Bitcoin Forum

So this guy has about 1000 cores generating bitcoins. About 10% of the total amount fo BTC.
His name is William Pitock aka Nenolod http://twitter.com/nenolod

What do you think? If he cannot prove the system isn't sustainable, he wins, because he will have lots of bitcoins.
If he does, we all loose.

I hope he will post here, as we discuss HIS ACTIONS and not HIS PERSON.
Also, I hope he will pay me 31337 bitcoins at this address 1EZdM6HBRn4BQNa2Bqcyh47fQWYFS5Ujr3
so I can prove him he's wrong.

Please discuss the issue.

what is the issue?

He hoards massive amounts of BTC only to create inflation later by putting them into circuit.

Now that the network is still relatively small, he can create swings in the proof-of-work difficulty and to some extent in BTC price if he sells his coins in large quantities. Nothing too serious, I think.

Hi, i'm new from a week. My question is.. where i can see the cost of generation of new coin? i suppose that with people with 1000 cores, we will need more time for get new coins.

bye bye
Juan.

Probably the son of a [paper] banker.  Or some other powerful interest that will be hurt by a disruptive technology.

nope, hes the Technology Director at SystemInPlace http://www.linkedin.com/in/nenolod (http://www.linkedin.com/in/nenolod) Appears to be a hosting company http://www.linkedin.com/companies/system-in-place (http://www.linkedin.com/companies/system-in-place).

I would guess that if he doesn't manage to break the market, he will find something useful to do with it that will benefit him and probably bitcoin as a whole (though maybe not all individual users of bitcoin).

I wonder how much he spends for using these 1000 cores... Because the price of bitcoins you get is NOT much larger than price you have to pay to generate them.

Nenolod, you're welcome to join this forum or #bitcoin-dev on Freenode. It would be interesting to have a chat with you.

BTW, Nenolod writes on Twitter:

He hasn't sold anything at BitcoinExchange.com and the service is down just for technical maintenance. Should be up today or tomorrow. Maybe he meant that 1500 € was the rate for the 84,732 BTC he supposedly has.

If he was generating one block per minute before the difficulty increase that would mean he is actually representing more than 50% of bitcoin's CPU power. Actually, rather nearly all of it.

0.3.2 has some security safeguards to lock in the block chain up to this point and limit the damage a little if someone gets 50%.

But if someone has 50%+ of the CPU power and malicious intent, they can prove what it already says in the design document.

Satoshi, could you explain this security safeguard? Is this an undocumented feature of the Bitcoin client or something?

It looks like the generation rate dropped to about half about six hours ago.

Some of the things he mentions are a bit suspicious. Generating 207... then 913 coins. The former could be explained by selling a random number, the latter... In addition, a thousand cores on Amazon EC2 instances is not so cheap as to make it economical even if he prepaid for the nodes.

Well, yeah. Even at the usual difficulty level generating coins is NOT so profitable, and at the harder one, it is just pure waste of real money.

Maybe he's trying to cause panic selling through rumor and hearsay.  Wouldn't be the first time someone's tried.

I can't see whats malicious about his actions.
Hording bitcoins and selling them later to create inflation ?
So ? Wow, inflation, that's definitely something a free market can't handle ...

Nenolod is a highly talented individual, coder and open source developer according to http://nenolod.net/about/ where he indicates he has "highly functional autism."

With the up most respect I welcome his 'actions' to openly challenge Bitcoin. As the technical director of http://www.systeminplace.net/ he certainly has the processing power to back-up the claims.

I cannot imagine that a founding member of http://atheme.org/ has malicious intent against Bitcoin. I'm sure Nenolod is just 'testing' Bitcoin and will find a good use for all those Bitcoins !


~ Anyone who destroys 'money' in the name of art or otherwise will always regret it...

