got my pth invite , recommeded.

I would like to know the price of PTH

There has been a lot of debate about what Bitcoins are -- i.e. currency vs. commodity. Also there has been a lot of debate about inflation vs. deflation with respect to Bitcoins, whether people would lend them, at what rates, etc.

I think the most apt description of Bitcoins is that they are shares of stock in this communal Bitcoin enterprise we are undertaking. It is a lot like being part of a company (right now a very small company) and being paid in stock shares. There are a fixed number of Bitcoins, as there are a fixed number of shares in a company (barring new issues/etc.).

The primary value of Bitcoins right now is the hope that they will someday be worth significantly more than they are right now. For that to happen, the Bitcoin enterprise as a whole needs to gain collective value. We, as employee/owners of Bitcoin need to generate that added value. The most obvious way is to facilitate internet commerce by bartering shares of Bitcoin for other goods. The collective computational effort of all the employee/owners helps ensure that the barter is fair by keeping a record of each transaction. The individual efforts of some Bitcoiners are helping to make the barter of Bitcoins easier or more useful.

Regarding lending/borrowing of Bitcoins, to me it is analogous to lending/borrowing stock. The primary reason to borrow Bitcoins would be because you think they are overvalued and will be worth less when you have to return them. When you borrow the Bitcoins, you can sell them now (barter them now) and hopefully it will cost you less to buy them back at a later date so that you can return them to your lender (probably plus a fee).

In essence, Bitcoins are like a "direct public offering" of stock in the Bitcoin enterprise.

A lot of people go into business partnerships (or marriages) assuming there will never be any serious disagreements. I forsee that if bitcoin ever gains enough acceptance to have some significant money involved, there will inevitably be disagreements and even lawsuits about some of the things that are currently established only via consensus. Imagine someone getting a court order mandating everyone must use a particular bitcoin program (or *not* use a particular one) because alternatives cause them "financial harm."

Everyone here (including myself) is more intrigued by the technical aspects of bitcoin, but the social (and perhaps legal) aspects of the system are ultimately going to be more important, unless someone can figure out a way to solve these problems technically. If bitcoin is ever going to succeed beyond a novelty, these issues are going to have to be resolved somehow.

I'm no expert at "social engineering" but I think this needs to be a priority sooner, rather than later, if the project is ever going to succeed significantly. In the absence of some sort of cryptographic method (voting via CPU power?) which I would love to see, I think there needs to be an official, or even legal, framework about how decisions are going to be made when serious disagreements arise.

One thing I've seen over and over with open source projects is their tendency to fork, often to the detriment of everyone involved. Saying that there will never be a major disagreement over the system seems naive.

I guess my real question is, how do we all decide what is the correct bitcoin program? Is it and will it always be whatever Satoshi posts on bitcoin.org? How is that different than just trusting the Federal Reserve? (In Satoshi We Trust)

The "cryptographic race" for the longest chain to prevent double spending seems, as well as I can understand it, to be a pretty robust system against cheating and other similar maliciousness.

However, I am curious about how much of the rest of the system security relies on everyone "playing by the rules" and using the standard (or a minor variant thereof) bitcoin program. It seems to me that if someone convinced enough people to use an alternative bitcoin program that generated more or less valid blocks but potentially differed in some other way (perhaps a Trojan), he or she could break or undermine the whole system.

Here is one scenario to illustrate what I am thinking about:
Let's say that when the time comes for the value of generating a block to drop from 50 coins down to 25 coins, a big group of bitcoin users whine and decide that they don't want to generate fewer coins per block. So, they write a patch for the bitcoin program and make their own clients keep generating 50 coins per block. Now, the standard client will reject these 50 coin blocks as invalid, but if the "50 coiners" have a large enough group and accept both the 50 coin blocks and the 25 coin blocks, they could impose their will on the whole system. It seems to me the "25 coiners" would grind to a halt, rejecting block after block, and the "50 coiners" would happily build away a long chain of 50 and/or 25 coin blocks. I don't think the "50 coiners" would even need a majority of users to impose their will in this way. I suppose the "25 coiners" could stubbornly continue, and the project would fork into two different bitcoin systems, but this would be a major destabilization to the value of the bitcoins.

So, how do we prevent bitcoin from forking, down the road? At some point there is bound to be a large group of users unhappy with the status quo and an effort will be made to split the project, to the detriment of everyone. Can we build in a consensus about the valid identities of the client programs in the same way that we do for the transaction log (or is that already being done)? Or do people have the right to make a fork, despite the negative consequences?

I like your revised article, although you may have gone too far in simplifying and leaving out details. Under the section "How Bitcoin Works" you might mention that it is based on public key cryptography, which is the same technology used for virtually all secure websites on the internet.

I'm a relatively new user, I generated 100 bitcoins, and since then... nothing. From what I've read, the difficulty for generating coins has increased dramatically. This is great, however it has the potential to limit the appeal for new users, who set up their system and then get nothing for days or weeks on end. I understand that the point of bitcoins is not to generate them, but for now it seems an important incentive for new users.

My guess is that changing the protocol for how many bitcoins are received (50) for the hash "winner" is unlikely. I had a thought on how we could effectively change the payout without changing anything about the bitcoin program or protocol -- a sort of "reverse lottery" for generating bitcoins.

If people registered for this "reverse lottery" they would pledge to donate their bundle of bitcoins to the reverse lottery if and when they successfully managed to generate them. This bundle would then be chopped up and distributed in varying proportions to other users who have registered for the reverse lottery. I don't know what the fairest or best way to distribute them would be, and I suppose it doesn't matter, because multiple reverse lotteries could be run simultaneously, for example, with the bundle being distributed to the 100 lowest hashes, or with the bundle being donated to everyone registered equally (the .01 bitcoin limit might be a problem for this, though). People could independently decide which lottery they wanted to register for.

I don't know how to enforce the donation of a full bundle for the anti-winner. One method would be to require donating a full bundle in advance in order to register, however this would leave out new users, which is part of the point of the whole thing. I suppose the other lottery members could agree to blacklist any registered reverse lottery member who doesn't donate his or her bundle after generating it. This blacklist might be circumventable if a person just generates a new bitcoin address, however.

Any thoughts would be appreciated!