Total number of Bitcoins hits 10.5 million, production halves to stop inflation - Polidicks

[QUOTE=/dev/sda1;38632639]wtf how can green paper have value?????????????????????? it's just like any other currency, it needs to be accepted and agreed upon with everyone, allowing you to exchange bitcoins for x product[/QUOTE] the problem is that with virtual money there's nothing limiting inflation

Going to play idiot's advocate here: What are bitcoins.

I still don't understand what it means to 'mine' bitcoins.

[QUOTE=ButtsexV3;38632710]the problem is that with virtual money there's nothing limiting inflation[/QUOTE] Except that there's a finite amount of bitcoins that get exponentially harder to mine the more you mine.

[QUOTE=supersnail11;38632757]Except that there's a finite amount of bitcoins that get exponentially harder to mine the more you mine.[/QUOTE] you're better off investing in gold than you are bitcoins

[QUOTE=ButtsexV3;38632810]you're better off investing in gold than you are bitcoins[/QUOTE] because gold isn't prone to inflation or deflation?

[QUOTE=E1025;38632750]I still don't understand what it means to 'mine' bitcoins.[/QUOTE] At the start of bitcoin you could mine em really easily, it's some kind of number generation, and as the numbers get higher they get harder to make, thus the value keeps going higher for them, as they are harder to produce. They will cap out in a while.

[QUOTE=supersnail11;38632829]because gold isn't prone to inflation or deflation?[/QUOTE] gold tends to go up in price. I haven't seen it go down in ages.

[QUOTE=finbe;38632867]At the start of bitcoin you could mine em really easily, it's some kind of number generation, and as the numbers get higher they get harder to make, thus the value keeps going higher for them, as they are harder to produce. They will cap out in a while.[/QUOTE] It's not that more of them exist making it harder, it's that the system is designed to produce a fixed amount of them per given time interval no matter how much mining power is thrown at it. As more people mine more efficiently, the difficulty goes up to compensate, and we are now at the point where only extremely specialized hardware can pay for it's upkeep costs.

[QUOTE=ButtsexV3;38632888]gold tends to go up in price. I haven't seen it go down in ages.[/QUOTE] That's even more reason to not invest. It's not going to keep going up forever, so investing when its high isn't going to be a wise decision.

[QUOTE=supersnail11;38632952]That's even more reason to not invest. It's not going to keep going up forever, so investing when its high isn't going to be a wise decision.[/QUOTE] inflation adjusted it doesn't go up too rapidly, and there are no signs of it going down anytime soon

Aren't Bitcoins already waaaay over inflated?

[QUOTE=Spot of Tea;38633163]Aren't Bitcoins already waaaay over inflated?[/QUOTE] Don't worry they're backed by comedy gold

[QUOTE=Spot of Tea;38633163]Aren't Bitcoins already waaaay over inflated?[/QUOTE] One bitcoin is 12USD, that's very high for a waaaay over inflated currency.

[QUOTE=The Baconator;38631633] I wish there was like some 5 min, nah maybe like 3 min youtube video that could explain this to me real easy[/QUOTE] [media]http://www.youtube.com/watch?v=Um63OQz3bjo[/media] I pretty much stopped caring when everyone who traded Steam games for Bitcoins stopped.

[QUOTE=Stonecycle;38633751][media]http://www.youtube.com/watch?v=Um63OQz3bjo[/media][/QUOTE] 1:44, too short.

[QUOTE=Skelmech;38631673]I think you can exchange Bitcoins for more or less free money at some places? I quite like the idea of Bitcoins to be honest. A global ecurrency that has no exchange rate or anything. Pretty neat idea.[/QUOTE] The concept is certainly nice no doubt but it seems the real world practice, at least for specifically bitcoins, has enormous flaws that cannot be overcome (like how many say the only people making money off of bitcoins are the ones selling the equipment or software that helps make them)

[QUOTE=The Baconator;38631633]I still don't understand how bitcoins can possibly have value. Like I never understood it in the first place, not the fact that it's unpopular makes it used less thus less demand. I wish there was like some 5 min, nah maybe like 3 min youtube video that could explain this to me real easy[/QUOTE] Like any other "because we say so" currency, it's no different from the dollar or any other fiat currency really. [QUOTE=ButtsexV3;38632710]the problem is that with virtual money there's nothing limiting inflation[/QUOTE] [quote] However, the ecurrency was engineered so that the technology could [b]automatically adjust itself[/b], replacing the need for a central monetary authority like the Federal Reserve.[/quote] You could try reading before posting. [QUOTE=ButtsexV3;38632888]gold tends to go up in price. I haven't seen it go down in ages.[/QUOTE] Sounds like a bubble.

