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The Almighty Buck Bitcoin Software

Mint It Yourself With a Browser-Based Bitcoin Miner 490

Posted by timothy
from the b-b-but-the-feds-are-here! dept.
An anonymous reader writes "There's a popular discussion happening at the Bitcoin forums about a new browser-based bitcoin miner released today. This lets people mine for bitcoin straight from the browser. There's talk of making an embeddable version. How long until websites start using CPU power from their users to create Bitcoin for their owners?" As Bitcoin gets more attention, I foresee malware with payloads promising to do the same thing.
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Mint It Yourself With a Browser-Based Bitcoin Miner

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  • Bitcoin - (Score:5, Insightful)

    by Anonymous Coward on Thursday May 19, 2011 @01:01AM (#36175064)

    Bitcoin Slashvertisements remind me too much of Glen Beck's gold hocking. Have fun with that.

    • Re:Bitcoin - (Score:5, Interesting)

      by Anonymous Coward on Thursday May 19, 2011 @01:40AM (#36175300)

      Bitcoin network charts [bitcoincharts.com]:

      In the last 12 days "There are 201 unconfirmed transactions".

      That's not an "economy" by any means. Your average American highschool probably has more kids purchasing drugs, smokes, and booze from one another in a 12 day time period than that.

      • Re:Bitcoin - (Score:5, Insightful)

        by naz404 (1282810) on Thursday May 19, 2011 @03:59AM (#36175970) Homepage
        Wow.

        You'll generate "0.00019867 bitcoins per hour" with this. It takes about 100-200 days nonstop to generate a single bitcoin with this if you're lucky.

        If a bitcoin is $8 now, even if let's say it rises to $20, that'd mean you burned hundreds of hours of CPU time/electricity to earn a mere $20 in 6 months.

        There are better things to burn your CPU time, electricity, bandwidth and attention on.
        • by FlyveHest (105693)

          Creating bitcoins with a GPU based miner is a LOT more effective than CPU bound miners.

          I'm getting ~4000 on a 4-core HT machine, and in excess of 140k on a 580GTX

        • Re:Bitcoin - (Score:5, Insightful)

          by Stellian (673475) on Thursday May 19, 2011 @08:13AM (#36177416)

          If a bitcoin is $8 now, even if let's say it rises to $20

          Hijacking the thread to point a major flaw of Bitcoin: It's an inherently deflationary currency. Because it aims to be 100% distributed, there's no central mint that controls the bitcoin supply. To prevent inflation, the system is designed with a hard limit [wikipedia.org] on the total amount of coins in circulation. This means that "mining" for coins will be get progressively harder until it will become virtually impossible to find new coins.

          The engineers behind the project might not see deflation as a flaw, but an economist most likely does. The immediate consequence is that when bitcoins start to be traded in the real world for goods and services, the relative value of a coin will increase. If bitcoins gain popularity and their penetration increases by say 20% a year, the market will quickly attract speculators who will see hoarding of bitcoins as a high return investment, and they will hold on to those bitcoins for as long as the high returns will continue. As with any deflation, this will create artificial scarcity of money and halts economic trades: deflationary money "do not want" to be spent. Of course the high returns are nothing more than a bubble that will burst at some point, and the market becomes engulfed in coins from investors wanting to make an exit. The cycle could then resume - but of course other speculators will try to ride the bubble making the value of a bitcoin highly speculative and random.

          The penetration of bitcoins in the real economy will undoubtedly be hampered by it's widely fluctuating value, and it will create an opportunity for speculators to extract undue profits from honest economic agents. An online store will be unwilling to sell for bitcoins inventory that was purchased for dollars for fear that it might not recoup his costs at tomorrow's bitcoin parity.

          As much as I like the idea of a distributed and truly democratic currency, I don't think bitcoin is it, even assuming all other technical aspects are flawless. An effective currency must not be deflationary, and the money supply must expand with the size of the underlying economy - this is a key role that the central bank plays in almost any country. Any engineer looking into creating a new currency should understand this undertaking is essentially an economic feat, not a technical one, and should consider Keynes' General Theory as mandatory reading.

