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Cpt Syrinx
Posted - 2011.05.24 21:02:00 - [31]
 

Akita is right ceaon, the details of what it does was not what I meant, but its now clear to me that the number crunching it does is involved in securing the tokens themselves.

So as I understand it, it is indeed converting 'rl' energy in a novel currency, which in turn can potentially be converted back into 'rl' by form of goods and services and whatnot, without some observed pitfalls of modern monetary economy.

Fair enough.

Personally, its not something I'd invest power and hardware in. I am having trouble with the expectation that this value overhead over the effort involved in generation will persist...

Akita T
Caldari Navy Volunteer Task Force
Posted - 2011.05.24 21:19:00 - [32]
 

Edited by: Akita T on 24/05/2011 21:23:02

From what I understand, the network auto-adjusts the difficulty quite often so that on average about 50 bitcoins are generated every 10 minutes in total across the entire network.
The more "miners" exist, the harder it is to get new bitcoins, since you can't (noticeably) increase the worldwide rate of bitcoin generation.
It's hardware power PvP with a sliver of luck Twisted Evil

Barakkus
Posted - 2011.05.24 23:28:00 - [33]
 

So am I supposed to put that khash/s number into that calculator? Trying to figure out how to figure out how much this **** is generating.

I'm sitting at ~400khash/s atm, which is supposedly like $300 a month, but I seriously doubt that's right.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2011.05.25 00:44:00 - [34]
 

Edited by: Akita T on 25/05/2011 01:06:51
Originally by: Barakkus
I'm sitting at ~400khash/s atm, which is supposedly like $300 a month, but I seriously doubt that's right.

Are you sure you're not entering kilohash per second in a field where you should enter megahash per second, and therefore get an estimate that's 1k times larger than it should be ?
Because at 400 khash/second = 0.4 MHash/sec and ~7 USD/BTC, at the (more or less) current difficulty rating, you're going to earn at most 35 cents per month on average (but actually incur a lot more in electricity costs), according to this.
But yeah, if your calculation rate is indeed 400 megahash/second (that's allegedly not that unusual for some gaming computers with ATI cards, for some reason NVIDIA seems to be doing rather bad in comparison), after you figure in power cost, if difficulty rating doesn't go up noticeably in the future (unlikely, it's almost tripled in the last 50 days) and prices for bitcoins don't go down (very hard to say how prices will evolve, they have increased nearly ten-fold in the last 70 days and 100-fold in the past 250 days), you could theoretically be looking at up to 300$/month on a long-term average, but with a lot of randomness thrown in.
Oh, and over one quarter of the TOTAL amount of bitcoins that will ever be generated (21 mil) has already been generated in late January this year, not much over one year after the first difficulty increase (so, basically, the first time people started generating them in any halfway serious manner).
That's a lot of ifs and buts there.
The current value might be pure speculation and exchange rates might crash, or it could be negligible compared to much later value and holding on to some would make you a fortune later... either one could happen, but I'm kind of leaning towards the former, not the latter.

ivar R'dhak
Minmatar
Posted - 2011.05.25 01:21:00 - [35]
 

Originally by: Cpt Syrinx

I am probably not getting the economic intricacies of having a currency with no actual value,..
Indeed you don´t.
I suggest you google "Money as Debt" and watch that to understand what you current monetary belief system is actually based upon.
Quote:
edit: And would it last?
I guess about as long as that dollar/euro you´re slaving your life away to get.


Barakkus
Posted - 2011.05.25 02:38:00 - [36]
 

Originally by: Akita T
unlikely, it's almost tripled in the last 50 days



That's probably due to press and people jumping on it thinking it's free money. I got in the car when my wife picked me up and NPR (national public radio in the US) had a brief story on it. I lol'd.

Cpt Syrinx
Posted - 2011.05.25 09:38:00 - [37]
 

Originally by: ivar R'dhak
Originally by: Cpt Syrinx

I am probably not getting the economic intricacies of having a currency with no actual value,..
Indeed you don´t.
I suggest you google "Money as Debt" and watch that to understand what you current monetary belief system is actually based upon.
Quote:
edit: And would it last?
I guess about as long as that dollar/euro you´re slaving your life away to get.




oh my

and you speak to your mother with that brain?

ceaon
Posted - 2011.05.25 12:01:00 - [38]
 

yes ATI is better that NV cards because it haz more ALU nvidia haz a higher frequency and a lower number of ALU
https://en.bitcoin.it/wiki/Mining_Hardware_Comparison

also check this pic http://i.imgur.com/VhgVh.gif

Kara Sharalien
Gallente
Federal Navy Academy
Posted - 2011.05.25 13:37:00 - [39]
 

Originally by: Lindsay Logan
How is this not a kind of a pyramid scheme?


