The blog post that you referred to, located here, http://falkvinge.net/2011/05/29/why-im-putting-all-my-savings-into-bitcoin/ referred to a more mainstream article here, written in sweedish. http://svt.se/2.22584/1.2439316/ny_piratvaluta_kan_hota_finanssystemen



Here's the Google Translation, which contains some classic translation bloopers:

http://translate.google.com/translate?js=n&prev=_t&hl=en&ie=UTF-8&layout=2&eotf=1&sl=sv&tl=en&u=http%3A%2F%2Fsvt.se%2F2.22584%2F1.2439316%2Fny_piratvaluta_kan_hota_finanssystemen

1. Headline:  "New counterfeit currency may threaten financial systems"
2. "You could say that the currency is backed by people's distrust of governments, "says Rick Falk Vinge to SVT. There is no government that can blow you to save the state economy."   (haha!  maybe THAT is the "Headline")

There are several non-profit organizations that are collecting and spending funds for lake improvement, and there have been several studies done to try to figure out the best course of action.  And the state has some funds directed at the effort.

My Bitcoin idea is to raise money and hand the money to one or two of the organizations that have studied the problem.  I'm not pretending to be the expert on the correct solution. Rather, I am trusting the people who have already spent thousands of dollars studying the problem.  I would just act as the public figure of the Bitcoin community, handing over the giant symbolic Bitcoin to the organization.  That would be cool.   

Here's one of the organization's solutions page:  http://www.lakeimprovement.com/sites/default/files/edseries/solutions/solutions.html .  As you can see, they have some solutions including both clean-up and prevention.  Everything costs a lot of money, of course.

But I DO think the idea of trying to get a local community to rally around Bitcoins as a solution to THEIR problem would be pretty cool.  There are a lot of local business people whose livelihood is threatened because of the dramatic drop in tourism.

I didn't mean to trivialize how tough it would be to compete against Mt Gox.  When I made the comment, I was thinking more about how easy "technically" it would be to program an exchange.  Surely a similar program to Mt Gox's could be written for thousands of dollars.

It's the trust thing that Mt Gox has over the other exchanges, and how easy they made it to conduct transactions.  From a US-centric perspective, I'd think that if Charles Schwab or eTrade set up an exchange, with escrow, and easy money transfers to and from your current account, they could easily pick up that kind of money (37K/month and growing).

The beauty of a decentralized currency is that if you think MtGox is too expensive, you are free to perform deals without the middle man.  I can buy and sell Bitcoins to my family and friends, with no fee whatsoever. 

The bid/ask spread is a little high right now, but the .65% transaction fee seems pretty cheap.  But as zillions of Bitcoins change hands, if that .65% fee proves to be too expensive, then someone will step in and offer a competing service for half the price.

FYI, the 30 day transaction history shows that $5.7 Million transactions took place.  So the Mt Gox owner pocketed $37,000 last MONTH for this valuable service (less costs, of course).  Not bad for a side project, and if you are looking to make a few bucks on Bitcoins, set up a competing exchange with half the fees!  It can't be that tough!

Gavin,
I'm trying to understand your usage of default.error_messages (first line in the snippet), vs. self.error_messages (last line in the snippet, above),  in your code.
Does Django somehow link those two together?  Or is that a bug in the code?  (I'm sure this code has been tested a lot since October!)

Seems to me that you should be using the same dictionary in both places.

I actually had a similar idea.  The project that I was thinking of mentioning was one that is trying to the save largest inland lake in Ohio.  It's a dying lake thanks to algae and farm run-off, and it's killing the local economy.  It's going to cost a lot of money to fix the lake - millions of dollars.  Maybe a Bitcoin effort can save a lake, and get the local cities using Bitcoins at the same time!  I know it's not a "tech project" which might be more like what you were thinking, but it could benefit Bitcoin simply through the press and awareness campaign.


I was thinking of a plan like this:

1.  Raise a bunch of Bitcoins for lake restoration through the generous donations of the Bitcoin community - from an international community of donors.

2.  Have a press release - a big announcement - donating the funds in Bitcoins to one or two of the non-profit organizations that are trying to save the lake.  (Picture a photo-op press conference where someone hands a giant "bitcoin Check" to the head of the Lake Restoration committee or the mayor.)

3.  Perhaps this could lead to a greater effort to "Save the Lake with Bitcoins" where local businesses (who are dependent on the lake and tourism) might accept Bitcoins for transactions, and commit to donating 1% of their transactions to Lake Improvement.  Donating 1% of their transactions to Lake Improvement, rather than donating 2.5% to Visa/Mastercard seems like a no brainer.  Many of these businesses will fail without the lake tourism.


