How China Took Control of Bitcoin (nytimes.com)

Slashdot reader Rick Zeman quotes the New York Times: In its early conception, Bitcoin was to exist beyond the control of any single government or country. It would be based everywhere and nowhere... Yet despite the talk of a borderless currency, a handful of Chinese companies have effectively assumed majority control of the Bitcoin network. They have done so through canny investments and vast farms of computer servers dispersed around the country...there are fears that China's government could decide, at some point, to pressure miners in the country to use their influence to alter the rules of the Bitcoin network. The government's intervention in 2013 suggests that Bitcoin is not too small to escape notice.

Comments

It's been days

[JustAnotherOldGuy]

It's been days since we had a Bitcoin story, I was growing nostalgic for one, and whaddya know, one pops up like a gift from Heaven.

Re:It's been days

[Anonymous Coward]

Obligatory: Haha, /. Bitcoin shills. We're not going to buy your overpriced tulips.

Re:It's been days

[JoshuaZ]

We're not going to buy your overpriced tulips.

Tulips at least look pretty. And gold is shiny. Bitcoin has all the same problems and doesn't even have anything nice to look at.

Re:It's been days

[TeknoHog]

We're not going to buy your overpriced tulips.

Tulips at least look pretty. And gold is shiny. Bitcoin has all the same problems and doesn't even have anything nice to look at.

Both tulips and gold suck big time if you need to send them instantly* across the globe.

*(plus pseudonymously, and independent of any business or government, but I guess you could do with tulips or gold too)

Re:It's been days

[Anonymous Coward]

So much for Bitcoin being independent of any government . . .

Re:It's been days

[TroII]

Both tulips and gold suck big time if you need to send them instantly* across the globe.

Contracts, futures, and options seem to work pretty well for gold, oil, and other commodities. They'd work just fine for tulips too if anyone was still trading them in such volume. We solved that problem a long time ago, hardly anyone ever takes possession of the physical goods anymore. Same goes for dollars, nobody (legit) is sending around enormous piles of $100 bills.

Re:It's been days

[Anonymous Coward]

By that logic I guess the internet is really nothing.

Re: It's been days

[Anonymous Coward]

How can the 12+ minutes it often takes for a Bitcoin transaction to end up in the blockchain be considered "instant"?

Re:It's been days

[dbIII]

I find it really funny that bitcoin enthusiasts go on both about the blockchain providing a record of transactions and how it's an anonymous currency.
Hey kids, I've got dollar bills with RFID chips on them to sell you along with that bridge you are stupid enough to buy.

Re: It's been days

[Anonymous Coward]

It doesn't have to arrive on the blockchain to be useful. Like Visa doesn't have to put money in your bank account before you hand out the coffee.

Re:It's been days

[silentcoder]

Wait... you think that "solved" something ? Only if you ignore the whole host of problems it caused.
Number one: massive fraud. The total amount of gold bullion in the world ever mined is about a cube the size of a tennis court.
The total gold bullion that there are gold certificates for ? Is roughly 3 times that vollume.

In other words - every bar of gold in the world has been sold to at least 3 different people who can all legally prove they own it ! Every gold certificate in existence has been fraudulently copied and sold to somebody else at least twice.

Gold was never a very secure kind of currency to begin with, it was always too easy to commit fraud with (history is rife with leaders who replaced their gold with gold-plated lead and defiled the currency for self enrichment) but since we stopped selling the physical item that problem has gotten far worse. At least in the old days if somebody sold you painted lead you had a chance of finding out, and maybe prosecuting them. Today - two thirds of the gold owners in the world are fraud victims and we have absolutely no way of even telling the fraud victims apart from the legitimate owners since the fraud was mostly committed by the same banks that issued the real certificates using the same official mechanisms.
A good counterfeiter can be hard to detect, a good counterfeiter who works for the mint is impossible to detect, and that's effectively the state of the gold trade. A trade in counterfeit paper issued by the same institutions that issue the real thing.

Re:It's been days

[Anonymous Coward]

Both tulips and gold suck big time if you need to send them instantly* across the globe.

Get this through your thick skull: A huge, overwhelming majority of people on this planet DO NOT NEED to transfer money across the globe.

Re:It's been days

[TeknoHog]

Both tulips and gold suck big time if you need to send them instantly* across the globe.

Get this through your thick skull: A huge, overwhelming majority of people on this planet DO NOT NEED to transfer money across the globe.

So if you don't need it, nobody needs it? What about the countless payments to online stores with Visa, etc? Besides, I don't see how this has anything to do with (a) my original post, or (b) the thickness of my cranium.

Re:It's been days

[TeknoHog]

I find it really funny that bitcoin enthusiasts go on both about the blockchain providing a record of transactions and how it's an anonymous currency. Hey kids, I've got dollar bills with RFID chips on them to sell you along with that bridge you are stupid enough to buy.

I never said anything about "anonymous" in my post. The word I used is "pseudonymous". The analogy with dollar bills is quite apt, though -- it's like tracking by serial numbers, which is only useful if you can establish a connection between a person and the number. With Bitcoin this is even harder, because it's easy to create throwaway addresses.

