Bitcoin?



  • Has anybody looked into Bitcoin? Am I missing an opportunity for major money making, or is it just a scam?

    I downloaded the client from the website, but it... well it doesn't do much to explain how to use it, and it's just sitting here with "0 connections." I assume it's supposed to at some point connect to stuff, yes?



  • Ok, well, it may or may not be a scam... all I know now is that their fucking program doesn't fucking work. (It's open source, so I should have figured that going in.)



  • @blakeyrat said:

    Has anybody looked into Bitcoin? Am I missing an opportunity for major money making, or is it just a scam?

    I downloaded the client from the website, but it... well it doesn't do much to explain how to use it, and it's just sitting here with "0 connections." I assume it's supposed to at some point connect to stuff, yes?

    Use a tool called Fiddler to fiddle with it. You come to know what connection it is trying to establish with fiddler.



  • Who cares? Do you have a computer good enough for this?



  • @serguey123 said:

    Who cares? Do you have a computer good enough for this?

    My home computer could run it overnight if I got it working. I'm not sure how long it would take to generate "coins" though, so I dunno if it's worthwhile or not. (I could also just speculate on the market.)



  • @Nagesh said:

    @blakeyrat said:
    Has anybody looked into Bitcoin? Am I missing an opportunity for major money making, or is it just a scam?

    I downloaded the client from the website, but it... well it doesn't do much to explain how to use it, and it's just sitting here with "0 connections." I assume it's supposed to at some point connect to stuff, yes?

    Use a tool called Fiddler to fiddle with it. You come to know what connection it is trying to establish with fiddler.

    Yeah, I know Fiddler. It's trying to use port 6667 to talk to an IRC server, which is apparently the dumbshit way they devised to make a peer-2-peer system.

    Hay gaiz, letz use the same port for your legitimate app that's used by every botnet and malware on Earth!!! Surely nobody will block that port!

    Whatever, I give up. I have no patience for retarded software.



  •  @blakeyrat said:

    I downloaded the client from the website, but
    it... well it doesn't do much to explain how to use it, and it's just
    sitting here with "0 connections." I assume it's supposed to at some
    point connect to stuff, yes?
    According to their "Getting Started" page it may take up to "several hours" to establish a connection.

     After looking at Bitcoin, I'm not surprised that it doesn't work.  It isn't a scam in the usual sense.  It's more like a stupid, badly implemented idea by a bunch of people who think that our existing monetary system is evil (for example one of the alleged benfits of Bitcoin is "Be safe from instability caused by fractional reserve banking and central banks.")

    Even though Bitcoin might not be intended as a scam, it is easily used that way due to transactions being "irreversible", i.e., you give somebody some bitcoins and they decide not to give you whatever you are supposed to be buying, you're pretty much screwed. That problem, along with allegations of money laundering and the fact that it's illegal to create your own money in most countries, has already resulted in other "digital currencies" being shut down, or being investigated, by the federal government.

    Pretty much the same thing that happend to "Flooz" and "Beanz" 10 years ago.


     



  • @blakeyrat said:

    @Nagesh said:
    @blakeyrat said:
    Has anybody looked into Bitcoin? Am I missing an opportunity for major money making, or is it just a scam?

    I downloaded the client from the website, but it... well it doesn't do much to explain how to use it, and it's just sitting here with "0 connections." I assume it's supposed to at some point connect to stuff, yes?

    Use a tool called Fiddler to fiddle with it. You come to know what connection it is trying to establish with fiddler.

    Yeah, I know Fiddler. It's trying to use port 6667 to talk to an IRC server, which is apparently the dumbshit way they devised to make a peer-2-peer system.

    Hay gaiz, letz use the same port for your legitimate app that's used by every botnet and malware on Earth!!! Surely nobody will block that port!

    Whatever, I give up. I have no patience for retarded software.

    I also don't like retarded software.



  • @El_Heffe said:

    According to their "Getting Started" page it may take up to "several hours" to establish a connection.

    I got the impression from the forum that you get connections right away, but what takes several hours is downloading the transaction history. (And yes, you need to have a copy of the entire transaction history since 2009 to use it... figure out the WTFs that lead to that.)

