BitCoin: Should I Sign Up?

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Rob Lister
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BitCoin: Should I Sign Up?

Postby Rob Lister » Wed May 25, 2011 2:05 pm

Should this be in a different forum too? All my threads are so muddled. Anyway

BitCoin


A rhetorical question really 'cause I've already decided to do it. Without your permission. I am looking forward to somebody here telling me 1) what a mistake it is, or 2) how useless it is, or 3) how flawed it is or 4) what a a great idea it is but I'm still an asshole.

If you haven't heard of it, here's the wiki of it.

http://en.wikipedia.org/wiki/Bitcoin

Q. What is Bitcoin?

A. Bitcoin is a peer-to-peer currency. Peer-to-peer means that no central authority issues new money or tracks transactions. These tasks are managed collectively by the network.

Q. How does Bitcoin work?

A. Bitcoin utilises public-key cryptography. A coin contains the owner's public key. When a coin is transferred from user A to user B, A adds B’s public key to the coin, and the coin is signed using A's private key. B now owns the coin and can transfer it further. A is prevented from transferring the already spent coin to other users because a public list of all previous transactions is collectively maintained by the network. Before each transaction the coin’s validity will be checked.


It's all very technical really. I don't get it all. I grok it but I don't understand the finer details.

Dive head first.

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Re: BitCoin: Should I Sign Up?

Postby gnome » Wed May 25, 2011 2:07 pm

What are the coins for?

And you're still an asshole.
"If fighting is sure to result in victory, then you must fight! Sun Tzu said that, and I'd say he knows a little bit more about fighting than you do, pal, because he invented it, and then he perfected it so that no living man could best him in the ring of honor. Then, he used his fight money to buy two of every animal on earth, and then he herded them onto a boat, and then he beat the crap out of every single one. And from that day forward any time a bunch of animals are together in one place it's called a zoo! (Beat) Unless it's a farm!"
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Re: BitCoin: Should I Sign Up?

Postby Rob Lister » Wed May 25, 2011 2:19 pm

gnome wrote:What are the coins for?


The same thing your nickels, dimes and quarters are for. In a word: Stuff.

Those that accept the bitcoin currency will give you stuff in return for your bitcoins. With 'stuff' being defined as something you want.

But that's the easy part of it really. The hard part is getting your head around the distribution part of it.

Join me?

http://bitcoin.org/

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Re: BitCoin: Should I Sign Up?

Postby gnome » Wed May 25, 2011 2:30 pm

Seems blocked at work. I kind of get the distribution method... the collective validation files serve as multiple redundant backups to each other.

How do bitcoins enter circulation?
"If fighting is sure to result in victory, then you must fight! Sun Tzu said that, and I'd say he knows a little bit more about fighting than you do, pal, because he invented it, and then he perfected it so that no living man could best him in the ring of honor. Then, he used his fight money to buy two of every animal on earth, and then he herded them onto a boat, and then he beat the crap out of every single one. And from that day forward any time a bunch of animals are together in one place it's called a zoo! (Beat) Unless it's a farm!"
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Re: BitCoin: Should I Sign Up?

Postby DrMatt » Wed May 25, 2011 2:38 pm

It's a virtual global currency, more or less the opposite of local currency. Like any currency, its value depends purely upon everybody acting as if it had value.
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Re: BitCoin: Should I Sign Up?

Postby Rob Lister » Wed May 25, 2011 2:39 pm

gnome wrote:Seems blocked at work. I kind of get the distribution method... the collective validation files serve as multiple redundant backups to each other.

How do bitcoins enter circulation?


that would be the part that I have a hard time wrapping my head around.

from an article on it...

Bitcoins are "mined" when you set your Bitcoin client to a mode that has it compete to update the public log of transactions. All the clients set to this mode race to solve a cryptographic puzzle by completing the next "block" of the shared transaction log. Winning the race to complete the next block wins you a 50-Bitcoin prize. This feature exists as a way to distribute bitcoins in the currency's early years. Eventually, new coins will not be issued this way; instead, mining will be rewarded with a small fee taken from some of the value of a verified transaction.

Mining is very computationally intensive, to the point that any computer without a powerful graphics card is unlikely to mine any bitcoins in less than a few years.


so, essentially you get paid for being a bitcoin accountant...kinda.

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Re: BitCoin: Should I Sign Up?

Postby DrMatt » Wed May 25, 2011 2:43 pm

...virtual mining.
Of a puzzle.
How do existing governments decide how much money to mint?
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Re: BitCoin: Should I Sign Up?

Postby specious_reasons » Wed May 25, 2011 3:20 pm

I was tempted to sign up for bitcoins. I certainly have enough computing power, and I have a tendency to leave the computer on all the time. I heard about from Econ Talk - it's probably worth a listen. I think in the end is was just laziness and I didn't sit down in front of the PC to find the software.
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Re: BitCoin: Should I Sign Up?

Postby corplinx » Thu May 26, 2011 1:57 am

You burn coal and get a virtual currency that is probably just a scam to make the creator rich.

Bitcoin mining basically means running your power efficient cpu or gpu in full speed mode.

Thumbs down. Plus, it sounds like a scam, feels like a scam, quacks like a scam.

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Re: BitCoin: Should I Sign Up?

Postby Rob Lister » Thu May 26, 2011 11:41 am

corplinx wrote:You burn coal and get a virtual currency that is probably just a scam to make the creator rich.

Bitcoin mining basically means running your power efficient cpu or gpu in full speed mode.

Thumbs down. Plus, it sounds like a scam, feels like a scam, quacks like a scam.


