Slashdot Mirror
Bitcoin Releases Version 0.3
Teppy writes "How's this for a disruptive technology? Bitcoin is a peer-to-peer, network-based digital currency with no central bank, and no transaction fees. Using a proof-of-work concept, nodes burn CPU cycles searching for bundles of coins, broadcasting their findings to the network. Analysis of energy usage indicates that the market value of Bitcoins is already above the value of the energy needed to generate them, indicating healthy demand. The community is hopeful the currency will remain outside the reach of any government." Here are the FAQ, a paper describing Bitcoin in more technical detail (PDF), and the Wikipedia article. Note: a commercial service called BitCoin Ltd., in pre-alpha at bitcoin.com, bears no relation to the open source digital currency.
I would like to see what sort of guarantees are in place for virtual currency
Tisha Hayes
and the moment it's cracked the world economy collapses? Nah. Pass.
#fuckbeta #iamslashdot #dicemustdie
means? This sounds like something I would do in an RPG? Where does it find these 'bundles of coins'? Am I just being obtuse about all of this? O_O
As someone pointed out, this article is light enough on source material that it may count as more of a slashvertizement. That said, if Bitcoin, or any micropayment and/or e-cash plan scales beyond a certain level, it's gonna attract both criminals and government interest and intervention, much as age-old Islamic halawa got a lot more notice when used by gangs like Al-Qaeda.
Luke, help me take this mask off
Could we just get a random reddit submitter instead? Please?
Often wrong but never in doubt.
I am Jack9.
Everyone knows me.
The dollars and euros are already on the verge of being virtual. Banks, corporations, and individuals rarely trade paper anymore; it's all done electronically as computer data. Even the ~1500 billion bailouts passed last year were done virtually - the Central Bank just appended a couple zeros to GMs, Bank of America's, and other private accounts. In effect they created money out of thin air.
BTW the Federal Reserve is not part of the government, just as Federal Express is not part of the government. The name is designed to deceive you but the Fed is still a private bank. It's a private corporate monopoly.
And finally, if you want to take money out of the hands of government to manipulate, inflate, or devalue, all you need to do is switch back to using precious metals - gold, silver, platinum. Governments and/or private central banks can not make metals out of thing air, thus they can not devalue your personal savings.
FOX NEWS.com should be BANNED from television and internet. Have the Congress take it over and give us Truespeak.
Seriously guys, it has been done to death hundreds of times.
They all died off. There's so many I don't even remember names.
Why did they die? Because whenever something like that reaches a meaningful size, something called "anti money laundering" kicks in.
This hits especially in payment processing. Companies are in practice prevented from processing anonymous payments. You cannot even go to a jewelry store with a suitcase with $20m in it and walk out of there with your pockets full of diamonds.
And if you have money to spend but nowhere that accepts it? Guess what, your money is worthless.
Shhhh...you'll disrupt their feelings of self-righteousness!
Monstar L
So this system requires CPUs to burn scarce, real electricity in order to generate virtual electronic tokens whose only purpose is to simulate the scarcity of rare metals, so that we can continue to use the old 'exchange value' economic model in the realm of information where by definition, it does not apply.
This seems like basing an economy on burning one's food crops to prove wealth and using the ash to buy things. I'm sure it would 'work', for some definition of work, but it doesn't seem particularly... efficient. Or sensible. Granted, humans do indulge in self-destructive behaviour, but do we really have to port all our bad habits into the digital world?
Is there some actual upside to this system which I'm not getting?
You are not a brain: http://books.google.com/books?id=2oV61CeDx-YC
Not only that but, what's stopping someone or a group to do transactions with another "real/trusted/VIP/fake/scam" node to artificially increase its "value" and "reliability".
And what is the meaning of: "blocks are created and added ad infinitum" and in what context does that relate and fit in?
Even ignoring all those issues, what and who creates "Bitcoins". My guess is a group of scammers.
Oh that's right... It isn't. But hey, thanks for trying to post something all edgy or controversial or whatever the hell you think it is, kdawson.
Did you just ignore your own quote? The part that said:
For an attacker to manipulate the record, he must outpace all of the other nodes on the network to produce the longest proof-of-work.
The "very fast machine" would have to be faster than all the combined peers in the entire network, since they are all working together to counter his fast machine.
No offense to you for trying to summarize it, but this sounds like utter horseshit.
I am still hunting for an intelligible explanation of why I can't forge money, copy money, or invalidate money, let alone why this isn't a privacy non-starter. And I'm not sure the Bitcoin "technical paper" counts.
I can create hashes, too. And I have lots of peers that will say whatever I want. Will you give me a cup of coffee for it?
All the redundant pithy comments about the real money supply aren't funny, either.
Tired of Political Trolls? Opt Out!
Good luck with that...
If there is a hard limit to the total amount of currency that can exist, then what you have is a situation where the currency will not scale with the economy. That means deflation and there's no faster way to kill an economy than that.
To me it seems like the people who created it are the same kind of gold standard 'tards who cry on and on about inflation without understanding it. They see inflation as "eating up your savings" (which is doesn't so long as you put them in an interest bearing account) and thus think deflation would just be great. I mean you have more buying power for doing nothing! Wonderful!
Except it badly fucks over an economy. For one, it simply drives down spending. If you can get something for a dollar today, or two of that something for a dollar next week, it makes sense to wait as long as you can. Non-essential purchases are discouraged since the longer you wait, the more your money gets you. While that sounds like it encourages savings what it really does is screw over trade. Money only works if people spend it. People can have as much money as you want if nobody spends it it is worthless, regardless of the form it takes.
