Do you think the average user cares about centralization ? Does the average Apple user care he's in a golden prison ? Bitcoin has value only if it's useful in making transactions, that's it. If Bitcoin loses that ability, it will fall like a house of cards. A few individuals might care that there is no central government taxing or freezing their hoard, but they are irrelevant in the grand scheme, they will be left with poker chips which they can trade in a select club of ex-millionaires.

The window of opportunity to fix this clusterfuck is closing fast. The fees are rising exponentially and already make up a non-negligible part of the miner revenue. This means miners will compete for it and plan their capital investments accordingly, and are forced by the market to compete. Because capital costs are the dominant expense in mining, we are are quickly shifting from situation where fees are a nice windfall for miners, to a situation where fees are already priced in the existing mining hardware. When fees will make up half of the mining revenue and will be essential in recovering sunk costs, good luck convincing any miner that he should forgo that revenue and return to negligible fees that the network is more than capable of supporting.

Lead devs and pool owners need to lock themselves in a room and not get out until they have committed to fix the fees issue by any means necessary in at most 6 months. Mark my words, we are on the deck of the Titanic and the band is playing.

Bitcoin is losing it's dominance as a direct result of the greed of the miners. There is no technical reason for keeping the blocksize so low, it's simply politics and human nature: miners are left to decide in their own short term interest and against the interest of the users. This is exactly how old banking behaved and it's sad to see a great dream killed by greed and pointless bickering.

I have paid in excess of $200 in mining fees in the last month. This is forgone revenue coming directly out of my pocket for a business that does not depend on Bitcoin or crypto. This is on par with fees paid to traditional payment gateways at similar volume. I'm already working at adding the option of a leading altcoin which I won't name and passing the Bitcoin fee to the users. It's just a small business but the tide is slowly but surely turning against bitcoin in the payment arena.

The idea that Bitcoin can act as a "store of value" and only deal with large transactions is delusional. Bitcoin is technically inferior to many of the new altcoins, it's only redeeming feature is the strong network effect it has gained, everybody speaks bitcoin so it makes sense to buy and trade in bitcoins. Once end users switch to newer and better performing altcoins, Bitcoin is dead.

This is a phishing attempt by a new user, please remove this link and user. The GPG signed message does not verify, and the official twitter account says nothing.


Edit: thanks for the quick follow up !

A consistent 2-4$ BTC price differential has started to be seen compared to other exchanges. Seems more people are withdrawing BTC than the market can absorb. Since Bitfinex lost half it's Bitcoins but applied only a 36% haircut to existing BTC deposits, they are now functioning as a fractional reserve on the BTC side: they can't match 1:1 even the bitcoins people see in their accounts after the haircut. And since Bitcoins are easy to transfer out, they are bound to run into BTC liquidity problems as more and more people cash out. Since they are solid on USD, they will probably purchase additional BTC from other exchanges and drive the price up. This is quite a fragile situation, Bitfinex is in efect short on BTC, a rapid price increase can kill it if they run out of USD to cover BTC withdrawals at inflated prices.

The scheme strongly favors the largest pool since it will win most preselections. The next to largest pool will win less, therefore it's clients will have less profits per invested mining capital. Yes, there would be some savings with the energy costs, but not proportional to the revenue drop since capital costs are paramount in mining. The miners will therefore switch to the largest pool where they are able to compete on an equal footing with other miners; this pool will quickly control 100% of the hashing power and employ it 100% of the time. We have achieved centralization without any energy savings.

We are seeing a bank run being traded. There are two basic scenarios:
1. People panic, start withdrawing all they have in BFX, this puts presure on their baking relation and USD reserves, delays pile up, people start hitting the exchange to get BTC at any price, and withdraw that instead, a large BTC premium is seen on Bitfinex, the exchange becomes useless for outside traders and the revenue and deposits drop, BFX tokens plunge to zero, eventually the lawyers take over and pick the remaining meat off Bitfinex bones, with some people recovering some parte of their money in a few years time.
2. People keep calm, Bitfinex keeps functioning and keeps generating revenues, withdrawals and deposits work fine, BFX tokens recover to 0.6-0.9 their nominal price in a few months, most people get almost all their money back by selling BFX, some traders make a profit when Bitfinex redeems the BFX at nominal price a few years down the road.

It's entirely up to us, the investors, how it's going to be. For the moment the market seems to think we will have scenario 2. A coordinated lawyer attack might still turn it into scenario 1.

A hijack attempt seems to be in progress. The .onion address is hard to reach (DoS?) while the gate.bitcoinfog.com clearnet site propagates a phishing page, terminated in phc6.onion (I don't want to propagate the full address).
It seems the hackers have compromised bitcoinfog's own clearnet DNS and are controlling the gate.bitcoinfog.com address, at least.
Upon logging in with a test account, this message is received:

Never had significant delays on Mtgox either (Bitcoin, ofc), until today. The beginning of the end I guess.

I've entered a BTC withdrawal request two hours ago. Paid the 0.005 fee too "for faster processing". The transaction was not yet broadcasted, according to blockexplorer.com. What gives ? Anyone can confirm ?

I would find it very ironic that people buy BTC at bubble prices when in fact there are no BTCs to be had in MtGox's coffers.

Actually, withdrawals have continued albeit at a reduced rate, 1 mln $ /day according to MagicalTux.

Billy is a vehement supporter of the cashless economy. He claims cash is an enabler of criminality and corruption. Naturally, I would expect him to hate Bitcoin.

