Thinking about Bitcoin, a couple points came to my mind that I find funny-

In the 1960s, Government research birthed Arpanet, evolved to the modern Internet as we know it now

In 2001, the NSA released standards for the SHA-256 cryptographic protocol

In 2009, Bitcoin was given to the world.


So, thank the US Government for giving us the tools to destroy thier own currency system someday

The exchange problem is the real issue, and really the only reason Bitcoin has been hurt so far. Decentralized currency doesn't mean much if it is all routed through a lone, very attack-able exchange that alters the price instantly because 80% of the traffic runs through it.

It seems this may be the one part of Bitcoin that should have been built into it somehow, though it seems there will always be a need for singular exchanges.

It seems a better solution is provide an open source exchange platform. I know if Intersango, though it seems like there is ample room for another one that isn't such a pain in the ass to set up. Just like mining is diversified, exchanges must also be this way.

Make sure to back them up somewhere before you do anything 

The Bitcoin protocol itself has never been hacked, because you would need a quantum computer from the future to do it.

Exchanges get hacked however, but that's not the fault of Bitcoin, its the fault of their operators for having insufficient security and redundancy. One of the big ones was burned because someone was stupid enough to be tricked into giving the hacker their admin creds over the phone...

ASIC costs literally millions of dollars to develop, I wish you the best of luck though you will have a pretty long road to get there.

ASIC for Scrypt can be done, but it is so expensive to produce up front there is no way we'll see them for Litecoin anytime soon. It is likely Litecoin and others will follow a similar hardware path to Bitcoin from CPU<GPU<FPGA<ASIC< ?, so we are now at the FPGA stage

So PLEASE stop (everyone) sa

Oh for...

http://www.howstuffworks.com/ponzi-scheme.htm

Ponzi schemes originate at a source entity, where the money train flows to in a branched structure to the top with money flowing upward. Bitcoin has no such authority, and no such entity to eventually cash out the whole system and run. Bitcoin's decentralized nature makes that pretty much impossible.

So please, everyone, stop saying BTC is a ponzi scheme, especially if you don't even know how an actual Ponzi scheme works. The original scammer Mr. Ponzi died penniless and alone.


Bitcoin works because:

Only 21 Million will be minted, ever. As coins are lost it makes the rest appreciate in value automatically. So essentially if you have a BTC savings left to appreciate, it acts just like a bank savings account that gives you interest back. Though spending coin would also appreciate all the same as they get rarer. So it is better than the current cash system in that regard as a native feature. That 21 Million can be divided among 100 Million Satoshis (.0000001 of a Bitcoin), and more can be added to further divide later if needed as it is built into the code to allow for that. One good analogy I heard is think of a Bitcoin =  1 US Economy, where that total economy is broken down into dollars, and then into cents to divide the spending. Bitcoin simply does this much more elegantly than cash could ever hope to. Even if in the end there was only a single Bitcoin left on Earth, the entire economy could still be based on it by this division, so it is deflationary and has a backed "gold standard" but designed to not matter in terms of wealth distribution, which is the real genius behind the protocol.

It eliminates the need to go away from a hard backed standard, or create any new Bitcoins, because the theory is we can never "run out" of Bitcoins on the basis we can just keep dividing them up indefinitely. To do that with physical currency, we would need to mint entirely new coins that are smaller in denomination than the current ones to shift the growing spending power to smaller pieces, however this cannot work with USD because it is ever inflationary, which means spending power is going down, not up. Obviously this only generates a lot of work and materials to mint a new set of coins. Bitcoin is digital, these in the end are just a string of numbers to it like any other, so it is very easy to do.

As USD is inflationary, the opposite might occur, as spending power is lost, someday the Dollar bill might become the new penny and change will be eliminated altogether because their spending power is so minuscule it would cost more than they are worth to mint them (the Penny already has this problem, each takes 2.41 cents to create, and they are only "worth" a penny still.) Obviously if your money costs more to make than it spends, eventually you would go bankrupt minting them. Metal money is also victim to the metals trade as well. Bitcoin has no such problem with currency generation.

It gives you incentive to maintain a savings because that savings is ever appreciating, opposed to spending money you don't have like we do today because we can just print more paper money (based on no back at all) to pay the debt, a practice that has fundamentally and actually totally screwed our current financial model now. Fixing the debt problem is going back to a standard where you can only spend what you earn, which Bitcoin can accomplish. We'd be back to a 1950s kind of economy in a way.

