Well you can't really compare apples to apples but if the market values square at 6x monthly transaction volume the equivelent "analysis" would put Bitcoin at $380M.

250K BTC daily transaction volume * 30 * $8.50 = $63M * 6 = $380M.

This 130nm shared wafer research ASIC can achieve 140 MH/J performing SHA-256 on a streaming input.  



http://rijndael.ece.vt.edu/sha3/index.html

Keep in mind:
a) this was designed as a testbed for SHA-3 and runs at only 50 Mhz.  Not exactly ideal for SHA-256.
b) it is on a 130nm platform.  65nm would be roughly 4x the MH/J. 45nm would be roughly 8x the MH/J
c) VT own data (once again not the intent of the research) shows that SHA-256 can easily run at much higher clock speed without increasing the gate count (and thus electrical cost).
d) the design is optimized for streaming large amounts of data which is ill suited for Bitcoin (where single nonce header is hashed once, checked and discarded/returned).
e) it was designed as research project at my alma mater Virgina Tech (hardly ultra cutting edge fabrication).

Despite all those handicaps this unoptimized (for Bitcoin hashing) ancient 130nm multi-purpose shared wafer chip built at a university research fab can achieve 140MH/J.  With optimization and a modern 45nm process >2 GH/J is certainly "possible".  

Once again before you misinterpert.  I am not buying any BFL product (or any new mining hardware).  I don't really care if BFL has the greatest hasher on the planet or the best scam.  I agree it is foolish to give money upfront and hope for the best.  All that being said you undermine your argument when you claim the possible is impossible.

Is a 3.5 GH/s ASIC running on 3.5W possible?  Most certainly.  
Will BFL produce it (and on time, and on spec)?  Who the frack knows.

Um not that I really care but don't you see the stupidity of your claim.


I mean it can't be both.  Hypothetically if they did need 500 chips per TH/s then obviously they are going to need 100,000+ chips to meet demand right?

I mean nobody designs a rig which requires 500 chips and then says "hmm how about lets start with 2,500 chips total".  It would be more like...  I think we can sell 200 of these so we should probably order 100K chips.

Now lets say your wrong about the upper limit being 2GH/s chip.  Lets say it is 5GH/s per chip.  That's 200 chips in the 1TH rig.  Now lets say in volume of 100K chips the per unit cost is $50.00.  That's $10K per rig.  Even on the upgrade price they are solidly profitable.

For the record I don't know if BFL is telling the truth, if it is a scam or not, or if they will meet their deadline.  I do know your claim that it is impossible and that their specs require them to be a competitor to Intel is just stupid.

The smaller the input (in satoshis) the longer the time (measured in blocks) required to get to the high priority threshold of 57,600,000.

All tx have a priority.  If the priority is <57,600,000 compliant nodes will require them tx to include a fee in order to be relayed or included in a block.  If the priority is 57,600,000+ the tx is not required to pay a fee (unless it violates the anti-spam rules).   High priority tx can still pay an optional fee to get priority processing by miners.  Since priority is a product of (value) * (age) the lower the value the higher the age needs to be in order to have the same priority.

Maybe some examples would help.
For simplicity all of the examples involve a single input.  If a tx has multiple inputs then priority is based on the sum product of inputs.

priority = sum(input_value_in_base_units * input_age)/size_in_bytes

0.01 BTC input, 200 blocks old

0.01 BTC input, 1000 blocks old

1 BTC input, 144 blocks old  (the "1 bitcoin day" threshold)

100 BTC input, 5 blocks old

No likely the wallet would use funds (if any) from other addresses to increase priority and reduce fees.

If you mean the user sends all of his funds to a single address in his wallet and then sends the funds to you well yes all the funds would be at a single address so that would be the source.  I would point out that would reduce the age of all the user's coins to zero and expose them to fees on all future tx until they "age" again.

This also won't work on shared wallets like instawallet or bitcoin exchanges where coins can be sent from any address regardless of what user does.

You seem to be trying to force a round peg into a square hole.

This is likely not what you want to hear but the two statements aren't in conflict.  It takes them 12 days to PROCESS your withdraw and then 2-5 business days for the international wire to clear your bank.  4 days is the most common.  So 12 + 4 = 16 days.    You likely will get your money ... in 2 to 3 weeks.  Also yes MtGox prices are consistently 2% to 4% above other exchanges and the illiquidity of outgoing USD is part of the problem.  Lots of buyers and less (relatively speaking) sellers leads to higher prices.