I believe megacorporations, crony capitalists and totalitarian governments are responsible for the lion's share of harm done to the people, not petty criminals and corrupt cops. A cashless society where the rulers can supervise all economic dealings of the populace and deny trade and property to anybody they select is a dream for Stalin, Pinochet or Mobutu. Governmental corruption is not deterred by lack of cash, corrupt officials will mask transactions as legitimate business dealings, deeds for land, offshore accounts, "consultancy contracts" etc.

Seems to me "micropayment channels" is somewhat of a misnomer. I belive the whole idea behind micropayments is to allow small payments for random publishers with which you don't have or need to maintain a relationship. Think random browsing, some pages costing 5c to view. At current fee levels the bitcoin network is perfectly adequate for this, although if everybody would do it the block limit will be hit and the fee would increase.

This is a trust-free incremental settlement system and does not really solve the core micropayments problem: fast and cheap transaction to random publishers. You will tell me someone can use this system to implement micropayments that publishers can leverage, and the user needs to do a single setup transaction with that centralized system. But in that case I really don't see Bitcoin's edge. Paypal could cover that market much better since they are better positioned in terms of market and mind share. Publishers care about their 5c and will implement the system that brings home the bacon, regardless of what currency it uses in the background.

(There are of course applications for this as explained in the thread, but "micropayments" ain't it).

Here where ? I only hear hype and bragging to discourage the competition. A real 2nd generation chip will come from Avalon, but it's likely secret since they don't want to kill their current line prematurely.

A 28nm chip is pure fantasy at this point, the process is too expensive to make it cost effective for bitcoin mining.

Don't buy graphics cards for mining, you won't have a chance to recoup the cost. Bitcoin difficulty has risen like crazy over the last months due to ASICs and you can't compete with those. As for Litcoin, is highly speculative, but if the price holds you will be able to actually see those 10K profits. It might tank the moment it's available on mtgox, or it might tank alongside Bitcoin.

The scheme is essentially a way to turn the increased electricity bill of your co-tenants into cash for yourself. I will stop short of calling it immoral since I had my share of bad neighbors. Sometimes you do what you need to do.

Indeed, blocks contain the hash of previous block, forming a linked list or chain, thus the blockchain. (tadaaaa !)

However the hash of a previous block can be contained by more than one candidate sibling at a given time, this is fairly common. This could be caused for example by two miners who solved a block almost at the same time and broadcasted their block, or by a double spend attempt. Since the network is distributed there is no way to know what is the "right" block.

The majority of the network picks a block they want to extend (for example, the block that does not contain what they ascertain to be a double spend) and they continue to extend that subchain. The algorithm is designed as to use the longest chain as the "main" chain, however it's fairly common that the majority of the network has a different view on which is the main chain. When this happens a reorganization takes place, and the miners who were working on extending the alternate subchain switch to the correct one.

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

The hash power used to create the orphan subchain is wasted and no coins are credited for it (technically there are, but you can spend them only in the orphan chain which nobody accepts). A fast block rate (such as in litecoin or feathercoin) favors block reorgs, and it's an open debate on what is the best security/speed tradeoff.

USB mining is an obvious dead end. Mining is fungible and prone to economies of scale, you will only survive with a massive datacenter, the best ASICs on the market tightly packed on the cheapest boards powered with the cheap energy. Large discounts for purchases, effective workmanship etc. enable you to undercut the competition by pushing more GH/s for a given BTC price. You get more of the mining pie and maybe a thin profit margin.

Compare this with an USB stick where the form factor alone (with USB controller and connector, plastic case etc.) has increased the price 10x as compared with the bare mining chip. Nevermind that in order to run say 10 USB dongles drawing 2W each, you need to power a whole desktop computer with at least 50W.

I assume if it says "finished", you've already clicked the link in the confirmation email. Maybe they are batching large withdrawals for manual review and increased security ?

I assume such a large confirmations requirement has to deal with the possibility of chain reorganizations. Unlike a double spend for a regular transaction, where 6 confirmations in one chain will usually guarantee the transaction will be found in all competing chains, for the coinbase transaction (new bitcoins mined) a chain fork and reorg will guarantee that the coins mined on the alternate chain will be worthless.

So it makes sense to expect a large number of confirmations before paying the mining shares. On the other hand, if the pool pays using the mined coins themselves, it should have no risk. So the real reasoning could be a bit more complex.

XRP is in full bubble mode, encouraged by OpenCoin who restricts the supply. The valuation exceeds that of Bitcoin, that's simply ridiculous. I think the long term goal is for 1XRP to be the same order of magnitude as 1USD, so another 100x increase.

I don't think OpenCoin has a moat sufficiently strong to make this happen and reward investors that buy at these prices. So in my view XRP is a pump and dump altcoin like bitbar, feathercoin etc. The Ripple technology is great and it may be the start of some great cryptocurrencies that do away with mining, while maintaining an open network with no central bank. Despite OpenCoin's claims, I doubt they will open source Ripple too soon, if ever.

They are clearly a first generation design, but the real dilemma is if another generation will be produced in the next few years. I think Avalons are your best bet today, but only if you put them online fast and can recoup the sunk cost in less than 6 months. Otherwise it is quite a risky proposition.

You are betting money on all these things happening simultaneously:
1. Bitcoin price does not tank as a result of panic, regulation, FBI raids etc.
2. Massive ASIC power with cheap energy supply does not come online, destroying your margin
3. Better and more effective ASICs are not produced

I think 1 and 3 are mutually contradictory on the long run, if the price holds you will see much better ASIC designs, there is wide margin for improvement in ASICs.