  • Still wondering... (Score:4, Insightful)

    by betterunixthanunix (980855) on Thursday May 19, 2011 @01:02AM (#36175066)
    What exactly gives a Bitcoin its value? At least with a dollar, I can pay my taxes and not be imprisoned.
    • by AnonGCB (1398517)

      The fact that it is a commodity specifically made to be a highly convenient, flexible, sound currency.

      Or, if it makes more sense, the economy behind it. Which is growing rather rapidly, for the record.

      • Or, if it makes more sense, the economy behind it. Which is growing rather rapidly, for the record.

        ...and how has that economy been created? What, exactly, have merchants been told that has convinced them that Bitcoin currency has actual value?

        • by Anonymous Coward on Thursday May 19, 2011 @01:15AM (#36175140)

          I think most of the merchants that accept Bitcoin do so for the express purpose of giving it value.

          • Re: (Score:3, Insightful)

            by oliverthered (187439)

            so is it a ponzi scheme?

          • Re: (Score:3, Informative)

            by larko (665714)
            It costs us (activegrade.com) about 3% to accept dollars, and about 0.7% to accept bitcoin. I can't afford to hoard bitcoin - I turn them into dollars right away. So far, this hasn't been a myth - I have actual dollars, and saved 2.3% getting them.
        • by myotheridislower (2144830) on Thursday May 19, 2011 @01:16AM (#36175148)

          What, exactly, have merchants been told that has convinced them that Bitcoin currency has actual value?

          Belief that it has value, the same illusion that makes our USD based economy run :p

          At least if we all had the same faith in bitcoin it would be impossible for the government or central bank to devalue our currency, effectively robbing everyone of their savings.

          • by qubezz (520511) on Thursday May 19, 2011 @05:23AM (#36176480)

            The illusion is that it's not a pyramid scheme for the creators and early adopters. The mailing list in-crowd creates a few million easy coin first (out of a total of 6.2 million coin currently created, total market cap $49 million), then opens up the service for speculators. The speculators drive up the exchange value against real currency and the original 'investors' cash out their imaginary bits.

            It's like how an IPO makes the original owners wealthy [nytimes.com] on the back end - they sell 49% of the company and keep a majority stock themselves that they can divest under the radar at a later higher market valuation. The only difference is there's no immediate cash infusion from the IPO and there's no company.

            • by qubezz (520511)

              Any doubts about the cashing out of early adopters that made cheap and easy coin (bitcoin launched 10 months ago, when did you first hear about it?), go to the exchange [mtgox.com] and click on depth-of-market. There are several sellers offering lots of 1000+ coin (at $7-8 each). Clearly the winners are those who got in early, either mining with no competition or buying the currency eight months ago for 1/100 of it's current value...

              Each hour approximately six computer in the world win a prize of 50 coin (based on cpu

        • ...and how has that economy been created? What, exactly, have merchants been told that has convinced them that Bitcoin currency has actual value?

          An economy is created through individuals specializing, trading with each other, and investing the resultant savings. Merchants haven't been "told" anything other than the Bitcoin exchange rate, which they can easily see for themselves [photobucket.com] just as with any other currency.

        • Probably merchants see a growing community around it right now, and are willing to take some risk now, betting on the future value of the currency, in order to profit in the future. Which is exactly what an entrepreneur is.

        • Re: (Score:2, Funny)

          by Anonymous Coward

          This [theonion.com] is fairly relevant.

        • by Vegeta99 (219501) <rjlynn.gmail@com> on Thursday May 19, 2011 @02:02AM (#36175424)

          What, exactly, has to make it have value?

          I just finished up a property class in law school. Way back in the day, people thought it nuts to purchase or transfer rights as opposed to a real, tangible thing like, say, gold. For instance, rights to land. You can't transfer land, I can't pick up my little corner of the earth and carry it over to you, only plate tectonics can do such a thing. So, people came up with "enfeoffment:" When I sell you land, I gotta hand you a clump of dirt, or a handful of wheat, or put your hand on the door to the house or somethin' weird like that.

          To me, smells a lot like the fear of fiat money. All you guys are just scared to transfer rights, or in this case, a measurement of the value of your services/wealth.

          That simple. Money doesn't have to be tied to shit, just like an estate.

