and it has to compete, that means that it has to provide a good service as currency, otherwise will go away. So any attemp at creating a inflationary Bitcoin (which is technically possible) will fail IMHO.




> Why did they choose such a low number?  21 million will mean if it catches on, surely common prices will be in the .0000001 range.  This will make so many transactions difficult to compute to the common person, I would think.


This has been discused a lot in the Bitcoin forum. The idea is to have milibitcoins (mBtc), microbitcoins (uBtc), etc... So in the future you wont pay 0.0034 Btc, you will pay 3.4 mBtc. You can even have funny names for them. In the Bitcoin forum, milibitcoins receive the name of satoshis, so that would be 3.4 satoshis.




> My biggest concern is this:
> The value of paper currency has been more or less enforced by threat of physical violence if one were to try create it, adn have the counterfeit items on their person.
> 
> But bitcoin is encrypted, and the value is based upon diminishing returns of computations. This leads to me to three problems, two technical, and one philosophical:
> 1. incentive to build bot-net armies to pool mine, without the knowledge of the owner.


Yes, but there are several problems with this.

1. CPU's are not good for mining. Right now (and for a while) mining with CPU gives you less than the cost of the energy it consumes. ATI GPU's are way quicker, and only 1 card can do the same as 10 or 20 cpu's. Also, there are procects developing specific chips for Bitcoin mining. When those appear, CPU mining will be even less profitable and maybe you will need 100 or 200 cpu's just for what one ASIC system is producing. The importance of CPU mining will diminish quick.

2. Its not the same a bot that creates spam or makes DDOS, than a bot that mines bitcoins. The mining bot uses the cpu heavily so the computer will slow down and the user will notice that the computer is infected and probably look for a solution. Bots want to remain undetected. There are ways for the mining bot to make detection harder but it lowers its hashing power and its still detectable (your cpu is always near 100%, its a bit slower sometimes, consumption is up, ...)

3. Mining pool owners are fighting against this miners. While its difficult to know if every owner of a pool is fighting against bots, the owners of the big three appear to be doing it. BtcGuild was down for day and a half by a DDOS because a bot network owner was pissed off because his bots were banned from btcguild. Slush and Deepbit have been DDOS as well.

4. Bots have a price. As Bitcoin mining becomes more specialized cpu mining will be less and less profitable, and bot mining wont be worth it.




> 2. A new technological breakthrough, be it encryption breaking or computational efficiency, or free energy, or a combination, could destroy the value of bitcoins.  I would say, this means bitcoins have 20 years to be a viable currency.


If the cryptography behind Bitcoin starts to show some problems, it can be changed, although its not trivial. The whole network would have to agree in a new protocol, but the people using Bitcoin has an incentive to get to an agreement so they can keep using their bitcoins, so it should be doable.

Also, Bitcoin uses the same encryption protocol as governments  and banks, so if the protocol is breached there would be big problems for everybody.




> 3.  Philosophical:  it seems a part of the value of bitcoins is their scarcity.  The more valuable they are, the harder they are to mine.  However, does this not mean that soon we may be dedicating a very large portion of our energy supply simply to the mining and transaction of bitcoins?


No, because the difficulty of mining gets adjusted by the mining capacity of the network. You can see graphs of mining capacity and difficulty at: http://bitcoin.sipa.be/ . When mining bitcoins is not profitable people stops adding more capacity.

For example, lets say a miner has 2000 Mh/s capacity and its getting 1 bitcoin a day and the cost of electricity is $60 a month. He is making a profit, he will continue mining or even adding more machines. But imagine that more and more people do this. After a while, because the mining power of the whole Bitcoin network has gone up, the difficulty goes up, and now he makes only 0.5 bitcoins a day with his 2000Mh/s, but his electricity costs are still $60 a month. He is still making a profit but hardly to pay for his initial investment, so people will probably stop adding mining capacity. It will get to an equilibrium.

Also, keep in mind that the profits of mining will decrease over time. Now each block grants 50 bitcoins, then 35 bitcoins, ... until the dont give anything because the 21  million limit is reached. At that point, the miners will have to sustain themselves only by transaction fees, and you will have an equilibrium.

----------


## kpitcher

Don't know if it's just the typical post-weekend upswing, or as the debt worries start to be noticed, but I don't recall seeing so much green on bitcoin markets for awhile.

----------


## hugolp

> Don't know if it's just the typical post-weekend upswing, or as the debt worries start to be noticed, but I don't recall seeing so much green on bitcoin markets for awhile.


Bitcoin has been fairly stable around $14 for a while now. It probably has an upswing at some point but I really dont know when, it could take a while.

I think that right now its more profitable to just create a Bitcoin business. The market is new and open to oportunities right now, but the window wont stay opened forever. As MtGox shows being the first gives you advantages (even allowing you to $#@! up).


Btw, Dwolla is now applying chargebacks. It seems it changed its term of use without advising the merchants. It seems Trade Hill has been hit and is on talks with Dwolla to solve the issue. This wont affect anyones account, but probably a lot of merchants will stop using Dwolla, including some Bitcoin exchanges, unless a solution is  found.

----------


## hugolp

EDIT: Never mind, false account.

----------


## Kludge

> I think that right now its more profitable to just create a Bitcoin business. The market is new and open to oportunities right now, but the window wont stay opened forever. As MtGox shows being the first gives you advantages (even allowing you to $#@! up).


This makes the most sense to me. BTC's become pretty stable (even if it's a slow, stable decline) and now's a great time for merchants to put up products & services without needing some type of dynamic pricing module so they aren't going to be screwed every few hours when BTC sees its value dramatically changed.

I hoped to buy out my favorite coffee distributor accepting BTC a couple months ago, but he declined. Still wish that went differently. Plenty of other product niches not yet filled. Having no competitors really is an enormous advantage. You can start up, get your rhythm of production going steady, learn from your customers, and build up loyalty. The fellow I talked to simply started as a coffee enthusiast. He called up some local roasters, printed up stickers, and ran with it - and he's doing very well.

----------


## hazek

I find it funny how there were a ton of people screaming "Disaster" when they learned about the fixed limited supply of Bitcoins that will cause a "deflationary spiral" which would be the demise of the currency and yet the price has been pretty stable for over a month now steadily declining just ever so slightly.

----------


## hugolp

> I find it funny how there were a ton of people screaming "Disaster" when they learned about the fixed limited supply of Bitcoins that will cause a "deflationary spiral" which would be the demise of the currency and yet the price has been pretty stable for over a month now steadily declining just ever so slightly.


Well, we are in the expansionary phase of Bitcoin. There are 50 bitcoins created every 10 minutes average. That means 300 bitcoins every hour, 7,200 bitcoins every day, 216,000 bitcoins every month (all on average). Im actually more surprised that with such a supply of bitcoins the price has not gone down more. There must be a strong demand for bitcoins. 7,200 bitcoins every day means 93,600 dollars worth of bitcoins each day. Granted, some of those bitcoins will be saved by some miners, but others will sell a part to pay for electricity or whatever, and I know of miners that are just in for "the money" (meaning fed notes) and sell all the bitcoins they produce. There is an amazing supply of bitcoins for the size of the economy and yet the price remains stable, so the demand for bitcoins has to be strong. When instead of producing 50 bitcoins a block it goes down to 35 (I believe) imagine what can happen.

(Also, we have had some scandals that have not help the bitcoin valuation.)

The claims about the problems of a price deflationary currency are bull$#@! in my opinion, but to be fair, they are yet to be tested in regards to Bitcoin.

----------


## hazek

Yeah I guess you are right.

----------


## kpitcher

hugolp's comment about dwolla awhile ago has escalated into more problems with people buying bitcoins on the exchanges. Not surprisingly the traditional money online movers - paypal, credit cards, etc all have rules prohibiting or making it very difficult to exchange for bitcoins. Dwolla made it easy but their hidden chargebacks has made the entire industry working on ways to make it easier for the layperson to buy and sell coins.  For now it doesn't surprise me bitcoin pricing is holding basically steady until the ease of buying/selling changes.

The banks make it surprisingly, or maybe not so surprising, difficult to send your money to where you want.

----------


## Kludge

MtGox announced a while ago they'll be sticking with Dwolla. Tradehill dropped support about a week ago. Tradehill does about 1/13 the business MtGox does, so I'm not sure TH's drop of support would have as much impact as other factors slowly pushing BTC down.

BTC price is back below $10. Considering betting a large $ amount in bids. I'm nearing the point where I'm just paying the electric bills with BTC. Will likely be out within a couple months, esp. since my mining software has been very fickle lately. Anyone have a graph showing transaction fee amount per block?

P.S. I've found 3 blocks in the past 2 weeks. But only a bit over 20 BTC to show for it.  (Yes, I feel sad when I find blocks)

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## Kludge

P.P.S. MyBitcoin, a major Bitcoin payment system for people wanting payments to go to an e-wallet instead of directly to their client, has been the victim of cyber-theft, and permanently shut down. The theft happened gradually and slowly to prevent detection, and thus, on top of 5% total deposits kept "locked away," has some funds to disperse to those filing claims. A claims system hasn't yet been posted. https://www.mybitcoin.com/

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## hugolp

> P.P.S. MyBitcoin, a major Bitcoin payment system for people wanting payments to go to an e-wallet instead of directly to their client, has been the victim of cyber-theft, and permanently shut down. The theft happened gradually and slowly to prevent detection, and thus, on top of 5% total deposits kept "locked away," has some funds to disperse to those filing claims. A claims system hasn't yet been posted. https://www.mybitcoin.com/


This is the reason why bitcoins are down. MyBitcoin was used by a lot of people and by disappearing it has hurt the confidence a lot.

Btw, its still dubious whether their story is true or not, because this explanations only appear in their webpage after the FBI started an investigation. According to some people in the forum they are just staling with those messages.

The good news is that a bunch of bitcoin business are about to appear (a lot of betting pages) and also I am getting ready a how to create a usb bootable wallet in very few and easy steps, so people dont need to rely on MyBitcoin or similar. Also, the encrypted client is about to be released.




> MtGox announced a while ago they'll be sticking with Dwolla. Tradehill dropped support about a week ago. Tradehill does about 1/13 the business MtGox does, so I'm not sure TH's drop of support would have as much impact as other factors slowly pushing BTC down.
> 
> BTC price is back below $10. Considering betting a large $ amount in bids. I'm nearing the point where I'm just paying the electric bills with BTC. Will likely be out within a couple months, esp. since my mining software has been very fickle lately. Anyone have a graph showing transaction fee amount per block?
> 
> P.S. I've found 3 blocks in the past 2 weeks. But only a bit over 20 BTC to show for it.  (Yes, I feel sad when I find blocks)


Murphy's law states that if you were solo mining you would have not found any.

Have you make the calculations correctly about being in the border of your electricity bill? I pay like 3 times your electricity rate and Im not there yet.

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## Kludge

> This is the reason why bitcoins are down. MyBitcoin was used by a lot of people and by disappearing it has hurt the confidence a lot.
> 
> Btw, its still dubious whether their story is true or not, because this explanations only appear in their webpage after the FBI started an investigation. According to some people in the forum they are just staling with those messages.
> 
> The good news is that a bunch of bitcoin business are about to appear (a lot of betting pages) and also I am getting ready a how to create a usb bootable wallet in very few and easy steps, so people dont need to rely on MyBitcoin or similar. Also, the encrypted client is about to be released.
> 
> 
> 
> Murphy's law states that if you were solo mining you would have not found any.
> ...


I'm not in the border. I'm still up over 100% my electric bill, but it's quickly becoming not worth my time. I've been falling pretty far behind on BTC news. I didn't even know the phatk kernal had been updated over a week ago. Didn't even know about MyBitcoin until today.

A couple months is when I'll probably be considering selling off my gfx cards. Mobos have integrated graphics, and the hardware's otherwise pretty solid for productive use. Would just need to put them in a box with a DVD drive and could sell them cheap on Craigslist. Could use the money to build myself a real media PC in the living room to replace the laptop which oddly has HDMI output but can't play 720p or higher video without serious stuttering.

Looking forward to there finally being an encrypted usable wallet. That's been at risk for way too long.

----------


## hazek

> The good news is that a bunch of bitcoin business are about to appear (a lot of betting pages) and also I am getting ready a how to create a usb bootable wallet in very few and easy steps, so people dont need to rely on MyBitcoin or similar. Also, the encrypted client is about to be released.


That is good news, although I don't believe it matters if the price is declining for now.. I wouldn't mind if it went all the way back to $1. As long as it's properties are maintained I think they will have value, it just needs time for businesses to discover it's use and employ it successfully.

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## hugolp

> That is good news, although I don't believe it matters if the price is declining for now.. I wouldn't mind if it went all the way back to $1. As long as it's properties are maintained I think they will have value, it just needs time for businesses to discover it's use and employ it successfully.


I dont care if the price goes down neither, but the problem is the scandals that keep popping. That worries me. People need to start wising up and stop being so gulible.

Previous to MyBitcoin just shutting down, there were numerous signs that it was shady. People reported in the forums that they were not answering to emails, etc... I can understand leaving 15 bitcoins in MyBitcoin.com and dont pay too much attention. But there were people with thousends of bitcoins in there and were not paying attention!! First, how do you deposit thousends of bitcoins in a service owned by you dont know who. The owners did not even gave their names or pictures, nothing. And second, when there is people in the forum warning about the dogy management, you dont care and you don nothing... I just dont understand some people.

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## hugolp

You guys need to see this:

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## iddo

I started a new thread for Ron Paul supporters who might be less familiar with bitcoin than people in this thread, regarding an idea to have bitcoin chip-in to raise money for grassroot groups that try to help Ron Paul win the primaries:
http://www.ronpaulforums.com/showthread.php?308767
If you have useful comments, please respond in that thread or here, thanks

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## Jeez

This was a good read, especially with government starting to look into bitcoin activities (by terrorists and drug dealers) prospects for this nerd currency is bleak.
http://www.betabeat.com/2011/08/05/m...with-bitcoins/

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## Channing

Bitcoin is to the financial system as what Ron Paul is to politics.
It's all about freedom.

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## Jeez

^ Yes lets try to come up with another financial system and completely ignore assets like metal which have been traded and used successfully for thousands of years. And heck unlike even paper currency this new currency will requires power, computers and internet. All which is proven to never ever fail and are very secure.

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## Channing

We're not ignoring gold and silver, we're just giving people more choice.

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## Jeez

BC are interesting and it is good to have choices, the problem i have with BC is the volatility in its prices (has pump and dump written all over it) and it is too complex for its own good and absolutely useless when there is true financial Armageddon (good luck trading BC when there is no power). 

Also because of the way system is structured the people who stand to the gain the most are early adopters and they are the ones promoting it. Thats' a conflict of interest right there....

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## rhelwig

> Bitcoin is to the financial system as what Ron Paul is to politics.


Yep, neither one is perfect, but they're the best we can realistically get. For now.

I am a big supporter of precious metal as money, but until we can keep government out of the Internet we really can't have an online precious metals backed currency (as E-gold, Liberty Dollar, etc have shown). So I support Bitcoin as at least a pretty good transaction handler: sell some PMs for BCs, send the BCs, the receiver converts the BCs to PMs.

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## Kludge

> BC are interesting and it is good to have choices, the problem i have with BC is the volatility in its prices (has pump and dump written all over it) and it is too complex for its own good and absolutely useless when there is true financial Armageddon (good luck trading BC when there is no power). 
> 
> Also because of the way system is structured the people who stand to the gain the most are early adopters and they are the ones promoting it. Thats' a conflict of interest right there....


Hi Steve. Actually, BTC has been extremely stable the past month or two. We're starting to move out of the expansionary phase of BTC's life, where electricity & labor costs for BTC production are rewarded pretty reasonably, as opposed to before, where BTC returns amounted to 10x or more the electricity rate.

Early adopters in every area of production/service are rewarded every time there's success. Now BTC has stabilized, it's a great time to start a BTC business as many industries currently have no representation by BTC traders.

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## hugolp

> Yes lets try to come up with another financial system and completely ignore assets like metal which have been traded and used successfully for thousands of years. And heck unlike even paper currency this new currency will requires power, computers and internet. All which is proven to never ever fail and are very secure.


Im a goldbug and I support and use Bitcoin. There are several shops where you can buy and sell gold and silver for bitcoins. They are all voluntary currencies. Bitcoin is just far more convineint for the Internet than gold and silver.




> Yes lets try to come up with another financial system and completely ignore assets like metal which have been traded and used successfully for thousands of years. And heck unlike even paper currency this new currency will requires power, computers and internet. All which is proven to never ever fail and are very secure.
> 
> Also because of the way system is structured the people who stand to the gain the most are early adopters and they are the ones promoting it. Thats' a conflict of interest right there....


So what is it? Its a pump and dumb operation or early adopters are in for the long run? It can not be both. It seems to me you are just throwing $#@! at Bitcoin without too much though.

Btw, I guess that since early adopters have such an advantage, you bought bitcoins when they went down to $6, right?

----------


## Jeez

> So what is it? Its a pump and dumb operation or early adopters are in for the long run? It can not be both. It seems to me you are just throwing $#@! at Bitcoin without too much though.
> 
> Btw, I guess that since early adopters have such an advantage, you bought bitcoins when they went down to $6, right?


It is two separate issues either way as for me buying it, i would never buy into any investment or idea which doesn't disclose who is behind it. 

What do i mean? The supposed founder of Bitcoin who owns 33% of Bitcoins' at issue. Has yet to even reveal himself and calls himself Satoshi (fyi it is name of Pokemon creator).

----------


## hugolp

> It is two separate issues either way as for me buying it, i would never buy into any investment or idea which doesn't disclose who is behind it.


Bitcoin is open source. You can see and check absolutely everything, there is nothing hidden.

And if you dont want to take the risk, dont complain when other that do gain.




> What do i mean? The supposed founder of Bitcoin who owns 33% of Bitcoins' at issue. Has yet to even reveal himself and calls himself Satoshi (fyi it is name of Pokemon creator).


