There seems to be a lot of that going around lately.  This is one of the reasons I believe it would be a great idea to have our own stackexchange site, specifically for answering questions in a dedicated environment.  For one thing, it would clearly distinguish the consistent non-stompers for the newbies' benefits.  To anyone who hasn't already subscribed to the proposal, please do that.

Some people skills, anyone?  Treating newcomers as opponents without taking the time to figure out what they're saying is pretty early on the list no matter where or how you learn them.

@al_capwn Don't treat those few responses as representative.  I will be happy to answer your questions--no one should be expected to magically understand something as complicated as BitCoin without some detailed, patient feedback.  BitCoin does work, it just takes a little while to fit into your head exactly how.  Don't give up yet--I wouldn't want you to miss out on something this cool just because you didn't get your questions answered by the right people.

Your question about what miners are doing is perfectly legitimate, and I agree with you that very few sources on bitcoin explain this properly--it's one of my pet peeves, though I also understand that most BitCoin early adopters aren't exactly customer service professionals.

In order to answer it effectively, let me first explain what BitCoin is and what problem it solves.  These two things are not typically well explained on most websites, and it is difficult to appreciate just how effective BitCoin is until they are understood.

What BitCoin is:  An agreement amongst a community of people to use 21 million secure mathematical tokens--"bitcoins"--as money, like the Iroquois used wampum.  Unlike wampum, there will never be more bitcoins, they are impossible to counterfeit, they can be divided into as small of pieces as you want, and they can be transferred instantly across great distances via a digital connection such as the internet.  This is accomplished by the use of powerful cryptography many times stronger than that used by banks.  Instead of simply being "sent" coins have to be cryptographically signed over from one entity to another, essentially putting a lock and key on each token so that bitcoins can be securely backed up in multiple places, and so that copying doesn't increase the amount you own.

Because bitcoins are given their value by the community, they don't need to be accepted by anyone else or backed by any authority to succeed.  They are like a local currency except much, much more effective and local to the whole world.  As an example of how effective the community is at "backing" the bitcoin, at the beginning of this week someone sold 30,000 bitcoins on the largest exchange, consuming nearly all "buy" offers on the order book and dropping the price by nearly 1/3.  But within a couple of days, the price on the exchange has fully rebounded and bitcoins are again trading at good volumes, with large "buy" offers slowly replacing the ones consumed by the trade.  The ability of such a small economy (there are only 5 million out of the total 21 million bitcoins circulating so far, or about 3.75 million USD worth at current exchange rates) to absorb such a large sell-off without crashing shows that bitcoins are already working beautifully.

What problem BitCoin solves:  Mathematically, the specific implementation of the bitcoin protocol solves the problem of "how to do all of the above without trusting anyone".  If that sounds amazing, it should!  Normally a local currency has to trust all kinds of people for it to be able to work.  So does a national currency.  And in both cases, that trust is often abused.  But with bitcoin, there's no one person who can abuse the system.  Nobody can print more money, nobody can re-use the coins simply by making a copy, and nobody can use anyone else's coins without having direct access to their keys.  People who break its mathematical "rules" simply end up creating a whole different system incompatible with the first.  As long as these rules are followed by someone, the only way bitcoin can fail is for everyone to stop using it.

This marvelous quality of not having to trust anyone is achieved in two ways.  First, through the use of cutting-edge cryptography.  Cryptography ensures that only the owner of the bitcoins has the authority to spend them.  The cryptography used in BitCoin is so strong that all the world's online banking would be compromised before BitCoin would be, and it can even be upgraded if that were to start to happen.  It's like if each banknote in your pocket had a 100-digit combination lock on it that couldn't be removed without destroying the bill itself.  BitCoin is that secure.

But the second way of securing the system, called the "blockchain", is where the real magic happens.  Even with top-notch digital encryption, if there was no central registry to show that certain bitcoins had already been "paid" to someone else, you could sign over the same coins to multiple people in what's called a "double-spend attack", like writing cheques for more money than you have in your account.  Normally this is prevented by a central authority, the bank, who keeps track of all the cheques you write and makes sure they don't exceed the amount of money you have.  Even so, most people won't accept a cheque from you unless they really trust you, and the bank has to spend a lot of money physically protecting those central records, even if they are kept in a digital form.  Not to mention, sometimes a bank employee can abuse their position of trust.  And, in traditional banking, the bank itself doesn't have to follow the rules you do--it can lend out more money than it actually has.

