Best Way To Mine Bitcoins - Allow Errors!

An anonymous reader writes: A recent paper from the University of Illinois at Urbana-Champaign shows that bitcoin mining profits can be increased considerably if mining hardware is allowed to produce occasional errors. The research shows that mining hardware that allows occasional errors ("approximate mining") can run much faster and take up less area than a conventional miner. Furthermore, the errors that are produced by the miner do no corrupt the blockchain since such errors are easily detected and discarded by the bitcoin network. Mining profits can increase by over 30%.

Comments

Shifting the workload onto other people?

[Anonymous Coward]

So, they basically shift part of the workload necessary for mining onto the nework, and thus pay less?

Re:Shifting the workload onto other people?

[110010001000]

Sounds like a Republican thought this scheme up.

Re:Shifting the workload onto other people?

[Zeroko]

They say the network would detect the errors, but more likely, an adjacent, more reliable processor would—there is no reason not to double-check the relatively few attempts that would make it through the first stage (as happens already e.g. with pooled mining, where you get credit for things that are not as hard as the official difficulty).

Re:Shifting the workload onto other people?

[Anonymous Coward]

Why expect me to do the work? It's on your ass if you're not satisfied!

See also Flint, Michigan. If you can't afford to test your own water, you shouldn't make us pay the price.

Re:Shifting the workload onto other people?

[michelcolman]

I don't get it. I thought the whole idea was that a hash was quick to calculate, but it was hard to find a nonce that yielded a correct hash since there are so many nonces to try. So once your approximate hardware finds a nonce, why don't you just check it on a regular processor before sending it to the network? Sending off a possibly bad block to the network seems like a lazy (not to say sleazy) thing to do.

Hey, I've got an even better idea to increase profits: just send loads of random blocks to the network. All the miners will be too busy checking your incorrect blocks to do any mining themselves and at some point you're bound to stumble onto a correct block!

Re: Shifting the workload onto other people?

[guruevi]

Because that would defeat the whole purpose of this method. This method only works faster by simply offloading the actual checking (recalculating the hash) onto the network (which has to do it anyway but now you've increased the workload on the network with a ton of false positives).

Re:Shifting the workload onto other people?

[slashping]

No, that part of the paper is bullshit. Once you think you've found a hash, it's easy to verify with a regular CPU before you'd claim to have found a block.

Re: Shifting the workload onto other people?

[slashping]

No, the false positives are easy to detect locally. A regular CPU in your PC could detect a false positive in much less than a microsecond, and the number of false positives would be small to start with.

Re:Shifting the workload onto other people?

[dbreeze]

BRILLIANT!!!

Re:Shifting the workload onto other people?

[JustNiz]

Lol I wish I had mod points to give you.

Re: Shifting the workload onto other people?

[WarJolt]

You got it wrong. Democrats are the ones creating jobs to fix their mistakes.

Re:Shifting the workload onto other people?

[Solandri]

Both parties are the same. Republicans shift workload onto society via corporate welfare. Democrats shift workload onto society via government welfare programs.

There's nothing "wrong" per se with either type of program as long as you can keep inefficiencies down. In that respect it's good to have both R and D at each others' throats - helps keep their pet programs honest. Corporate welfare helps to guide the direction of economic development and technological progress (renewable energy being the latest example). Social welfare helps to act as a safety net allowing people who fall on hard times to pick themselves up and become productive members of society again more quickly.

But when any of these programs are given a free pass (as the most staunch conservatives and staunch liberals do), inefficiency (corruption) begins to creep in and their cost to society eventually exceeds their benefit. Corporations take the subsidies without producing a meaningful product. People mooch off welfare with no intent to re-enter the workforce. If you can see the possibility of that happening with only the half of these programs your political party opposes, you're part of the reason our government wastes so much money.

Re:Shifting the workload onto other people?

[Dahamma]

Both parties are the same. Republicans shift workload onto society via corporate welfare. Democrats shift workload onto society via government welfare programs. ...
But when any of these programs are given a free pass (as the most staunch conservatives and staunch liberals do), inefficiency (corruption) begins to creep in and their cost to society eventually exceeds their benefit.