See: K Foundation Burn a Million Quid - http://en.wikipedia.org/wiki/K_Foundation_Burn_a_Million_Quid  :'(

Cause a panic or a problem and then take advantage of the confusion to push through your agenda...


hmmmmm...where have I heard that before? ;)

http://twitter.com/nenolod (http://twitter.com/nenolod)

I'm curious about that. Is this why bitcoinexchange.com is down ?

He probably exchanged more bitcoins than the exchange has cash reserves ....

I thought there was a daily limit on the amount of bitcoins you could exchange at one time?

bitcoin exchange has been down for a while.  I don't think it has anything to do with him.

I am really worried about this....

I'm not.  It will adjust downward again once he takes his node offline.

Bitcoin is not about generating coins and sell them for money.
Bitcoin is about trading and people should start seeing it this way.
Of course it`s nice to get some "free" coins by generating them yourself but if that's all what bitcoin is to you, you should start questioning whether bitcoin is the right thing for you.

Hmm... think I'll rent a few servers too for easy money...

You actually found servers to rent at a price to make this profitable?

His stated goal of bankrupting the exchanges is where I think his basic mistake is.  I don't think he realizes that bitcoinmarket is not an exchange in the same way bitcoinexchange is.  It's a market place and if he sells enough bitcoins to exhaust the current demand he will make the price go down, for a while, but he won't be making any real difference.  He will make himself some money, but he seems to be doing so at the expense of his server clients, which is pretty poor business practices and I hope it is pointed out to them.

LOL

Though, I'm not sure how an exchange can be "bankrupted". Any trade should always be zero-sum or profitable for an exchange; only the individual players should possibly lose out. That is, unless the exchange itself is doing their own trades and not simply acting as a mediator.

Yep, that was my point.  The only exchange that isn't just a mediator is, I believe, bitcoinexchange.com

I'm 100% certain that he isn't really generating that much and I'll leave it at that.

Not sure as I have no idea what their output will be, but for the sake of experiment...

I agree, there are many things about his statements which don't seem to be in line with reality. In particular his quoted generation rates are not divisible by 50.

when you modulo-devide it trough 50, the rest could be from transaction fee, he's running ~1000 instances (or at least cores) of bitcoin, so the probability of him getting transaction fees is very high.

What amount does one have to send to incur a transaction fee though? I've send some large amounts around myself and never saw a fee?

Typically, over 25,000 BTC.

Who gets the transaction fee? The person that solves the block your transaction is in?

Does the fee come out of thin air or is it taken to from the transaction so that it cost 25,009 to send 25,000 BTC?

Yes

The latter.

Ok, I was certain that you couldn't transfer BTC around in a circle to pick up fees that were more than the cycle of transition (basically BTC coming out of thin air rather than being generated)

So if this guy was intercepting greater than 25,000BTC currency being traded around, it must be from someone else and even then, you can only transfer it around so many times before you run out.

I think that further cements that this Nenolod guy is just blowing smoke.

If he dumps all his alleged 85 000 bitcoins on bitcoinmarket.com right now the price will go down to 0.004 USD/BTC. Then it will go up again. So what?

I'll put in a couple of low bids just in case he's serious. If he wants to subsidize my bitcoin purchases I gladly accept.

Nothing could be better than for someone to come in and beat on the system at its margin to see what it can handle.  This is a far better stress-test than those issued to the banks, if true.

It also explains to me why I came back from being away for 4 days and only generated 1 block of coins.  8)

I guess it's better to know sooner than later if BitCoin has vulnerabilities, so I welcome anything we can learn from this 'attack'.

http://nenolod.net/thoughts-on-bitcoin/

Speculating is a valuable service. http://mises.org/daily/4466

Anyone know when the next block that difficulty will be reevaluated at will be?

my speculation is that he is going to use them to buy linden dollars, since that is something he mentioned that can currently be done.

http://theymos.ath.cx:64150/q/nextretarget

i have approximately zero interest in buying L$.  you will see what i will do with the BTC i generated when I have something to demonstrate.

i stopped generating btc when difficulty hit 181.5, as i had enough BTC for what i needed.

actually, it was not very expensive.  i spent roughly $130 USD in expenses to generate the BTC needed... then difficulty rose to 181.5, which made things no longer interesting, as I had enough BTC.  there were a couple of people who were offering money to keep the instances online so that they could get some BTC of their own though.

my parents are not bankers, i can assure you of that.  one is a librarian and the other is retired...