The blockchain fixes all these problems by creating a single master registry of the already-cryptographically-secured bitcoin transfers, verifying them and locking them down in a highly competitive market called "mining".  If you're interested I'll be happy to explain specifically how this happens, but this is the work bitcoin miners are doing--they're not doing any other work for anyone else, and it is very easy to check this both in the sourcecode and also just by observing a running miner carefully, because this is the only data that enters and leaves the program.  In return for this critical role, the bitcoin community rewards miners with a set amount of bitcoins per block, taken from the original limited quantity on a pre-agreed schedule.  As that original amount gradually runs out, this reward will be replaced by fees paid to prioritise one transaction over another--again in a highly competitive market to ensure the lowest possible cost.  The transactions are verified and locked in by the computational work of "mining" in a very special way that means no one else can change the official record of transactions without doing more computational work than the cumulative work of all miners across the whole network.

This means that no matter where or how you process bitcoin transactions, the network remains secure.  Which is incredible--no one else has ever tried to create a system that worked this way!  All previous monetary systems have relied on trusting somebody, whether it was the king, town hall, the federal reserve, or banks.  BitCoin doesn't.  So it's very fair to ask what amount of energy goes into securing the bitcoin network, but you need to understand what BitCoin gets in return for this.  And as someone who's worked extensively in IT, I have to say that all security costs money.  I strongly doubt, however, that a bank could afford to secure their financial systems as cheaply as BitCoin has, nor as effectively.  And unlike banks, every element of BitCoin is laid bare for people to look at.  If there is any way to attack BitCoin profitably, people are welcome to try.  At least 3.75 million dollars' worth of trust is sitting there saying it can't be done.  And as BitCoin scales up, the coins become worth more--thereby leading to higher and higher security.  BitCoin truly is a beautiful technology.

Ask me anything you need to about the parts you don't understand.  I'll be happy to explain them to you.

738577

This is the single best one-liner in favour of BitCoin ever!

+1

Discourse is not a waste of time, but pursuing a point simply because you hope I will have missed a key element of a situation is.  If you want to make a case for taxes being involuntary, make it directly.  Hoping to catch someone on a misstep is an emotional tactic to gain momentum for your argument--it lends no rational significance.  I could be the most bumbling debater in the history of humanity and still accidentally right.

If you live in and benefit from a community which has agreed to use taxation to fund certain activities of shared pertinence such as law enforcement, infrastructure, emergency services, education, etc. yet you do not pay your taxes, you become a leech on everyone else.  To prevent leeching most such communities will have a known and defined process for ascertaining your guilt beyond a reasonable doubt, and taking the actions the community has deemed appropriate.  If you can find a "should" in there somewhere you're welcome to try.

Voluntary is a complicated notion.  Is eating voluntary?  I certainly feel that for myself I choose to eat food of my own free will without coercion and happily.  But on the other hand if I don't eat I will die.  So do I truly eat under duress of death?  A lot of voluntary has to do with a person's attitude rather than the particular circumstances.  Nonetheless the availability of an alternative is generally considered to make something voluntary.

Are you telling me that if you had the option for your taxes not to support your children's education you would take it?  And more importantly, that you feel wronged when your taxes go to educate the child of someone who could not otherwise afford it for them?  You're not exactly currying my sympathy here--education has a pretty clear return on investment.  There do exist jurisdictions, not even just anarchist ones, where there is no government support for education--you are quite welcome to move to one of them.

On the contrary--if any community you participate in is doing unconscionable things, then you have the responsibility to speak out against it and use whatever methods are available to you within that community to prevent it.  If your community continues to act unconscionably you would do well to leave it.  How else can any community willing to act more conscionably gain traction?

At whichever step you do any action impacting the thief which the thief themself did not consent to, you have acted against their consent.  I agree with you that it makes a great deal of difference how such actions are performed, but this is also the case within a state.  Giving someone a fair trial with the opportunity to explain their actions, not using undue force against them unless it is necessary, etc. etc. etc. are all essentially your own standard above applied at a community level.  But at this point in history there's no such thing as a jurisdiction which obtains complete consent from all of its members all the time.