The two primary lake cities of Celina Ohio (population  10,300) and St. Marys Ohio (pop 8,300) are small enough that they could get Bitcoins going in the local economy.  It might take some Bitbills to make it work, but could you imagine a CITY using Bitcoins?  That would create quite a buzz!  And being within short driving distance (100 Miles) of some much larger cities (Columbus, Dayton, Cincinnati), it might actually create a stir that gets attention to Bitcoin and saves the lake.  The lake is in the center of a circle of 150 mile radius that touches some major US cities:  Chicago, Detroit, Indianapolis, Cleveland.


If we could raise even 10,000 BTC for something like this, it would get so much positive press, it would be amazing.  And with two rival cities on the lake, it might just spur a competition as to who can raise the most money through Bitcoin acceptance (after the donation).  10,000 BTC is a donation of 1 BTC from each member of this forum.
 

Bottom line - I think a GEOGRAPHIC based fund raiser - something like this - would make a lot of sense, and actually benefit the Bitcoin community in the long run.  If you can do good, AND make a big press release, AND get more people using Bitcoin (in the local economy), that seems like a winning formula.



At the risk of my reputation, I'll volunteer to lead this, if you guys think it might work.  (It'll be embarrassing if I only end up collecting .7 BTC or something.)  
Now you guys don't know me from Adam, and you might be reluctant to donate to a project thinking it's a scam.   But I'll be glad to tell you all about me, or do what I can do earn your confidence.  And you'll be able to WATCH the transactions in BlockExplorer.

This post is getting kind of long, so I'll give you a donation address, and end with links and stuff.

Donations for Save Grand Lake can be made via me:
1D1MC9fYjvhH3vw89vSEiQpBp1uf2T7X9s


Here's an article describing the situation.  (You can find many more in Google)
http://www.dispatch.com/live/content/local_news/stories/2011/05/21/toxic-algaes-return-a-blow-to-businesses.html?sid=101


If you want to make a contingent donation (Like "I like the idea, but I don't want to be the only person to donate, so here's 5 BTC, but I want it back if you don't get 1000 BTC or more by July 1, 2011."), I am totally fine with that.  But you have to tell me BEFORE you send the money (since anyone can see the transaction and claim that they made it.)  Send me such stipulations in emails to jerfelix on Hotmail - I'll need to know the sending address and the BTC amount so I can watch for the transaction.


http://en.wikipedia.org/wiki/Grand_Lake_St._Marys_State_Park  The Wikipedia page has some info about the lake issues.

Donations for Save Grand Lake can be made via me:
1D1MC9fYjvhH3vw89vSEiQpBp1uf2T7X9s

What do you guys think?  Not exactly an "Angel" investment in a company, but it might actually benefit Bitcoin.  Didn't mean to hijack the thread!

I disagree, and it has been discussed and rehashed many times.

The assumption that you are posing is backwards.  It's not the cost of electricity that determines the value of Bitcoin, it's the value of Bitcoin vs. the cost of electricity that determines whether people will find it economically beneficial to run the verification program (i.e. Mining).

As people find new sources of energy, and lower cost computational capabilities, it becomes more economically beneficial to perform mining.  So more people will mine until it's not really all that beneficial due to competition.  And more miners (i.e. verifiers) means that the system is stronger, not weaker.

While I'm alive, it will never go that low.

Contest parameters:
- The winner will be the most creative, believable, and well written.
- You are allowed to plagiarize.


This is a "no brainer".   All I need to do is to come up with Bitcoin related text that can convince tens of thousands of people to spend their hard-earned money on a promise of riches, with no track-record of results.

I respectfully submit the document that can be found at this link:
http://www.bitcoin.org/bitcoin.pdf

Creative, believable, and well written.

Please send my winnings to the address below.

You're nuts!
That's where someone will kick you.

I'll try to explain by examples.  Here are several transactions.

1.  Someone who mined 50 bitcoins exactly one year ago spends them.
2.  Someone who mined 50 bitcoins yesterday at this time spends them.
3.  Someone given 50 bitcoins today spends them 12 hours later.
4.  Someone moves 50 bitcoins from one wallet to another (but they own both)

In case 1, you can examine the block and see that the last time this particular money was touched was 1 year ago.  So that's 50 coins, times 365 days that have been "hoarded", but now are spent.  So that's 50x365 => 18,250 Bitcoin-days destroyed.  That's good.

In case 2, the coins weren't hoarded as long.  50 Bitcoin-days destroyed.

Case 3 might be the "same coins" as case 1 or 2, only they circulated again.  But since they recently circulated, it's not nearly as good as 1, and only half as good as case 2.  25 Bitcoin-days destroyed.

Case 4 is the odd case, because money didn't really change hands, but you can't tell that.  It still counts as "circulated".  In one sense, it's an indication that the bitcoins haven't been lost, so it's a good metric.  On the other hand, moving money from one pocket to another really isn't a good measure of economic activity!


