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Bitcoin - P2P currency
Jonatan Hedborg
Member #4,886
July 2004
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Trezker said:

Can't they just make it a lottery for who gets the new coins instead of wasting all this power?

Not really. Then it wouldn't be decentralized. You are actually creating the money with this system. Which is cool. But wasteful.

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Sweden: Free from the shackles of Democracy since 2008-06-18!

Arthur Kalliokoski
Second in Command
February 2005
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Wait, what? Wasted? Don't they do something useful with the computing power? Such as guessing account numbers for real accounts in real banks with real money in them?

The only way Trump is going to be involved in a landslide is if the land surrounding the White House collapses into the Earth's core. -- bamccaig

gnolam
Member #2,030
March 2002
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decepto said:

I'm curious, what do you guys think of Bitcoin?

Neat concept, but utterly useless.

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Move to the Democratic People's Republic of Vivendi Universal (formerly known as Sweden) - officially democracy- and privacy-free since 2008-06-18!

Jonatan Hedborg
Member #4,886
July 2004
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My video card (AMD 5870) does like ~70-100 Mhash/s, and my CPU (i7 @ 3.2ghz) does like ... 5 Mhash/s. 600 Mhash/s sounds CRAZY!

heh. My bad. I was running both a CPU worker and a GPU worker at the same time - this reduced the GPU to about 80MH/s, where if I ran it alone it does around 300MH/s.

It's a really interesting piece of technology, but I don't see how it could scale very well and still be distributed. Every peer stores a copy of the whole block chain (as I understand it). This could grow to a very large size I guess, if the system kicks off.

-------
Sweden: Free from the shackles of Democracy since 2008-06-18!

decepto
Member #7,102
April 2006
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Trezker said:

Having your computer crunching number for no good except generating codes to get money seems pretty crappy.

Trezker said:

Can't they just make it a lottery for who gets the new coins instead of wasting all this power?

Wait, what? Wasted? Don't they do something useful with the computing power?

http://www.bitcoin.org/sites/default/files/bitcoin.pdf

https://en.bitcoin.it/wiki/FAQ

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Boom!

Arthur Kalliokoski
Second in Command
February 2005
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I still don't see anything that says this mining is put toward anything useful. You might as well pay me for counting integers. Since I'm already in my late youth, I probably wouldn't make it past a billion, and nothing of advantage would be produced. OTOH, if I became an accountant, then I could do something worthwhile for the money.

The only way Trump is going to be involved in a landslide is if the land surrounding the White House collapses into the Earth's core. -- bamccaig

Thomas Fjellstrom
Member #476
June 2000
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I still don't see anything that says this mining is put toward anything useful.

The processing that is done is the actual transaction processing for the network. There isn't any dedicated hardware for the transaction processing, the entire p2p network takes care of it. All that processing you're doing when in a bitcoin network is transaction processing, and verifying other node's have processed transactions properly.

That way theres multiple redundancies, so even if someone manages to sneak some fake transactions in, they will be caught fairly quickly, and any transaction using any bitcoins gained, will be invalidated.

--
Thomas Fjellstrom - [website] - [email] - [Allegro Wiki] - [Allegro TODO]
"If you can't think of a better solution, don't try to make a better solution." -- weapon_S
"The less evidence we have for what we believe is certain, the more violently we defend beliefs against those who don't agree" -- https://twitter.com/neiltyson/status/592870205409353730

bamccaig
Member #7,536
July 2006
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I remember hearing about this months ago (maybe the OP also mentioned it then?). I looked into it then, but didn't trust it and eventually just lost interest. I guess I'll give it another shot. :-/ See if I can get the code running. It better not h4x0r me. >:(

Thomas Fjellstrom
Member #476
June 2000
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I don't think its worth the power use at this point. I only have one GPU that might be able to do a decent job, but Its in the machine that takes the most amount of power, so yeah no.

--
Thomas Fjellstrom - [website] - [email] - [Allegro Wiki] - [Allegro TODO]
"If you can't think of a better solution, don't try to make a better solution." -- weapon_S
"The less evidence we have for what we believe is certain, the more violently we defend beliefs against those who don't agree" -- https://twitter.com/neiltyson/status/592870205409353730

decepto
Member #7,102
April 2006
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I still don't see anything that says this mining is put toward anything useful.

As Thomas said, the computational work done by the miners is needed to create blocks.

There's an arbitrary difficulty factor added to the work. The hash needs to have a certain number of leading 1's in it's binary representation. As the overall computing power of the network increases, the number of leading 1's required increases.

In the grand scheme of commerce and economic utility, the energy cost to create BitCoins is dwarfed by the economic utility it provides.