And you have a plan to do this in a non-disruptive way?  Then more power to you!  But if I were to sum up my response to everything above, I would say that you are trying to compare our present circumstances to nearly perfect ones.  This is the wrong comparison--rather a society deserves the support of any rational person if it is simply better than anything else available, including something they themselves are able to bring about without unconscionable action.  We are always bound by our material circumstances--that is the nature of living in a universe that is real.  But we have many tools available to improve those material circumstances--a meaningful life consists of a meaningful use of those tools.

Yes, if at all.  It's not an overly interesting topic to me unless you are looking for a particular insight on it that I actually possess, or have one of broad import yourself to offer.  Suggestions for the former include a more international perspective.  Suggestions for the latter would be any general insights into the functioning of societies which would be widely applicable.

Which is why helping to educate, inform, and involve people with steering them both in a better direction is a very worthwhile pursuit.  And it's more possible to be much more effective at it than it ever has been in history--isn't that great?

There's no "ought".  There's only the "if living under the tyrannical force of a democratic state is unlivable, well, there is actually an alternative.  So by your own measure it can't be so overly terrible can it?"  Under our current set of circumstances I think this is the primary reason that anarchy comes off as so much whining.  Almost anyone posting on the internet is enjoying a higher material standard of living than 5 nines of human beings in history.  It's kind of unimpressive that some of them would be sitting there thinking "It's horrible that I have to give a percentage of this away.  Now if only I had my own private army, I could probably avoid that!"  Hardly inspirational, is it?

Yes, but in your anarchist model someone who does things you don't like (tries to take your property) will be subject to violence against their consent, and quite frankly I don't see the difference.  Every society has some sort of rules which if broken lead to negative consequences.  However if we produce many of them the ones people want to be in will evidently be more desirable.  And right now you must accept that more people want to be in democracies than in anarchies.

In the final assessment I can agree that there probably exists a Nash Equilibrium at total nonviolence and therefore no further possible value to the external imposition of structure.  I'm happy to call it anarchism.  It's a long way away, but probably achievable if we don't destroy ourselves first.  I also believe there's likely to be a possible path from here to there both mentally and socially, with many intermediary steps.  I see present-day democracies as a mediocre but best-so-far environment within which the next step can emerge.

To whom, and when?  It's rather a long list.

Did anyone else greatly appreciate that these two were posted in a row?  Because I sure did

You're digging a giant hole here buddy--I knew precisely what I was talking about.  During the first war I was too young to pay taxes, and during the second war the country I pay taxes to did not support the war with one cent.  And as a completely unrelated topic I opposed the war I was in the country during though not for reasons of anarchism but because of the complex politics involved which I'm sure you're quite ignorant of.  But all of these things aside, I said "functioning anarchism" and I suspect that Somalia is not your model of functioning anarchism.  And in interest of the larger discussion I ought to add that no matter who collects "points" from this particular issue it doesn't really contribute to a meeting and interaction of our respective ideas.  Me "getting to be right" in this paragraph is actually just a waste of both of our time--it says nothing about the validity or invalidity of our approaches.

I would, if I were set on forming an incompatible society with the one I lived in whereas another compatible jurisdiction was available.  In fact, I regularly re-assess this possibility.  I've no idea what you mean by "the validity of the social contract" since I don't follow that model myself.  There is, however, the practical fact that human lives are interconnected and when one decides to start acting incompatibly with the community in which one lives one ought not to be overly surprised that the community sometimes objects.  Applies in a western democracy or the middle of Papua New Guinea.  Involving contracts in the situation doesn't seem to clarify the issue at all.

The same internal page isn't necessarily even desirable, but I do believe that reality itself is convergent, so if our internal change leads our map to better reflect the territory, we're all likely to benefit as social organisms.

An admirable decision.  I'm eager to have you demonstrate your position to me in this manner, if it is more correlated with reality than my own.  I've simply never heard a compelling cause for anarchy.  I'm under no delusion that our existing system is best--in fact I continually try to improve it myself for that very reason.

I think it's an interesting idea, launched under less than ideal circumstances, which hasn't scaled terribly well.
Come now.  I'm being quite civil since as you're well aware I've advocated neither.  Rather, I've advocated the availability of access to alternatives.

I wouldn't say that--there's me for one.  See http://maps.google.com/maps?q=https://smsz.net/btcStats/bitcoin.kml and http://www.bitcoinmap.com/ for an idea.

lol, hardly.