    You can also use it over Tor (motto: "Child Porn? We Got It!") so you can make transactions 100% anonymously.

    When I posted about the firewall issue in their forum, someone replied that I could install Tor on my work computer (!) because it works over port 443. Yeah, I'm going to install a child porn spigot on my work computer. How out-of-touch with reality do you need to be to make a suggestion like that?

    At least it has a working uninstaller.

    @El_Heffe said:

    It's more like a stupid, badly implemented idea by a bunch of people who think that our existing monetary system is evil (for example one of the alleged benfits of Bitcoin is "Be safe from instability caused by fractional reserve banking and central banks.")

    You also "mine" bitcoins by having your computer do expensive operations... basically creating tons of hashes. What bugged me the most is that the calculations are purely to "mine" bitcoins... it's not like they're sharing CPU/GPU time with SETI@Home or Folding@Home or anything, it's just flushing power down the drain.



  • @blakeyrat said:

    When I posted about the firewall issue in their forum, someone replied that I could install Tor on my work computer (!) because it works over port 443. Yeah, I'm going to install a child porn spigot on my work computer.
     

    You don't have to make your installation of Tor publicly available just to use it yourself. Just don't forward the ports on your router... presto, nobody else's data gets sent through you.

     @blakeyrat said:

    "several hours" to establish a connection
    @blakeyrat said:
    You also "mine" bitcoins by having your computer do expensive operations... basically creating tons of hashes. What bugged me the most is that the calculations are purely to "mine" bitcoins

     "whaaaaa doing this the normal way takes too long" "whaaa using the fast gpu miner is a waste of power"



  • @Zolcos said:

    @blakeyrat said:

    When I posted about the firewall issue in their forum, someone replied that I could install Tor on my work computer (!) because it works over port 443. Yeah, I'm going to install a child porn spigot on my work computer.
     

    You don't have to make your installation of Tor publicly available just to use it yourself. Just don't forward the ports on your router... presto, nobody else's data gets sent through you.

    Ok; OR they could just fix their shitty software so it works in all network environments, like 99% of all other Internet-using software.

    And maybe (this is just a thought bear with me here) they could not recommend a CHILD PORN NETWORK when people point out how broken their software is?

    @Zolcos said:

     @blakeyrat said:

    "several hours" to establish a connection
    @blakeyrat said:
    You also "mine" bitcoins by having your computer do expensive operations... basically creating tons of hashes. What bugged me the most is that the calculations are purely to "mine" bitcoins

     "whaaaaa doing this the normal way takes too long" "whaaa using the fast gpu miner is a waste of power"

    Point: missed.

    Real money is created by people creating real, useful products. (Combining less-valuable raw materials into more valuable products.) Or extracting the raw materials, transforming them from a less-useful form into a more-useful form.

    Bitcoins are created by... wasting power. The value of my computer doesn't change between starting the bitcoin mining process and receiving a coin; nor does the value of the power used. In fact, I'd just-as-likely need to then spend that bitcoin paying for my power bill-- it takes, what, a couple weeks for a single computer to mine a bitcoin? And a bitcoin's worth a little more than a dollar? So am I even breaking even here?

    You seriously don't see any difference between the two?

    EDIT: While trying to look up the value of a bitcoin, I found that https://bitcoin.org has an invalid security certificate-- really building confidence here!



  • @blakeyrat said:

    Point: missed.

    Real money is created by people creating real, useful products. (Combining less-valuable raw materials into more valuable products.) Or extracting the raw materials, transforming them from a less-useful form into a more-useful form.

    Bitcoins are created by... wasting power.

     

    I don't know who originated it, and I'm too lazy to look it up:

    "Cash may be king, but barter is ace!"



  • @blakeyrat said:

    Point: missed.

    Real money is created by people creating real, useful products. (Combining less-valuable raw materials into more valuable products.) Or extracting the raw materials, transforming them from a less-useful form into a more-useful form.

    Bitcoins are created by... wasting power. The value of my computer doesn't change between starting the bitcoin mining process and receiving a coin; nor does the value of the power used. In fact, I'd just-as-likely need to then spend that bitcoin paying for my power bill-- it takes, what, a couple weeks for a single computer to mine a bitcoin? And a bitcoin's worth a little more than a dollar? So am I even breaking even here?