True, and an insightful point. Though I would argue that the result of corporate welfare abuse is that the already rich 0.1% benefits the most. The result of social welfare abuse is that the poorest 25%+ benefits the most.

Neither form of waste and corruption is ideal, of course, but if I had to choose the lesser of two evils I'd prefer to direct the inefficiencies to the 25% of the poorest people in society living day to day with underfed kids and horrible health care than I would to millionaires wanting to add an extra comma to their net worth.

Re:Shifting the workload onto other people?

[Dahamma]

Did you even look at Sanders' plans? Or are actually so ignorant just to take the Fox talking head's word that you would pay more taxes under Sanders' plan? The middle class is no longer in the "middle 25%" - in reality the middle 25% is barely better off than the bottom 25%. If you want to get to "middle class" these days you're talking top 30-40% of income, few of whom will see ANY tax increase (yes, only the top 1/3 of US households make more than $60k per year).

If you are making $250k+ you are in the top 2% and will remain there because the government taking an extra couple percent of your income (because it's a PROGRESSIVE MARGINAL TAX INCREASE, duh) is not going to change your financial situation ONE BIT vs anyone below you (again, PROGRESSIVE MARGINAL TAX SYSTEM).

If, however, you are making $2M+ a year, then you will be paying significantly more than you were. In that case I'm sure the 99.9% of the population below you will have much sympathy that you will have to wait an extra month to buy that Lamborghini.

Re:Shifting the workload onto other people?

[tricorn]

From reading the linked page (which is woefully short on details), this isn't approximation, it's more akin to overclocking hardware so it goes faster even though it occassionally will make a mistake. If it can run twice as fast, but only create 10% false positives and negatives, it's worth it (as long as the overclocking doesn't use twice as much power).

Sending it on to the network without double-checking that it's valid would be stupid, though, considering it takes less than a microsecond to check a result, and even the false positives would be very rare.

The real problem isn't the false positives but the false negatives, as those are missed wins. The nature of the hash probably makes the false positive and negative rates the same, absent some specific failure mode of the hardware.

Re:Shifting the workload onto other people?

[Dahamma]

Yeah, the irony is much of the tea party thinks they are in the middle class but most of them haven't been for a while now.

The 1% has already taken 14 of the 15 cookies and left them to fight over the last one with everyone else.

Re:Shifting the workload onto other people?

[slashping]

False negatives are a problem, but as the percentage of them is less than the gain in total amount of hashes, it's still a net win to do approximations.

Re:Shifting the workload onto other people?

[penguinoid]

Basically, it is the same sort of thing that has been done in medicine for ages -- use a cheaper test with a high rate of false positive, but low rate of false negative, and verify the (few) positives with a more expensive and reliable test.

Re:Shifting the workload onto other people?

[sexconker]

No, verification is trivial. I have no idea why he wouldn't verify the result.

Mining pools use a similar scheme to distribute work, sending each miner what amounts to a partial problem only, while checking answers to see if they're valid before submitting to the network and awarding any bounty to the miner. This was done so that miners with varying hardware could all effectively help the pool without their tasks expiring and so that miners couldn't submit work to the pool and then submit any blocks found to the network directly, thus getting the pool rewards from every other pool member's found blocks and not sharing any blocks they find.

This jackhole is suggesting to just skip verifying the result and instead spam the network with trash.
No idea if he has gotten any significant improvement over what already has been done, but I seriously doubt it.

Re:Shifting the workload onto other people?

[cadeon]

I look at it this way: Any government spending hurts the poor and benefits the rich.

When the government spends money, it borrows it. Borrowed money is created out of thin air by the banks. Reserve requirement.

Money creation causes inflation.

Inflation means it costs more for the poor to buy stuff, and it means the stuff the rich own becomes more valuable. (if you bought a $100k house 30 years ago, it's worth $300k now thanks to inflation... you made $200k simply by owning it).

Unfortunately this means huge government programs often hurt the people they try to help in the long run.

