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  1. Rivington is offline
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    Posted On:
    4/07/2013 2:55pm

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    Hell yeah! Hell no!
    Actually, the point of bitcoin is to enrich early adopters of bitcoin at the expense of later adopters.

    If you're reading this thread and thinking, "Wow, bitcoins! I'd better get in on this thing right away", guess what group you're in?
  2. Tranquil Suit is offline
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    Posted On:
    4/07/2013 3:01pm

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    Quote Originally Posted by Rivington View Post
    Actually, the point of bitcoin is to enrich early adopters of bitcoin at the expense of later adopters.
    You mean like a pyramid scheme? I'd appreciate if you could elaborate.


    EDIT: Scratch that I said "pyramid scheme", I have no clue what I'm saying.
    Last edited by Tranquil Suit; 4/07/2013 3:10pm at .

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  3. Rivington is offline
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    Posted On:
    4/07/2013 3:16pm

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    Quote Originally Posted by Tranquil Suit View Post
    You mean like a pyramid scheme? I'd appreciate if you could elaborate.
    More like pump and dump. It used to be easier (i.e., require less processing power and hardware) to mine bitcoins. Bitcoin production is becoming harder faster than processing power is improving. Thus, the early adopters of bitcoins necessarily have more than later adopters will. But of course people want bitcoins! People are talking about how awesome bitcoins are. You can see how interested people are in that even the anarchobimbos of Bullshido are lining up now (now==way too late). But how can one get bitcoins easily without making some real-money hardware investments?

    Well, you can buy them, with real money, from the early adopters.

    If one actually wanted to create a virtual currency—not a generalizable one, because good fucking luck—but something that could replace Paypal or VISA for certain international purchases—all one would need do is create all the bitcoin-style virtual notes one wishes, and distribute them randomly to people via positive hacking. Then they'd start circulating. But then you won't have a stash of very cheap coins to sell to suckers down the line. The best customers for bitcoins are simple people who want bitcoins—one of the relatively few legal things you can buy with bitcoins are turnkey hardware platforms for bitcoin mining. The tendency is for early adopters to hoard except to sell to later adopters. So one level, yes, it is similar to a Ponzi, but it's not precisely like one.

    Compare to freicoin, another virtual currency scheme which uses demurrage (costs associated with holding) to encourage velocity of its currency instead of pumping and dumping (which is probably why it's not as famous).
  4. TheRuss is offline
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    Posted On:
    4/07/2013 3:22pm

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    Hell yeah! Hell no!
    Quote Originally Posted by Rivington View Post
    One could potentially argue that bitcoins are tied to processing poweróthus the "mining" metaphoróbut processing power doubles every eighteen months, so unless bitcoins become harder to mine, it's a non-starter as a "sound money."
    quizzicaldog.jpg

    https://en.bitcoin.it/wiki/Difficulty
    http://bitcoindifficulty.com/

    ---

    On the subject of bitcoin difficulty, I link to the latter site to point out something that bothers me about the whole thing.

    At first, bitcoin was about "proof of work" (read: wasting cycles) with CPUs, and that's fine; CPUs are multi-use hardware.
    In general, a CPU that's good at bitcoin mining is good at other things as well; if you were to buy a fancy Intel processor, mine a bunch of bitcoins, and then couldn't find anything to do with them... you've still got a (slightly out of date) fancy Intel processor that you can use for playing games or crunching spreadsheets or whatever.

    Then someone figured out how to use GPUs, which can generate the same proof of work much more cheaply (hashes per dollar) and efficiently (hashes per watt).
    And that's fine. GPUs are multi-use hardware too; the ones that are good at bitcoin mining are also good at other things as well.

    Then some guys figured out how to use FPGAs to mine bitcoins. FPGAs are still sort of multi-use hardware, but not trivially so; you need to have a layout to program the thing with for the task you want it to do, and that's a fairly significant engineering effort. But still, if bitcoins are useless, at least it's not a paperweight.

    But what's happening now is that people are fabricating ASICs to mine bitcoins, which are single-use hardware. You can buy (well, preorder) a $1250 box that generates bitcoins 50x as fast as my $300 graphics card while using 1/10th of the power. Sounds great, right? Except that's all it does. You can't use it to do useful work. If bitcoins become useless, so does your hardware. And even if someday bitcoins gain acceptance and you can actually exchange them for useful goods and services, once all twenty-one million are minted, all of that research, development and capital expenditure is worth nothing. It's an evolutionary dead end.

    ---

    What I wish had happened instead is this:
    -someone needs a massive, embarrassingly parallel problem (ideally a whole series of problems) solved because it is actually important and useful (read: protein folding, large scale simulation, etc.)
    -they create a cryptocurrency with the same properties as Bitcoin (including deflation; that's a separate issue), but with a trivial proof of work/difficulty curve
    -they fire up their workstation and mine all their new currency in a few minutes
    -they then offer this currency as a reward for people using their hardware to do the actual useful work they want done, and establish a floor for its value by guaranteeing a minimum exchange rate

    In this case, if someone rolls out an ASIC that solves the problem much more quickly, it's not a waste of time; they've found a way to get actual useful work done much more quickly.

    You still get all your cryptocurrency goodness, without all the Sisyphean bullshit.