The hard back ensures that we don't have the same currency problems we have today, which now involves our governments steadily devaluating our money by simply making more that isnt based on a damn thing to pay a never ending and increasing debt. It will all fail because the debt is bigger than the total currency we have available to fill it.

I hate to say it, but everything in your post is fundamentally wrong, and it sounds like you're understanding of Bitcoin is limited. The current laws of economics does not apply here, because Bitcoin is not your average customer when it comes to currency. Old world thinking does not apply to it at all. I don't mean to antagonize, but ill informed posts like these only add to the existing pool of misconceptions which confuses people already.




You obviously don't know anything about mining, or computers/networking for that matter, as you spent your time studying economics instead   . The design of Bitcoin is built to scale naturally to network power, and also self correct as power is added or removed from the available pool of total mining hashpower to keep the coins flowing at an even rate. Transactions vs bandwidth is an invalid measure, mining (really, transaction processing) is not using a finite pool of "bandwidth", it is all about raw processing power to crunch the cryptography algorithms for forward and backward authentication. The more power there is, the harder it is to mine a whole block of coins.

Bitcoin also is divisible by a magnitude larger than fiat currency. The Winklevii have 1%, even if they held it indefinitely, it would only make the rest more valuable, and divided further down to compensate. BTC needs the support of big Bitcoin spenders, that is $11 Million that now belongs to Bitcoin instead of the United States government.


That is a good thing, because it enables more average hobbyists to add power to the network and reap a small reward for it. True, make sure you can trust your pools. Though soon with the arrival of ASIC mining units, these little GPU miners will be obsolete with the vast rise in difficulty, even a 2 GHash/s machine will have a much harder time mining, even in a pooled scenario, and the miner stands to make little profit if any after system overhead is considered. Miners must amp up the hardware to compete, turning it into a new cottage industry on its own. Mining is going pro, there will be no shortage of network power coming online in the coming months.





The Dollar is the primary form of laundering today as it always has been, what is the difference if it is Bitcoin instead? It is an invalid point. No one called to ban cash because it happens to be used to buy illegal things (which are only illegal because of the government). Those that call on that point means there isnt anything else bad about Bitcoin they can speak about.

The Government would have to ban the entire internet to stop Bitcoin (I dont put it past them to try), being a freely distributed application that lives on 1000's of computers all over the world. By the time they are done making the first draft of some vague SOPA like bill against Bitcoin it will be far to late to stop it now. Fighting it would just push it underground much like BitTorrent did. After millions of dollars and armies of lawyers, P2P sharing is still alive and well. They cannot attack the core system, they can only attack individuals at the fringe and they cant prosecute all of us.

Bitcoin does not have accounts, it has addresses (aside online wallet's or exchange accounts, about as close to a Bitcoin account you can have). You can use a unique address if you want to for every transaction you make, making it very difficult forensically to track where the payment came from, or from whom. e-Drugdealers already do this unless they are complete idiots (and most are), they only get busted for the same reason they get busted in the real world, because they were careless in other aspects of their business (insecure communications, for example). Bitcoin simply removed the hassle of paying criminals with traceable money and opening their trade to the whole world instead of just their own neighborhood. Overall it changes nothing, it's not like the DEA ha been anywhere near close to winning their ridiculous, expensive, and ultimately useless War on Drugs that we taxpayers must burden (and considering the CIA runs drugs to fund black ops, (they got caught red handed in the 80s) so the DEA is fighting the CIA...and we pay for it). If it is bought with BTC instead of cash, it makes no difference.


Bitcoin's currency supply cannot simply triple by law of the system. The supply is governed by the mining process to only put so many into the system over time. Today you get 25 BTC for mining a whole block, when it reaches the next limit, this will go down by half while total network hashpower goes up as well as overall difficulty in calculating the equations, making each coin harder and harder to mine and ride a logarithmic scale to zero coins per block mined when it hits the max 21 Million. When there are no more coins to mine, these machines will collect transaction fees instead as the network must still process transaction authentication after the last coin is minted sometime in 2140.