I'm all for helping people, but the money that goes to help people needs to come from individuals, not from money creation. Also, human time assisting the needy needs to come from volunteers, not workers paid from borrowed (created) funds.

Re:Shifting the workload onto other people?

[SirSlud]

So corporatism is a huge problem, but every dollar they have they've earned? Am I getting this right? The government sucks for giving breaks to corporate America, but companies are pure because they earned all their money through blood, sweat and tears?

Re:Shifting the workload onto other people?

[tricorn]

Reading the paper further, while they do discuss overclocking, they are also allowing for occasional errors in an adder, specifically by assuming that long carry chains won't occur, thus avoiding the need for carry lookahead circuits to ripple the whole word length. That means occassionally an add will get the wrong result, but not very often, but the add circuit can be made faster. It's still deterministic, just that a few specific bit patterns aren't handled correctly.

Re:Shifting the workload onto other people?

[AmiMoJo]

The real problem isn't the false positives but the false negatives, as those are missed wins.

Could BTC be "lost" this way, I wonder. Do candidates get checked by more than one person, or is it organized like other distributing computing systems where blocks of work are allocated to avoid duplication of effort?

Allowing errors is somewhat like how GPUs work. The reason the professional cards cost more despite having the same hardware is that they are guaranteed to produce correct results. Gaming grade cards might produce the occasional error, but it will likely be unnoticable to the player and the card costs a fraction of what it otherwise would..

Re:Shifting the workload onto other people?

[danbert8]

AC is right. Forget the tax system. It's just a net loss of productivity in dealing with it. Make it a flat tax to eliminate the vast majority of financial wasted labor. How many accounting and tax law jobs exist solely to deal with an unnecessarily complicated tax system? All of it a waste.

Meanwhile, we have a spending problem. Until someone figures out how to balance a budget, it makes little difference as we are just printing money and IOUs to cover the rest.

Re:Shifting the workload onto other people?

[Dahamma]

Except many of your points are just plain nonsense, sorry. Borrowing does not by definition create money out of thin air and cause inflation. The US government borrowed tons of money in 2015, and inflation was way below average. Inflation can be due to a government printing money because it CAN'T borrow enough. If lots of people are willing to lend the government money at low rates (like in the last couple years), then inflation can be really low even if govt borrowing is high.

Inflation means it costs more for the poor to buy stuff, and it means the stuff the rich own becomes more valuable. (if you bought a $100k house 30 years ago, it's worth $300k now thanks to inflation... you made $200k simply by owning it).

Whoa, that's absurdly incorrect. Appreciation != inflation. If it were due to inflation you'd be no better off than you were back then. You really have no idea what inflation is, do you? For a REALLY simple example: If you bought a house, and because your neighborhood became really desirable, it gained 10% this year, does that mean "inflation" was 10%? No, it is TOTALLY UNRELATED, because it appreciated (gained value) vs inflated (gained price for no increase in value).

I'm all for helping people, but the money that goes to help people needs to come from individuals, not from money creation. Also, human time assisting the needy needs to come from volunteers, not workers paid from borrowed (created) funds.

See above. Since your premise is wrong, this doesn't make any more sense than the other points.

Re:Shifting the workload onto other people?

[Dahamma]

If you want to screed against something of that ilk, I'd suggest railing against the corporatism that is rampant in this country. The current administration dumped a trillion bucks to their buddies on wall street, and another trillion in "shovel ready" stimulus pork, right out of the gate!

Exaggerated, but partly true. But what you fail to understand is Mark Zuckerberg did not inherently create $300B in value by creating a large website. It's worth $300B because Wall Street made it worth $300B. He and the other Facebook investors made money because Wall Street investors decided it was valuable. So, yes, most of these companies gained much of their value from Wall Street speculation, partly enabled by the government in bailouts (it wasn't just GM: it was the investment banks now inflating .com values) low taxes, low interest rates, protectionism, and just completely lax regulations.

HENCE: a lot of their value is due to these bailouts, low taxes, low interest rates, protectionism, and lax regulations, ie. SOCIETY created a lot of the value and deserves to share the profit. You seem to think that one guy has an idea and that somehow "inherently" makes him worth $50B and all of the employees who help build it worth nothing. Well, sorry, that's not a law of nature, it's a result of some work, some luck, and a very stacked system.

