Bitcoin Mining Startup Gets $500k In Venture Capital 381
Sabbetus writes "Seattle based Bitcoin startup CoinLab secured a $500,000 investment from various investors such as Silicon Valley firm Draper Associates and angel investor Geoff Entress. CoinLab is an emerging umbrella group for cultivating and launching innovative Bitcoin projects. CEO Vessenes said 'if there is a currency that can trade around the world, it's semi-anonymous, it's instant, it's not controlled by government or bank, what's the total value of that currency? The answer to that is, if it works, it's gotta be in the billions. It just has to be for all the reasons you might want to send money around the world.' This type of talk is common from Bitcoin enthusiasts but apparently seasoned investors are starting to agree. Forbes explains the details of their business plan but in short it has to do with tapping the GPU mining potential of gamers, more specifically gamers of free-to-play games. This would add a new revenue stream for online game companies that are trying to provide free games profitably."
Sucker born every minute. (Score:5, Funny)
Shouldn't that be BitCoin mining scam bilks idiots of $500,000?
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Yeah, I'm sort of amazed that its on forbes. You'd expect them to do a little research and at least address the built in deflation in a story.
Re:Sucker born every minute. (Score:5, Insightful)
Why does this amaze you?
What are the odds either the writer was paid, Forbes was paid or one of the two have people involved in both?
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Bitcoin doesn't have "built in deflation." It has built-in monetary inflation, which is currently around 35%, and which decreases over time.
Re:Sucker born every minute. (Score:5, Interesting)
The definition of deflation is *decreasing* money supply, not stagnant money supply.
It's just that our current world is so hopped up on pro-inflation propaganda that even a failure to sufficiently pump up the money supply in perpetuity is, to some, "the same thing as deflation".
Re:Sucker born every minute. (Score:4, Insightful)
Most people care about prices not the money supply.
Most people expect population and economic production to increase over time.
Thus most people see a stagnant money supply as price deflation.
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Deflation is the declining real value of money, reflected in a decline in prices. Money supply is only one variable in the equation, a fixed money supply will still be deflationary if the velocity of money decreases or the quantity of goods on the market increases.
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Make that first "declining" into an "increasing."
No not so much (Score:5, Interesting)
An unchanging money supply in a growing economy and population = automatic deflation. A simple example:
Suppose you and 3 of your friend create your own little currency. You each get two "favour tokens". Any time you want someone to do a favour for you, you pay them a token, and you get paid a toekn if you do a favour for them. This works so well that someone else decides they want in. You all say fine, but they don't get any tokens, they have to work for their first token. Soon, you have 10 people in your little economy.
However it is being badly hamstrung by the lack of tokens. At most, 8 people can have a token, there will always be at least two people without a token. So you start having lots of situations where people want to do a favour, but the person who wants it has no token.
That right there is deflation. It gets more complicated on a larger economy, of course, but if you have a fixed amount of currency and the economy grows, deflation is inherent.
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I'm pretty sure that is not a problem with bitcoin. Each coin is divisible into subcoins. So it is possible to pay someone with 1/1000000th of a bitcoin.
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No. The definition of deflation is that prices decline. In a growing economy with a fixed money supply, prices must decline.
Re:Sucker born every minute. (Score:4, Informative)
Er, not quite. When you lose the private key to a bitcoin public key that has received (net) bitcoins, those bitcoins are gone. You would have to somehow infer the private key from the public key, which is by design impossible to do in feasible time.
There is no mechanism for getting the network to "re-credit" you your lost coins. No amount of whining about how this or that HD crashed or computer was hacked will allow you to regain access to the credits. At the very least, it would require a full fork and migration of the entire blockchain (i.e. global ledger), with full cooperation, to cover up your little oopsie ... which isn't going to happen.
As always, of course, if you have the private key(s) backed up somewhere, you can go right on re-spending like nothing happened.
Re:Sucker born every minute. (Score:5, Interesting)
Yeah, good point, every story about Bitcoin should re-hash every major and minor criticism anyone has made about it, regardless of how many times they've been made public, or the relevance to the story.
