Why does Mybitcoin, or anyone, have to offer you recourse?  Bitcoin is cash for the Internet.  Would you walk into a corner store and pay cash for a candy bar?  What is your recourse there?  If the vendor took your money and then told you to buzz off, what would your recourse be?  Call the cops over $1.50?  What would happen, do you think?  In the end, you would be out your money and a candy bar, and would simply never trust that vendor again.  Don't send bitcoins to untrusted vendors.  If you get screwed, tell people about it, and name names.  Sometimes the risks of getting defrauded is just part of the costs of doing business.  There are steps you can take to limit those risks, but none of those things are intergrated into Bitcoin, nor should they be.

Doubtful.  At worst, half the miners will give up because they suddenly became unprofitable, and the interval between blocks would stretch to 20 minutes.

Most will not, but we can expect that there will always be the altruistic miner to catch a block every now and again.  There are other motivations for certain groups of miners besides the direct profit from mining fees.  For example, I posted at length in another thread, my "Wal-Mart" theory.  Wherein if Wal-MArt ever starts taking Bitcoin as a major currency, Wal-Mart itself has a strong economic encentive to make certain that their own transactions, which would be a huge ongoing volume, are processed quickly.  The cheapest way for Wal-Mart to do this would to either build a mining cluster of their own, or directly sponsor a professional mining company to act in their behalf.  In part, because their direct competitors could do so and intentionally exclude Wal-Mart's own transactions as a matter of course, whether they paid a fee or not.  At this point, adding in free transactions (that are not from a competitor) is trivial, and becomes a public relations bonus.

There doesn't need to be a solution, because you don't really understand the problem yet.  Even so, much of what you are concerned about is negated by MyBitcoin.com's system.

Let the buyer beware.

Yes, but the hardware improves for the common user at the same pace as the massive attackers' does.  There will always be new supercomputers being built, each faster than the one just before, so the happy target goal is always moving anyway.

True.  And dedicated ASICs would move the bar yet again.

Actually yes.  Although I'm impressed that all that research has it's basis in the Folding@Home project, I did notice that most of that same research were subjects with real economic value.  Said another way, Folding@Home seems to be used as a means for research companies to get research done on the cheap.  If the Folding@Home contributiers knew that they were being exploited for the profit of others, particularly "big pharma" would they still participate?

Really?  Did Bruce really predict that there would be such a rapid response from the remainder of the Forbes readership that actually reads print?

In fact, the difficulty has doubled 16 times since Jan 2009.  If it doubles another 16 times, we would be around 7,187,333,120 difficulty (if not more) and roughly 1,113,784,320 TeraHashes per second to get there.  I don't consider this likely, as I expect the growth to mute as Bitcoin's market matures; but I would consider at least two more doubling to be likely. 

The question is, how much hashing power is enough to secure the system?  That's not really an answerable question, but I'd have to guess that having a hashing power in excess of the total power of the top 20 known supercomputers is a safe goal.

I'm sure that all that processing power that is contributed to folding@home makes the contributers feel good and a part of something, but what has come of that project?

Bitcoin, on the other hand, has tangible benefits for both the community and the contributer.  It is no shock to me at all that Bitcoin's total power leapfrogged right past them.

The world is full of unfair advantages.  This isn't a Bitcoin issue.

And the confidence in the Bitcoin system increases by one Brownie point.

And, last I heard, ArtForz's mining cluster is set to accept all free transactions regardless of the standard blocksize limit for free transactions, so it all evens out in the end.

My opinion is that the rule should be changed to drop the minimum fee in the default client and set back the minimum free transaction as well.  The massive growth we have seen recently has moved these limits from really tiny amounts to non-trivial limits, and the growth isn't likely over.

We are quite sure that more hashing does not lead to more bitcoins in the long run.  We are also quite sure that the market is a self balancing thing, and if there is a profit to be made on hardware arbitrage then someone is going to try it.  I doubt that it would ever be significant enough of a problem to really impact the Bitcoin economy once it is big enough that hardware manufactures actual are tweaking their products for hashing performance.

Hmmm, I see what you are saying.  Good eye.  This might be a possible exploit, indeed.  You deserve kudos if this is true.  This could be fixed by requiring that the transaction as a whole be signed by the first input private key.  This would still require absolute isolation to work consistantly, but might work often enough by forcing a double spend type event to be a worthwhile criminal endeavor.

Gavin, thoughts?

Try it, and you will find that it doesn't work in practice, even if it is theoreticly possible.  Most likely you won't even be able to isolate a client in order to actually steal from it's transactions in the start.  In any case, this is an attack upon a particular user of Bitcoin, not a flaw in the system itself.  This kind of theft attack would only affect one user.

As you describe it, the modified transaction would fail a validity check anyway because the transaction must be hashed as a whole after being 'signed' by the sender's private key, which you don't have.  If you cannot sign the modified transaction, the transaction would fail on that point.

Quiet dude!  You're cuttin' into my game!   

This is because the US monetary system was pegged to a defined weight in gold.  This is not the case anywhere in the world today.

Um, yes there is; but it's the market price of the bitcoins that drives difficulty later.  Cause and effect.  The rise in the value of the block reward, which is sneaking towards $200 per block, encourages new miners to join the game.  When I got into all this, a block was worth about $1.30.

You can't know who it's profitable for, or it isn't.  Mining was never profitable for me, and in general I don't, but I can envision conditions that I would mine for short terms.  There are many users who mine in their winter months because the cost of electric is either the main method of heat, and therefore running a miner is just a possible bonus to paying the heat bill; or they functionally have near free electric.