Thats not true. The "Satoshi owns 33% of the bitcoins" was FUD.

Anyway, you dont want to argue, you just want to spread FUD.

----------


## Kludge

"Inspired by stories of unique methods of scattering ashes such as Timothy Leary’s space burial, Hunter S. Thompson’s ashes being fired from a cannon, & golfers being reconstituted as part of golf balls, a sick bitcoin miner has some last plans for an epic send-off of his own. He loves bitcoins to the point where he has decided to have his remains tied to them. However, there is a problem – bitcoins aren’t physical – they exist in cyberspace only – so there is no way to, say, scatter his ashes in a field of bitcoins. He briefly considered the OnlyOneTV studio but decided that they wouldn’t want his ashes getting their carpet dirty and it would just be awkward.

...

Enter a plan to create the ashes themselves with a unique cremation process – and be content to then treat them like most people, with a simple urn on the mantel. The plan calls for the body to be placed in a square room with no A/C, stuffed to the absolute brim (from top-to-bottom, side-to-side) with his many case-less mining rigs. All graphics cards will be overclocked to their breaking point. If that is not enough to melt components and start an inferno, strips of paper representing his USD cash reserves (but not actual cash because it is illegal to intentionally destroy federal reserve notes) will be shredded and thrown into the room until the pure heat causes the tinder/tender to ignite everything and cremate the body."

On a serious note, mining difficulty is noticeably lower. Only time difficulty's gone down since April (which was just a tiny blip). I'm guessing this is due in large part to the knock-off BTCs which have come from making BTC open-source? People've been starting up all sorts of different e-coins lately, with a surprisingly high amount of people willing to buy them. It's actually a great choice for a lot of the miners. XYZcoin may only be worth .05 BTC, but it's mined 1000x quicker. If difficulty continues dropping at the current increasing rate, maybe we'll have a real 2D hockey stick instead of a stick hockey stick. .... 

Maybe from the loss of miners' supply, BTC price is slowly increasing. BTC businesses are doing quite well, it seems. Silk Road's inventory and user base has expanded quite substantially. Tor seems slower than ever, though. Nearly $500k-worth in USD traded in BTC every day now.

Mining difficulty chart:

----------


## Kludge

MtGox updated a graph fairly substantially. You can now receive audio alerts when the price changes. By default, you're only alerted when the price changes .1BTC, but you can edit that as you'd like by changing the value after "audio" in the URL. http://mtgoxlive.com/orders?audio=0.1 -- Check out some of the other options in the bottom-right of the screen

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## hazek

cool!

----------


## specsaregood

so how much does some good buds go for over there?  its been years since i had any....

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## Kludge

> so how much does some good buds go for over there?  its been years since i had any....


That's a bit difficult to figure out. The organization scheme of Silk Road really needs improvement. There are over 250 listings for Cannabis. People sell different strains and quantities, but there's no way to figure out, say, the best price/oz without going through 250+ listings and trying to figure it out yourself.

Small quantity, so probably not the best value. You can purchase 1g "Blueberry" ("drugs" have a surprisingly high learning curve. It's actually pretty intimidating just trying to figure out what "SWIY," "SWIM," and "SWIH" are talking about.) @ ฿1.17, or about $12.75. That one's listed only for EU residents, though.... There's another for US, 1g pre-rolled using medical-grade MJ (Kush & GD Purple). ~$13 shipped.

The rating system's pretty solid and's led to some great innovations in packaging & shipping to please customers. Much more communication than was happening otherwise. I think the drug scene's going to become much more powerful as a result of open worldwide communication on the matter in a safe environment.

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## hugolp

Guys, check this up: http://www.bitcoindeals.com/

Its still only accesible through invitations because they opened three days ago (they wanted to have it ready for the Bitcoin Conference that happened this last weekend), but it looks great.

Also, http://www.btcdeals.com is up and running again. Apparently, the guy got ill and that is why he had to get the page down temporarely. He has now sent the orders that were ordered when he got ill and is up and running again.

Business are starting to pop up in the Bitcoin economy. It seems that the level is raising. Last Friday I bought the food for my cat with bitcoins. I asked if I was the first one to pay with bitcoins, and they said no. I only wish something like this existed in Europe: http://www.bitucopia.com/ Then I would be a happy fellow.

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## hazek

It's going to take a while before we have a significant number of merchants accepting Bitcoins but we can clearly see the number is growing..

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## Elwar

I am in the process of getting my wife's clothing store website to accept bitcoins.

I have been working with the folks at bit-pay.com who are trying to make it easy for e-commerce sites to add bitcoin as an option for payment as easily as accepting paypal.

Currently I have it accepting Bitcoins but I have to go to the bit-pay.com site to verify payment (more of a deficiency in my php skills than the bit-pay system).

Site: Heidi Jo's Boutique

----------


## hugolp

> I am in the process of getting my wife's clothing store website to accept bitcoins.
> 
> I have been working with the folks at bit-pay.com who are trying to make it easy for e-commerce sites to add bitcoin as an option for payment as easily as accepting paypal.
> 
> Currently I have it accepting Bitcoins but I have to go to the bit-pay.com site to verify payment (more of a deficiency in my php skills than the bit-pay system).
> 
> Site: Heidi Jo's Boutique


Im programming a site that will accept bitcoins (will release soon) and I have programmed the part of accepting (and refunding) bitcoins without the need of a third party (you save the fees). The only downside is that you have to run a bitcoind instance in the computer, which always involves the risk of being hacked (although if I was not sure I would not risk my own money). If you want to give it a try I could help you set it up. Im using python/django but there are libraries for php that behave exactly the same.

EDIT: I would accept a discount at your wife's shop as payment.  The clothes look great.

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## hugolp

Interview with the guy of bitcoindeals.com. Over 1.000.000 products sold only in bitcoins and with discount because they dont have to deal with chargebacks (although I want to see that personally). And the guy says its only the first project and have planned bigger projects in the future.

More professional people is starting to move into Bitcoin. Its amazing the development that is happening in so short period of time.

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## hazek

> Its amazing the development that is happening in so short period of time.


It's a sound technology and more and more people trust it. I can't wait to see where we'll be in like a year or two

----------


## Elwar

I liken it to the early days of the Internet...(90s Internet, not 60s). You used to have to buy books that had IP addresses and go on gopher or use telnet or to newsgroups to experience the Internet. Very immature and primitive. But it matured. As will Bitcoin.

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## Kludge

So far from Bitcoin-related services, I've only had personal account details taken twice, and have only had all VNC servers used remotely without authorization once. It certainly suggests there's a lot of interest in BTC and perhaps BTC is suffering in value due to how very likely it is some of the best (and arguably worst) minds are trying to break the encryption BTC uses.

----------


## Kludge

One experience I'll never forget is my order with BitBrew.com -- I posted a quick review on the thread @ https://bitcointalk.org/index.php?topic=40068.0 where a promotion's been announced. The coffee's simply the best I've ever tasted, and the owner - edd - is a champ all the way!

If someone's interested in 10% off their order, and a subsequent 15% off my next order, I'd very much appreciate a PM and I'll give you the email address I used!

----------


## Kludge

FPGA is slowly moving toward becoming competitive. Upfront costs are still insane, but its ability to sip power should eventually make up for it as the designs progress. However, that'll probably still be years off, I suspect.

Best value out there so far (still not in production phase): Specific to 2-FPGA boards (a.k.a. X6500):
at least 180 MH/s avg hash rate (~$18.21/month profits @ current BTC & difficulty rate, profits likely declining as time progresses - does not include rest of PC req'd - actual profits would probably be around $15.91/mo)less than 15W power draw (around $.75/month @ $.07/KWh) (does not include rest of PC req'd - actual power draw would probably be around 60W)costs $610 upfront (does not include rest of PC req'd - actual upfront cost would probably be around $750)Would probably never be able to make a profit off assuming no liquidation valueCompare to my mining PCs sporting two 5850s OC'd to ~955 MHz core I put together around 6 months ago:
750 MH/s avg hash rate (~$56.05/month profits @ current BTC & difficulty rate, profits likely declining as time progresses)450W power draw (comes to a bit over $23/month for each set of two gfx cards)cost ~$450 upfront (probably lower now since that price comes from 6 or so months ago)Already doubled my money assuming no liquidation valueYou'll note I did indeed factor in power costs when calculating that initial profit number. Electricity, however, is extraordinarily cheap where I live. If you live in a place with something like $.40/KWh electricity, then I'd be losing $55 or so every month per PC while the FPGA boards may still be able to eek out a tiny profit for a couple months.

----------


## hazek

Where do you think the price will go from $6 in the short term?

----------


## Esoteric

> Where do you think the price will go from $6 in the short term?



zero-ish.

----------


## hugolp

> zero-ish.


Are you willing to put your money where your mouth is? If you set a reasonable date where the bet closes I will take the other side of the bet.

----------


## Jeez

> Are you willing to put your money where your mouth is? If you se a reasonable date where the bet closes I will take the other side of the bet.


 When the underlying value of bunch of bits is nothing more than a few micro cents, it can go as low as zero.

----------


## low preference guy

> When the underlying value of bunch of bits is nothing more than a few micro cents, it can go as low as zero.


how is that related to the request about betting on a specific date?

----------


## helmuth_hubener

A better currency: Pecunix.

It's gold.  Not just gold-based, it is gold.
It's anonymous.
It's free-market.
It's secure.
Again, it's gold.  You can take delivery of the gold.  When you own Pecunix, you own allocated gold stored in a secure warehouse.
It uses jurisdictional arbitrage to minimize the risk of governmental attacks (especially US government attacks) ala those against e-gold and the Liberty Dollar.
You can fund a debit card with Pecunix and use it to make purchases, both online and offline.

I use Pecunix.  I recommend it.  It works.

I wish Bitcoin the best, but it is not based on any underlying assets.  According to my understanding of Mises' regression theorem, it can't work.  Money only arises from something with real value.  I don't think BitCoin tokens have real value.  Look up Loom.cc or e-cache for similar decentralized concepts, but with asset classes backed by actual assets such as gold.

Digital gold(or other commodity) currencies could be a major part of making the world a freer place.  When all transactions are anonymous, encrypted, and untraceable, that makes it hard to tax them.

----------


## My First Name Is Paul

> According to my understanding of Mises' regression theorem, it can't work.  Money only arises from something with real value.  I don't think BitCoin tokens have real value.  Look up Loom.cc or e-cache for similar decentralized concepts, but with asset classes backed by actual assets such as gold.


Keep in mind that Mises never discussed nor conceived of a digital currency such as Bitcoin. His conclusions are based only the information available for him to review.  Using his arguments as supporting evidence that Bitcoin cannot be used as a medium for exchange is using what I call the post mortem fallacy.The problem really is people evaluating Bitcoin as a currency itself, instead of what it actually is, which is simply a cyber-credit that can cross all barriers and allow transactions without any middleman.  A way for parties to hand cash directly to one another without a middleman.

----------


## helmuth_hubener

> Using his arguments as supporting evidence that Bitcoin cannot be used as a medium for exchange is using what I call the post mortem fallacy.


Apparently this fallacy would involve using the arguments of a person now dead to prove, disprove, or in any way apply to phenomena or inventions not existing when the person was alive.  I do not see how it is fallacious to apply arguments to a object merely because the original purveyor of the arguments has become deceased.  I disagree that such a thing is a fallacy.

I agree with Mises' Regression Theorem because it is fundamentally sound.  Its logic is impeccable.  This logic irresistibly leads to its conclusion.  It is a timeless and universal argument.  An attempted money being "digital" changes no aspect of the argument of the Regression Theorem.  Perhaps Mises also did not ever conceive of string theory.  However, if in 5 years someone comes along and tried to start a "string theory currency" all the same principles will apply to it as to "digital currency" and those same principles are the ones which apply also to paper currency, and any other type of currency.  You see?  The details of the technological medium in which the money operates does not change fundamental principles of logic and rationality.  Just because Aristotle and Xeno are dead does not mean we cannot use their logical principles when discussing flying cars and pneumatic ratchet sets, things they probably never conceived.

So, I personally think it is fallacious to think that merely because a person died we can_not_ apply their reasoning to modern situations.  So Mises was the first one to discover or to puzzle out the Regression Theorem of how money must necessarily originate.  So he happened to live from 1881-1973.  So what?  What if the one who first puzzled it out happened to be Bob Murphy in 2010?  Would we then be any more or less justified in applying the theory to BitCoin?

 If it was Cato the Younger in 50 B.C.?

A theory of this nature is timeless, and fails or succeeds by the quality of its reasoning, not the technological milieu of its inventor's generation.

Something with no intrinsic value, with no commodity value that is, will never become universally accepted, and thus will never become money.  BitCoins seem to me to have no intrinsic value.  There is nothing in their nature to make them desirable.  There are a wide variety of digital money ideas that could work, superficially similar to BitCoin, for instance cryptographically traded rights to computer cycles or to bandwidth on network nodes.  In fact, micro-payments for access could solve problems such as e-mail spam and denial of service attacks.  See, the thing valued need not be a tangible asset such as gold, but it does need to have some conceivable value.

----------


## low preference guy

> BitCoins seem to me to have no intrinsic value.


They do because they can be used as a tool which enables anonymous transactions.

----------


## hugolp

> Something with no intrinsic value, with no commodity value that is, will never become universally accepted, and thus will never become money.  BitCoins seem to me to have no intrinsic value.


Bitcoin has no intrincis value, gold has no intrinsic value, petrol has no intrinsic value. Value is subjective.

It seems weird to cite Mises to then justify yourself with marxists theories.

----------


## low preference guy

> Bitcoin has no intrincis value, gold has no intrinsic value, petrol has no intrinsic value. Value is subjective.
> 
> It seems weird to cite Mises to then justify yourself with marxists theories.


i think he means non-monetary value.

----------


## hugolp

> There is nothing in their nature to make them desirable.


If this is the case, why are people using it, and you have to come to a Bitcoin thread to promote Pecunix?. Btw, Pecunix is a centralized system, with the gold deposits in Switzerland so they are subject to government intervention exaclty like e-gold. The only thing going for Pecunix is that its small and did not had success so the government has not deem necesary to invervene. That could change and Pecunix has nothing different from e-gold to stop it.




> There are a wide variety of digital money ideas that could work, superficially similar to BitCoin, for instance cryptographically traded rights to computer cycles or to bandwidth on network nodes.  In fact, micro-payments for access could solve problems such as e-mail spam and denial of service attacks.  See, the thing valued need not be a tangible asset such as gold, but it does need to have some conceivable value.


I think you are very confused as what value is.

First, computer cycles or bandwith are horrible for backing a currency as they are not scarce at all.

Second, Bitcoin does not violate Mises regression theorem, because some people were valuing bitcoins before they were used as money. Probably not how Mises expected, but ahtat is because he could not imagine such a currency, but bitcoins were valued when they were not used as money.

----------


## Kludge

ATTN: MTGOX USERS WHO HAD THEIR INFO STOLEN! Ignore messages from MtGox stating your account's been blocked. The email address is masked. Most email service providers will note the message is not from who's stated, and usually include it's from msk4.imhoster.net, for instance, when you open the email address. Do NOT click the links!

Cheers!

----------


## helmuth_hubener

> Bitcoin has no intrinsic value, gold has no intrinsic value, petrol has no intrinsic value. Value is subjective.
> 
> It seems weird to cite Mises to then justify yourself with marxists theories.


Value is subjective, but value is not just a meaningless word whose definition is subjective.  I perhaps did not express the idea very well; intrinsic may have been the wrong word.  The idea is: the money must have been first valued by people_ in and of itself_, not just valued because of its anticipated future purchasing power as money.  It became money because it was so widely desired by such a large number of people that it was more and more commonly used as a convenient intermediate good in multi-stage trades.  In those multi-stage trades, the budding money is valued by the trader that day because he anticipates it will have "purchasing power" to get him what he really wants tomorrow.  First, however, it is a good of some sort valued by people in and of itself, as a good, not for any anticipated purchasing power.






> Second, Bitcoin does not violate Mises regression theorem, because some people were valuing bitcoins before they were used as money.


 Is this actually true?  Because you're right, this would mean it would not violate the regression theorem.  That's if people were valuing the BitCoins _as BitCoins, in and of themselves,_ not valuing them for their anticipated purchasing power once the system was up and running.  I suspect they actually were valuing them because they anticipated they would "become money" in the future, thus they were already using them as store-of-value money, even if they could not yet be used as means-of-exchange money.  After all, what were they going to use them for?  Why would they value the Bitcoins in and of themselves?  I'm not saying it's impossible, value is indeed subjective.  Perhaps they have some non-monetary application or utility I am unaware of.  Perhaps these people you speak of valued them because they wanted to enjoy their mathematical beauty on their computer, like buying a great painting to hang on your wall.  As I said, though, I suspect they valued them for their monetary value, that is, for their anticipated purchasing power, that is, for the same reason people value dollar bills.  However, that is merely what I suspect and I am not at all familiar with BitCoin history, so I could be wrong.  Please feel free to educate me!




> If this is the case, why are people using it


 Speculation, the hope that it will work, a variety of reasons.  They seem to me to share a lot in common with unbacked "local currencies" like Ithaca Hours.  The bitcointalk.org Intro page concurs with me:

"Because bitcoins are given their value by the community, they don't need to be accepted by anyone else or backed by any authority to succeed.  They are like a local currency except much, much more effective and local to the whole world. " -- https://bitcointalk.org/index.php?topic=7269.0

These local currencies are ultimately worthless slips of paper, unbacked by anything whatsoever, and are utterly dependent on "the community" to "give" them value.  Any ongoing redeemability that Ithaca Hours-type currencies have is more akin to a game or an experiment that the users enjoy than any real hope of becoming an actual widely-accepted money.  Unfortunately, I see BitCoins as occupying the same hopeless position as Ithaca Hours or as Murray printing up his famous illustrative "Rothbards".  And even the above introduction to BitCoin agrees.  Now Murray always said no one would accept fiat Rothbards if he were to print some up, but actually I might buy a Rothbard, if only for joke and sentimental reasons.  A whole indie market could develop for them.  We could all meet in Auburn and have a huge bazaar once a year where you can buy products for Rothbards.  But ultimately, Rothbards will never become money because they have zilch commodity value.  They're utterly worthless, in and of themselves.  Likewise BitCoins, as far as I can tell.  Again, feel free to educate me!




