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But what are bitcoins? In the "data recorded on a disk" sense? You can have bitcoins offline on a pendrive, as you say... then what are they? Files? What's in those files?
I read about it, but my technical knowledge is not deep enough. I'm very curious about the whole thing
Bitcoins are secure mathematical tokens.
Yes, the data is recorded in what's known as the blockchain, a log of all Bitcoin transactions.
Bitcoin is based on strong cryptography which allows it to work. The community agrees to the Bitcoin protocol (by using it) which has rules for how bitcoins come into existence, how many there are, and how transactions work, etc.
Bitcoins are transacted between "wallets" which use cryptographic key pairs, consisting of a public and private key. You give out your public address which people can use to send you bitcoins. For example: 175tWpb8K1S7NmH4Zx6rewF9WQrcZv245W.
Your private key allows you to spend those coins.
So the blockchain contains a record of all transactions, and wallets contain key pairs necessary to send/receive bitcoins to/from other wallets.
They are pretty much just that, files, or parts of files in a digital wallet. Think of it like USD, each serial number is a unique dollar. There's a way to track that dollar, so to speak, with bitcoins, and see what they were used for.
No, seeing what bitcoins were used for is not quite accurate. With Bitcoin you can see the balance that exists at different addresses, and you can see transactions made between addresses.
However, you won't readily know who is the owner of any given address (unless they publish it), and one user can have any number of addresses.
There are also "mixing" services where you exchange coins, so even if there was someone trying to follow the progression of a coin, your address could become disassociated with it.
Also, technically coins are not actually stored in wallets, although they can be thought of like that for practical purposes and ease of explanation. If you lose your wallet file you lose the coins forever (the ability to spend them). Similarly, if someone gets access to your wallet file and learns your private key they can send (steal) your coins to another address.
That is my understanding. They are equivalent to something like "credit cards" that aren't tied to any currency denomination. Think of it like if Visa and Mastercard paid with monopoly money that they gave a value too, and each retailer sets its own unique price based on how they value the money. Pretty much just any acceptable payment at that level.
No, that's not a good description because their is nothing to stop Visa or Mastercard from creating as many units of their currency as they wanted. Also, if the government wanted to shut them down they could, because they know where to find them. With Bitcoin there is no individual or group to target, or office to raid, as it's decentralized.
I haven't researched this enough to say the exact ins and outs but I am still troubled about how easy it is to derail Bitcoin. Currently for the low, low price of $800,000 (at retail rates) you could buy the processing capacity to outvote the legitimate network for 1 hour. So for slightly more than it's profits for a quarter Apple could completely compromise the current BitCoin network for a year.
Yes, the dreaded 51% attack has been thoroughly discussed. Please see here:
It's not accurate to say Apple could compromise the network for a year as stated. In fact, outvoting the network for 1 hour doesn't guarantee successfully implementing an attack due to variance. Also, unless the attack is sustained there is no way to say how long any effects would last; business on the normal chain would resume as usual. The damage done to Bitcoin would mostly be any negative PR which might call into question the soundness of the currency system.
My opinion is any entity with the resources to beat the network would not attempt it for profit driven reasons, as they could do better using those resources for "good". I'd say it would be someone with indirect benefit, such as a government with a competing currency. If that was the case the attack and source of it could be discovered resulting in all sorts of interesting consequences.
I don't think a government would attempt it because the resulting blowback if it were exposed could be far worse.
Of course, as the network gets larger it become much harder for anyone to pull together the processing capability to compromise the network - the real risk would be a distributed malware trojan that quietly infects a few hundred thousand machines before turning on to flood the network with bogus authentications and fake coins for a period.
Actually, there are already less-than-moral people that do use botnets for mining power to gain bitcoins. However, because typical PCs are not as efficient for computation as specialized mining rigs, or indeed the mining pools of such rigs, such individuals are not considered a threat.
That'd be much harder than it seems, deploying a trojan or a phish to a targeted group is a crapshoot, especially a paranoid one. Now if the currency were larger and more widely accepted...
You misunderstand me, the trojan isn't to phish bitcoin users, it's to create zombie computers who's combined processing power will outvote the legitimate network. The legitimacy of any bitcoin transaction is validated by asking other parts of the network to confirm the ownership chain of the coin. If a large precentage of the network is rogue then that confirmation system breaks down.
Yes, a network with more hashing power than the Bitcoin network could implement an attack, but remember it's only for as long as the rogue network sustains 51% of the hashing power of the normal network.
