Hey,

In my personal effort to spread awareness about Bitcoin and it's valuable properties I've contacted the owner of the MinutePhysics channel on youtube asking him if he'd be interested in making an animated video about Bitcoin.

Well we talked just now and he told me he'd be generally happy to have us sponsor a Bitcoin related video. He said he could try to make it about a topic related to Bitcoin, like the two generals problem, encryption, etc. and it would be a regular MinutePhysics video on his channel which would have a title card at the end saying "this video made possible by support from xyz".

But he said he wanted to be clear up front, and that to get that kind of recognition & input into the topic, the sponsorship would need to be $1-3k or above (depending on details&circumstances). The funds would be used to make future MinutePhysics projects and videos possible.


So the purpose of this thread is to gauge the interest in sponsoring a video.. As you can see by yourselves he is really good at explaining complex ideas in short, funny and interesting ways and I thought maybe it would be a worthwhile idea to have him explain some of the more complex parts of the Bitcoin technology and have it featured on his channel.


What do you think?

Hello,

I was watching the video with the new voice-over for MtGox's checkout solution and a question popped into my mind: How accessible is this information? In order words, how hard is it for merchants potentially interested in using Bitcoin to learn about the various options they have?

So I first looked at weusecoins.com where I found it lists:

https://bit-pay.com/ which is good and
https://bitspend.eu/ https://walletbit.com/ http://www.bitwillet.com/ which I have no idea about who or what these are and..
..there's also a link to http://btcinch.com/ which goes to a hosting default page and it also links to a wiki page but actually just links back to the merchant page on weusecoins.com.

I think this is a problem!

Next I looked at the official bitcoin.org and the Bitcoin wiki page and there it's even worse. Although the frontpage bitcoin.org has a link to the "Merchant Howto" wiki page, the main wiki page has no link that would lead directly to merchant solutions. Also once you do go into "Businesses (Trade)" it's only at the very bottom of the page of all the businesses accepting Bitcoin under "See Also" where one can find the link to "ECommerce" https://en.bitcoin.it/wiki/Category:ECommerce and it's only on this page where there's a "Merchant Howto" link to here https://en.bitcoin.it/wiki/Merchant_Howto

I believe this is also a problem.

If I'm a merchant and I already have some sort of an online solution incorporated into my business I would probably get really frustrated and disheartened really fast if not only I needed to do a lot of reading on Bitcoin but also had trouble getting easily accessible and easy to learn how to use information about merchant solutions.


So I would like to suggest:

weusecoins.com please look into updating the "Bitcoin for Merchants" page and whoever is in charge of the wiki page please add a link to merchant solutions on the main wiki page and also update the information on the relevant sub pages.

At the very least I'd like to start a discussion about this topic of information availability with regards to merchant solutions in the hopes to find ideas of how to make it as easily accessible and as easy to learn how to use as possible so potential adopter don't get discouraged unnecessarily.

Based on genjix's article: http://bitcoinmedia.com/algorithmic-money-bitcoin-needs-a-buzzword-and-own-lexicon/


Let's brainstorm catchphrases that would lend themselves well to describing Bitcoin and luring in new owners/users?

A few of my ideas:

Bitcoin -

- a currency not a even a banker with a super computer can create more out of nothing.
- combined user computational speed that puts the best most expensive super computers to shame.
- a currency so accessible the only requirements are being a live and having access to the internet
- a currency more predictable and fixed than the force of gravity
- rendering central bankers so obsolete they'll cry for Greenpeace protection
- so scarce that there will ever only be at most 1BTC per every 330 people at the current world population
- so free that only a nuclear bomb can stop you from sending it
- so transparent the whole world can see exactly how it works


Got any more?

[Miners, in other words those who safeguard the Bitcoin system against any attacks on the system as it is but also safeguarding against a new client with a change of the pre agreed upon rules, are getting whittled down to a small minority that has the capital to compete!]

EDIT: My thinking in this OP is flawed by my lack of understanding of how the Bitcoin system works.

