There is only $45 Million dollars worth of Bitcoins in the world.  If you think you are "late to the game" and also there's some "incredible wealth" out there, I think you are mistaken.

There are 11,000 people registered in this forum.  Probably most are like me, with just a little bit of Bitcoin.  Some registered users probably have none, but on the contrary some bitcoin holders probably aren't registered in the forum.

The first 960 participants registered prior to 11/1/2010.  Back then there were about 4 Million bitcoins issued (so a current value of about $28 M).  Even if 280 of them split the 28M, that's only an average of $100K each.  Not exactly "incredible wealth".  Or even if only one person has the vast majority of coins issued prior to 11/1/2010, that's only one person getting very rich ($28 Million).
 
I suspect that you could apply the 80/20 rule.  20% of the 11,000 own 80% of the current $45M wealth.  Splitting $36M over 2200 people won't exactly make them all rich.  That's $16K a person.   Maybe the top 20% own 80% of that wealth.  So 440 people split $28M.  That's 64K per person, for 440 people.  Still no incredible wealth.  And if you apply 80/20 one more time, you have 88 people splitting $22M.  That's 88 people getting $250K each.  Still not a lot of money, but respectable.   And 80/20 one more time gets you to 18 people splitting $18M.   So it made 18 millionaires. 

18 millionaires seems about right.  And that's if they didn't dump their bitcoin when the value quadrupled, the first time, or the second time, or the third time.


Besides, there is SOooooo much money and opportunity in other services, and there are soooo many more people that still need to be introduced to Bitcoin.  You are hardly late to the game!

The shortest number of paths would be approximately log( N )/log( 8 ).  So about 5.2 hops for 50,000 nodes of which each are connected to 8 non-repeating nodes.  I talk to 8, they talk to 64, they talk to 512, they talk to 4096, and they talk to 32,768, and 20% of them talk to the rest.

But with a mesh network, there would be a lot of overlap (I talk to a peer, who talks to a peer, who talks back to me, for instance).  There's probably a formula, and it's probabilistic, probably.  

I'd guess it's would average around 2x the above figure, so 10.4 hops. to reach everybody, on average, in a 50,000 node mesh network.


PS, the math is:
8 ^ X = N
log ( 8 ^ X ) = log ( N )
X log ( 8 ) = log ( N )
X = log ( N ) / log ( 8 )

My point was not to encourage regulation - that was your addition, I think.  My point was along the lines of your last sentence. 

If you are making buy decisions by looking at the buy order log, keep in mind that those buy orders could be an attempt to fool you, and can be cancelled at any time.  They could be an attempt to signal to the masses that there is a demand that really isn't there (because the orders could be cancelled).  They could be an attempt to show support, so that a sell order can get a maximum value.  Be Effing Careful.


You're right there.  My price target on Bitcoins is $147 per BTC. 
So if I buy it for $6 or $7, who cares about a buck!

Hey, I'm up to 5.19 BTC just from people's generosity. Once I get 1000 BTC, I'll explain my $147/BTC math, which is sure to drive the price up.     Yeah, I move markets, haha.

I'm trying to buy some Bitcoins, but it's still very hard!

How's this?

Your story tonight regarding Bitcoins was interesting and informative.

I wanted to clarify something though.  While Bitcoins are designed for anonymity, to say that there is "no record of the transactions" is just plain wrong.  In fact, *every* Bitcoin transaction since the beginning of time is recorded, and currently passed to *every* Bitcoin user that uses the current software.  The Peer-to-Peer software passes the transaction log to every user, and that's how the system works to prevent fraud!

The part that is anonymous is that the user's name and IP address are not recorded.  But the path of Bitcoins can be tracked forever.  I can use the site called http://blockexplorer.com/ to view every Bitcoin that was ever spent, and see the path from one user to another.  I cannot identify those users by name (unless I happened to have transacted with the user, and he or she happened to give me the same ID as he or she gave to someone else - which is not recommended).  But clearly there is a record of every transaction.

