Bitcoin - ###Mod Note in 1st Post - Please Read###

HardyBuckFan

Can anyone explain to me in plain english what bitcoin is? see it popping up a bit, know its something to do with an online currency, how does it work?


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HardyBuckFan

ta

slasher_65

Smells like a scam to me.

drunkmonkey

i've got some magic beans for sale if anyone's interested, bitcoins not accepted, paypal only please.

HardyBuckFan

interesting to say the least!

amacca

Golobulus wrote: »

Why do you think it is a scam? I have been involved with it for 6 months now and made a few thousands income on generating coins and investing in them.
.

How....just the basic idea, it cant be the same as currency trading can it?

what makes a bitcoin appreciate or depreciate even?

cant quite bring myself to read through lashings of text this early on a Sunday on another website.....please indulge me.......

amacca

Golobulus wrote: »

The price of 1 bitcoin was ~0.06USD back in September 2010. Now it is ~0.40USD. You can easily check that in one of the on-line Bitcoin exchanges, like http://mtgox.com/trade/history. Click on "All time" to see what I am talking about. If someone was "brave" enough to invest some decent amount of EUR in BTC back then, they made ~800% profit. But I am not going to mention any names.

jaysus...seem to have missed the gravy boat on that one

but presumably...high reward = high risk which also presumably still exists.

given me some interesting research anyway

amacca

Golobulus wrote: »

only 21 millions of Bitcoins will ever be created

If that is true and wont ever change I cant see it working.....

but perhaps my puny brain and lack of research on the topic is making me incorrect

The Waltzing Consumer

Is this just some thread created by people involved in Bitcoin as some advertisement?

digme

bitcoin owner may own 1.5 million bitcoins.This is the funniest thing I've heard all year.If you are retarded enough to have
some of these I'd sell them right now as you are getting taken for a ride.You can bet your ass he's the one selling them for 30 dollars a pop to gullible idiots. So 30 times 1.6 million is a lot of money,obviously he's not selling them all but he is offloading them at a nice rate for a new yacht or something along those lines.

jesus_thats_gre

The Waltzing Consumer wrote: »

Is this just some thread created by people involved in Bitcoin as some advertisement?

It's in the media lately as it one of the funding mechanisms used by that hacking group Anonymous.

EverEvolving

At first glance of this thread I thought the OP was HardLuckMan and thought what a lovely match for HardLuckWoman. I may need glasses.

Badgermonkey

What Is BitCoin?

Sam Biddle — Maybe you've heard of BitCoin—it wants to shake the entire global economy. And some people think it might! It's online money—an alternative to dollars and euros. Well what's that mean? It's complicated, but we break it down.
BitCoin is a digital currency...

BitCoin is not real money. It's an online "currency"—virtual tokens that can be exchanged for goods and services at places that accept it, the same way you'd give someone a dollar for a cookie.

...with mega aspirations...

In their YouTube manifesto, BitCoin's creators say they're going to revolutionize global finance the way the web changed publishing. So! Kind of a lofty goal, aiming to be a global currency up there with (or replacing) the dollar. Right now, that's still the pipiest of pipe dreams.

...that's exchanged via P2P...

When you write your friend a check, money from your account is withdrawn from your bank, and then transferred to her bank, and then she withdraws it as cash (maybe). With BitCoin, there are no middlemen (other than the users that comprise the network itself). Money goes straight from you to whomever, through the BitCoin P2P system, with no intermediary agency passing along the chips.

...and generated by its users...

This is where it starts to get a little weird! Unlike traditional currency, that's backed up by something, (be it gold, silver, or a central bank), BitCoins are generated out of thin air. Through a process called "mining," a little app sits on your computer and slowly—very slowly—creates new BitCoins in exchange for providing the computational power to process transactions. When a new batch of coins is ready, they're distributed in probabilistic accordance to whomever had the highest computing power in the mining process. The system is rigged so that no more than 21 million BitCoins will ever exist—so the mining process will yield less and less as time goes on, and more people sign up. This makes the whole system a lot sweeter for early adopters.

...to be spent at the few places BitCoin is accepted...

Not many places accept BitCoin at the moment, unlike traditional currency. But! There's decent incentive for small businesses to use it—it's free to use, and there aren't any transaction fees. At the moment you can buy the services of a web designer, indie PC games, homemade jewelry, guns, and, increasingly, illegal drugs. If the internet is the Wild West, BitCoin is its wampum.

...or converted into real money.