So I did some more thinking about my post here and specifically the lesson about if there's centralized power to be auctioned off, the auctioned will always follow and a really alarming thought crossed my mind:

I fear I may have discovered a fatal flaw in Bitcoin's design.

(I know what you're thinking: "oh no, not one of those again.." but please hear me out. I'd much rather you prove me wrong than me being right, I just fear that I'm not wrong.)


The fatal flaw is in how network gets secured through CPU power and more specifically the way the reward is tied to the hashing difficulty. Think about it, if you examine the current situation of who the miners are, not the mining pools which are irrelevant to this problem, but the specific individual miners.. who are they? I'll tell you! They are those individuals among us  that have the right equipment and can get electricity at the right price in order for mining to be a profitable venture for them.

Do you see the problem yet?

Miners, in other words those who safeguard the Bitcoin system against any attacks on the system as it is but also safeguarding against a new client with a change of the pre agreed upon rules, are getting whittled down to a small minority that has the capital to compete! Don't you see? It's a clear example of concentration of power! As the difficulty rises less and less miners are able to stay afloat and compete and smaller and smaller is the number of safeguarding individual miners!

It doesn't take a crystal ball to figure out where this is leading.. Eventually you are going to have a few powerful corporations running all the mining power and we're all going to be at their mercy when it comes to the rules of the system. And believe me, it's a given that such concentrated power will inevitably get auctioned off!

Btw this is how Satoshi envisioned the system staying secure in his Bitcoin paper:

The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes.

Can we really count on a small minority of nodes to remain honest? The entire human history says: NO!


I'm a bit shaken just by thinking about this so please, someone, please put my mind at ease and show me how I am wrong, how the scenario I just laid out isn't going to come true?

tl;dr: What if miners demanded insurance on a proposed BIP and we had company offering such insurance instruments forcing it to examine every proposal for it's risks and being financially motivated to get their assessment right putting the miners minds at ease and forcing the developers to be open and honest about their proposals?

[TOPIC]
As we are facing this dilemma about which BIP is the best way forward I see a few potentially very dangerous paradigms shine through the discussions I see on how to solve this dilemma and prevent it in the future. For example genjix deals with the later question in this article: http://bitcoinmedia.com/cathartic-progress/

I spoke to genjix last night about a few of my objections to his idea and explained to him my own idea. I would like, as a thought experiment, introduce my idea to everyone, to see what kind of reactions it would get, whether it has any merits and potential legs.


[INTRODUCTION]
It is my strong belief that Bitcoin will not succeed if it can't maintain it's integrity of the promised rules embedded in the original client. It is these rules(scarcity, security, sovereignty in control) why I support and believe in Bitcoin so strongly. And it's why any potential breach of these rules will instantly make me lose faith and leave never to return to Bitcoin ever again.

I speculate I'm not the only one who shares these beliefs so I think the big question is how do we insure the integrity of these rules? How do we insure the whole system doesn't get corrupted by a small group of people and changed in a profound way.

To answer this question I believe the best approach is to look to the real world for examples of what exactly enables such events. And from all of my research into human history on this particular subject this one lesson speaks volumes to me: If there is centralized power or influence to be auctioned off, the auctions are soon to follow. (hence the corporatism, often mistaken as capitalism, in today's real world)

Because of this lesson I do not believe any one individual, or one group of individuals, elected or picked otherwise, should hold centralized power or influence over everyone else no matter what the issue is. As soon as we make this mistake, however well-intentioned, the auctions are going to follow and eventually we're going to end up with a system that will look much like what we have in the real world today.

[CONCEPT]
But how then one can solve a dilemma such as we face without centralizing power or influence you ask? Well I think the answer is pretty straight forward:

The main problem any of the proposed changes has is the attached risk factor. The risk of making the wrong step in the development complicating future developments, the risk of making the whole system more susceptible to attacks, the risk of making mistakes causing damage(bugs), the risk of dividing the community, ect..

Well, if it's all about risk, then I ask you, what do we do in the real world when we face a credible risk? We insure ourselves! And my main point of this post is: Why don't we do the same?

