You can't predict future. Tomorrow bitcoin could crash down to 0.01$/btc. No one is predicting the future. He is trying to calculate the PAST rate of return over an 8 month period, expressed as an ANNUAL figure. |
|
|
|
Sure. I did the math pretty quickly, but I think I got it right. It'd be embarrassing if I got it wrong. I have a reputation to uphold, as if I know something about compound interest! |
|
|
|
Since (1) is based on the top 100 addresses and one person can own multiple addresses, there are some extremely wealthy individuals out there.
The 3rd highest is only $1.3M in wealth. #4 through 100 are lower than that. Not sure where "$1.3M" is "extremely wealthy", but it sure isn't here in the US. (not that $1.3M isn't a lot of money, but "extremely" wealthy. naaaah.) |
|
|
|
I'm looking for an ANNUAL increase.... expressed an a %....
You asked a very simple question. Not sure why everyone misunderstood! In 8 months: 20/0.06 = 33333% (or 33332% GAIN) That's a monthly compounded rate of: 0.06 x (1+ n ) ^ 8 = 20 or n= (20 / 0.06 ) ^ (1/8) -1 n=1.06, or a 106% gain every month In other words, your value is 206% of last month's value (or approximately doubling every month.) Proof: 0.06 * 2.06 ^ 8 = 20 so to answer your question, doubling every month, for a year.... 2.06 ^ 12 = 5839, which is 583,900% You were off by a factor of 10. **note, I did monthly compounding. Continuous compounding will yield a different answer, but pretty close.** |
|
|
|
For me the biggest down sides of BTC are
1. I envy the *real* early adopters that mined throughout 2009 with a combined power like my HD6970 and are maybe mainly one person.
I think you are looking at this all wrong. In 2009, there were only about 2.6 million BTC generated ALL YEAR. Say those are evenly spread over 100 early adopters. So 100 people got 26,000 BTC each (current value about a half million dollars). A half million dollars is hardly enough to "retire rich" these days. Not even close. Furthermore, most of those people gave away or spent thousands of BTC already. They would currently be worthless had they NOT thrown them around like candy. Even if it's only ONE guy who mined all of 2009, and has $50M in BTC/paper wealth (no where near Bill Gates' wealth), I don't see a reason to be envious. B.F.D. Congratulate him on his genius, and move on. You're envious of some supposed wealth that just really isn't there. Totalling every bitcoin that has ever been mined, you are only up to $130M. And with 250,000 users currently*, even using the 80/20 rule, there's really not that many "really rich" Bitcoin early adopters. Furthermore, they're probably kicking themselves because they paid 10,000 BTC for a pizza, (currently valued at about $200,000 - that's a darn expensive pizza!) We can all be envious of them, and they can be mad at spending BTC foolishly, or we can look to the future where we have a decent decentralized currency. * I estimated 250,000 users yesterday in another thread. Edit: Here's the list of the 100 richest Bitcoin owners. B.F.D. Ranges from $134K (rich???) to about $6M (ok, that's some serious money, but that is ONE person. Congratulate him on his success, and move on.) |
|
|
|
What's with such hostility? It's one thing to think bitcoin is an unworthy project, but to actually want it to be "stomped out of existence" really crosses the line.
Honestly, a whole bunch of Aspergian basement-dweller types are really really upset about this because 1) They didn't think of it or 2) They just found out about it. Faux rage is strong with Internet males who feel left out. I think there's a need to "take sides", especially among the Slashdot crowd. It's funny, five years back, I would have thought that the Slashdot crowd would be one of the first to embrace something like this. Bitcoin appeals to the liberty-minded tech geek. But lately, it seems that Slashdotters feel the need to "take a stand". There is definitely a group of Slashdotters who derive weird pleasure from superiority in knowledge and opinion. And many of them heard about Bitcoin more than a year ago, and dismissed it. Now there's a need to defend that decision. If this Slashdotter really feels the need to "stomp it out of existence", the best thing that they could do is to undermine the community's faith in the currency. That could be through a technical attack (good luck with that), or through a financial attack (organize a massive dumping of Bitcoins to drive the price down. Good luck with that, too). So we should tell him that he should go buy a bunch of Bitcoins, and then dump them all at once to cause a lot of turbulence in the financial stability of Bitcoins. We also shouldn't overlook the fact that there are quite a number of people who have their personal fortunes tied up in the current financial systems. It may be in Paypal's and Mastercard's best interest to be badmouthing Bitcoin now, to "stomp it out of existence" before it's a serious competitor. |
|
|
|
Evaluating the smallest possible block in the block chain, I looked at Block #1, which is 215 bytes, and is 50 BTC. Using calculations from 2007 Discover Magazine, we can compute that the weight of the 215 bytes is about 1E-21 ounces. At current exchange rates, this 50 BTC is worth approximately 1E+3 dollars (a little less than a thousand bucks). This means that Bitcoins are worth roughly 1E+24 dollars per ounce. Gold is under $2000 per ounce (2E+3), so Bitcoins are 5E+20 times more valuable than gold. That's 500 * 1E+6 * 1E+12, or 500 million trillion times more valuable than gold. Meaningless calculations, I know. But kind of funny. Maybe? |
|
|
|
Does this make it less threatening?
Yes. The fewer entities that have motivation to do it, the less threatening it is. |
|
|
|
Thanks a bunch for your ideas! I've implemented the 1'st one (great idea), and as far as I can see I've fixed the second as well.
For the third I'm not quite sure if it's a much better way to do it than what i'm already doing. But thanks for your proposal :-)
I will soon buy a domain for the website, after that it should be no problem.