The other item that was a bit of a disappointment was how All Things Considered focused on the potential illegal uses of Bitcoin.  If you were doing a story on the Dollar currency or the Euro, would you focus on that?  Remember, Bitcoins are like cash that you can push through a wire from person to person.  Dollar Bills can be used by criminals, and they are every day. 

The story here isn't that criminals have another currency.  The story is that now EVERYONE can accept cash over the internet without fees. 

Are you organizing a group gift for your boss in another state?  Send an email out to your co-workers with your Bitcoin address, and each person can contribute to you electronically.   THAT is the story.  How did you miss it?

But dropping the transaction penalizes the recipient, not the sender, right?  It's bad enough that the second recipient gets screwed out of the bitcoins.  Why would you want to double the amount of innocent victims, by also penalizing the first recipient?

I think you are trying to hurt the sender by locking up the coins, but I'm not sure your proposal achieves that.

(then again, I'm still a newbie, so pardon my ignorance, if I'm wrong!)

Actually, in stock markets, you CAN get fined for the behavior that I described in my first post.  Such market manipulation is regulated.

I could be wrong, but here's my source for this information:
http://www.lrb.co.uk/v33/n10/donald-mackenzie/how-to-make-money-in-microseconds

A spoofer might, for instance, buy a block of shares and then issue a large number of buy orders for the same shares at prices just fractions below the current market price. Other algorithms and human traders would then see far more orders to buy the shares in question than orders to sell them, and be likely to conclude that their price was going to rise. They might then buy the shares themselves, causing the price to rise. When it did so, the spoofer would cancel its buy orders and sell the shares it held at a profit. It’s very hard to determine just how much of this kind of thing goes on, but it certainly happens. In October 2008, for example, the London Stock Exchange imposed a £35,000 penalty on a firm (its name has not been disclosed) for spoofing.

I'm looking at Bitcoin Charts, and see a huge spike of buy orders at 6.50 BTC
See http://bitcoincharts.com/markets/mtgoxUSD.html for realtime, or http://www.flickr.com/photos/63348656@N08/5755403189/ for a screen shot.

Seems unusual that someone would put in a public buy order for 7000 units at a price of 6.50.  That's $45,500.

To me, that looks fishy.
I recently read an article about stock market manipulators who buy a small amount of shares, and then put in a HUGE public Buy order below the market price, so that other potential buyers will see it, and think that there's major support at a certain price (and therefore, the price is less likely to go down below that, so it's a safer bet).  And then the public (i.e. the suckers) bid up the price, while the scammer sells out at a higher price (and then cancels the low buy order).

The theory that I am posing is that perhaps someone wants the price to go up, so they have put in a huge public buy order at 6.50 (which they never intend to execute) and maybe a dark sell order at 7.50 or so.

Do you think I am being too paranoid?  I know there are manipulators out there.

At the same time, I am very impressed with the generosity of the Bitcoin community, as a newbie.  Guess it's life.  There are the takers, and there are the givers.  
In another thread, I posted my bitcoin address, because the faucet was broke and I am bitcoin-broke, and someone was kind enough to shoot me some coins!  

That was awesome, and very nice of you!!  Thanks!

Yup. You are right - lots of people do it.  I think a warning in your FAQ or terms and conditions is sufficient. 

I think the difference is that you are dealing with money, while YouTube is just dealing with videos.  (Not that personal videos can't be a lot more valuable than the 1 BTC that someone might have in their instawallet,...) 

Although you are only dealing with small amounts of Bitcoins, I can imagine the temptation at one of the suppliers to be great, in that a rogue Google / Alexa / Yahoo employee can attack ALL of the tiny stored amounts, and potentially get a lot of cash.  Or worse, maybe one of these sites publishes to the internet "Frequently accessed pages on the site instawallet.com" and lists a bunch of them.  Then a random stranger on the internet could rob the bank of many pennies.

I think someone can use Yahoo API to find the 1000 most popular pages on a website, which might be exactly the hack needed.

I'm not saying you shouldn't go forward with the project.  I love the idea.  But it's something to think about.  Maybe some security experts can give their opinion.