          If you're interested and not a member of a Commonwealth country or derivation thereof, take a look at estates in land under the English fuedal system after William the Conqueror. Owning a piece of land is a lot more complicated than you would expect.

        • by lxs (131946)

          Which is growing rather rapidly, for the record.

          That's fairly meaningless. If you only have twenty participants, a new sucker^H^H^H^H^H^Hparticipant constitutes 5% growth.
          Boom times for all 21 players involved.
          Or a pyramid scheme about to topple.

      • by Anonymous Coward on Thursday May 19, 2011 @01:27AM (#36175208)

        Bitcoin is a stupid idea with excellent PR. Up to and including a weekly slashvertisement.

      • Which is growing rather rapidly, for the record.

        Any growth from zero is impressive when expressed as a percentage.

    • by dadioflex (854298) on Thursday May 19, 2011 @02:12AM (#36175480)
      Bitcoin doesn't have any value. It's an economic in-joke along the lines of the great spaghetti monster. Some folk simply choose either to believe, or appear to believe. They're not hurting anyone, so best to leave them to it.
    • by Artifex (18308)

      The greater fool theory, in a tulip-bubble of expectation.

  • /vertisement (Score:5, Insightful)

    by blackraven14250 (902843) on Thursday May 19, 2011 @01:14AM (#36175138)
    The level of slashvertisement on these things is seriously getting retarded. Stop publishing this crap!
  • by Compaqt (1758360) on Thursday May 19, 2011 @01:15AM (#36175144) Homepage

    At some point or another, you have to interface with the Real World (TM), do you not?

    Or will you pay your rent/mortgage/food in Bitcoin, too?

    That's where they'll get you. Or Visa/Mastercard will stop processing for wherever bitcoin.org is hosted after a friendly call from a Senator.

    • by Jeremi (14640) on Thursday May 19, 2011 @02:07AM (#36175456) Homepage

      That's where they'll get you. Or Visa/Mastercard will stop processing for wherever bitcoin.org is hosted after a friendly call from a Senator.

      Bitcoin.org could be lawyered right off the face of the Earth and it wouldn't make any difference. You'd still be able to trade BTC for USD (or vice versa) with any of the thousands of other Bitcoin owners. It's all P2P, remember?

  • by keith_nt4 (612247) on Thursday May 19, 2011 @01:17AM (#36175156) Journal
    When this came up a couple of days ago I didn't see anyone link to this for some reason (or I missed it).

    The podcast called Security Now featuring Leo Laporte and Steve Gibson (famouse for that the "Shields Up!" web page) dedicated episode 287 entirely to bit coin.

    I thought steve gave an incredibly well thought out, clear, concise explanation of what bit coin is why it is apparently impossible to "game" the system in anyway. The following episode (288) was the "listener feedback" episode with many listeners expressing doubt and even more excellent explanations from Steve.

    Here are the convenient transcripts of these episodes, linked here in the hopes perhaps it will be useful to the slashdot community.

    http://www.grc.com/sn/sn-287.htm [grc.com] - main episode

    http://www.grc.com/sn/sn-288.htm [grc.com] - Q-and-A episode

    In my mind if Steve says it's trustworthy and not a scam, that's good enough for me. But then I've listened to all 300+ episodes and am a big fan so I may be biased.

    In fact there was a spike in use after the SN bitcoin episode. It may be wholly or partially due to Steve's apparent endorsement (he says he's going to make his software purchasable via bitcoin).

    • by fred911 (83970)

      Steve Gibson (famouse for that the "Shields Up!" web page)

      Um.. Steve is famous for Spinrite, that saved many many RLL drives. Spinrite does an non-intrusive, non-destructive low-level format, saved my ass many a time.
        But thanks for the post great info!

    • by rantomaniac (1876228) on Thursday May 19, 2011 @05:41AM (#36176564)

      impossible to "game" the system

      The system has already been "gamed" by its very creator and a handful of early adopters. They mined most of the bitcoins currently in existence and then they made people believe in their value and became millionaires. (Satoshi is said to own between 1 and 2 million bitcoins, that's between $7M and $14M at current market prices.) Regardless of the usefulness of the idea itself, bitcoin was also designed to be a get rich quick scheme. You could conceive a similar digital currency, where wealth distribution was not so heavily biased towards early adopters.