I don't know why you think that Oprah Winfrey building a billion dollar media empire is a huge problem that should be addressed by confiscating the majority of her wealth

Is this the Oprah who bought a large share of Weight Watchers, announced she lost weight on the latest WW fad diet (for like the 20th time) and raked in $20M in stock gains the next day? Yeah, she worked hard for that money. Worked hard to figure out SEC insider trading loopholes. As they say, it takes money to make money - which is the whole point.

Re:Shifting the workload onto other people?

[Dahamma]

There is no such thing as a zero sum game.

Of course there is, that's a stupid statement. There are many zero sum games. It's a huge branch of game theory.

And while long term investing may not be one of those, much of the short term investing of Wall Street (options, futures, many of the strategies of hedge funds) are for all practical purposes zero sum games. And of course usually the professionals (i.e. the already rich people) win, and the average middle class investors convinced to try their "luck" or forced to invest in retirement accounts, lose.

Re:Shifting the workload onto other people?

[cadeon]

I don't believe my premise is wrong, but I may have not made it all clear due to brevity. Of course reality is more complex than a few sentences in a slashdot comment; if it were this simple we'd all be economy experts. Let me try to clear things up.

Inflation can be due to a government printing money because it CAN'T borrow enough.

The government doesn't print money. Well, it does, but not nearly enough to matter, and in order to print it, the money has to be created first via a borrowing event. Look up how that all works.

When the news says the government is 'creating money' they really mean they are borrowing it. The US government has no direct control over the money supply, that's all handled by the Federal Reserve, which despite having "Federal" in the name is actually a private entity. Really.

The US government borrowed tons of money in 2015, and inflation was way below average.

The correlation is not immediately 1:1. It takes some time for the created money to get into the system. That said, the industries where the government is spending the money tend to be impacted first - so if you want to see what the impacts are, look at those areas. Education and Healthcare have been focuses recently, look at the inflation numbers in those fields.

Education is a great example; we tend to all agree that education costs too much (despite it becoming easier to actually distribute information) - it's due to dollars in that area simply not being worth the same amount as dollars spent elsewhere. This is thanks to government funding the schools directly, subsidizing tuition under the covers, and making loans very accessible. Money is easier to come by, so it's not worth as much.

I'm all for helping people- but the government programs to make college more accessible are making it cost more and hurting competition, and in the end hurting those we're trying to help. Schools don't need to get more efficient or produce better graduates, they have no impetus to. In some cases (such as government assistance to colleges based on square footage) schools actually have good reason to retain and expand old practices, which the modern student gets to help pay for, but gets limited benefit from.

"Inflation" in the education space has been miles higher than the overall "inflation" number that gets published. That's the place to look for a short-term study on government spending. Similar stories can be found in healthcare.

Whoa, that's absurdly incorrect. Appreciation != inflation.

I didn't say due to appreciation, I said due to inflation. There's no additional value in this mythical house.

Let's say it another way - 30 years ago you took out a (for simplicity, 0%) loan for $100k. You still haven't paid it back today, but today it's much easier to pay it back because $100k is a lot less money than it used to be. The loan, like the house, hasn't appreciated. The only thing that's changed is the value of the dollar, effectively shrinking your debt without you doing anything to shrink it. Even if you're paying interest on the loan, if you got a good loan, your interest rate is less than inflation. Same effect but slower. As such, inflation helps (or at least *can help*) the people who can get good loans or own things, and just make things cost more for those who can't.

Re:BeauHD

[BeauHD]

Nope but thereabouts is a good spacing wouldn't you say?

Re: Great news!

[bill_mcgonigle]

> worthless

All value is subjective. Back to ECON101 with you.

Re:BeauHD

[110010001000]

I like it! Keep up the good work, we appreciate it!

Really?

[Drethon]

Approximations can solve problems faster than exact algorithms but with occasional errors? Who would have thought? https://en.wikipedia.org/wiki/...

Re:Really?