---

Here's another attack that may or may not be an issue.  There's a tricky way for one site to access your browser history - specifically, it can see whether you have or have not visited a specific page.  I don't THINK that will be a problem for you (as they'd have to guess the exact page), but it popped into my head as I was typing this.   See http://infinity-infinity.com/2009/06/sniffing-browser-history-with-css/ which is the page that also mentioned that Yahoo API can give you the 1000 most popular pages on a site.

Anyway... as long as people treat it like "disposable money" to play with, then no biggie.  But your site could lose credibility or you may need to shut down, if you get hacked in one of these fashions, so it's something to consider. 

Hope I'm being helpful in pointing out things that you may figure out preventions for!

Very cool!

Question:  How do you envision merchants would use this?  I'm thinking out loud here....

Seems like as a merchant, you'd want to offer your goods and services in various currencies, and "lock in" the prices for the duration of the users' session, so that the price in Bitcoins is constant during the period that a user fills out the order form. 

Say the merchant's page says "Now available for 6.20 BTC (which is approximately $44.99 at the current exchange rate)."  And then the user fills out the order form.  Meanwhile, the exchange rate has fluctuated.  But, as a merchant, I want to make it easy for my buyer, and if they agree to pay me 6.20 BTC, I don't want to stop the transaction and say "oh wait, the currency value fluctuated, and now you owe me 6.25 BTC".   (unless, perhaps, the exchange rate has fluctuated wildly during the time that the user filled out the form).

Most merchants will think in their native currency, so they'll want to make sure that the offers in BTC are approximately equivalent to their offer in the native currency.

My concern is that if the price conversion is determined by Javascript at the client, then it's potentially subject to attack by the user.  So the merchant would need to validate the sanity of the BTC pricing at the server once the order is submitted.  And the range of acceptable prices could be pretty wide.

An example of this concern would be that I, as a user with Firebug installed, could easily alter the 6.20 BTC price, make it 2.20 BTC, and order the product.  The server would then need to be able to detect that I was cheating.  How would this work?  Does the server need to keep track of all recent exchange fluctuations?  (because a 6.20 vs 6.25 difference may be acceptable due to the time it takes to fill out the form.  But a 2.20 vs 6.25 difference was probably the result of a cheater).  Or would the server just check to see if the submitted price is within, say, 3% of the current exchange rate? (In which case, if I were a cheater, I'd always give myself a 3% discount)

I'm sure this issue can be resolved, and probably has been resolved for non-BTC multi-currency sites. 

Maybe there needs to be a way for the server to hit BTCrate and ask "when was the last time $44.99 converted to 2.20 BTC?" and check to see that the time interval is within an acceptable range.  If the answer is greater than 20 minutes, then throw the user to a "Sorry, you timed out" page.

Any thoughts?

My favorite part of the Alexa info:

Relative to the overall population of internet users, [Bitcoin.org's] audience tends to be male; it also appeals more to childless, low-income users under the age of 35 who browse from home.

It apparently would serve us well if everybody got out of their parent's basement and browsed bitcoin.org from Starbucks with your girlfriend and your rich aunt.

@JAV, You may also have to worry about Toolbar programs (like Alexa toolbar, Ask toolbar, Bing tool bar, Yahoo Tool Bar, Google Toolbar, lots of Firefox plugins).  I believe that some of these send URLs back to the "mother ship" to help with page rankings and site analytics.

But Instawallet is a very nice looking site!

See http://www.google.com/privacy/faq.html#toc-terms-urls

URLs and embedded information

Some of our services, including Google Toolbar and Google Web Accelerator, send the uniform resource locators (“URLs”) of web pages that you request to Google. When you use these services, Google will receive and store the URL sent by the web sites you visit, including any personal information inserted into those URLs by the web site operator. Some Google services (such as Google Toolbar) enable you to opt-in or opt-out of sending URLs to Google, while for others (such as Google Web Accelerator) the sending of URLs to Google is intrinsic to the service. When you sign up for any such service, you will be informed clearly that the service sends URLs to Google, and whether and how you can opt-in or opt-out.