Does that help?

GRrrrrrrr.

I'm working hard on this, and the payment gets cut by 97.5% just before I publish?
That is extremely frustrating!
Rats.

I had seen several articles on Slashdot, and sort of ignored them.  It sounded to me like a geek game - mining sounded like geeks racing to see who could win the race and capture the worthless coinage as a prize.  It vaguely sounded like Pokemon cards of a decade ago, where people who had them talked about how you had to get them because they were only going up in value.

A couple of weeks ago, my son (age 21) said "have you heard about bitcoins?  You have to check them out."
I've learned that when my son says something like that, it's worth my time to investigate.

(He's a big reddit fan, so that's probably where he heard of it.)

Since then I've told at least twelve people, who tend to look to me to spot early trends, and then often laugh at me when I say something is going to be big.  (one guys says "I still remember you describing Twitter to me years ago, and I thought there was NO WAY this would catch on, so now I listen to you.")

Is this different from or better than what you can see on http://bitcoincharts.com/markets/mtgoxUSD.html ?

(see chart lower right)

+100 
(which is the same thing as old +1)


You are essentially describing what happens with a stock split.
"What do you mean, a bitcoin is worth 100 times less?" 
"It's ok Mom, you have 100 times as many now."

Don't insult him!  He actually has 250,000.01 !

http://bitcoinreport.blogspot.com/2011/03/bitcoin-top-100-rich-list-20th-march_20.html

A similar concept was proposed in 1992, in a paper titled "Pricing via Processing or Combating Junk Mail".  It eventually evolved into a system called Hashcash (http://en.wikipedia.org/wiki/Hashcash ), where users had to do some "proof of work" to send email.  Since the proof of work took some time (and cost), it was thought that it would slow down spammers (and make it expensive).

As others have pointed out, there are a number of problems with this system. Two are that it penalizes legitimate bulk lists, and spammers have bot networks.

Interestingly, though, the concept of "proof of work" algorithms is precisely what enables Bitcoin to work.


So you are proposing a system similar to one that led to the invention of Bitcoin in the first place!  Pretty cool that you came to that conclusion.

I didn't invent the Bitcoin-days-destroyed metric, someone else did.  I was just trying to interpret it.
My addition was to make it a cumulative value.  All I did was take the spreadsheet that other people produced, and summed it up, and calculated a percentage off of the total Bitcoins in circulation since the beginning of time. 

Regarding a bubble - that's my interpretation.  I could be wrong, but it seem like when people start hoarding, that will cause prices of Bitcoins to go up irrationally, bubble-style.  And the Cumulative Bitcoin Days Destroyed metric seems like a decent metric to determine the level of hoarding.


Your concern is definitely a limitation of the metric. 

Another interesting consideration is this:  Since the spending algorithm always favors spending smaller "denominations" first (if I understand it correctly), this means that as the old-timers who are active in the system will generally be spending "new money" until they get some coins in big chunks.  For example, an old miner has a bunch of 50 BTC units in his wallet, from his mining success.  And as long as he has tiny units (1 BTC, 5 BTC, etc), the old mined 50 BTC units never get spent.  But if he gets a large chunk of money that's been actively circulating, say 100 BTC, then this will be hoarded in his account until he spends all his 50's.

So I think cumulative bitcoin days destroyed is a pretty decent metric, but certainly not perfect.

Basically, the system is currently creating about 6.3 Million Bitcoin days every day.  In layman's terms, that means that each day that goes by, the 6.3 Million bitcoins could have been hoarded for another day.   If a hoarder cashes in some of their "stash", then they "destroy" Bitcoin Days.  Destruction of BitCoin Days is a healthy thing.  It is a measure of circulation.

To date, there have been approximately 27.3 Billion Bitcoin days created.  And about 2.2% of those have been destroyed.  This figure has been rising steadily.  (See my post that I linked to, above).  Since this is RISING, this means that more and more bitcoins are being circulated - a very good thing for the future prospects of Bitcoins.

If you are a speculator, you'd be wise to keep an eye on that "cumulative Bitcoin Days Destroyed" figure.   If it begins going down, that means that less bitcoins are being circulated, and more are being hoarded.  That's the sign of a bubble forming.  (This may be hard to believe, but we're not in a bubble now - the cumulative bitcoin days destroyed is increasing, meaning there's more spending and less hoarding than there has been in the past!  This is a VERY good sign for the long-term viability of Bitcoins.)

If cumulative Bitcoin Days Destroyed begins to go down, that's an indication that people are "over-hoarding".

I noticed that in BTC, all those other currencies are fluctuating wildly.  The Bitcoin is the ONLY one that's stable, relative to the BTC.