[John Bokma]

Yeah, so great that you published all those scientific papers. Thanks for your wonderful contributions to science!

Re:Really?

[slashping]

You make it sound like it was obvious, but SHA-256 hashing requires 64 rounds of a hash function, and bitcoin mining requires a double SHA-256 hash. Even a small error in the hash function is likely to propagate quickly to the point where practically all of the results are bad. So, in this case the approximation must be nearly perfect to be worthwhile.

Re:Really?

[Drethon]

You are welcome, I just don't choose to post my published paper on slashdot since it shows the kind of crap that is accepted in publications.

Re:Really?

[Drethon]

Just so long as people remember that a heuristic is not always the best solution: a heuristic "is any approach to problem solving, learning, or discovery that employs a practical method not guaranteed to be optimal or perfect, but sufficient for the immediate goals"

Re:BeauHD

[BeauHD]

Thanks, obviously still getting the hang of things but I appreciate it!

Re:No.

[aix tom]

A virtual currency that really shouldn't even have any value at all, if it weren't for the idiots who decided it was worth something when it really isn't.

Since they gave up the gold standard that's pretty much true for every currency.

Re:No.

[Cacadril]

It's the margin that counts.

Re:No.

[Lunix Nutcase]

And how was it also not equally true of gold itself?

Re:No.

[slashping]

It is true that mining is only worthwhile if you have the cheapest equipment and lowest electricity rates. The same is true for many other endeavours.

Re:BeauHD

[fustakrakich]

This the first article of the day. The last one was 14 hours previous. Are some articles not showing up? Or did I misunderstand the question?

Re:Great news!

[r.freeman]

Quit trolling, you can't exchange your monopoly money to an actual real new car or a house, can you?

Re:Oh great.

[r.freeman]

No, the article is bullshit about that. No such thing happens, the miner verifies the checksum himself, it takes around 1 / 1,000,000 of the time/energy required to find a solution (or even few orders of magnitude less).

Re:Gold vs BC

[slashping]

Industry use of gold is very small, and does not explain its value. And the monetary value is a big reason for people to buy gold jewelry (otherwise they'd all get gold plated stuff).

Better way to mine bitcoins

[Khyber]

Just scam them from Martin Shkreli's dumb ass.

Re:No.

[slashping]

Not true. Right now, finding a block requires doing an average 7E20 hashes before you find a good one. Verifying only takes one hash.

Re:BeauHD

[BeauHD]

My apologies, I can imagine it's only a temporary issue caused from the new editors like myself. I'll PM my overlord, Logan, so that he can provide you with a more detailed answer.

Thanks for asking! While I don't like to shamelessly plug myself, you can always google search 'Beau HD' to see some of my work. I've covered a wide range of technology news in video form over the past 7 years or so. Usually, I focus on consumer electronics but lately I've been covering a broader array of breaking tech news.

Re:Old Idea

[slashdot_commentator]

Technically, its already widely adopted on consumer computing hardware. If you're going into the gigabytes of memory that isn't EEC (RDIMMs), every so often, there are incorrect values being passed/caused by the RAM. Only finance/science and some engineering cares about a potential false value being returned every few months.

Re:Gold vs BC

[slashping]

You misunderstood. There are plenty of uses, but the combined total of industrial use is only 10% of the new gold mined every year.

Re:No.

[Wycliffe]

Gold has intrinsic value to humans.

So does water, iron, and air. Yes, modern society requires a small amount of gold but gold is only worth anything because of its scarcity and it's perceived value. You can see that taking place in the oil market right now. Yes, modern society needs oil to run and is willing to pay $100/barrel for it but if it's plentiful it loses much of its value. Like water, if water was scarce people would pay hundreds of dollars per gallon for it but it's not scarce so it's worth relatively little.

Re:Great news!

[Aaron B Lingwood]

I can't exchange BitCoin for a real house either.

Oh, really?

Re:Great news!

[slashping]

All you are showing is that bitcoin, money, cars, and houses have value.

Re: Great news!

[JoeMerchant]

not all value is subjective, that's libertard nonsense

True, but if you're talking about money, be it bitcoin, USD, or rupees - that's all subjective value.