I mean, while we're at it, be sure to mention how bitcoin uses SHA256 cryptographic hashes for proof of work, as well as the relevant journal articles on SHA-2's potential weaknesses, on double-spend attacks and their countermeasures, etc etc etc.
That way it'll be sure to be a nice, to-the-point, concise article, pandering to every possible concern. They might even be able to squeeze in a few words about some mining startup and the VC they raised!
Re:Sucker born every minute. (Score:4, Informative)
Given that its (eventual) deflation is a key feature of the protocol, I would think it merits mentioning up front. I mean, hell, they wouldn't have to say much about it, since you can assume a Forbes reader knows what currency deflation is. Something simple like:
The supply of Bitcoins is not infinite. After a set number of transactions (estimated to be reached around the year 2140), no more Bitcoins will be generated, making the currency permanently deflationary from that point forward.
There you go, summed up in 36 words. Could probably even be trimmed a bit for space, if necessary.
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Forbes is the best videogame journalist in the industry.
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think for a second.
High processing cycles needed to "generate" a bitcoin?
Something only has value if someone wants it.
What exactly are bitcoins and why are they so mathematically complex.
Re:Sucker born every minute. (Score:5, Interesting)
think for a second.
High processing cycles needed to "generate" a bitcoin?
Something only has value if someone wants it.
What exactly are bitcoins and why are they so mathematically complex.
The transfer of funds from one person to another usually relies on a trusted third-party like Paypal, Visa, or the various banks, which prevent double-spending. Bitcoin is an attempt to remove third-parties from transactions altogether. To prevent double-spends, the transactions are instead verified by a peer-to-peer "mining" network. The incentive for miners to verify transactions is that there is a 50 BTC reward every time a block of transactions solved. The math behind it is complex because the entire system requires zero trust by all parties and there is a clever use of economic incentives to keep everything going.
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Bitcoin is an attempt to remove third-parties from transactions altogether.
Pardon if this is pedantic, but that overstates it, as you next sentence suggests. Bitcoin doesn't remove third-parties, as the network *is* the third party. Rather, what it removes is the need for a specific third party (the "network in general" serves this function), or a 3rd party that needs to know specific details about you.
Determination. (Score:4, Insightful)
Spending 500k$ just to troll Slashdot hard.
Re: (Score:2, Interesting)
It is a scam. The value proposition is an utter fabrication that preys on people who have a poor understanding of central banking and currency valuation.
What exactly was Vanderbilt's scam? Did he lie about building railroads? Did Rockefeller lie about being able to use oil to fuel ships and vehicles? You're right that Zuckerberg doesn't have a scam either. He built a popular website that people want to use, and makes money by selling their data and advertising instead of an access fee.
Maddoff didn't get cau
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Well, bitcoins is not actually a real scam... it might have been in the beginning... But as soon as people are paying to get bitcoins and you can sell your bitcoins you can start making money....
Just as an example... Store X sells a product for Y bitcoins and can then sell those bitcoins for Z amount of your local currency it becomes a quite valuable way to do transactions...
No cost for making a payment.. compare that to Mastercars/Visa etc where they take a 2% cost.. maybe even a fixed cost per transaction
Re:Sucker born every minute. (Score:4, Insightful)
So instead of accepting real money minus a transaction cost, I could take fake money for free.
Are you calling those slips of paper with pretty printing on them "real money?" I think you've been hoodwinked.
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Mod Parent up.
People don't understand where a monetary coin gets its value.
The enforcement and reprisals from the US government is what keeps the dollar afloat.
When Asian countries where considering trading oil in euros put the US in considerable panic.
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Until I can no longer use it to pay taxes and other debts it's as much a 'real' currency as anything else.
What is it about fiat currencies that makes them not real, just because the materials they are made of hold no significant value? What, do you think gold and other "precious" metals will stay valuable forever? Have a think about exactly why the price of gold is so high at the moment (hint: it involves China).
Re:Sucker born every minute. (Score:5, Interesting)
Yes, I know, that much is obvious. I was simply saying that many people (myself included) have given this some thought and think that the status quo is far from desirable, but far better than what is proposed by goldbugs.