I'm guessing he is going to make an MMO, allow others to run servers, and sell items via bitcoin. Of course, this doesn't explain why he would need a stock of bitcoins... this implies he is going to be buying something.

an MMO service needs a stable exchange for the microcurrency.

Is this something you were already developing, and bitcoins just fit in perfectly, or did you see bitcoins, and decide that this would be the best use for them?

Why not just keep generating them and sell them? you should be making a profit still at the higher difficulty.

because running a public bitcoin exchange is not my goal.

i have looked at bitcoin before, although i did not choose to experiment with it until some friends of mine pointed me to some absolutely hilarious posts on these boards.  at first, i was more interested in seeing what would happen if i threw a lot of compute resources at bitcoin (both on a technical and social scale).  when i started to fiddle with it more though, i saw the potential for it's use as a legitimate microcurrency.  that said, i think a lot of the views of the people on these boards are kooky,  i do not believe that the people who are just doing bitcoin to "fight the man" will stay around forever, though.  i also believe that aspect of bitcoin serves as a detractor towards using it, simply because many businesses do not want to be associated with crazy libertarian government conspiracy views.  but frankly, the politics do not matter, what matters is the underlying system, and that is mostly sound.

there is a person on the IRC channel, you may know him :)  his name is Diablo-D3.  many people i know who have looked at bitcoin for their projects run away because they get a vibe that the project is in general filled up with people who are like Diablo-D3 :)

cause he's not in it just for the money.  I am excited to see what sort of MMO results from this.

What conspiracy libertarians are believing in? What's "kooky" about my views?

You also made me laugh when you say speculating is bad.  ::)

He probably would like trigger a "sell out" panic. He will sell a few Bitcoins. I do not think this will work.

Why not just generate lots of test bitcoins?  Surely that's cheaper? 

Here's my response to his blog post:
This is an attack in that you can play with the block generation rate, but the most you can influence it is 4x per 2016 blocks. If you bring 3x the network power in, you can make the difficulty go up 4x in roughly 4 days. You could then leave, forcing the block generation rate back down from a block every 2.5 minutes (at the height of your noding) to a block every 40 minutes. You would also get ~ 75,600 BTC in the process. If, however, you wanted to raise the difficulty *another* 4x, you would need to bring in another 3x the *current* network power, so you would account for 15/16 of the network. This would obviously cost more, and would net you the same reward in both increased difficulty (so called denial of service) and in bitcoins. The "solution" to this, in my opinion, is to shorten the difficulty adjust time from ~2000 blocks to ~100 blocks, but even if this attack isn't solved, there's nothing wrong with you controlling a large part of the network as long as your nodes are honest.

What do you mean by this? All you can do is sell your bitcoins for a very low price, giving whoever was around to buy them a decent chunk of coins and netting you less than ideal profit. This wouldn't cause bitcoin to "fail" - it would just lower the market price. The price would recover eventually. You'd be better off selling the coins at some value that made you profit considering all the computer time you spent to get them.

Nenolod, don't spend your time worrying about those attacks. Anyone who has more than 1/2 of the network's computer power can execute the much more dangerous "double spending" attack, which has the potential to damage Bitcoin's reputation as well as get a lot of coins stolen.

I cross-posted this there too.

In addition, if Nenolod had stopped generating when the difficulty spiked so much, wouldn't we expect to see the rate of generation drop below one block every ten minutes? On the contrary: we're currently doing better around 9/10 blocks per hour, or a block roughly every six minutes. (http://nullvoid.org/bitcoin/statistix.php)

I think you have a pretty sweet idea there nenolod. I have been entertaining a similar idea that involves exchanging pure digital property potentially using bitcoin as a medium to facilitate exchange.