Re:No.

[Bert64]

I don't live in the US, so i can't pay any of those things with USD either, nor can i pay those things with gold or stocks. However what all of these and bitcoin have in common is that they can be exchanged for local currency which i can use for all of the things you've listed.

Re:No.

[slashping]

Where I live, there's a food home delivery service that accepts bitcoin as payment.

Standard academic practice

[John Allsup]

That is what is done with writing research papers these days: pay sufficient lip service to the notion of science to get published, and if errors turn up, just ignore them. Increases rate of publications significantly, and that's what people get paid for these days.

Re:Standard academic practice

[Anonymous Coward]

> That's why the peer review process exists - it significantly cuts down the amount of BS that makes it to "print".

Tell that to the "soft science" journals. I did my postgrad degrees in stem, but studied psychology as an undergrad. The math in every single psych paper I've read from 1970 onward is not only wrong as fuck, but so wrong that everyone with even a modicum of sense for basic statistics will be able to instantaneously figure out that it's garbage. My favorite was when one paper that experimented on a whopping 6 subjects deduced a -10% margin of error (or, at least, that's what it would have had to have been to be consistent with their conclusion).

This was in Science, by the way.

This is cheating

[mysidia]

The research shows that mining hardware that allows occasional errors

All you are doing is making other people do the checking work for you.

This is wasting other people's CPU and bandwidth.

Your mining pool should ban you if you're caught doing this.

Completing 'fake' shares, which ultimately enrich yourself at the cost of the total profits of your pool and other miners.

Re:This is cheating

[dbreeze]

I think the exploiters have already grokked those issues...

Re:This is cheating

[dbreeze]

If I can mine up a coin, cash it in for....cash, and go buy a lollipop at the corner store, it's got value.

Re:This is cheating

[Jherico]

*No form of money* has intrinsic value. The US doesn't create value if it prints more dollar bills, nor does the EU if they make more euros. The value that these units represent is mantained via artificial scarcity.

Re:No.

[Antique Geekmeister]

> Yes, modern society requires a small amount of gold but gold is only worth anything because of its scarcity and it's perceived value.

Its scarcity is quite real: The world supply of gold is quite limited. It has very real industrial value because it's easy to refine when found, it's very soft and easy to smith when refined, and it's extremely stable and non-reactive with other. It's also extremely conductive, both thermally and electrically, and is invaluable for making good electrical contacts between physical objects and even for heat sink layers in micro-design.

Re:No.

[slashping]

Current above-ground gold reserves are big enough for more than 650 years of industrial consumption. The scarcity is purely artificial.

Re:No.

[Hognoxious]

You cannot freely print more gold at will

Yeah, it's not like you can dig it out of the ground or anything.

Gold is useful for making jewelry and electronics.

And lots of other minerals are useful for lots of other things.

Local error checking?

[AC-x]

If the hardware misidentifies a solution as valid, the network will quickly identify that the solution is invalid when the miner broadcasts it. “These are essentially immediately rejected.”

Why broadcast the block straight away? Surely checking if a given solution is valid is quick enough that it could be checked by a different system before being broadcast?

Re:Local error checking?

[slashping]

Read the paper. The savings come from smaller/faster hardware due to approximate carry propagation in the hashing cores. It has nothing to do with submitting false positives. False positives as easily weeded out by a regular CPU in less time than it takes to prepare a block and send it over the network.

Re:Local error checking?

[TeknoHog]

The savings come from smaller/faster hardware due to approximate carry propagation in the hashing cores. It has nothing to do with submitting false positives. False positives as easily weeded out by a regular CPU in less time than it takes to prepare a block and send it over the network.

So it's just how mining has been done since at least 2011, soon after we developed the first FPGA miners. Clock rates are gradually increased until a suitable error rate is reached, which depends on the individual chip and other factors.

Re:Local error checking?

[ArtForz]

Indeed. How the hell is this innovative?

Re: Great news!

[bondsbw]

Nope. Value is an opinion that differs per person, and is therefore subjective.

Re:Great news!

[tnk1]

I hope that no one believes that Bitcoin has no value. It has whatever value is assigned to it by the people willing to use it.

The problem with Bitcoin is not that is has no value, the problem with it is that it has significantly less utility than legal currencies, can have significant shifts in value, and that things like this "innovation" can affect the value in a way that isn't representative of any economic indicator.

However, much could be said about fiat currencies especially if they are poorly managed. It is usually just that a fiat currency is managed, and closely watched and protected. That has both positive and negative effects.

So in the end, the problem with Bitcoin may well be that it is completely off the rails. I don't think I'd hesitate to use it to make small purchases, if I had to, but I don't think I'd want my retirement in Bitcoin.

That said, I'd like to see it continue. A currency that cannot be governed by some country's monetary policy may well reveal interesting things about a free market currency. I'm just not sure I want to be part of the experiment.

Bitcoin has lots of problems

[Powercntrl]

The problem with Bitcoin is not that is has no value, the problem with it is that it has significantly less utility than legal currencies, can have significant shifts in value, and that things like this "innovation" can affect the value in a way that isn't representative of any economic indicator.

You missed one of the largest problems with Bitcoin: It was designed to be deflationary. Most fiat currencies are designed to be slightly inflationary, which encourages people to spend or invest it (the economy, in a nutshell), rather than hoard it or invest in it on speculation that it might be worth more in the future. Unlike investing in a business, precious metal, or commodity, when you buy Bitcoin you're not putting your faith in peoples' ability to turn a profit, the labor and costs involved in mining and extracting a rare element, or something with intrinsic value. You're simply buying into a cryptocurrency modeled after a pyramid scheme.

To truly picture what's wrong with Bitcoin, think of a new iPhone release. Yeah, some of the people buying them are speculating that they'll be able to sell them for a profit on eBay. Perhaps some of the buyers on eBay are speculating they can re-sell the phones in their bodega cell phone shops. But ultimately, at the end of the line are people who just want to actually buy an iPhone to use it.

Bitcoin's utility is limited by the hassle of exchanging it to and from fiat, its unstable value, and extremely limited merchant acceptance. It's kinda like paying a fee to have someone hold your wallet and randomly add or remove some of your money, and most of the time tell you "no" when you ask if you can spend your money at a merchant. Doesn't look like such a great investment, does it?

Souldn't these guys be working on HAL?

[MrKaos]

We've seen the results of an occasional error in that work!!!

Re:Great news!

[ASDFnz]

..... with Bitcoins, I'd promptly tell you to go fuck yourself.

Really? Just for asking a question? Don'y you think that is a bit extreme or do you answer all questions in the negative with "go fuck yourself". E.g., if I asked if you had the time and you didn't would you say "go fuck yourself"?

.As would most people.

I very much doubt it.

Re: Great news!

[diamondmagic]

Oh cool, another economist on Slashdot. Well then you're probably familiar with how Smith's theory of value has been superseded by Menger's subjective theory of value and marginal utility; and how Marx is total garbage for doing anything useful.

Physicists know about heliocentrism, Kepler's laws, and Newton's laws. Some are pretty good theories that work well for day-to-day kinematics, some are total garbage that don't even give us good enough estimates to do anything useful with, and if you want to launch a GPS system you're going to have to look for a theory that supersedes all three (say, general relativity).

Re:No.

[dbreeze]

http://www.numbersleuth.org/wo...
http://www.visualcapitalist.co...
http://www.24hgold.com/english... this one would seem to indicate your premise in the sense that there is actually very little gold "consumed".

He also notes "Based on available information, the 166,606-tonne figure seems to be the most accurate. However, the 1,200,000 figure wouldn’t surprise me at all. As Philip Barton says it so well, “No claim to precision can be made with regard to the amount of gold in the world. All that can be done is to try to arrive at an educated approximation, based on such vague evidence as is available.”

Re:No.

[synaptik]

Correct. But, we're talking about the proposal-- permitting 'approximate mining'-- not how things presently are. But, upon re-reading my original comment, I didn't do the best job of explaining it. (And the mods apparently agree.)