I don't care what's in Fort Knox, it doesn't affect me, I do care that money supply can grow when needed, and be adjusted as the economy demands, and encourage moderate spending rather than hoarding based on expectation of future growth. I know these things are anathema to you and people that think like you, I just want you to appreciate that some of us have heard your arguments and disagree.
Prioritization? (Score:2)
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Forget losing performance, think about your GPU running 100% when it only needs to be at 10% and what that will due to your powerbill. My GTX460 eats 150watts and newer cards will be even more.
Fan noise (Score:2)
Forget losing performance, think about your GPU running 100% when it only needs to be at 10% and what that will due to your powerbill. My GTX460 eats 150watts and newer cards will be even more.
And fan noise as the various fans in your system desperate try to cool things down.
Re:Prioritization? (Score:4, Informative)
150W = 0.15kW x 24hrs/day = 3.6kWh/day x $0.10/kWh = $0.36 / day x 30 days/month = $10.80 / month.
Rescale according to your local electricity cost and actual number of hours per day.
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A 560 and 660 will probably both eat around 150 watts, though the 680's use less power than the 580's. The x80 series use roughly the same form factor and power draw from the 8800 up to the 580 and then a bit less (but not a lot) for the 680.
Much of GPU design is what you can cram into a given power envelope (between 6 and 8 pin connectors on the side and what you can draw from the mobo). CPU design has been the same way for quite a while with power points of 45 75, 95, 140 W TDP for intel parts. There a
More bitcoins than sense (Score:5, Funny)
I officially declare Internet Bubble 2 as confirmed!
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bubble v1 had Flooz with Whoopi Goldberg. who will get the first big Bitcoin sponsorship?
amazing use of resources (Score:5, Insightful)
In the 21st century, humans have invented fake mines to work in, and fake mining companies that mine in them.
Not fake mines likes the ones in Minecraft that might actually be interesting, of course. And not a side-effect of something else, like WoW's "gold farmers". Fake mines that exist solely and purposely to be tediously mined by fake mining companies! Now that's creating value. Value that's "gotta be in the billions".
Re:amazing use of resources (Score:5, Insightful)
I realize this is snark, but having a currency that is semi-anonymous, convenient, and resistant to meddling by central banks would be quite valuable to some.
The value you place on such a thing is probably not very high, but value is entirely subjective, and can only be shown on an individual basis by what that person is willing to trade to acquire the object (or information) in question.
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A kind of anonymous money could be useful, but I'd rather use one that doesn't double as a pyramid scam.
It's easy to make a bitcoin-clone without this property, you just need to adjust the mining rate so that the early adopters don't get half of the total wealth to ever be available.
Why would anyone use your clone? (Score:2)
You have to give the initial adopters a reason to pay attention to you.
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Perhaps in Bitcoin's case it was too heavily weighted toward early-ado
Re:amazing use of resources (Score:5, Insightful)
The next time you're playing a free solitaire game online, and your CPU fan is going wide open, your gpu fan is wide open, the room feels hot and stuffy all of a sudden, and the lights dim, just seek solace in the fact that you're making someone else fake money.
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Mind you, people will need to realize that their computers and their electricity may be being used by someone else to make money but if they're getting paid for it in some other way, that can be part of the deal. This announcement is about a way to get vitual in-game items for mining in an
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It also funcations as a signed message notary service protected by the strength of all the hardware and electricity that is securing the blockchain.
Bitcoin isn't great for jewelry though...you got me there.
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Not only that, but the creators of these fake mines have found a way to extract the potential value from the mine without actually paying the miners.
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Not fake mines likes the ones in Minecraft that might actually be interesting, of course
Okay, this is entirely subjective. I find bitcoin fascinating even though it has never been of economic value to me. And I've never played Minecraft. I find it somewhat interesting, but many people I know do not. And I find bitcoin much more interesting than Minecraft.
Re:amazing use of resources (Score:5, Insightful)
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No, it's not. I can actually hold it in my hands, and I can exchange it to someone else for goods and services.
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It's because they are intellectually living in the fantasy land of austrian economics. They are 'mining' all the 'gold/bitcoins' possible (apparently 21 million bitcoins) and that will be the whole currency supply.