    You seriously don't see any difference between the two?

    Point missed: money is not the same as currency. Creating a bitcoin is analogous to printing a dollar bill, not doing a dollar's worth of work.



  • @intertravel said:

    Point missed: money is not the same as currency. Creating a bitcoin is analogous to printing a dollar bill, not doing a dollar's worth of work.

    Ok, well, if they admit the money's coming from nowhere, then why not just "create" a billion of them and give them away first-come-first-serve? Why waste GPU power?



  • @blakeyrat said:

    @intertravel said:
    Point missed: money is not the same as currency. Creating a bitcoin is analogous to printing a dollar bill, not doing a dollar's worth of work.

    Ok, well, if they admit the money's coming from nowhere, then why not just "create" a billion of them and give them away first-come-first-serve? Why waste GPU power?

    I'm surprised you're having trouble with this. Money != currency - I don't know how much clearer I can make that. What Bitcoin are doing is creating a currency - the physical banknotes, so to speak. That's not the same thing as making the banknotes worth anything. The processing power is (presumably) going to the same place an engraver's work goes when a new note design is issued.



  • And my point, which you didn't respond to, is: why don't they make the currency in a way that isn't a huge waste of energy?



  • There are actually legit technical answers to all your questions but it would be a lot more efficient for you to just read the bitcoin wiki instead of demanding we re-explain everything to you while you pretend to not understand it and flippantly insult things that are popular within the community you're posting in.

    Hey, this pattern sounds familiar...


  • Discourse touched me in a no-no place

    @Zolcos said:

    it would be a lot more efficient for you to just read the bitcoin wiki instead of demanding we re-explain everything to you
    I tried to read that wiki and understand it. It was less than helpful with the theoretical aspects. And, hell, it was less than helpful with the practical ones, too. All it really covered was the silly technical crap.

     

    @Zolcos said:

    pretend to not understand it and flippantly insult things that are popular within the community you're posting in.
    I'm pretty sure he's posting on TDWTF, and the only two people here that seem to think this is anything other than a pointless waste of resources are a no-poster and a relative n00b. That does not make popularity. Furthermore, popularity does not equal validity. Witness Charlie Sheen.



  • @Zolcos said:

    There are actually legit technical answers to all your questions but it would be a lot more efficient for you to just read the bitcoin wiki instead of demanding we re-explain everything to you while you pretend to not understand it and flippantly insult things that are popular within the community you're posting in.

    Hey, this pattern sounds familiar...

    Oh yeah, Bitcoin is obviously SOOO popular here. This topic only went a full month with no replies!

    Look, let's lay it all down:
    1) The bitcoin software doesn't work on a large number of networks
    2) The software's design excludes dozens of use-cases (every user has to have the entire transaction history at all times; transactions can take a significant amount of time to show up)
    3) Generating bitcoins is a complete waste, no matter how you measure it
    4) Advocates for bitcoin are perfectly fine with using child porn distribution networks, and recommending their use to others, even on work computers(!)
    5) Advocates for bitcoin are kooks who think the federal reserve system is going to collapse any... minute... now...

    If you want to keep using it knowing all of those facts, knock yourself out.

    But for the record, I'm not "pretending not to understand anything". And the fact that neither you nor intertravel have answered my extremely simple question leads me to believe that the answer is something like, "durp durp durp." If the answer is in the wiki, then the wiki is ineffective at documenting the product, because I sure as shit couldn't find it.

    The ending of Portal 2 is ridonkulous.



  • @Weng said:

    ...popularity does not equal validity. Witness Charlie Sheen.
     

    Charlie Sheen is as valid and viable as he ever was.  He's an entertainer, and there's nothing more entertaining in this world than watching a rich, good-looking person undergo a very public psychotic meltdown.



  • @blakeyrat said:

    The ending of Portal 2 is ridonkulous.

    You asshole!



  • @Spectre said:

    @blakeyrat said:
    The ending of Portal 2 is ridonkulous.

    You asshole!

    I thought it might be a homage to the ending of The Black Hole. Not sure though...

    The song isn't as catchy either.