If such an attack were detected there might also be "Bitcoin defenders" that fired up rigs with GPUs for example to protect the overall system. Don't forget, there are already some pretty resourceful people with an interest in seeing Bitcoin succeed. And that will only increase.
Actually most trojans used another route. They used the infected machine's power to mine for coins in a large network of zombied PCs or the tried to steal / break the security / private key to one individual's digital wallet.
Yes, this is true. One of my own concerns with Bitcoin is for less technically savvy users. Bitcoin is hard to understand and very technical.
In fact, much of the population is vulnerable regardless of Bitcoin because our lives become more reliant on technology everyday. I believe billions of dollars are stolen each year by digital crimes alone.
Bitcoin only exacerbates that problem unless we who are working to facilitate it remain conscious of protective countermeasures.
That is my understanding. They are equivalent to something like "credit cards" that aren't tied to any currency denomination. Think of it like if Visa and Mastercard paid with monopoly money that they gave a value too, and each retailer sets its own unique price based on how they value the money. Pretty much just any acceptable payment at that level.
No, that's not a good description because their is nothing to stop Visa or Mastercard from creating as many units of their currency as they wanted. Also, if the government wanted to shut them down they could, because they know where to find them. With Bitcoin there is no individual or group to target, or office to raid, as it's decentralized.
However much they print is of no concern. The value is determined by the person you're transacting with. If Visa created X amount more visamoney, the value of visa would go down, the person taking transactions in it would require more. I used it as an example to illustrate a point on how people exchange goods and services for payments. Whether by barter or through fiat money. Bitcoin isn't so much a currency so much as a way to codify a barter.
And yes, most of you do have businesses, funny how the bulk of the supporters run businesses that encourage you to get bitcoins from them in exchange for a fiat currency of some variety.
I should really invest in aluminium though. I hear they make fashionable hats.
That is my understanding. They are equivalent to something like "credit cards" that aren't tied to any currency denomination. Think of it like if Visa and Mastercard paid with monopoly money that they gave a value too, and each retailer sets its own unique price based on how they value the money. Pretty much just any acceptable payment at that level.
No, that's not a good description because their is nothing to stop Visa or Mastercard from creating as many units of their currency as they wanted. Also, if the government wanted to shut them down they could, because they know where to find them. With Bitcoin there is no individual or group to target, or office to raid, as it's decentralized.
However much they print is of no concern. The value is determined by the person you're transacting with. If Visa created X amount more visamoney, the value of visa would go down, the person taking transactions in it would require more. I used it as an example to illustrate a point on how people exchange goods and services for payments. Whether by barter or through fiat money. Bitcoin isn't so much a currency so much as a way to codify a barter.
And yes, most of you do have businesses, funny how the bulk of the supporters run businesses that encourage you to get bitcoins from them in exchange for a fiat currency of some variety.
I should really invest in aluminium though. I hear they make fashionable hats.
As I said in my original post my intention is not to argue, so I won't comment on whether or not currency inflation might be a concern. I was only pointing out that with Bitcoin there is a known hard limit of 21 million coins, and it can't be inflated beyond that by anyone.
And again, I'm not here selling anything or on some promotion mission. I'm here to try to provide accurate information regarding Bitcoin, the thread topic, that's all.
I like to clear up misinformation whenever I can, regardless of the topic.
You can put more than one response in each post @acoindr as it is generally frowned upon to have .....seven.... posts in a row.
I was trying to make responses to different questioners easily distinguishable, but I'll try for post consolidation if that's preferred.
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But what are bitcoins? In the "data recorded on a disk" sense? You can have bitcoins offline on a pendrive, as you say... then what are they? Files? What's in those files?
I read about it, but my technical knowledge is not deep enough. I'm very curious about the whole thing
@Stormwatcher I misunderstood your question as "Is the data recorded on a disk" when you were really asking what bitcoins are in a more technical sense. My apologies.
Bitcoin consists of two parts data wise - wallets containing cryptographic keypairs (which allow you to send/receive coins) and the blockchain.
Please see here for a great explanation of the keypairs:
The blockchain is a log of all Bitcoin transactions, and each block contains a hash of the previous block. This results in a chain of blocks from the genesis block to the current block. Please see here for more information:
So really bitcoins themselves don't exist as files. Rather they exist as the record of which wallet address had the coin starting from when the coin was first "mined" to where it currently is at. When you "spend" a coin what you are really doing is announcing to the world (the network) that you are transferring it from your wallet to the recipient wallet. And the blockchain records that.
Hence the Ponzi scheme moniker: the finite number of coins means anyone who started early and holds coins will only watch them get more valuable, provided more people inject real world value to BitCoins.
