Doh! Yes. Edited.

I'm curious if that person overseas is now holding $1.05 million worth of BTC? If so, I'd ask for that $15 fee back.

I have to laugh at the irony of this post. I'm not laughing at you Rarity. But I'm laughing with... well, I guess with all the folks who started this forum!

Bitcoin is the crypto-anarchist libertarian's wet dream of a currency. Its core premise is that there is no way for anyone to force redistribution of wealth. There is nothing particularly egalitarian about bitcoin. Sure the leftist ideologues, libertarians, and tea party folks are all trying to pull down the current system.

However, everyone is trying to pull it down from opposing directions. It is all very self defeating and amusing to watch.

Actually, yes I can. I have a concept discussion thread here if you are interested.


It's not about how far bitcoin has come. I'm interested in how much farther it will go. The initial Darpa grand challenge was very impressive. However, no car got to the intended goal line. The second grand challenge seemed less astonishing after the first. However, cars actually got to the goal.


Perhaps you'll consider commenting on my above thread?

Actually this is called the iterated prisoner's dilemma problem. If the dozen peers did the mining cooperatively, they could reap much higher profits that mining competitively.

Your rule is that prisoners are unlikely to cooperate even if it is in their own self interest. Mining pools show this isn't true. Competing mining pools show it is!


[edit] fixed the link!

Actually, yes I can. I have a concept discussion thread here if you are interested.

Bumping this because I just got asked the same question in two other forums.

Pity, that would be great information to know.



The fascinating part is how fast the number of miners increases to eat up any potential profit in mining!



It is fascinating what the "cost of distrust" is.

Technically speaking, if everyone were to trust any single peer to keep accurate records of all valid transactions and settle the consensus. (What every peer has to do now anyway.) That would be the optimum in electrical efficiency.

If everyone was to trust one of a few dozen peers, all of whom distrusted all of the other few dozen peers, then that would be a few dozen times less electrically efficient for the same behavior.

By requiring every peer to duplicate all the work of every other (distrusting all other peers) we create a system that is maximally electrically inefficient.

Mining competition based on price seems to optimize convergence toward maximum electrical inefficiency.

I have to admit I think it is retarded that the White House allows random people to post such crap on a site that purports to represent all of us.

retarded |riˈtärdid| |rəˈtɑrdəd| |riˈtɑrdəd| |rɪˈtɑːdɪd|
adjective
less advanced in mental, physical, or social development than is usual for one's age.

While I'm not as opposed to "fiat" currency as most people, I do look forward to a reasonable p2p alternative. I have been intrigued by bitcoin for going on two years now. However, from the beginning I have thought its monetary policy was flawed. "Flawed" of course is an argument word, but in this case the flaw I saw was that it would lead exactly to this current dynamic.

Lots of others saw the same "flaw". There was a French guy here arguing bitcoin should pay a Universal Dividend. It is a fascinating twist of logic. Morality in his view dictates that every living human receive and equal share of all new money created. The money supply itself should grow 5% a year in order to provide this universal dividend. When pressed the logic for this was to make up for the penalty of having been born later than your predecessors. Ostensibly, some people where here when all that money got created. "They got it for free! So we want some too!"

I just wanted a stable currency. One that wouldn't inflate or deflate over time. Indeed it looks possible to create. It was just that nobody was interested in such a currency two years back. What would be the point? Everyone was going to get rich on the bitcoin plan.

I think this is a fair summary of why I started this thread. I don't think there is any such thing as "fair" in this situation. There is the state in which we start (the current state) and the state to which we want to achieve (universal acceptance). My question is, "Is there a plausible path between the two?"

There is no point in telling the six billion people who haven't adopted bitcoin yet, that they are just jealous they didn't get here first. You have to persuade them there is some personal value for them in the proposition of their using bitcoin. The argument of, "Think how rich you'll be when the rest of the six billion people get here," only holds for so long.

http://blockchain.info/

Bitcoins cost roughly $3.41 in electricity to mine. They sell for $3.67. That is a 26 cent profit if you mine and sell today. But in general the prices have been falling. If you don't sell immediately, you risk losing any profit.

With Bitcoin, you are competing against the owners of 7,479,400 BTC. Most of these owners bought there BTC for pennies a BTC. Say for example, knightmb who bought 371,000 BTC for $5,000. That is (1.35 cents/BTC) if you are keeping score. So basically, the early adopters are still making piles of money selling their hoards. There is no solid bottom to BTC prices at the moment.

If you mint and sell immediately, you are not really doing much to support bitcoin as a growing economy. If you buy with cash you are basically enabling the speculators and early adopters to sell off their hoards at a profit. (Good for them!) If you hold these coins you will likely lose value (at least for a while). In that case you would be better to hold off your purchase until BTC bottoms. If you spend these coins immediately on goods, you are building the economy. (Go Bitcoin!) Convince enough people to do this and the early adopters will cease selling there coins because their wealth is increasing and hoarding is preferable again. BTC prices will spike and you still won't have any.

---

Litecoin is the same as bitcoin in everyway, except it is designed for CPU mining so you aren't competing with the big boys. You are also not selling against giant hoards. It is like a "do over" for bitcoin. Might as well test all your theories at your lowest cost, and highest potential profit.

I suggested the same thing 18 months or so ago. I was soundly shouted down by the existing folks who thought it was the greatest idea ever. Very Austrian. I turned away because the consequences seemed obvious. I should have bought up a few and held until the boom though. I always see the future too soon!

