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Bitcoin Mining Startup Gets $500k In Venture Capital
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."
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?
Control the 'net and you control bitcoin. Do you think pippa/acta / cispa and variants are limited to the riaa and mpaa agenda only?
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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.
Palm trees and 8
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 producer of value that other people want to trade for just doesn't exist in their mental vocabulary.
If you have the ability to produce value that other people want to buy then decentralized currencies potentially can allow you engage in transactions that would otherwise be impossible or unprofitable. That is the real value of Bitcoin.
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 caught because he used an old scam. He got caught because he used a scam. He took investor money under the pretense that he was investing it, lied about where he invested it, and lied about his performance. Can you tell me the names of the people at "Goldman Sachs, Bank of America, etc" who did this? What exactly was their crime?
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.
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!
Information theory is life. The rest is just the KL divergence.
The US government has shut down plenty of operations it sees as ways of dodging taxes, trade sanctions, etc . . . But all of those had something to shut down (eGold, Liberty Dollar). Now there is nothing centrally located to shut down. A government might be able to crack down on users of it, or even some of the exchanges, but this will be a much harder genie to put back in the bottle.
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".
Information theory is life. The rest is just the KL divergence.
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.
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.
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.