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It depends on the size of the transaction. Space in the blockchain and processing time are not free as miners are competing to have their blocks accepted by the rest of the network as soon as possible after they are found. The transaction fee for most transactions to get included right away is 0.0005 btc which is about $0.05 For average confirmation time, whcih has been decreasing due to greater hashrates see http://blockchain.info/charts/avg-confirmation-time

Most recently mined blocks in the bitcoin block chain: http://blockchain.info/

Given that I'm on a geek website, I was expecting a flurry of corrections, actually. Maybe Slashdot isn't the geek hangout that I thought any more. Maybe we're all just naysayers following everyone else because "Bitcoin is stupid" or whatever.

I've barely looked into Bitcoin myself and don't mine and wouldn't come close to some of the insane setups I've seen documented for mining even if I did.

But:

https://blockchain.info/charts/n-unique-addresses

Something like 90,000 unique Bitcoin addresses seen every single day. Bear in mind, that's not "90,000 users" so much as "90,000 transactions to/from unique addresses for that day". Something like 80,000 GH/s. That's a lot of oomph being put in by clients for a long time. Go googling for mining setups, or exchange rates (there are BUCKETS of individual exchange websites for Bitcoin alone), or anything related to bitcoin and you find tons of results. And just about every single news provider in the world has run half-a-dozen stories on Bitcoin already.

Someone, somewhere, most probably geeks / overclockers /etc. is pumping away at Bitcoin for most of the day, sending or receiving money or generating coins. Just because you're not one of them, doesn't mean it's not happening.

SETI@Home / BOINC would kill to have those people running their software instead.

..."They've also provided data dumps of the Bitcoin addresses involved" mean?

I'm not up on bitcoin minutia. If these d-bags were running miners, that means that they own the coins... their wallet. So, what addresses do they mean? Specific coin IDs?

Yes, they went to a wallet that the ESEA owned. In your wallet, you can setup numerous addresses that you can give to unique miners so you can see how many bitcoins specific miners are brining in. You can also just use a single address to have all of your bitcoins sent to. Either way, they'd all end up in the same wallet. As an example, here is the address I used when I first tried mining on a pool, you can use it to see how much I bothered to get from this specific pool.

1AiyVX1Ag87gar9E3oWb3QEziUHvDBRHax

It might be the goal, but right now exchanges is vital - most trades are basically "USD to BTC -> buyer -> seller -> BTC to USD -> refresh stock/fulfill order". Stats at http://blockchain.info/ show that 60-80% of daily BTC transactions are at exchanges.

If true, it would mean that nearly 1/1000 of the total energy use in the US is currently devoted to bitcoin mining. That is preposterous. According to wikipedia, the total usage in the US is 3,886,400,000 MW-h/yr. The stated value for mining is 358,000MW-h/yr. The ratio between them is 9.23e-4. That energy usage figure includes all industrial activity, all computers running in the US, all street lights, all TVs, all electric stoves, etc. Everything. So, I simply don't believe the figure given.

The figure probably originates from http://blockchain.info/stats. I'm guessing it is either made up, or using bogus energy figures.

Heh, compare.

Now let's see where it goes next.

Clearly. But that's not money when you have to sell it at an exchange for fiat currency to do any of what he described with it. That's a commodity.

http://blockchain.info/charts/market-price

If you SERIOUSLY think this price chart represents a useful *currency* vs. a commodity in a bubble - please, for the love of your descendants, store your savings in a mattress.

its because its rose above 90$ a coin duo the run on them because of that bank having troubles. once the run on them ends and the new rigs get shipped i bet they will drop back down to below 11$.

I dont think people in countries where the banks are stealing their deposits are running to bitcoin. Is that what you would do? Take out your money and invest it into a speculative digital commodity that you cant use to pay rent or buy clothes and is difficult to deposit into a foreign bank and may rise or drop 10% in a single day? Is that what you would do with your families savings in times of trouble? Or would you be getting your money out in the form of cash and other stable commodities which can be transported and deposited elsewhere? The world news about the behaviour of banks in Europe and the US may be driving speculation into bitcoin, but I dont think it is coming from Cyprus or Greece.

Also, the production of bitcoins is not determined by the "new rigs". The production level is flat: http://blockchain.info/charts/total-bitcoins. There is a built in moderation to the difficulty of mining which predetermines the output to a set amount. As the link shows... its very predictable and not likely to cause significant change no matter how much mining power is used.

But I read a post that he keeps his bitcoin wallet there!

his "tip wallet" data is here: http://blockchain.info/fb/1etlgu

Those are problems with someone's logic, but not mine. You didn't even respond to the problem I pointed out: the exponential growth of the size of the blockchain.