Good luck to you!

P.S. Would you care to share how many coins your were able to capture during your testing?

Wow, you came to the Lion's den?  ;D

Here's why I don't believe your story. You tweet how many BTC you are generating. We know that each block generates 50 BTC, we know the history of when blocks were generated, it's easy to go back and lookup their history.

So, I don't believe for a second that you've generated an amount that's nearly 85K BTC due how many possible blocks were generated since you started, the amount of cores you claim to have generating (if you had that many cores, they must all be 200 MHz cores).

So the only way to get that amount would be to buy them. That's more plausible to me, but I know your setup wouldn't generate the amount that people here believed you generated in such a short time.

Frankly, you may believe whatever you want.  I have better things to do than argue.

Just like I have betters things to do than entertain people's ego.  ;)

I suspect the point Mr. Nenolod would like to demonstrate is that it's currently relatively easy to create wild swings in currency value with a small amount of resources.  This is "bad" because wild swings in value of a currency discourages economic activity in that currency since business depends on predictability at least in the short term.  Who wants to use bitcoins when the value of them could swing enormously because someone is trying to manipulate prices to their own advantage?

I'm new to bitcoin, but find the whole idea intriguing.  I actually find the whole idea of speculation in this market to be fascinating and educational.  Whatever you're planning on doing, just do it.

The bitcoin currency market is so small, any number of things can produce wild swings.

Just wait until someone wants to buy $10,000 USD worth of bitcoins (and then convert back to dollars later on).

Once block 70560 comes around, we will know if the other part (Nenolod's) plans were a lie as well.

Could you decode your meaning for me? I'm a little slow.

I don't think Nenolod has any intention of screwing with or manipulating bitcoin values in the future. At least not given his obviously announced plans. On the contrary, he is literally "banking" on Bitcoins becoming successful.

I'm assuming that he is just going to use bitcoins as backing for his own inter-MMO exchange currency. I'm not an MMO player so excuse my lame examples, but suppose someone was really good at cybersex in say secondlife, but they wanted to trade their services for say a magical sword in world of warcraft. It sounds like Nenolod wants to build an exchange for that. But how do you value orgasms vs magical swords? If you do it in USD, you open yourself to a world of needless regulatory pain. If you do it in Nenocoins, no one will bat an eye.

However, if he backs his Nenocoins with Bitcoins, he gets a bonus selling point in that Nenocoins can be converted to USD or fiat currencies, without him suffering any government grief.

It really is a clever idea! Kudos!

Why would he go through all the grief he did of running 1,000 servers?  I'm sure he started the gag as a hack. But after contemplating it for a couple of days he realized, Duh!  Bitcoins have designed in steady deflation!

Say he gathered 60,000 bitcoins. That represents about $300.00 worth of market cap (last I checked). If his claims are true, he was able to collect them at a discount for only $100.00. In addition, he could quietly gather all of them without competing against himself by driving up Bitcoin prices.

So now he is done. For $100.00 he has all the Bitcoins he'll ever need. If Bitcoins become successful, he no longer has to deal with the bitcoin market again. If Bitcoins fail, he has lost minimal value for a development task the size he is working on. (about 2 hours of paid programmer time).

That was what I meant about early adopter "Bitcoin Lord".

Your not slow, it's just cryptic talk really. Basically, people are worried he is going to mess with the market. Mainly, they thought he had a 1,000 CPU farm churning out Bit Coins like he was printing money. Which going by his own words, he was leading everyone to believe. At the same time though, many stories about Bit Coin were spreading across the Internet, so traffic to the site increased, many people downloaded the client and set their PC to start "generating coin" so to speak.