Think about it. Who bears most of the risk? I would argue the most risk lies with the miners since they have the most invested in this system and are making a profit from it. Second most lies with all the Bitcoin holders but even so, their holding is irrelevant if there aren't any miners to enable them the use of it, so I'd argue the risk in both cases lies primarily with miners.

[IDEA]
Here comes my thought experiment: What if we had a insurance company, or more companies competing with each other.., that offered the miners insurance on a proposed change to Bitcoin going bad in any way? What if miners wouldn't agree to a proposed change unless they could get a good insurance deal? What if they would weigh which proposed change was better by how good the insurance deal they could get for it was? What would happen?

My theory is that if such a company existed and miners demanded insurance on proposed changes it would need to have people employed who were capable assessing the risks carried by a particular proposed change. If a proposed change carried too much risk, the insurance deal wouldn't be good enough for miners to feel comfortable taking the risk so they'd reject it. It would force the developers to be as open and as helpful to the insurance company's experts in order to convince them how small or non existent the real risks attached to their proposed change is. It would punish the insurance companies for being wrong in their assessment by being liable for a big payout if the risky event came true. It would put miners minds at ease without the need to completely understand the intricate technical details of each proposed change. There would be no need for any kind of centralization of power or influence in which proposed change should get adopted, instead there would be a ratting attached by a company financially incentivized to get this rating right, especially if it had competition!

[END]
Insurance companies are also how I personally believe we could have the real world without any need for governments and their coercive services but that's a whole different topic.

Anyway, I invite you to please share your opinion about this idea, and please don't get hanged up on the fact that we don't have such an insurance company or how it could possibly operate, the thought experiment is about a scenario where we have one. Thank's for your attention!

Update 3:

7 days ago I got this email:

Hi hazek,

Just thought I'd follow up your last email.  Thanks heaps for your helpful links regarding Bitcoin.  We've researched into using accepting Bitcoin as payment, but it's not feasible or practical to pursue at this point in time.

Thanks again for your interest in the film.

Regards,
Ed.

 

Oh well. I replied asking why, but haven't heard back since.

------------------------------------------------------------
UPDATE 2:

I'm talking with the filmmaker:

Hey hazek,

Thanks for your email.  I appreciate you blogging the film on Daily Paul.  Hopefully that will give us a boost.

I hadn't considered Bitcoins as payment, but we'll certainly consider that.  Distrify also offer an affiliate program, where you can sign up with them and share the film on your website or Facebook page, thereby received a commission off all sales derived through that.  Just a thought anyway.

Will definitely look into the Bitcoin opportunity.

Regards,
Ed.

----------------------------------------------------------

UPDATE: Now available at: http://www.endoftheroadfilm.com/

Unfortunately it's not free and costs $4.99 to rent and stream or $10 to buy and download but from judging by one review it's well worth it!

----------------------------------------------------------
I just saw Peter Schiff post a link on his FB page to this trailer and I thought it's production looked amazing and it really could turn out a major documentary telling people exactly what's going on in the financial world right now.

Check it out:
http://www.youtube.com/watch?v=A1DqBNE0vgE

[Mt.Gox has]

To the community;

A free society perspective on the matter


The answer to the question who has the authority over what happens now at Mt.gox is Mt.Gox has. Period.
They own the place, they (temporarily) own your money and they can do what ever the hell they want.



Yes the money was yours and you had(past tense) the authority when it was in your possession but the second you deposited that money into Mt.Gox you gave up that authority and surrendered it to Mt.Gox and that's the reality of the situation.

True, you voluntarily surrendered your authority because you trusted Mt.Gox and you even rewarded this trust by paying a commission on all of your trades. But that doesn't mean you have any guarantees you're money or your trades are being properly protected. Mt.Gox may promise you they'll protect your money and trades but you can't force them to.

Unless you signed a private contract with them stating otherwise, all you can do is trust them and ultimately they're in control. Again, the reality of the situation.