Then there's loans. The ability to make and receive loans goes to hell in a situation of continual deflation. Unless the loan is extremely short term, it won't work. Take a house loan. This is doable because even with minimal to no inflation, you know you can afford it. You know your cost will not go up in percentage terms. However with deflation? No such luck. In a situation of continual deflation, the amount of money you receive for work will go down with time. As such the payments on a loan will be a larger and larger part of income, growing until you can't afford them. To make it work, the loan would have to be offered with a negative interest. But nobody will do that, they'd simply not loan out their money instead as that is a higher rate of return and is guaranteed. Currently people will make loans because the risk of the loan is balanced against having a positive return.
I could go on, but deflation is an extremely bad thing in the long run, and with a fix currency supply you have guaranteed it. Sounds like your project needs less gold standard survivalist geeks and more economists. Tell you what, run your idea by Dr. Gerry Swanson, you get him to sign off on it, maybe I'll reexamine it. As it stands now it sounds like an extremely bad idea just from an economics standpoint, never mind any technical arguments.
Gold would be near worthless as it has few uses in a non-industrial society (basically only as decoration) and thus would be worth fuck-all as a currency in a survivalist world.
Fail. Gold was highly valued before the industrial revolution. Further, it wasn't just western cultures who found it valuable (unless you include ancient Egypt and the Ottoman empire as either post-industrial or western states).
Gold would be near worthless as it has few uses in a non-industrial society (basically only as decoration) and thus would be worth fuck-all as a currency in a survivalist world.
Fail. Gold was highly valued before the industrial revolution. Further, it wasn't just western cultures who found it valuable (unless you include ancient Egypt and the Ottoman empire as either post-industrial or western states).
But that was based on historical tradition. There have been several generations born in which the meme of "gold=money" has not been culturally transmitted and it has extinguished. The vast majority of the world population today think of gold as a material for jewelry and electronics. Some people are trying to use modern marketing to re-inject that meme into society, with (as can be seen from the comments here on Slashdot) mostly poor results.
There's a perfect xkcd for my sig but I'm too lazy to look it up. sudo someone go find it.
Deflation is just not good for an economy. Large amounts of inflation aren't either. Really a perfectly flat lien might be the best, no inflation or deflation, but that doesn't seem possible. Looking at historical data it doesn't seem like you can hold it steady state. That being the case, a small amount of controlled inflation is by far a better choice than swings back and forth.
I believe that inflation as something good for the economy is a myth that has been perpetuated by those who take advantage of the situation and make a profit off of that inflation. Unfortunately, it has been so ingrained into modern industrial societies for so long that very few if any people really understand just what life without inflation could possibly be like, and too many people do long term financial planning on the presumption of future inflation that any other scenario is seen as foolish or not welcome.
Yes, deflation stinks if your are borrowing money from a lender that uses compound interest for repayment. With few exceptions, however, most ordinary consumers rarely if ever get any sort of loan at an interest rate which beats inflation, so to suggest that the only way a modern banking system can function is via modest inflation is sort of a red herring too.
I get the theory that inflation tends to encourage investment, while deflation tends to encourage people putting money into the bank of the master bedroom mattress. It isn't quite as simple as that either, and even with an inflationary monetary policy people still tuck money away in a cookie jar or some other place for temporary safe keeping.
Inflation tends to favor bankers and people dealing with "financial services" through a variety of means. Since they are also the ones in control of the money supply and the other fiscal management tools, it also implies why their point of view is followed. For more ordinary folks, all they are really interested in is a stable currency and even a little bit of fluctuation isn't necessarily a bad thing.
For most of the 19th Century, the U.S. Dollar stayed relatively stable compared to the labor needed to get things done. Generally speaking, a dollar paid for a full day's labor of a semi-skilled or unskilled laborer. While there certainly were periods of modest deflation, America was certainly able to grow into a mighty industrial power without the need of constant inflation of the kind that has been dominant in the 20th Century.
The only times in history when you have seen wild swings of hyper-inflation or huge deflation are usually when the government or some scam artist (often the same but not always) gets involved in the picture and tries to manipulate the currency as a way to make personal profit without having to work. The massive deflation happens usually with something like a Ponzi or pyramid scheme (and related scams) and the scam collapses. Sort of like is happening right now in the U.S. economy, other than the fact that the current U.S. President is also simultaneously spending money on a hyper-inflation model as well. I'm not convinced that those who are trying to perform this balancing act of moderating simultaneously massive deflation through hyper inflation are necessarily going to get the right balance.
You're going to be waiting a long time before you can proclaim that gold has failed to live up to its well-deserved reputation as a safe and stable place to store a portion of one's assets. Since you're so eagerly anticipating this event and have so much riding on it, why don't you call us when it happens!
Inflation/Deflation cycles are due solely to fractional reserve banking and deliberate market manipulation via monetary policy.
Our inflation rate (measured as the price of goods and services) from the time of the Pilgrims all the way to the very beginning of the 20th Century was nearly FLAT, with only a few bumps during times of war when the government decided to print it's own money. Before that it was all mostly copper and silver and a few gold coins. Paper money only came into force in the US during the Revolutionary war, with the printing of "Continentals". Not surprisingly, the government printed too many and the currency was absolutely worthless in a short time.