      • by epine (68316) on Thursday May 19, 2011 @08:12AM (#36177404)

        There's an intrinsic value to a currency which is hard to trace and hard to tax and liquid across international borders. Satoshi engineered a nice exit strategy for himself. I don't know why you call it "gamed". It's a damn sight more clever than anything Bezos ever patented.

        Most of Satoshi's personal profits will ultimately come from the robber barons of the black economy, such as Nigerian 419 scammers. Is that a bad thing? For pillaging the Philippine nation, there's the Swiss banking system; for everything else, there's Bitcoin.

        I know this is a bit too abstract for many, but an accurate and reliable and relatively private score-keeping system is an intrinsic good in human affairs. It doesn't need to be backed by any other form of value.

        What the ultimate market cap in Libertarian cachet?

  • by S3D (745318) on Thursday May 19, 2011 @01:27AM (#36175210)
    What's this thing with regular promotion of bitcoins on /.? Shouldn't it be in advertising box or something?
  • There's a popular discussion happening at the Bitcoin forums about a new browser-based bitcoin miner released today.

    Only just today? Are you SURE?

    How long until websites start using CPU power from their users to create Bitcoin for their owners?

    This has been happening for days [aspiesforfreedom.com] at least, already. (Look at the first post date, and there's another older thread at the same site.)

    • by macraig (621737)

      That site is also utilizing much more efficient GPUs to do the mining, as opposed to relatively inefficient (and power sucking) CPUs. An 8800GT GPU draws 100 Watts less power to do four times the work of a Phenom X4 9850.

  • Word of warning (Score:5, Informative)

    by Zibbo (2176270) on Thursday May 19, 2011 @01:29AM (#36175226)

    Site uses only CPU mining, and I can guarantee you that you will be spending more on electricity than gaining in bitcoins with the current valuation. You need a powerful GPU or some other specialized hardware to do it profitably. It's cheaper and easier to just buy bitcoins.

    That said, if it works as a steppingstone for you to get interested in Bitcoin, and actually familiarize yourself with the system, before coming to the wrong conclusion about its validity, then go for it.

    Here are some places you can start with:
    http://www.bitcoin.org/bitcoin.pdf [bitcoin.org] for the original whitepaper that everything is based on (internalize this)
    https://en.bitcoin.it/wiki/Myths [bitcoin.it] for some of the more common myths flying around about bitcoins
    https://en.bitcoin.it/wiki/Weaknesses [bitcoin.it] for some ACTUAL weaknesses in the system, so you don't have to come up with the same old false ones that come up with these thread all the time.

    • Thanks for your insightful post. As someone who's researched bitcoin (and who should have put that $500 in at the $.20 mark...) I find your post to be the only one so far that actually gives some context about this development and what it means to bitcoin, both to those new to the concept and for those who have been out of the loop for over a year. I'm certainly no expert, but I know enough that I was hoping an explanation like yours would show up earlier in the discussion for those who might not know about

    • I can guarantee you that you will be spending more on electricity than gaining in bitcoins with the current valuation.

      Doesn't that assume that one's PC would be turned off otherwise? If it's just idling - especially if it's a powerful box - it still drains quite a lot. Would BitCoin minting really cause that much extra power use to cost more than the value of minted coins?

  • "mining" for bitcoin (Score:5, Interesting)

    by smash (1351) on Thursday May 19, 2011 @01:38AM (#36175288) Homepage Journal

    So, essentially, we're burning CPU cycles (and thus, electricity, and thus, fossil fuels in most cases) simply to give an electronic currency scarcity?

    Sounds like a fine use of resources to me!

    /sarcasm

    • by Jeremi (14640) on Thursday May 19, 2011 @02:19AM (#36175510) Homepage

      So, essentially, we're burning CPU cycles (and thus, electricity, and thus, fossil fuels in most cases) simply to give an electronic currency scarcity?

      If you know of a more energy-efficient method to enforce scarcity, let's hear it. The traditional method (establish and maintain a judicial system and police force to catch and punish counterfeiters) isn't exactly low-overhead either.