This is an interesting point, which I'm glad you brought up.
As stated earlier bitcoins were once in the cents range. Some people had access to many thousands of them. At current prices it's certain there now exists "bitcoin millionaires". Newer adherents bemoaned missing out on earlier prices. Trust me. It is still way early days for Bitcoin. I believe anyone with as few as 10 bitcoins (about $100 worth) has a good chance at becoming equivalent to a millionaire. I don't say that with Ponzi motivations. That's just my honest assessment of the math along with my consideration of possible outcomes.
So...the people who got in earlier got the best value, but there's totally plenty of room to grow and you could still make a ton if you invest now! That's exactly a multi-level marketing pitch.
And what the hell use will Bitcoins be if one of them is worth $100k? How many things in their life does an average person spend more than $100 grand on? How many banks do you think are going to accept a down payment of one bitcoin on a mortgage? The very fact of their indivisibility makes them increasingly useless even as they become increasingly valuable.
It's an investment scheme, realistically, again, that's why I mentioned the largest and most vocal supporters run investment businesses. Turn your real world wealth into virtual wealth by giving me your money, sort of situations. I glanced through a few threads there (and the PA one) the ones that issued disgust at our "ignorance" are the ones that give loans and run exchanges on some level.
These aren't "oh gee I'll make a website for a bitcoin" services, these are "allow me to give you monopoly money for real money." Or cash for gold, except the gold is a ticking time bomb of worthlessness because bitcoins have no value inherently unlike precious metals.
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Donovan PuppyfuckerA dagger in the dark isworth a thousand swords in the morningRegistered Userregular
Besides how useless bitcoins ultimately are (and they are), I find it hilarious how many of the 'libertarian'-type end-of-the-world survivalist types involved in the bitcoin scheme are really really into precious metals. Anybody with half a brain knows that if there is an armageddon scenario (and there most definitely won't be), precious metals won't be worth shit. You can't eat them, clothe yourself with them, build shelter for yourself with them, or burn them for warmth.
The actual big boys, the power-men in that kind of a scenario? Dudes with secure warehouses full of clean water, food, wood, and building materials. They will be the guys who will get all the apocalypse supermodel whores.
Essentially something like iron would be useful. So... controlling scrap yards will be key too.
Most of the point is you're securing for an economic collapse because gold/silver are inherently valuable as a metal and hold value for things like rings, jewelry, electronics, etc. Flat out collapse of society and you're fucked unless you can make fire, and hunt for food (or have the warehouse).
It's probably the most sophisticate ponzi scheme I've seen to date, though. Sort of screams of the stock market, early investors reap rewards, but what motivation is there to use it. Might as well just use whatever fiat currency is in play at the time. I'm not really to concerned with who's tracking what I buy, that's the least of my economic problems. Plus the huge issue with theft present with an anonymous currency, and it being decentralized.
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Donovan PuppyfuckerA dagger in the dark isworth a thousand swords in the morningRegistered Userregular
The first guys who built mining rigs and unlocked a bunch of coins right at the start really cleaned up. If they sold at the right time (before that bitcoin market crash that happened a while ago), they could have made substantial sums of real money. To be honest, today, I'd play the real money auction house in Diablo 3 before I'd get into bitcoins...
Hence the Ponzi scheme moniker: the finite number of coins means anyone who started early and holds coins will only watch them get more valuable, provided more people inject real world value to BitCoins.
This is an interesting point, which I'm glad you brought up.
As stated earlier bitcoins were once in the cents range. Some people had access to many thousands of them. At current prices it's certain there now exists "bitcoin millionaires". Newer adherents bemoaned missing out on earlier prices. Trust me. It is still way early days for Bitcoin. I believe anyone with as few as 10 bitcoins (about $100 worth) has a good chance at becoming equivalent to a millionaire. I don't say that with Ponzi motivations. That's just my honest assessment of the math along with my consideration of possible outcomes.
So...the people who got in earlier got the best value, but there's totally plenty of room to grow and you could still make a ton if you invest now! That's exactly a multi-level marketing pitch.
And what the hell use will Bitcoins be if one of them is worth $100k? How many things in their life does an average person spend more than $100 grand on? How many banks do you think are going to accept a down payment of one bitcoin on a mortgage? The very fact of their indivisibility makes them increasingly useless even as they become increasingly valuable.
Each Bitcoin isn't really a coin, it's just a catchy name. Any Bitcoin can be subdivided to such a degree that it may as well allow infinite division (I think it's 100 million subdivisons with scope for more in the protocol). What Bitcoin really is just a protocol for adding and looking up entries in a massively replicated database.