If they break your trust, if they mishandle your money and trades the only recourse you have is to withdraw your money and take it and your commissions some place else, hurt them where it hurts them the most, their wallet.


And that dear Bitcoin community is how a free society and the free market would deal with this fiasco.

[The thought also occurred to me]

This guy is so full of shit you have to reread it to believe it. In the below quotes of his OP  you can basically see how he first explains the facts of the matter and then goes on to make some wild outrages fantasy driven claims and accusations. Way to contradict yourself in the very same post buddy!

The thought also occurred to me that there were only about 100 bitcoins worth of buy orders back on the market in the minutes immediately following all of this. I could place a reasonably sized sell order for $0.001, crash the market again, and withdraw probably all of the bitcoins, since they'd be valued at $0.001 each and would fit under the $1000 USD limit. I also decided against this, when I realized that whoever placed the gigantic sell order was probably doing so for the exact same reasons and I knew how that would make me look.

On top of how misleading I felt they were being about what I knew occurred, I felt it was far worse that they were using this argument for why they wanted to undo the trades. From reading their public statements, they're making it sound like they're reverting the trades because they want to prevent a hacker from profiting from it. This is simply not true, the vast majority, if not all of the buy orders that picked up coins at a low price were regular users like myself. Any profit this hacker was going to make, he's already done so. The majority of the buy orders that got executed were standing orders from legit users that had been in the system for quite some time, and those are the orders he's threatening to revert.

WTF? First you say you figured out that the hacker was probably buying low and trying to profit from it, and then you try to argument that the only trades that could have happened were from legitimate users??  

Recently I've been getting into the bitcoin trading market. Over the last couple of weeks, I was hitting the $1000 USD Dwolla cash withdrawal limit from Mt Gox, so I requested that it be increased. I sent Mt Gox a copy of my driver's license and two utility bills in my name/address to prove my identity, which Mark accepted and increased my limit. Could that have been faked? Sure. But, if I was the hacker I was going about this whole thing stupidly. I had several ways I could have drained the Mt Gox account, and deliberately didn't. I immediately contacted Mark to identify myself as the buyer and offer assistance. If I were up to something shady, I was doing a really bad job at it.

I attempted to withdraw the bitcoin balance into my own wallet, and hit the limit that Mt Gox has, preventing you from withdrawing more than $1000 USD worth of bitcoins (at the current market value) in a day. This transferred 643.27 bitcoins to my personal bitcoin account before hitting that limit. It was pretty well known that the limit for transferring bitcoins was actually broken in Mt Gox. It stopped you from moving more than that in one withdrawal, but you could immediately ask for more and get another $1000 USD worth, over and over. I decided against this, since it was exploiting a bug, and I definitely didn't want to do anything suspicious looking or improper.

The second thing wrong with Mt Gox's statement is that it makes it sound like only the hacker managed to withdraw any money, and even then only $1000 worth. I alone withdrew 643 bitcoins (worth more than $10,000 USD easily). The withdrawal limit feature was so broken, it was hard to imagine the hacker didn't know how to exploit it.

So wait, you requested your account limit to get raised so you were able to withdraw more than $1000 worth, you got your limit raised but that also meant that the withdrawal limit was somehow broken and the hacker withdrew god knows how much? Interesting logic.


Sir, you are full of shit. You are whining about not being able to keep stolen money and you are making it sound as if anyone is forcing you or anyone else to stay at mtgox after it reopens. I suggest you stfu, be glad you didn't get your money stollen, the $3000 you had in there and withdraw and never trade on mtgox again because that's about the only recourse you have in your situation.

I guess this is how mental illness looks like:

We're about to get a pretty big bump again.

Difficulty now:   567358
Estimated increase by bitcoincharts:   875009

Also, here's chodpaba's post with a more in depth forecast: http://forum.bitcoin.org/index.php?topic=12671.0

[tl;dr: mtgox creates an environment of imperfect information which causes crazy volatility which then hurts Bitcoin's credibility and chances of merchants picking it up as a viable payment option and ultimately it's success. Please switch to an exchange that offers full transparency, like tradehill.com for example does!]