Bitcoin has never once crashed to zero, even this latest dip recovered into the $100 range, which was needed to blow off some steam so the price keeps going up overall, which it only has over the whole history of BTC. Transaction volume is only going up despite the USD price. People are way to concerned with the exchange and not the other stats that actually matter, which is use and transactions going up showing adoption by users and businesses alike. 1 Bitcoin is always a Bitcoin, the only variable is its spending power.

BTC is only acting like a "gold" type commodity is because it is new and has speculators foaming at the mouth as a simple investment, and they are gaining value rapidly. However unlike gold, you can spend Bitcoins as well. Unless someone knows a shop you can pay for things with gold bars, though I doubt they would argue if you did  

In a way that is the beauty of the system, is that over time coins will be lost, as they become more rare their buying and trading power increases. If Bitcoin was the only defacto currency in the future, it still appreciates even after every coin has been mined because the supply will naturally decrease (backup that wallet!), but thanks to BTC using an 8 decimal system which could later be expanded if needed dividing the currency further as it increases with value is accounted for indefinitely. If it gets big enough, we might need a smaller denomination than the Satoshi. Bitcoin can be split and reconfigured endlessly which fiat cannot do. 21 Million Bitcoins is 100 Million Satoshies, 1 Satoshi is .0000001 of a whole Bitcoin, and smaller denominations can be created by moving the decimal over a place to divide it further. This is why even with the Winklevii holding a lot of BTC at the moment doesn't really matter.

Because 21 Million (there will already be less than this total because coins have already been lost) will only ever exist, those that do exist get more valuable, but it is easy to divide their spending power further and further. I've read that if the entire worlds market cap was in BTC was converted right this second, each full coin would be worth around $3 Million in spending power, making a Satoshi around $.03 each. If another division was added, the new denomination (we'll call Operatrs to stroke my vanity) would be worth around $.003. And on and on. Seems we wont need any more than Satoshis though, but obviously it is difficult to speculate that far ahead in time. It allows for a very fine tuning when it comes to pricing products.


Bitcoin is an open standard, you literally could create your own version. Others already have that differ from Bitcoin to fill a certain purpose.

BTC won't collapse in a final flame like that I dont think. It could certainly perish someday, as we really dont know what happens next. This has never been tried before ever, every day is a new day. The only way for Bitcoin to die is if everyone stops using it. Again, old world economics don't apply here. Bitcoin also has something no other currency has right now: believers. These are the ones who don't give a good god damn about the current exchange rate, but simply believe it is the future.


I look forward to maybe mining CryptoDollars someday  


Again I'm not trying to be an ass, I simply found your post to be more imaginary than factual. Bitcoin is rewriting money from the ground up, we must rewrite economics along with it as it doesn't work like any fiat currency.

Regardless, who really knows where it goes from here.

It has nothing to do with the protocol itself though, ultimately the exchange rate is not a good indicator of the health of the system. It is true there are ways to manipulate it now simply because it so young. Hackers put the exchanges through the ringer to drop the price, then buy, let it grow and cash out, then do it again. If MTGox didn't carry 80% of transaction traffic this would be much harder to do. But that 80% is why they keep attacking it and not others so much. The network will only grow more resilient with time, not less.

http://www.blockchain.info

Look at the charts, despite the fluctuations overall use is increasing.

Bitcoin is also linked to fiat, so it will fluctuate when things occur in the real world. Cyprus was one example of this happening, when Bitcoin suddenly found itself with a lot of new users, added boost from the media and speculators, demand was so great it actually knocked MTGox offline. Bitcoin only stuttered because the network couldn't handle the sudden and large volume, not  a selloff due to loss of confidence in the currency, though many did pull out as indicated by the severe 50% drop in market cap.

This is just the first true stress test, and now we know of a weakness that needs to be fixed to move forward, which is exchanges need to be more diversified. Remember that the original core group 3 years ago began this as a hobbyist experiment for cryptography and tech geeks, but now we all need to grow up with Bitcoin as it ventures to garage project to real business, and the powerful infrastructure needed to go along with it for system security and redundancy. I imagine MTGox is not a professional IT operation, since it obviously has no redundancy built in to mitigate problems if something goes wrong.

Bitcoin is treading toward mainstream, I think this the beginning and the first showing to the pubic of Bitcoin's fluid power. Even as a curiosity the public wants to know more about this now that it is in the eyes of the media.

I look forward to the exchange jumping to $500 next push.

Just stop it with the Tuplip Mania crap, it is not even the same thing even slightly.

