• Bitcoin isn't shit - The Economist
    51 replies, posted
[Quote=The Economist]“GIVE me control of a nation’s money supply, and I care not who makes its laws.” So said Mayer Amschel Rothschild, founder of the Rothschild banking dynasty. What would he make of Bitcoin, an online currency with no issuing authority whatsoever? Despite being written off following a speculative bubble and crash last year, the online cryptocurrency is still going strong, not least thanks to its ability to circumnavigate the law. Bitcoin was devised in 2009 by a mysterious figure known as Satoshi Nakomoto. It is the world’s first, and so far only, decentralised online currency. Instead of a central bank, Bitcoins can be issued by anyone with a powerful personal computer: it mints them by solving extremely difficult mathematical problems. The problems are automatically made harder to ensure that the overall supply of Bitcoins cannot grow too fast. They are traded online, with transactions cryptographically authenticated. These curious capabilities make Bitcoins a combination of a commodity and a fiat currency (creating the coins is referred to as “mining” and they have value only because people accept them). But boosters inflated a Bitcoin bubble. Shortly after the currency launched, articles spread around the internet arguing that Bitcoins would protect wealth from hyperinflation and that early adopters would make a fortune. The dollar price of a Bitcoin currency unit climbed from a few cents in 2010 to a peak of nearly $30 in June 2011 (see chart), according to data compiled by Mt Gox, a popular online Bitcoin exchange. Inevitably, the currency then crashed back down, bottoming out at $2 in November 2011. But in the nine months since, Bitcoin has recovered. One unit now costs $12, and the volume of transactions is increasing. Though the price still fluctuates against the dollar, it is less volatile than it was, which makes it a better store of value. Its use as a means of exchange is also getting easier: an increasing number of online retailers take the currency, and new smartphone apps make Bitcoins almost as easy to use as cash. A proliferation of exchanges means that it is relatively easy to swap Bitcoins for conventional currencies. Tony Gallippi, the boss of Bitpay, which processes Bitcoin payments for retailers, says that his client list has increased from around 100 in March to 1,100 now. These are mostly e-commerce businesses, selling things like domain names and web hosting. But the list also includes a taxi-driver in Chicago and a dentist in Finland. “Credit cards weren’t designed for the internet,” he says. Bitcoin transactions cost less and cannot be reversed in the way credit-card transactions can be. This is important for firms selling to customers in countries known for credit-card fraud, such as Russia or Belarus. But another big reason for the currency’s success is its role in dodgy online markets. Although tracing Bitcoin transactions to real people is not impossible, the currency’s relative anonymity and ease of use makes it a natural conduit for criminal funds. On the website Silk Road, a sort of eBay for drugs hidden in a dark corner of the web known as Tor, Bitcoins are the only means of transaction. Buyers transfer their Bitcoins into an escrow account where they sit until receipt of the goods is confirmed. Bitcoin transactions on Silk Road are now worth $1.9m per month, estimates Nicolas Christin, a researcher at Carnegie Mellon University. This may explain why users put up with a big drawback. Bitcoins tend not to be very secure, says Richard Booth, a consultant at RSA, a cyber-security firm. As some users have found to their cost, hackers can sometimes steal Bitcoins from users’ online vaults. In the latest raid, on September 5th, hackers stole $250,000 in Bitcoins from Bitfloor, a large American exchange, causing it to shut down its operation. But although the raid caused a dip in the price of Bitcoins, it soon recovered. It turns out that a currency can thrive even when no one is making laws for it.[/Quote] [url]http://www.economist.com/node/21563752[/url] [img]http://media.economist.com/sites/default/files/imagecache/290-width/images/print-edition/20120929_FNC152.png[/img] WELP GUESS IT'S TIME TO HIJACK A COMPUTER LAB AT SCHOOL AND START DIGGIN' Actually I think this is pretty cool. It's sort of like mining for gold except I don't have to live in fear of being stabbed by some underpaid South African miner.
The mining process still takes forever and the whole thing is still prone to crashes from people stealing the coins from exchanges.
Yep, it brings value (albeit temporarily) back to currency, problem is the source is infinite and streamlined into a process as simple as buying a tool to mine it. If the ground were made of gold and you simply needed a big enough tool to break the ground; that would be bitcoin.