For example, when you submit information to a web page (such as a user login ID or registration information), the operator of that web site may “embed” that information – including personal information – into its URL (typically, after a question mark (“?”) in the URL). When the URL is transmitted to Google, our servers automatically store the URL, including any personal information that has been embedded after the question mark. Google does not exercise any control over these web sites or whether they embed personal information into URLs.

I think the "Cumulative BitCoin Days Destroyed" calculation demonstrates that the BitCoin market is actually healthier recently.  See http://forum.bitcoin.org/index.php?topic=9300.0 .

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", and I would expect that hoarding to drive the price of Bitcoins up.  That's when you get irrational exuberance.  (I contend that the exuberance so far has been rational.)  You can make a lot of money in a bubble if your timing is good, but you can also lose a lot!  At some point, this will happen, and then the savvy speculator who notices the downturn in the rate of destruction of cumulative bitcoin days will begin cashing out, a little at a time, as the froth forms on the bubble and the price of the Bitcoin climbs.  This will actually circulate more Bitcoins, as the savvy speculator sells off his hoard.

Like every bubble, at the top of the market, the savvy speculator will be cashed out, while "the masses" will be trying to buy and hoard.  Then the slaughter of the lambs will begin.  People who bought in at the top will watch their speculation plummet.  And some will be exiting the market as it drops, bringing sanity back to the market.


So, bottom line, Bitcoins are not in an unhealthy bubble YET.   People are NOT hoarding more now than before; the rise in value of Bitcoins in recent weeks has actually caused many people to cash out some of their position.  This is often due to the fact that an individual's Bitcoin wealth is a disproportionate portion of their overall wealth.  If I were sitting on $1M worth of Bitcoin wealth, you better believe I would be slowly divesting myself of some (even though I'm bullish on the prospects of Bitcoin value).


One other thing to consider: there are many reasons why people might sell Bitcoins (including being bearish on Bitcoin value, but also including trying to diversify, getting money for an upcoming wedding, death and taxes, whatever!) but there are only two reasons why people might buy bitcoins:  For their utility (including spend-ability, entertainment value, learning value, or novelty value) or because they think the value is going to go up in the future.

legal disclaimer:  This is not financial advice!  I am not a licensed professional.  Past performance is not an indication of future results.  Your mileage may vary.  And although I am bullish on Bitcoins, I just got my first 0.12 bitcoins less than 12 hours ago.  (Feel free to send me some, if you got this far in this long post!   1BZbpx7wHAUcBgzAtH4KeogTmtgUrq5Nkk  .  I'm bitcoin poor! )

--

Edit:  There have been about 27.3 Billion Bitcoin-days created so far.  I had listed how many Bitcoin-minutes have been created, and incorrectly called it Bitcoin-days.  Fixed.

Let's see if I can interpret this.  The last ten blocks of output look something like this:


125384,342.04
125385,1626.24
125386,16030.47
125387,182937.81
125388,23690.77
125389,146.36
125390,4092.02
125391,7074.40
125392,41.07
125393,140665.75

Looking at the last block, Block #125393, there have been 50 x 125,393 == 6,269,650 Bitcoins mined since the beginning of time.  The first 50 coins mined have been in existence for roughly 125,393 x 10 minutes, while the most recent 50 are brand new.  Total BitCoin existence minutes are the 6,269,650 x the average, so 6,269,650 x 125,393 x 5 == 125,393^2 x 50 x 5 == 3.93E+12.  Since about 144 Blocks are created per day, this means that since the beginning of BitCoins, there have been 3.93E+12 / 144 == 2.73E+10 Total BitCoin Days ever.

And during block 125393, 1.4066575E+5 Bitcoin Days were destroyed, which is a whopping .000515%.
Cumulatively, there have been 594187738.6 BitCoin Days destroyed (adding up all of the 2nd figures on each line of this web page - http://dl.dropbox.com/u/28441300/output.txt ).  So cumulatively, 2.18% of the BitCoin Days have been destroyed.