Since Bit Coin regulates coin production based on CPU power, all these new people running the client were adding more CPU power to the pool. Thus, the difficulty of each block generation (50 BTC) in this case started to increase rapidly. He used this situation to offer up no proof of nothing more than he had a server farm out there somewhere churning Bit Coins. At the same time, everyone is hoping on board Bit Coin and naturally increasing the difficulty of block generation.

So, people would cross correlate that since he said he had a server farm making coins and the difficulty had jumped up so rapidly, they assumed he was telling the truth.

The breakdown though is given the short amount of time he claimed to have generated 85K of Bit Coin went against of the logic of just how many BTC can actually be generated. According to his own tweets, he was producing 85K in under a few days. By logic, he can't because it would take an 11 day straight coin generating server farm to do this, plus no one else would be able to generate any coin. I was generating plenty during the time he claims to have his server farm up and running, so on that front he was lying I believe.

He now claims that he shut down that server farm long ago and that he has all he needs. Fair enough, if that's true, then by block 70,560 the difficulty of BTC coin generation will take a nose dive.

On another front, he mentions how much he spent using cloud computing to generate all the BTC. I use cloud computing myself and I know how much it cost to use that much CPU power and it's certainly not the few hundred dollars he claims. So, again, I believe he was caught in another lie.

And finally the third reason, and one I don't ever mention, is because some members at this forum have way more CPU resources than he claim to have and they know what the generation rates for them was before and after his claims. His CPU power doesn't pan out against real world experience or else he had the worlds slowest 1,000 core setup.

I have to disagree, but only for one reason. He wanted a large amount of BTC and the easiest way was to take advantage of the situation when Bit Coin had a lot of press and he knew the difficulty of all these new people joining would increase and thus make it much harder to generate BTC. Using this, he puts out a claim that he has a massive server farm running somewhere and how he's out to show that BTC can be bought out with enough money. At first, it seems logical to people, so they feel the current BTC they have will probably be worthless. He buys up all the BTC he can at fire sale prices and then ends up with a lot of BTC when it's done.

What he does with it, I'll leave that to him. But to go through all of that for only 85K BTC is really just a drop in bucket compared to how much some people have right now.

Only he knows the truth, but in the end after some time, we will at least know if his methods were false or not. What he does with his real or made up amounts of BTC is his own business and I'm not concerned about that. I'm only concerned when I see someone trying to use scare tactics to take advantage of a market. I compare it to someone claiming they have invented a device that can turn water into gold for only $9.99, the gold market plummets, someone buys all the gold at cheap prices, then later people realize that the original water to gold machine was just a lie. The price goes back up, someone gets very rich  ;D

Wow, Thanks! Nice explanation. Far more than I expected!


I think what I was missing is that block 70,560 is the next difficulty reset point.


I think your math speaks for itself. Thanks for sharing your analysis.

I initially thought the "attack on bitcoin" was a simple case of 1) see bitcoin get good press. The most intriguing thing for many people is the ideal of generating "free money". So, 2) during the wave of new adopters run 1,000 competitive bots against a couple hundred noobs. Most noobs succeed only in spinning their desktop fans really fast, and burning their legs on their laptops. (I almost did!)   3) They abandon bitcoin taking their coins in the process, and spawn a wave of bad press, "I ran bitcoin for two weeks and all I got were two roasted balls!"  4) He gloats a little to his friends.

His new story makes Bitcoin all the more interesting for me though. I'm hoping he really does have a constructive use for any coins he gathered.


Of course, outlandish claims and gullibility are always market forces.

It should be possible to analyze the market transactions to see if there was a surge there as well. Just a thought.