Just like you can trade in yen for dollars, you can swap your BitCoins with other users for several "real world" currencies. And right now, the BitCoin is trading very high! As I write this, one BitCoin is worth $7.5. Not too shabby at all.

Source: http://gizmodo.com/5803518/what-is-bitcoin

Capt'n Midnight

pyramid scheme

The Scientician

Capt'n Midnight wrote: »

pyramid scheme

Essentially. It's amazing reading up on it. Some people fervently believe this is gonna protect them from economic woes, government tyranny etc. and help them buy weed anonymously .

Eric Cartman

wonderful idea in theory but after they reach a high value and people stop buying them all the people who got in early and mined coins will start selling them , the price will keep falling as everyone sells their coins and it will be dead again in 3-4 years

blubloblu

Capt'n Midnight wrote: »

pyramid scheme

It pretty much is, but not intentionally. If people just use it to speculate, it's essentially a ponzi scheme. If it's used as a currency, it actually has potential, but this isn't happening on any kind of scale right now.

digme

I'll give you a piece of paper if you run around the block, same idea....
might aswell be selling dingle berries on farmville for real money.....

Capt'n Midnight

blubloblu wrote: »

If it's used as a currency, it actually has potential, but this isn't happening on any kind of scale right now.

if it's used as a currency

the revenue will take an interest, like they have done with every other medium of transfer so far

if someone figures out a better algorithm the currency will be worthless

NSA could pull the plug if they wanted using spare computer time

if it turns out that a botnet is being used to generate them then the PR will kill it

D-Generate

On Bloomberg we have been talking about it a decent amount! In the City it has got some traction but only because it is so nuts with the vols and hilarious that nerds are going mad with the illiquidity when they want to sell. Two articles in the FT about it recently, well in Alphaville which is the FT blog.

strokemyclover

A lot of nerds trying to get their Bit! Where have I seen that before?

On topic: Looks good but nothing that hasn't been thought of before.

That reminds me, I'm only 400 Funderland tickets away from a sweet Lee Majors 6 Million Dollar Man doll - I hope they come back to the RDS next year!

BlueBaron

1.Download Bitcoin
2.Computer solves problems
3.Awarded Bitcoins
??????????????????
5.Profit = Free Weed

FTW

digme

BlueBaron wrote: »

1.Download Bitcoin
2.Computer solves problems
3.Awarded Bitcoins
??????????????????
5.Profit = Free Weed

FTW

1. Get busted for said weed cause electricity bill is through the roof from mining sh!tcoins

BlueBaron

digme wrote: »

1. Get busted for said weed cause electricity bill is through the roof from mining sh!tcoins

The electricity bill is hardly gonna go through the roof for leaving the computer on for awhile!

ScumLord

Hi, I am your typical foreign immigrant, I would like to know if I break into some ones house and force them to send their fancy emoney to my cousin in foreignland will this be the perfect crime if I wear the mask?

jagrey

Many pro/anti views here. Very detailed discussion.


Tyler Cowen - of Marginal Revolution fame - is skeptical.

swordofislam

There will only ever be 21 million bitcoins. Think about it. Get in now and profit is guaranteed. They find new sources of Gold all the time but Bitcoins are safe.

Safe as houses.

Hal1

bitcoin - bit torrent

donutface

I messed with it last summer and forgot about it completely. They gave me 5 free bitcoins for starting and I sold them for $102 yesterday, not bad for doing absolutely nothing.

Currently the exchange rates are so volatile (lows of $11 and highs of $24) that you can make a nice bit of cash if you know when to buy and when to sell

bnt

In addition to the problems pointed out in that article jagrey linked to, it seems to me that there are two things going on here, which are being conflated:
- the technical side of the Bitcoin;
- the perception that they're a money-making scheme;
I think the scheme has some technical validity, but it has attracted people who aim to make money off of it. The technical side seems to be causing people to overlook the economic downside. Such concerns are only exacerbated by the extreme fluctuations in market value, and the hoarding by the likes of the mysterious "deepbit". So, while I think there's a good idea there, and the execution is OK, it was inevitably going to be ruined by speculation, which is what I see now.

