First impressions: here for awhile

[bitCooper]

Well, since I'm a prisoner in this Newbie forum, I'll post my thoughts on Bitcoin. I've been watching bitcoin for over a year now.  Last summer I was fairly convinced that the game was over after the crash; that bitcoin would die a natural death when people realized it had no backing.

Then a month ago I logged back in to check on the price of bitcoins.. back up over $10! To me, this has proven that the bitcoin experiment has succeeded.  I've done a lot of reading on these forums and elsewhere.  A lot of people are disillusioned because they think this experiment proves that
a) libertarianism falls victim to greed, causing bitcoin volatility.
b) bitcoin hoarding is a problem.
c) bitcoin isn't fair.

Volatility is necessary until the market gets much larger for bitcoins. Regardless of how saint-like the market participants are, someone will always want to make a profit via arbitrage, loans, hoarding, etc. That is necessary for any market to function. Without speculators and hoarders, we'd probably still be at $.10 prices with wild hourly fluctuations due to the small volumes involved.

Stating that early adopters have an unfair advantage is silly; why should we call something unfair if people accomplish something while adhering to the rules of the game? How much more fair could bitcoin be when participants *must* agree on the rules to the game from day 1 in order for the software to work? Anyone smart enough to obtain bitcoins legally during the early days should be commended for their foresight, and our ignorance was our own fault.

To me, the biggest bitcoin barrier appears to be the difficulty of buying bitcoins. You have all these steps:
1. Download the client and wait a couple days for it to sync.
2. Create a dwolla account. Setup ACH transfers.
3. Transfer money to dwolla.
4. Setup mtgox account. Verify mtgox account.
5. Transfer money from dwolla to mtgox.
6. Buy bitcoins from mtgox.
7. Transfer bitcoins to personal encrypted wallet file because we don't trust the exchanges.

Or you can cut out some steps using bitinstant when paying higher fees. This is so complicated as to seem like a pyramid scheme or hoax. Nonetheless, I am very impressed with the community of users, the depth of discussion about economics, and the fact that bitcoin is soon to surpass the 4-year mark!

I am particularly interested to see what will happen on the first "halving-day".. this is certainly an amazing economic experiment. From the practical side, I have a hard time seeing how bitcoin can be used in real-time exchanges due to the time it takes to get 0-6 confirmations; however, perhaps bitcoin could be used on a large scale for Internet purchases in the future.

[DannyHamilton]

. . .
To me, the biggest bitcoin barrier appears to be the difficulty of buying bitcoins. You have all these steps:
1. Download the client and wait a couple days for it to sync.
2. Create a dwolla account. Setup ACH transfers.
3. Transfer money to dwolla.
4. Setup mtgox account. Verify mtgox account.
5. Transfer money from dwolla to mtgox.
6. Buy bitcoins from mtgox.
7. Transfer bitcoins to personal encrypted wallet file because we don't trust the exchanges.
. . .

I'm curious.  If you are in the U.S. and you want to own some Euro, or Yen, or Rupee, how much less difficult is the process?

. . . From the practical side, I have a hard time seeing how bitcoin can be used in real-time exchanges due to the time it takes to get 0-6 confirmations; however, perhaps bitcoin could be used on a large scale for Internet purchases in the future. . .

What sort of wait is there for 0 confirmations?  It seems to me that the delay for 0 confirmations is about as fast as confirmation on any credit card transaction.

[bitCooper]

I'm curious.  If you are in the U.S. and you want to own some Euro, or Yen, or Rupee, how much less difficult is the process?

Typical exchanges are pretty easy.   In a European country I can walk up to an ATM and get Euros after paying $4 or so in fees.  Or I can use a Capital One credit card and pay no fees.  Most websites I've seen accepts USD via credit card.  However, if I wanted to get $100 worth of Yen, then I admit it would probably be pretty difficult.

One of the things I like about bitcoin is that once it's there, it's very cheap to move money between addresses.

What sort of wait is there for 0 confirmations?  It seems to me that the delay for 0 confirmations is about as fast as confirmation on any credit card transaction.

I read that it can take several minutes for a transaction to propagate across the network; if that's not true, then maybe it's not an issue. If zero-confirmation transactions can be handled with a manageable level of risk, then it would be pretty cool to see bitcoin hit the retail scene. I wonder: do we have statistics on documented cases of double-spends which have cost people money?