This is a serious problem and I sincerely hope you are able to read this post as objectively as you possibly can.


First let me define what successful Bitcoin means to me: It means Bitcoin is used on a daily bases and on a large scale to facilitate trade between people.

It does not mean Bitcoins have to be worth a specific amount of something else, it does not mean the price needs to keep rising, it does not mean people aren't losing money speculating about their value.

Now that I've cleared that up I will get to the point of this post. I think we all already understand that one of the main factors that will play a huge role in Bitcoins success (as I defined it) is if merchants adopt it as a payment method. This is one of the biggest obstacles we face and even though we're still in it's infancy and we already have quite a few merchants accepting it I think we have a problem.

The problem lies in what is happening with the spot price this weekend. These huge horrendous fluctuations aren't problematic because speculators are losing money, no! they are a problem because merchants can't possibly trust Bitcoin to keep it's value if they accept it for their goods and services. And yes I know there's options trading going on where they can insure themselves but I just believe that's too much of a hurdle and also wipes out any profits they gain by not paying fees to traditional online payment service providers.

Simply put Bitcoin absolutely needs some semblance of price stability in order to be considered by merchants as a viable option.

So what does that have to do with mtgox? Well I believe they create an environment where people are making a bunch of bad decisions based on incomplete information. First big problem are the dark pool orders that hide a potentially huge chunks of oversupply or over-demand from us. Then they have this ridiculous 0.73/1.73 depth table rule where they don't even show all the orders placed and active. That's right, they only show bids with a price from spot to 27% below and asks with a price from spot to 73% above.

Essentially everyone gets to see a partial picture of supply and demand with 3 times as much asks as they see bids, and that's even if we could see the hidden dark orders.

How are people suppose to know what is a good price in such an environmental? How is the price suppose to remain stable if all everyone ever does is at best educated guessing about what their Bitcoins are worth? The answer is obviously they can't. Hence the horrendous volatility of the past 60hours or so.

If we want stable prices, the market needs to have all the information in order to make educated decisions.


In conclusion: I wrote this post with the intention of raising this issue and making a plea to everyone who shares my hopes of success for Bitcoin. I don't care what mtgox does, they can do whatever the hell they want. But please listen to me and please strongly consider switching over to tradehill.com where there are none of these shenanigans and we can all see everything and make educated decisions about what our Bitcoins are worth and maybe just maybe maintain a more stable price, stable enough for merchants to see it as a viable option and adopt it.

Thank you.


tl;dr: mtgox creates an environment of imperfect information which causes crazy volatility which then hurts Bitcoin's credibility and chances of merchants picking it up as a viable payment option and ultimately it's success. Please switch to an exchange that offers full transparency, like tradehill.com for example does!

p.s.: I'm not in anyway affiliated with tradehill, I do have an account that I created today but I wont even give you my referral code because I don't care where we move our trades, as long as we can see all the information like we can on tradehill.

p.s.2: I have more Bitcoins right now then I had before the volatility started so you can't attribute this post to any sort of rage or anger on my part.

Well I just saw a link posted on Facebook to the Wikileaks Spreadshirt webshop and when I checked it out I saw they don't accept Bitcoins for payment.

Talk about a low blow: http://wikileaks.spreadshirt.com/shop/help/index/categoryId/8#jumpto38

If you sold your Bitcoins in the past few days, would you please tell us what your reasoning was for not holding on to them?

Hey my early adopter friends. Let me assume for a second that you like I believe that Bitcoin is the greatest invention of our recent time and it is in our best interest and the interest of the whole world to get a critical mass of people use it and support it.

I think we're already doing a pretty good job of it but I also think there's a lot of room to grow. And in that spirit I was hoping you'd sacrifice 18min and watch the following presentation:

Simon Sinek: How great leaders inspire action

Thank you for your time.