    ---

    Also, Phrost, you may want to double-check your assumptions about bitcoins being "untraceable"; it's significantly easier to track the movement of bitcoins than dollar bills:

    "The main problem is that every transaction is publicly logged. Anyone can see the flow of Bitcoins from address to address (see first image). Alone, this information can't identify anyone because the addresses are just random numbers. However, if any of the addresses in a transaction's past or future can be tied to an actual identity, it might be possible to work from that point and figure out who owns all of the other addresses."
    https://en.bitcoin.it/wiki/Anonymity
    Quote Originally Posted by Emevas View Post
    Downstreet on the flip-flop, timepants.
  5. Phrost is offline
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    Posted On:
    4/07/2013 3:46pm

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    Hell yeah! Hell no!
    Quote Originally Posted by goodlun View Post
    Let me introduce you to the Bearer bond. No need for banks or the government but has real tangible value.
    Let me introduce you to Confiscation and Asset Seizure laws currently being practiced at border crossings and on American highways, then you let me know when I can back up those pieces of paper in an encrypted format that would take several thousand years to crack.
  6. RurikGreenwulf is offline

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    Posted On:
    4/07/2013 4:30pm


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    Hell yeah! Hell no!
    So, I just started mining this bitcoins

    is there any chance I can change them to dollars? or is this just some bullshit?

    Edit:

    Mysterious japanese dude behind the curtains

    Bitcoin phenomenon is one of the most intriguing things to have happened in cyberspace since the invention of the peer-to-peer networking that undermined the music business and enabled developments such as Wikileaks. It's an invention of a mysterious – and, to date, unidentified – programmer who called himself Satoshi Nakamoto and claimed to be a 36-year-old Japanese male. He launched Bitcoin on 3 January 2009 and disappeared entirely from the net in April 2011, saying that he was moving on to other things. A Pulitzer prize awaits the journalist who unmasks him. At the moment, all we have is the verdict of Dan Kaminsky, a leading [/FONT][/COLOR]internet-security expert who examined the Bitcoin code and concluded that "Nakamoto" was "a world-class programmer[COLOR=#333333][FONT=arial] with a deep understanding of the C++ programming language" who also "understands economics, cryptography and peer-to-peer networking. Either there's a team of people who worked on this or this guy is a genius.""

    http://www.guardian.co.uk/technology...P=NECNETTXT766
    Last edited by RurikGreenwulf; 4/07/2013 4:33pm at .
  7. RurikGreenwulf is offline

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    Posted On:
    4/07/2013 5:20pm


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    Hell yeah! Hell no!
    If I can make 5 bitcoins per month and exchange them for 100 U.S dollars each
    I can fucking quit my fucking job and earn the average uruguayan salary
  8. Phrost is offline
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    Posted On:
    4/07/2013 5:25pm

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    Hell yeah! Hell no!
    Quote Originally Posted by Rivington View Post
    Actually, the point of bitcoin is to enrich early adopters of bitcoin at the expense of later adopters.

    If you're reading this thread and thinking, "Wow, bitcoins! I'd better get in on this thing right away", guess what group you're in?
    Dude, that's just as tinfoil as believing Bitcoin will genuinely overthrow the financial establishment and create an AnCap utopia.
  9. TheRuss is offline
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    Posted On:
    4/07/2013 5:42pm

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    Hell yeah! Hell no!
    Quote Originally Posted by Phrost View Post
    Dude, that's just as tinfoil as believing Bitcoin will genuinely overthrow the financial establishment and create an AnCap utopia.
    No, it's not. Think about it.

    1) The difficulty curve is such that a miner's yield in blocks is proportional to their share of the global mining pool (as the number of participants increases, the average block yield per participant decreases)
    2) The coin value of each block is scheduled to halve every 210k bitcoins mined (https://en.bitcoin.it/wiki/Controlled_Currency_Supply)
    3) The final volume of coins is finite

    So miners could pull more blocks with less effort when there weren't many participants, their blocks back in the day are worth more than blocks now, the currency itself will be deflationary if people actually use it (which rewards hoarding), and once mining is done, the only way to get bitcoins will be to buy them.

    Everything about bitcoin is stacked in favour of the early adopters.
    Quote Originally Posted by Emevas View Post
    Downstreet on the flip-flop, timepants.
  10. RurikGreenwulf is offline

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    Posted On:
    4/07/2013 5:45pm


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    Quote Originally Posted by TheRuss View Post
    No, it's not. Think about it.

    1) The difficulty curve is such that a miner's yield in blocks is proportional to their share of the global mining pool (as the number of participants increases, the average block yield per participant decreases)
    2) The coin value of each block is scheduled to halve every 210k bitcoins mined (https://en.bitcoin.it/wiki/Controlled_Currency_Supply)
    3) The final volume of coins is finite

    So miners could pull more blocks with less effort when there weren't many participants, their blocks back in the day are worth more than blocks now, the currency itself will be deflationary if people actually use it (which rewards hoarding), and once mining is done, the only way to get bitcoins will be to buy them.

    Everything about bitcoin is stacked in favour of the early adopters.
    Probably the japanesse genius is going to get all the money as he invented the bitcoins
    the japanesse genius is truly clever
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