1. The more people use bitcoin, the faster the blockchain file grows. This is independent of how many bitcoins exist so your point #1 is irrelevant. As the blockchain grows ever larger it will naturally find it's way off of users drives and offloaded to "the cloud". This is already happening right now and the blockchain is only an annoyingly large 6gb. With mass adoption it will eventually get large enough to need it's own hard drive. And then its own server. My above exponential growth rate graphed above is incredibly simplistic and only meant to demonstrate a point. The growth rate may grow much quicker as more people join in and people who were previously on the fence jump on board.

2. Understand that there is zero physical backing to the value of the bitcoin. To counter your inevitable reply that the USD is also unbacked, the USD at least has an economy behind it. You don't have to convert USD to Arkansas dollars to spend them. Bitcoin physically can not get to that point however because of space constraints of modern hard drives. As bitcoin becomes more accepted and more used, the blockchain grows in size that much faster and as people become gradually more inconvenienced by the size of the ever growing blockchain they will either cash out and drop out or offload the blockchain requirements to one of the cloud providers. It's really all about y=x^2.

3. Rich people have an almost magical ability to stay rich that entails not putting their money in the same places poor people put theirs. There is a maximum cap of 21 million bitcoins and to date only 10,950,200 exist. The current market cap is about 900 million USD. Up til this last pre-bubble explosion in growth the cap was about 140 million USD. That is incredibly serious volatility and simply does not attract the kind of investors that have the power and influence needed to keep government from attacking it. It attracts almost exclusively the kind of investor that can't understand why their investments always seem to fail.

Telling the future of bitcoin isn't about being cool, it's really just about understanding 10th grade math and the storage limitations of hard drives. Eventually individual user participation will be impossible. This is a mathematical certainty.

Those are problems with someone's logic, but not mine. You didn't even respond to the problem I pointed out: the exponential growth of the size of the blockchain.

1. The more people use bitcoin, the faster the blockchain file grows. This is independent of how many bitcoins exist so your point #1 is irrelevant. As the blockchain grows ever larger it will naturally find it's way off of users drives and offloaded to "the cloud". This is already happening right now and the blockchain is only an annoyingly large 6gb. With mass adoption it will eventually get large enough to need it's own hard drive. And then its own server. My above exponential growth rate graphed above is incredibly simplistic and only meant to demonstrate a point. The growth rate may grow much quicker as more people join in and people who were previously on the fence jump on board.

2. Understand that there is zero physical backing to the value of the bitcoin. To counter your inevitable reply that the USD is also unbacked, the USD at least has an economy behind it. You don't have to convert USD to Arkansas dollars to spend them. Bitcoin physically can not get to that point however because of space constraints of modern hard drives. As bitcoin becomes more accepted and more used, the blockchain grows in size that much faster and as people become gradually more inconvenienced by the size of the ever growing blockchain they will either cash out and drop out or offload the blockchain requirements to one of the cloud providers. It's really all about y=x^2.

3. Rich people have an almost magical ability to stay rich that entails not putting their money in the same places poor people put theirs. There is a maximum cap of 21 million bitcoins and to date only 10,950,200 exist. The current market cap is about 900 million USD. Up til this last pre-bubble explosion in growth the cap was about 140 million USD. That is incredibly serious volatility and simply does not attract the kind of investors that have the power and influence needed to keep government from attacking it. It attracts almost exclusively the kind of investor that can't understand why their investments always seem to fail.

Telling the future of bitcoin isn't about being cool, it's really just about understanding 10th grade math and the storage limitations of hard drives. Eventually individual user participation will be impossible. This is a mathematical certainty.

I'd like to add to this something I've seen others point out before.

Bitcoin's Blockchain grows exponentially larger with time.

In 2 years it went from about 200mb to 6gb.

I'll rough-graph this exponential growth to show you clearly what it means At around 10 years you're talking about a 100gb file sitting on the drives of every bitcoin user. At 20 years that 100gb file is now over 4tb. In 30 years that's 9tb. And so on, you can read a graph.

The blockchain is a fundamental aspect of the bitcoin, you can't just start truncating it. It will grow like this forever. Bitcoin will eventually grow so large that it is impractical for even the most diehard of virtual currency enthusiast. The only way to keep it functional is to assume massive advances in technology or that everyone is going to move to cloud based bitcoin banking, letting a third party company do all the processing and blockchain storage. At that point bitcoin would be as equally regulated as any other currency rendering the entire point of bitcoin useless.

The reality here is that bitcoin is an intentionally manufactured bubble. Anyone that understands math and has a reasonable grasp of how large a terabyte actually is can easily see this if they look past the near blinding glamour that the bitcoin proponents toss out to distract you from the truth.