I think that the most meaningful way to use these statistics is to look at the Percentage of Cumulative BitCoin Days Destroyed.  If my numbers are correct, we're at 2.18% Cumulative BitCoin Days Destroyed now (2.18% CBTCDD).  As less people hoard, that number will rise.  And this figure takes into account the new coins being mined.

This number has been on a fairly steady rise, from zero.
It's not exactly straight up, but generally, here's what I am seeing when I run the cumulative days destroyed calculations:


2/23 - 4/24/2010    0.6%
4/24  - 6/28/2010   0.7%  (flirted with 0.8% a few times and dropped back down)
6/28 - 7/28/2010    0.8%
7/28 - 7/30/2010    0.9%
7/30 - 8/1/2010      1.0%
8/1 - 8/2/2010        1.1%
8/2 - 8/9/2010        1.2%
8/9 - 9/19/2010      1.3%
9/19 - 12/12/2010   1.4%
12/12 - 12/30/2010 1.5% 
12/30 - 2/13/2011   1.7%  (skipped right over 1.6%!)
2/13 - 4/18/2011     1.8%
4/18 - 4/20/2011     1.9%
4/20 - 5/8/2011       2.0%
5/8 - 5/16/2011       2.1%
5/16 - present         2.2%


Hope this helps.

Hey guys, I'm trying to test some merchant software, and I am new to BitCoins and haven't gotten my first bits... and the faucet has been dry.  Can anyone shoot me a loan (or gift of .01, if these numbers were valuable)?    1BZbpx7wHAUcBgzAtH4KeogTmtgUrq5Nkk   Much appreciated!

I like the idea, and I believe there's a real need that could be addressed, but I think there are issues with this implementation.  Specifically, I would be reluctant at point #3 to send in my private key.  How do I know that the other 499,999 people are going to send in their key.  Further, how do I know that there's not just one really well funded person spoofing 499,999 entries.

Imagine a government agency (for sake of an example, 1940's Nazi Germany) setting up such an announcement on an anonymous website (in 1940!) soliciting support for an idea (say, "if you are sympathetic to the Jews, follow steps 1 and 2, above").  And each day, the government agency falsifies about 1000 new signups, even transferring BTC to the cause which they control (i.e. paying themselves with BTC).  Well intentioned people fall for the ruse as they see the numbers climbing daily, and after 500,000 people sign up (some real, some fake), they are all exposed, rounded up, and slaughtered.  And it cost the government agency nothing.

No, I think you need a better system of proving that someone is legit, other than just paying BTC to a cause. 

You might look into "Web of Trust" technologies.  http://en.wikipedia.org/wiki/Web_of_trust 

Perhaps if I know, and can personally vouch for, ten people who are in support of the cause, and each of them can vouch for ten others with no overlap (and so on), then there are more than a million people within 6 steps of trust from me.  I trust the 10 that I know.  And I mildly trust the 100 that they know.  I'm a little less trusting of the 1000 that they know.  Then maybe it could work.  Not sure.

Good luck, though.  I love the idea for social change!

I like your idea.

You may want to check out the Wikipedia page on Digital Time Stamping.  It may give you some implementation ideas.  http://en.wikipedia.org/wiki/Trusted_timestamping

Digital Time Stamps generally have sort of the opposite purpose than what you describe (they are typically used to prove that something is "old", not that something is "new".  For example, you may invent something today, but you want to prove in court in 5 years that it was indeed invented today.  So you digitally time stamp it.)

In the context of Bitcoin, you could use the Bitcoin block hash code (which a new one is generated approximately every ten minutes) to be your "proof of recency".  For example, take a photo of an item, with THIS QR Code in it [ http://chart.apis.google.com/chart?cht=qr&chs=230x230&chl=http%3A%2F%2Fblockexplorer.com%2Fblock%2F0000000000004b5a4b59a5cbf4098247c7ecc8f58f1434b3ab51fa46e797e4a0 ], and you know that the photo was taken at or after the time I am typing this message (as it's the most recent block hash).

And the date/time is confirmed by block explorer.


(I guess what I am saying is that your application can be done very simply using current block hashes, google QR Code generator, and block explorer.  Not that it doesn't have value, but that you may already be done!)

Hope that helps.