Mining as a term does kinda make sense. If money was still on a gold standard then all the money in the world is both the extracted gold in circulation and the gold under the ground waiting to be dug up. In the case of bitcoins there is a limit on the number of mathematical problems that they c
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It's not distributed proportionally to CPU resources. It's distributed as a payment for a service it requires in order to operate. In order for the Bitcoin system to operate, transactions have to be secured with computing power. It's the nature of the way the system operates -- it takes computing power to secure the transactions. New currency is paid out proportionally to those who provide the computing power needed to make the system work. When the block rewards stop, computing power will still be needed.
electricity is free (Score:2)
If a game is going to use my GPU to mine bitcoins for the other end, they should have to tell me. Because otherwise they're just taking money from me and having my electric utility do the billing for them.
Note that anyone who is on a pay-per-bandwidth internet plan is in the same boat with ad-supported software. You are paying the maker of the software, just your ISP is doing the billing for them.
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I don't see that happening. I mean, if I write a game so inefficiently that it takes 100% CPU when I only really
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Because otherwise they're just taking money from me and having my electric utility do the billing for them.
Exactly. That, and your GPU will be running at 100% potentially for long periods of time when it would otherwise be near idle - so you might need to replace it sooner. You'll certainly have extra noise from the fans if your card is not passively cooled.
LOL (Score:3, Funny)
I am going to laugh so hard the first time I see and hear someone playing farmtown while their video card is at 90 decibel turbo speed.
You're kidding me??!?! (Score:5, Insightful)
'if there is a currency that can trade around the world, it's semi-anonymous, it's instant, it's not controlled by government or bank, what's the total value of that currency? The answer to that is, if it works, it's gotta be in the billions. It just has to be for all the reasons you might want to send money around the world.'
It's also going to be top of the list of every law enforcement agency across the globe. Governments tend not to like their citizens taking part in transactions that don't have a paper trail.
Re:You're kidding me??!?! (Score:5, Interesting)
That is true, however politicians and bureaucrats really like having a way to receive bribes that don't leave a paper trail. Which impulse will win out in the end?
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Governments tend not to like their citizens taking part in transactions that don't have a paper trail.
Yes, but what a government likes or not is immaterial; There are plenty of legitimate things and reasons for anonymous purchases, not the least of which is economic stability; If money cannot be exchanged anonymously, then that means that all transactions can (and will) be taxed. That means that the barter system will come back into play for any number of purchases, as well as complex tax shelters and evasion methods where goods trade hands instead of cash, or instruments are created that are "like" cash, b
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Governments tend not to like their citizens taking part in transactions that don't have a paper trail.
On the other hand, every Bitcoin transaction does have a very public "paper trail" that is quickly available to everyone, including law enforcement. The only challenge is matching account IDs to actual people. I wouldn't be surprised if law enforcement is able to find ways to do that, in which case they might prefer that criminals use Bitcoins rather than cash.
after instagram, it's official: (Score:3)
there's a new dot-com bubble
congratulations on the investors here on seeding the hype to attract the rubes
just remember to step off the merry go round before things tank
i'd give it a few years
any VC want to fund my innovative paradigm shifter? i call it flooz. whoopi goldberg is going to help me spread the good word
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there's a new dot-com bubble
Maybe, maybe not. Its not like instagram raised a billon from the market. The Wall Street Journal reported that the decision was largely made by one person.
Trojan (Score:5, Insightful)
Forbes explains the details of their business plan but in short it has to do with tapping the GPU mining potential of gamers,
So 'in short', they're going to trojan a video game and turn a bunch of PCs into a botnet to generate bitcoins. But because it's a business doing this, and not some teenager in his mom's basement, they're going to make billions instead of go to jail? That sound about right?
If any other kind of software you ran was doing something in the background other than what you wanted to do, it would be called malware.
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The difference is in the EULA.
Re:Trojan (Score:5, Insightful)
They will disclose it in the EULA, that no one reads.
Bitcoin haters (Score:5, Insightful)
never seem to understand the advantages of it is a form of exchange and yet they will cry and moan every time the government takes another one of their freedoms, another step into their privacy, another step towards authoritarianism.