  • Bitcoin... (Score:5, Funny)

    by bky1701 (979071) on Thursday May 19, 2011 @01:48AM (#36175338) Homepage
    For some reason, the only way I can analogize bitcoin to people is "it's what you'd get if you explained Star Trek's energy credit system to a stoner, who then ran for US congress and implemented it." I write science fiction constantly and would be hard pressed to come up with a zanier scheme.
    • by huh_ (53063)

      I'd mod you up if I had points.

    • Said stoner, if in the Star Trek universe, would somehow manage to spew out a string of words that would cause these words to be uttered: "Self-destruct sequence has been activated. Ten minutes until antimatter core overload.'.
  • by QuantumG (50515) * <qg@biodome.org> on Thursday May 19, 2011 @02:10AM (#36175472) Homepage Journal

    Both as a technical concept and as a social phenomena. Quite a lot of people using Bitcoin are not doing so for practical benefits.. they're installing the software and promoting the concept as a sort of protest against the fiat banking system. Oh, and because they hate paypal.. but that's mutual.

    http://susansayler.wordpress.com/2011/05/16/bitcoin-p2p-currency-the-most-dangerous-project-weve-ever-seen/ [wordpress.com]

    That's a pretty interesting article.. and it demonstrates the power of portraying yourself as persecuted to attract new members.

    However, I think they're pretty delusional about the robustness of the system. From the paper that started it all:

    If a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or using it to generate new coins. He ought to find it more profitable to play by the rules, such rules that favour him with more new coins than everyone else combined, than to undermine the system and the validity of his own wealth.

    This obviously assumes the attacker is interested in profits that can be extracted from the system. An attacker who is already wealthy, and has a greater interest in undermining the system than extracting profit from it, can trivially overwhelm the network by assembling processing power - especially if the attacker already has a stockpile of processing power.

    National governments obviously fall into this category, so if they ever decide to destroy Bitcoin they won't need to issue any bans or even tell anyone.

    I'm sure you can think of some other potential attackers who have the capability.

    • by ctid (449118)

      I think that the system as implemented restricts the speed at which new coins can be created, so the "attacker's" second option is not available. I don't know enough about this to say anything about the first option.

    • This obviously assumes the attacker is interested in profits that can be extracted from the system. An attacker who is already wealthy, and has a greater interest in undermining the system than extracting profit from it, can trivially overwhelm the network by assembling processing power - especially if the attacker already has a stockpile of processing power.

      Usually, the cost of destroying something is much cheaper than creating it. That's why terrorism can work. The cost of attacking is not that large

    • Still the only 2 things any attacker can do is mine bitcoins, and attempt to double spend their existing coins. Your coins are cryptographically safe, and cannot be stolen from you. If you accept bitcoins as payment, you will find our reasonably quickly if an attempted double payment has occurred. If you hold any goods in escrow for a while you should be ok.
  • by jumpingfred (244629) on Thursday May 19, 2011 @02:42AM (#36175598)

    What can I buy with bitcoins? Food, housing, software anything? For the articles it looks like you can trade US dollars for bitcoins and bitcoins for us dollars. And that the $7.70 you put in two days ago is worth $7.10 today.

    • by Rivalz (1431453)

      that isn't bitcoins fault that is cuz they keep printing US $'s.
      Pretty soon the dollar bill will be like the penny. Cost more to mint it than it is worth.

    • https://en.bitcoin.it/wiki/Trade [bitcoin.it] Also, drugs, apparently.
    • by shutdown -p now (807394) on Thursday May 19, 2011 @03:42AM (#36175888) Journal

      For the articles it looks like you can trade US dollars for bitcoins and bitcoins for us dollars. And that the $7.70 you put in two days ago is worth $7.10 today.

      Same as with any other currency, the rate goes up and down - but historically, it has gone up more than down [mtgox.com], so if you had bought bitcoins three years ago and kept them around, you'd get 10x as much as you paid by selling them today.

