Bitcoin and the significance of decentralised currency

Saajid

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Hmm.. very interesting how Anonymous plan to take down the Federal Reserve. I guess of hackers can take Sony and PSN down, this isn't too far fetched either. Time to stock up on gold.
 

ebendl

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Hmm.. very interesting how Anonymous plan to take down the Federal Reserve. I guess of hackers can take Sony and PSN down, this isn't too far fetched either. Time to stock up on gold.
... or Bitcoins? :)

So who here is mining for Bitcoins?
 

Saajid

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... or Bitcoins? :)

So who here is mining for Bitcoins?
Still don't understand Bitcoins enough to make me want to mine/invest in it. Gold is something real, tangible, something I can touch, feel, hold, exchange. When the time comes, I'll sell my gold to the Bitcoin farmers, or exchange it for the currency of the time, or sommer trade in gold straight. You can't go wrong with gold, or other precious metals and stones.
 
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ab-user

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http://www.bitcoin.org/

Anybody accepting bitcoins? Or is this just a method to monetize GPU cycles rather than 'spending' those same cycles on Folding@Home, Seti@Home, etc? Or... Even saving electricity by NOT doing any of this?
 

wamatt

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Nice article Andrew, you do seem you very pationate about Bitcoin! There has been a massive increase in Bitcoin awareness this last month. The reason is simple, the system was designed to reward early adopters leading to a "goldrush" mentality.

However, I would have like the article would to try represents both sides a be a bit more realistic. I see Bitcoin has a very big image problem on its hands with some saying it it's primarily being being used for illicit purposes. eg

  • Selling child pornography
  • Selling drugs
  • Selling stolen identities
  • Funding hacker group Anonymous
The nature of the network is very attractive to criminal enterprise. With anonyminity and irreversibleness of transactions as fundamentals to the system. This is a breeding ground for the criminals.

I hope bitcoin does succeed, and I'm supportive of the ideals it stands for, eg personal financial liberty. However unless the good guys can figure out how to get the common man on board quickly, and not just idealist techies/libertarians (who don't constitute the mainstream), or speculators, they are going to have a big problem on their hands and I would be very skeptical of claims that it will become a dominant currency in the future.

And reminiscing on the history books let us not forget about Tulip Mania.
 
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wayfarer

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What is this bitcoin thing?
My question exactly.

This author goes off on a tangent explaining some aspect of Bitcoin (like its resilience to a volatile market), without fully defining what it is. Initially I thought that perhaps it was an "old news" thing and that people already know what it is. But I don't recall it being mentioned on MyBB before. Strange way to introduce a concept/product...
 

Axis

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Still don't understand Bitcoins enough to make me want to mine/invest in it. Gold is something real, tangible, something I can touch, feel, hold, exchange. When the time comes, I'll sell my gold to the Bitcoin farmers, or exchange it for the currency of the time, or sommer trade in gold straight. You can't go wrong with gold, or other precious metals and stones.
Your gold can get stolen
 

MadMailMan

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Hang on. We shouldn't hold Dollars, which is backed by physical gold, because the Fed could be hacked but we should invest in a virtual currency which is backed by nothing. A virtual currency could never be hacked. ;)
 

Hard Rain

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Hang on. We shouldn't hold Dollars, which is backed by physical gold, because the Fed could be hacked but we should invest in a virtual currency which is backed by nothing. A virtual currency could never be hacked. ;)
Friend, you seem to be a bit behind the times... The dollar's last tenuous links to gold redemption were ended in August 1971. I had to laugh when the article claimed that the dollar was saved from becoming 'worthless' by the Fed; the dollar has never been more worthless in its entire history when we value it against precious metals and commodities and this is the case precisely because of the Fed's inception and actions since 1913!

The problem with Bitcoin, in terms of fundamental monetary economics, is that real 'money' is not merely some arbitrary token used for exchange. It's an actual good with demand and utility in addition to its function as a medium of exchange. That said, I'm not against Bitcoin per say (because I believe currencies should be private and compete against one another) but I think it's important to understand that Bitcoins will only be valued so long as there is demand for them and there will only be demand for them so long as people believe they can exchange them for stuff. Time will tell, but pure theory leads me to suspect Bitcoin will be driven out of circulation by virtue of Gresham's Law.
 