Bitcoin is an incredible idea: decentralized exchange, totally anonymous, no central body to print it out of existence, no government to track who your exchanging with and for what, a limited stable inflation on the money supply with no one to dictate that "the crisis would end if we just gave the banks more money".
Would I want to store all of my wealth in bitcoin? No. Do I like the idea of being able to convert my money into an exchange medium that is untraceable? Of course.
How many stories have we read of governments steering us towards a cashless society where all forms of exchange are withing their monitoring (not to moention all forms of communication.)
To me bitcoin is the currency equivalent of TOR and shouldn't be hated on.
bitcoin's biggest drawback (Score:5, Interesting)
Control the 'net and you control bitcoin. Do you think pippa/acta / cispa and variants are limited to the riaa and mpaa agenda only?
One Thing Is For Certain (Score:2)
The suspense is killing me.
Duplicate (Score:5, Funny)
Don't the editors read what they post?
We just had an article about billionaires funding a crazy mining scheme [slashdot.org] a few days ago.
Security (Score:2)
That is that as an individual trader you are at the low end of the reliability spectrum when it comes to trading and finances. If your bank goes bust you will probably not receive your money. If there is a sudden drop in markets, your trades won't be processed for hours or days. Probably not an issue unless there's a war or some other kind of major event, like
I'm surprises it doesn't already happen (Score:2)
The other option I've not heard happen (which is considerably more practical) is for a miner to be included in malware. Given malware tends to disable task manager and related things that could report the extra CPU use, and many users would not think to look anyway, this could
Can this sort of activity be blocked? (Score:2)
Say I'm writing drivers for these GPU's and I want to give my customers the ability to block this. In theory, the calculations required to mine a bitcoin follow a particular and repetitive pattern, which means I could probably identify the pattern of instructions being sent to my GPU. Could I code a driver to render the functions that draw the screen for the game normally but just return '0' every time I'm asked to mine a bitcoin?
I feel like I would invest in a graphics card that offered such a featur
It's a Bitcoin trojan (Score:2)
Bitcoin mining is barely profitable now. Bitcoin "difficulty" self-adjusts so that the number of new Bitcoins created per unit time remains constant. Currently, that number is about 6*50*24*30 = 216K bitcoins per month, worth about $900K/month. Every few years, the number of coins created per unit time drops, so that eventually there will be a fixed number of coins, 21 million. Around the end of 2012, half of all Bitcoins that will ever be created will have been created, and the production rate drops in h
Wow look at all these trolls. (Score:5, Insightful)
It is becoming more and more obvious who is on which side of the bitcoin "debate". This thread honestly isn't even worth reading, everyone who knows what they are talking about is spending all their time explaining the most basic info to idiots. Admittedly there are a few lazy, but intelligent sounding posters mixed in, but this is mostly just troll FUD. 95% of normal people either think it is interesting or just don't care.
What's with all the hositility (Score:5, Insightful)
Get over the hype and take Bitcoin for what it really is: a fascinating experiment that has, so far, withstood the amazing barrage of publicity, hacking attempted, legal uncertainties, and remains valuable for reasons completely contrary to everyone that says it's worthless. It may become worthless one day, but consider the possibility that Bitcoin is disproving all your wildly oversimplified assumptions about what makes something valuable. It is completely different, and there's plenty of reasons to believe that it could succeed as much as it could fail.
I like to think of Bitcoin like gold. Nothing is backing gold. It's a material for which there is a limited supply in the world, and which is universally regarded as value because of various properties it has: perhaps beauty, fungibility, density, etc. Bitcoin is really the same, with a limited global supply, except that it has different properties, mainly ease of transfer over the internet, fungibility, storage efficiency, near-anonymity and built-in escrow.
I don't think it's any more ludicrous for Bitcoin to have value than it is for gold to have value. And in the end, when I want to sell WoW weapons, buy webserver space, or play a few games of poker online, why would I use gold, cash or paypal, which all require me to remember log-in creditials, give away information and/or a bunch of third party fees. There's plenty of value in being able to pay people across the world, instantaneously, without sacrificing your privacy, and without paying any fees. Why is that not valuable? Seriously... quit focusing on the get-rich-quick kids, and start appreciating Bitcoin for it's unique properties and philosophy.