This is an interesting point, which I'm glad you brought up.
As stated earlier bitcoins were once in the cents range. Some people had access to many thousands of them. At current prices it's certain there now exists "bitcoin millionaires". Newer adherents bemoaned missing out on earlier prices. Trust me. It is still way early days for Bitcoin. I believe anyone with as few as 10 bitcoins (about $100 worth) has a good chance at becoming equivalent to a millionaire. I don't say that with Ponzi motivations. That's just my honest assessment of the math along with my consideration of possible outcomes.
So...the people who got in earlier got the best value, but there's totally plenty of room to grow and you could still make a ton if you invest now! That's exactly a multi-level marketing pitch.
Yes, I know.
Please excuse my levity. It's just I'm 100% convinced Bitcoin is not a Ponzi scheme, but because of some unavoidable aspects of it, it can certainly resemble one.
There has to be some way of introducing/distributing a new currency to an economy, and fairly. The dollar system, for example, does this by using debt, as dollars are borrowed into existence.
Bitcoins come into the money supply in a similar fashion to gold in that it takes a certain amount of work and resources to mine them.
Let me explain more directly why it's not a Ponzi scheme. A Ponzi scheme necessarily relies on new people investing money, so the scheme can be perpetuated.
Bitcoin doesn't require people invest money that way to be successful. Already there are a certain number of bitcoins in existence (I believe around 7 million), and these are traded for different things 24/7, just as would be expected of a currency. Some people work for bitcoins, others trade items for them. Let's say no new person invested a single unit more of fiat currency into bitcoins. The current economic exchange that takes place would not cease.
What would happen then is the exchange price of bitcoins would drop because they are constantly being mined into existence (the money distribution part), and bitcoins would experience inflation. They would probably drop from $8 currently to back below $1.
You have to understand there are many people, including myself, that would jump at the opportunity to access bitcoins again at that price point, because we missed out earlier. That would probably sustain the price around $1, perhaps a bit more.
So bitcoins would continue to come into existence and would continue to have decent exchange rate value. That's all that's needed for the economy to continue to bootstrap itself. It only takes time for more people to learn of bitcoins, some would pass on them, but others would stay. That's how it goes. Again, no new person need invest money. They could enter the economy by working for bitcoins or trading other items of value like honey. As more people entered the economy it would cause deflation, which would make the value (in goods/services) for bitcoins go up. People would be able to trade fewer and fewer bitcoins for things of higher and higher value. So bitcoins would again attain a high value, but not one based on fiat exchange, but actual exchange of goods and services.
Of course, deflation might cause people to want to horde them again at that point, making the value of them go up even further, although at the expense of the bitcoin economy somewhat. But at the same time bitcoins would continue to be mined into existence, so deflation wouldn't likely last. The economy would be able to resume growth. It might take several years, but as long as bitcoins had any value at all, the economy would be able to build around them because of the unique opportunities it provides.
What Ponzi-esque speculation does is make things happen presumably a lot faster. Either way a large bitcoin economy can develop, which means bitcoins have true value.
And what the hell use will Bitcoins be if one of them is worth $100k? How many things in their life does an average person spend more than $100 grand on? How many banks do you think are going to accept a down payment of one bitcoin on a mortgage? The very fact of their indivisibility makes them increasingly useless even as they become increasingly valuable.
You would be exactly right if bitcoins couldn't be subdivided, but they can be up to 8 decimal places. So people might see prices listed in stores as 5 µBTC (micro bitcoins), etc.
The first guys who built mining rigs and unlocked a bunch of coins right at the start really cleaned up. If they sold at the right time (before that bitcoin market crash that happened a while ago), they could have made substantial sums of real money. To be honest, today, I'd play the real money auction house in Diablo 3 before I'd get into bitcoins...
If you're into Diablo 3 you might be interested to know you can get into bitcoins using Diablo 3 gold on Ogrr.com, a game forum that exchanges based on bitcoins.
acoindr on
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Donovan PuppyfuckerA dagger in the dark isworth a thousand swords in the morningRegistered Userregular
There has to be some way of introducing/distributing a new currency to an economy, and fairly. The dollar system, for example, does this by using debt, as dollars are borrowed into existence.
Not really. Dollars were not originally borrowed into existence. First a ruling body (a government) decides on the currency, then they mint it, then they introduce it via payments to government employees and contractors, before they take some if it back in tax. Then banking begins, then borrowing starts. At least that's how federally supported currency happened over here (Australia) 212 years ago to replace all the dribs and drabs of other foreign currencies that were being used and abused. http://en.wikipedia.org/wiki/Australian_pound#History
Well fiat currency is like that, it's not surprising someone espousing precious mineral investment would want a commodity currency kind of feature in their virtual currency.