I've actually been wonder quite a bit about the new Bitcoin Lords.  I know there are stats on how many coins were generated and what accounts they are in... But are there any statistics on
1) How rich is rich in Bitcoins? A sort of Forbes 400 kind of thing.
2) how many Real Life node operators are there?
3) now many nodes are running full time and intermittently. Graphed over time kind of thing

Given that 70,000 blocks = roughly 3.5 million bit coins. Having 85k would give him about 2.4% of the market. I know a lot of the market exchange sites for Bit Coin have at least that or more BTC for the trade volume. I would be curious myself  ;D

He now claims that he shut down that server farm long ago and that he has all he needs. Fair enough, if that's true, then by block 70,560 the difficulty of BTC coin generation will take a nose dive.

We're generating over 9 blocks an hour, so it's going to slow down. Right?

Than one should make use of that information to win big in the market. This will increase market efficiency by ensuring that bad speculators' money flow to good and less gullible speculators who will be able to allocate resources more appropriately.

The numbers don't add up.
Right before /. the whole network was only averaging about 200 Mhash/s
Rising to approx. 1200 Mh/s in the 24h after /.
Then a pretty steady increase to currently about 1700 Mh/s over the following 10 days.
No discernible dips, not at switch to 181.5, nowhere else either.
Okay, the current numbers are big enough that a hundred slowish machines or so won't really show up, but then they also won't make much of a difference.
So I guess it was a cluster of TI-84s or simply making impressive-sounding shit up on the fly.

Sorry for the noob question, but how is the 1700 Mh/s number calculated or gathered? I saw my local node's speed in the GUI. Didn't notice a network speed.

Are there also stats for the number of nodes running over the same time period?

The blocks per hour try to remain steady, the difficulty just goes down. Basically he's saying "I made it hard for everyone because my machine(s) were winning every time", now that the machines are shut off, "you all should be winning the blocks everytime".

So the rate remains constant, but everyone should start generating more blocks (perhaps a few per day instead of 1 every 2 weeks like before).

Relatively easy, using block timestamp + difficulty extracted from blocks.dat
for example, take the interval from block #68832 to #68976 (= 144 blocks = nominal 24h time period)
68832 was generated 2010/07/18 07:19
68976 was generated 2010/07/19 02:43
difference is 69862 sec
69862 sec / 144 blocks = ~485 sec/block
at a difficulty of 181.5, on average, a block gets found after roughly 2**32 * 181.5 tries
so ~ 780000M tries/block / 485 sec/block = ~ 1607M tries/sec
these numbers are of course influenced by the "randomness" of finding blocks, but they are a lot better than blind guesses.
If you are statistically inclined you can also calculate standard margin of error, use overlapping ranges to smooth the curve, ...

The network adjusts difficulty every 2016 blocks to get to 6 blocks/hour average, basically factor = (14 * 24 * 60 * 60) / (actual # of seconds taken for the last 2016 blocks); factor = max(0.25, factor);  factor = min(4, factor); new_difficulty = old_diffculty * factor
And, as I said, the total hash rate after he supposedly stopped his nodes went UP.
If things continue like this, on the next iteration we'll end up with a difficulty increase to ~ 230.
Which means then at 1000khash/s you'll generate a block every ~11d10h on average, which comes out to ~ 0.1825BTC/h

Yes relatively easy... LOL!  :-)

Thanks for the explanation, but I'll be taking your word for it from now on!

That's what I was expecting too, but I was using napkin math, glad you took the time to work out the real numbers. Either someone has stopped the search for SETI or Gene Finding to start making Bit Coins or a lot of people have installed the client on their PC and have it churning 24/7 to mine coins. I guess since all the downloads come from sourceforge, I wonder how many downloads have taken place in the last few months? I know I've downloaded the client hundreds of times now to install it  ;D

I second this.  The channel's snr falls to zero when these ppl stumble in, to pose their poorly understood rants on monetary policy and devotion to bitcoin.  Its getting to the point that some people are treating the hashing of a block as some sort of personal achievement, which will make that first trade tantamount to giving up their first born.  Hard to imagine the market taking off with this kind of logic anchoring it in place.