A bit of economic analysis: Bitcoin is a market with "information asymmetry". Like the stock market, it has "insiders" who will always have an advantage over "outsiders" or "retail traders". The stock market has rules about insider trading: the Bitcoin market does not. How easy is it for a holder of many Bitcoins to move the market? Very easy, by the looks of it. :rolleyes:

the groutch

I'd sooner invest in Iraqi Dinars than go near this

ScumLord

the groutch wrote: »

I'd sooner invest in Iraqi Dinars than go near this

Why what's so great about Iraqi food?

donutface

the groutch wrote: »

I'd sooner invest in Iraqi Dinars than go near this

Long term investment is definitely not too smart, its a bubble. But I dont see the currency collapsing within the next couple of days either. 1000 bitcoins was on the market last december for $50. If you had bought it you would have been worth $30,000 today

Capt'n Midnight

http://www.quora.com/Bitcoin/Is-the-cryptocurrency-Bitcoin-a-good-idea

evading legal tender law for any sorts of significant business transactions in the US will have inevitable negative consequences. I'm personally indifferent to the assurances of Bitcoin and other techno-currency startups to the contrary. Any sort of barter or "time-trading" transaction is taxable.

Even if you can find some kind of brilliant legal loophole, the government will change the law and throw you in jail anyway.


....


Theft: In its current form, the Bitcoin client stores your Bitcoin addresses in an unencrypted wallet.dat file. It's like a bearer bond, anyone who gets access to read that file (or a backup copy of it that you might have made) gets access to your money.


Trust: Currently there are a several places that will hold your Bitcoin for you, including brokers (MtGox.com), payment systems (MyBitcoin.com) and online casinos (dragons.tl). If one of them gets hacked (or disappears), there's going to be some unhappy people around.


Ownership: So the founder ... Satoshi. Anybody met him? And who today has the 4.7 million BTC already "minted" (bitcoinwatch.com)? That's 22% of the entire Bitcoin currency that will ever be issued.



....
The excitement about Bitcoin prove that people have not learned from the failures of past digital currencies, from DigiCash to CyberCash, Beenz, Flooz
...There are many reasons why a cipher can be "reliable" as a marker of value, but many more reasons why it will not preserve the value it represents.

The generation of new Bitcoin blocks is a large, but arbitrarily finite, computational challenge. If the rarity of block solutions is n today, simply because of Moore's Law, it will be (n/2)/2 two years later -- twice as much computational power will be available at half the price every two years. The lowering of the number of BTCs rewarded every four years doesn't keep up with the diminishing cost of solving the block equation. The owners of initial Bitcoins would retain a higher value or, in the case of a failure of the currency, be left holding worthless BTCs. Arguments that the Bitcoin currency are immune from a bank run are specious, because the value of the "proof of work" represented by the BTC is relative to the average computational power available in the global economy and not the financial soundness of a guarantor.

Arguments about the strength of the crypto, based on comparisons to key sizes in public key cryptography, are overly optimistic about the strength of cryptography. These claims of virtually infinite security ignore the practices perfected by code-breakers, of picking targets and the application of factoring machines to targets, that substantially decrease the security of a message -- or a proof of work. This amplifies the erosion of value due to Moore's Law and raises the potential for a failure of the currency due to lack of confidence. Many organizations in the world have sufficient compute capacity to crack multiple Bitcoin blocks -- and you only have to break a few to undermine the value of the whole system.

are bitcoins more than a libertarian's / drug dealers way to evade tax / authorities ?

Capt'n Midnight

The are 6.5 million bitcoins now out of a possible 21 million
2013 half of the total supply will have been generated, and by 2017, 3/4 will have been generated.


https://en.bitcoin.it/wiki/Transaction_fees minimu Transaction fees are 0.01 BTC

also https://en.bitcoin.it/wiki/ArtForz

ArtForz is a regular on #bitcoin-dev. He was the first person to mine with GPUs, using private mining code that he wrote himself. He continues to hold a high percentage of network computation power (~25%),

So the creator holds 22% of the bitcoins and another user makes maybe 25% of them :eek:

Capt'n Midnight

Golobulus wrote: »

ArtForz's times are long over, someone should update this wikipedia page because it's only causing confusion.

It's not wikipedia , it's the bitcoin wiki This page was last modified on 14 January 2011, at 11:52.

Also, where did you get this info that the creator holds 22% of coins? The coins from the very first blocks very distributed straight away among the coders.

from the link I posted :rolleyes:

The_Thing

Steve Gibson of www.grc.com did a podcast on this a while back.

Here's his "Security Now" Page listing all his podcasts:
http://www.grc.com/securitynow.htm

BitCoin podcast:
http://media.grc.com/sn/sn-287.mp3

Capt'n Midnight

The_Thing wrote: »

BitCoin podcast:
http://media.grc.com/sn/sn-287.mp3

http://www.grc.com/sn/sn-287.htm for the text version - starts half way down

Capt'n Midnight

http://www.theregister.co.uk/2011/06/14/bitcoin_slump/

Following last week’s call by US senators for an investigation into virtual crypto-currency Bitcoin, its value is slumping.