I don't really see how this is in any way a pyramid scheme. In a pyramid scheme, money filters upwards by a process of unending recruitment, so that those at the top receive lots of money, but the construct eventually runs out of new recruits and collapses, with those at the bottom receiving less returns then they paid to join, as it were.

The bitcoin system seems to be based on a horizontal plane, where the generation of coins is based on the computational power you apply to it, with no person having an inherent advantage over another. Competition will cause those with insufficient computational power on their side to lose money rather then gain it, but this still occurs on a horizontal plane, and the existence of a thousand small players reduces the income of a large player (compare a pyramid scheme, where a large player profits in the same circumstances).

This is not to say I am convinced yet that it is a stable or useful form of currency, but I really don't see how you can call it a pyramid scheme without drawing a very long bow on the nature of currency.

Wilhelm Riley
Posted - 2011.05.25 14:17:00 - [40]
 

I don't think I would have understood any of this were Akita not here. Confused

ceaon
Posted - 2011.05.25 23:41:00 - [41]
 

i did get interested to see the total network power

Network total:3,813 Thash/s
you need ~6 teraflops to get 1Ghash/s
you can make the numbers :)

Brujo Loco
Amarr
Brujeria Teologica
Posted - 2011.05.26 01:38:00 - [42]
 

The system sounds great, but I think I see a trend here. If this money can be converted from E-Currency to RL Currency into prepaid debit cards for example, it would explain the HUGE SPIKE in Prepaid Debit Card smuggling happening right now into Panama, there must be way to WASH money using this system somehow.

Panama is the only country I have seen that besides the regular Airport drug busts, they bust people that have swallowed MONEY. It's usual to find people smuggling US Bills into the country Southbound to Colombia. Lately drug traffickers have begun giving people stacks of pre-paid debit cards instead of making them swallow money Shocked

Just wondering with my /tinfoil hat about the exploits these systems can cause. <bored>

ceaon
Posted - 2011.05.26 18:33:00 - [43]
 

MtGox intl plan to offer margin trading and options

Quote:
In the coming months we'll use the new backend to (finally) implement options, margin trading, and various other things we've been missing.


link http://forum.bitcoin.org/index.php?topic=9808.0
internets moneys is serious business Laughing

Malaclypse Muscaria
Posted - 2011.05.26 19:12:00 - [44]
 

If you happen to live in North America, be careful about getting too hardcore with mining them bitcoins: the cops may turn suspicious of you eating up so much electricity, and show up one day knocking on your door presuming you've got an indoor pot-growing operation going on. Rolling Eyes

ceaon
Posted - 2011.05.27 07:27:00 - [45]
 

difficulty just got at 434882.72175 a 78% increase Laughing

Sidus Isaacs
Gallente
Posted - 2011.05.27 10:20:00 - [46]
 

I guess the gold rush is more or less over. Now you need to really dedicate lots of hardware to really get any coins.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2011.06.10 00:12:00 - [47]
 

Edited by: Akita T on 10/06/2011 00:13:17
Originally by: ceaon
difficulty just got at 434882 a 78% increase Laughing

567358 now, hah.
Also, bitcoin current traded value is over 28$.
Can you say "hyperdeflation" ? Laughing
Or, maybe, "bubble" ? Twisted Evil

Adunh Slavy
Ammatar Trade Syndicate
Posted - 2011.06.10 13:48:00 - [48]
 

BitCoins ... Theoretical limit is what, 30 million coins and no more? People are using them as money, and their value in physical currency is increasing, or has been last I looked. Of course the cost in physical currency terms to generate them and use them is also increasing.

But, how long till someone else comes up with ByteCoyns or some other such new currency? Although the monetary base for these systems are limited, the number of monetary bases is unlimited.

Sooner or later there will be a mish mash of all this Cryptographic money and the overall values will become diluted. BitCoins may stay on top of the pile as the older and more accepted currency, but sooner or later all monopolies in unregulated markets are taken down.

