True, I was going to take an average ASIC value (when ASIC's arrived on the scene), and before that an average GPU value and plug those into the system, however that would take a little more research than the simple thought experiment version. EDIT: It would probably be easier to put everything into terms of dollars, since its significantly easier to get a dollar value of a GPU/ASIC than the total electrical energy costs of producing one.

EDIT: In response to moonshadow, the price of bitcoins is currently the price on mtgox, in your analogy that's what people value that house with a swimming pool, the cost of labour of putting that in however, is generally the "true value" of whatever work you put into the swimming pool, however without a perfect system the true value is never reached due to speculation.

True, however as that energy could have been expended to produce other work, as you can most likely (however more indirectly) convert the economic cost to electricity consumption, you can figure out the value of the production of a bitcoin in comparison to other energy intensive exploits, such as gold mining, food production, etc.

Would you guys value such a calculation? I might get to work and try and derive a total economic value up to this point, but I don't know if I can easily get data on the cost to produce all the PH/s that we currently use, unless I take a standard total electric cost/PH/s

Correct! I wrote that pretty fast, but I felt that no one else was saying it

prepare yourself


A bitcoin is the value of the total amount of labour done by computing devices over the duration from 2009 - 2140 to produce one of 21 million bitcoins.

this means that 1 bitcoin = 1/21million*(avg_total_mining_energy_consumption_per_year_converted_to_gold+mining_equipment_cost_per_year_converted_to_gold+miscellaneous_cost_per_year_converted_to_gold)*(131 years), and this has the units of gold weight in kg.

I at one point had to wait 4 months for gox not to send money to my bank account, but to issue me a refund that I finally requested on the 2nd month, great service.

Only exchange that I actually have had really good experience with is www.cavirtex.com the canadian exchange (thankfully, I'm canadian), all others seem to suffer from bank closure issues.

there should be someone local who might be interested in trading for cash directly, www.localbitcoins.com, however that's quite a bit of money.

it might be possible to find someone who'd be interested in selling their house for bitcoins, I definitely would, if your in a deeply bitcoin penetrated area that could be alot cheaper.

I was actually considered this, forming a "bitcoin decentralized bank" that would issue bitcoin "notes" just like how the US used to issue gold notes, I'd be completely ready to work with a group of people internationally on creating a "standard" bitcoin note if there was demand, I have access to a injection mould and could potentially get access to a coin/paper press.

Have you put any research into this casascius? (PS: I actually lost one of your "misprint" coins in the mail I was shipping to a buddy in the UK, oops! there goes ~$5k)

I'm pretty sure you may be looking for freicoin (FRC). Each coin over a period of time is sent back  "into the soup" of the mining sector, which means that you can't just hoard freicoins without your investment eventually losing value.

Personally I have no problems at all with bitcoin, even though I personally don't currently hold any (I have 0.15 btc to my name, I had at one point 650 of them but sold them all at $10 each for a 2 dollar exchange profit.)

The people that made the protocol and put faith in bitcoin during the dark years of 2011-2013 have well deserved their fortune, I only wish I was in a better position to not have had to sell my 650 coins for tuition, but such is life.

There is nothing wrong with discovering something first and being able to make money off that fact, that's how life works. Even if you could distribute a single "happycoin" to every single person on the planet, whats the point? I don't get it? wheres the value there? If anyone actually valued these coins, the only way to make more was to make more people, do you really want to overpopulate the planet? You may want to take a doubletake at what your theorizing before you clutter your senators inbox.

so the trick is, to never convert back into krone in any large quantities.

I get where you're coming from. You want bitcoin, but you also want a regional currency, you want to be able to freely exchange one for the other (maybe pay property tax, buy corporate certifications, etc), I get it.

Right now however, is not the right time to do this. The senator you'll be sending this along to barely can understand what a bitcoin is let alone "hey lets make a US coin wooh!" This could be disasterous for bitcoin adoption.

I personally would like to see a one currency world with only bitcoin as it suits the needs of everyone sans the government itself, however realistically I see multiple cryptocurrencies, some run by governments, and this could certainly happen in the long run.

Nationalism aside, do you have any other reasons for wanting a regional currency rather than a borderless, non-descriminate, inflationless (nearly) single currency?

agreed, counterfeit proof physical bitcoins could be easily spread to places where internet access is at a premium, but would like to use a currency that isn't federally controlled. Personally everyone I've talked to have brought up the "I can't hold it in my hand so it isn't real" point, at which point I introduce them to my single 1 BTC casascius coin. However a cascascius coin shouldn't be traded unless you 100% trust your trading partner, as it can easily (and has been) counterfeited.

I'm thinking potentially of an RFID chip that can change ownership from a "handheld" controller, smart property style, however I'm not sure if I'm reaching scope creep here.

As you can see from my name I've got nothing to hide myself, however I can certainly see issues with reducing privacy for the chinese or other countries where bitcoin privacy is what's currently keeping them from being locked away in jail for currency fraud or whatnot.