[DeathAndTaxes]

0-confirmation should be pretty much instantaneous especially for a well connected merchant node.  sub 1 second maybe 5 seconds in an extreme case.  pretty much just as fast as a credit card.

I don't know of any stats of double spends because they are pretty much non-existent.  That doesn't mean they won't become more common as the network grows but it is pretty difficult to pull off a non-Finney double spend and if the merchant is well connected to major pools and super-nodes it may be pretty much impossible to win a race with any reasonable chance of success. 

One unique thing about double spends is that failed attempts involve the attackers own money (unlike say a stolen CC number where attacker never puts his own funds at risk).  I know personally that is someone tries to double spend me and fails I am keeping their funds.  If they want it back well they can go before a judge.

[DannyHamilton]

. . .
To me, the biggest bitcoin barrier appears to be the difficulty of buying bitcoins. You have all these steps:
1. Download the client and wait a couple days for it to sync.
2. Create a dwolla account. Setup ACH transfers.
3. Transfer money to dwolla.
4. Setup mtgox account. Verify mtgox account.
5. Transfer money from dwolla to mtgox.
6. Buy bitcoins from mtgox.
7. Transfer bitcoins to personal encrypted wallet file because we don't trust the exchanges.

Or you can cut out some steps using bitinstant when paying higher fees. This is so complicated as to seem like a pyramid scheme or hoax. . .

I'm curious.  If you are in the U.S. and you want to own some Euro, or Yen, or Rupee, how much less difficult is the process?

Typical exchanges are pretty easy.   In a European country I can walk up to an ATM and get Euros after paying $4 or so in fees. . .

Ok, I'm in the U.S. so my experience is significantly different than yours.  I don't know of any ATM in my neighborhood that dispenses Yen, Pesos, Euro, Rupee, or anything other than USD.  So acquiring other currency with my USD isn't much easier than acquiring bitcoin.  Currency conversion from my native currency to a foreign currency while I'm in my native country simply isn't a convenient cheap process.

Regardless, since you seem to indicate that $4 or so in fees is perfectly acceptable for a convenient process (where you have to leave your home and drive to an ATM to get the currency), I don't see that the bitcoin process has to be much more difficult:

• Step 1: Create a wallet at bitcoin.info
• Step 2: Fill out web form at bitinstant.
• Step 3: Deposit cash to bitinstant.

For $4 or so in fees you can receive approximately $100 worth of bitcoin.

Using LocalBitcoins.com, many people can find a local person interested in exchanging their bitcoin for local currency.  This can potentially reduce or eliminate the fee.

Or I can use a Capital One credit card and pay no fees.

And again, I don't know that it's quite so easy to acquire foreign currency here in the U.S. with my credit card. Even so, you include the process of setting up a bitcoin wallet to get the bitcoin, but you don't include the application form and credit check in the process of acquiring the credit card that you want to use to get your foreign currency.  That isn't really a fair comparison.  In both cases it is something you only do once and then re-use for future transactions.  You also leave out the process of transferring money to the credit card to cover the payment you made to the supplier of the foreign currency.  This is part of that same transaction, since by using the credit card what you really did was to take out a loan to acquire the foreign currency.  You haven't actually paid for it until you pay the credit card company.  You are significantly simplifying the process of acquiring foreign currency, and complicating the process of acquiring bitcoin.

[Gabi]

1. Download the client and wait a couple days for it to sync.

Use a lightweight client like Electrum

[Zangelbert Bingledack]

Here in Japan, although there are almost zero Bitcoin users, buying bitcoins is very simple and easy because Mt. Gox is in Tokyo.

1. Create a Mt. Gox account (takes a couple minutes)
2. Stop by an ATM and transfer some cash to Mt. Gox (~$5 but amount can be up to several grand I think)
3. Download a smartphone BTC app
4. Convert fiat currency to BTC and then send it to the address in the app

Total time: 20-30 minutes if during banking hours, total cost: $5+ Mt.Gox fee

Except actually the first time Mt. Gox might ask you for more info and delay the process by several days. I hope they get the AML requirements clear in their FAQ so people know what details they need to provide before they send money.

[Kuusou]

1. Download the client and wait a couple days for it to sync.

Use a lightweight client like Electrum

Since when does it take a couple days to sync the main client?

[Gabi]

1. Download the client and wait a couple days for it to sync.

Use a lightweight client like Electrum

Since when does it take a couple days to sync the main client?