Another point to consider is that bitcoin is not a stable currency. It swings up and down very wildly in value. This is fine if you treat it like an investment akin to trading the Forex markets, but it's pretty terrible not knowing from day to day how many bitcoins it takes to fill your gas tank. If you do get involved with bitcoin be prepared to exit at any time or you risk losing everything. Enron was also a fantastic investment for early adopters.

When millions of users are making transactions every day the miners will be unable to keep up with the transactions

Not to mention that the entire blockchain grows exponentially longer with every transaction and is already at 6GB. A few more years and it will be hundreds of terrabytes.

There is a hard limit of 1 MB per block, and therefore about 4000 transactions/10 minutes, and ~144 MB/day. That is because each transaction requires ~250 bytes of data. The block chain therefore has a linear growth limit. I don't know about you, but the last hard drive I bought could fit 38 years worth of transactions on it and cost $70.

What will happen is that the mining rewards for blocks will decrease every 4 years, making transaction fees relatively more important for miners. Therefore they have an incentive to process transactions with higher fees. In turn, this will force the creation of new transaction pools using the same block chain technology. The pools will condense multiple transactions from individuals into single larger ones on the main block chain, and deliver the details as side transmissions to each other directly.

This is analogous to how banks use the Federal Reserve to clear transaction balances among each other on a periodic basis (daily last time I looked), while doing the detailed accounts internally. Thus the block chain will end up being used directly for large transactions and pools, and stay a manageable size.

As an individual, you would keep your local pool block chain, and the main central one, both of which grow linearly, while the total bitcoin network can expand by the number of local pools splitting the daily transaction limit of 576,000 on the central block chain.

The death knell to bitcoin will be mass adoption. When millions of users are making transactions every day the miners will be unable to keep up with the transactions and the network will slow to an even more glaceral crawl. Already it often takes 20 minutes or more to validate a transaction.

Not to mention that the entire blockchain grows exponentially longer with every transaction and is already at 6GB. A few more years and it will be hundreds of terrabytes.

These sound like reasons why you think bitcoin should lose ground, or why you want it to lose ground, not proof that it is losing ground. Take a look here to see a graph of bitcoin trading activity:

http://blockchain.info/charts/bitcoin-days-destroyed-min-week?showDataPoints=false&timespan=&daysAverageString=7&scale=0

And here is a graph of volume and price:

http://bitcoincharts.com/charts/mtgoxUSD#tgTzm1g10zm2g25zvzcv

It's obvious from the above that its usage has been increasing. Also, if you have a google alert on bitcoin you'd notice that these have been increasing as well, so the media is picking up on it.

you aren't required to keep all 6 GB of blockchain history unless you are mining. It just so happens that the official bitcoin client does keep the entire 6 GB blockchain history. You are welcome to use any non-official client since the protocol is 100% open source.

Malfeasance already happened. It looks like someone took advantage of this to have another shot at their losing Satoshi Dice bets: http://blockchain.info/double-spends

Generally, the company will not make money from the rise and fall of the bitcoin. Like most investment companies they will make money from the investment transactions. You pay a small fee or portion of the investment to buy and maybe you pay something to sell out. The more the bitcoin fluctuates, the more likely they are to see clients investment decisions change and the more money they make. I think what they are providing is a useful service. Here is a link to the value of the bitcoin vs US dollar over the last year: http://blockchain.info/charts/market-price. As you can see, it has a juicy track record.

Every single bitcoin transaction is public knowledge. That's inherent to the bitcoin protocol. See http://www.blockchain.info/.

And they accept Bitcoin. They've received 800btc so far. Not bad, that's USD$10,500 according to BTC-E (up 112btc/$1470 in ~48h).

(this is merely a linkified+updated version of the parent comment, with currency exchange)

Note, I am not sure if this triggers the 3x matching.