You're a technical guy, can you find the flaw that makes the scam? I can't, but I'm not really that technical.

can you think of a currency that is not a scam? less of a scam?

some people covet them to some extent. Really, that's all that is required.

here's a cool 'how it works' video

[youtube]Um63OQz3bjo[/youtube]

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Re: BitCoin: Should I Sign Up?

Postby Mentat » Thu May 26, 2011 12:30 pm

Going to go with Corplinx here. Don't trusts its, my precious. Not that I think the creators had a malicious intent in making it.
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Re: BitCoin: Should I Sign Up?

Postby Rob Lister » Thu May 26, 2011 12:49 pm

Mentat wrote:Going to go with Corplinx here. Don't trusts its, my precious. Not that I think the creators had a malicious intent in making it.


what's to trust? what's to risk?

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Re: BitCoin: Should I Sign Up?

Postby gnome » Thu May 26, 2011 12:54 pm

I don't trust the basic idea--running your CPU at no constructive purpose, and arbitrarily awarding the biggest computing time wasters?

I would think that any system of currency should be based on some kind of wealth creation to accumulate.
"If fighting is sure to result in victory, then you must fight! Sun Tzu said that, and I'd say he knows a little bit more about fighting than you do, pal, because he invented it, and then he perfected it so that no living man could best him in the ring of honor. Then, he used his fight money to buy two of every animal on earth, and then he herded them onto a boat, and then he beat the crap out of every single one. And from that day forward any time a bunch of animals are together in one place it's called a zoo! (Beat) Unless it's a farm!"
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Re: BitCoin: Should I Sign Up?

Postby Rob Lister » Thu May 26, 2011 1:00 pm

gnome wrote:I don't trust the basic idea--running your CPU at no constructive purpose, and arbitrarily awarding the biggest computing time wasters?

I would think that any system of currency should be based on some kind of wealth creation to accumulate.


well, in mining, the CPU cycle's go to validating transactions so it has a constructive purpose, but I get your drift.

Still, upon what type of wealth creation is your currency based?

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Re: BitCoin: Should I Sign Up?

Postby ed » Thu May 26, 2011 1:08 pm

Maybe it is to use up the processing freed by the demise of SETI at home.
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Re: BitCoin: Should I Sign Up?

Postby Rob Lister » Thu May 26, 2011 1:21 pm

ed wrote:Maybe it is to use up the processing freed by the demise of SETI at home.


Egg-zakly! My CPU cycles have value. They have value to SETI@home, einstein@home, lhc@home and lots of others.

Here is a pretty good list of organizations vying for my cycles
http://distributedcomputing.info/projects.html

If they want my cycles, they gotta pay me.

now, while I'll accept visa, mastercard, paypal and bitcoin, conceptually, bitcoin is the most logical currency for the trade.

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Re: BitCoin: Should I Sign Up?

Postby gnome » Thu May 26, 2011 2:12 pm

Rob Lister wrote:
gnome wrote:I don't trust the basic idea--running your CPU at no constructive purpose, and arbitrarily awarding the biggest computing time wasters?

I would think that any system of currency should be based on some kind of wealth creation to accumulate.


well, in mining, the CPU cycle's go to validating transactions so it has a constructive purpose, but I get your drift.

Still, upon what type of wealth creation is your currency based?


I missed that bit. So the CPU cycles go to the functioning of the system as a whole.

US currency is based on wealth created in the economy. The fed actually manipulates the money supply ostensibly to match the current economic environment, in which the creation of wealth matters significantly.
"If fighting is sure to result in victory, then you must fight! Sun Tzu said that, and I'd say he knows a little bit more about fighting than you do, pal, because he invented it, and then he perfected it so that no living man could best him in the ring of honor. Then, he used his fight money to buy two of every animal on earth, and then he herded them onto a boat, and then he beat the crap out of every single one. And from that day forward any time a bunch of animals are together in one place it's called a zoo! (Beat) Unless it's a farm!"
--Soldier, TF2

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Re: BitCoin: Should I Sign Up?

Postby clarsct » Thu May 26, 2011 11:41 pm

What is a bitcoin worth?

I understand the currency part..worldwide currency...et cetera. They have some way of generating them...K.

But like all currency, it must be translatable...X Yen is worth Y Euros, and so forth.

So 100 bitcoins = ?

I realize currency markets also change. But in estimated figures, or even at a certain date, what's the number?

If it cannot be thus translated, then I think it is a waste of CPU cycles.

If it can be thus translated, then I think it's a very easy way to make money, even if 1000 bitcoins = $.01
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Re: BitCoin: Should I Sign Up?

Postby specious_reasons » Fri May 27, 2011 12:16 am

clarsct wrote:What is a bitcoin worth?

I understand the currency part..worldwide currency...et cetera. They have some way of generating them...K.

But like all currency, it must be translatable...X Yen is worth Y Euros, and so forth.

So 100 bitcoins = ?

I realize currency markets also change. But in estimated figures, or even at a certain date, what's the number?

If it cannot be thus translated, then I think it is a waste of CPU cycles.

If it can be thus translated, then I think it's a very easy way to make money, even if 1000 bitcoins = $.01

https://en.bitcoin.it/wiki/Trade
There are over 100 sites which accept bitcoins, along with some currency exchange sites. I looked at one exchange site, and it looks like the last trade was 7 bitcoins/USD. The chart is not clear on units, so I could be off by orders of magnitude.

Most of the sites look like small businesses with techie-geeky people running them.
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Re: BitCoin: Should I Sign Up?

Postby corplinx » Fri May 27, 2011 1:51 am

Originally, bitcoins were basically worthless, now they are are about 7 bucks a coin? The rumor is, the creators farmed most of the coins to begin with, and waited for careful astroturfing of sites like slashdot to create interest so they could dump their coins and become millionaires.

I applaud the audacity of such a thing.


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