It's important to note that the way the bitcoin network works is designed to automatically adjust the algorithms for generation such that adding massive amounts of raw computing power isn't going to do anything. Ninja'd.

[QUOTE=The Baconator;38633802]The concept is certainly nice no doubt but it seems the real world practice, at least for specifically bitcoins, has enormous flaws that cannot be overcome (like how many say the only people making money off of bitcoins are the ones selling the equipment or software that helps make them)[/QUOTE] Tons of people are making money. It's a very popular thing to do with a server, as long as you can manage the electrical bill. And no one sells bitcoin software. At least, no one does legally.

Who's calculations are being performed when mining for bitcoins? What are the calculations for? Has any programmer decided to just take a look at what data was being fed into the gpu when 'mining'? EDIT: Seems the calculations are really for nothing of value. The calculations are basically only towards solving a riddle to find a jackpot, but everyone's work is recorded, so that everyone who worked on each block gets paid equal to their computer's work. This is how bitcoins have value, how strange.

[QUOTE=lulzlalz;38633838]Who's calculations are being performed when mining for bitcoins? What are the calculations for? Has any programmer decided to just take a look at what data was being fed into the gpu when 'mining'?[/QUOTE] [quote]The mining and node software for the Bitcoin network is based on peer-to-peer networking, digital signatures and cryptographic proof to make and verify transactions. Nodes broadcast transactions to the network, which records them in a public record of all transactions, called the blockchain, after validating them with a proof-of-work system. Every node in the Bitcoin network collects all the unacknowledged transactions it knows of in a file called a block, which also contains a reference to the previous valid block known to that node. It then appends a nonce value to this previous block and computes the SHA-256 cryptographic hash of the block and the appended nonce value. The node repeats this process until it adds a nonce that allows for the generation of a hash with a value lower than a specified target. Because computers cannot practically reverse the hash function, finding such a nonce is hard and requires on average a predictable amount of repetitious trial and error. This is where the proof-of-work concept comes in to play. When a node finds such a solution, it announces it to the rest of the network. Peers receiving the new solved block validate it by computing the hash and checking that it really starts with the given number of zero bits (i.e., that the hash is within the target). Then they accept it and add it to the chain. [url]http://en.wikipedia.org/wiki/Bitcoin#Mining_and_node_operation[/url][/quote] So basically the calculations that are being done are needed to ensure the validity of transactions made using the currency. (Nobody could fake a transaction or give themselves bitcoins out of thin air unless they had millions of computers calculating a hash for quite a while.)

Of course this would happen when I was just about to work up the nerve to make my first purchase on Silk Road. Then again, I don't think there will be too huge of an impact? It sounds like the prices on sites like that are adjusted according to the value of Bitcoins.

The BitCoin bubble popped a little while ago, dropping the 21$/coin rate to 3$/coin after a major exchage got hacked, and the community lost faith in the currency. I cashed out my coins that I mined, I had one of the most efficient Watt/Bitcoin/Hour Graphics Cards, so I technically made a small profit over a weekend that I was busy programming at a game jam, about 1.5 coins, or 28 dollars! I cashed out after a while. This recovery of BitCoin has taken a while, but I think the market is a bit more aware of what can happen to the currency this time around. Hopefully this currency will become stable, because it's a really cool idea.

[QUOTE=Secone;38633903]Of course this would happen when I was just about to work up the nerve to make my first purchase on Silk Road. Then again, I don't think there will be too huge of an impact? It sounds like the prices on sites like that are adjusted according to the value of Bitcoins.[/QUOTE] It's better for you. The value of bitcoins will only go up from this.

bitcoinsouttheass.gif

Also, the Bank of Canada is working on MintChip, an NFC chip that uses something very similar to BitCoin, but instead it's actually backed by the Canadian Dollar.

[QUOTE=OogalaBoogal;38634030]Also, the Bank of Canada is working on MintChip, an NFC chip that uses something very similar to BitCoin, but instead it's actually backed by the Canadian Dollar.[/QUOTE] So, not similar at all then.

[QUOTE=ShaunOfTheLive;38634042]So, not similar at all then.[/QUOTE] It uses hashes, so, kind of.

[QUOTE=Strider*;38633806]Sounds like a bubble.[/QUOTE] I wouldn't say that about gold. I suppose it's possible that it's a bubble, but gold does have a lot of intrinsic values. It's absolutely essential in almost every piece of computer related technology we have, and there aren't any substitutes for the moment. Things can go up in price without them being bubbles, as long as there is an actual use or need for those things.