  • @Weng said:

    the only two people here that seem to think this is anything other than a pointless waste of resources are a no-poster and a relative n00b
    I think that's an unfair criticism.  There is no correllation between the number of times a person has posted here and their knowledge about a particular subject.   A better criticism would be the fact that nobody has answered some basic questions about Bitcoin, instead, just keep repeating "currency != money" and "read the Wiki".   Well, I've read theWiki, a couple of times.  It is extrememly vague and doesn't address some basic fundamental issues: 

    * The Wiki says that you can generate (on average) 50 Bitcoins in a year (just over a week per coin).  Unless the value of that Bitcoin is <font face="courier new,courier">significantly</font> greater than the cost of the electricy used to create that coin, then there's really no point in all of this.  You're just wasting energy.

    * Since Bitcoins are only "created" by performing a bunch of operations that serve no real purpose, why bother with the charade?  Instead of making someone perform 2 weeks of pointless meanigless operations on their computer, why not just give them a Bitcoin every couple of weeks.  Seriously, what's the difference?



  • @El_Heffe said:

    @Weng said:

    the only two people here that seem to think this is anything other than a pointless waste of resources are a no-poster and a relative n00b
    I think that's an unfair criticism.  There is no correllation between the number of times a person has posted here and their knowledge about a particular subject.   A better criticism would be the fact that nobody has answered some basic questions about Bitcoin, instead, just keep repeating "currency != money" and "read the Wiki".   Well, I've read theWiki, a couple of times.  It is extrememly vague and doesn't address some basic fundamental issues: 

    * The Wiki says that you can generate (on average) 50 Bitcoins in a year (just over a week per coin).  Unless the value of that Bitcoin is <font face="courier new,courier">significantly</font> greater than the cost of the electricy used to create that coin, then there's really no point in all of this.  You're just wasting energy.

    * Since Bitcoins are only "created" by performing a bunch of operations that serve no real purpose, why bother with the charade?  Instead of making someone perform 2 weeks of pointless meanigless operations on their computer, why not just give them a Bitcoin every couple of weeks.  Seriously, what's the difference?

    Hey, I seem to have been mischaracterised as defending Bitcoins - to be clear, they're completely worthless and deeply flawed. However, the flaws are not in the creation-by-lots-of-calculation, particularly. What they're doing is akin to printing really expensive, really beautifully engraved, really hard to counterfeit Monopoly money.

    Money is a store of value*, where currency is a means of exchange. Bitcoins, as designed, are a flawed means of exchange in any case, so fairly useless as currency, but the real problem is that, whatever their merits as currency, they have no value. [*Which is pretty much the same thing as work, in this context.]

    By the way, I haven't checked, but surely the 50 bitcoins a year is the amount they give you out of the total generated, not the total itself?



  • @intertravel said:

    What they're doing is akin to printing really expensive, really beautifully engraved, really hard to counterfeit Monopoly money.
    It's more like going into a room and playing solitaire on your computer nonstop for a week, and then someone hands you some Monopoly money.@intertravel said:
    By the way, I haven't checked, but surely the 50 bitcoins a year is the amount they give you out of the total generated, not the total itself?
    Right.  A single person supposedly can generate 50 coins a year on average.



  • @El_Heffe said:

    @intertravel said:
    What they're doing is akin to printing really expensive, really beautifully engraved, really hard to counterfeit Monopoly money.
    It's more like going into a room and playing solitaire on your computer nonstop for a week, and then someone hands you some Monopoly money.

    Yeah, the work the video card does doesn't actually end up in the end-product. If it did, a single bitcoin would be hundreds of gigabytes.

    And the only reason you can't counterfeit is that every computer using bitcoin needs to keep a database of every bitcoin transaction, ever. This alone is enough to keep sane people running from it. "How do I do a bitcoin transaction from my cellphone?" "Well, first fill its memory which 800 MB of crap..."



  • @El_Heffe said:

    @intertravel said:
    What they're doing is akin to printing really expensive, really beautifully engraved, really hard to counterfeit Monopoly money.
    It's more like going into a room and playing solitaire on your computer nonstop for a week, and then someone hands you some Monopoly money.
    I don't think I understand what you mean by that. I'm trying to say that the processing power is not being completely wasted, because it is making something that under other circumstances might be useful - although in fact it is completely wasted for practical reasons to do with bitcoins being valueless (and likely to remain that way because of the many ancillary WTFs).