There has to be some way of introducing/distributing a new currency to an economy, and fairly. The dollar system, for example, does this by using debt, as dollars are borrowed into existence.
Not really. Dollars were not originally borrowed into existence. First a ruling body (a government) decides on the currency, then they mint it, then they introduce it via payments to government employees and contractors, before they take some if it back in tax. Then banking begins, then borrowing starts. At least that's how federally supported currency happened over here (Australia) 212 years ago to replace all the dribs and drabs of other foreign currencies that were being used and abused. http://en.wikipedia.org/wiki/Australian_pound#History
Well, yes, I agree there are different ways of introducing a currency to an economy, but I think ideally it should be done in as fair a way as possible. That's just my view.
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acidlacedpenguinInstitutionalizedSafe in jail.Registered Userregular
The first guys who built mining rigs and unlocked a bunch of coins right at the start really cleaned up. If they sold at the right time (before that bitcoin market crash that happened a while ago), they could have made substantial sums of real money. To be honest, today, I'd play the real money auction house in Diablo 3 before I'd get into bitcoins...
If you're into Diablo 3 you might be interested to know you can get into bitcoins using Diablo 3 gold on Oggr.com, a game forum that exchanges based on bitcoins.
oh man that's hilarious. You can trade fake fake money for just regular kinda-fake money that you can possibly trade for real money at a decent exchange if you're lucky? On the one hand it sounds awesome in that someone will give me something with worth for something completely worthless, but on the other hand, for the exchange I'm guessing I could work like 80 hours in a game for barely anything or just, you know, work a real job, for 8 hours and make probably 100x more, and trade that in for the kinda-fake money.
The actual big boys, the power-men in that kind of a scenario? Dudes with secure warehouses full of clean water, food, wood, and building materials. They will be the guys who will get all the apocalypse supermodel whores.
Booze. That would become your big trading chip. I know if the world was ending, and I had some extra beans, I'd gladly trade that shit from some Jim Bean.
I might have to hang around here a little while longer. You guys are hilarious.
You should check some of the other threads. You think this is funny, but it is at best a half-hearted effort.
Geez.
Well, you've got our forum beat. We get occasional gems but our entertainment sadly comes mostly in the form of Bitcoin drama. People have thus far been significantly affected by Bitcoin, both financially and emotionally. It's a wild ride.
acoindr on
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Donovan PuppyfuckerA dagger in the dark isworth a thousand swords in the morningRegistered Userregular
The actual big boys, the power-men in that kind of a scenario? Dudes with secure warehouses full of clean water, food, wood, and building materials. They will be the guys who will get all the apocalypse supermodel whores.
Booze. That would become your big trading chip. I know if the world was ending, and I had some extra beans, I'd gladly trade that shit from some Jim Bean.
The actual big boys, the power-men in that kind of a scenario? Dudes with secure warehouses full of clean water, food, wood, and building materials. They will be the guys who will get all the apocalypse supermodel whores.
Booze. That would become your big trading chip. I know if the world was ending, and I had some extra beans, I'd gladly trade that shit from some Jim Bean.
Not everybody is an alcoholic?
Anecdotal evidence says you are wrong.
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Donovan PuppyfuckerA dagger in the dark isworth a thousand swords in the morningRegistered Userregular
The actual big boys, the power-men in that kind of a scenario? Dudes with secure warehouses full of clean water, food, wood, and building materials. They will be the guys who will get all the apocalypse supermodel whores.
Booze. That would become your big trading chip. I know if the world was ending, and I had some extra beans, I'd gladly trade that shit from some Jim Bean.
I might have to hang around here a little while longer. You guys are hilarious.
You want comedy?
At best Bitcoin is a techno-utopian fantasy fueled by the paranoid distrust of big government and fiat currency. A naive belief that because smart people have thought about the problems then they aren't problems. Ignoring the vast history of humanity where smart people make terrible decisions again and again and again. Bitcoins proponents are fundamentally the digital equivalent of gold bugs.
At worst it's a scam where a large number of the scamees think they are the scamers. A large fraction of the Bitcoin community are positively wetting themselves at the purported future where the network is made up of a majority of dumb clients with a relatively few authenticator/miners who charge a 'reasonable' fee to verify transactions. Probably in the belief that they would be the people running the authentication nodes and earn money for doing "nothing".