Also, as these new currencies evolve, and dilute one another, physical monetary bases are increasing, and real wealth is being siphoned off due to inflation. The cost to generate, much less use all the crypto money is increasing.

BitCoins are a nice experiment in debt free fixed base system, but the environment in which they operate will out pace the experiment sooner or later.

Caldari Citizen20090217
Posted - 2011.06.10 14:41:00 - [49]
 

Edited by: Caldari Citizen20090217 on 10/06/2011 14:41:27
OK so you download the software etc, run your massive repurposed renderfarm to spam bitcoins, and end up with a pile of egold. How do you convert those to another currency?

edit: typing fail

Zagam
Posted - 2011.06.10 14:41:00 - [50]
 

A good rule to follow:

If it sounds too good to be true, it probably is.

Herzog Wolfhammer
Gallente
Sigma Special Tactics Group
Posted - 2011.06.10 17:22:00 - [51]
 

I think the problem here is understanding how a currency can work when not attached to a limited hard commodity.

Indeed state currencies, not backed by gold and silver, are indeed devalued and worthless and no civilisation that used fiat money ever survived.

But gold and silver itself lacks intrinsic value. Commodities never lose value, but metals-backed currency over time becomes an acceptable exchange medium for these commodities.

Lacking in the metals, the commodities themselves actually become currency. In colonial America, lacking a mining base and having to rely on scarce foreign coin of gold and silver, tobacco and whiskey were used as currency quite often (one of the factors behind the Whiskey Rebellion, by the way).

Governments, in order to pay for their welfare and warfare states, print money with printing presses, causing inflation and devaluing the money itself. 80 years ago one ounce of gold was $20 US, but it's now hovering around $1500 and the dollar is nearly worthless. The dollar was disconnected from the gold backing in 1971 when Richard Nixon said "we are all Keynesians now".

Bitcoins appear to be way out of alignment with the concepts of currency. I think what is hard to wrap the mind around is, what is being produced (what commidity of value or value added action) in the creation of a bitcoin beyond the creation of a bitcoin? Bitcoins appear to be a construct, like ISK, that never had any commidity over which is became an acceptable forme of exchange, and they are not apparently backed by anything.

It would seem too good to be true, and the global derivatives bubble that has put the world into quadrillions in debt was based on "base desires" and "greater fools" theories: invest your money or buy that real estate and it will simply grow in value for no reason while you sit on your ass and some greater fool will pay more for it later.

There has to be a tarp in this scheme.

Kazuo Ishiguro
House of Marbles
Posted - 2011.06.10 17:51:00 - [52]
 

Originally by: Akita T
Or, maybe, "bubble" ? Twisted Evil


Yes, this seems entirely plausible. I would definitely not want to buy right now if I was planning to hold for several years.

Originally by: Sidus Isaacs
I guess the gold rush is more or less over. Now you need to really
dedicate lots of hardware to really get any coins.


You can join a collective that shares out the proceeds when any individual member solves a block. The returns should be roughly constant.

Originally by: Adunh Slavy
BitCoins ... Theoretical limit is what, 30 million coins and no more?


The minimum tradable unit is 1 Satoshi. There are 100,000,000 Satoshi to the bitcoin. That takes care of the granularity issue.

Quote:

But, how long till someone else comes up with ByteCoyns or some other such new currency? Although the monetary base for these systems are limited, the number of monetary bases is unlimited.

Sooner or later there will be a mish mash of all this Cryptographic money and the overall values will become diluted. BitCoins may stay on top of the pile as the older and more accepted currency, but sooner or later all monopolies in unregulated markets are taken down.


All someone has to do is design a better digital currency. In a similar vein, all someone has to do to beat Google is design a better search engine. I don't see any easy, consequence-free way of shutting down bitcoin, due to the minimal amount of central control it requires (one irc channel as a 'meeting place' for clients to swap transaction details).

Quote:
BitCoins are a nice experiment in debt free fixed base system, but the environment in which they operate will out pace the experiment sooner or later.


How, exactly? I suppose we'll eventually reach the point where the difficulty per block can't be raised any further, but by then all the currency ever in circulation will already have been issued, and people will be mining for transaction processing fees instead.

Originally by: Caldari Citizen20090217

OK so you download the software etc, run your massive repurposed renderfarm to spam bitcoins, and end up with a pile of egold. How do you convert those to another currency?