Re:Gold vs BC

[dbreeze]

http://www.24hgold.com/english...

Some analysis. Mebbe good, mebbe not.

Re:No.

[synaptik]

... Also, I was apparently browsing at score=2 when I first replied, and didn't realize that the question "how was it also not equally true of gold itself?" was actually a side-topic about whether or not fiat currencies are worthwhile, and not about TFA.

Breaking News: Sky is Blue

[Redmancometh]

This is super obvious...how did this paper get published?

Re:No.

[gl4ss]

if you exchange sticks for rocks, you still need to pay the taxes on that transaction in dollars. that means you must have dollars. there is the value, since you can't run a business legally without them in USA. of course you could try to argue that what if everyone in the USA just ignored tax laws, then it wouldn't have value. then you wouldn't have USA either though.

Re: Great news!

[KGIII]

If you don't mind, I have a question... What doesn't have subjective value?

I really can't think of anything that doesn't have a subjective value - at least at an individual level. I am not trolling, I am not being snide, I am not fishing for an answer to then pounce and say, "Ah ha!" I really don't understand and you're far more adept at it than I. I can assure you that you know more about the subject than I do and I will happily defer to your expertise.

Yes, it's sad that I pretty much have to include that. The quality of the comments are such that I'd doubt my motives too. Rest assured, I am not trolling.,

Re:No.

[KGIII]

I don't think that's a very good analogy. You know that they sell unrefined ore, right? They do an assay and figure out an estimated value, agree on a price, and they buy the rocks and then refine the ore. So you can, I guess, show up at *a market* and foist a bunch of rocks on 'em and say "there's gold in there, pay me." Obviously, there needs to be gold in them there rocks.

I'm pretty sure there's operations for that with a bunch of different valuable metals. The mining company isn't always the same company as the refining company. It's even available on a smaller scale - if you, personally wanted to do it you can. If you go to one of those "mine the shit yourself" places and bang around with a pick ax and don't hurt yourself then you too can participate in such a market. You bang about with your pick ax, hunt around, and find some stuff with gold in it. Then you stomp down at the end of the day and either take your rocks with you or you pretty much say exactly that.

Re: Great news!

[diamondmagic]

Indeed, that came across crass. I should have said Oh cool, there's a fellow economist on Slashdot. It is my passion, and I think it is the hardest science we have. (Indeed, economists invented game theory.) It is not (merely/necessarially) a social science, people who think of it that way or criticize economists are being rather narrow-minded.

Re:Gold vs BC

[RuffMasterD]

I think you mean gold has utility value. So do bricks, goats, toothbrushes, ball-bearings, forks... actually, all those things seem to have more utility value to me than gold. Remind me again why people pay so much money for gold, just to leave most of it lying around unused? And what would happen to the "value" of gold if people stopped hoarding it and actually put it all to use?

Re: Great news!

[LinuxLuver]

Economists forget that most people aren't economists don't don't behave how economists think they will or should. This is why neo-liberalism has run aground. People just sent that selfish. But some are. It depends on what one values.... and people value things quite differently. For example, some people will pay extra for a shurt with certain logo on it. Others would not have the shirt even for free because they consider it to have been defaced by the same logo. Value is subjective.... Though non economists seem to understand this much better than some economists.

Re:Gold vs BC

[davidwr]

This was "Gold vs. BC" not "Gold vs. Bricks."

Even if Gold were $0.025/Troy ounce" it would still have almost(?) infinitely more utility value than BitCoin.

Re: BeauHD

[whipslash]

Nobody's turning this site into another gadget site

Re:BeauHD

[whipslash]

We actually noticed this gap before we acquired it. Do you guys prefer 1-2 hours at all times even through the wee hours of the morning?

Re:BeauHD

[whipslash]

I just mean do you prefer evenly spaced articles at all hours, or more articles during peak hours

Re:BeauHD

[whipslash]

En route

Re:BeauHD

[fustakrakich]

To tell the truth, I wouldn't change a thing. In fact, I kinda hope you don't. I'm one of the more content people around here.

Re:BeauHD

[whipslash]

Alright cool thanks. Appreciate it