> and you have to come to a Bitcoin thread to promote Pecunix?


 I meant no offense.  The two just seem related in my mind.  They are both digital currencies.  I figured people interested in one digital currency might be interested in learning about other digital currencies and digital currency generally and probably many have never heard of Pecunix, loom.cc, nor e-cache.  

I know about digital currency.  I was a major part or running an exchanger a while back.  I've done research and reading on them.  I've tested various currencies.  I've used them for real-life economic transactions.  I have significant value stored in them.  By bringing up Pecunix I was merely trying to point people to a system I find useful and to be a promising development for the prospect of a free and anonymous digital market.  I think most BitCoin proponents here like it likewise for its potential as an enabler of a free and anonymous digital market.





> Btw, Pecunix is a centralized system, with the gold deposits in Switzerland so they are subject to government intervention exaclty like e-gold. The only thing going for Pecunix is that its small and did not had success so the government has not deem necesary to invervene. That could change and Pecunix has nothing different from e-gold to stop it.


 Pecunix has many things different from e-gold to "stop it".  Not all governments around the world are equally interested in seizing gold.  Some have a vested interest in being seen as a safe repository for gold.  Not all governments are equally willing to go along with what other governments want them to do.  Not all governments are equally willing to go to war or otherwise attack governments which will not go along with what they want them to do.  By avoiding having any aspect of their business tied to, jurisdictioned in, or in any way related to the United States, they avoid the worst threat.  In this, they are quite a bit different than e-gold.  I see a difference.  Do you?

Pecunix definitely is a centralized system, however, which does have definite drawbacks.  Understanding one of these drawbacks (potential government attack) and disliking it, you may prefer a decentralized system such as loom.cc .  In Loom, everything is private, including transactions (which are public in BitCoin).  Or any one of a number of anonymous cash-like digital currencies.  Read this issue of DGC Magazine to learn what's available:
http://issuu.com/dgcmagazine/docs/di...e-special-2011




> First, computer cycles or bandwith are horrible for backing a currency as they are not scarce at all.


 They most certainly are scarce, in the economic sense.

----------


## hazek

LOL Dr. White just mentioned Bitcoins in his opening statement at Ron's hearing 

http://mfile.akamai.com/65722/live/r...p=36167&prop=n

----------


## hugolp

> LOL Dr. White just mentioned Bitcoins in his opening statement at Ron's hearing 
> 
> http://mfile.akamai.com/65722/live/r...p=36167&prop=n


I know!!! Bitcoins have been mention in an official hearing of the USA congress. Its amazing.

For anyone interested they are mentioned starting 20 minutes 30 seconds after a list of posible competing currency list.

----------


## helmuth_hubener

> LOL Dr. White just mentioned Bitcoins in his opening statement at Ron's hearing 
> 
> http://mfile.akamai.com/65722/live/r...p=36167&prop=n


 That's excellent!

----------


## hugolp

> The idea is: the money must have been first valued by people_ in and of itself_, not just valued because of its anticipated future purchasing power as money.


Why? You keep repeating this in different forms but never justify it.

Who are you to judge why people value things? Its not the role of an economist to judge what are valid valuations and what are not. If people value something, then it has value. "In and in itself" is just a clever way of saying: I will personally decide which valuation I deem acceptable and which valuation I dont deem acceptable. But that is not an objective economic analisys. Your personal valuations are fine when you have to decide in live, but should be left aside when giving your opinion as an economist (and this is specially true if you are an austrian economist).




> Speculation, the hope that it will work, a variety of reasons.


I buy the food for my cat with bitcoins, Ive bought socks, computer hardware, music, etc... with bitcoins. People buy stuff with bitcoins daily (including the famous Silk Road). Whether you like it or not and want to admit it or not, bitcoins are being used as money, as means of exchange. And the shops that accept bitcoins are growing daily.

So, bitcoins are being used as money. Thats a fact. So either Bitcoin does not violate the Mises regressiom theorem or the theorem is wrong. (I would like an answer to this)




> They seem to me to share a lot in common with unbacked "local currencies" like Ithaca Hours.  The bitcointalk.org Intro page concurs with me:
> 
> "Because bitcoins are given their value by the community, they don't need to be accepted by anyone else or backed by any authority to succeed.  They are like a local currency except much, much more effective and local to the whole world. " -- https://bitcointalk.org/index.php?topic=7269.0


They are similar to those currencies in that they are not certificates, yes. Sorry, I dont understand how this is relevant or what you were trying to imply. A gold certificate system is similar to those currencies because they are all centralized, as opposed to Bitcoin that is different from them all in that sense.

[Ive seen later what you are trying to imply]




> These local currencies are ultimately worthless slips of paper, unbacked by anything whatsoever, and are utterly dependent on "the community" to "give" them value.  Any ongoing redeemability that Ithaca Hours-type currencies have is more akin to a game or an experiment that the users enjoy than any real hope of becoming an actual widely-accepted money.


Again, its not the job of a real economist to judge. One has to try to be objective, otherwise you are not being an economist. These currencies that you personally deem worthless are being used as money in their communities. Its 100% fine that _you personally_ think they are worthless and dont want to use them, but _you as an economist_ have to acknoledge the fact that they are being used as means of exchange wihtin a certain group of people and therefore are money within that group of people.

For example, Rothbard explains how the USA government, when it invaded Philipines, tried to impose gold coins as money as a first step to impose their dollar gold-exchange system. The natives refused to use the gold coins, got rid of them as soon as they could and kept using silver as money like they had done always. The fact that these people had not choosed gold as money, and then refused gold as money when imposed, means that gold is worthless as money? No, it means that particular community, that particular market, choosed silver as money and not gold. The fact that you or anyone else refuse to use Ithaca hours, bitcoins (or rothbards) does not mean they are not money for other people.

As long as there is a group of peole using something as means of exchange, its money. By definition, and that is independent of your personal valuation.




> Unfortunately, I see BitCoins as occupying the same hopeless position as Ithaca Hours or as Murray printing up his famous illustrative "Rothbards".  And even the above introduction to BitCoin agrees.  Now Murray always said no one would accept fiat Rothbards if he were to print some up, but actually I might buy a Rothbard, if only for joke and sentimental reasons.  A whole indie market could develop for them.  We could all meet in Auburn and have a huge bazaar once a year where you can buy products for Rothbards.  But ultimately, Rothbards will never become money because they have zilch commodity value.  They're utterly worthless, in and of themselves.  Likewise BitCoins, as far as I can tell.  Again, feel free to educate me!


If you feel that way you should not hold bitcoins or use them. I can tell you they are very useful in this Internet era, but if your believes tell you that, then Bitcoin might not be for you. I pesonally think your attitude is similar to the believers on fiat currency, that argue any currency not imposed by a government will never work, therefore refuse to look at any of the useful characteristics of other types of money. But again, its your choice. Bitcoin is a voluntary currency and nobody is forced to use it.

Btw, Rothbards would have been money for as long as they were used as means of exchange (during your Auburn market). When the market ends they would have stopped being money.




> Pecunix has many things different from e-gold to "stop it".  Not all governments around the world are equally interested in seizing gold.  Some have a vested interest in being seen as a safe repository for gold.  Not all governments are equally willing to go along with what other governments want them to do.  Not all governments are equally willing to go to war or otherwise attack governments which will not go along with what they want them to do.  By avoiding having any aspect of their business tied to, jurisdictioned in, or in any way related to the United States, they avoid the worst threat.  In this, they are quite a bit different than e-gold.  I see a difference.  Do you?


You are talking about Switzerland, the country whose banks opened the data of their clients to the EU and the USA govs. According to you this is the country that does not go along with what other governments want them to do?




> Pecunix definitely is a centralized system, however, which does have definite drawbacks.  Understanding one of these drawbacks (potential government attack) and disliking it, you may prefer a decentralized system such as loom.cc .  In Loom, everything is private, including transactions (which are public in BitCoin).


Loom is not decentralized.

Btw, if you want a gold certificate system you should look at Open Transactions.

----------


## rhelwig

> I know!!! Bitcoins have been mention in an official hearing of the USA congress. Its amazing.
> 
> For anyone interested they are mentioned starting 20 minutes 30 seconds after a list of posible competing currency list.


Is this video available somewhere? I'd love to see the list of competing currencies quoted.

----------


## helmuth_hubener

> Why? You keep repeating this in different forms but never justify it.


 Because that is what the regression theorem says!  It seems you are not as familiar with this as you might be.  Here's a write-up on the regression theorem: http://mises.org/daily/1333




> Who are you to judge why people value things? Its not the role of an economist to judge what are valid valuations and what are not.


 I have failed to communicate effectively enough and a gross misunderstanding has ensued.  I apologize.  I am not passing judgement on what is a "valid" reason to value things.  I, and Mises, merely distinguish between two reasons for valuing a thing.  

* One, it may be valued as a commodity.  That is, valued for its use directly (or "in and of itself").  A man valuing a painting because he wants to hang it on his wall, or some grain because he wants to make bread and eat it.  

* Two, it may be valued as a money.  That is, valued for its exchange potential.  A man buying a painting because he knows absolutely everyone wants it and he can easily resell it, or, more likely, some grain for the same reason.

That is two different reasons to value something.  I do not claim one reason is "wrong", that would be preposterous.  But the reasons are different and understanding the difference is essential to understanding the regression theorem.




> So, bitcoins are being used as money. That's a fact. So either Bitcoin does not violate the Mises regression theorem or the theorem is wrong. (I would like an answer to this)


 I would contest this fact.  I do not think Ithaca Hours nor BitCoins really qualify as money.  They are not the most widely accepted medium of exchange.  Thus, they are not money.  Neither is gold, by the way.  Neither is e-gold or Pecunix or Liberty Dollar or Phoenix Dollar or WebMoney or PayPal.  They are all used by groups of varying size, but none is universally accepted in any community and thus cannot be considered money.

The reason the regression theorem is relevant is that the above (gold, e-gold, Pecunix, Liberty Dollar, Phoenix Dollar, WebMoney, PayPal) could become money because there's at least a link to a commodity if you go back far enough (e.g. Paypal <- dollar <- gold).  With Ithaca Hours and BitCoins, there is no such link and thus no possible chance that they will ever become money, in my opinion.  There's an upper limit on their spread and success due to their being worthless fiat never linked to any commodity.  If they ever did become money, if there were ever 7 billion BitCoin users, or 300 million American users, or even 100,000 Billings, MT users, then at that time Mises' Regression Theorem would be disproven and we'd all have to step back and question some of our fundamental assumptions about human nature as we try to understand why all these people have chosen to give up a more-marketable good for a less-marketable one, one, in fact, with no conceivable commodity value (other than the theoretically possible sentimental/decorative/mathematical beauty value I mentioned earlier).  Until then, it's just a large monetary experiment.




> Btw, Rothbards would have been money for as long as they were used as means of exchange (during your Auburn market). When the market ends they would have stopped being money.


 I would claim they are not money, that part of the definition of money is to be universally accepted, or at least overwhelmingly commonly accepted.

In a broader sense, yes, anything ever used as an intermediary good is money.  Grain can be money, pillows can be money, any commodity.  Even any worthless thing can be money as well in this broader sense: casino chips can be money, bus passes can be money, computer hashes called BitCoins can be money.  But they cannot be _the_ money.  Does that make sense where I'm coming from?




> You are talking about Switzerland, the country whose banks opened the data of their clients to the EU and the USA govs. According to you this is the country that does not go along with what other governments want them to do?


 No, I'm talking countries in general.  Switzerland is unlikely to allow gold vaults to be violated.  Panama is unlikely to hand over financial information.  Have encrypted servers in a couple different countries like Malaysia and New Zealand and server-seizure risk becomes minimal.  Etc.  GoldMoney and Pecunix have been operating for many years before and after the e-gold raid, yet have been left alone.  For one thing because they discourage HYIPs from using their system, which are legally dubious to the USA and which were what the vast majority of the e-gold spends always were.






> Loom is not decentralized.


 The value stored is.  You can have one guy with one gold coin here, another guy with another gold coin there, etc.  The server is in one particular location, yes.  The downsides to that are virtually non-existent in my opinion.  Have a couple, or even several as the system grows, mirror servers in amenable jurisdictions, and where is the risk?  Everything's encrypted, so no data will be forthcoming to any government seizing a server.




> Btw, if you want a gold certificate system you should look at Open Transactions.


 Yes, I know about them.  They are covered in the DGC magazine issue I linked to.

----------


## helmuth_hubener

A google search for HYIP BitCoin yields almost a million hits, by the way.  I just pass along that tidbit to give you an idea of what is most likely fueling the BitCoin market, just as it fueled e-gold before it.

----------


## hugolp

> A google search for HYIP BitCoin yields almost a million hits, by the way.  I just pass along that tidbit to give you an idea of what is most likely fueling the BitCoin market, just as it fueled e-gold before it.


So you mean that a more successful currency has more hits with another term than a less successful currency. Wow, who could have guessed. And obviously in your world it means its a proof of what its fueling Bitcoin, 100% guaranteed, pure science. Speculating with anyother crypto-currency is as easy as speculating with Bitcoin, so there has to be something more to Bitcoin (that thing you can not or dont want to figure out).

----------


## hugolp

> Is this video available somewhere? I'd love to see the list of competing currencies quoted.


The video is in Hazek link.

----------


## hugolp

I hope you are not doing it on purpose but you have changed the issue on discussion and answered to a different thing that what both you and me were saying previously. Hopefully you just got lost and its not a discussion trick to appear right. Let me explain:




> Because that is what the regression theorem says!  It seems you are not as familiar with this as you might be.  Here's a write-up on the regression theorem: http://mises.org/daily/1333
> 
>  I have failed to communicate effectively enough and a gross misunderstanding has ensued.  I apologize.  I am not passing judgement on what is a "valid" reason to value things.  I, and Mises, merely distinguish between two reasons for valuing a thing.  
> 
> * One, it may be valued as a commodity.  That is, valued for its use directly (or "in and of itself").  A man valuing a painting because he wants to hang it on his wall, or some grain because he wants to make bread and eat it.  
> 
> * Two, it may be valued as a money.  That is, valued for its exchange potential.  A man buying a painting because he knows absolutely everyone wants it and he can easily resell it, or, more likely, some grain for the same reason.
> 
> That is two different reasons to value something.  I do not claim one reason is "wrong", that would be preposterous.  But the reasons are different and understanding the difference is essential to understanding the regression theorem.


But we were not discussing about the value of Bitcoin as money. We were discussing about the value of Bitcoin before being money. You have changed the argument as if I was saying that the value of Bitcoin is money therefore it does not violate the regression theorem and therefore I dont know what the $#@! Im talking about (which would be true if that was what I said). Problem is thats not what either you or I said before.

Your own words:




> That's if people were valuing the BitCoins as BitCoins, in and of themselves, not valuing them for their anticipated purchasing power once the system was up and running.


Now you are against entrepreneurship? How can an austrian be against entrepreneurship and judge that the value of Bitcoin for entrepreneurs is worse or better than other valuations?

You are indeed judging one value better than the other, and thats not what an economist should do. My point stands unanswered.

Btw, Bitcoin had value to entrepreneurs of the Bitcoin project because they believed that it could create a better monetary system and in general help having a more free economy that would create a better system. You insunuating that it was because they wanted to become rich is false in general. Very few people were specting Bitcoin to have such a quick success. If you go to the archives of the first forum you can read about why they were using and mining them. Note that people were using scarce resources to adquire bitcoins when they were not money yet (they were not accepted anywhere), means that for this people they had to have some value previous to being money. You can see in the forums how people were giving away hundreds of bitcoins to other people, paying 10.000 bitcoins for a pizza, etc... Thats what you do when you spect it to skyrocket in price in a year? No, people were in Bitcoin because they believed (and believe) that it can help create a better monetary system and a better system in general.




> I would contest this fact.  I do not think Ithaca Hours nor BitCoins really qualify as money.  They are not the most widely accepted medium of exchange.  Thus, they are not money.  Neither is gold, by the way.  Neither is e-gold or Pecunix or Liberty Dollar or Phoenix Dollar or WebMoney or PayPal.  They are all used by groups of varying size, but none is universally accepted in any community and thus cannot be considered money.


Answered later on.




> The reason the regression theorem is relevant is that the above (gold, e-gold, Pecunix, Liberty Dollar, Phoenix Dollar, WebMoney, PayPal) could become money because there's at least a link to a commodity if you go back far enough (e.g. Paypal <- dollar <- gold).  With Ithaca Hours and BitCoins, there is no such link and thus no possible chance that they will ever become money, in my opinion.  There's an upper limit on their spread and success due to their being worthless fiat never linked to any commodity.  If they ever did become money, if there were ever 7 billion BitCoin users, or 300 million American users, or even 100,000 Billings, MT users, then at that time Mises' Regression Theorem would be disproven and we'd all have to step back and question some of our fundamental assumptions about human nature as we try to understand why all these people have chosen to give up a more-marketable good for a less-marketable one, one, in fact, with no conceivable commodity value (other than the theoretically possible sentimental/decorative/mathematical beauty value I mentioned earlier).  Until then, it's just a large monetary experiment.


You dont need to repeat your interpretation of the regression theorem. I get your interpretation and Im explaining to you why its wrong.




> I would claim they are not money, that part of the definition of money is to be universally accepted, or at least overwhelmingly commonly accepted.


This is an important part:

You can have the definition of money you want. And we can play with your definitions if you want to. But your definition has a big problem: it is too vague. Whats a widely accepted medium of exchange? Who judges "widely"? How universal it has to be? If an island starts using something as medium of exchange is it not money because its not in the whole world? So basically you are saying that the currencies of some small asian country (f.e.) is not money because there is not enough people in the world using it? To me is nonsensical to say its not money when people are using it as a means of exchange. And lets get crazy (Krugman style), is the planet Earth universal enough? Maybe not even the the dollar or gold have ever been money because the alliens were and are using something else.