[QUOTE=lifehole;37870731]If the ground were made of gold and you simply needed a big enough tool to break the ground; that would be bitcoin.[/QUOTE] No, that would be Peter Molyneux's Curiosity
[QUOTE=jordguitar;37870675]The mining process still takes forever and the whole thing is still prone to crashes from people stealing the coins from exchanges.[/QUOTE] Our outright hacking the system and flooding the market
I think I am the only one that doesnt understand Bitcoins
Shame I am on a laptop, oh well.
I killed the GPU on my brother's computer by mining. I never told him.
How does bitcoin mining work then? I never understood how it exactly worked.
[img]http://i.imgur.com/FAVyM.gif[/img]
[QUOTE=smurfy;37870749]No, that would be Peter Molyneux's Curiosity[/QUOTE] inside the box there are enough bitcoins to crash the bitcoin market forever
Still don't trust a currency where you are told you can essentially print your own money. Sure it gets harder with time but it's such a massive fucking loophole.
The days were bitcoin mining was profitable are long over. If you want bitcoins you need to exchange your money.
So, uh, how do I get into the bitcoin business? Not seriously, but is there a way to make some bitcoins on the side? Would be nice to use it to get some cash for dem steam sales. [editline]1st October 2012[/editline] [QUOTE=Pirate Ninja;37871206]The days were bitcoin mining was profitable are long over. If you want bitcoins you need to exchange your money.[/QUOTE] Not criticizing, but curious. How is making something from nothing not profitable?
because people accept bitcoins. as long as people accept bitcoins there will be demand.
[QUOTE=MIPS;37871146]Still don't trust a currency where you are told you can essentially print your own money. Sure it gets harder with time but it's such a massive fucking loophole.[/QUOTE] That's not how it works at all. The network, as a whole, generates the money, because there's a random (evenly distributed) chance that any one person will be the one to solve the proof of work and earn the generated money.
[QUOTE=richard9311;37871233] Not criticizing, but curious. How is making something from nothing not profitable?[/QUOTE] because the electricity and hardware costs more than what the coins are worth pretty much
[QUOTE=richard9311;37871233]Not criticizing, but curious. How is making something from nothing not profitable?[/QUOTE] Because at this point, you will end up spending more on the extra electricity you use than what you actually earn. It was only profitable early on. EDIT: ninja'd
[QUOTE=MIPS;37871146]Still don't trust a currency where you are told you can essentially print your own money. Sure it gets harder with time but it's such a massive fucking loophole.[/QUOTE] You don't print money Read how it works [url]https://en.bitcoin.it/wiki/Controlled_Currency_Supply[/url] [url]https://en.bitcoin.it/wiki/Mining[/url]
[QUOTE=joe588;37871399]because the electricity and hardware costs more than what the coins are worth pretty much[/QUOTE] Exactly. Still might be worthwhile for those of us in University accommodation with unmetered electricity (i.e. set payment each week includes EVERYTHING)
I think a lot of people seem to think you claim bitcoins as your own or something, when in reality thats not how it works at all You need to have transactions verified, you can't just get bitcoins without any sort of security [editline]1st October 2012[/editline] Ninjad
[QUOTE=latin_geek;37871007]inside the box there are enough bitcoins to crash the bitcoin market forever[/QUOTE] Party like it's 1929
[QUOTE=TehWhale;37871294]because people accept bitcoins. as long as people accept bitcoins there will be demand.[/QUOTE] To expand: Why is gold valuble? Why are diamonds valuble? By all nature, these are "useless" items, but an once of gold is worth thousands of dollars. Same with diamonds - they are actually very common minerals you can find all over the world, and just happen to be close to the surface in africa. The value of a diamond is completely artifical. Currency works, because people at some point in ancient history went "Okay, this single coin equals one loaf of bread. So as long as you carry 200 coins, you can get 200 loaves of bread". As demand for a currency goes down, you need more of it to "equal" its real world value. It's why countries like Zimbabwa have tens of thousdands of zimbabwae dollars equal just one american dollar, which equals a candy bar (the real-world value). Thier currency is worth less globally, therefore there is little demand to trade with it, therefore you need thousdands of it to equal just one dollar of the most commonly traded currency out there (USD). Bitcoin is exactly the same, except it was born of the internet and not of the government. If people go "Okay, 1 bitcoin equals one movie ticket" and the people selling movie tickets accept that "trade", then that is going to be their established value.