Then again I am a competitor offering same day wire service (yes same day) so take everything I say with a grain of salt.

If the tx consisted of a single 1 satoshi input and we assume it was 250 bytes in size.

https://en.bitcoin.it/wiki/Transaction_fees


A tx must have a priority of 57,600,000 in order to be considered "high priority" and avoid fees.

priority = sum(input_value_in_base_units * input_age)/size_in_bytes
57,600,000 = 1 * input_age / 250
230,400 = input_age

The single satoshi input would need to be 230,400 blocks old (~4.3 years)*.

Remember priority is based on the INPUT not the desired send amount.  If you are sending someone 1 satoshi from an input of 100 BTC it would require much less time (because input: 100 BTC and output: 1 satoshi + 99.99999999999 BTC "change).


* Note: this was an academic exercise because there are hard coded rules which require a fee on tx with value of less than 0.01 BTC regardless of priority/age.  This is done to protect the network from spam.

The exact rules are complex but a rule of thumb is 1 bitcoin day (144 confirms).

So if your input is 1 BTC you would need to wait for 1 day to have sufficient priority to avoid fees.  
If your only input is 0.05 BTC you would need to wait for 20 days.

The sum of the inputs is used to calculate priority so you can for example send 10 BTC to the wallet and then wait a couple hours and send the entire 10.5 BTC without fee.  The outgoing tx (with both 10 BTC and 0.5 BTC inputs) will have a combined priority that is higher than the fee threshold.

Worthy of a hard to explain to co-workers LOLZ!

You choose not to return it.  You can't get a second job, set aside some % of your paycheck, return the item you bought, sell possessions, sell the item you bought with stolen funds, offer to mine at 100% donation, etc?  Really?

You really expect people to believe it PHYSICALLY impossible for you to return the funds you stole in any other manner than a 20% donation on future mining. 

You stole money and choose not to repay it.  There is no CAN NOT.   You are choosing to remain a thief, liar, and piece of shit!  Lets stop pretending ok. Obviously nobody can force you to return the funds but be a man and be honest (at least to yourself) about your complete lack of morals.

If someone stole $1,000 from you and then agree to repay you $0.20 per day would that make it ok?
You will get your money back (minus any interest) in 5,000 or so days.  Of course that assumes they don't just stop repayment given they are a criminal.

I mean 20% really?  Even if repayment made it ok where does 20% come into the equation.  How about 100%?  IT IS STOLEN MONEY.  On what planet is a thief given the option to extend "repayment" of stolen funds by 500%? and then people should be happy about it?

"Oh thank you Mr. thief for repaying at 20% donation not 10% or 1%."

I would point out you likely would not be sued for defamation.  At least not in the US.  Most people don't realize how (almost impossibly) difficult it is to win a defamation/slander suit in the SU.

The first amendment has (somehow despite the slow erosion of liberties) managed to keep the burden of proof very high.

Generally speaking (although statutes vary by state):

• The statement must be false.
• The defendant must know the statement is false or a reasonable person would determine the defendant should have known the statement is false.
• The plantiff must suffer a loss (one recognized by the court as compensatable damages) as a result of the statement.
• The plantiff must be able to quantify and prove the loss.

The burden is very high.  Plenty of people accuse other people of running Ponzi and don't get sued.   Hell some investment brokers accused Madoff of running a ponzi for YEARS before the ponzi broke.  Proving all four elements is extremely difficult even in the best circumstances.  It is possible that defamation actually occurred and yet it simply can't be proven.  I am not saying the plantiff's lawyer did a bad job, I am saing it simply not possible to prove defamation in all cases.  The Supreme Court ruled that while the high burden will allow unanswerable accusations to do otherwise would have a "chilling effect" on free speech.

Even then there are interesting carve outs like the Small Penis Rule.

Your asking two unrelated things.

Is it a Ponzi?  You aren't going to solve this here.  Hell some of Madoff victims didn't believe it was a ponzi AFTER he was arrested.

Is it damaging to Bitcoin?  Is a USD based ponzi/scam/fraud/theft damaging to the dollar?

Bitcoin is a medium of exchange.  Period.   It isn't the morality police.  It isn't the "that interest rate is too high so ban it" agency.   It isn't the commission to prevent idiots from losing their money.  It is a medium of exchange.  People are choosing to exchange their Bitcoins for the potential to get more in the future. 