1. 1. Are you therefore implying that everyone in the world needs to run their own server in order to have the benefits of SaaS?
2. 2. If so, do you think they *actually* have to run their own physical server? What about regular hosting providers?
3. 3. Doesn't GNU provide SaaS for hosting free software projects, i.e. Savannah? I know the software running Savannah is free, but you've said before that even then, you don't know what modifications have been made by the server operator. Does using Savannah fit under the exception of published work not having to be private, e.g. Twitter vs. Facebook as you mentioned in your 2009 talk at the University of Calgary?
4. 4. Don't you use non-free software every time you go to a website that has custom code running on the server? Is this a compromise you make to receive the information (presumably you wouldn't give them any private information)? Or is this not a compromise at all? Is therefore the real issue of SaaS just the fact that you're giving private information to someone else, irregardless of the software's level of freedom (though of course that would matter as well)?
5. 5. What do you think about the various infrastructure-as-a-service (IaaS) offerings that are available, specifically things like Amazon's EC2 and Google's Compute Engine (irregardless of your views about other aspects of those companies; I don't want your views on the Amazon Swindle to affect your answer)? Users of these services are running their own software (or at least can; for this question, assume the users are running either free software or private software that they created and have the source for), but at some lower level these services are managed by non-free software. Is it immoral to use such services? What if they were managed by entirely free software? You would still have to send data and code to their computers. How would that change your view, if at all?
6. 6. What do you think of a service like the Blockchain.info Bitcoin Wallet that encrypts/decrypts your private data in the browser and releases all the client-side code as free software, along with a browser plugin that checks the code provided by the website against the code in the public repository to verify that they are the same? Would such a system be moral to use (irregardless of your views on Bitcoin either way)?
7. 7. Homomorphic encryption allows computations to be carried out in ciphertext. Although currently unpractical, if/when it does become practical to perform secure, private computations on someone else's computer, how would this affect your views on SaaS/IaaS/hosting providers? Would you have different views depending on the freedom of the software managing the service provider's low level systems?

I've gone on much longer than I initially intended. Thanks for your time :).

It's done.

Pretty naive perspective. Three things can cause mining to become more profitable.

What if BTCUSD goes up to say $100/BTC? Putting aside whether that's realistic for now, the point is there is relationship between profitability of mining and the BTCUSD ratio.

What happens if miners start to shut down and leave? Difficulty goes down, each MH returns more BTC per unit time.

More services start to pop up, like SatoshiDice, that impose a transaction fee. Have you seen the growth in transaction fees graph at blockchain.info? http://blockchain.info/charts/transaction-fees Right now, it's miniscule (1% of mining revenue) but over time, as the block reward goes to zero, will determine the profitability of mining.

This is a scam. I read the letter here. If the scammer really has Romney's signature scanned, he'd post it somewhere, along with just enough interesting facts for reporters to verify that they really do have Romney's returns. It's fun talking about this scam, but it's just some young dork across the pond who thought this up and is having some fun. I checked his two bitcoin accounts. As of now, the account for releasing the returns is a bit over 1.1BTC, or about $11, and that's almost all from one transaction. The account for not releasing the returns has 0.33BTC, with 33 tiny transactions.

I really do want to know what's in those returns, but any BTC sent to this hack is a waste of BTC.

This is a scam. I read the letter here. If the scammer really has Romney's signature scanned, he'd post it somewhere, along with just enough interesting facts for reporters to verify that they really do have Romney's returns. It's fun talking about this scam, but it's just some young dork across the pond who thought this up and is having some fun. I checked his two bitcoin accounts. As of now, the account for releasing the returns is a bit over 1.1BTC, or about $11, and that's almost all from one transaction. The account for not releasing the returns has 0.33BTC, with 33 tiny transactions.

I really do want to know what's in those returns, but any BTC sent to this hack is a waste of BTC.

I think you're really missing the point of Bitcoin mining. It's like gold mining, in an economy using Gold as a currency; you'd never expect the majority of economic effort being involved in digging the stuff out of the ground. Rather a small segment of society does that, and the rest of society does whatever they do in the economy, buying gold from other people as needed.

Bitcoin mining was *never* meant to be the way that the majority of people would get their Bitcoins. Rather it's a way of securing the network, namely in that Bitcoin essentially consists of an accounting system, where value is exchanged by writing public key crypto signed messages saying things like "Alice gives 10 bitcoins to Bob". Mining is required because there needs to be some canonical way of ordering those transactions in time. That's done by saying that whatever at least 51% of the computing power in the network thinks is true, is. So long as no one party ever controls that 51%, you can determine if coins have been spent to another party before you decide to accept them.

Look at the pool hashrate diagram. Each of those pie slices is a group of dozens to hundreds of users, each with at least a few hundred dollars worth of mining hardware, securing the network. Do I care if they are making more in Bitcoins than their rigs are costing them? Heck no. I just want a secure network so when I receive some Bitcoins I can know that they haven't been spent before. FPGAs and the upcoming ASICs are good for that, because they perform so much faster than off-the-shelf CPU's that any attacker would have a hard time getting enough computing power to attack the network.

Besides, if I did want to become a miner, all I'd have to do is spend about $600 on a Butterfly Labs fpga platform and I'd gradually have Bitcoins trickle in. But it's a lot faster to just buy them from someone else, just like it's a lot faster to buy gold from someone than mine it.

Not by growth in daily transactions: http://blockchain.info/charts/n-transactions?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=