Slashdot Mirror
Sinkhole Sucks Brains From Wasteful Bitcoin Mining Botnet
judgecorp writes "A sinkhole has taken a quarter of the bots out of the ZeroAcess botnet which was making money for its operators through click fraud and Bitcoin mining. This particular Bitcoin mining operation was only profitable through the use of stolen electricity — according to Symantec, which operated the sinkhole, ZeroAccess was using $561,000 of electricity a day on infected PCs, to generate about $2000 worth of Bitcoin."
" ZeroAccess was using $561,000 of electricity a day on infected PCs, to generate about $2000 worth of Bitcoin/"
Just as with government spending, the important the RoI must take into account the origin of each money input.
i.e.: The $2,000 must not be compared to the $561,000, but to the cost of developing/acquiring the botnet.
Except that it must still be profitable to do it with ASICS or whatever it is they're using these days. Eventually that will be a waste of time too.
which is totally what she said
Capitalism works because it is easy to convince people that they need/want to be exploited.
Well, it's even easier to convince a computer that they "should" be doing something.
Why don't people still not kill the zombie computers when a botnet is discovered and they have control over a Command Server?
In my perspective that would teach the people that security is more important than they realize.
And yeah i know that could kill some essential piece of hardware. And to that my response is. WTF. Why is an essential piece of hardware on the internet and not secure? This isn't 1970 when the internet was 2 computers and they had line of sight to validate trust.
What is it with Slashdot and people using the phrase "Ponzi scheme" to refer to anything they think is a scam?
Yes, Bitcoin mining becomes less profitable over time, because the goal of the system is not to make people money, but to create a sustainable currency. The "gold rush" was engineered in to build up the basic level of hardware needed to make the system useful, and now that there are a lot of bitcoin machines doing transactions we no longer need to hand out a reward for showing up.
No kidding!!! What do you say at this point?
Ok, maybe ponzi sceme is not the right word... but try this on for scale: Facebook is a pyramid social network, allowing users to create content (a user who "creates", or posts content to facebook then gives over to the pyramidFB all rights to their "creation"). FB then analyses the user-created data, and "monetizes", or sells, bits of it to third parties. Esentially, FB is a scam, and Zuckerbooger is a artist-scammer/scam-artist.
Where does "intelligence" fit into the pyramid, well, for example the NSA,CIA,FBI,DEA, they eat what they`re fed.
Then theres an anomalous actor in the pyramid-sceme, it`s name is "akamai": akamai purportedly copies EVERYTHING, stores it on servers IN EVRY COUNTRY claiming improved access speeds, and when a user from anywhere in the world logs into their FB account, akami then accesses the user-machine. This is invasion.
If the Swiss got their threat-assessment right, they would freeze the akamai bank accounts and servers.
I'm probably being naive here, but without the ability to issue new bitcoins isn't the currency doomed?
If all of the bitcoins have been mined then surely either the currency will collapse, or inflation will be rampant. If inflation is rampant then people will just hoard the coins and the currency will collapse. Also I'm guessing bitcoins will be 'lost' in the same way that gold or paper notes are lost, so long term without the ability to mine new coins the total number is gonna go down.
I might be missing something but I have a feeling that a proper currency probably needs new money. A proper useful currency anyway.
It's the same reason every vulnerability is a "0-day" and every time you can't figure out an argument it's a "strawman." Buzzwords make you sound like you know what you're talking about while asking for a definition of a buzzword makes you sound dumb so you're less likely to be questioned.
A few months ago I mentioned that botnets would be used for bitcoin mining and everybody was all over me saying it could never work because people would be suspicious of their machines running at 100% all day and start running scans. Yet here we are...
No sig today...
You're thinking of deflation, not inflation which is the opposite.
A few months ago I mentioned that botnets would be used for bitcoin mining and everybody was all over me saying it could never work because people would be suspicious of their machines running at 100% all day and start running scans. Yet here we are...
No, no-one except for a troll was all over you, to everyone else that was obvious and they didn't care about your post.
Isn't the idea to use it as currency?
There is no 'making out' involved in exchange of currency, just a transfer of values.
The whole printing money out of cpu cycles thing was odd anyways and seemed more like a built in fundraiser/motiviation to get the thing started in the first place.