Synaesthesia

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I'm getting into bitcoin. Setting up a little mining rig, but with mining difficulty rising exponentially don't think I'll make many. I'll also buy a few.
 

ozoned

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We already have a decentralised currency in the form of money (I refer here to "'money" and not to the vouchers issued by central banks), what BitCoin provides is in essence the ability to make a "virtual" money exchange.

The idea is clever, from the concept of value derived from cryptographic "work" to the extension of the P2P concept to include distributed databases and timestamp servers.

I've only skimmed the info on bitcoin, and so far I have not really seen discussed the implications of simple physical theft of the computer holding the users wallet.
Sure, you have pass phrases for the key pairs an all, so theoretically it should be impossible for the thief to access your stash.

One interesting thing is that you can actually create "paper" money with bitcoins. Basically it is just the address which corresponds to your online "coin".
Of course the paper address can be copied, as there is no way to prevent it being used more than once, unless it is incorporated into some other signed object.

I don't believe bitcoin will become mainstream, but it will probably give us lots to learn from.
 

Tinybolt

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All this publicity has made my bitcoins value go up 60% within 48 hours :) Volatile but I like it ;)

Currently trading at $14 per coin, takes me about 4 days to farm 1 coin on my slow little GFX card :(
 
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Knersus

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Hmm.. interesting stuff..

Firstly, the article could be better written because it does not at all describe what Bitcoin is or give background, the author just assumes everyone knows it already. He compares this little known currency to the dollar as if it's on the same level. I bet 99% of international bankers and financiers have never even heard of this virtual money and even with all the current "hype" around it I bet the total volume traded bitcoins does not come near a fraction of the total volume of $ traded daily.

Secondly I think it's an interesting experiment that will probably grow quite big over time so I am not against it, but if some big companies do not come on board then I think it will always stay fairly low-key. How do you spend this currency if you can't do online transactions with it anywhere on the net? Sure you can do transactions at some places or from person to person which is great for ebay and obviously criminals. And there is a list of shops where you can spend bitcoins here but the majority of these "shops" seem to be from the "shady" side of the internet or purely for digital products and services, and not much for physical day to day products like you spend real money on bread water and electricity type stuff. Are there any shops in SA where we buy our day to day electronics, books, cds, etc that accept this?

Once someone like Amazon or iTunes comes on board the value will go up hugely because then this is actually worth something to ordinary people and I'm sure many other retailers will jump on board. Problem is that those companies are so tied up in legalities that it would probably never happen. If iTunes started accepting bitcoins it would be happy days for South Africans because then we can buy music there like anyone else, but iTunes (and the music industry and many other online shops) specifically have these international laws that prevent them from selling stuff to certain countries, and the best way to verify your country is by your credit card address. BitCoin would circumvent these "international boundaries" and that would be a problem for those shops' legal departments. I am ALL FOR getting rid of these silly international "boundaries" on the internet so if Bitcoin could make that happen that would be awesome, but realistically I doubt it would happen.
 
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bridgetroll

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Your gold can get stolen
And a hard drive crash can destroy you wallet and all bitcoins in it. Which do you think is more likely?

I really hope bitcoins make it but right now it looks EXACTLY like a pyramid scheme.
 

Tinybolt

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Hmm.. interesting stuff..

Firstly, the article could be better written because it does not at all describe what Bitcoin is or give background, the author just assumes everyone knows it already. He compares this little known currency to the dollar as if it's on the same level. I bet 99% of international bankers and financiers have never even heard of this virtual money and even with all the current "hype" around it I bet the total volume traded bitcoins does not come near a fraction of the total volume of $ traded daily.
Whereas I agree with most of what you have said, I was chatting to a friend last week about bitcoins and on mentioning it he knew exactly what I was on about. He is an Actuary and after a bit of further explanation from him he mentioned its part of his job to follow all currencies. So maybe Bankers/Financiers have never heard of this currency but the fact that its reached levels above that is impressive?

My own little addition, investing in something this risky would be an excellent/terrible idea, the basics known to most is risk=reward. Im not going to expand on that however when it comes down to it for the time being investing GPU power into Bitcoin can buy you your weekly takeout. ( as can a 2 hour part time job but lets not get to technical )
 
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