The best description of Bitcoin's I've heard is this:
"You have a set of bingo balls, and you pull one ball out at a time and write the result down on a piece of paper, making longer and longer numbers. You have a friend look at the number when it gets to a certain length, and based on what it looks like tells you that it's either 'bad', in which case you throw it out, or 'good' in which case you retain it because it's now worth five dollars."
For ten times the hilarity of this thread I suggest meandering over to the SomethingAwful thread that I got the quote from. There are some real gems there, like this real thing that real people really made:
Posts
Bitcoins are secure mathematical tokens.
Yes, the data is recorded in what's known as the blockchain, a log of all Bitcoin transactions.
Bitcoin is based on strong cryptography which allows it to work. The community agrees to the Bitcoin protocol (by using it) which has rules for how bitcoins come into existence, how many there are, and how transactions work, etc.
Bitcoins are transacted between "wallets" which use cryptographic key pairs, consisting of a public and private key. You give out your public address which people can use to send you bitcoins. For example: 175tWpb8K1S7NmH4Zx6rewF9WQrcZv245W.
Your private key allows you to spend those coins.
So the blockchain contains a record of all transactions, and wallets contain key pairs necessary to send/receive bitcoins to/from other wallets.
No, seeing what bitcoins were used for is not quite accurate. With Bitcoin you can see the balance that exists at different addresses, and you can see transactions made between addresses.
However, you won't readily know who is the owner of any given address (unless they publish it), and one user can have any number of addresses.
There are also "mixing" services where you exchange coins, so even if there was someone trying to follow the progression of a coin, your address could become disassociated with it.
Also, technically coins are not actually stored in wallets, although they can be thought of like that for practical purposes and ease of explanation. If you lose your wallet file you lose the coins forever (the ability to spend them). Similarly, if someone gets access to your wallet file and learns your private key they can send (steal) your coins to another address.
No, that's not a good description because their is nothing to stop Visa or Mastercard from creating as many units of their currency as they wanted. Also, if the government wanted to shut them down they could, because they know where to find them. With Bitcoin there is no individual or group to target, or office to raid, as it's decentralized.
Yes, the dreaded 51% attack has been thoroughly discussed. Please see here:
https://bitcointalk.org/index.php?topic=52388.20
It's not accurate to say Apple could compromise the network for a year as stated. In fact, outvoting the network for 1 hour doesn't guarantee successfully implementing an attack due to variance. Also, unless the attack is sustained there is no way to say how long any effects would last; business on the normal chain would resume as usual. The damage done to Bitcoin would mostly be any negative PR which might call into question the soundness of the currency system.
My opinion is any entity with the resources to beat the network would not attempt it for profit driven reasons, as they could do better using those resources for "good". I'd say it would be someone with indirect benefit, such as a government with a competing currency. If that was the case the attack and source of it could be discovered resulting in all sorts of interesting consequences.
I don't think a government would attempt it because the resulting blowback if it were exposed could be far worse.
Actually, there are already less-than-moral people that do use botnets for mining power to gain bitcoins. However, because typical PCs are not as efficient for computation as specialized mining rigs, or indeed the mining pools of such rigs, such individuals are not considered a threat.
Yes, a network with more hashing power than the Bitcoin network could implement an attack, but remember it's only for as long as the rogue network sustains 51% of the hashing power of the normal network.
If such an attack were detected there might also be "Bitcoin defenders" that fired up rigs with GPUs for example to protect the overall system. Don't forget, there are already some pretty resourceful people with an interest in seeing Bitcoin succeed. And that will only increase.
Yes, this is true. One of my own concerns with Bitcoin is for less technically savvy users. Bitcoin is hard to understand and very technical.
In fact, much of the population is vulnerable regardless of Bitcoin because our lives become more reliant on technology everyday. I believe billions of dollars are stolen each year by digital crimes alone.
Bitcoin only exacerbates that problem unless we who are working to facilitate it remain conscious of protective countermeasures.
However much they print is of no concern. The value is determined by the person you're transacting with. If Visa created X amount more visamoney, the value of visa would go down, the person taking transactions in it would require more. I used it as an example to illustrate a point on how people exchange goods and services for payments. Whether by barter or through fiat money. Bitcoin isn't so much a currency so much as a way to codify a barter.
And yes, most of you do have businesses, funny how the bulk of the supporters run businesses that encourage you to get bitcoins from them in exchange for a fiat currency of some variety.
I should really invest in aluminium though. I hear they make fashionable hats.