The entire Bitcoin concept is a shiny, hi-tech Ponzi scheme. Those that "invested" by spending CPU cycles (electricty) early made out. By design, no one else ever will unless, of course, they can steal the resources necessary to do the mining.
For some reason, you seem to only look at BitCoin as some kind of an 'investment' tool.
No wonder you see Ponzi schemes everywhere if fast buck is all you care about.
By that definition any currency which undergoes deflation at some point is a ponzi scheme.
Or really any currency. After all, if no user B ever shoes up to take those dollars from you in exchange of wares, they are worthless.
Correct (other than the inflation thing, where you meant deflation). Essentially Bitcoin's "Growth" is (a) engineered to slow down to a standstill in a few years and (b) cannot in any way be related to the growth of the underlying economy. If the economy tries to grow 10% in a year, and would under normal circumstances, assuming there's not already slack in the monetary base, there will not be enough Bitcoins to cover the increased commerce.
About the best you can say about it is that if we had a problem where people are doing too much work, Bitcoins would fix that...
Now, in fairness, I should point out that Bitcoin's defenders here normally argue that it's all OK because what can happen is banks can issue tokens equal in value to a single Bitcoin, backed by a smaller number they'd have in reserve combined with themselves (because they're effectively loans of one bitcoin to the person who takes one.) This is called Fractional Reserve Banking, is used in the real world, works well, and has the itty-bitty problem that virtually all the people who seem to be obsessed with Bitcoins really, really, really, don't like FSB, considering it a form of fraud. It isn't, it's a quirk of accounting, but it's hard for many people to get their heads around as is the fiat money system, so they get upset and start saying "What we need is something backed by something real", "Oh, I know, what about a whole load of computational power that's lost when making the coins", "Yes, great idea, even though it doesn't make sense because you can't turn the coin back into that computational power so it isn't, actually, backed by anything after all", and then this happens.
You are not alone. This is not normal. None of this is normal.
It is impossible for their to be "not enough bitcoins" because they are infinitely divisible (the number of decimal places is determined by computer code).
The "gold rush" was engineered in to build up the basic level of hardware needed to make the system useful, and now that there are a lot of bitcoin machines doing transactions we no longer need to hand out a reward for showing up.
Very good point. But I suspect the "gold rush" also was engineered to make the (still anonymous) originators of the system very rich. It's a beautiful thing to not just discover, but to actually *create* a gold mine, then to engineer it to make the initial gold mining far cheaper than for those who follow. In this case, though, the initial "gold" becomes valuable only after a critical mass of miners shows up.
For that matter, any popular website could be used for mining via page hits e.g. a site could throw a hash computation into every page served, store the result in a cookie and return the result with the next request. It'd probably happen so fast people wouldn't even notice their CPU cycles being stolen. Perhaps some sites are already do this.
Tell me, would you take out a loan of, say, 100 bitcoins?
Could say exactly the same about gold and diamonds... heck I could even say the same about printed money. Non basic goods have exactly the value that society as a group accepts they have. This goes for absolutely any non basic goods.
Yes, that's an issue they'll have to face that fiat currencies do not. It'll be interesting to see what happens, if it lasts that long.
No kidding!!! What do you say at this point?
It's been a very long time since a PC consumed a constant amount of power no matter what it is doing. Today a PC running at 100% CPU or GPU is using -more- power than a PC sitting on but idle. The processors don't even run at the same clock speed when they're idle any more.
Bitcoins will only be desirable so long as people can get them for 'free'.
After that, what's the point? It's just another exchange medium. Not going to revolutionize anything.
No sig today...
If one entity was marketing and selling all the bitcoins and claiming the returns were generated by something else, then sure.
But since that isn't the case it's just a normal bubble. Or just a normal reasonable increase in asset valuation. Depending on whether you think the actual asset in question justifies the increase in value.
The assertion was that botnets were more valuable for doing other things, that drawing attention to yourself by mining (using 100% CPU) was counterproductive.
No sig today...
Well, it doesn't have most of the characteristics that make a currency work, the main one being that it's inherently deflationary. This is a terrible thing for a currency, due to this psychological phenomenon called money illusion. This makes the monetary base shrink over time, instead of grow, turning said prospective currency into an investment vehicle. It's just natural behavior when something increases its value when you hold it. This makes most of the currency be there as a holder of value than as a method of exchange, increasing the demand of money over time.