I had Bitval open all day, and it worked great! The charts were a little flaky early in the day, but that problem seems to have corrected itself. I used to have Bitcoin Charts open a lot, but it seems to kill Firefox after some time. I suspect it's some sort of memory leak. Bitval is perfect - nice and light and functional. |
|
|
|
Yes they were flawed, it was only a back-of-the-envelope calculation. I didn't think the maintenance cost and building cost would be so expensive compared to the GPUs themselves, but you probably know better.
I think you may have misunderstood my line of attack though. Once somebody has more computing power than everybody else put together, they should go about 1,000 blocks back and try to build a new chain building off that, in secret. (This would take a week.) However their chain will not include any of the transactions from the last 1,000 legitimate blocks. Once it becomes longer than the existing chain, they publish it and instantaneously a whole week of transactions un-happen, i.e. they are reversed and the money (including mining fees) returns to the hands of the original owner, whereas the 50,000 BTC legitimately mined disappear, and the new 50,000 BTC generated are owned by one bitcoin address, the attacker's.
This would cause a massive panic and the price of BTC would crash on the exchanges.
They are then pretty much done in my opinion. They can turn off their datacentre and as long as everybody knows that the datacentre is there and can be powered up again at any time, people will not want to use bitcoins or any similar system.
Of course ideally all the miners would rally together and increase the network power, so much so that our attacker is forced to order another batch of GPUs or give up. But that's a little too idealistic for me.
So in this scenario, they will have spent a massive amount of money on computing power. And it has to be FAR greater than the current combined network (to create fake week-old transactions, and to catch up to present, and then finally to surpass the present). And then, according to your scenario, they will create their own 50,000 BTC (which, at current market prices is itself worth almost $1M), and then throw away that $1M, by driving the price of BTC to zero. Who would do this? A government, I suppose. But you wouldn't do it to make money! |
|
|
|
|
It seems to be that the cost of mining will always approach the expected revenues from mining, such that it's hard to do much better than break-even on mining from now on, especially when you factor in electricity costs. So it occurred to me that the only people who can really benefit from mining in the future are those with no electric bill.
Around here, the price of utilities at college is included in the dorm fee. I wonder if, come September, college campuses will see a spike in their electric bills for dormitories.
|
|
|
|
Fire him, hire me, I'm much more experienced, I know bitcoin-central's code by heart and I accept BTC  Best of luck in your job search. |
|
|
|
As I've mentioned in another thread, you can set up a 2-tier architecture and have the money part on a back-end system, running on your PC, while you have your front end on PHP on a host server. |
|
|
|
Private URLs = security through obscurity,
Well, of course the URLs are password protected. I didn't think the obvious needed to be stated. No matter what, you are trusting the hosting facility. The goal is not perfect security. The goal is minimization of risk with a reasonable cost. Refer to Schneier's writings on security and tradeoffs. |
|
|
|
What I mean is, what if the US takes the bitcoin code, starts their own block chain that allows them to print extra currency whenever they like, sets up a few dozen Thash of servers to secure it, and then offers to the general public that they can exchange their real dollars 1:1 for this virtual currency?
How do you know that Bitcoin wasn't started by the US Government? |
|
|
|
Yes, and it's also one of the most important issues for me. The question is, is it solvable?
One partial solution I have thought about, is to actally withdraw some of the online funds to an offline bitcoin adress, and then manually deposit/withdraw funds to the online host as neccessary. This would limit my risk since any potential thieving host would only be able to run away with a fraction of the entire project balance. But this still puts me at a risk I'm not entirely comfortable with, so I would really like if this is possible to secure some other way. Is it at all possible to solve this with encryption somehow?
Of course, the optimal would be to actually find a host I can trust 100%, but this is quite hard to do since even the most trustworthy may surprice you when money is involved.
One solution that I have already implemented is this: Architecture: A server in a hosting environment that the users interact with. Also, a PC at your location that is permanently connected to the internet. The PC contains your wallet. The PC communicates to the server using a "private URLs" and json to communicate the status of payments. The PC software can monitor the Bitcoin network looking for confirmed transactions. The PC software can generate wallet ID's for the server, so that when someone "pays" the server using one of the ids, the money is actually coming to your PC in your basement. Your PC detects the confirmed transaction, hits the server at a private URL saying that a payment came in, and the server handles the rest. Essentially, you are building a 2-tier architecture, with the "front end" having zero money on it. The "backend" is in your basement, on a PC. The way I set this up, the backend is just a simple Python program, running JsonRPC, and hitting the Bitcoin Server program which is installed on the PC. I wrote the program to "preload" a bunch of wallet ID's (like 10,000, to handle a lot of transactions and abandoned transactions on the server). Then send each of those wallet ID's to your server. When your server needs to send a Wallet ID to a user (so that the user can pay the server), it just draws from its pool, and the money follows this path: From the user, to the bitcoin network, to the backend PC. Then, the backend PC is in a loop, looking for transactions, and, when it discovers a confirmed transaction (using whatever confirmation you think is required. 1? 6? zero? it's your choice), then it sends a message to the server reporting that the funds have been received. If you are sending money out, you can do the same thing. Have the backend PC check periodically with the server, asking "are there any outbound transactions?" If so, the backend gets the transactions, and verifies the sanity of it. (You can set whatever parameters you want. Want to make sure no one send more than 10 BTC without your manual involvement? fine.) The backend PC stays in contact with the server, informing the server of the progress the whole way. The biggest risk in this setup would be that some guy at the hosting facility would change the wallet IDs to direct the incoming money to himself, rather than you. Or perhaps trigger a transaction to try to force money to be sent to him, from your PC. But that cuts out A LOT of risk. I have built this already and have it "in production". (The software is not production grade, but it'd be simple to make it pretty bullet proof). Let me know if you are interested. |
|
|
|
|
Show Posts