  • by Just Brew It! (636086) on Thursday May 19, 2011 @03:07AM (#36175744)
    So Bitcoin is basically a mechanism for converting electricity into an asset which is worth less than the cost of the electricity used to produce it, and which can only be used in trade with other people who are stupid enough to have not thought this through? I think I'll pass.
    • Don't think of it as printing money, think of it as investing in stock. You're "purchasing" a commodity which in the future will become scarce. It may be a desirable commodity, it may fall flat on it's face. Remember, however, that all things are worth as much as the value people attribute.

      Plus, as each bitcoin is verifiable, there is zero room for forgery.
  • by Seumas (6865) on Thursday May 19, 2011 @03:09AM (#36175754)

    I don't see enough people ever taking it seriously enough to matter. I ignored BitCoin entirely for a year, simply because they did such a poor job of explaining (in user-facing content, at least) just exactly what the fuck the clients were doing and the fundamentals of the process. You can watch their promotional video, which amounts to "install a client that does magic and makes money appear".

    The reason I ignored it for over a year is that it just instantly hit me as a garbage. As a scam. As those companies that used to ask you to install a client that would do distributed work and would pay you for your CPU usage, but never really actually accomplish enough work per user to ever bet any money back (especially when counting the energy your system used to do the work). With this, the starting user is left wondering "okay, what am I doing? is my client doing computational work that is being sold by bitcoin to companies and institutions and they're giving my bitcoins in return for that?" but you never really know, until you start digging around in white papers - which most users aren't going to do.

    And if you check out the forums, there's even more scammy sounding things. Like advertising sites that sell pre-built computers made just for running your own bitcoin farming machine. Or guys offering to contract to you for a certain amount of work, etc, etc. It all just rubs even the experienced person as shady and scammy. You really have to overcome a lot of mental hurdles to stop and give it a real look.

  • Er. Uh. (Score:4, Interesting)

    by adolf (21054) <flodadolf@gmail.com> on Thursday May 19, 2011 @03:11AM (#36175760) Journal

    I've been seeing bitcoin mentioned here and there for a few weeks now.

    With this FA, I've been introduced to the concept of "mining" Bitcoin. (It seems I'm a few months late, perhaps -- and yes, you can get off my lawn.)

    Which, I must say, is interesting -- if people are willing to pay for it.

    But in my own preliminary experience, I will generate two 10,000ths of a bitcoin per hour on my Intel Core2 Quad Q6600. (I found it interesting that all 4 cores were appropriately maxed out with in-browser Java, and that the system still seemed as responsive as always.)

    But that's for my years-old CPU, which everyone seems to agree is the wrong way to mine Bitcoin. And while I can harness my GPU(s) to do the work considerably faster, given appropriate kit, here's something I've been so far completely unable to figure out:

    What in the fuck are these cycles being used for? Is there some problem being solved? Is it just a measure of masochistic tolerance? What's going on here?

    • by cyberworm (710231)
      I think the actual "problem" being solved, is the code/encryption for each "coin" that is made.
    • What in the fuck are these cycles being used for? Is there some problem being solved? Is it just a measure of masochistic tolerance? What's going on here?

      It's basically trying to generate a block of data such that the hash is not less than the current (network-wide) difficulty value. So it is a "problem solved", but it does not carry any inherent utility outside of BitCoin. The only point of making you do this work is so that it can be later be verified that the coin was indeed generated by doing the work, and not conjured out of thin air (thus keeping the total supply at check).

    • Re:Er. Uh. (Score:4, Interesting)

      by SomePgmr (2021234) on Thursday May 19, 2011 @04:08AM (#36176038) Homepage
      There's nothing productive happening. You're effectively flipping a coin over and over and over again (as fast as your rig can), until you happen to be the first to hit.

      Unfortunately the workload isn't doing protein folding or anything. Though that woulda been cool.
    • Re:Er. Uh. (Score:4, Informative)

      by julesh (229690) on Thursday May 19, 2011 @04:34AM (#36176202)

      What in the fuck are these cycles being used for? Is there some problem being solved?

      Yes: put simply, the problem being solved is generating authentication codes for transactions that require enough CPU time to generate that it's infeasible for an attacker to generate them themselves. On a technical level, you're searching for random numbers that can be added to a transaction list and the hash of the last transaction list block which makes the SHA256 hash match a certain pattern.

      Does that help?

  • by John Zero (3370) on Thursday May 19, 2011 @03:44AM (#36175906)

    It took me some time to understand what BitCoin actually is.

    Basically, BitCoin network is a big transaction database.
    One transaction is: "transfer X amount of BitCoins from account Y to account Z." This 'database', or transaction log is replicated and stored on all participating users' computers.
    You can be sure a (your) transaction has been recorded, because you can check with many other peers who will verify that it is.

    Of course, the inner parts are more complex, and there's a way to generate new BitCoins (but over time you can generate less and less, so it's a finite amount in total).

    (I forgot to login before my comment, so i'm posting it again.)

  • Bitcoin is stupid (Score:5, Interesting)

    by mrnobo1024 (464702) on Thursday May 19, 2011 @04:02AM (#36175988)

    The few people who found out about bitcoin back in 2009 were able to mine a very significant percentage of all the bitcoins that will ever be created, just because there was no competition yet (back then you could create a block with on average 4 billion sha-256 hashes; now it's about a quadrillion). If they hold on to their bitcoins, and bitcoin trading becomes big, they'll be filthy rich just because they found the website before slashdot did.

    I'll be staying away from doing any bitcoin transactions. Humanity does not need any more undeserving elites.

  • by bmo (77928) on Thursday May 19, 2011 @08:19AM (#36177478)

    It seems I can't get away from the pump-and-dump of bitcoin. It's all over the place on certain websites as a new form of spam. This is part of the pump.

    The dump is when we get the first people selling into the bubble and then it's a race to the bottom as sellers can to try to beat everyone else. Those that didn't sell are known as bag holders.

    I see all sorts of justification for the trading on the "exchange" which is entirely unregulated and full of wash trades and other manipulation nonsense. Why people even trust the market is beyond me. It's trades in a vacuum - based entirely on the greater fool theory of value. Just like tulips. But with tulips, if you are starving, at least you can eat them. You can't eat bitcoins.

    The above doesn't even take into the account the fucked up economics of bitcoin. With built in deflation, if this was ever adopted as a real currency, the dumbest thing you could ever do is take out a mortgage in bitcoins for a house, even at a rate of 0 percent interest. Proof of built in deflation is that there are roughly 21 million bitcoins maximum, that if they become a valid currency, become fewer and fewer (they can be destroyed and gone forever) while chasing more actual goods and services as economies grow. This benefits hoarders and nobody else. Deflation is bad. It gums up the works of functioning economies, like sand in the gears of a transmission.

    But that's if it ever becomes viable. There are no advantages to it at all beyond what we have right now for electronic transactions. Even the most credit-unworthy can waltz into a bank and get a secured credit card and be protected from online fraud in purchases or if the card is stolen. Bitcoins give you no such protection. If your bitcoins are stolen or you are defrauded, they are gone for good. It's as if you've used a debit card over the net.

    I see no advantages. Only pitfalls.

    This is so unworkable that it must be for another purpose entirely - money laundering. Make successive wash trades (illegal in real exchanges like NYSE, Chicago, NASDAQ, etc) in the market and voila, your formerly dirty money is now untraceable and "clean."

    I can't wait until bank accounts are frozen and people go to jail over this. It will be delicious to watch.

    I'm getting popcorn.

    --
    BMO

  • Automotive Analogy (Score:4, Interesting)

    by JoeMerchant (803320) on Thursday May 19, 2011 @08:36AM (#36177654)

    No /. discussion is complete without the bad car analogy:

    I see this as being a similar false economy to the plug-in hybrid that people drive to work and charge for "free."

    At this very moment, my work computer has all 4 cores pegged, generating one bitcoin every 45 minutes (except when the java periodically hangs up...) So, I'm using my employer's landlord's electricity (which my employer gets for a fixed price in the lease) to generate bitcoin. I win, but ultimately, somebody else is paying the price.

    Really, it's the landlord's own fault, the air-conditioner is from the 1960s and only has one setting which results in about 64F at my desk, if I weren't generating bitcoin, I'd be doing un-necessary FPGA compiles to keep warm.

"Regardless of the legal speed limit, your Buick must be operated at speeds faster than 85 MPH (140kph)." -- 1987 Buick Grand National owners manual.

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