All the recent posts that people are making about the scary deflation monster and other "fatal flaws" of the Bitcoin design made bit uneasy about trusting people to be smart enough and to refuse any such proposals in the future.

I believe that we are all currently slaves under the fiat monetary systems around the world and the only reason for that is lack of economic literacy. People simply don't know they are getting ripped off by an invisible hand of inflation. I believe media propaganda and the public school indoctrination play the crucial role in keeping everyone in the dark.

Since I'm still not exactly sure how many clients would have to start using new rules for the whole Bitcoin network to switch and since I learned to fear the ignorance of the general public I had this idea that maybe it would be smart to add some Austrian economic lessons to the client. Either links to key articles or key youtube videos or key books on amazon or at least something to keep the Bitcoin users informed.


What do you think? Are my fears baseless or is this a good idea?

Buckle up and fasten your seatbelts, this mike be a big boost:

http://www.youtube.com/watch?v=2GiQEECNcZM


EDIT: Btw horrible timing for the wiki pages to be down. Anyway we can get that fixed ASAP?

Just cought the following tweet:

rampietti‎ @TheRealPlato Hi, can you contact me at alessandro.rampietti@aljazeera.net please. trying to do a story on Bitcoin for al jazeera english.

Could someone contact the man?

It's just too big. I have only 2.5 BTC in my possession and I read this article that I liked so I wanted to donate a small ammount of 0.03BTC which is around 25 cents USD and now because there's this stupid 0.01 mandatory fee I'm just not going to donate anything.

Freaking fix this.

LOOOL

In the currency wars, the nerds are winning. The value of a Bitcoin — a digital currency trading over peer-to-peer networks — has rocketed more than nine-fold in two months to $8.74. The preordained supply and decentralization of Bitcoins have intrigued geeks and paranoid inflationistas alike. But this abstract gold may not survive what looks like a bubble...

By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Read more at: http://blogs.reuters.com/columns/2011/05/27/virtual-bitcoins-are-appealing-but-probably-doomed/

I was thinking of making making a video in a powerpoint presentation style while narrating with the below script and I was wondering what you think about it and whether or not I should do it? Mind you I have zero experience with making videos..

---------------------------------------------------------
Bitcoin for dummies

draft:
-goal of the video
-basic description
-basic explanation of terms
-basic explanation of how it works, security
-advantages, appealing features


Goal of the video

So there are already these countless articles out there, explaining in detail what exactly Bitcoin is and how exactly it works in the technical sense, but I still get the sense that people don't really understand it. That's why I decided to make this short Bitcoin for dummies video, where I'll explain in very simple layman terms roughly what it is and how it works and perhaps why you should research it further.

Basic description

And having said that,  lets get right to it. Now before I get into anything else I just want to clarify what Bitcoin is. And the best way to sort of describe it is by comparing it to money in a video game. Just like say gold in World of Warcraft Bitcoin is a fictional, basically made up money on the computer. It's using it's own software for generating, maintaining, securing and transferring of Bitcoins and even though you can already transfer them physically they do not exist outside of a computer chip in a physical form.

Terms:
Next I want to look at the terms that are most often used to describing Bitcoin: a decentralized digital p2p crypto-currency

Let's start with decentralized. Unlike WoW gold which you can earn while playing the game Bitcoins are not being created and regulated by a main server or a central authority. With our example WoW the central authority is Blizzard, the producer of the game, who owns the servers, which you as a player connect to when you play the game. And it is these servers that decide how much of gold there is at any point in time and how players can earn it. With Bitcoin on the other all the rules are already embedded into the client you install on your computer. These rules were preset when Bitcoin was developed and cannot change anymore. If someone connects to the network they have to use a client that obeys these rules or they'll get ignored by the rest. So the only way to ever change the rules is to have the entire network switch to your client with your new rules.

I don't want to delve into the economical or political implications of this type of a design, I just want you to be able to understand how it works.

The next term is digital, which we already covered and as we said it means it exists solely on computers just like WoW gold.