I do, however, still want an anonymous digital cash to be used over the internet and elsewhere. I'm even OK with the quasi-anonymous nature of nakamoto chained transactions. I'm actually in favor of the FBI catching major criminals. I just want a currency that is not broadly and needlessly profiled.


Yes this seems to have failed. The major problem was, merchants and goods purchasers should have been the focus of the currency. However, many were turned off by the excessive philosophizing.


In all honesty, litecoin is probably the fairer bet for you. If you started today with it, you would be an early adopter. With bitcoin, you are way behind the curve.

I think Satoshi picked a fine incentive to encourage early adopters. However, the early adopters didn't manage to translate the excitement outside of the crypto-anarchist libertarian community.

If there were 5 million daily bitcoin users today with a geometrically increasing goods transaction rate, then the incentive he chose would have seemed brilliant. It looked like that might be the case earlier in the summer. However, it now appears the early adopters have failed at their promotional duties. If this remains the case, they are really only failing themselves.

However, I still don't see why the masses will come around once the early adopters have even more advantage. Everyone seems to be hoping it gets easer to push boulder up a steeper hill.

The dynamics of this would make an interesting discussion. I mean who would get to vote? It seems like those with the coins would be the ones granted the vote. However, if the future adoptees don't agree with that vote, then any resolution doesn't bind them. They can either go elsewhere or not-adopt any coin.


It doesn't cause a technical problem. It causes a perception problem. However the plausibility of the system becoming widely adopted is based purely on the perception of the potential adoptees.


I guess the point of my post was that, from my point of view, the likelihood of "slow steady growth" becomes less plausible as the percentage of generated coins grows. And at some point you need to hit geometrically increasing growth. That should come sooner rather than later.

You had to quote my entire post to say that?

I didn't mean to cast aspersions by calling anyone Satoshi's friends. I myself spend time corresponding with Satoshi. I have great respect for everything he did. I also have great respect for everything current Bitcoin operators are doing. As best as I can tell, people are investing close to $1,000 a day in electrical cost to maintain Bitcoin's accounting. That is a huge commitment of resources.

However, to the 6,000,000,000 current non-Bitcoin users, the lack of broad adoption creates a bit of a landed gentry situation. Even if we were to give the remainder of the BTC out to the masses for free to speed adoption, we still have a privileged class. It is pretty clear that knightmb could live the rest of his life off of his $5,000 investment (371,000 BTC). Then he could leave his estate to his children who could live the rest of their lives. That is the wonder of planned deflation. Each billion new Bitcoin users makes knightmb increasingly richer.

It just doesn't seem like the great masses are in a mood to create such a situation. Even if we were to convince them of the wonders of anonymous p2p crypto-currency (which I desperately want), it seems more likely that a general assembly would wave jazz hands at cutting knightmb and the other "more than equals" out of the loop.

Thanks for the kind words. I didn't really mean to be a total kill joy.


I really think the 14 month deadline is pretty set in stone though.

Does anyone see a path to sustainability? I think if the bitcoin community were to throw a couple million coins at the Wall Street protesters. And they were to use them to trade among themselves rather than immediately cashing them out for pizza. Maybe there would be a plausible path.

But, I really think that scenario is a fantasy. The protesters seem to be more "on strike" then productively producing goods they could be traded among themselves.

As best I can tell 35.5% of all bitcoins have already been minted. These 7,473,950 coins are all property of existing bitcoin users. There seem to be about 41,280 registered members of this site. I'll be generous and say there are ten times as many bitcoin users as there are members. That means about 410,280 bitcoin owners with on average 18 BTC each. Clearly BTC ownership is more concentrated than this, but lets be egalitarian for the moment.

If we pretended all bitcoin owners were all Americans that is about 0.13% of the population. It's not of course. Bitcoin is intended to be a world currency. So 0.0068% of the world population own 100% of all current and at least 35.5% of all possible bitcoins.

The view on this forum is that the world will come to their senses, throw out fiat currencies and move to something rational like Bitcoin. This of course means 6,000,000,000 people basically begging to use a resource owned by a relative handful of people. Say we just minted up the remaining 13,526,050 BTC and scattered them to late adopters purely out of the kindness in our hearts. That means about 0.00225 BTC for each of them to use in rebuilding their economy. Sure 18 BTC on average doesn't make us feel very rich. But it is 8,000 times what everyone else would have if we stopped competitive minting today.

But we won't stop competing of course. Sometime around Pearl Harbor Day of next year Bitcoin will hit the 50% distributed mark.

----
By that day, how many active Bitcoin users and daily goods trades do there need to be to make a sustainable Bitcoin economy viable?
----

Because to potential new adopters, after that point Bitcoin is going to look like a new a 21,000,000 coin currency with a 10,500,000 coin pre-generation that went to the creator and his "friends". Certainly people will stop caring about Bitcoin long before they show up on our doorsteps with signs saying,

"We are the 99.9932%!"

I really have to ask? WTF is that?


And curiously, Paris Hilton does ok for herself. Forbes had her listed at $7 million a year in product sales in 2006 or so. That probably exceeds the entire bitcoin economy!
http://shop.parishilton.com/
http://www.zappos.com/paris-hilton/UgLDEFoCwxDiAgILCg.zso

Awesome link. That is a staggering amount of electrical cost. The site shows a theoretical net operating profit per day. Market value of mined coins minus electrical cost.

However, has anyone totaled up exactly how many Dollars/Euros/etc. actually flow into exchanges each day? I'm assuming electrical costs must be paid in some national currency. Is there enough actual incoming cash to pay all the mining bills?