Don't think of it as wealth! (Score:3)
How can there by any equivalency between these two as a vehicle of exchange? I'm not saying BitCoin is a scam or worthless. But to say it's anywhere near the level of gold is ridiculous.
I used to think Bitcoin was stupid because it's another fiat currency, no real value, poor store of wealth, etc.
Then I realized - its real value is not as a safe full of gold but as a replacement for Western Union.
Never store your wealth in Bitcoins, but always conduct your transactions in it. This mindset sets an upper bou
Re:Bitcoin why? (Score:5, Funny)
I just don't understand Bitcoin and "mining" whatsoever.
Oh, you didn't recently invest half a million dollars in a start-up, did you?
Re:Bitcoin why? (Score:5, Informative)
If you like technology, there are many fascinating areas that Bitcoin brings together: p2p networks, cryptography, economics to name a few.
Regardless of the image problem Bitcoin has and people's propensity to denounce it based on what they've heard, it really is a revolutionary development. If the current Bitcoin network doesn't make it into your life, you can bet that one or many of its predecessors will.
One of the things it enables is fast global transactions. I created a site to sell digital downloads for Bitcoin called CoinDL: https://www.coindl.com/ [coindl.com] and the processing time is averaging under 10 seconds which is pretty impressive considering there's no company, government or other centralized organization involved in the transfer.
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Its predecessors? I think you mean its descendants.
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I think you just explained the reason for the speed.
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One of the things it enables is fast global transactions. I created a site to sell digital downloads for Bitcoin called CoinDL: https://www.coindl.com/ [coindl.com] and the processing time is averaging under 10 seconds which is pretty impressive considering there's no company, government or other centralized organization involved in the transfer.
Um... other way around. You'd expect anything going through a company or government to take time as they have legal requirements for verification and recording which they really really really can't fuck up.
When governments decide bitcoin is a giant scheme to dodge tax (note: I'm not saying it is, but governments will come to that conclusion eventually) it's going to get the beat down from all sorts of organizations. The whole premise 'idea of using cryptography to control the creation and transfer of mone
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the charters of those 'central authorities' - as the sole provider of national currencies and sole arbiters of the creation of money
In the US, at least, no such charter exists.
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Regardless of the image problem Bitcoin has and people's propensity to denounce it based on what they've heard, it really is a revolutionary development. If the current Bitcoin network doesn't make it into your life, you can bet that one or many of its predecessors will.
I will take that bet. I will even offer you generous odds, but only if we wager in dollars and cents. You know, real currency. Oh, wait...
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This must be the source of most of the Bitcoin hate. You're looking at how new currency units are created to the exclusion of all other aspects of the system.
To people who do not have any appreciable skills to sell on the open market would naturally see only this because the concept of being a produce
Re:Bitcoin why? (Score:5, Insightful)
Creating numbers and telling people they have value is not being a producer of value.
The work that went into the crypto behind bitcoin was useful skilled work, that created value for society. Running a bitcoin mining operation is not.
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Creating numbers and telling people they have value is not being a producer of value.
Actually, it is if those numbers allow people to make mutually beneficial changes they would otherwise not be able to make, which is what all moneys do in the first place. They don't have terminal value, but they facilitate exchange.
If Bitcoin can so facilitate exchange between people who like the protections it offers (and don't mind those it doesn't offer), then it has created value.
The work that went into the crypto behind bitcoin was useful skilled work, that created value for society. Running a bitcoin mining operation is not.
Only in the sense that performing any computational proof-of-work "didn't create value for society". If you can accept tha
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I never said that bitcoin mining creates value.
Except, to everyone who uses bitcoin, it does.
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This must be the source of most of the Bitcoin hate.
Not necessarily, but it is the source of why most people realize it is a scam.
To people who do not have any appreciable skills to sell on the open market would naturally see only this because the concept of being a producer of value that other people want to trade for just doesn't exist in their mental vocabulary
What? Being the creator of a scam now is something to be valued?
If the creators of Bitcoin truly wanted to create some kind of new currency, they should have set it up in such a way that they didn't get the lions share of the bitcoins right away, signalling to everyone else that it's a fucking scam.