Bitcoin is working.  If it is a legit business Bitcoin is working.  If it is a scam Bitcoin is still working.

What exactly would that prove?  He is human?

I mean IF (and I don't have a horse in this race one way or another) this is a scam we are talking about a million dollar scam and probably a pro.  For a couple grand (a rounding error on the fraud) one could get birth cert, driver's license, and passport in the name Earl Scrooge McPirateDuck Jr.  For a couple grand more you could get a complete back history with matching records for schools, prior employment, credit cards, and all the social media sites to create an entire convincing backstory.  Seeing someone in person on a 1,000 BTC loan has some value.  It is all about risk/cost vs reward.  When the reward is millions of dollars unless you plan on hiring a investigating firm and spending tens of thousands of your own dollars any sel-help "due diligence" is going to come up short.

Now pirate may be running a legit operation (I don't know/care) but if so then what is keeping the "investors" from losing money is simply blind luck not any skill or due diligence.   


I think people are assuming the kind of due diligence that reduces the risk on a 100 BTC has any value in a potential multi million dollar scam.  It doesn't.  Hell you could get a DNA sample from "pirate" only to learn later that the "pirate" you met was simply some actor who lives in Vegas who was paid $10K to play a role for the day.

Once again before someone says proof this, or you can't prove that ... I DON'T GIVE A FLYING CRAP IF PIRATE IS A SCAMMER OR THE BEST BUSINESSMAN THAT BITCOIN HAS EVER SEEN.  It doesn't matter.   The reality is IF this is a scam/ponzi/fraud the victims are playing against someone way out of their league.   Like peewee soccer vs. world cup champs.

DOH.  Don't post while sleeping.  Your right. I should have said "I can send you a bitcent (0.01 BTC)".

Of course that treshold (0.01 BTC) is adjustable and if BTC were to rise to a significant value (i.e. $100 USD:BTC) it could be lowered without risking the network.

This has to be sarcasm right?  Please tell me you honestly don't believe that.

From ...

To

No I am saying if you have a "stuck tx" you can delete it from your wallet (this will prevent wallet from continually broadcasting it).  In time peers will forget about the stuck tx and you can spend the coins again.  If the tx isn't just stuck but actively been dropped by peers/pools you don't even need to wait you could double spend it right away.

Because it isn't so "easy".  Larger blocks are more likely to be orphaned.  If miners were only paid with fees that wouldn't matter but miners receive a subsidy; currently the subsidy is very high relative to the value of fees.

By including say 200 more tx at 0.0005 ea the miner/pool will produce a block which is worth 0.1 BTC more however if they increase their orphan rate by say 1% then they actually lose 50 * 1% = 0.5 BTC.   The pool/miner long term revenue per block declines by 0.4 BTC.

Is this a problem?  Not in the long term.   The fee was reduced to 0.0005 from 0.01 when BTC:USD exceeded $20.  Had BTC price continued to rise ($33, $50, $150+) it likely would have been a good idea however the price fell making the "value" of 0.0005 BTC tx to a miner much less. 

The issue becomes fees are a negligible relative to the subsidy.  In time three things will change that
1) The subsidy is being reduced to 25 BTC in dec (and 12.5 BTC in little over four years)
2) The value of BTC is rising.
3) The number of tx are rising.
4) The avg fee per tx are rising.

To put it into perspective today all fees make up <1% of block reward however if over the next year the number of transactions doubled, the subsidy is cut in half, and avg fee per tx rises 50% then fees would be worth closer to 5% of total miner compensation.

This.

1) The 0.0005 BTC fee is a spam prevention mechanism.  You could use Bitcoin everyday for your entire life and never pay a fee.

2) The spam prevention fee only applies to low priority transaction.  Period.  If your transaction is high priority then there is no fee.  I could send you a single satoshi right now without a fee.  The input not output size/age is what determines priority.

3) The spam prevention fee can be adjusted.  It was adjusted downward from 0.01 BTC when Bitcoin went above $20 USD.  If necessary it could lowered again to sub cent range as BTC continues to gain value.  I would say at >$100 USD:BTC it might be worthwhile to consider lowering the spam prevention fee to 0.0001 BTC but not until then.    Someday the spam prevention fee may be a single satoshi

So ... no.