""I ran bitcoin for two weeks and all I got were two roasted balls!" "

FTW

The whole episode seems to have turned out in favor of BitCoin, and not against it :-)

Nenolod apparently has some plans for us and his BitCoins, and I'm curious on what he will do  ;D

Probably establish a game like wow using bitcoins as currency.He mentioned that bitcoins are the perfect virtual money for that type of thing.

He may aswell, just disintegrate that bitcoins. Just for fun.
How many bitcoins does he own now?

No one can disintegrate bitcoins even if it were fun. The only thing you can do is decide NOT to spend them. Whoopee! What a blast!

It really doesn't matter how many coins he is NOT circulating. What's important are the ones which are.

Bitcoins never leave you unlike your wife lol

So, I can't send coins to a random BitCoin address, so they become blocked forever?
And disintegrated for me.
And that will reduce the volume, that is circulating.
And the total volume is limited, curculating or not.
How much value may he collect over time?

Assigning coins to no one, is exactly equivalent to hoarding them. Which is exactly equivalent to losing your wallet keys.
The result is the same. No one will notice or care. If you are having trouble grasping this

No one knows what coins he has. No one is begging him for them because no one needs them. So if he hoards them or loses them it makes no difference.

Now if he were to spend them, he might have some effect on supply and demand. But NOT SPENDING them can have no effect, the lack of his coins is already priced into the market as they say.

Oh, really. And you see no difference in the long run between hoarding of very large quantities of $$ and putting them all of fire?
If you burn 10 teradollars, then you will make America happier, since no one will notice or care, that somebody's federal reserve is printing extra 10 Tdollars.
But if you suddenly buy currencies or securities for all of your hoarded 10Tdollars, I hope everybody know what happens?

This is different with BitCoin, since the system need some coins to operate and their number is limited.
I just was curious about whether someone is able to collect significant amounts of coins.
It seems, that you believe that is not possible, anyway, thanks for your answer and patience dealing with people like me.

I don't have to see it. Mathematically there is no difference.

Coins are not limited. You can trade 1/10 of a coin as easily as you can trade 10 coins.

It is well known that one person has 10% of all existing coins. Most are being "hoarded" because he is developing a new venture that requires the coins as collateral. If his venture were to fail before it started and he were to "burn" his wallet with 10% of all existing bitcoins. NOBODY WOULD NOTICE! Nobody knew he had the coins until he told us. If he had never told us, the math is no different.

If he decided to sell them all at once the market would notice. But nothing happens if someone takes NO action.

Consider the obvious. By definition the bitcoin system has 21,000,000 BTC of value. Currently 3,500,000'ish is available to circulate if it wants to.

That means that 17,500,000 is being hoarded by the BitCoin reserve to be trickled out over time. It makes no difference if it is being hoarded in a bitcoin address or outside a bitcoin address. (In fact I'd have to examine the code to know for sure.)

If all the users decided that trickling the coins out was stupid and we should put a stop to it. It still wouldn't matter. The system would continue to trade with 3,500,000 total coins rather than 21,000,000.

Absolutely no one would notice, EXCEPT those people who wanted to get bitcoins for free. That is a "social" dynamic, not a monetary dynamic.

I can't explain this to you any better.
I can only explain it to you LOUDER.

If you are still unclear on the concepts, you'll have to look to someone else.

A side point, it's now a lot more economical to buy them off the market/members than it is to generate them. So as this month ends, all the server time that was being used will be slowly fazed out (as it has been for 1 week now) and the difficulty still continues to remain high so interest in Bit Coin continues to remain high around the world from what I'm seeing.

In case anyone was curious, the servers were made up of about -330- 64bit ( 8 )-core Xeon processor systems that all ranged from Linux to Windows along with another 20 special systems that ranged from 8 to 64 core systems running various flavors and windows and Linux. After the end of this month, it will just fall back to a half dozen 8-core servers to keep the daemons running for testing and keeping the BitCoin network going of course  ;)

A month of running all of those servers 24/7 produced a lot of coin of course, but it's been a better process just to purchase it (and faster, less maintenance) and now with the difficulty much higher than it was last month, it's more economical just to buy it from the market sites. So unless the difficulty falls back down below single digits, I'll be glad to not have to worry about monitoring that many servers in the future.  ;D

That is pretty awe inspiring!  You didn't assemble all those machines for this project did you?