    @El_Heffe said:

    @intertravel said:
    By the way, I haven't checked, but surely the 50 bitcoins a year is the amount they give you out of the total generated, not the total itself?
    Right.  A single person supposedly can generate 50 coins a year on average.
    Now I'm confused - I asked 'a or b?' and you responded 'yes'. I'm asking about how it works - surely you don't keep every bitcoin you create? Instead, I'd expect they pay an average processor 50 coins a year to do the processing needed to make [many more than 50].



  • @blakeyrat said:

    Yeah, the work the video card does doesn't actually end up in the end-product. If it did, a single bitcoin would be hundreds of gigabytes.
    Eh? Where does it go, then? I'd note that prime-factorisation of a number just a few bytes long is a mammoth job, but will not produce more than another few bytes of output.

    @blakeyrat said:

    And the only reason you can't counterfeit is that every computer using bitcoin needs to keep a database of every bitcoin transaction, ever.
    Yes, that is completely insane. Oh, hang on...
    @blakeyrat said:
    This alone is enough to keep sane people running from it.

    Anyway, leaving all the practical problems aside for a minute, let's go back to basics and talk about what would be involved in creating a proper, usable currency. Assume first of all that there's an entity somewhere with a large store of something valuable with which to back the currency, because that's the simplest way to get people to trust the currency is worth something. Then, instead of going electronic, let's think about printed bank-notes. They have to be reasonably secure - that is, hard to counterfeit - which makes them not-free to produce. In reality, you go to a bank-note printing company and pay them to print notes for you - obviously, though, you only pay them a small fraction of the face value of the notes they have produced for you. In theory, you could let anyone print notes, have them send them to you to become valid, and send them back a small fraction as payment.

    If you do the same thing, but electronically, you could end up needing, say, lots of prime numbers that are computationally expensive. It would be entirely reasonable to get people to crunch those for you, in exchange for a small percentage of the value of the electronic banknotes they help you create.

    That is, though, pretty much the only thing that makes any sense at all about bitcoins.



  • @intertravel said:

    Then, instead of going electronic, let's think about printed bank-notes. They have to be reasonably secure - that is, hard to counterfeit - which makes them not-free to produce. In reality, you go to a bank-note printing company and pay them to print notes for you - obviously, though, you only pay them a small fraction of the face value of the notes they have produced for you. In theory, you could let anyone print notes, have them send them to you to become valid, and send them back a small fraction as payment.

    If you do the same thing, but electronically, you could end up needing, say, lots of prime numbers that are computationally expensive. It would be entirely reasonable to get people to crunch those for you, in exchange for a small percentage of the value of the electronic banknotes they help you create.

    That is, though, pretty much the only thing that makes any sense at all about bitcoins.

    Well, you're one-up on me, because I don't get that at all. It's quite a leap from "the government has to pay the guys who print the bills" to ... something about prime numbers? And crunching? I dunno.



  • @blakeyrat said:

    Well, you're one-up on me, because I don't get that at all. It's quite a leap from "the government has to pay the guys who print the bills" to ... something about prime numbers? And crunching? I dunno.
    OK, well how would you make an electronic currency? Again, let's assume there's something to back it - which is the major thing missing from Bitcoins, despite the other massive WTFs - so you don't have to worry about that. You simply have to find some way of making something which will fulfil the function of a banknote. Is there a way that isn't computationally expensive?



  • @intertravel said:

    @blakeyrat said:
    Well, you're one-up on me, because I don't get that at all. It's quite a leap from "the government has to pay the guys who print the bills" to ... something about prime numbers? And crunching? I dunno.
    OK, well how would you make an electronic currency? Again, let's assume there's something to back it - which is the major thing missing from Bitcoins, despite the other massive WTFs - so you don't have to worry about that. You simply have to find some way of making something which will fulfil the function of a banknote. Is there a way that isn't computationally expensive?

    I don't even know why bitcoin is computationally expensive in the first place. So I'm the wrong person to ask. You skipped that little explanation, and I'm not going to go back and read those idiots' wiki again.