I understand the problems that arise from a quasi-anonymous digital "cash" system that bitcoin is, but regulating the shit out of it and breaking the fundamental structure of what makes bitcoin such a universal tool is not the way to do it, I appologize to all the american users who want to easily buy bitcoins, however I don't share your pain because my country doesn't have draconian legislation.

"chlid pornographers use bitcoin, we must change bitcoin to stop them from doing this" - this old LE tactic has never worked and only hurts common users of new technology, you must stop child pornographers/drug dealers/ hackers from having an incentive for doing this in the first place, clearing the symptoms of the problem doesn't actually do anything besides make the LE look like their actually being productive.

Yeah, I was trying to think of a clever, futureproof method of distributing physical bitcoins that couldn't easily be spoiled by others counterfeiting, I don't think theres an easy, non-super technical way to do this. I wonder if theres a demand to start producing near cost, plastic bitcoin "tokens" in the 10,100, 1000mbit range in my local, I think it actually works as a loophole to avoid finCEN, but I could be wrong.

The problem is, "blacklisting" coins is actually completely worthless in the hands of a not completely incompetent fraudster, it doesn't take a rocket scientist to pretend that you traded your bad coins for something else by moving them between wallets and claiming that some "other" sold you those coins, or even a portion.

The whole "redlist" idea is literally worthless, theres no good that it could possibly do and the only thing it does is do harm. Mike, prove to me otherwise please, I can't see the reasoning.

take a look at the exchange fees / withdrawal fees in all the currencies your looking to trade in, you might realize that the arb value is very close to the real value + the total value of fees.

excellent decision by the administrators, I hope that the bitcoin cyprots take this to their legislators to see if they would be interested in adopting bitcoin as an acceptable form of payment to pay tax, etc.

If this happened I'm pretty sure I'd migrate any potential business I might be forming to cyprus, and I could certainly imagine quite a few wealthy bitcoin holders would consider the same.

man, I wish I lived closer, I'm from nova scotia so it's a bit of a trainride down, would totally like to bounce some ideas off you guys on spreading bitcoin to the general populace.

I think I might have to agree with you, however there might be a "suffciently secure" anti-counterfeiting method that would be extremely challenging to break, something like a QR code that produces an obfusticated version of the private key that can be defusticated via a version of the bitcoin wallet client, however that's considerably more "centralized" than I think is reasonable, if anyone wants to bash brains on this I'll be on IRC tonight at some point.

I'm interested in making physical bitcoins in my city, but to really allow people to trade them without risking counterfeit coins, I ran into a problem.

The public key can be viewable on the front of the coin, but how could I possibly prove that the private key, which is hidden on the back similar to Casacicuis' design, actually exists and is the correct private key for the public key displayed on the front? A possible counterfeit would produce multiple coins with the same public key, but either with no private key on the back, or with incorrect/invalid private keys.

Does anyone have an idea on how to solve this problem? Is it possible to display part of the private key to verify that it is in fact the correct key? I was thinking of displaying the first 5 digits of the private key and then using some comparison method, but I'm not sure on the exact capabilities of the algorithim.

Volatility of price (as max Kaiser talks about http://www.youtube.com/watch?v=WAjL_X_ZesE) will decrease with the bitcoin price increase. When the price was 3 dollars, an increase to 6 dollars did not take a significant amount of capital to do, however it doubled the price. The same is not true at higher valuations (when bitcoin reaches $2k, it will be considerably more difficult to raise the value to 4k, etc) This is particularity true at the sub 1 BTC valuation.

Price swings may seem significant now, and will be for the next few years, however once we start approaching widespread, close ended usage (IE paying rent in bitcoin unpegged from the regional equivalent, buying food in bitcoin unpegged from the regional equivalent, etc) variability of the bitcoin exchange rate will be marginal.

We have to stop looking at "price per bitcoin" and start looking at "price per dollar", if you start looking at it in the inverse perspective, you see that we're doing quite well, even with the volatility.
1 "cbic" (as I like to call it) currently buys = $7 USD (700 per full bitcoin), that's almost 4.5x the GBP to USD exchange rate. We start realizing that bitcoin is considerably more valuable than all other currencies, and this isn't just speculation. We have bottlenecks we need to solve, the normal client needs to shrink in size, the "dust transaction" code should be changed to allow for growth in the mbic transaction volumes, etc. However if the bitcoin foundation (cough mike Hearn) stops trying to change the code and instead helps facilitate early adopters from gaining bitcoin (physical bitcoins that can't be counterfeited? They have enough donation money to do this.)

Even if the US did infact decide to try and regulate bitcoins, and made it illegal for exchanges to function otherwise in the US, there's absolutely no reason why two people wouldn't be able to trade in person somewhere, particularly if there were large volumes of bitcoins being traded  at a time, in this event what needs to be put in place is companies tailored for this kind of transactions, with security and safety as top priorities (something a buddy of mine is working on in the UK, incidentally)

EDIT: I should clarify what I mean about critical adoption, I mean the point at which bitcoin will start replacing national currencies for entire communities, once this starts to happen, we've reached critical adoption in my opinion.