Were some of them cloud machines (like amazon ecc?)

I'm hoping you'll give some details on your project soon. I've got some anonymous banking ideas if you want to share.

Machines from about a dozen different hosting companies around the US here. Basically, each machine rented for between $19 to 50 a month, so this is the last month for their rental and the next month we won't be renewing the rental. I did try some Amazon cloud machines, but they ended up being nearly the same speed as the other servers we were renting for the price. I could rent a Amazon instance for about a $1 / hour to churn 10,000 khash/s but then I could rent a server from another hosting company for an entire month for $19.99 and it could churn close to 7,000 khash/s so using Amazon didn't make economical sense; an entire day of hashing was the same price as an entire month of hashing at another hosting service.

There were some special machines that were rented from some hosting centers in GA that had a lot of cores and mainly we used idle time (since it was cheaper, it would really burn up the khash at night when the server load was nearly non-existent)

And then course, just go out and buy the Bit Coin through the market place and members here  ;) (thanks to everyone willing to part with their BTC for USD)

Overall, the server farms only churned out about 1/3 of the total, the other 2/3 was bought over the last few months from members and the market websites. Some members here even gave me a large chunk at no cost simply because they were early adopters and didn't know what else to do with large amounts they had generated early on. So it paid off for me to try and contact all the early adopters of Bit Coin.

That's very fascinating insight,  knightmb.  Some incredible machines on-tap.    I have been doing a lot of btc-per-energy calculations, but outright renting cores for off-peak khash is taking it to the next level.

At the current difficulty level, I've stopped all coin generation on machines where I pay for power or cooling.  Even the highest-end i7 machines had enough of a delta between idle/light-load and full steam that it was not worth the marginal cost.  Not by a longshot.

Recovering bulk coins from the dusty wallets of early adopters is very clever.  :)

Same for me, I had a set budget by the investors and doing another month of servers at the current difficulty just isn't economical anymore when I can buy it from the market/members here for much less now. On top of that, the amount gathered should be more than enough to start with. If things take off, then it just means everyone's BTC will be worth more since I'll have to raid all the market sites again.  ;D

Considering the size you are interested in how are you guessing what price you will have to pay? The markets are thin compared to what you want you may drive the price considerably.

I don't mean to imply you haven't considered this, you sound like you've got it together, I'm just interested in your thoughts.

Now i know why my last lot of bitcoin sales went through so fast!

 :D

Yeah, I noticed a lot of those sales were going to the same e-mail address over and over  ;)

So..., any news about Nenolod's plan to "destroy" bitcoin ?

http://xwalck.se/j/img/threadrevival.jpg
Holy thread revival, Batman!

LOL! Why don't you let me list the pictures you have in your website? I am sure there are more awesome ones! :D

(:=~~~

Looking back at ArtForz's analysis of Nenolod's action (earlier in this thread (http://bitcointalk.org/index.php?topic=431.msg5593#msg5593)), I was amused to read that when the Slashdot article was published the total generating capacity of the entire Bitcoin network was 200 MHash/sec. That's one-third of what a single 5970 GPU card will do now.

http://imgs.xkcd.com/comics/duty_calls.png

I think it is safe to declare that Nenolod was wrong.  Case closed.  Or else, you will never get any sleep.

I put forward a motion to close this thread.  Does anyone second?

seconded. :)

No need to close a thread. Just stop bumping it. If people wish to talk, then let them.

If I recall correctly, he wasn't trying to destroy bitcoin, he wanted to use it as the currency for a mmorpg or something like that. Probably lost interest and sold his coins.