Next we have peer to peer which is what p2p stands for. This term describes how the Bitcoin network communicates. A peer is someone in the network who is running the Bitcoin client. This client acts both as a client and as a server, which means that unlike in a centrally run network like the WoW game, where the clients all connect to a central server, in the peer to peer network clients form a network by connecting to each other.

And then theres crypto which is short for cryptography which describes how Bitcoin is secured. Basically it's a way of hiding and securing data, which among other things is used with securing online banking, protecting government secret digital data, securing secure communication lines ect.

How it works:

Now that we have a basic understanding of it's main features and what Bitcoin actually is let's look at how it all ties together and why it works.
As we said Bitcoins are fictional, made up digital "coins" so you are probably asking yourself why couldn't someone just make up how many Bitcoins they have and cheat everyone else, especially if there is no central authority keeping track and keeping everyone honest. Well the reason they can't cheat lies in the next important part of it. In our WoW example it's the server which keeps track of every player's gold in it's own private database. Because Bitcoin is decentralized the database is public and a copy of it is downloaded on every single client. This in of itself does not keep everyone honest or secure but if you want to add a new entry to the database that says you received some coins, there are rules you have to follow or else when you send the new entry to the rest of the people for them to update their version of the database they'll reject it as invalid. These rules are really easy to check if they were followed and extremely hard or practically impossible to cheat. So in essence everyone is keeping everyone else honest.
In order to comply with one of those rules you have to sacrifice your processor speed for solving a difficult mathematical problem, so there is a reward system in place for those who contribute.  Anyone who wants to add a new entry to the database has to first solve that problem. It's a meaningless problem, but with our current technology can't be cheated and is very easy to verify.

The solving of this problem is what the Bitcoin community dubbed as "mining". It's something you don't have to take part in order to able to use Bitcoin for transactions only and it's actually regulated through it's rules so that the more people "mine", the harder it is to solve the problem, where right now it's not even worth the electricity unless you have a good graphics card.

This problem solving is also random which means it's impossible to know how fast someone will find a solution. The faster your computer, the less time it will take but it's still random which means someone with a way slower computer can get lucky and beat you to it. Who ever finds this solution first, can then make a new valid entry to the database and as a reward receive some Bitcoins. When a solution is found and new entry made, that entry also called a block, is then sent to everyone in the network to verify and add to their version of the database. This process is also how all the Bitcoins that will ever exists are going to get created and distributed.

Basically all these virtual fictional coins are within that database. The database is constantly updated by people who participate in the "mining" process. Every time a new entry or a block is added someone received some brand new Bitcoins. These blocks also contain all the transactions between people which happened since the last block was created.
Every coin in that database is attached to a pair of a public and private key. The person who owns a Bitcoin must have both the public key to which the Bitcoin is attached and the private key. It is these pairs of keys in a separate file on your computer called wallet.dat that determine the ownership. If you lose this pair of keys you lose your Bitcoin.

This hopefully roughly explains how Bitcoin works. Now let's look at why someone would value these "coins" and use them as money online:

- they are extremely secure and are becoming increasingly so with the growing network of Bitcoin users.
- you can store your wallet.dat file anywhere you'd like: USB stick, DVD, CD, online email account, ect ect
- they are like cash which means no chargebacks are possible, once you send them, you can't get them back unless someone sends them back voluntarily
- the supply of Bitcoins is limited to just under 21mio, so thievery through the invisible hand of monetary inflation is not possible
- unless someone gets a hold of your wallet.dat file, no one can stop you from using them
- even if all transactions are public in the distributed database there is no way for anyone to know by just looking through the database who those "coins" belong to
- with proper precautions it is possible to remain pseudo-anonymous while using Bitcoins
- the Bitcoin network is practically impossible to shutdown by anyone
- no need for middlemen gobbling up expensive fees and requiring being trusted with your personal info
- client software is open source, meaning the code is freely available to everyone and anyone can see and double check, what it does

----------------------------------------------------------

What do you think?

Oh, and feel free to give me an incentive : 1KZxnxVuvXTrspNa6zWNpPu7LwPD8VXeko