Tulips were not a brand new untried technology in the time that occurred and really was investor stupidity and mania. Tulips were not used as a currency. There was a certain mania here, but the price right now reflects who stayed. BTC has not crashed.

Im also keeping in mind that there are external forces at work on Bitcoin, the fluctuations are due to the rise in use and additional outside fiat being converted into BTC, plus new media hype simply a lot of desperate people out there looking to get ahead, and BTC is red hot. Some by long term investors, some by get rich quick people, as in any market. There has been no failure of the protocol or the community drive to see it succeed.

I look forward to the next rise to $500

I feel the same way, a lot of people are very short-term minded when it comes to this. "It didnt make me a millionaire overnight!" Well, this isn't a lottery and it is a crappy analogy for what Bitcoin really is. This mini-pop was the first instance of true stress testing, and we found the weaknesses in the system to improve upon until the next wave. There is also an important distiction that the cause of the crash was literally Bitcoins own popularity as people scrambed to trade and get MTGOX accounts, and the trade engine crashed, sending the stock trader wannabes scrambling. The rest of us know this is just the beginning, over the long term those who stay invested will reap the real benefits later on, and also keep the system alive. Bitcoins only true failure comes when we stop using it.

Done and done, we don't need this breed of crap on the forums

And that is totally true, seen plenty of ITX  Lanparty rigs out there with graphics cards bigger than the motherboard itself. They are tiny but still support usually one full PCIE x16 device.  Though for economies sake one would limit himself quite severely, given crypto-currency growth you will need to keep adding more power to make it worth your while. I would have gone with a full system and a motherboard that supports at least 4x PCIE x16 slots so you can keep adding cards over time.

The only thing fighting Bitcoin would get them is increased Bitcoin use from all the publicity, as there is nothing about Bitcoin not to like, unless you are a dirty bank with something to lose, like control of currency.

Just like BitTorrent, the attacks against it only pushed it further underground, for 10 years and millions of dollars later in lawsuits and their armies of copyright lawyers, P2P file sharing with the BitTorrent protocol is still alive and well as it always has been.

The government is too slow to do anything about it. By the time they manage to pass any anti-crypto-currency motions Bitcoin will be on the verge of crushing the Dollar and Euro, or so I hope anyway.

They can do nothing to attack the core of an open source platform, the only thing they could do is go after exchanges and end users, both of which are difficult to do. The only way Bitcoin ends is when everyone stops using it.

That aside, our governments and banks are worried about a much larger mess right now, Bitcoin is something so far I think they have been cautious to mention for fear of helping it spread more, even sparking outrage at their efforts to undermine it. Not their greatest worry, for now.

They can confiscate my wallet when they pry it out of my cold, dead computer, which they will need to step over my corpse to get to.

Ok, antibanker, why dont you do some research before flaming your hate-speech and general asshatery before you start, the Rothchilds originated in Britain, you incredible twat

http://en.wikipedia.org/wiki/Rothschild_banking_family_of_England

Would someone ban this human waste already?

http://www.mtgox.com

Well...this isn't promising, what is going on over there?

I would kill for a good Bitcoin Wordpress shopping solution.

It would be nice to be able to manage several currencies with the same client instead of having to run separate wallets for each one. Though, maybe the price we pay for hedging our bets on several cryptos coming to prominence beyond just Bitcoin. Just have to put up with that element to play in everyone's sandbox.

On the long term it is better to mine. Why spend $700 when you are not sure how much they will be at any given time, you could get a bad deal or a good one just as easily. Build a cheap mining rig and reap essentially free (aside power and hardware cost) coin forever, which is immune to what the current exchange rate is because no matter what 1 BTC/LTC is still just that regardless of how much they are worth in fiatworld at the time. Id rather have a miner someday pulling in BTC out of the air when they are worth much more than they are now then simply buying a few coins. Mining is ongoing, a one time purchase of BTC won't generate you any more coins after that unless you like playing the markets.

(which really shouldn't matter to you if you are a driver of this tech and not just some hot shot Wall Bankster parasite in it to make a quick buck and then deride the whole system because it didn't make you an overnight millionaire. If you are one of those, we don't serve your kind here, the droids will have to wait outside)

Plus mining is good for expanding and securing the network at large, so there is that too.

Oh yeah? What are big banks doing then? Go spread your filth elsewhere