According to DailyTech, Bitcoins last Friday suffered more than 30 percent depreciation in value – a considerable fall given that the currency’s architecture is designed to inflate its value over time.

The slump could reflect a change in attitude among holders of Bitcoins: if the currency were to become less attractive to pay for illegal drugs, then dealers and their customers would dump their Bitcoins in favour of some other medium.

Being dumped by PayPal won’t have helped either. As DailyTech pointed out, PayPal has a policy against virtual currencies, so by enforcing the policy, PayPal has made it harder to trade Bitcoins.

Bitcoin is another CIA psy-op...there, i said it..

Amhran Nua

It smells like your common or garden pyramid scheme. The first few in get the most benefit, then more and more people are needed to keep it going, and each level of the pyramid has an incentive to get more in underneath them.

I'm not saying that's what it is, but thats what it smells like.

blubloblu

Amhran Nua wrote: »

It smells like your common or garden pyramid scheme. The first few in get the most benefit, then more and more people are needed to keep it going, and each level of the pyramid has an incentive to get more in underneath them.

I'm not saying that's what it is, but thats what it smells like.

What's the incentive to get more people in beneath you?

Amhran Nua

blubloblu wrote: »

What's the incentive to get more people in beneath you?

Looks like I'm not the only one to get that feeling.

The problem with that model is that it entices people into the technology on the implied promise that they will make money from future users. That is not all that Bitcoin does in theory; it's also potentially a system for processing payments conveniently online.

But the problem is that the promise of future wealth is presently such a driving force behind Bitcoin's adoption that even though the technology has the potential not to be a scam, it ends up in practice working almost wholly as a pyramid scheme.

You buy and hold Bitocins at present only because you hope to sell them higher to people in the future willing to pay more, knowing it's backed by nothing. That's the essence of a pyramid scheme. But what complicates things is that there are technically other reasons to buy (and not hold) Bitcoins: for example, you might make payments with them to people around the world, for goods and services. The problem, in practical terms, is that Bitcoin isn't a very convenient system for making payments for most law-abiding people at present. That's what led me to say on Fatwallet that the only people buying Bitcoins, in practice, appear to be (1) speculators banking on a pyramid scheme, (2) people who want Bitcoins in order to make payments for illegal things that PayPal and similar payment-processors would prohibit, like drugs and illegal forms of pornography, and (3) ideologues who have been convinced that Bitcoin fits their anti-government worldview. There's literally nobody else buying Bitcoins at present, or at least that's true with very few exceptions.

Now, promoters of Bitcoin tend to say that what much of what I've said is true of gold and other precious metals; if Bitcoin is a pyramid scheme, they say, so are these other instruments. And so, they say, are dollars. They're right in formal terms, but only in formal terms; the analogy ignores all cultural history and institutional factors. And in any event, the analogy just shows a problem with gold and other precious metals. The last thing rational investors need is another such way of storing value, particularly when the new vessel is immature, exists in a very thin market, and is subject to technical problems and market-manipulation.

To summarize, the perversion of Bitcoin is that it has attracted a small core following, based on the way it was designed, that is based mostly on ideology and on its function as a pyramid scheme. That is unfortunate, because it's a legitimately interesting technology that could have a role in simplifying online payments. In the meantime, it would be a horrible mistake to "invest" in Bitcoins unless you think you're very good at playing a period scheme -- and also if you think it won't be regulated or stopped for being exactly that sort of scam, functionally and substantively. And it could indeed be regulated successfully, notwithstanding all the protestations of marginally savvy Bitcoin users to the contrary.

Also, I haven't poked around into the background too deeply yet but I'd have serious concerns about letting software crunch heavy crypto in a peer to peer network on my computer without knowing very exactly what it's doing.