Just pick any model of a currency that we have, and insert the parameters required to make it behave like bitcoin, and see what it does. It's not pretty.
The rest of us upgraded to computers that use more power when they work harder than when they are idle long, long ago.
And thus if something causes my computer to do any extra work that will result in more power consumption than otherwise. It doesn't make a different whether that also slowed down the work I was doing on it or whether the machine was completely idle at the time (well the former case may cause even higher power consumption if it triggers lots of swapping, etc).
I believe he means scarcity of minable bitcoins. Once you can't mine them why would I or anyone not already in on the scheme want in?
They can be divisible to 1000 decimal points, if the only way in is to buy something you generated for a couple cents of power for real money I won't bother.
The deal is with CPU mining, they are SO SLOW that even one unit of work done is almost definitely stale by the time it is submitted. That is, it is no good.
"When life gives you lemons, don't make lemonade. Make life take the lemons back!" -- Cave Johnson
if no user B ever shoes up to take those dollars from you in exchange of wares,
The issue with deflation is that YOU wouldn't give away dollars in exchange for wares. If you know your dollars will be worth more in the future, there's no reason not to sit on them and do nothing. (e.g. why invest and take risks when your dollars [err...bitcoins] are worth more every day without you doing anything!?).
"If anything can go wrong, it will." - Murphy
I think you need to review the purpose or meaning of having a currency "backed" by something. The whole point is that the real value is in the scarcity of the currency or resource backing the currency. Anything that is truly scarce can "back" a currency because it represents an expenditure of resources that can't be counterfeited. This is why gold has value. Mining gold takes resources (time, transportation, and exposition of which are the most difficult to come by -- merely finding the gold) which you never recover, but the gold itself is the valuable asset that backs itself and/or other currencies. Bitcoin, then, could be viewed similarly. You spend the resources to acquire a new bitcoin by "mining" it, which you should never expect to get back, just like you can never expect to get back the time and other resources you spend to mine gold. Bitcoin, like gold, retains its value in its quality of scarcity. You can't get another one without expending resources relative to its value. That's why the existing bitcoins retain their value and new bitcoins add value to the bitcoin economy. They don't need any external backing because they are scarce and represent a past expenditure of resources, just like gold.
The problem with Fractional Reserve Banking is that there is no real money. Fiat currency is by nature imaginary; but in this case fiat currency isn't printed and spent into the economy, but rather loaned into existence. That means every piece of currency in existence is basically owed to someone else, with the caveat that it's probably not in the hands of the debtor who owes it to said creditor.
On top of this, loans necessarily incur interest, meaning more money is required to pay off the loan than borrowed, meaning inflation, meaning that every piece of currency that comes into existence causes inflation and immediately creates a need for more currency to come into existence at a later date. It's not that predictably later we will need more currency because of another action, but that the event of currency becoming accessible creates the situation that more currency needs to be made accessible.
In essence, each unit of currency loaned into existence causes inflation by increasing the money supply ("printing money") and by increasing the amount of money owed (monetary demand to pay off the interest). We operate on a negative currency system, where the system becomes more and more poor as the amount of currency increases. Our entire economy is continuously indebted, and the growth of the money supply is accomplished by the growth of debt and the continuous loss of wealth.
Support my political activism on Patreon.
Doesn't that just mean that the interest rate is bad. 10% per year on a currency in deflation is ridiculous. The interest rate on such a currency should be 0% or less because the mere fact that the currency is gaining value would represent its own interest.
By your definition, all startups are Ponzi schemes. To make the necessary correction:
A Ponzi scheme is a system where only the revenue added by new subscribers pays the return on investment of early investors.
No kidding!!! What do you say at this point?
Saying that you owe more than you borrowed in real terms doesn't introduce anything new into the financial services economy. Everyone is charging interest to make money, which means you always owe more than you borrowed. How does anyone pay off their debt with interest? They have to earn it from outside sources.
That might be true - if they can get a binary onto your system that uses CUDA, that doesn't show up as 100% CPU usage at all. But you might as well use 100% of the CPU as well. Put it at the lowest priority but eat every remaining cycle. Look for taskmgr.exe and decrease production when that task is running.