Also, as Walter would say, "BitCoin is not the issue here, Dude." Napster didn't bring down the record companies. Napster simply ushered in a new era for digital goods. In the same way, BitCoin may not be a panacea for fiat currencies. But I certainly welcome competing electronic currencies which are based on solid mathematical principles.

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Boom!

bamccaig
Member #7,536
July 2006
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I don't think its worth the power use at this point. I only have one GPU that might be able to do a decent job, but Its in the machine that takes the most amount of power, so yeah no.

Well, I run my desktop all the time anyway, and I don't actually pay for power. :-/ So I guess it wouldn't hurt to run (e.g., while I'm at j0rb), if it all checks out. :) My GPU is nothing fancy (and the whole PC loves to overheat) so I doubt that shitbox will win any contests... :P If Sony hadn't taken the feature away I would try to build it on my PS3. ;D

Thomas Fjellstrom
Member #476
June 2000
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bamccaig said:

Well, I run my desktop all the time anyway, and I don't actually pay for power.

I don't run it all the time anymore because I pay for power. Also, just letting cpufreq do its job saves a bit of power, but with bitcoin running, my system would be at 100% and thus not be able to do any cpufreq scaling.

--
Thomas Fjellstrom - [website] - [email] - [Allegro Wiki] - [Allegro TODO]
"If you can't think of a better solution, don't try to make a better solution." -- weapon_S
"The less evidence we have for what we believe is certain, the more violently we defend beliefs against those who don't agree" -- https://twitter.com/neiltyson/status/592870205409353730

bamccaig
Member #7,536
July 2006
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My CPU is already thottled back because of heat... :( Every time the computer starts now Linux (or was it the BIOS? I don't recall...) displays a couple of messages about the CPU being too hot and being throttled. :(

Thomas Fjellstrom
Member #476
June 2000
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Wow. You need to fix your machine.

--
Thomas Fjellstrom - [website] - [email] - [Allegro Wiki] - [Allegro TODO]
"If you can't think of a better solution, don't try to make a better solution." -- weapon_S
"The less evidence we have for what we believe is certain, the more violently we defend beliefs against those who don't agree" -- https://twitter.com/neiltyson/status/592870205409353730

decepto
Member #7,102
April 2006
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gnolam said:

Neat concept, but utterly useless.

Why do you say that?

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Boom!

AMCerasoli
Member #11,955
May 2010
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And what if I want to use others' computers to render my extremely complicated 3D scenes?

Edit: BTW I didn't know that the yen it's also called "more"...

decepto
Member #7,102
April 2006
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video

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Boom!

Karadoc ~~
Member #2,749
September 2002
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That video doesn't make sense to me. He gives some example of a receipt from a shop owner being used as money, and tries to portray it as being somehow more fair and sound than money from a centralized system; but really, what's to stop that shop owner from giving out these receipts willy-nilly, essentially printing money and being rich for doing nothing? I wouldn't trust that grocer to control the value of my currency. I'd much rather trust the reserve bank.

The guy ends by saying that money you have is more like debt than bounty. Like by having money you somehow own something to someone – well obviously that's not true. Maybe someone owns someone money because I have money, but it isn't me. The money is mine to do what I like with, with no obligations.

Anyway, as for bitcoin... It seems like a good idea, but there are a few things about it that bother me. Firstly, as many have already said, the whole 'mining' business seems like a waste of physical resources – but I'm in two minds about it, because I know that there will be waste like this assciated with any kind of currency. I guess it's just a matter of magnitude.

The second issue in my mind is probably a non-issue; I'm concerned that if everyone has the entire transaction history of their bitcoins, as seems to be implied from what I've read, then this mass of information will one day become impractically large, and thus the system is unsustainable. But surely this is something that has been thought of. It's a pretty obvious problem so I've be surprised if there wasn't a good solution to it already built into the system. I just don't know what that solution is.

Finally, the main thing that stops me from seriously using bitcoin as a currency is that I don't really trust it. With 'normal' currency, I find it easy to understand the system, and understand its weaknesses. I know that currency can be devalued if the central operators decide to bring too much of it into existence, but I trust them - mostly. The thing about this bitcoin system is that instead of trusting people, I would have to trust the system. My main concern is that if bitcoin really does catch on, and everyone is using it as their main currency, and everyone is happy and it's sustainable and useful and fair and everything... but then someone finds a new algorithm which breaks the computational complexity of the mining problem... then the whole currency collapses and we're all screwed.

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Bob
Free Market Evangelist
September 2000
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Firstly, as many have already said, the whole 'mining' business seems like a waste of physical resources – but I'm in two minds about it, because I know that there will be waste like this assciated with any kind of currency. I guess it's just a matter of magnitude.