I'm quite a lot more aware of who exactly invaded Somalia than you are, since I actually know people who fought in the respective wars themselves, was in Ethiopia during one of them, and I could tell you some pretty gory details.  You are just making silly assumptions--I'm not american, and have never paid american taxes.  And could you resize that image?  It's unhelpfully large.

lol, that's exactly what I was thinking!

Especially since the existing video, unfortunately, says "bitcoins are generated all over the network, by anybody!"  This is something we need to fix psychologically in the community here.  Although that's the order in which bitcoins get to the network, bitcoins are not generated by a bitcoin miner.  They were all created mathematically right at the beginning when the bitcoin protocol was specified and the blockchain launched.  They are awarded to miners by all of us, in return for processing transactions and providing security to the network, in a highly competitive market.  Everybody repeat it five times.  If I could change one thing about how bitcoins get described to newcomers it would be this.  This slight change makes a universe of difference.

Another thing for people who want to improve the professionalism of Bitcoin:  go here right now and add your support for the proposal of a professional StackExchange Q&A site for BitCoin.  Having a simple, clean, beautiful get-your-questions-answered website linked right off the main page would be an awesome thing for us, and we have the community to support it effectively!

+1

Yeah, but...if it's their own forums those ones going down doesn't make any difference for bitcoin.org.  Or was I the only one who meant "on a different website"?

Regarding business image, +5.  Talk to anyone who's built a successful internet project--professionalism in first impressions is very important.  The non-professional image of bitcoin is the primary barrier I've experienced to getting otherwise interested people to adopt it.

This guy knows something that most hollywood filmmakers don't--that in real life automatic weaponry heats up way too hot to hold it the way Sylvester Stallone does.

Well, for that specific comment I'm simply telling you what most Ethiopians or Kenyans I know feel like.  There are a lot of complicated factors in true quality of life and as I said before material factors don't always play the precise role that some people think.  What in particular were those studies trying to estimate via those metrics?  To build out the picture, the PPP-adjusted per-capita GDP of Ethiopia is close to double Somalia's, and Kenya's is close to triple.  Certain factors, like infrastructure, are heavily impacted by geography: Somalia is a long strip of arid land with its population heavily concentrated on the coast, while Ethiopia is a mountainous highlands with people spread across most of the country.  Commerce in Somalia is also tied heavily to socio-religious homogeneity, with the vast majority of Somalians being Muslim.  The fact that so many money/banking matters are religiously tied (after all Mohammed pbuh was a business man) keeps those aspects more secure from conflict than many individuals.

I'd be surprised if Somalian technology and cell services truly surpass Kenya though--the latter has one of the highest levels of technology in Africa, with services such as cell phone payments used by 90% of households, and reasonably inexpensive wireless internet access across most of the country--it's the telecommunications hub for the whole region.  You can walk into a one room shop in a fairly remote town and the clerk will be sitting behind the counter browsing facebook.  Actually it's my experience with "M-Pesa" cell-phone payments in Kenya that convinces me BitCoin will go global as the internet does--one of the biggest reasons I'm excited about it.  The highest volume use of M-Pesa payments occurs with family members sending money between cities and rural areas--since this describes the bulk of Western Union's international business it bodes very well .

I've lived in both Ethiopia and Kenya, which together account for roughly 90% of the Somalian borders.  Can only comment briefly on Somalia via second-hand experience (mildly better than third-hand a.k.a. "news" I suppose), but happy to answer questions on Ethiopia and Kenya.  I'd have to start by saying that most Ethiopians and Kenyans would laugh at your idea that Somalia is a good place to live relative to them.

I wasn't actually proposing that Somalis are living in a functional anarchy.  However, it is probably one of the best bets for someone to try and start living anarchistically without a government immediately preventing them.  Since there are both Somalis who will befriend you and Somalis who will try to kill you it is also a good place to understand the diversity of the human experience.

If it helps at all, as someone who doesn't identify strongly with either of your perspectives it appears to me that you two largely misunderstand each other.  The skill of creating meaningful dialogue with someone whose perspective you strongly oppose can be quite difficult to acquire--statistically two people who oppose each other tend to both veer further from reality due to human counterwill.

If you prefer you can move to a different jurisdiction and try to convince the populace there to elect someone who will dissolve their government voluntarily.  But those are the breaks of being a very small person in a very big world--we all have to share this little blue dot.