Seems like a pyramid scheme to me.
Or the goal is to make the original creator involved rich, like other schemes.
Or maybe they do, because with out them...
Change is certain; progress is not obligatory.
Do you know anything about what you're talking about? Facebook is not pyramid-shaped. The one group at the top makes all the money - no promises of money for anyone else. Yes, the everyday user of Facebook is not the customer - they are the product. But that's only a small change to advertiser-supported content going back to the golden age of television.
Akamai is hired to help distribute data. If you feel "invaded" by being directed to Akamai for faster content on Facebook, then your blame should fall on Facebook for hiring them. Akamai doesn't access your machine - your machine submits a request to their machine, which is fulfilled. It's doing what you're asking it to (in proxy for Facebook).
This crap is so old it's actually mentioned in the bitcoin FAQ:
http://bitcoin.org/en/faq#wont-bitcoin-fall-in-a-deflationary-spiral
There is lots of academic research that indicates the "deflationary spiral" doesn't happen like that.
Bitcoin having a fixed final size is just fine - it means when the economy grows, everyones money becomes worth a little bit more, i.e. prices fall a bit. Things get cheaper. That's sort of what you expect from progress, isn't it?
I actually know a few people who are mining Bitcoin because they expect to make a profit.
Change is certain; progress is not obligatory.
I think this chain of jokes has jumped the shark.
Being only vaguely familiar with hacker jargon, I was expecting an actual sinkhole: in the ground, into which computers were literally falling.
Is 1563649 a prime number?
If the economy tries to grow 10% in a year, and would under normal circumstances, assuming there's not already slack in the monetary base, there will not be enough Bitcoins to cover the increased commerce.
It's not the amount of currency in circulation which needs to increase, just the value of the currency. If the economy grows 10% in a year and the number of bitcoins is fixed then each bitcoin will be worth 10% more at the end of the year. The people who saved their money—who deferred consumption, and thus helped the economy to grow by 10%—have 10% more purchasing power, corresponding to the 10% increase in available goods.
None of this has anything to do with Fractional Reserve Banking, which, as you say, is merely an accounting quirk: a way for banks to have more outstanding claims for money on demand than they can actually satisfy. Any bank practicing FRB is technically insolvent, but that doesn't quite cross the line into outright fraud as long as your customers are aware of the situation.
There is nothing to prevent a bank from offering FRB bitcoin accounts, but the level of reserves required depends on the degree to which the bank can keep transfers confined within the system. I don't see very much incentive for people to leave their bitcoins in bank accounts and accept off-blockchain account-to-account transfers in place of actual bitcoins when an encrypted private wallet offers a similar or greater degree of security and convenience.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
Bitcoin uses a different philosophy. The below is pretty rough, as I've just started to understand it all myself.
Fiat currencies as we have them right now are unlimited money related to limited resources. If the number of goods in the economy grows, the money can grow as well, keeping it balance. But it doesn't have to, it can also grow slower or faster. In general, it grows faster, creating inflation.
Gold or other backed currencies were limited money related to limited resources. They would grow if the amount of gold (or whatever) grew, so the expansion of money was largely unrelated to the changes in the overall economy, which is pretty bad, but worked for a while because the amount of gold was not growing or shrinking dramatically. Until the spanish hauled it home by the boatload from the New World.
Bitcoin is the strange new beast: A limited amount of money related to a limited resource, but with a well known growth potential and limit. While also unrelated to the currency, this means that it is not erratic. It also tends towards deflation rather then inflation. Once the financial sector, which is built entirely on inflation, catches on, I wouldn't be surprised if there were a couple of fatal accidents. Bitcoin isn't undermining any particular currency, it is undermining the currency system.
And yes, the economic danger with Bitcoin is that as it becomes more valuable over time, hoarding it can be more profitable then investing it. Our current economic system is fueled by inflation because for the rich, investing is more profitable than being Scrooge McDuck. However that same system continuously shafts the non-rich, i.e. the 99%. If we had constant deflation instead of constant inflation, saving up for your retirement, or house, or car, would be so much easier.
Imagine you had started to work in 1950. You'd be about ready to retire. The accumulated inflation between 1950 and today is 870.4%. The first years of savings you may have accumulated are worth about 10% of what you put in today. Interest is the only thing saving your day. The game worked well for a couple decades, but interest rates have been laughable for a decade now with inflation staying largely constant.