red menace

http://gawker.com/5811868/a-500000-geek-cyberheist

Yesterday, a guy woke up to find that nearly $500,000-worth of virtual cash had been plucked from his computer by a thief. The first of the big Bitcoin heists is upon us! If you've spent any time in the nerdier parts of the internet in recent months, you know that Bitcoin is the hyper-trendy, virtual currency championed by geek libertarians, hackers and drug dealers. Completely decentralized, open-source, and nearly anonymous, Bitcoin functions essentially as digital cash. Users can store their bitcoins in an electronic wallet file on their computer, as opposed to in a bank or Paypal account. Unfortunately, like cash, Bitcoins are gone forever if they're stolen or the computer they're on is destroyed.
A high-rolling geek who goes by the handle Allinvain claims that on Monday afternoon, someone pilfered 25,000 Bitcoins from his wallet file and deposited them into another anonymous account. At the current exchange rate of $18.72 per Bitcoin, that's about $467,500. (Though the exchange rate has reached as high as ~$29 in recent days.)
"I feel like killing myself now," an anguished Allinvain wrote on the Bitcoin forums after discovering the theft. He was an early adopter of Bitcoin back in 2010 and had held onto his currency from when it was worth just pennies. "I remember watching the price like a hawk," he writes. His plan was to cash out eventually and use his earnings to open up a Bitcoin business. "Needless to say, I feel like I have lost faith in Bitcion," he wrote.
Allinvain says that he had noticed some strange activity with his computer that suggests it had been hacked. Although he can't rule out that someone had physically stolen his Bitcoin wallet file from his computer.
Geeks everywhere are in an uproar over the theft, debating whether it was made possible by a Bitcoin security flaw or stupidity on the part of Allinvain. Another forum user said he had been hit by a hacker who had transferred his Bitcoins to the same account that was used to empty Allinvain's, which has led to speculation that a serial Bitcoin robber is on the loose.
"That's one thing about bitcoins. There's no FDIC or SIPC watching your back," wrote a commenter on Hacker News. "It's the wild west with train robberies and stage coach heists in all."

CreepingDeath

The_Thing wrote: »

Steve Gibson of www.grc.com did a podcast on this a while back.

Here's his "Security Now" Page listing all his podcasts:
http://www.grc.com/securitynow.htm

BitCoin podcast:
http://media.grc.com/sn/sn-287.mp3

+1

I listen to EVERY "Security Now" podcast from Steve in GRC.

However, I also appreciate that the nerd idealism doesn't always translate in the real world.

Yes, bitcoin is a secure and transparent currency for the common user.
But I work in the anti-fraud and anti-money laundering sector, so I wouldn't be surprised if a lot of very wealthy countries/currencies/sectors don't start putting pressure on this unregulated currency.

The artificial inflation of this bit coin currency is probably due to illegal money laundering across country boundaries.
As soon as there's a legal crackdown, the exchange rate of real currency to bitcoin currency will collapse to at least parity I imagine.

Feels like this should have just been tied to the value of the dollar for a few years and let the intentions of the currency develop.. Anonymous and free transactions. The skepticism with who got rich from the beginnings along with how easy it is to lose a fortune as seen above will kill it.

That lad who got robbed was worth half a million because he got in early.. How can anyone believe that will turn into a genuine currency. He can't even begin to try find his money again because a trail doesn't exist.

laugh

Someone is a bigger shill than that Craig Doyle fella.

bonzodog2

Man says he lost $500,000 in virtual currency heist - article on TheRegister today

Orando Broom

Can they be acquired without you handing over an actual currency? If they are exchanged for work then there is no real problem. A lot of guys sitting at home, unemployed, on message boards getting nothing, maybe the bitcoin is worth a punt.

I am not very tech savvy so I could be waay off the reservation here.

Seachmall

Orando Broom wrote: »

Can they be acquired without you handing over an actual currency?.

You can 'mine' them. You essentially download a program and let it solve algorithms on your computer in the hopes it'll generate a bitcoin or two.

There's also a site that'll give you a half a bitcoin for free, can't remember which site though.

Mantel

Seachmall wrote: »

You can 'mine' them. You essentially download a program and let it solve algorithms on your computer in the hopes it'll generate a bitcoin or two.

There's also a site that'll give you a half a bitcoin for free, can't remember which site though.

All the bitcoin generation has moved to mining pools and GPU power, mining with just CPU is really a waste of time, you'd be lucky to get a single bitcoin in a month especially when your up against setups like this one.. If you've got a decent GPU setup for gaming then joining a pool will show some small results fairly fast.

Capt'n Midnight wrote: »

http://www.theregister.co.uk/2011/06/14/bitcoin_slump/

That article is pretty ****ty tbh, that 30% decrease didn't really take in to account the massive value increase that happened bitcoins in the days before that and I doubt the decrease was due to the reason they state but more to do with market trying to stablise itself (people selling off bitcoins once it hit a price that looked good for them to sell at). The price went from $10 to $28 in a few days and hasn't dipped much below $19 in the last two days it looks to be fairly stable at the moment, stable for the bitcoin market that is. If it stays around a price point for a day people start saying it's stablised.