As I said in my original post my intention is not to argue, so I won't comment on whether or not currency inflation might be a concern. I was only pointing out that with Bitcoin there is a known hard limit of 21 million coins, and it can't be inflated beyond that by anyone.
And again, I'm not here selling anything or on some promotion mission. I'm here to try to provide accurate information regarding Bitcoin, the thread topic, that's all.
I like to clear up misinformation whenever I can, regardless of the topic.
I was trying to make responses to different questioners easily distinguishable, but I'll try for post consolidation if that's preferred.
_______________
@Stormwatcher I misunderstood your question as "Is the data recorded on a disk" when you were really asking what bitcoins are in a more technical sense. My apologies.
Bitcoin consists of two parts data wise - wallets containing cryptographic keypairs (which allow you to send/receive coins) and the blockchain.
Please see here for a great explanation of the keypairs:
https://bitcointalk.org/index.php?topic=55706.msg662901#msg662901
The blockchain is a log of all Bitcoin transactions, and each block contains a hash of the previous block. This results in a chain of blocks from the genesis block to the current block. Please see here for more information:
https://en.bitcoin.it/wiki/Block_chain
And the Bitcoin whitepaper is here:
http://bitcoin.org/bitcoin.pdf
So really bitcoins themselves don't exist as files. Rather they exist as the record of which wallet address had the coin starting from when the coin was first "mined" to where it currently is at. When you "spend" a coin what you are really doing is announcing to the world (the network) that you are transferring it from your wallet to the recipient wallet. And the blockchain records that.
And what the hell use will Bitcoins be if one of them is worth $100k? How many things in their life does an average person spend more than $100 grand on? How many banks do you think are going to accept a down payment of one bitcoin on a mortgage? The very fact of their indivisibility makes them increasingly useless even as they become increasingly valuable.
These aren't "oh gee I'll make a website for a bitcoin" services, these are "allow me to give you monopoly money for real money." Or cash for gold, except the gold is a ticking time bomb of worthlessness because bitcoins have no value inherently unlike precious metals.
The actual big boys, the power-men in that kind of a scenario? Dudes with secure warehouses full of clean water, food, wood, and building materials. They will be the guys who will get all the apocalypse supermodel whores.
Most of the point is you're securing for an economic collapse because gold/silver are inherently valuable as a metal and hold value for things like rings, jewelry, electronics, etc. Flat out collapse of society and you're fucked unless you can make fire, and hunt for food (or have the warehouse).
It's probably the most sophisticate ponzi scheme I've seen to date, though. Sort of screams of the stock market, early investors reap rewards, but what motivation is there to use it. Might as well just use whatever fiat currency is in play at the time. I'm not really to concerned with who's tracking what I buy, that's the least of my economic problems. Plus the huge issue with theft present with an anonymous currency, and it being decentralized.
Each Bitcoin isn't really a coin, it's just a catchy name. Any Bitcoin can be subdivided to such a degree that it may as well allow infinite division (I think it's 100 million subdivisons with scope for more in the protocol). What Bitcoin really is just a protocol for adding and looking up entries in a massively replicated database.
I made a game, it has penguins in it. It's pay what you like on Gumroad.
Currently Ebaying Nothing at all but I might do in the future.
My point being I'd rather try and make money flipping items there than get me some o' dem bitcoins.
Yes, I know.
Please excuse my levity. It's just I'm 100% convinced Bitcoin is not a Ponzi scheme, but because of some unavoidable aspects of it, it can certainly resemble one.
There has to be some way of introducing/distributing a new currency to an economy, and fairly. The dollar system, for example, does this by using debt, as dollars are borrowed into existence.
Bitcoins come into the money supply in a similar fashion to gold in that it takes a certain amount of work and resources to mine them.
Let me explain more directly why it's not a Ponzi scheme. A Ponzi scheme necessarily relies on new people investing money, so the scheme can be perpetuated.
Bitcoin doesn't require people invest money that way to be successful. Already there are a certain number of bitcoins in existence (I believe around 7 million), and these are traded for different things 24/7, just as would be expected of a currency. Some people work for bitcoins, others trade items for them. Let's say no new person invested a single unit more of fiat currency into bitcoins. The current economic exchange that takes place would not cease.
What would happen then is the exchange price of bitcoins would drop because they are constantly being mined into existence (the money distribution part), and bitcoins would experience inflation. They would probably drop from $8 currently to back below $1.
You have to understand there are many people, including myself, that would jump at the opportunity to access bitcoins again at that price point, because we missed out earlier. That would probably sustain the price around $1, perhaps a bit more.