Do you see the problem? Your definition is vague and allows whoever is using it to play with the vaguety to asses or deny something as money if it suits him/her. Having a strict definition of money much less subject to interpretation allows for more clearer discussion. If something is being used as means of exchange it is money. It makes no sense to decide if something is performing a function by how many people use it for that function. Either its performing that function or it is not.

My point stands unanswered.




> In a broader sense, yes, anything ever used as an intermediary good is money.  Grain can be money, pillows can be money, any commodity.  Even any worthless thing can be money as well in this broader sense: casino chips can be money, bus passes can be money, computer hashes called BitCoins can be money.  But they cannot be _the_ money.  Does that make sense where I'm coming from?


See above.




> No, I'm talking countries in general.  Switzerland is unlikely to allow gold vaults to be violated.  Panama is unlikely to hand over financial information.  Have encrypted servers in a couple different countries like Malaysia and New Zealand and server-seizure risk becomes minimal.  Etc.  GoldMoney and Pecunix have been operating for many years before and after the e-gold raid, yet have been left alone.  For one thing because they discourage HYIPs from using their system, which are legally dubious to the USA and which were what the vast majority of the e-gold spends always were.


The encrypted servers is not really a problem. The problem is the storage of gold. Its fine that you think Switzerland will never allow its gold vaults to be violated. The same though the clients of the banks in Switzerland about the data of their bank accounts. Yet, they ended up giving it to the EU and USA govs. I dont think its a risk a currency that would go against the USA dollar can survive.




> The value stored is.  You can have one guy with one gold coin here, another guy with another gold coin there, etc.  The server is in one particular location, yes. The downsides to that are virtually non-existent in my opinion.  Have a couple, or even several as the system grows, mirror servers in amenable jurisdictions, and where is the risk?  Everything's encrypted, so no data will be forthcoming to any government seizing a server.


Even if you start decentralizing a lot who keeps the assets, the risk is obviously counterparty risk. If its already risky to trust one party to keep your assets, imagine having a distributed network of people that can be anonymous. How can you trust such a thing?

Backing and decentralization dont mix together. (And this is another reason why gold works great as money, because its not backed by antying its decentralized).

----------


## helmuth_hubener

> You are indeed judging one value better than the other, and that's not what an economist should do. My point stands unanswered.


Hello, hugo!

I'm sorry, but you have failed the reading comprehension test.  I have no reason to continue offering my expertise and insight to you since it only agitates you and accomplishes nothing.  No hard feelings.  Let's both work to elect Ron Paul and have a great time doing it, agreed?

For any other BitCoin users here who read this, my analysis of the situation is this: e-gold was a HYIP currency.  The "gold" part of it turned out to actually not be important to its users, the HYIP industry.  Someone looking back at the history figured this out, and created an e-nothing currency.  It still serves the purpose just as well, which is to allow folks to waste their money in pyramids without anyone's getting arrested.  In both currencies there is a libertarian contingent of users as well who are excited because the currency could allow people to stop paying taxes and sell drugs, etc., without anyone's getting arrested.  But the driving force is this appetite Americans have for HYIPs and the need for the existence of some online currency willing to look the other way as they play their delusional game.  

An important lesson will be taught by BitCoin, just as it was taught by e-gold.  Try not to lose too much money.

----------


## hugolp

> Hello, hugo!
> 
> I'm sorry, but you have failed the reading comprehension test.  I have no reason to continue offering my expertise and insight to you since it only agitates you and accomplishes nothing.  No hard feelings.  Let's both work to elect Ron Paul and have a great time doing it, agreed?


Now I see you have no intention of having a rational debate. You just come here to through baseless accusations and promote your interests.

----------


## Kludge

> Hello, hugo!
> 
> I'm sorry, but you have failed the reading comprehension test.  I have no reason to continue offering my expertise and insight to you since it only agitates you and accomplishes nothing.  No hard feelings.  Let's both work to elect Ron Paul and have a great time doing it, agreed?
> 
> For any other BitCoin users here who read this, my analysis of the situation is this: e-gold was a HYIP currency.  The "gold" part of it turned out to actually not be important to its users, the HYIP industry.  Someone looking back at the history figured this out, and created an e-nothing currency.  It still serves the purpose just as well, which is to allow folks to waste their money in pyramids without anyone's getting arrested.  In both currencies there is a libertarian contingent of users as well who are excited because the currency could allow people to stop paying taxes and sell drugs, etc., without anyone's getting arrested.  But the driving force is this appetite Americans have for HYIPs and the need for the existence of some online currency willing to look the other way as they play their delusional game.  
> 
> An important lesson will be taught by BitCoin, just as it was taught by e-gold. Try not to lose too much money.


Worth noting there's a pretty big list of innovative merchants accepting BTC. Food, PMs, jewelry (I'm having a fantastic piece made up by a fellow in Thailand right now), drugs, games, coffee, and it's extremely liquid thanks to people now offering up instant no-fee conversions to gift cards to retailers such as Amazon. Plenty of us (myself included) also have a strong preference for selling in BTC exclusively. There's a market backing it up. Payment is extremely convenient, is somewhat difficult to trace, is dramatically more safer than giving out a CC# (no need to worry if public Bitcoin keys are leaked), hides revenue and assets from gov't, and permits such services as Silk Road to function. There's a strong market functioning with BTC, and there will continue to be no matter how low BTC goes (until a better e-currency takes its place).

----------


## helmuth_hubener

> Now I see you have no intention of having a rational debate. You just come here to through baseless accusations and promote your interests.


 At the moment, I don't have any interests in any e-currency.  I do have holdings, which will be unaffected by whether more or fewer people use the same currency as me.  It's not as if I'm an investor or principal in Pecunix.

Rational debate (or discussion, which was more what I was trying to have) requires reading comprehension.  One can only go so far before one gets frustrated.  

I trust that my analysis, as one with years of experience and expertise in the field, will be valued by others lurking on the thread though not by yourself.

~~~

Kludge, there was a market for real products with e-gold also.  You could buy music downloads, phone cards, debit cards, anything from Amazon, coffee, etc., etc.  The main LDS DVD store accepted e-gold, remarkably, and so I was able to buy Harry's War (good anti-IRS movie, BTW) with e-gold.  There were a bunch of vendors I'd discover occasionally that accepted e-gold.  Many of them were accepting it for ideological reasons, no doubt (libertarians who thought there ought to be a gold currency).  But the market was not as large as one would expect given the millions of dollars of daily spends that occurred.  Where is all this volume coming from? those of us in the industry asked ourselves.  What accounts for all these spends?  The answer was, it was generally concluded, HYIPs.

I think that likewise, for a $32 million dollar economy with a $3 million dollar a day trade volume the number of vendors in the BitCoin sphere is too low.  The volume of economic activity occurring from people buying coffee and jewelry does not seem to me to account for the velocity of the BitCoins changing hands, though it is more difficult to determine exactly how many real spends are occurring on BitCoin than it was on e-gold.

It's clear to me that what the market demands, what a large number of people really want, is a way to run and participate in HYIPs.  It turned out that the "gold" part of e-gold really offered no advantage or added customer satisfaction to the market, but to the contrary had major disadvatages (most notably in the end: seizure).  Some clever entrepreneur applied a correct analysis to the situation and rolled out a currency that gave the market exactly what it wanted: the ability to run HYIPs.

----------


## Kludge

> Kludge, there was a market for real products with e-gold also.  You could buy music downloads, phone cards, debit cards, anything from Amazon, coffee, etc., etc.  The main LDS DVD store accepted e-gold, remarkably, and so I was able to buy Harry's War (good anti-IRS movie, BTW) with e-gold.  There were a bunch of vendors I'd discover occasionally that accepted e-gold.  Many of them were accepting it for ideological reasons, no doubt (libertarians who thought there ought to be a gold currency).  But the market was not as large as one would expect given the millions of dollars of daily spends that occurred.  Where is all this volume coming from? those of us in the industry asked ourselves.  What accounts for all these spends?  The answer was, it was generally concluded, HYIPs.
> 
> I think that likewise, for a $32 million dollar economy with a $3 million dollar a day trade volume the number of vendors in the BitCoin sphere is too low.  The volume of economic activity occurring from people buying coffee and jewelry does not seem to me to account for the velocity of the BitCoins changing hands, though it is more difficult to determine exactly how many real spends are occurring on BitCoin than it was on e-gold.
> 
> It's clear to me that what the market demands, what a large number of people really want, is a way to run and participate in HYIPs.  It turned out that the "gold" part of e-gold really offered no advantage or added customer satisfaction to the market, but to the contrary had major disadvatages (most notably in the end: seizure).  Some clever entrepreneur applied a correct analysis to the situation and rolled out a currency that gave the market exactly what it wanted: the ability to run HYIPs.


That's definitely a valid concern, and I've brought it up too, either here or on a BTC forum. There's over $10m USD being bought and sold for gov't currencies every month and we don't really have numbers to say how much of a productive economy is functioning on BTC. BlockExplorer gives a lot of stats, but they don't have a stat to exclude BTC going in and out of currency exchange markets, and that'd be impossible to find out, so while it's telling us that hundreds of BTCs are being moved each time 50 BTC is created, it doesn't give us any idea how much of those hundreds in transactions aren't money shuffling or money going to a currency exchange account. Silk Road probably does tens of thousands of USD worth of business a day, the jeweler I'm working with for trade-ins and getting a couple rings made up probably does a couple tens of thousands in business a month in BTC. The coffee dealer I buy from probably does a few thousand a month (based on a guesstimate when I asked for his revenue stats back in June when he started up and I offered to buy). Other than that, http://bitporium.com/ and http://www.bitcoinworldmarket.com/default.aspx do a lot of business, as well as those offering no-fee exchanges of BTC to gift cards and Steam purchases, but I have no way of guessing their revenue stats -- then there's the slew of people doing person-to-person sales on forums and elsewhere, which I have no idea what amounts to. If I had to guess, I'd say there's about 1/3 the amount of BTC being traded on currency markets being used in a productive economy, but the bulk of that guess is pulled out of my ass. However, with BTC low (mining's not nearly as profitable as it was) and a finite time for BTC to inflate (we're currently in the highest rate of inflation, with BTC production essentially being halved in a few months), many, many more people are setting up shop to accept BTC for production.

BTC's volatility (which, while nowhere near the rollercoaster we rode when BTC soared to over $20, is still too far all over the place for many to feel comfortable accepting it) is the greatest problem... It might be interesting to see a collection of the largest miners essentially set up a central bank (now loan markets are being introduced to BTC, what better time?) to try keeping the BTC volatility in check, but they'd have to be insane (and quite rich -- I'd guess $500k USD minimum would be required) to do it. They could ask the merchants, loan-sharks, and miners for USD contributions (in return for shares in the "bank") or loans to attempt controlling BTC's value relative to other currencies and getting that power out of speculators' hands. Buy BTC when it gets too low, sell (from the miners' collective cache of BTC in the "bank") when it gets too high. Ideally, they would disband once all the BTC has been created which ever will, with the final stockpile of currencies distributed to shareholders.


Yes, I just suggested introducing an opaque central bank to BTC with the sole intent of artificially controlling its value. On Ron Paul Forums. Coincidentally, you could replace all my use of the word "bank" with "cartel" and it'd still fit fine, especially because miners would head up the "bank," making up a large share of BTC production and then essentially controlling output.

----------


## helmuth_hubener

> BlockExplorer gives a lot of stats, but they don't have a stat to exclude BTC going in and out of currency exchange markets, and that'd be impossible to find out, so while it's telling us that hundreds of BTCs are being moved each time 50 BTC is created, it doesn't give us any idea how much of those hundreds in transactions aren't money shuffling or money going to a currency exchange account.


 BitCoin Days Destroyed is supposedly a more accurate measure of BitCoin velocity.  Unfortunately (and I'm not mathematically stupid) I look at the graph here or the table here and have no real idea what it means, or at least how to convert it into "quantity of spends per day".  Do you have more understanding than me?

----------


## Kludge

> BitCoin Days Destroyed is supposedly a more accurate measure of BitCoin velocity.  Unfortunately (and I'm not mathematically stupid) I look at the graph here or the table here and have no real idea what it means, or at least how to convert it into "quantity of spends per day".  Do you have more understanding than me?


You can take average transaction size (82.62) and multiply it by transactions per block (46.122) for BTC traded per BTC created (~3811 traded per 50 created - 30d average). The vast bulk of that is probably money laundering (moving BTC around to different wallet addresses to make it more difficult to trace and determine how much BTC someone has) services provided by most places offering a BTC wallet service, so the stat's pretty meaningless. Others can be transfered to personal wallet files used so not all of someone's BTC is tied to one account.

I'm not sure if I understand the Bitcoin Days Destroyed measurement. Is that supposed to determine the % of Bitcoins awarded through mining which have been sent somewhere else? If so, there are probably a few different major factors it isn't taking into account (because it can't due to the nature of how BTC wallets and transfers work). First, and probably most substantial, is the amount of people who now mine in pools instead of doing the work solo. The BTC is awarded to the pool (the reward for solving a block isn't counted as a transaction), the pool keeps tabs of who's earned what, and then when the user requests, the BTC is sent to their account. So that would count as a transaction, and make it appear the BTC is spent, even though the miner merely took ownership of the BTC he earned. I'm guessing the calculation also can't count transactions to wallet services, which include MtGox, Silk Road, MyBitcoin, Flexcoin, and others (including e-wallet apps for smartphones like those Android-based). Aside from e-wallets, some people secure their BTC by basically moving a portion their BTC to a USB stick, encrypting the file, and hiding it away in a safe place (step-by-step @ https://bitcointalk.org/index.php?topic=36663.0 -- oh, hey there, Hugo).

Edit: the transaction size in BTC instead of kB would probably be more helpful :x

----------


## hugolp

Kludge and apart from not knowing how many of the Bitcoin transactions are money suffling or real buys, you dont know how many buys are made from MtGox wallet or similar, since that does not appear in the blockchain and MtGox does not publish the information (and if they did you had to trust it).

So the actual bitcoin commerce volume could be higher or lower than the movement you see in the blockchain.

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## helmuth_hubener

> I'm not sure if I understand the Bitcoin Days Destroyed measurement.


 I'm glad I'm not the only one!  Check this out and maybe you can understand it better than I, being familiar with the inside lingo: https://en.bitcoin.it/wiki/Bitcoin_Days_Destroyed




> Is that supposed to determine the % of Bitcoins awarded through mining which have been sent somewhere else?


No. My (limited) understanding is that it takes the amount spent, multiplied by the number of days since the last time it was spent.  Apparently there is some kind of digital thing called a bitcoinday, 7 million or so of which are created by the BitCoin system each day (since there are 7 million or so BitCoins).  When a coin owner lets a BitCoin sit around unspent on a given day it accrues one bitcoinday to itself, while if he makes a spend on a given day, it uses up (or "destroys") all those bitcoindays it's built up.  

The actual intended function or purpose of a bitcoinday, I do not know.  But for our discussion, measuring how many bitcoindays are destroyed on a given day is allegedly useful as a measurement of monetary velocity -- how many actual changes of ownership are taking place, as opposed to meaningless shuffling.  From this table: http://john-edwin-tobey.org:2750/ (sorry, I put in the wrong link in my last post), it appears 36% of the total bitcoindays have been used up or destroyed today.  So that means about 2.5 million BitCoins were spent which had been sitting around an average of 273 days before that.  Or, double that many BitCoins an average of half as old, or whatever combination that multiplies out to 707 million (36% of 7.2 X 273).  Is that right?  That seems way, way too high.  Do that for 10 days and your average coin age will go from 273 down to 1.5 or something.

There's something I'm misunderstanding, clearly.  I fell like I'm getting _close_ to understanding, though!  Isn't there somewhere that will tell you the raw number of bitcoindays destroyed rather than a percentage (which I feel like I _must_ be misinterpreting) or an inexplicable graph of block number vs. % destroyed which I really don't understand at all?

Regardless, this measure does not seem to completely solve the problem.  I guess the assumption is that you get some money, you're usually going to do all your laundering and obfuscatory shuffling that same day, and same for when you spend it again.  Otherwise, if you're constantly moving your coins around daily just for fun, that would look identical to the bitcoindays destroyed metric as if those coins were being spent every day, right?




> So that would count as a transaction, and make it appear the BTC is spent, even though the miner merely took ownership of the BTC he earned.


Yeah, but one extra transaction that one happens once for the whole lifetime of the coin (presumably eternity) is not a big deal.




> I'm guessing the calculation also can't count transactions to wallet services, which include MtGox, Silk Road, MyBitcoin, Flexcoin, and others (including e-wallet apps for smartphones like those Android-based).


 That's correct, because of course all the activity in these pools is opaque to the outside BitCoin system.  MxGox is just one big static account as far as the system knows.

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## helmuth_hubener

Bump.

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## Kludge

> One experience I'll never forget is my order with BitBrew.com -- I posted a quick review on the thread @ https://bitcointalk.org/index.php?topic=40068.0 where a promotion's been announced. The coffee's simply the best I've ever tasted, and the owner - edd - is a champ all the way!
> 
> If someone's interested in 10% off their order, and a subsequent 15% off my next order, I'd very much appreciate a PM and I'll give you the email address I used!


Scroll down to see the many new reviews lauding edd with praise. Nobody'll take me up on the 10% off?

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## Elwar

So, I am back (after being banned for poor photoshop abilities and bad humor). But while I was gone I have been delving into the world of Bitcoin.

My wife's store in Tarpon Springs, FL is now accepting Bitcoins. It was all set up through http://www.bit-pay.com and makes point of sale transactions super easy with very low transaction fees.




This is huge because it allows any merchant...or anybody really...to accept Bitcoins and either receive the Bitcoins or have it converted to USD for a small transaction fee (cheaper than credit card fees). No more credit cards, no more carrying around cash. All you need is your phone.

My wife's shop is giving 10% off if you pay with Bitcoins.

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## hazek

Very cool Elwar. I have no doubt that as long as the technology remains sound it is and will remain useful and will flourish, despite the recent decline in the exchange rates.

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## libertybrewcity

hmmm...i'm thinking about reading through this thread...is it worth it?

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## Texan4Life

> So, I am back (after being banned for poor photoshop abilities and bad humor). But while I was gone I have been delving into the world of Bitcoin.
> 
> My wife's store in Tarpon Springs, FL is now accepting Bitcoins. It was all set up through http://www.bit-pay.com and makes point of sale transactions super easy with very low transaction fees.
> 
> 
> 
> 
> This is huge because it allows any merchant...or anybody really...to accept Bitcoins and either receive the Bitcoins or have it converted to USD for a small transaction fee (cheaper than credit card fees). No more credit cards, no more carrying around cash. All you need is your phone.
> 
> My wife's shop is giving 10% off if you pay with Bitcoins.


sweet

----------


## libertybrewcity

> So, I am back (after being banned for poor photoshop abilities and bad humor). But while I was gone I have been delving into the world of Bitcoin.
> 
> My wife's store in Tarpon Springs, FL is now accepting Bitcoins. It was all set up through http://www.bit-pay.com and makes point of sale transactions super easy with very low transaction fees.
> 
> This is huge because it allows any merchant...or anybody really...to accept Bitcoins and either receive the Bitcoins or have it converted to USD for a small transaction fee (cheaper than credit card fees). No more credit cards, no more carrying around cash. All you need is your phone.
> 
> My wife's shop is giving 10% off if you pay with Bitcoins.


Wow, you were banned for that? That's poor moderating IMO.

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## Kludge

> hmmm...i'm thinking about reading through this thread...is it worth it?


Depends what you're looking to know. If just general info on BTC, my sig link has some decent info.

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## hazek

> hmmm...i'm thinking about reading through this thread...is it worth it?


There is a lot of stuff explained mixed into even more pointless arguing left and right on all sorts of Bitcoin related issues. I doubt it's worth the time to comb through the hole thing and find the good stuff..

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## Kludge

Lol... on MtGox alone, there's $40k of bids to $4.8/BTC, $15k of asks to $5.2/BTC, and even though there's almost no resistance against BTC>$5.10, nobody will buy BTC @ $5. http://mtgoxlive.com/orders?dark;volumeon

Though, when you're putting in large sums of money, the difference between $5/BTC and $4.95/BTC can be hundreds of $.

----------


## Becker

> Lol... on MtGox alone, there's $40k of bids to $4.8/BTC, $15k of asks to $5.2/BTC, and even though there's almost no resistance against BTC>$5.10, nobody will buy BTC @ $5. http://mtgoxlive.com/orders?dark;volumeon
> 
> Though, when you're putting in large sums of money, the difference between $5/BTC and $4.95/BTC can be hundreds of $.


lol its only $5 now?

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## Kludge

> lol its only $5 now?


Yep. Been chilling out ~$5 for nearly a month now.

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## enter`name`here

Can someone please explain how to set my self up for mining?  I tried following the "begginers guide" at the bitcoin forum, but all the links eventually lead to a page not found.  I am not to concerned with making a profit this is more to satisfy my curiosity.

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## P4man

> Can someone please explain how to set my self up for mining?  I tried following the "begginers guide" at the bitcoin forum, but all the links eventually lead to a page not found.  I am not to concerned with making a profit this is more to satisfy my curiosity.


Easiest way to get started is bitminter:
https://bitminter.com/

Assuming you already have a bitcoin wallet, and assuming you have appropriate hardware and drivers (including AMD  SDK if you have an AMD card), its just a matter of creating an account, and clicking the "start" button. Its also a damn fast miner.

----------


## Elwar

I have tried mining a few times...I usually go through the steps and get toward the end and hit "go" or whichever the step is and nothing happens...or I get an error.

This is the same reason I did not get into Bitcoins about a year ago when BTC was worth about a penny.

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## Elwar

> Easiest way to get started is bitminter:
> https://bitminter.com/


Wow...that worked quite well. Thanks.

----------


## Kludge

Identity of "Satoshi Nakamoto" uncovered?

"There's been plenty of press attention on Bitcoin over the last six to eight months, and many talk about how Bitcoin came about in a rather secretive manner by someone going by the name "Satoshi Nakamoto," who then basically disappeared. No one seems to know who Nakamoto is. However, in a new New Yorker article (mostly hidden behind a paywall), reporter Joshua Davis may have tracked down Nakamoto. While the New Yorker is going to lose traffic and interest in this story by not putting it online, it's opened up the opportunity for others, such as the folks at _Planet Money_, who have the key details: including the belief that "Nakamoto" is likely a guy named Michael Clear.
_
So Davis, the author of the New Yorker story, emails Clear."I like to keep a low profile," Clear replies. "I'm curious to know how you found me."
Davis eventually cuts to the chase:Finally, I asked, "Are you Satoshi?"
He laughed, but didn't respond. There was an awkward silence.
"If you like, I'd be happy to review the design for you," he offered instead. "I could let you know what I think."
"Sure," I said hesitantly. "Do you need me to send you a link to the code?"
"I think I can find it," he said.In the end, Clear says he's not the guy — but his denial leaves the door open just a crack:"I'm not Satoshi," Clear said. "But even if I was I wouldn't tell you."
_The other key point is that Clear points out a weakness in the Bitcoin code: encryption for wallets. When _Planet Money's_ Jacob Goldstein asks another Bitcoin expert about what's new in Bitcoin, the guy points out that the latest version... has wallet encryption."

Article from http://www.techdirt.com/articles/201...-creator.shtml

----------


## helmuth_hubener

So Kludge, or anyone else, did you have any more understanding or enlightenment about bitcoindays or other ways of figuring out the actual spend volume on BitCoin, as I tlked about here?

----------


## coinabul

Coinabul is the first professional bitcoin to gold and silver dealer. It should provide some liquidity and sound money backing for bitcoin.

----------


## helmuth_hubener

Welcome to the forums.  Not "backing" exactly, but still, sounds like you will provide a desirable service.

----------


## Kluge

Bitcoin seems to be making a solid comeback (as far as price & total network hashing rate) since it was pronounced dead. Price's jumped over 50% since last month. Difficulty's even creeping upward again.

(network speed and difficulty)


Guess I'll start resuming BTC sales on MtGox.

----------


## Conza88

_ferongr | 4 days ago | permalink_



> Quote: Bitcoin's comeback: should Western Union be afraid?




*No.*

----------


## V3n

Bitcoin being discussed on Freedom Watch right now.

----------


## Conza88

> Bitcoin being discussed on Freedom Watch right now.


I'm sure it's positive? Who is discussing?

----------


## hazek

Like I was certain bitcoin will survive when the value was falling I'm certain right now it will survive and flourish when it's rising again. As long as the technical aspect of it retains it's integrity, nothing can stop it. If nothing more it will remain the preferred back market money.

----------


## hazek

Man, isn't this 1year chart of Bitcoin's exchange rate interesting to look at? Are we headed for another bubble? Human nature in the free market sure is fascinating:


http://bitcoincharts.com/charts/mtgo...zm1g10zm2g25zv

----------


## Kluge

I've been pretty good at keeping up on the latest miner kernals, but only just upgraded to the new client. It's pretty fancy. Encrypts the wallet.dat file & has a new interface I'm not particularly fond of (more clicks to do what I want than before) - but it looks more slick. It's still miles ahead of the Namecoin GUI, anyway.

----------


## helmuth_hubener

> If nothing more it will remain the preferred back market money.


 It will remain the preferred HYIP enabler.  Until it stops being that.

I'm warning you guys, hedge your bets.  It's only a matter of time before bitcoin crashes and loses all value.

----------


## low preference guy

> I'm warning you guys, hedge your bets.  It's only *a matter of time* before bitcoin crashes and loses all value.


a matter of how much time? 1000 years?

----------


## helmuth_hubener

Based on my own experience in the digital money industry: 1 year.  2 at most.

----------


## Steven Douglas

I agree with those who see bitcoin, NOT as a store of wealth, but as an hyper-efficient wealth transfer mechanism that cuts banks and other transfer institutions out of the equation.  All "in the moment".  As such, I don't see bitcoin ever going away or dying a death, despite anyone's losses, because I don't see it losing it losing its utility as a superior transfer mechanism.  Bitcoins could lose 99.99% of their value, and so what? People who mistook it for a store of wealth are wiped out, but I can still make a transfer in the moment.  And as long as people are using bitcoins to transfer, that's means they are being temporally bought and sold.  Buy a gajillion devalued bitcoins on one end, the recipient on the other side of the Earth collects and converts the same bajillion bitcoins on the other.  The rest is gravy (e.g., volatility smooths out, trust increases, etc.,), but not necessary.

----------


## low preference guy

> I agree with those who see bitcoin, NOT as a store of wealth, but as an hyper-efficient wealth transfer mechanism that cuts banks and other transfer institutions out of the equation.  All "in the moment".  As such, I don't see bitcoin ever going away or dying a death, despite anyone's losses, because I don't see it losing it losing its utility as a superior transfer mechanism.  Bitcoins could lose 99.99% of their value, and so what? People who mistook it for a store of wealth are wiped out, but I can still make a transfer in the moment.  And as long as people are using bitcoins to transfer, that's means they are being temporally bought and sold.  Buy a gajillion devalued bitcoins on one end, the recipient on the other side of the Earth collects and converts the same bajillion bitcoins on the other.  The rest is gravy (e.g., volatility smooths out, trust increases, etc.,), but not necessary.


So you believe bitcoin has a non-monetary value. I agree. If that is so, there is a hole in most arguments for hyperinflation (pricewise) of bitcoins.

----------


## Steven Douglas

> So you believe bitcoin has a non-monetary value. I agree. If that is so, there is a hole in most arguments for hyperinflation (pricewise) of bitcoins.


The nice thing about bitcoins having a marginal utility that is independent of its long term value makes hyperinflation a non-issue.  No wheelbarrels required for a go-jillion bitcoins. The computer screen can handle whatever number it throws at you, and as long as you aren't letting your money rest in that form, the odds of it losing (or gaining, and who cares) value in the space of a few hours is virtually irrelevant. 

It's not the value of the bitcoins themselves - it's value of the mechanism itself. That, to me, is the brilliance, and indeed "intrinsic" value of the system, which will ultimately immortalize it in one form or another - now that that encrypted cat is out of the bag.  It doesn't even matter if Bitcoin 1.0 dies the death! There will be ENORMOUS demand for Bitcoin 2.0, and there you are, back in business, able to transfer funds at a click, peer-to-peer, with minimal short-term risk and no transfer fees other than the teensy losses (but sometimes gains) which happened along the way.  

I am definitely in the category of those who think bitcoins are here forever, and will even evolve to some amazingly reliable (and government/bank-ousting) forms.  Just not for the reasons most people are thinking.

----------


## hazek

Well their value has to remain stable for at least the time it takes to buy a certain sum, transfer them and sell them but yes, their value is inconsequential to their utility as a means to transfer wealth across the world.

But I do believe given their nature of built in scarcity they will eventually also have the role of a store of value much like gold bullion does today. I mean gold is down quite a bit off it's peak and people that bought at peak and were forced to already sell lost some money but that doesn't take away from gold being a store of value over the long run now does it? It will just take time. Plus, whoever bought bitcoins at $0.003 is still up by quite a lot.

----------


## low preference guy

> I am definitely in the category of those who think bitcoins are here forever, and will even evolve to some amazingly reliable (and government/bank-ousting) forms.  Just not for the reasons most people are thinking.


I'm in the same camp. I'm thinking bitcoin will outlast the dollar.

----------


## Steven Douglas

> Well their value has to remain stable for at least the time it takes to buy a certain sum, transfer them and sell them but yes, their value is inconsequential to their utility as a means to transfer wealth across the world.
> 
> But I do believe given their nature of built in scarcity they will eventually also have the role of a store of value much like gold bullion does today. I mean gold is down quite a bit off it's peak and people that bought at peak and were forced to already sell lost some money but that doesn't take away from gold being a store of value over the long run now does it? It will just take time. Plus, whoever bought bitcoins at $0.003 is still up by quite a lot.


In a very strange and ironic way, volatility and artificial scarcity are the saving graces of bitcoins.  If it becomes truly inflated, it can and will crash. I fully expect bitcoins to have boom and bust cycles of its very own for that reason! I also expect that will level out over time, but that remains to be seen.  However, so long as anyone continues to use it, and have any faith in it at all, it will continue to have and rebuild its value. It is really no different from the same principle exploited by Keynesian-spawned currency meddlers and what they recognize about so-called "banks", and that is your utter dependence on checkbooks and plastic debit cards - not as a storage mechanism, so much as a momentary transfer of wealth mechanism (deposit so much, pay out so much). 

I have a PayPal account which has extreme utility value to me - only as a transfer mechanism, and even though my balance is ALWAYS ZERO.  No fees involved on my part, because I don't use it to receive funds.  I make a PayPal payment, it comes straight from my bank account in that moment, into my PayPal account for all of what might as well be nano-seconds, and straight to the person I paid.  That, to me, is analogous to Bitcoin's ultimate core function.

----------


## hazek

Yep, I couldn't agree more. I also expect more bubbles with perhaps the swings eventually becoming almost irrelevant. 

I practically haven't changed my position on the Bitcoin technology since the day I learned about it almost a year ago, that as long as the technology can maintain it's integrity, it is here to stay forever, even if improved upon and replaced by a better version down the road.

And I'm glad that more and more free market economist realize this, especially given their fairly strong opposition in the beginning.

----------


## helmuth_hubener

> That, to me, is the brilliance, and indeed "intrinsic" value of the system, which will ultimately immortalize it in one form or another - now that that encrypted cat is out of the bag.


 All DGCs had and have encryption.  That cat has long been out and prowling.  Its elusive mate which it is ever-seeking is the cat of "how to store value/wealth in a secure way so governments won't steal it".

Bitcoin's solution to this was to eliminate the value/wealth component.  Bitcoin said "Well, there is no way.  There is no wealth-storage girl out there for me.  That will always end in heartache."  So bitcoin is a confirmed bachelor.  He decided that instead of "settling down" and creating a system to trade value/wealth, he would go it alone and just be his own cat: a system to trade the title to hashes -- hashes with no meaning.

----------


## hazek

helmuth_hubener did you know that there is an attempt being made to make these hashes meaningful?:

https://bitcointalk.org/index.php?topic=59956.0

You really think there's no other use for a permanent record that virtually can't be forged? We haven't even scratched the surface of how useful bitcoin can actually be aside from it's banking and monetary aspects.

----------


## helmuth_hubener

Hazek, now that is an application (vote tally integrity verification) that does make some sense.  That's what hashes are for, after all: verifying things that need to be verified.  As little sense as I think bitcoin makes as a money attempt, it is a fantastic system to piggy-back on to do a project like this, due to its widespread public distribution, etc.

----------


## hazek

No worries. It's really up to the market to decide whether or not and if, how viable Bitcoin is, not me or you

----------


## helmuth_hubener

Very much agreed.

If you or anyone has any further insight on tracking bitcoin spend volume, I would still be interested.

----------


## Kluge

Derp. Just realized I'm loaning out large sums of Bitcoins to someone who's "sub-leasing" the BTC to a popular HYIP offering 1%/day (or more) compounded interest. 10% MPR on loans which are being sub-leased @ 1% "DPR." Read a banking textbook and still didn't think to add terms to lessen moral hazard. Derp derp derpity derp.

----------


## hazek

Fking hell, not again  

I was browsing Silk Road to see what's new, then went on to read their forums a bit and when I tried to browse the marketplace some more the site wasn't working anymore. Well now I know why:

Now You Can Buy Guns on the Online Underground Marketplace
BY ADRIAN CHEN JAN 27, 2012 1:45 PM



> It's been eight months since we exposed Silk Road, the underground online marketplace where you can anonymously buy any drug imaginable. After our article, a couple U.S. senators declared war on Silk Road. But it hasn't been shut down. It's bigger than ever, and now you can buy a Glock with your LSD.


http://gawker.com/5879924/now-you-ca...nd-marketplace

----------


## IDefendThePlatform

Any of our bitcoin experts want to weigh in on this website: cryptoxchange.com  ?

I went but am afraid to sign up. Just another exchange on a par with mtgox and others?

----------


## hazek

AFAIK they are legit and reliable. They even have a thread up on bitcoin forums asking for suggestions what else they can do to provide a better more desired service:
https://bitcointalk.org/index.php?topic=61144.0

I think the only big downside to using them over the dominant mtgox is that mtgox has the far superior liquidity which may or may not matter to you.

----------


## nayjevin

So the value that bitcoin has, which most austrians would recognize as real, is its utility - the ability to facilitate trade?

And the rest of its value, most austrians would see as illusory or unsustainable - its sentimental value, and the value of the marketing by those who are invested in its use, in addition to the barrier to switching to some other competitor (annoyance, effort)??

----------


## hazek

> So the value that bitcoin has, which most austrians would recognize as real, is its utility - the ability to facilitate trade?


I don't believe it's limited to only the ability to facilitate trade.. People have ideas for other practical uses for this public openly mass shared database that virtually can't be forged.




> And the rest of its value, most austrians would see as illusory or unsustainable - its sentimental value, and the value of the marketing by those who are invested in its use, in addition to the barrier to switching to some other competitor (annoyance, effort)??


You could say that the true believers are what backs bitcoin in a sense. But we back it only because we believe in it's functionality. Believe me, the second it couldn't maintain the integrity of the embedded rules I'd be among the first to jump ship, and come over here and sound the alarm. So this value is sustainable as long as the technology retains it's integrity so I don't know if it's fair to label it unsustainable.

----------


## helmuth_hubener

> So the value that bitcoin has, which most austrians would recognize as real, is its utility - the ability to facilitate trade?
> 
> And the rest of its value, most austrians would see as illusory or unsustainable - its sentimental value, and the value of the marketing by those who are invested in its use, in addition to the barrier to switching to some other competitor (annoyance, effort)??


You seem to be asking how Austrians view BitCoin.  As an Austrian, my view is the following:

*Bitcoins can never become money*, that is, a universal or very widespread medium of exchange.  For them to become such would violate Ludwig von Mises' Regression Theorem.  They are a game or a monetary experiment, with a scope of use and acceptance that will of necessity remain limited.  In this regard they can be compared to Ithaca Hours, "Rothbard" fiat notes, casino chips, bus passes, and other valueless tokens.

If they ever did become money, if there were ever 7 billion BitCoin users, or 300 million American users, or even 100,000 Billings, MT users, then at that time Mises' Regression Theorem would be disproven and we'd all have to step back and question some of our fundamental assumptions about human nature as we try to understand why all these people have chosen to give up a more-marketable good for a less-marketable one; one, in fact, with no conceivable commodity value (other than a theoretically possible sentimental/decorative/mathematical beauty value).

As someone with experience in the digital money field, my analysis is the following:

*Bitcoin is a HYIP currency*.  Bitcoin enables HYIPs.  That is the only purpose for their ongoing existence and success.  That's it.

e-gold was a HYIP currency, too. The "gold" part of it turned out to actually not be important to its users, the HYIP industry. Someone looking back at the history figured this out, and created an e-nothing currency. It still serves the purpose just as well, which is to allow folks to waste their money in pyramids without anyone's getting arrested. In both currencies there is a libertarian contingent of users as well who are excited because the currency could allow people to stop paying taxes and sell drugs, etc., without anyone's getting arrested. But the driving force is this appetite Americans have for HYIPs and the need for the existence of some online currency willing to look the other way as they play their delusional game.

An important lesson will be taught by BitCoin, just as it was taught by e-gold. Try not to lose too much money.

----------


## helmuth_hubener

I suppose I'll go back and reply again to Mr. Hugo LP.  I was a bit dismissive to him for the crime of continuing to obtusely misunderstand my posts after three attempts at re-explaining.  But, I would not want someone to think that his points were unanswerable or I was shrinking from the debate, leaving him triumphant.




> I hope you are not doing it on purpose but you have changed the issue on discussion and answered to a different thing that what both you and me were saying previously. Hopefully you just got lost and its not a discussion trick to appear right.


 Did I _seem_ to be engaging in trickery?  Did I seem to be doing anything but explaining in an implausibly patient way to you, over and over, my thoughts on this matter?  As Ron said to Santy: I think you're being a bit over-sensitive.




> Let me explain:
> 
> But we were not discussing about the value of Bitcoin as money. We were discussing about the value of Bitcoin before being money. You have changed the argument as if I was saying that the value of Bitcoin is money therefore it does not violate the regression theorem and therefore I don't know what I'm talking about (which would be true if that was what I said). Problem is, that's not what either you or I said before.


 What are you trying to say here?  OK, I figured it out, but believe me, you are not being clear.  You are claiming that I'm claiming that you're claiming that because people value Bitcoin monetarily, that is, because they value it for its exchange value (real or anticipated), it does not violate the regression theorem.  I claimed no such thing, and I hereby explicitly state that you did not claim any such thing as you claim I claim you claimed.  By doing so, I hope to thereby be done with it and put that behind us.  It is tedium like this which caused me to cut off further exchange with you, which I saw as simply wasting precious minutes of my life.




> Now you are against entrepreneurship? How can an austrian be against entrepreneurship and judge that the value of Bitcoin for entrepreneurs is worse or better than other valuations?


 No, Hugo, I am not against entrepreneurship, but thank you for asking.  what I said, what I was trying (unsuccessfully, for your part) to communicate is this: Bitcoins have no commodity value.  You had said that I was mistaken in my views, because people were valuing bitcoins even before any exchanges took place, so that value by definition cannot be a monetary value so it must be a commodity value, so bitcoins clearly have commodity value, or at least started off having it, thus not violating the Regression Theorem.  But you were wrong.  No one was valuing bitcoins because he could hang them on his wall and gaze at them.  People were valuing them even before any exchanges were taking place because of their anticipated monetary value, not for any commodity value.  They have no commodity value.  They're empty hashes, hashes to nothing.  No one values the hashes qua hashes.




> You are indeed judging one value better than the other, and thats not what an economist should do. My point stands unanswered.


 Once again, I am not judging one value better than another.  I am differentiating between two reasons for a thing to be valued: commodity, or monetary.  Understanding that distinction is fundamental to understanding the Regression Theorem. 




> Btw, Bitcoin had value to entrepreneurs of the Bitcoin project because they believed that it could create a better monetary system and in general help having a more free economy that would create a better system.


 Right. 


> You insunuating that it was because they wanted to become rich is false in general.


 I did not insinuate that.  I hereby disclaim any such insinuation. 


> Very few people were specting Bitcoin to have such a quick success. If you go to the archives of the first forum you can read about why they were using and mining them. Note that people were using scarce resources to adquire bitcoins when they were not money yet (they were not accepted anywhere), means that for this people they had to have some value previous to being money.


 They had monetary value, not commodity value.  They were being valued for their anticipated value in exchange, they were not being valued as hashes qua hashes.  The hashes themselves are nothing but a string of random, meaningless numbers.  No human cares about strings of random meaningless numbers.  The only factor that makes them _not_ meaningless and _not_ random is if they are part of a larger system of exchange (either established or planned).  If there be no system of exchange, there can be no value in the number string.




> You can see in the forums how people were giving away hundreds of bitcoins to other people, paying 10.000 bitcoins for a pizza, etc... Thats what you do when you spect it to skyrocket in price in a year? No, people were in Bitcoin because they believed (and believe) that it can help create a better monetary system and a better system in general.


 As I've said over and over: it's an experiment.  A game.  It's not a viable money.

Many of the people using it, and perhaps some creating it, believed (and believe) that it can help create a better monetary system for HYIPs and a better way to run HYIPs in general.  In that belief, I think they are right.  Spot on.  Bitcoin is a very good currency platform for operating HYIPs.




> You dont need to repeat your interpretation of the regression theorem. I get your interpretation and Im explaining to you why its wrong.


Actually, I don't think you're doing that. I really wish you _would_ just come out and explain why I'm wrong.




> You can have the definition of money you want. And we can play with your definitions if you want to. But your definition has a big problem: it is too vague. Whats a widely accepted medium of exchange? Who judges "widely"? How universal it has to be? If an island starts using something as medium of exchange is it not money because its not in the whole world? So basically you are saying that the currencies of some small asian country (f.e.) is not money because there is not enough people in the world using it? To me is nonsensical to say its not money when people are using it as a means of exchange. And lets get crazy (Krugman style), is the planet Earth universal enough? Maybe not even the the dollar or gold have ever been money because the alliens were and are using something else.
> 
> Do you see the problem? Your definition is vague and allows whoever is using it to play with the vaguety to asses or deny something as money if it suits him/her. Having a strict definition of money much less subject to interpretation allows for more clearer discussion. If something is being used as means of exchange it is money. It makes no sense to decide if something is performing a function by how many people use it for that function. Either its performing that function or it is not.


  To add the qualifier "widespread" or "universal" to money's definition may seem unsatisfying and "vague", but it is necessary for this discussion of the Regression Theorem.  The alternative you propose, to simply call everything money if it's performing the function of exchange, means we must immediately admit that casino chips (along with many other examples) long ago proved the Regression Theorem to be totally wrong.

I think the Regression Theorem is correct, and so I define money in such a way that it's correct.




> The encrypted servers is not really a problem. The problem is the storage of gold. Its fine that you think Switzerland will never allow its gold vaults to be violated. The same though the clients of the banks in Switzerland about the data of their bank accounts. Yet, they ended up giving it to the EU and USA govs. I dont think its a risk a currency that would go against the USA dollar can survive.


 The risk of seizure is ever and always being run, so long as nation-states endure.




> Even if you start decentralizing a lot who keeps the assets, the risk is obviously counterparty risk. If its already risky to trust one party to keep your assets, imagine having a distributed network of people that can be anonymous. How can you trust such a thing?


 Some of us have pondered such things long and hard.  One solution would be an independent trusted third party auditing person, traveling around the countryside verifying the trustworthiness of the stashers and the existence of their stashes and indemnifying himself should any abscond.  Essentially this auditor would vouch for the individuals in the distributed and otherwise-anonymous network of value storage.  They wouldn't be anonymous to him.  Of course, then you're concentrating a great deal of trust all in one man.  But concentrating trust might be a better risk than concentrating physical assets all into one or several physical locations.

It's one idea, anyway.

----------


## hazek

Forbes decided to jump on the bash technology because it can be used for what some say is evil bandwagon, even calls Bitcoin a hacker currency - LOOL:

How Technology Complicates The War On Drugs: Guns And Drugs For Sale Online



> The War on Drugs is forty-years-old, but since Nixon launched the federal government’s attempt to crack down on illicit substances and drug users, one very important thing has changed: we now have the internet.


http://www.forbes.com/sites/erikkain...r-sale-online/

----------


## DonovanJames

> Forbes decided to jump on the bash technology because it can be used for what some say is evil bandwagon, even calls Bitcoin a hacker currency - LOOL:
> 
> How Technology Complicates The War On Drugs: Guns And Drugs For Sale Online
> 
> 
> http://www.forbes.com/sites/erikkain...r-sale-online/


It is true although that BitCoins are the primary currency of exchange amongst TOR, FreeNet, DarkNet, etc. Since the majority of users are there to remain anonymous, the use of a currency that has value and cannot be tracked (Save the public logs of exchanging dollars for BTC from a service exchanger) is prized. These then can be used to purchase services or products that many would prefer to be kept "off the books" -- The easiest example is The Silk Road which is essentially the Amazon of drugs amongst the deep web that relies on BitCoins, customer review rating systems and air tight vacuum sealed mailing procedures

----------


## Kluge

Soon after Bitcoin price dropped from ~$6 to ~$5 within 48h, you could find me in Skype railing against a client transaction fee which amounts to ~$.0049 on one part of a loan I'm being paid 15% MPR to make. Bitcoin users are frugal, frugal, frugal!

(edit: dammit, Mark!)

----------


## JuicyG

Not worth it. Better help us get Ron Paul 2012 team into top 10 on home@folding. Check my signature for details.

----------


## Kluge

> Not worth it. Better help us get Ron Paul 2012 team into top 10 on home@folding. Check my signature for details.


Fwiw, Bitcoin network has ~15x more computing power than F@H.

http://bitcoinwatch.com/ (check under "Blocks")
vs.
http://fah-web.stanford.edu/cgi-bin/...?qtype=osstats

----------


## Indy Vidual

No offense, but you clearly do not know enough about BTC to be putting so much effort into writing long posts.




> ...
> [B]... Bitcoin enables HYIPs.  That is the only purpose for their ongoing existence and success.  That's it.
> ...


You can buy warm socks w/ BTC, is that a_ HYIP_ to you?

----------


## JuicyG

> Fwiw, Bitcoin network has ~15x more computing power than F@H.
> 
> http://bitcoinwatch.com/ (check under "Blocks")
> vs.
> http://fah-web.stanford.edu/cgi-bin/...?qtype=osstats


That`s not the point

----------


## Kluge

> You can buy warm socks w/ BTC, is that a_ HYIP_ to you?


Forget the socks. I don't even think those are still sold. We got a taxi driver, hotels, restaurants -- the trade page on the BTC wiki exceeds *33* pages!

BTC stock market, leveraged trade markets, a rapidly-developing BTC-denominated lending market (soon to be superseded by a nice site a lender's developing)!

ETA: Oh -- how'd I forget the Bitcoin Magazine which'll be sold in Barnes & Nobles?

----------


## helmuth_hubener

Same kind of stuff could be said about egold.  All kinds of stuff for sale, all kinds of services, a stock market, even a second currency built on top of egold.  But it was still a HYIP currency.  I make generalizations and hyperbole.  Very very true generalizations and hyperbole.

----------


## Indy Vidual

> Forget the socks. I don't even think those are still sold. We got a taxi driver, hotels, restaurants -- the trade page on the BTC wiki exceeds *33* pages!
> 
> BTC stock market, leveraged trade markets, a rapidly-developing BTC-denominated lending market (soon to be superseded by a nice site a lender's developing)!
> 
> ETA: Oh -- how'd I forget the Bitcoin Magazine which'll be sold in Barnes & Nobles?


Thanks, for the update, I do know it's "more than buying socks".




> Same kind of stuff could be said about egold.  All kinds of stuff for sale, all kinds of services, a stock market, even a second currency built on top of egold.  But it was still a HYIP currency.  I make generalizations and hyperbole.  Very very true generalizations and hyperbole.


Great, we are making progress.
Now, you might want to learn why BTC is so much different than eGold:
eGold was run by a 'centralized' company which was a big, fat target for the Fed's to go after. The BTC project does not have that major weakness*

*The primary USD/BTC exchange is _too dominate_, but that is not a permanent situation.

BTC has survived several huge setbacks, and is still going strong; Tons of upside and potential remain.

----------


## Kluge

> Same kind of stuff could be said about egold.  All kinds of stuff for sale, all kinds of services, a stock market, even a second currency built on top of egold.  But it was still a HYIP currency.  I make generalizations and hyperbole.  Very very true generalizations and hyperbole.


There was a stock market specifically for handling businesses involved with e-gold?

----------


## helmuth_hubener

> Great, we are making progress.
> Now, you might want to learn why BTC is so much different than eGold:
> eGold was run by a 'centralized' company which was a big, fat target for the Fed's to go after. The BTC project does not have that major weakness*
> 
> *The primary USD/BTC exchange is _too dominate_, but that is not a permanent situation.
> 
> BTC has survived several huge setbacks, and is still going strong; Tons of upside and potential remain.


Indy, I actually am fairly well-informed about bitcoin.  Hopefully your information will be of use to others lurking, though it has been covered many times in the thread already.  I know what is different about bitcoin.  Bitcoin has no gold.  Bitcoin has no assets whatsoever, centralized or decentralized.  So yes, having nothing to go after is one way to prevent people from going after it.




> There was a stock market specifically for handling businesses involved with e-gold?


 http://web.archive.org/web/200602090...www.pvcse.com/

----------


## Steven Douglas

One thing that is rarely discussed is bitcoin's similarity to, especially in terms of intent and effect, of Hawala - a form of money transfer, or Informal Funds Transfer (IFT). It is little known in the west, but has very old roots as a money transfer system that completely sidesteps formal financial institutions, and is still in wide global usage today.

A senior economist with the IMF wrote an article about Hawala in the wake of the Sept. 11 attacks. Emphasis mine:




> *Why hawala developed*
> 
> In earlier times, IFT systems were used for trade financing. They were *created because of the dangers of traveling with gold and other forms of payment on routes beset with bandits*. Local systems were widely used in China and other parts of East Asia and continue to be in use there. They go under various names—Fei-Ch'ien (China), Padala (Philippines), Hundi (India), Hui Kuan (Hong Kong), and Phei Kwan (Thailand). The hawala (or hundi) system now enjoys widespread use but is historically associated with South Asia and the Middle East. At present, its primary users are members of expatriate communities who migrated to Europe, the Persian Gulf region, and North America and send remittances to their relatives on the Indian subcontinent, East Asia, Africa, Eastern Europe, and elsewhere. These emigrant workers have reinvigorated the system's role and importance. While hawala is *used for the legitimate transfer of funds*, its *anonymity* and *minimal documentation* have also made it vulnerable to abuse by individuals and groups transferring funds to finance illegal activities.
> 
> Economic and cultural factors explain the attractiveness of the hawala system. It is* less expensive, swifter, more reliable, more convenient, and less bureaucratic than the formal financial sector*. Hawaldars charge fees or sometimes *use the exchange rate spread to generate income*. The fees charged by hawaladars on the transfer of funds are *lower than those charged by banks and other remitting companies*, thanks mainly to *minimal overhead expenses and the absence of regulatory costs* to the hawaladars, who often operate other small businesses. To encourage foreign exchange transfers through their system, hawaladars sometimes exempt expatriates from paying fees. In contrast, they reportedly charge higher fees to those who use the system to avoid exchange, capital, or administrative controls. These higher fees often cover all the expenses of the hawaladars.
> 
> *The system is swifter than formal financial transfer systems partly because of the lack of bureaucracy and the simplicity of its operating mechanism*; instructions are given to correspondents by phone, facsimile, or e-mail; and funds are often delivered door to door within 24 hours by a correspondent who has quick access to villages even in remote areas. The *minimal documentation and accounting requirements, the simple management, and the lack of bureaucratic procedures* help reduce the time needed for transfer operations.
> 
> In addition to economic factors, kinship, ethnic ties, and personal relations between hawaladars and expatriate workers make this system convenient and easy to use. The flexible hours and proximity of hawaladars are appreciated by expatriate communities. To accommodate their clients, hawaladars may instruct their counterparts to deliver funds to beneficiaries before expatriate workers make payments. Moreover, cultural considerations encourage expatriate workers to remit funds through the hawala system, and such considerations also apply to family members in the home country. Many expatriate communities are exclusively male, because wives and other family members remain in the home country, where family traditions prevail. These traditions may require family members, especially women, to maintain minimal contacts with the outside world. A trusted hawaladar, known in the village and aware of the social codes, would be an acceptable intermediary, protecting women from having direct dealings with banks and other agents. Thus, a system based on national, ethnic, and village solidarity depends more on absolute trust between the participants than on legal documents.
> ...


With hawala there are very limited records - everything more or less in the moment.  With bitcoins there are full records, but complete anonymity is still possible. The hawala system itself is actually extremely reliable. I know two Chinese people myself who have used hawala to transfer funds (over the phone, no internet involved) from one province to another.  Like banks, halawa relies on reputations and faith in a system, but only of individual halawanders - not institutions.  Thus, like bitcoin, it is not, and cannot be, centralized or centrally controlled. 

Halawa and bitcoins would seem to be a match made in Halawa heaven. I often wonder if halawanders (the actual people making the transfers) would see bitcoin technology as a useful tool, or something to be avoided given public records involved, or just plain competition.

----------


## Kluge

Live in Las Vegas? Pay your rent in Bitcoins.

https://bitcointalk.org/index.php?topic=73712.0

----------


## hazek

Nice!  It's spreading, although slowly right now..

Btw did you happen to see this video yet?:

----------


## Madison320

> 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?


Bit coins have no intrinsic value. End of story.

Suppose you have a totally private, free banking system. Bank A's notes are backed by gold. Bank B's notes are backed by ... nothing. I'm choosing Bank A.

----------


## Steven Douglas

> Bit coins have no intrinsic value. End of story.
> 
> Suppose you have a totally private, free banking system. Bank A's notes are backed by gold. Bank B's notes are backed by ... nothing. I'm choosing Bank A.


You're right. Neither bitcoins nor FRN's have any intrinsic value (read=no economically valuable physical properties associated with them). As such, they are not reliable "store of value", and the technology itself is not a perfect "banking system" in that respect.  

Aside from loans and other fiduciary media, the average person uses the average banking system as a convenience only - a conduit for temporary storage and transfer, or reallocation, of wealth, both of which have associated costs, as well as privacy issues.  

Bitcoin technology is definitely not a substitute for what Austrians think of as a reliable "store of wealth" (i.e., the value of hard specie is derived from intrinsic physical properties, which it retains forever regardless of market value).  However, Bitcoin technology is extremely useful, as it is arguably a superior global transfer mechanism on a strictly transfer-and-cash-out basis.  In other words, you don't "invest" in bitcoins, and you don't "store" bitcoins, any more than you would "invest" in a PayPal account balance (which I keep ZERO at all times).  Rather you use bitcoins as a free RIGHT NOW transfer and conversion medium. Because the exchange value is constantly changing, you leave nothing in the system.   However, as a transfer and conversion medium only, you are unaffected by the transitory MOMENTARY value of each bitcoin, because that won't change substantially in the process of making a transfer.  Which is otherwise free.  That's the real value of bitcoins, and why the technology will never die.

----------


## Madison320

> You're right. Neither bitcoins nor FRN's have any intrinsic value (read=no economically valuable physical properties associated with them). As such, they are not reliable "store of value", and the technology itself is not a perfect "banking system" in that respect.  
> 
> Aside from loans and other fiduciary media, the average person uses the average banking system as a convenience only - a conduit for temporary storage and transfer, or reallocation, of wealth, both of which have associated costs, as well as privacy issues.  
> 
> Bitcoin technology is definitely not a substitute for what Austrians think of as a reliable "store of wealth" (i.e., the value of hard specie is derived from intrinsic physical properties, which it retains forever regardless of market value).  However, Bitcoin technology is extremely useful, as it is arguably a superior global transfer mechanism on a strictly transfer-and-cash-out basis.  In other words, you don't "invest" in bitcoins, and you don't "store" bitcoins, any more than you would "invest" in a PayPal account balance (which I keep ZERO at all times).  Rather you use bitcoins as a free RIGHT NOW transfer and conversion medium. Because the exchange value is constantly changing, you leave nothing in the system.   However, as a transfer and conversion medium only, you are unaffected by the transitory MOMENTARY value of each bitcoin, because that won't change substantially in the process of making a transfer.  Which is otherwise free.  That's the real value of bitcoins, and why the technology will never die.


I'm not understanding the advantage to Bit Coins. Suppose I want to buy a car. What are the steps if I want to use Bit Coins and how would it be an advantage over cash?

----------


## JWZguy

> I'm not understanding the advantage to Bit Coins. Suppose I want to buy a car. What are the steps if I want to use Bit Coins and how would it be an advantage over cash?


One advantage - the police can't steal your bitcoins on your way to make the deal by claiming you were "probably" involved with drugs.

----------


## Madison320

> One advantage - the police can't steal your bitcoins on your way to make the deal by claiming you were "probably" involved with drugs.


What if I use my debit card?

----------


## hazek

> I'm not understanding the advantage to Bit Coins. Suppose I want to buy a car. What are the steps if I want to use Bit Coins and how would it be an advantage over cash?


When you buy the car and you pay with bitcoins you don't risk ID theft because you don't need your ID to send or receive them. You send bitcoins directly to me so you avoid fees of middlemen.

Also if you were from another country you'd avoid dealing with international transfer fees as well as conversion fees as well as save time.

On the other hand:
If I want to sell you that car, and you want to pay me online and I insist on Bitcoin I protect myself against you taking the car and then claiming you got defrauded and demanding a chargeback being done by paypal or mastercard.

Also if I sell a lot of cars I significantly cut down on fee costs and risk of fraud costs as well as eligibility compliance costs for using online money processors.


There are ample benefits in using Bitcoin. And it's Bitcoin(the system) and bitcoins (the units), not BitCoin, or Bit Coin, or bit coins or w/e.

----------


## helmuth_hubener

Steven summed up the situation reasonably well.  And as JWZguy said:




> One advantage - the police can't steal your bitcoins on your way to make the deal by claiming you were "probably" involved with drugs.


However, keep in mind, that is the situation _for now_.

Exchangers are, as always, the weak link in this "super-strong state-proof" system.  Think about it.  If I still own some e-gold or, to make it a more perfect analogy, 1mdc, good on me, so I guess the police will never steal my 1mdc.  If the company hadn't taken down the website, I could log in forever and gaze longingly at my balance of 1mdc.  But what can I do with it?

Likewise, if the law leans on all the exchangers sufficiently (wouldn't take much) that it becomes impossible to form a link between the banking system and Bitcoin, what happens? You are no longer able to quickly and easily convert bitcoins to dollars in your bank account, or a balance on a debit card.

You can still print out your hash and have it framed and hung on the wall.  Then you can just gaze at it longingly every day.

----------


## LibertyRevolution

> If I want to sell you that car, and you want to pay me online and I insist on Bitcoin I protect myself against you taking the car and then claiming you got defrauded and demanding a chargeback being done by paypal or mastercard.


Right.. So I send you the bitcoins, whats stops you from keeping them and not giving me the car?
What is my recourse now that you have my bitcoins?

----------


## presence

My 2 questions about "Bitcoin", to those of you in the know, apply to super computers and government/corporate networks:

1)
When you read online articles about "mining" bitcoins you find references to network admins that have access to 20 or more machines who use them to mine for profit.... what happens when this concept is applied at the corporate or government level?  What happens when someone with admin access to thousands of computers sets them to mining bitcoins?

2)
Bitcoin is based on cryptography, what happens when one of these petaflop super computers run by the NSA is tasked with hacking the system?

presence

----------


## hazek

> Right.. So I send you the bitcoins, whats stops you from keeping them and not giving me the car?
> What is my recourse now that you have my bitcoins?


Escrow services or reputation systems. 

This is not rocket science. Just because the current status quo has spoiled everybody with chargeback doesn't mean there aren't alternative solutions, much friendlier to merchant costs, and also much fairer with dispute resolution services.

----------


## JWZguy

> Steven summed up the situation reasonably well.  And as JWZguy said:
> 
> 
> 
> However, keep in mind, that is the situation _for now_.
> 
> Exchangers are, as always, the weak link in this "super-strong state-proof" system.  Think about it.  If I still own some e-gold or, to make it a more perfect analogy, 1mdc, good on me, so I guess the police will never steal my 1mdc.  If the company hadn't taken down the website, I could log in forever and gaze longingly at my balance of 1mdc.  But what can I do with it?
> 
> Likewise, if the law leans on all the exchangers sufficiently (wouldn't take much) that it becomes impossible to form a link between the banking system and Bitcoin, what happens? You are no longer able to quickly and easily convert bitcoins to dollars in your bank account, or a balance on a debit card.
> ...


No. That's the situation forever. The more adoption we have the less reason to have exchanges at all. It only gets better from here.

----------


## hazek

> My 2 questions about "Bitcoin", to those of you in the know, apply to super computers and government/corporate networks:
> 
> 1)
> When you read online articles about "mining" bitcoins you find references to network admins that have access to 20 or more machines who use them to mine for profit.... what happens when this concept is applied at the corporate or government level?  What happens when someone with admin access to thousands of computers sets them to mining bitcoins?


Difficulty of mining goes up and if the price doesn't follow it drives out the weaker miners. But even if these entities gain the majority in mining, the rest of the users can still ignore their blocks they find but aren't following the original rules. In other words if those who mine want to keep making a profit by keeping everyone accepting their blocks they must avoid forking the chain which means they must follow the rules. And if they don't follow the rules, their blocks will get simply ignored by everyone else and honest miners will pick up the pieces in a new fork. Or so goes the theory. (It's an ongoing experiment..)




> 2)
> Bitcoin is based on cryptography, what happens when one of these petaflop super computers run by the NSA is tasked with hacking the system?
> 
> presence


With todays technology it is impossible to effectively brute force strong encryptions and when that changes, Bitcoin can be upgraded with new stronger encryptions to stay ahead. Remember if anyone can start cracking encryption, they'll be able to crack most of encryptions used in finance or protecting government secrets before they'll break SHA256.

----------


## helmuth_hubener

> No. That's the situation forever. The more adoption we have the less reason to have exchanges at all. It only gets better from here.


  Well, I suppose that is the unreasonably optimistic scenario.  The reasons for believing it will evince are... not strong.

Steven's method of usage is impossible without reputable, dependably rapid exchange services.  Also, and far more importantly, HYIP people are always going to be interested in exchanging, in cashing out.  HYIP are the only people actually using Bitcoin.  They are driving the whole thing.  All the other users are really small and inconsequential.  If all of a sudden Bobby Bob Jr. can no longer obtain U.S. dollars from his pyramid, believe me his interest in Bitcoin is going to evaporate real quick.  He has no philosophical interest in agorism to motivate him to weather the storm.

----------


## LibertyRevolution

> Escrow services or reputation systems. 
> 
> This is not rocket science. Just because the current status quo has spoiled everybody with chargeback doesn't mean there aren't alternative solutions, much friendlier to merchant costs, and also much fairer with dispute resolution services.


Spoiled by chargeback.. Yes I expect to be able to easily cancel the transaction at my discretion.
Same reason I don't use cash for large purchases, I don't want to wait for a check in the mail for a refund.

You are saying that to spend bitcoin you have to trust the person your buying from, this is absurd concept to me.
Rule #1 to buying stuff: Never trust the person that is trying to sell you something.

----------


## Isar

What obsession? ask 100 people on the street about bitoin and at least 95 will have NO idea what you are taking about.

However..gold and silver have no inherent value either. IT is not like the old days when it was a great metal to make things with. IT is worth only what people are willig to pay for it.

----------


## Indy Vidual

> ...HYIP are the only people actually using Bitcoin.  They are driving the whole thing...


Do you have some links/*evidence* to back up that statement? 
If 'No', maybe you should stop saying it, month after month, forever...





> ...interest in Bitcoin is going to evaporate real quick....


Too late, it already crashed and Bitcoin is quietly making progress without so much excess speculation. Your "propaganda" is old now helmuth.  





> ...All the other users are really small and inconsequential....


There is the best part:
Thousands of _"small and inconsequential"_ users are enough to keep Bitcoin prices above $4/BTC, even while many new BTC are still being created every day.

----------


## helmuth_hubener

My evidence is that it is just obvious.  You can do your own research and see if you agree with me.  You won't.  That's cool.

Time will prove me right.  By the time it has, you will forget I ever predicted it and will be mainly focused on the sad fact that you lost some money.  That's OK too.

----------


## psi2941

Y? isn't this thread dead yet! bitcoin is only worth 5 dollars now. i remember when it was worth like 30-40 dollars and a bunch of clowns on this forums promoting it

----------


## hazek

Three rather big articles just came out:

http://www.reuters.com/article/2012/...83108120120402




> Bitcoin, the financial traders' anarchic new toy
> By Naomi O'Leary
> LONDON | Mon Apr 2, 2012 5:52am EDT
> (Reuters) - Financial traders have a new toy: Bitcoin, a digital currency variously dismissed as a Ponzi scheme or lauded as the greatest invention since the Internet.


http://www.betabeat.com/2012/04/02/b...l-trader-says/




> Bitcoin Is a Better Form of Money Than We Have Right Now, Pro Trader Says
> Financial traders try to avoid getting Zhou Tonged.
> By Adrianne Jeffries 8:12am
> Betabeat noticed back in August that professional Wall Street traders were taking an interest in Bitcoin. Even though the Bitcoin market is valued lower than in the past, and volatility (read: easy opportunities to flip coins and make fast money) has also flattened out, it seems pro bankers are still trading in BTC.


http://www.forbes.com/sites/jonmaton...n-slow-motion/




> Jon Matonis, Contributor
> I cover economics, cryptography, and digital currency.
> TECH | 4/02/2012 @ 7:56AM |2,965 views
> Watch Bitcoin Robbery in Slow Motion
> Bank robberies of the future may not reveal the traditional security camera shot of the ski-masked gun holder but rather we will watch them evolve slowly in front of our eyes as the money hops around the globe. Its not so much where is the money but when is the money? The public and transparent nature of the bitcoin transaction ledger ensures that all transactions are known by date, time, amount, and block number although not necessarily by the who or the where. Contrary to conventional opinion, this is not a negative for the protocol because bitcoin liberates cash by putting it online.

----------


## hazek

Oh and I forgot this one:

http://uk.reuters.com/article/2012/0...8300JP20120401




> Factbox - What is Bitcoin - currency or con?
> 
> By Naomi O'Leary
> LONDON | Mon Apr 2, 2012 12:16am BST
> (Reuters) - Bitcoin is a mathematical money system driven by code. It allows users to send money directly from their computer to another on the other side of the world.

----------


## helmuth_hubener

Consider that attention is not always a good thing.

----------


## DEGuy

After hearing about Bitcoin from this forum a few weeks ago (thanks Hazek!), I went and explored it, bought and sold some coins, looked at investment opportunities, etc. My verdict: I'm pretty impressed. I think this system of currency has some potential, especially since it does not have a central source regulating it. Even PM's are subject to the intervention of governments that have stored vast amounts of gold and influence the international trading platforms. Due to the nature of the internet and how the bitcoin is maintained, governmental manipulation would be difficult, although not impossible.

Here are my conclusions:
1. Due to the nature of bitcoins, it is extremely easy to use them  to assist in illegal activities (drugs, money laundering, etc). And there are some people making a small fortune off this fact, and it will continue to grow. On the plus side, it provides a consitent demand for the currency that is not tied to speculation.
2. Eventually governments will intervene because they think they can stop people from doing illegal business by cutting off one method of operation. It'll be interesting to see what they do (attempt to buy out the bitcoins, interrupt the network, criminilize exchanges)
3. I would accept payment from someone anonymously in Bitcoins in exchange for selling something. I used to sell comic books online, but stopped because paypal could essentially shut me down when one buyer had a disagreement. I'd even offer a 10-20% discount for using bitcoins.
4. There is an appropriate risk/reward ratio to investing in Bitcoins. It's a moderately high risk, but given the projected demand for the currency, and the projected deflation in purchasing power of the dollar, I think there is also a high level of reward. It's not for the faint of heart, but a few percent in a portfolio is pretty reasonable. It's probably a lot less risky (and transparant) than a lot of the crazier derivative investments that are out there.

----------


## hazek

You're welcome. 

Btw have people read this pretty awesome article/introduction from a libertarian perspective?:

http://evoorhees.blogspot.com/2012/0...roduction.html




> Bitcoin  - The Libertarian Introduction
> 
> What it is, how it's used, and why you should care.
> 
> Erik Voorhees - April 11, 2012
> 
> "When a state currency is challenged, the state itself is challenged,
> and market forces move swiftly around sickly, depreciating inhibitors."
> 
> ...

----------


## helmuth_hubener

> 2. Eventually governments will intervene because they think they can stop people from doing illegal business by cutting off one method of operation. It'll be interesting to see what they do (attempt to buy out the bitcoins, interrupt the network, criminilize exchanges)


It's obvious to me they'll just end the exchangers.  Just _end_ them.  Rubble.  The exchange process is the weak link in the system.

Even if you disagree with my idea that most of the activity happening on bitcoin is HYIPs and other similar vapor, rather than real commerce, -- and that's fine, it's not like anyone has any real statistics on it to prove anything either way -- even if you disagree with that, you should still be able to agree that exchanges are the weak link.  They have to be tied into the banking system to function.




> It's not for the faint of heart, but a few percent in a portfolio is pretty reasonable. It's probably a lot less risky (and more transparent) than a lot of the crazier derivative investments that are out there.


 Using "bitcoin" and "portfolio" in the same sentence is the wrong, wrong idea; a bad idea.  But as you say, maybe you like risk, and people make bad investments all the time.  Just do not cry when there are no exchangers to convert your bitcoins into dollars.

----------


## Indy Vidual

> ...to convert your bitcoins into dollars.


Some people don't want to convert BTC to worthless paper money.

----------


## DEGuy

> It's obvious to me they'll just end the exchangers.  Just _end_ them.  Rubble.  The exchange process is the weak link in the system.
> 
> Even if you disagree with my idea that most of the activity happening on bitcoin is HYIPs and other similar vapor, rather than real commerce, -- and that's fine, it's not like anyone has any real statistics on it to prove anything either way -- even if you disagree with that, you should still be able to agree that exchanges are the weak link.  They have to be tied into the banking system to function.
> 
>  Using "bitcoin" and "portfolio" in the same sentence is the wrong, wrong idea; a bad idea.  But as you say, maybe you like risk, and people make bad investments all the time.  Just do not cry when there are no exchangers to convert your bitcoins into dollars.


I mostly agree with you on the first point. Governments have already taken swipes at some of the exchanges, and it's possible they could shut them down completely and leave the bitcoin market in shambles or nonexistant.

However, governments can also do the same thing with practically any currency that's being traded. I think we shut trading rials out of world markets as part of the embargo. But that doesn't mean that rials couldn't be a part of someone's portfolio. A risky move sure, but still a legitimate investment. My point was that the risk/reward ratio is pretty reasonable, which is my opinion. And like I said, a few percent (1 or 2) max as an investment under the "I don't mind losing this money, but there is an outside chance it'll pay off well" category. Along the same lines as lottery tickets.

----------


## helmuth_hubener

> However, governments can also do the same thing with practically any currency that's being traded. I think we shut trading rials out of world markets as part of the embargo. But that doesn't mean that rials couldn't be a part of someone's portfolio. A risky move sure, but still a legitimate investment. My point was that the risk/reward ratio is pretty reasonable, which is my opinion. And like I said, a few percent (1 or 2) max as an investment under the "I don't mind losing this money, but there is an outside chance it'll pay off well" category. Along the same lines as lottery tickets.


 True.  

Under the influence of Harry Browne, I split things into speculations and investments.  Bitcoin I would consider a speculation.

----------


## hazek

> True.  
> 
> Under the influence of Harry Browne, I split things into speculations and investments.  Bitcoin I would consider a speculation.


Buying bitcoins just on expectations of a higher market price is definitely speculation. Using bitcoins as a currency in a global payment system in as many transactions as you can in your daily life is not.

----------


## Kluge

Thought you guys may appreciate knowing there's a more centralized gold-backed (yes, real gold in vaults) "e-debt" in the works. Similarities to a currency, and could be used as currency in the same way a collateralized bond could. This "e-debt" can be redeemed for physical gold, Bitcoins, or kept as redeemable-for-gold e-debt. Yes, it will of course include an currency exchange - one which coincidentally already has a decent track-record.

In addition, the business launching this will be concurrently launching a pawn shop using a "passed-through" pawn license valid in 50 states, and even a credit union chartered with an aim at tech startups. Assuming multiple offices, this means you can "wire" someone in a different city USD/gold/e-debt (they get to choose what to redeem these debt instruments as -- it could also be redeemed for items in the pawn store) by pawning/selling your items. More importantly, this gives the company MSB licensing exclusion in all 50 states, so it's immune against the legal piledriving e-gold suffered. All of this will be housed in a franchise-able tech-friendly and community-oriented hostel where "dorms" are upstairs and bring in the steady income, while ground-level space is used for the various physical/online commercial ventures.

If you have $10k+ (seeking at least $350k total within a few months) and some interest, there's definitely a big initial capital requirement which needs to be addressed as most everything (less the rental units) needs to be launched simultaneously. Things are being done carefully but daringly -- things are moving fast, but there are two competent lawyers working for/with the company, including a lawyer working for a nation's leading payment processor. Certainly more details available if you'd like. If you're in/around San Francisco (will be in Mission District), you could visit the building and operators. There's expected to be some form of an "Investors' Open House" within a couple months, possibly early next month.


Cheers,
Ben (first time *I* have posted in quite a few months)

----------


## helmuth_hubener

Thanks, Ben.  That's very exciting.  Would the investment be for equity, or are they selling bonds/debentures?

----------


## hazek

Hmm it seems like bitcoins are headed for another bubble valuation, we had significant exchange rate jump in the past 24h, from $7.6 to almost $9 per 1BTC, which is pretty crazy compared to the last 6 months of relative stability. I wonder where this is going from here on out?

You can follow the price movements here:
http://bitcoincharts.com/markets/

Live trading:
http://btccharts.com/#m=mtgox-BTC-USD

EDIT: nvm, it was just someone manipulating the market and making a killing doing it

----------


## DEGuy

> Hmm it seems like bitcoins are headed for another bubble valuation, we had significant exchange rate jump in the past 24h, from $7.6 to almost $9 per 1BTC, which is pretty crazy compared to the last 6 months of relative stability. I wonder where this is going from here on out?
> 
> You can follow the price movements here:
> http://bitcoincharts.com/markets/
> 
> Live trading:
> http://btccharts.com/#m=mtgox-BTC-USD
> 
> EDIT: nvm, it was just someone manipulating the market and making a killing doing it


Yeah, I wish I'd been watching at that time and sold some BTC at the peak. Of course, it's still up pretty high, gonna unload a little bit and take some profit.

----------


## Indy Vidual

Good intro article from _Disruptive Competition:_

* Bitcoin and Disruptive Currencies*
...The even more interesting feature of Bitcoin, from a disruptive  competition perspective, is that transferring currency from one private  party to another using the Bitcoin system is free and instantaneous over  the Internet....

----------


## hazek

Bitcoin-Based Drug Market Silk Road Thriving With $2 Million In Monthly Sales

2012-08-07

http://news.slashdot.org/story/12/08...-monthly-sales


"Every day or so of the last six months, Carnegie Mellon computer security professor Nicolas Christin has crawled and scraped Silk Road, the Tor- and Bitcoin-based underground online market for illegal drug sales. Now Christin has released a paper (PDF) on his findings, which show that the site's business is booming: its number of sellers, who offer everything from cocaine to ecstasy, has jumped from around 300 in February to more than 550. Its total sales now add up to around $1.9 million a month. And its operators generate more than $6,000 a day in commissions for themselves, compared with around $2,500 in February. Most surprising, perhaps, is that buyers rate the sellers on the site as relatively trustworthy, despite the fact that no real identities are used. Close to 98% of ratings on the site are positive."


Btw let me take this opportunity to also link this page where you can learn about and dispel the oh so many myths about Bitcoin and bitcoins: https://en.bitcoin.it/wiki/Myths

----------


## kpitcher

A growing silk road usebase could explain why bitcoins are up to $11. While there are more and more legit companies adding bitcoin ability it's still far from common.  Personally I don't know why people aren't afraid of long term stings operations with silk road. Even if the money is mostly anonymous the buyer has to provide a shipping address....

----------


## low preference guy

> A growing silk road usebase could explain why bitcoins are up to $11. While there are more and more legit companies adding bitcoin ability it's still far from common.  Personally I don't know why people aren't afraid of long term stings operations with silk road. Even if the money is mostly anonymous the buyer has to provide a shipping address....


The drug user just buys in the safest way possible, even if it's not safe.

----------


## specsaregood

> A growing silk road usebase could explain why bitcoins are up to $11. While there are more and more legit companies adding bitcoin ability it's still far from common.  Personally I don't know why people aren't afraid of long term stings operations with silk road. Even if the money is mostly anonymous the buyer has to provide a shipping address....


Maybe some aspects of our govt find a lucrative black market useful for moving the drugs they protect.

----------


## Kluge

> Maybe some aspects of our govt find a lucrative black market useful for moving the drugs they protect.


I've thought that too--which is probably the only reason they haven't shut down bitcoin usage. Hell, they could even use it as a conduit for experimental drugs.

----------


## low preference guy

> I've thought that too--which is probably the only reason they haven't shut down bitcoin usage. Hell, they could even use it as a conduit for experimental drugs.


can they technically do it (not talking about the law)?

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## Elwar

> A growing silk road usebase could explain why bitcoins are up to $11.


I believe that the high price may have something to do with a very prominant ponzi scheme going on right now that is paying a bunch of suckers 7% per week. It is obvious to most people but some people cannot turn down 7% a week return.

When the payouts stop, the price should drop quite a bit.

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## Kluge

> can they technically do it (not talking about the law)?


Yes. But I'm not sure how worthwhile it would be since they can't really evaluate the guinea pigs very easily. Probably a bigger danger that they have a spook selling on there and they essentially set people up and bust them.

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## low preference guy

> Yes


do you (or anyone else) have a short explanation on how it's done for the amateurs? do they have an address or something and can the government just block that address?

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## Kluge

> I believe that the high price may have something to do with a very prominant ponzi scheme going on right now that is paying a bunch of suckers 7% per week. It is obvious to most people but some people cannot turn down 7% a week return.
> 
> When the payouts stop, the price should drop quite a bit.


Yeah...that is problematic.

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## Kluge

> do you (or anyone else) have a short explanation on how it's done for the amateurs? do they have an address or something and can the government just block that address?


I'd have to get the real Kluge to explain the specifics, but Silk Road has servers all over the world with shifting IP (IIRC)...I also need a clarification--were you asking if a gov't spook could sell on Silk Road, or if they could shut down Silk Road/bitcoin?

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## low preference guy

> I'd have to get the real Kluge to explain the specifics, but Silk Road has servers all over the world with shifting IP (IIRC)...I also need a clarification--were you asking if a gov't spook could sell on Silk Road, or if they could shut down Silk Road/bitcoin?


shut down! sorry!

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## Kluge

> shut down! sorry!


From what Kluge has told me, it would be like whack-a-mole. One of the reasons that Silk Road is slower to load is because of that shifting IP thing (hopefully I'm recalling that correctly) and it's mirrored on various servers in a lot of locations--I'll ask him again tomorrow and see if I can clarify. He explained it to me quite a while ago when I asked him the same thing.

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## kpitcher

Silk road is on Tor which anonymizes where the server is. A server on the tor network is basically invisible. Since you stay on the tor network you're not going to be noticed by any exit nodes. It does take using a specialized browser but that's all of a simple download so no big deal. 

Shutting it down isn't an option, tor is designed to be anonymous and decentralized. Unless they find who actually runs the website and nab the servers it's going to stay running. What is more likely to happen is a cop or dozens of them setup seller accounts, sell for awhile with good pricing and good ratings, then bust people. You only need a few busts and people wouldn't trust the system.

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## DEGuy

> I believe that the high price may have something to do with a very prominant ponzi scheme going on right now that is paying a bunch of suckers 7% per week. It is obvious to most people but some people cannot turn down 7% a week return.
> 
> When the payouts stop, the price should drop quite a bit.


Not necessarily. Should it turn out to be a true ponzi, the bitcoins that people think they have invested will just disappear. If anything, this will provide upward pressure on the market since the amount of perceived bitcoin will be lower. From what I see, there aren't a lot of people out there buying bitcoins just to invest it in that particular 7%/week fund. Many are reinvesting funds and hoping to pull out before it comes crashing down (Well, if it comes crashing down).

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## hazek

Yeah long term a busted ponzi is bullish I believe since people will want to buy bitcoins they thought they had. Short term it might be a bit bearish because the fraudsters might quickly offload their loot, but I doubt they'd want to do it too fast and hurt themselves by driving down the price too much..

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## Elwar

I assume this is the Ponzi holder: http://www.blockchain.info/charts/ba...rQepAvnsRyHoYM

When he dumped a lot of BTC, he first talked it up like he knew the price was going to skyrocket and told everyone to BUY BUY BUY...then he dumped a buttload and it dropped about 10-15%.

Though it has since risen considerably.


I believe this:
https://bitcointalk.org/index.php?topic=92055.0
will do the most to stimulate the Bitcoin economy than anything else.

Adding a Bitcoin transaction feature to the credit card network allowing for merchants to accept Bitcoins with little to no effort (getting paid in their local currency or in bitcoins). And for Bitcoin users to use any credit card to spend their BTC as long as you have the Bitcoin software running on your home computer or a server somewhere. Essentially allowing people to become their own banks.

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## helmuth_hubener

> From what Kluge has told me, it would be like whack-a-mole.


 Technically, the bitcoin network itself could not be shut down.  In my opinion.

Bitcoin could be totally crushed and ended by shutting down the exchangers.  That would be easy, both technically and legally.  Then people would be free to continue trading the worthless hashes to their hearts' content.  But the system would, for practical purposes, be ended.

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## hazek

It's true they could severely hurt and damage Bitcoin's development and adoption if they went after the exchanges but I don't think they would succeed because people can always turn to these type of exchanges: 

https://localbitcoins.com/
http://tradeyourbitcoin.com/
https://www.bitcoinary.com/
http://tradebitcoin.com/ 
https://btcspot.com/

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## Elwar

> Not necessarily. Should it turn out to be a true ponzi, the bitcoins that people think they have invested will just disappear. If anything, this will provide upward pressure on the market since the amount of perceived bitcoin will be lower. From what I see, there aren't a lot of people out there buying bitcoins just to invest it in that particular 7%/week fund. Many are reinvesting funds and hoping to pull out before it comes crashing down (Well, if it comes crashing down).


No more need to speculate on this. The ponzi has come to an end and people are reacting.

Initially it dropped from $14-$15 to around $10-$11.

The ponzi has promised a slow payback over the next week to investors but I doubt anything will come of that other than buying a week of time.

There will probably be a lot of panic trading but I believe that the fundamentals are good for the long term. Short term will be a roller coaster.

I would rather the price be stable with a slow rise. Huge leaps and falls make it difficult to plan around.

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## IDefendThePlatform

> Also, and far more importantly, HYIP people are always going to be interested in exchanging, in cashing out.  HYIP are the only people actually using Bitcoin.  They are driving the whole thing.  All the other users are really small and inconsequential.


Bumping this old thread because I found Helmuths arguments very informative and wanted to get some new perspective on this since the general bitcoin usage has increased greatly in the last year:http://bitcoinmagazine.com/bitpay-ex...coin+Magazine)

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## hazek

> In my view BitCoins intrinsic value is derived from it's design of the technology.


LOL what a noob that guy was almost 2 years ago. He said BitCoins instead Bitcoin's and he argued for some stupid concept of intrinsic value which does not exist since all value is inherently subjective

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## hazek

> 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


The funny part? I had that kind of money, just not money I could have forgotten about and my prudent conservative mind told me not to put it into Bitcoin. If I had? Well I'd have around $400k right about now  Life is funny that way I guess. 

And lol me mining 0.54BTC, ahahahaha

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## Shane Harris

This was the first thread I saw on BTC and I don't think I even bothered to investigate it. It took until September 2013 for me to start getting interested. So depressing. I have no excuse for missing out on 5 dollar bitcoin ...

Needless to say, I still consider myself an early adopter

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## amonasro

> This was the first thread I saw on BTC and I don't think I even bothered to investigate it. It took until September 2013 for me to start getting interested. So depressing. I have no excuse for missing out on 5 dollar bitcoin ...
> 
> Needless to say, I still consider myself an early adopter


I remember this thread too, it was also the first I had heard of the Bitcoin. I remember thinking that it seemed interesting but I didn't read nearly enough about it and the possibilities of decentralized asset ledgers. At least I can say I bought $60 bitcoins--that's "early adopter" status enough for me.

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## XTreat

> This was the first thread I saw on BTC and I don't think I even bothered to investigate it. It took until September 2013 for me to start getting interested. So depressing. I have no excuse for missing out on 5 dollar bitcoin ...
> 
> Needless to say, I still consider myself an early adopter



I bought $5 BTC....and spent them on TSR....

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## presence

bump

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## RonPaulIsGreat

Funny, I still have the same "View" in terms of I think bitcoin would have been better off if instead of an ever dwindling block reward, it would eventually just issue like 1  or 2 bitcoin as a block reward minimum. 

Anyway, I have some bitcorns now, I could have been filthy rich though if I had accepted the good instead of continuing to hunt for the "perfect". Oh well.


**Edited to clarify as got a message of someone that misinterpreted. I mean the block reward would work the same as today aka 25 Bitcoins and the halving would continue to happen, it just would stop halving and forever be 1 or 2 bitcoins per block at the point the halving would have resulted in less.

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## 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.


Just don't worry, early 2011 fatjohn, just plough in all your money and you'll get rich.

(Here's to hoping that the forum's time travel abilities work well.)

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## Kade

Bitcoin value when I started mining and bought in, late September 2013: $123 
Bitcoin value today: $455

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## Kade

> I'm not a goldbug, in fact, I was often on here verbally beating goldbugs. However, I will point out that many of the valid arguments for GOLD also apply to bitcoin. Myself being a rather technologically progressive person find bitcoin to be wildly more relevant and useful in terms of currency. Every currency is based on the "faith" of the users. Some will argue about utility of some currencies, ie gold in jewelry, electronics, etc.. 
> 
> The truth is, unlike gold, bitcoin cannot be manipulated so heavily by hoarding and it is impossible for any authority to manipulate the quantity. It is limited and easily traded anonymously and without issue. You will not see "Bitcoinplus" advertisements anytime soon, you will not see people scamming people from their jewelry or otherwise, and you will not see ridiculous inflation hedging against it... 
> 
> The amount of bitcoins currently is at around 6.49 million. This number is easy to look up and viewable by all the users. When Bitcoin goes down, if it does, it will be because a Government took it down, not for any other reason. 
> 
> It is valued by people who have valuable services to offer in the real world and digitally... it is the currency of the underworld.


Old Kade, so much passion.. so much epic. And probably slightly poorer

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## opal

I looked into bitcoin again just yesterday - still kicking my self in the ass for not buying at 13 bucks.. anyway
here's my most recent drawback

bitcoin ATMs.. none near me

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## muh_roads

> I looked into bitcoin again just yesterday - still kicking my self in the ass for not buying at 13 bucks.. anyway
> here's my most recent drawback
> 
> bitcoin ATMs.. none near me


Download the latest mycelium wallet for android and check out LocalTrader feature built within.  It sort of acts like localbitcoins.com

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## opal

I don't do mobile devices

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## FSP-Rebel

> I don't do mobile devices


Then an ATM would do you no good anyway. Just link up your checking account w/ Coinbase.

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## opal

> Then an ATM would do you no good anyway. Just link up your checking account w/ Coinbase.


hmmm.. one of the things I read yesterday was the new atm's .. you can input cash and your wallet number/deposit code on the keypad and poof.. bitcoins

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## FSP-Rebel

> hmmm.. one of the things I read yesterday was the new atm's .. you can input cash and your wallet number/deposit code on the keypad and poof.. bitcoins


Yeah.., if you have a mobile device w/ an installed wallet. Outside of that, you need Coinbase via your computer. No mobile device, no worky on the ATM. You're on better footing with this model; just do what you always do to deposit but just do something different and deal it accordingly on CB.

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## RonPaulwillWin

blimp!

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## RonPaulIsGreat

> blimp!


Please never bump this thread again, I'm compelled to look at my old posts, and how my lack of having a better understanding cost me millions!!!!!!!!!

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