Someone pays you to transfer it to them. There are already several exchange websites that allow people to trade bitcoin for other currencies, and a more limited number of sellers who accept them directly as payment for goods and services.

Adunh Slavy
Ammatar Trade Syndicate
Posted - 2011.06.10 19:19:00 - [53]
 

Edited by: Adunh Slavy on 10/06/2011 19:26:07
Originally by: Kazuo Ishiguro

The minimum tradable unit is 1 Satoshi. There are 100,000,000 Satoshi to the bitcoin. That takes care of the granularity issue.



Pointing out that there is a limit to the monetary base was simply that, not a concern with regards to granularity. That limit is part of BitCoin 'appeal' to many. That appeal is an illusion.

Originally by: Kazuo Ishiguro

All someone has to do is design a better digital currency. In a similar vein, all someone has to do to beat Google is design a better search engine. I don't see any easy, consequence-free way of shutting down bitcoin, due to the minimal amount of central control it requires (one irc channel as a 'meeting place' for clients to swap transaction details).



If BitCoin has an impact and looks successful, someone else will come along and Make BitCoins2, 3, 4, n.

When this begins to happen, there will be additional competition to the currency. What remains to be seen, even with BitCoins as the first, is how widely they are adopted and held, and if so, how long can that position be held just by BitCoins. If these various currencies become widely accepted and can maintain real value, then one eventually becomes no better than the other.

These Crypto monies are perfect substitutes. So, although the base for each may be fixed, there is no limit on how many bases can exist. Those which are most widely held, easily exchanged and promoted will have the most value. BitCoins ultimate value will rest on how popular they are compared to another product that is identical. I'm not sure about you, but I haven't seen too many paper clip monopolies around.

I would not be surprised to see someone down the road attempt regulation and subsequent capture of that regulation in attempts to promote one version of this over another.

Originally by: Kazuo Ishiguro

How, exactly? I suppose we'll eventually reach the point where the difficulty per block can't be raised any further, but by then all the currency ever in circulation will already have been issued, and people will be mining for transaction processing fees instead.



Someone will come up with another kind of Crypto money as I described above.

Kazuo Ishiguro
House of Marbles
Posted - 2011.06.10 20:14:00 - [54]
 

If and when someone does make a better currency than bitcoin, I doubt it will take off overnight and instantly displace bitcoin, any faster than bitcoin itself has displaced physical currency. The common knowledge that a decent share of people are using a particular currency is probably going to be enough to keep most of the newcomers at bay - and again, the search engine analogy is a fairly good one.

Adunh Slavy
Ammatar Trade Syndicate
Posted - 2011.06.10 21:27:00 - [55]
 

Edited by: Adunh Slavy on 10/06/2011 21:27:36
It doesn't have to be "better" it just has to be the same or at least no worse. What matters is how widely held and used one will be over another. An electronic currency, in this day and age has potential to go anyplace in the world instantly. BitCoin adoption rate has been impressive. It won't take much for another one.

As for the analogy, like all analogies they have faults. If the hardware requirements, the capital, employees, etc are a good analogy to a peer to peer environment, with software that can be created by one person, we'll just have to differ. I'll stick with the paper clips.

Creepy Goat
Collateral.
Posted - 2011.06.10 21:57:00 - [56]
 

This is excellent for money laundering.

Anything else, useless.

Kirja
R.U.S.H
Red Alliance
Posted - 2011.06.10 22:01:00 - [57]
 

The idea behind bitcoint is interesting both from technical and economical point of view. As long as project keeps relativly low profile it may last but the moment there will any significant amount of real money involved bitcoint will be banned and bitcoint traders prosecuted by US which will followed by many others. Uncontrollable currency is bad for goverments in so many ways that i dont even know where to start - money laundering, terrorism, tax evasion, damaging ability of central banks to perform monetary policy just to name a few.

Anyway, bitcoint is an excellent case-study of "greater fool theory". Anyone doing a uni thesis soon and dont know what to write about? Very Happy

Kazuo Ishiguro
House of Marbles
Posted - 2011.06.11 11:40:00 - [58]
 

Originally by: Adunh Slavy
It doesn't have to be "better" it just has to be the same or at least no worse.


I disagree. Suppose you're someone looking to trade using an electronic currency. Your available options are bitcoin, which at this point is fairly well established and is used by ~100% of participants in your marketplace of choice, or a clone of bitcoin that's just been launched and is only used by a handful of people. The new currency does not give you access to any worthwhile share of the market that you can't already reach via bitcoin.