Make no mistake. Inflation is not your friend if you aren't super-rich. A currency that won't inflate will have a dramatic impact on our economic system. What exactly remains to be seen, but at least the old games won't work anymore.
Assorted stuff I do sometimes: Lemuria.org
The issue with deflation is that YOU wouldn't give away dollars in exchange for wares. If you know your dollars will be worth more in the future, there's no reason not to sit on them and do nothing.
Here's one reason: you need the wares now, not later. We've had continuous price deflation in the area of electronics for decades, and it hasn't prevented people from buying the new iPhone 5 just because they know there will be an iPhone 6 next year for the same or lower cost.
As for investments, sure, some ventures with a positive, but below-deflation, return will be unlikely to receive funding due to deflation. However, that's a good thing: such investments are really malinvestments, diverting capital away from more profitable ventures. If you can't find an investment with an expected rate of return above the rate of deflation, then both you and society are better off with you holding onto the money and accepting the default rate of return for merely deferring consumption rather than actively directing effort and resources into a below-average investment.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
Also, while it's true that we "wasted" computational power while generating the bitcoins, we have to understand that all that computational power was used to strengthen the reliability of the system's logbook (i.e. the blockchain). The way it is now, each time a coin is generated, we are adding more and more mathematical means of proof that the information in the logbook has not been corrupted, and that all wallets have the right amount of "credits".
Because, as has been demonstrated here, the economics of producing bitcoins mean that there is a huge incentive to use stolen resources to produce them. Secure currency? No, just another incentive to create botnets.
"Deferring consumption" is what makes economy grow and that's why you deserve a bigger slice of pie for doing nothing, really now? Silly me, I thought things like building plants, mining ore, growing wheat and making inventions is what makes economy grow.
But thanks to you, now I know! Everyone should stop buying anything except for bare necessities and see the economy skyrocket by the power of all that consumption deferred.
When will we see a postive story about Bitcoin's usefulness? Oh right, there really ISN'T any news on that front.
There is news on that front; it just doesn't get reported here as often.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
virtually all the people who seem to be obsessed with Bitcoins really, really, really, don't like FSB, considering it a form of fraud. It isn't, it's a quirk of accounting
What's the difference?
Give me Classic Slashdot or give me death!
The account is that the Israelites received Divine Punishment For Something that the Ark of the Covenant was captured by their enemy, the Philistines.
Now the Ark didn't do much good for the Philistines either. I guess they took it as a war trophy or because it was kewl, but they didn't believe in the religion behind the Ark so their possession of it was a sacrilege. In the Hollywood movie, the Ark melted the faces of the Nazis, who coveted the Ark but they weren't Good People who would benefit from the Ark. What happened to the Philistines? Depending on the translation, they got rectal lesions -- hemorroids or even rectal cancer, depending on whom you believe.
So if a thief, say, swipes 100 dollars, you are 100 dollars poorer and the thief is 100 dollars richer. Suppose the thief swipes your prized vinyl record collection. To you, the collection was beyond value, irreplacable 60's vintage recordings in their original jackets. To the thief, let's say the thief gets only 1 cent on the dollar "for that junk." That thief took something of value from you but did not obtain anything of value to him. That thief is a Biblical Philistine.
In essence, each unit of currency loaned into existence causes inflation by increasing the money supply ("printing money") and by increasing the amount of money owed (monetary demand to pay off the interest).
Maybe it does cause inflation, and maybe it doesn't. The key factor here is that currency is the medium of exchange of wealth (goods and services). If the interest rate is less than the growth of wealth, you get a situation where the goods per dollar rises - deflation. If the interest rate is higher than the growth of wealth, you get a situation where the goods per dollar falls - inflation.
When our name is on the back of your car, we're behind you all the way!
I'd notice the fan noise...
No sig today...
Yes - and you probably would never get infected in the first place. We're not talking about people quite as smart.
Get little overexcited pressing that elevator button too hard and you can cause property damage that may end up costing the owner hundreds of dollars in repairs.
You may not have had that intention but they got you on camera and they're gonna sue.
On the other hand, if they got you on camera stealing money or goods of the same nominal value - they'll just call the cops on your ass.
Cause it's a completely different situation.
People tend not to accidentally steal other people's property.
But people tend to want to be reimbursed for the damage that other people do to their property.
Accidentally or not.
Mit der Dummheit kämpfen Götter selbst vergebens
currency that free the civilization from the scam master that is the Federal Reserve.
New Economic Perspectives
Interest is the only thing saving your day.
It also sucks money out of local communities. Put your money into the local S&L for community lending paying 1.5%? No way - with real inflation over 6%, you send your money to Wall Street (either directly or with a 401(k)) or you're going to lose money every year. S&L paying 4.5% while inflation is under 1%? Sure thing, that's an easy way to park some cash. ... and "somehow" there's no money for loans to small businesses anymore.
Running the printing presses at a high speed only helps exacerbate the problem, but it's systemic. You can see the rise of the 401(k) system shortly after the 1971 switch to fiat money and the resultant rampant stagflation, but, again, that's symptomatic.
that same system continuously shafts the non-rich, i.e. the 99%
Absolutely, and by design.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
You'll forgive me if I don't take the word of bitcoin.org when discussing problems with Bitcoin.
Yeah, 0% and negative interest rates would be pretty ridiculous. But so is the notion that when you're repaying loan you're not paying more than you borrowed anyway. Loan repayments always entail extra cost beyond what was borrowed.
"This is why gold has value. Mining gold takes resources (time, transportation, and exposition of which are the most difficult to come by -- merely finding the gold) which you never recover, "
Productive of unity or less means the Industrial Revolution did not happen. Good luck with that theory.
Does the stats on electricity cost really apply? If those PC's are not infected, wouldn't they be using the electricity anyways? They are not on for the bot. The bot just infected them for it's own purposes.
Have you fscked your local propeller head today?
Considering that fraction reserve banking predates fiat currencies, why do you think that fractional reserve banking requires a fiat currency?
What do you mean? Are you talking about the value of something produced being less than that invested to produce it? It may be stupid, but people are spending more resources to produce bitcoins than they are worth. That doesn't mean bitcoins aren't retaining their value. It just means people are wasting resources acquiring them. Do you disagree the the resources expended in mining gold are never regained?
The US is on a fiat currency, so this is relevant. Backed currency is irrelevant here.
Support my political activism on Patreon.
Spent money _IS_ the economy.
No, goods and services are the economy. Money is just a placeholder, and the act of spending money is merely a rearrangement of goods. Neither are essential; the economy can exist without money, albeit less efficiently. But before you can spend, both you and others must have produced and saved in order to have goods to trade.
It is consumer demand, the desire for consumption, which drives the economy, not consumption itself. Between desire and consumption lies production. Production exists in response to demand, and in turn enables consumption. In order for the economy to grow the capacity for production must increase, which requires saving and investment. The returns from saving (in a deflationary economy) and investment provide the effective consumer demand for the extra goods being produced.
Second, if bitcoins are worth significantly more over time, why would anyone lend money? Good luck running a healthy economy in that currency.
You would lend money because you expect to get back more bitcoins than you lent, obviously. You wouldn't lend only to get back less, even if they're worth more than the larger number you started with, because you could have just held on to the original bitcoins for an even better ROI. That's good, since only below-average investments would have a negative nominal return, and you wouldn't want to bring down the average. (With a fixed currency supply, the rate of deflation matches the average "risk-free" ROI.)
More investment is not always better, particularly when it diverts resources from better investments. With a deliberately inflationary currency this sort of malinvestment is much harder to identify.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
Saying "wasteful bitcoin mining" is a little redundant, like "round circles" or "avian birds".
"Nine times out of ten, starting a fire is not the best way to solve the problem." - my wife
Visa costs me nothing to use, in fact I get paid for it. It can easily be controlled by governments by banning exchanges and deflationary currencies are bad.
Security is why I hear about those losses at bit coin exchange?
I don't see the mining as having had a value I want to pay for. If I could exchange money without enriching the miners I would be more likely to use it. If not I might as well get into litecoin or whatever.
"Contemptible-ness" should be, and is, proportional to two variables: how much the thief stole, and how much damage was done in the process.
Nevertheless, it's understandable if you shake your head when you hear that the victim's losses were £1,001, while the thief's gain was only £1.
That that is is that that that that is not is not.
If you anticipate inflation, it's in your interest to trade your currency for something that's less likely to lose value. Hyperinflation meets my definition of "collapse" of a currency.
If you anticipate deflation, it's in your interest to convert goods into currency that's likely to gain value (i.e., to hoard currency). A currency that's gaining value can hardly be said to have collapsed.
Deflation happens when the supply of a particular currency doesn't grow fast enough to meet the demand for that currency.
No disrespect, but how did your post get +5 Insightful?
That that is is that that that that is not is not.
It's a pyramid scheme. As you said, a Ponzi scheme requires investors and a central figure who is taking money from those investors.
there will not be enough Bitcoins to cover the increased commerce
Sure there will, unless somebody tries to impose price controls that prevent Bitcoins from gaining value (i.e., that prevent deflation from happening). Deflation is the natural and proper response when the supply of a particular currency doesn't grow enough to meet the demand for that particular currency.
And if some entrepreneur introduces yet another currency, whose supply is more responsive to demand, that too is a natural and proper response.
Is the difficulty of minting new Bitcoins set in stone? Maybe it could be relaxed a bit, to try to prevent deflation.
Slightly off-topic: the goal of the Federal Reserve -- the target of its policies -- is for the U.S. dollar to experience inflation of 2% per year. Not 4%, not 0%, but 2%. Can anyone explain why? I've always thought a target of 0% would make more sense. The 2% target means that sellers have to expend effort to reprice their goods and services more often -- for no other reason than the existence of that 2% target. And that's not a productive activity. (And then there's old-timers who kvetch about the dollar not buying as much as it used to, and see inflation as a symptom of decay. They would have less to complain about, and have improved confidence in the economy, and feel like they were passing a more stable world on to their grandkids, if the Fed had a 0% target.)
That that is is that that that that is not is not.
I played a bit with a miner on my computer for a while just to understand Bitcoin a little better. I calculated the difference in electricity use between my computer idling and mining. Even ignoring hardware cost (it was already bought for other purposes, after all) and only calculating the DIFFERENCE between idle and mining (the computer is always on), projected profits on the mining didn't even cover the difference in electricity usage, and my electricity costs aren't high.
Part of this has to do with the price of Bitcoins at the time, but more of it has to do with the fact that even high-end NVIDIA cards are bad choices for Bitcoin miners.
Presumably, most computers in such a botnet aren't running high-end AMD video cards, and many of them are going to be office computers and inexpensive home desktops and laptops without a dedicated 3D video card. Mining in CPU mode is laughably pointless. Less so if you're not paying for the electricity.
Like you, I'm not convinced Bitcoins do more good than harm, strictly based on being a semi-fiat currency whose backing is, effectively, electricity waste.
Excellent post. The broken window fallacy is truly a fallacy.
In this case, $561,000 of electricity per day works out to a whopping $205 million per year!
That that is is that that that that is not is not.
Could you point me to some such resource?
Because that sounds very, very, illogical.
Err, so you are saying that bitcoin value isn't increasing?
I mean... It's not mine to judge people slapping the elevator controls with their dick and then punching them.
Mit der Dummheit kämpfen Götter selbst vergebens
It is true. I get 1% back.
The merchant will not decrease the cost if I offer cash. I have often offered to do so. Cash and bitcoins have costs that VISA does not. Most of them do not impact you, but for a business paying VISA to handle that stuff has a value.
Not to the lender, it wouldn't. Nobody is ever going to lend at negative interest rates, no matter how deflationary the currency.
What you're really saying is that rather than hoarding the medium of exchange, you're stuck loaning it out or investing it directly so it can be used productively to grow the economy. That doesn't sound like much of a tragedy.
The flip side to your ideal world with constant deflation is that it gets kind of hard to borrow money to start a new business. If the deflation is constant, you have to make sure that your investment pays off more than simply having your potential lender roll around naked in it. If it's unpredictable (which Bitcoin sure as hell is and probably always will be), you could simply be ruined because the real value of your nominal debt skyrocketed unexpectedly.
If people want to use Bitcoin for exhange, I'm all for it, but it just isn't fit to be a major currency.
An interesting anagram of "BANACH TARSKI" is "BANACH TARSKI BANACH TARSKI"