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The creator of Bitcoin specifically included a newspaper headline in the genesis block in order to advertise the fact that he did not start mining Bitcoins before the code was publicly released. Everyone had the opportunity to start mining at the exact same time.
He mined the first 1.5 million or so Bitcoins, and as anyone can easily verify, has not spent the vast majority of them.
Re:Bitcoin why? (Score:4, Insightful)
Awesome, so this guy has grabbed about 7% of all the currency there ever will be, and is sitting on it.
This gives me all sorts of confidence and reason to love bitcoins, oh yes.
Re:Bitcoin why? (Score:5, Insightful)
C'mon, seriously, how hard did you need to try to miss that point?
The GP pointed out nothing more controversial than saying that the mint doesn't give your money its value, the fact that you can use it to buy bread and gasoline, and pay your rent and taxes, does. If you want to disagree with that, I can't stop you, but it just sounds deliberately obtuse at this point.
You guys need to go back to calling it a Ponzi scheme, at least then we can consider you legitimately ignorant about what that means.
If the creators of Bitcoin truly wanted to create some kind of new currency, they should have set it up in such a way that they didn't get the lions share of the bitcoins right away, signalling to everyone else that it's a fucking scam.
You mean, exactly like they did?
The Bitcoin block chain has exactly one "pre-mined" block, which remains unredeemed; and even if Satoshi himself someday shows up to claim it, at this point a mere 50BTC would have no effect whatsoever on the stability of the Bitcoin economy (currently with 8.8 million BTC in circulation).
You personally had just as much chance (adjusted for hardware) at mining every... single... block generated since that origin block, as all those who did so instead of whining about fairness; and your ongoing failure to do anything about it except sow FUD about the entire concept doesn't inspire sympathy.
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Congratulations: if you have now determined that any investment where the founders get the majority of the shares - Google, Microsoft, etc - are now scams! Do you wish to revise that definition?
In a scam, there's a promise of profits. The bitcoin creators have never made such promise, nor anything close.
Is it a stupid investment? Sure, and for that reason I don't hold any bitcoins. But it's not a scam.
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Re:It has to be? (Score:4, Insightful)
You don't understand the nature of fiat currency. Money (most currencies anyways) has a value because people want it to have a value. Bitcoin is no different.
Re:It has to be? (Score:5, Interesting)
You don't understand the nature of fiat currency
Money (most currencies anyways) has a value because people want it to have a value
Government back currencies have value because the government creates demand for those currencies through taxes. The US dollar has value because millions of Americans have to pay their taxes, and they cannot use Bitcoins, gold bars, or Tulips to do so -- they have to use US dollars to do so. Governments also create demand by charging for various services, assigning damages in court, etc. -- people are compelled to pay in government issued currency.
Bitcoin, on the other hand, has nobody creating demand for it, just a lot of hype and promises of secure and anonymous payments.
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Whoa boy are you miss informed. money has value because it has supposed scarcity. Government backed just means that the government or one of their agents controls that supply and does or doesn't screw it up. Bitcoins are limited by a mathematical theory/proof.
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If you buy something from an overseas website in Euros, you are supposed to assess the value of that in dollars, and pay the appropriate use tax to your state (if it has one, like say, California). Bitcoins would be no different.
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Nobody's been threatened. You agreed to follow the laws of this country when you took up residence here. Those include paying your taxes, and paying them in US Dollars.
Unless of course you don't believe that a people has the right to govern themselves, which is a downright retarded idea to hold.
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Bitcoin: Change you can believe in
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This is the same kind of bullshit that was flying around in the late 1990's. Time to short the NASDAQ 100.
The difference is that there aren't anywhere near as many big idea/no income tech IPOs this time around. Groupon is the only major Web 2.0 (or whatever the buzz-phrase is these days) IPO. Facebook may be the next, and will almost certainly be over-valued and over-subscribed - but it'll wilt in isolation. The economy in general is in the toilet. Glencore (global resources - you know, mines and oils wells and such.) was the biggest, I think, IPO in history and they lost about 15-20% of their launch price when
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why do they care? they aren't paying the electric bill.