I think this has been discussed many times before.  I thought a "block headers only" solution was in the works.  In this case, a client only needs to download the block headers instead of all transactions.  As new transactions are received, it would pull input transactions lazily out of the network to do verification.  You need to take steps to ensure that there are still clients that maintain the full transaction history however.  

Creating a digest of current account balances is still a good idea though...in fact, it might be a good idea to include a full digest of all account balances with every block that is created (the block header would have a merkle hash that points to the digest and only addresses with a nonzero balance would be included).  This way, no signatures or trust network is needed...the digest gets created as part of normal block creation.  In fact, clients could choose not to verify the entire history, but simply start with the current block in the network and validate forward from there.  They could even discard old transaction history this way (as long as you set a limit on how deep reorgs are allowed to happen).  The validation might need to reach back into history prior to the earliest digest that the client is using, but it could pull those earlier transactions as needed from the network.  I think you would just need to be verifying that input transactions did appear in an earlier block.

It's web based.

Roger, this is fantastic!  Btw, the cash deposit feature is great...I've tested it twice now.  On both occasions, by the time I made it back home, my exchb account had been credited.

Very nice casascius!

Bit-Pay.com allows merchants to set prices in either dollars or bitcoins and then receive either dollars or bitcoin as payment.  We have several tools to choose from, we have our own cart or you can use opencart (we'll be adding more), you can integrate directly with our JSON API.  On the back end you get transaction history along with daily sales charts.  And, of course, we're constantly expanding our feature set.  If you want to take dollars, we charge a flat 2.99% per transaction (no minimums, no base charge, no other fees at all).

I've had my CC info stolen twice in the last 3 months.  Previously I'd had it stolen only a couple times in the last 10 years.  This is a big advantage for bitcoin (and one we point out at bit-pay.com and when talking to prospective merchants).  It's not just about the risk for the consumer, it's also about the cost involved in collecting and securely handling the personal information that merchants have to collect to reduce the risk of fraud.  A few highly publicized cases (i.e. Sony) show just how costly it can be if you don't adequately secure that information.  Bitcoin gives you a way to avoid ever having to collect that information in the first place.

Not only that, but he almost certainly would have put it under the GPL license (bitcoin is under the MIT license).

Yes, I get that and that's reason enough...I was just wondering whether people had more utilitarian reasons for wanting them.

These are cool, but I'm curious why people feel the need to have a tangible bitcoin.  To me it kind of reminds me how early autos were made to look like horse drawn buggies.  I get the need for some people to have a physical way of securing bitcoins because of the current usability issues with doing that digitally, but aside from that and the novelty aspect, what is compelling about them?  For me, one of the great advantages of bitcoin is that it does away with the need for such a physical manifestation of a token (while not losing some important properties of physical token).

  Alison is great...she really gets bitcoin and has introduced us to a lot of companies that she works with...check out one of her spots on Fox Sports:
http://multimedia.foxsports.com/m/video/35303294/college-experiment-hot-girl-auburn.htm?r_src=ramp

I wouldn't be so giddy...Microsoft is just using bitcoin as a convenient boogeyman to induce legislative action...I wouldn't expect any Microsoft funded legislation to be friendly to bitcoin.

If no miner sold any mined bitcoins for an entire month, then the supply would increase by exactly 0 bitcoins... 0 new dollars would be required to support the price (all other things being equal).

But you don't know that...we could get 50 new coins in the supply every 10 minutes, or we could get 0...it depends on whether the miner contributes those coins to the supply or whether they keep them.  If the miner keeps them, no new money is required to keep the price where it is (again, all other things being equal).

I just mined a block and I'm keeping the bitcoins...tell me, where do any new dollars or services come into play?

Erik is correct.  The supply of bitcoins is determined by the quantity offered for sale.  The demand is determined by the quantity requested for purchase.  The current price is simply the point of equilibrium where the demand matches supply.  Hence, all that is required for the price to remain stable is the number of bitcoins offered to balance the number requested for purchase at that price.

As a result of mining, somewhere between 0 and 50 new bitcoins are entering the supply every 10 minutes, but you can't be sure of the exact number.  Your calculation assumes all 50 newly minted bitcoins are being offered for sale every 10 minutes, in which case ~$1.4 million in value would need to change hands to support the price.  Now, if the price does hold steady over a period of a month, then it is true that the notional value of all bitcoins in existence would have grown by ~$1.4 million.  But that's very different than saying $1.4 million new money has entered the bitcoin economy.

Over leveraged malinvestment and indebtedness enabled and encouraged by a flawed ideology.

There are only two things bitcoin nodes have to communicate with each other...transactions and blocks.  Neither of these require a particularly large amount of bandwidth and they are both asynchronous.  For the same reasons that the internet can be made to work over these communications channels, bitcoin can as well.

And bitcoin would still work perfectly well.

Anyone investing in bitcoin should assess the risk of government interference and remain appropriately diversified.  For people that simply want true two party transactions, bitcoin works at any price.  If governments really want to stop bitcoin, they'll need to place restrictions on all forms of digital communications.  They'll need to make sure you check with a government agency before you exchange USB keys with anyone.  The transfer of ownership of a computer will need to be a registered and tracked activity.  And let's not forget radio...bitcoin will work fine over HAM radio covering very large distances...they'll have to put an end to any form of digital communication over radio.  And what about bluetooth, NFC, QR codes and optical scanners...they'll need regulations for those.  They'll need to make sure any wifi enabled device runs only government provided software.

This article, while disturbing in many respects, is grossly underestimating the magnitude of the expenditure that will be required to stop or control digital currencies from proliferating.  At some point, I'm confident that govt's and financial institutions will make the rational, self interested and self preservationist decision that it is better to make use of digital currencies than to fight them.

I think the reality is that you'll find you need the third-party server.  Just run bitcoind (or bitcoinjs) on a server somewhere (a user could run their own if they have issues trusting a third party) and connect with it over a lightweight protocol using ssl.

You should talk to Jan at instawallet about scaling.  I know he has struggled off and on with scaling and would probably be able to offer some good advice on what to do and what to avoid.

mintymark, I think you're best off sticking with the c++ client for the time being.  If your hosting provider won't allow it, find another one.  I understand your desire to not have the full block chain, but to validate transactions yourself you'll need it...otherwise you'll have to rely on a third party to run the full client to validate transactions for you.  You might want to have a look at bitcoinjs.org...it is a little more pliable than the C++ client, but I think Stefan is still not recommending it for use in any kind of production environment (and he also strongly recommends only connecting to the network indirectly through the c++ client).

In my opinion, the most important contribution (by far) of bitcoin is that it enables true 2 party transactions to occur over the internet.  That has profound social implications and might be something that the TED crowd would would be interested in hearing about.  The fact that bitcoin isn't issued by a central authority is of secondary importance.