[QUOTE=KorJax;37871826]Why is gold valuble?[/QUOTE] Actually gold would continue to be valuable beyond its use as currency purely because it has a nearly unlimited number of industrial applications. It has some very useful properties that give it intrinsic value, and it's not extremely common. It does not corrode, it's extremely conductive, and it forms durable alloys extremely easily while requiring very little work to purify and utilize. In terms of industrial use, its a borderline miracle metal.
[QUOTE=Zephyrs;37872011]Actually gold would continue to be valuable beyond its use as currency purely because it has a nearly unlimited number of industrial applications. It has some very useful properties that give it intrinsic value, and it's not extremely common. It does not corrode, it's extremely conductive, and it forms durable alloys extremely easily while requiring very little work to purify and utilize. In terms of industrial use, its a borderline miracle metal.[/QUOTE] For sure, but if gold was only valued for its industrial uses it would not be worth thousands per ounce. It would only have its "practical" value, which is for use in industrial applications. AKA an once of gold being worth maybe $50 instead of $2000 It is worth what it is today, largely because people ever since ancient times associated things that shine with brilliance and look pretty as being things of value, even if for the majority of human history gold had absolutely no practical value/purpose in real life applications.
I own some bitcoins, I find them easier to buy things with then a credit card. I also have a small mining operation.
[QUOTE=Period;37872272]I own some bitcoins, I find them easier to buy things with then a credit card. I also have a small mining operation.[/QUOTE] Yeah, I find it much easier to buy crystal meth with bitcoins. None of the dealers around here accept Visa.
[QUOTE=ShaunOfTheLive;37874022]Yeah, I find it much easier to buy crystal meth with bitcoins. None of the dealers around here accept Visa.[/QUOTE] Scrubs [IMG]http://sparklingspur.com/wp-content/uploads/2011/07/Credit-card-reader-for-iphone.jpg[/IMG]
[QUOTE=richard9311;37871233] Not criticizing, but curious. How is making something from nothing not profitable?[/QUOTE] The power bill is higher from the extreme power usage than you get in total bitcoins in the end.
[QUOTE=lifehole;37870731]Yep, it brings value (albeit temporarily) back to currency, problem is the source is infinite and streamlined into a process as simple as buying a tool to mine it. If the ground were made of gold and you simply needed a big enough tool to break the ground; that would be bitcoin.[/QUOTE] There's so much ignorant misunderstanding here that it makes Fox news look like they know exactly what they're talking about. The source is NOT infinite, there will never be more than 21 million bitcoins and 50 are given out every 10 minutes to a random miner (or share among a pool of miners if you join one, which is they only way to actually earn any at this point.) Bitcoin miners are freeware, and many are open source. The only thing right about your post is that getting bitcoins is as easy as mining, it's just that you need a hell of a big shovel in the form of fast hardware to make a decent amount from it. Most miner rigs can pay themselves off in a few years, which isn't very promising but it's still a profit if you're in it for the long run. [QUOTE=MIPS;37871146]Still don't trust a currency where you are told you can essentially print your own money. Sure it gets harder with time but it's such a massive fucking loophole.[/QUOTE] Then you don't understand cryptographics. [QUOTE=Pirate Ninja;37871206]The days were bitcoin mining was profitable are long over. If you want bitcoins you need to exchange your money.[/QUOTE] Mining is still certainly profitable, it just depends on how long you're planning on doing it. Anyways, I actually just bought a new 64GB UHS-1 MicroSD card (among other things) from Amazon using bitcoins through btczone.com. I mined the ~8 coins required in a little over 2 months with an HD5850. [img]https://lh4.googleusercontent.com/-tvmRtNKDKAQ/UGoX62rmDRI/AAAAAAAADUI/LVB8QkMQLeI/s0/2012-10-01_18-23-35.jpg[/img] [editline]1st October 2012[/editline] [QUOTE=Mr. Smartass;37874724]The power bill is higher from the extreme power usage than you get in total bitcoins in the end.[/QUOTE] Depends on your local power price, but in all but the most extreme cases it's still profitable. [editline]1st October 2012[/editline] Also, this belongs in every bitcoin thread: [media]http://www.youtube.com/watch?v=Um63OQz3bjo[/media]
Sorry, you need to Log In to post a reply to this thread.