Let's say that at this point in time bitcoin is selling for a reliable $10 per coin. Conversly, it's so hard to find anyone who'll accept the clone that you have no idea what it's worth, if anything. Given this choice, why would any rational, self-interested person pick the latter option? Even if the new currency was better in some significant way it would be hard for it to reach 'critical mass'.

I have yet to hear any major complaints about bitcoin from people who actually use it, or suggestions for improving it that can't be incorporated into bitcoin itself - one can already do some quite interesting things with Bitcoin.

Adunh Slavy
Ammatar Trade Syndicate
Posted - 2011.06.11 14:17:00 - [59]
 

Edited by: Adunh Slavy on 11/06/2011 14:27:39
Originally by: Kazuo Ishiguro

I disagree. Suppose you're someone looking to trade using an electronic currency. Your available options are bitcoin, which at this point is fairly well established and is used by ~100% of participants in your marketplace of choice, or a clone of bitcoin that's just been launched and is only used by a handful of people. The new currency does not give you access to any worthwhile share of the market that you can't already reach via bitcoin.



Which is why I said this, "What matters is how widely held and used one will be over another."

Now you wanted to use google as an example. Let's use something else more applicable - Sharing Links. How about twitter, Facebook, etc. Once upon a time, not too long ago, if you wanted to share a link, you only had a few choices. Now if you want to share a link, you click the gizmo and get a hundred choices, no longer just Twiter or Facebook, but all kinds of things, hundreds of them. Adding a new crypto currency isn't going to be much trouble. Instead of just accepting bit coins, a vendor can accept any thing. So long as they get a B to B link to some exchange keeping track of exchange rates, they can modify prices on the fly. Just get the XML feed for the exchange and poof.

Originally by: Kazuo Ishiguro

Given this choice, why would any rational, self-interested person pick the latter option?



I'll give you a great reason - Cause it's worth something.

Let's suppose we have a glass box, and inside the glass box is a pile of gold. We can't touch the gold, but you and I agree that 10 pieces of blue paper are worth all the gold in the box.

On the other side of the room are two people that decide their red paper, all 10 pieces of it, are worth all the gold in the same box. Let's add another group, some people with 10 pieces of green paper.

Now you choose to accept only blue paper, but one of the people with red paper wants to make a deal with me. At first this seems dubious, but I notice that the other guy with red paper has something I want. So I agree to transfer the red paper for my serivices, and now go trade the red paper for the other red guy's services. I am now richer than you. I don't have any more blue paper, but I was able to trade something you refused to accept. I also increased my potential customer base.

Now the green guys over there noticed I was willing to accept red paper, so they trade some green with the red. I notice the greens doing this and offer to trade them some blue for green, cause I can use that to buy services from red. So while we're all trading with each other, you're sitting there waiting on some blue. You may get some sooner or later from the red guys or the green guys, or you can also choose to accept green and red as claims on the gold in the glass box. If you don't, I'll get their business, and you won't. Of course all the while I'll still be getting the blue business.

How much gold is the blue paper now worth? The green, the red? How about when the purple, the plaid and the polka-dot?

The gold in the box is all the wealth and labor in the world. As more claims are made upon the box, the less each claim will be worth.

Originally by: Kazuo Ishiguro

I have yet to hear any major complaints about bitcoin from people who actually use it, or suggestions for improving it that can't be incorporated into bitcoin itself - one can already do some quite interesting things with Bitcoin.



I don't disagree with the idea of BitCoins, I think it's a very interesting idea, I like it's decentralized nature. What I am pointing out is that people should be cautious in thinking that its limited monetary base is actually as limited as it appears. The brand "BitCoins" is limited, the proliferation of potential crytographic monies is unlimited.

Dyner
Minmatar
Midgard Protectorate
Posted - 2011.06.11 16:21:00 - [60]
 

To me this looks like owning some ultra-rare Baseball Cards. You trade that baseball card for cash. New owner does the same...eventually though no one is going to want to trade cash for that baseball card; whole thing collapses.

How about instead of figuring out new ways of making 'Money' we figure out WE-DO-NOT-NEED-MONEY. No one seems to want to do anything just because it would better the species...nooooo, gotta have my money Rolling Eyes


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