So bitcoins would continue to come into existence and would continue to have decent exchange rate value. That's all that's needed for the economy to continue to bootstrap itself. It only takes time for more people to learn of bitcoins, some would pass on them, but others would stay. That's how it goes. Again, no new person need invest money. They could enter the economy by working for bitcoins or trading other items of value like honey. As more people entered the economy it would cause deflation, which would make the value (in goods/services) for bitcoins go up. People would be able to trade fewer and fewer bitcoins for things of higher and higher value. So bitcoins would again attain a high value, but not one based on fiat exchange, but actual exchange of goods and services.
Of course, deflation might cause people to want to horde them again at that point, making the value of them go up even further, although at the expense of the bitcoin economy somewhat. But at the same time bitcoins would continue to be mined into existence, so deflation wouldn't likely last. The economy would be able to resume growth. It might take several years, but as long as bitcoins had any value at all, the economy would be able to build around them because of the unique opportunities it provides.
What Ponzi-esque speculation does is make things happen presumably a lot faster. Either way a large bitcoin economy can develop, which means bitcoins have true value.
You would be exactly right if bitcoins couldn't be subdivided, but they can be up to 8 decimal places. So people might see prices listed in stores as 5 µBTC (micro bitcoins), etc.
If you're into Diablo 3 you might be interested to know you can get into bitcoins using Diablo 3 gold on Ogrr.com, a game forum that exchanges based on bitcoins.
Not really. Dollars were not originally borrowed into existence. First a ruling body (a government) decides on the currency, then they mint it, then they introduce it via payments to government employees and contractors, before they take some if it back in tax. Then banking begins, then borrowing starts. At least that's how federally supported currency happened over here (Australia) 212 years ago to replace all the dribs and drabs of other foreign currencies that were being used and abused. http://en.wikipedia.org/wiki/Australian_pound#History
Well, yes, I agree there are different ways of introducing a currency to an economy, but I think ideally it should be done in as fair a way as possible. That's just my view.
oh man that's hilarious. You can trade fake fake money for just regular kinda-fake money that you can possibly trade for real money at a decent exchange if you're lucky? On the one hand it sounds awesome in that someone will give me something with worth for something completely worthless, but on the other hand, for the exchange I'm guessing I could work like 80 hours in a game for barely anything or just, you know, work a real job, for 8 hours and make probably 100x more, and trade that in for the kinda-fake money.
If that isn't sound money, I don't know what is.
Clearly the best option of stupid shit to be doing for money.
Booze. That would become your big trading chip. I know if the world was ending, and I had some extra beans, I'd gladly trade that shit from some Jim Bean.
Warframe: TheBaconDwarf
You should check some of the other threads. You think this is funny, but it is at best a half-hearted effort.
chair to Creation and then suplex the Void.
Geez.
Well, you've got our forum beat. We get occasional gems but our entertainment sadly comes mostly in the form of Bitcoin drama. People have thus far been significantly affected by Bitcoin, both financially and emotionally. It's a wild ride.
Go into SE++, and wait until the Eat Poop You Cat thread reaches it's terrible climax. You'll either laugh your arse off, or require psychotherapy.
Not everybody is an alcoholic?
Anecdotal evidence says you are wrong.
Oh yeah?
Well...
Empirical data says you have a poopy head!
You want comedy?
At best Bitcoin is a techno-utopian fantasy fueled by the paranoid distrust of big government and fiat currency. A naive belief that because smart people have thought about the problems then they aren't problems. Ignoring the vast history of humanity where smart people make terrible decisions again and again and again. Bitcoins proponents are fundamentally the digital equivalent of gold bugs.
At worst it's a scam where a large number of the scamees think they are the scamers. A large fraction of the Bitcoin community are positively wetting themselves at the purported future where the network is made up of a majority of dumb clients with a relatively few authenticator/miners who charge a 'reasonable' fee to verify transactions. Probably in the belief that they would be the people running the authentication nodes and earn money for doing "nothing".
I made a game, it has penguins in it. It's pay what you like on Gumroad.
Currently Ebaying Nothing at all but I might do in the future.
I mean unless you're in the Colosseum or something.
"You have a set of bingo balls, and you pull one ball out at a time and write the result down on a piece of paper, making longer and longer numbers. You have a friend look at the number when it gets to a certain length, and based on what it looks like tells you that it's either 'bad', in which case you throw it out, or 'good' in which case you retain it because it's now worth five dollars."
For ten times the hilarity of this thread I suggest meandering over to the SomethingAwful thread that I got the quote from. There are some real gems there, like this real thing that real people really made: