Mint It Yourself With a Browser-Based Bitcoin Miner 490
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.
Best explanation: SN 287 (Score:5, Informative)
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).
Word of warning (Score:5, Informative)
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.
Re:Still wondering... (Score:5, Informative)
Yes, which is deflation from the perspective of someone holding bitcoins. The value of bitcoins rises, massively, people hold on to bitcoins instead of spending them because they'll be worth more later, the value then rises further due to scarcity, causing a feedback loop.
Sure, these sorts of things have a limit, somewhere. I'm not quite sure how the people at bitcoin think this is going to work though.
Re:Still wondering... (Score:4, Informative)
That is monetary deflation relative to other currencies; that is, each unit of money (e.g. bitcoin) has become more valuable, and prices correspondingly drop (price deflation). Inflation is the opposite: prices rise, currency becomes worth less per unit.
Monetary and price inflation / deflation are often related, but not always. For example, computer processors have had prices fall due to technology, not because the dollar is worth more. Conversely, a civil war in, say, Saudi Arabia would make oil prices (and many others) rise.
Both monetary inflation and deflation can have positive and negative effects depending on the individual. With deflation, money becomes more valuable over time, so savers accumulate money simply by holding it. No risky investment needed. Debtors, on the other hand, see their debts grow over time. There is a push for less spending and more saving as it makes more sense in this environment. Consumers may hoard cash.
Inflation on the other hand means money loses value over time. Debtors see their debts lessened over time, while savers must invest to break even over the long run. In this environment, there is more spending and less hoarding. More risky investments are needed to make the same real (adjusted for inflation) return.
This ignores interest rates and the like, fractional reserve banking, etc. because I don't think I have a solid grasp of economics beyond this much (assuming I made no mistakes, here's to hoping)
Re:Still wondering... (Score:4, Informative)
Re:Still wondering... (Score:4, Informative)
You've just described a bubble.
The fun thing about bubble is that they eventually pop.
So image when a guy who owns a lot of bitcoins decides to suddenly dump them on the market. Sudden inflation. So another guy does the same to protect his investment (ie: by buying a more stable investment). More inflation. So a third guy does it. Rinse and repeat. Probably 90% of it being done by automated scripts.
Instant massive inflation.
Re:Er. Uh. (Score:4, Informative)
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?
Re:Best explanation: SN 287 (Score:5, Informative)
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.
Re:Still wondering... (Score:3, Informative)