Since the blockchain is huge, 4.8GB, i downloaded 1000 blocks some days ago and it took more than a hour, and my computer is a good one. Verifying blocks is the bottleneck

[Eskimo]

Here in Japan, although there are almost zero Bitcoin users, buying bitcoins is very simple and easy because Mt. Gox is in Tokyo.

1. Create a Mt. Gox account (takes a couple minutes)
2. Stop by an ATM and transfer some cash to Mt. Gox (~$5 but amount can be up to several grand I think)
3. Download a smartphone BTC app
4. Convert fiat currency to BTC and then send it to the address in the app

Total time: 20-30 minutes if during banking hours, total cost: $5+ Mt.Gox fee

Except actually the first time Mt. Gox might ask you for more info and delay the process by several days. I hope they get the AML requirements clear in their FAQ so people know what details they need to provide before they send money.

Wish they still had the Mt. Gox deposit feature in the U.K.

[bitCooper]

Ok, I'm in the U.S. so my experience is significantly different than yours.  I don't know of any ATM in my neighborhood that dispenses Yen, Pesos, Euro, Rupee, or anything other than USD.  So acquiring other currency with my USD isn't much easier than acquiring bitcoin.  Currency conversion from my native currency to a foreign currency while I'm in my native country simply isn't a convenient cheap process.

Regardless, since you seem to indicate that $4 or so in fees is perfectly acceptable for a convenient process (where you have to leave your home and drive to an ATM to get the currency), I don't see that the bitcoin process has to be much more difficult:

• Step 1: Create a wallet at bitcoin.info
• Step 2: Fill out web form at bitinstant.
• Step 3: Deposit cash to bitinstant.

I am in the U.S. as well. The point is that the USD is so convenient because you can go almost anywhere in the world and either use it directly or easily trade for the local currency. That's the goal of Bitcoin. Why would I ever want to acquire Euros or Rupees while I was in the U.S.? The only value of these other currencies is when it is *more* convenient for trade than USD. If you want to speculate on the relative value of currencies, you can open up a forex account online. Foreign exchange is probably the most competitive and efficient type of trading in the world.

If I am going to a foreign country for vacation for a week, I will buy the local currency out of necessity; thus, a $4 fee might be acceptable, especially since you can withdraw a lot more than $100.

I suppose bitinstant is a good tradeoff between money and time. I know none of my friends would ever go through all the steps to do it the secure and inexpensive way, and if I told them to pay a 4% fee they would ask me why they should buy an experimental currency and lose 4% off the bat. That means buying bitcoins and selling back into dollars would cost 8%, which is unthinkable in the investment realm.

[bitCooper]

1. Download the client and wait a couple days for it to sync.

Use a lightweight client like Electrum

Since when does it take a couple days to sync the main client?

When I downloaded bitcoin onto my laptop, I think it took well over 24 hours to sync. However, I did eventually determine that the btrfs I use was heavily fragmenting the block chain index file and causing performance to crawl. By periodically defragmenting the bitcoin files, things finally finished loading.

My problem is that I always want to do things "the right way." If a lightweight client is less secure, then I don't want to use it. Electrum depends on a central server, Armory looks good but is still alpha code.. no way I trust any amount of money to that! Multibit looks good but doesn't encrypt the wallets. Again, there is no way I would trust an unencrypted wallet, and I'm not about to install TrueCrypt onto my PC just for this insecure client. I also don't want to leave much money in an online account given the number of thefts.

It seems like another year could do a lot to mature the lightweight clients as bitcoin gains popularity. In the meantime I will do things the hard way with the original bitcoin client.

[meInTheJungle]

I can confirm it took me about 30 hours to first synch the Bitcoin-Qt client. Transactions that took place 2 days have just appeared in the client and everything is hunky-dory now I agree somewhat with OP about the barriers to using bitcoin, there's some hoops at the moment, but seeing the news from Wordpress, I'm hopeful that it starts a rise in BTC adoption!

[Jaw3bmasters]

It's possible to get the Blockchain via torrent.

[QuestionAuthority]

I can confirm it took me about 30 hours to first synch the Bitcoin-Qt client. Transactions that took place 2 days have just appeared in the client and everything is hunky-dory now I agree somewhat with OP about the barriers to using bitcoin, there's some hoops at the moment, but seeing the news from Wordpress, I'm hopeful that it starts a rise in BTC adoption!

No one should be using the Qt client anymore. Try this one - it's much easier. https://bitcointalk.org/index.php?topic=40264.0