Mining is used as a means of generating the initial set of currency.

Think about it this way: Initially, there are no bitcoins. Clearly, that's not an interesting currency if no one has any. So now there's a problem: How do you create the initial set of bitcoins, and how do you do it such that people will trust it and that the distribution is somewhat fair?

With real money, the initial seed started out from commodities with industrial values. But "bitcoins" were never anything real to begin with, or were not traded in another form prior to the invention of bitcoins, so that's not going to work.

The author of bitcoin could have just assigned himself the 21 million bitcoins, and then tried to convince people that they should send him real goods & services for his bitcoins. However, most people will scoff at such a deal, so that's not going to work.

There could have been a lottery, but that would defeat the decentralized nature of the system.

What they came up with is this "mining" system. Is it perfect? No, but it's better than anything I can think of for bootstrapping a new currency.

Quote:

I just don't know what that solution is.

The transaction history isn't the problem (for storage). Instead, storage is done per account. Ie, the system remembers that user "Karadoc ~~" has 23.4251 bitcoins in his wallet.

The transaction history is a problem in terms of network update bandwidth: every node in the system needs to be notified of every transaction. That can get very expensive very quickly.

Quote:

ut then someone finds a new algorithm which breaks the computational complexity of the mining problem... then the whole currency collapses and we're all screwed.

Thankfully, that problem is already solved. All the existing clients accept only 50 bitcoins per 10 minutes worth of new bitcoins generated by mining. For the entire system. Any further bitcoins generated will be rejected as invalid.

So even if you can crack the algorithm, and generate bitcoins infinitely fast, the best you'll enrich yourself is at a rate of 50 bitcoins per 10 minutes.

But more than that: every year the system accepts only half the previous year's mining output. So in 2012, the clients will only accept 25 bitcoins per 10 minutes for the whole system, then 12.5 bitcoins per 10 minutes, and so on, until eventually no mining is possible.

So, to have the system collapse via hyperinflation, you would need to modify virtually every client out there to accept a higher mining throughput. But if you can do that, you might as well just assign yourself everyone's bitcoins and be done with it.

All in all, it's pretty neat. I think I'll give it a whirl with some token change.

--
- Bob
[ -- All my signature links are 404 -- ]

Jonatan Hedborg
Member #4,886
July 2004
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Bob said:

But more than that: every year the system accepts only half the previous year's mining output. So in 2012, the clients will only accept 25 bitcoins per 10 minutes for the whole system, then 12.5 bitcoins per 10 minutes, and so on, until eventually no mining is possible.

Every four years I think?

And wont the system break down when no mining is possible/worth while? Since it's also what processes transactions and keeps the system running. Though at that point maybe transaction fees will be a better source of income.

-------
Sweden: Free from the shackles of Democracy since 2008-06-18!

Billybob
Member #3,136
January 2003

Though at that point maybe transaction fees will be a better source of income.

Indeed. The assumption is that over time the system will grow, more transactions will occur, and thus the transaction fee bounty will become quite large.

Even if that didn't happen, the system is self-balancing. If it is difficult to profit from mining, less people will do it, leaving more to those that do mine.

And remember, even the official client can mine, so the system will function just fine without professional miners.

Dustin Dettmer
Member #3,935
October 2003
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I bought $20 worth of bitcoins. Do you think they're going to deflate? Getting in early could potentially be a good investment....

I'm also generating coins. We'll see how much I get for doing that.
{"name":"Screen_shot_2011-04-08_at_6.38.25_PM.png","src":"\/\/djungxnpq2nug.cloudfront.net\/image\/cache\/5\/2\/52b1439d3d16f031fbb6334697eda602.png","w":556,"h":176,"tn":"\/\/djungxnpq2nug.cloudfront.net\/image\/cache\/5\/2\/52b1439d3d16f031fbb6334697eda602"}Screen_shot_2011-04-08_at_6.38.25_PM.png

Apparently you can get money out of the system here:
http://coincard.ndrix.com/

bamccaig
Member #7,536
July 2006
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Dustin Dettmer
Member #3,935
October 2003
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Binary. Far too much work to compile something.

Oscar Giner
Member #2,207
April 2002
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I bought $20 worth of bitcoins. Do you think they're going to deflate? Getting in early could potentially be a good investment....

The system is already like 1 year old, and the value has been decreasing, so no, it's actually a very bad investment.

As for mining, you should use a GPU miner. It'll take you months/years (depending on what cpu you have) to generate a single block with a CPU miner.

I'd recommend you join a mining pool, unless you have a strong ATI card (nvidia cards are much worse at mining).



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