    In any case, banks already have this all figured out... I pay bills all the time using "an electronic equivalent to banknotes". So the real question is, "why is a new currency required at all?" (Oh wait, I know: because they're loons who think the federal reserve is going to cause armageddon.)



  • @blakeyrat said:

    I don't even know why bitcoin is computationally expensive in the first place.
     

    To make 'em hard to counterfeit.

    Banknotes are also hard to make, but a banknote is of course entirely worthless if there's no bank to back it. Production energy down the drain, just like a bitcoin.

    Banknotes and coins don't gain intrinsic value because they're hard to make. They gain trust.

    @blakeyrat said:

    In any case, banks already have this all figured out... I pay bills all the time using "an electronic equivalent to banknotes".

    What? How?

    Entering a number and clicking  the Transfer! button on your online banking website is not a bitcoin equivalent, or is that not what you mean?



  • @El_Heffe said:

    for example one of the alleged benfits of Bitcoin is "Be safe from instability caused by fractional reserve banking and central banks."
     

    But... but...  value instability is how money works.



  • @dhromed said:

    @El_Heffe said:

    for example one of the alleged benfits of Bitcoin is "Be safe from instability caused by fractional reserve banking and central banks."
     

    But... but...  value instability is how profit is made.

    FTFY



  • @intertravel said:

    how would you make an electronic currency?
    I wouldn't.   There's no need for it.   I can go just about anywhere on the Internet and purchase items and have the cost of the items charged to a credit card or withdrawn from a bank account.  In fact , that's how I buy most things and pay most of my bills.   The whole concept of "digital currency" is flawed because it's based on the idea that the current monetary system is evil and doomed to collapse any day now.



  • @dhromed said:

    @blakeyrat said:

    I don't even know why bitcoin is computationally expensive in the first place.
     

    To make 'em hard to counterfeit.

    But it's... just a number.

    Accounts need to be secure, obviously, and transactions between accounts need to secure, obviously, but the bitcoin is just a fixed-point number attached to an account. "Blakeyrat: 12.9 bitcoins." The part that's important is you need to make sure that bitcoins always come from some valid account, so I can't just log into my account and decree I have 999 bitcoins instead of 12.9. (Which, from what I've read, they already have figured out-- your bitcoin client looks at the transaction database, finds all the ones involving your account, and sums up the balance from that. A stupid way of doing it, but it works.)

    Why is counterfeiting even in the same universe here?

    Do you think Bank of America has banks and banks of Xbox 360s churning out GPU work every time someone deposits cash at an ATM? To prevent "electronic counterfeiting?"



  • @dhromed said:

    but a banknote is of course entirely worthless if there's no bank to back it
    Maybe in other countries, but in the US all money is produced by the government and has nothing to do with any particular bank.@dhromed said:
    Banknotes and coins don't gain intrinsic value because they're hard to make
    Actually they do.  There are two things required to make any object usable as currency:

    -- It must be difficult to make.  If everyone can print money on their home printer, then it becomes worthless.

    -- Everyone agrees to accept it as currency.

    The second point is a very important one that many people overlook or don't understand.  My money has value because I can go anywhere in the country and use it to buy anything I want.   Whether or not it is backed by something (gold or whatever) is irrelevant.  Every person and business will accept it as payment because we as a society have said "these pieces of paper have a certain value."  



  • @El_Heffe said:

    Maybe in other countries, but in the US all money is produced by the government and has nothing to do with any particular bank.
     

    My bad. That's what I meant.

    @El_Heffe said:

    Actually they do.

    What I meant was, a random really hard to make note with "$10" on it is not automatically worth anything i.e. cannot be used to buy an item. Bitcoins are, apparently, hard to make, but are worth $0.

    I think we agree on this, and I think we also agree that the bitcoin must be more valuable than the power it costs to "mine" one, which creates the interesting dilemma that the bitcoin value is strongly influenced by the price of electricity in one's country. So much for independent currency :3

    @El_Heffe said:

    Whether or not it is backed by something (gold or whatever) is irrelevant.

    Money's value is backed by the government and all its assets. Having mutual agreement that a note has value is required, but it's pretty fragile for large groups of people. If the government collapses, your money will go down with it.

     



  • @blakeyrat said:

    I don't even know why bitcoin is computationally expensive in the first place. So I'm the wrong person to ask. You skipped that little explanation, and I'm not going to go back and read those idiots' wiki again.
    Hey, don't think I know anything about Bitcoins. I couldn't be bothered to read those nutters' wiki at all. Since when did basic knowledge of the subject under discussion become a prerequisite for arguing?

    @blakeyrat said:

    I pay bills all the time using "an electronic equivalent to banknotes".

    No you don't. Electronic cash is not the same as a simple bank transfer. Electronic cash is freely transferable, and does not require a bank account to keep a record of it. (Which is one of the most immense WTFs in the whole bitcoin mess).

    @blakeyrat said:

    So the real question is, "why is a new currency required at all?"
    It's not a pressing need, but real electronic cash would be useful and, more importantly, seriously cool. Nothing to do with the gun-toting paranoiacs' fear of the US guvernment, or anything like that - just think about what would actually be involved in making something that would fulfil all the functions* of a banknote without having any physical existence. [* Not including snorting drugs, emergency toilet paper, and so-on.]



  • @El_Heffe said:

    The whole concept of "digital currency" is flawed because it's based on the idea that the current monetary system is evil and doomed to collapse any day now.

    Bollocks. That may be true of bitcoins, but proper digital currency concepts are based on the idea that pretty much everything else we used to use paper for is now done electronically, so why not cash? In purely practical terms, it's probably worth looking at replacements for paper currency based purely on the cost of use, which is non-negligible.

    @dhromed said:

    What I meant was, a random really hard to make note with "$10" on it is not automatically worth anything i.e. cannot be used to buy an item. Bitcoins are, apparently, hard to make, but are worth $0.

    Yeah, that's what I was trying to say when I mentioned Monopoly money.

    @dhromed said:

    @El_Heffe said:

    Whether or not it is backed by something (gold or whatever) is irrelevant.

    Money's value is backed by the government and all its assets. Having mutual agreement that a note has value is required, but it's pretty fragile for large groups of people. If the government collapses, your money will go down with it.

    Money is backed by society and all its assets - nothing to do with mutual agreement. I would dispute that a governmental collapse would cause the money to become worthless - although it would probably be accompanied by societal collapse, which of course would affect the money situation.

    I like Terry Pratchett's simplified explanation quite a lot:

    On a desert island a bag of vegetables is worth more than gold, in the city gold is more valuable than the bag of vegetables.

    This is a sort of equation, yes? Where's the value?

    He stared.

    It's in the city itself. The city says: in exchange for that gold, you will have all these things. The city is the magician, the alchemist in reverse. It turns worthless gold into… everything. How much is Ankh-Morpork worth? Add it all up! The buildings, the streets, the people, the skills, the art in the galleries, the guilds, the laws, the libraries… Billions? No. No money would be enough.

    The city was one big gold bar. What did you need to back the currency? You just needed the city. The city says a dollar is worth a dollar.

    I would suggest that society can't exist (as we know it, anyway) without money, and that's what really makes money worth something.


  • Discourse touched me in a no-no place

    @intertravel said:

    just think about what would actually be involved in making something that would fulfil all the functions* of a banknote without having any physical existence
    Oooh, oooh, I know!

    (Yes, the cards physically exist - but they are really just devices for transacting currency that doesn't physically exist and happens to be valued at a 1:1 exchange rate with a physical currency.)



  • Debit/credit cards aren't the same as cash - they're tied to a specific account. If I give you a banknote, you don't need to have a bank account to receive it or spend it.



  • @intertravel said:

    Debit/credit cards aren't the same as cash - they're tied to a specific account. If I give you a banknote, you don't need to have a bank account to receive it or spend it.

    Unfortunately, the same is true of bitcoin. So...



  • @blakeyrat said:

    @intertravel said:
    Debit/credit cards aren't the same as cash - they're tied to a specific account. If I give you a banknote, you don't need to have a bank account to receive it or spend it.

    Unfortunately, the same is true of bitcoin. So...

    So that would has a good chance of making the top five bitcoin WTFs.



  • An economist's take on Bitcoin:
    @Tyler Cowen said:


    I’ll still admit to some confusion, but I am inclined to think the following. It is a privately created fiat currency, bundled together with an anonymity scheme for transactions. The anonymity scheme means there is some reason to grant one-time seigniorage to the original currency issuers. Eventually the anonymity scheme, in some form or another, will be available without the fiat currency. At that point, or more likely before then, the fiat currency will fall to near-zero in value. Hold it at your own risk. The original issuers will have kept some of their initial gains.

    In the meantime, it’s mostly a fun topic for the internet. Private fiat currencies have potential value only during hyperinflations, or extreme deflations. Even then (especially in the former case), people may prefer real assets and investment assets. The new Bitcoin asset simply isn’t a useful one and I’ve yet to see a source on it which explains how it could be or should be. That said, here is a list of sites which accept Bitcoin, on what terms I am not sure.

    He's got some other links that might also be useful in understanding TRWTF. My take is that it's an interesting experiment, and we'll probably learn something about how to do it right (or why) from where they got it wrong.


  • Bitcoin can be dangerous

    I just came across this article about Bitcoin, which also links to a couple of other articles   The stories aren't actually about Bitcoin, they are about how police in the U.S. and Canada are getting search warrants for people suspected of large marijuana growing operations based on their electricity usage.  According to one article, in Ohio at least 60 subpoenas are filed each month for energy-use records of people suspected of running an indoor pot growing operation.  

    In Columbus, Ohio, a DEA agent told the local newspaper "We thought it was a major grow operation ... but this guy had some kind of business involving computers. I don't know how many computer servers we found in his home."  It turns out the guy was "mining" Bitcoins.  In the town of Mission, BC, Canada, it's being claimed that 2 people mining Bitcoins have been visited by the police as a result of unusally high electricity use.

    I wonder if the Electric Company takes Bitcoins for payment of electric bills?

     



  • @El_Heffe said:

    I just came across this article about Bitcoin, which also links to a couple of other articles

    Bitcoin definitely has some kind of marketing effort going recently. They've been all over the tech news.

    Note that this article is sourced from an IRC conversation.



  • @blakeyrat said:

    Note that this article is sourced from an IRC conversation.
    But not this one which is from a slightly more reputable source (and is linked to in the other article).  I thought it was a bit humorous that people trying to generate Bitcoins that are essentially worthless are using huge amounts of electricity in the process.

     Sort of like the old joke "we lose money on every sale, but we make up for it with volume".



  • Whee, bitcoin!

    People seem to miss the boat in all circles here.  I love that people always talk about "but currency backed by assets is always better" and the like.  Currency is never, ever, backed by assets: currency (and all money) is always backed by one thing and one thing only: confidence that the money can be exchanged for something else.  All money is fiat. Even gold, the granddaddy of 'em all, is fiat; it's only useful as a currency as long as people know they can trade the gold they have to someone else for something they want.  This is the same characteristic as any other object or concept known as money.

    Personally, the problems I have with bitcoint are two-fold: the first (which is common) is that it is inherently deflationary. As soon as all 21 million or however many total coins there are (or until the cost of creating a new one is too high), prices will deflate.  This means nobody of sound mind will ever borrow bitcoins, because the debt would always be more expensive to pay back.  There's also the psychological effect: I don't think I've heard of people en masse willing to accept pay cuts because "those dollars buy more today than they did yesterday."

    The second is a more subtle flaw: bitcoins are useless without electricity, computers, and a network. If any of those things is unavailable, bitcoins are ineffective.  This is the reason that bitcoins will not be anything more than an internet phenomenon. Put succinctly: Bitcoin has an inherent availability problem. There's no way to "cash out" Bitcoins, because then there would be no way to validate the transactions. You'd have to revert to some commodity or other currency, at which point there really is no effective benefit to having Bitcoin, because the other alternative is more flexible.  I suppose some might argue that the transaction validity is worth keeping it around, but I do not fall into that camp.



  • I think it's a pretty cool idea, but also the biggest waste of space and energy imaginable. Like designing and implementing your own compression scheme or encryption algorithm, likely nowhere near as good as the tried and tested standards either in effectiveness or reliability, but a fun little exercise in programming.


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