Re:It's been days

[Burz]

I've been telling enthusiasts (who apparently only skimmed the main bitcoin sites briefly, if at all) for years that if bitcoin does rise in utility, then bigger and bigger institutions will come in and swamp the small players -- or force them into their own cartel.

They want a currency created by mathematics, but refuse to look at the logical conclusions it engenders.

Re: It's been days

[Anonymous Coward]

How about posting a reference?

Re: It's been days

[Anonymous Coward]

Tried googling.... Can't find anything on this either

Re: It's been days

[Anonymous Coward]

It kind of does. When you perform a Visa transaction, Visa is telling you that the transaction will go through. When you lodge a bitcoin transaction, you are relying on the transaction making its way into the blockchain. Until that happens, all bets are off.

Re:It's been days

[Anonymous Coward]

Get this through your thick skull: A huge, overwhelming majority of people on this planet DO NOT NEED to transfer money across the globe.

Yes, but the few entities that DO need to do so more or less make the world of international finance happen, and if you think you can blithely ignore that little bit of economic activity then you're the one with the thick skull.

Re:Bitcoin is for pigs

[LynnwoodRooster]

No, this is about bitcoin in China and China's much more about the pork. You can get beef, but it's the pig that powers the bellies of China. So it should be:

You are all pigs. Pigs say oink. OOOOOINK! OOOOOINK! Oink pigs OOOOOINK! Oink say the pigs. YOU PIGS!

Re: Bitcoin is for cows.

[Anonymous Coward]

trolling or no... and having been a long time slashdot reader.. poster has a point, lol

All but for one fatal flaw

[Anonymous Coward]

Any value attributed to bitcoin is essentially in the eyes of the people who choose to use it. I know this could be said of any fiat currency but as it is tied to no nation, no central bank, backed up by no specie reserves and isn't circulated in the conventional sense it's a hell of a lot easier for people to simply walk away, at which point the value vanishes. It would only take a hint of a scare for people to start cashing out and send the exchange rate tumbling.

Re:All but for one fatal flaw

[Anonymous Coward]

"and send the exchange rate tumbling"

Like what happens every week?

Re:All but for one fatal flaw

[jandersen]

Any value attributed to bitcoin is essentially in the eyes of the people who choose to use it.

The same is true of anything whose value depends on a perception of value; Spain learned this when they started minting the famous 'Pieces of Eight' in the 15th century in such huge numbers that the actual value in term of what you could buy with them tumbled - and they were made of very pure silver. Money is, even at best, not real value, but only a token that you can exchange for goods and services of value. We continue to believe in certain currencies only because we believe in the entities that guarantee their value, and that is where cyber currency falls down, IMO. Like the emperor's clothes, it works well until the little boy speaks up and breaks the illusion; and the world is full of little boys like that.

Re:All but for one fatal flaw

[silentcoder]

At least in theory a fiat currency is tied to the productive labour of the people of the country - which is why hyperinflation only ever really happens in countries that first had some other kind of social unrest or plague or war destroy their productive capacity (look it up - every example of hyperinflation* in history was first preceded by an unrelated and massive problem that destroyed the productive capacity - printing money only *really* becomes a problem when there isn't any production for it to represent). Bitcoin isn't even tied to that.
It's, at best, tied to the energy it costs to mine - which you need to buy, for a fiat currency... which makes it nothing but a substitute for fiat currencies without any official recognition or supply controls or consumer protections or ... well any of the things we added to money over the centuries to solve the many problems we encountered over the past ten thousand or so years. Which pretty much leaves it vulnerable to every single one of those long-solved problems, problems we solved so successfully and so long ago that most people have forgotten they ever existed.

*Well, all but one but the one time that it actually WAS the money supply in isolation is never mentioned by the goldbugs. That was the Spanish hyper-inflation problem which ultimately led to the collapse of the Spanish empire. The reason they don't mention that one is that goldbugs are mostly also free market fundamentalists who think inequality, no matter how severe, is the proper state of the world - so they don't want to mention that one because the key driving force of it was extreme inequality. The money supply was massively increased (by conquistadors coming back with gold and silver mined in the new world by slaves), but this increase went entirely to a tiny elite (the conquistadors). So businesses raised prices massively to get at that new money from the conquistadors who had it to spend. Of course this meant the money was worth a lot less than when they arrived - so their brutality in the mines got worse and worse because no matter how much they mined they never got much richer back home. Meantime every merchant's prices had gone through the roof selling at a fortune to the conquistadors, so the suppliers raised their prices to cash in on the newly-moneyed merchants... etc. etc. and the average workers (mostly farm-workers then but others like bricklayers and the like too) did not see their incomes increase. While the prices of food and clothing were set at the rates only the super-rich could afford, the country starved... until civil war followed.... so basically the end result is the same as every extreme inequality in history, just with a side-trip into hyperinflation that aggravated the problem.

Re:All but for one fatal flaw

[Opportunist]

Finally someone gets this.

Bitcoins, like any fiat currency, only has its value as long as people see a value in it. People put faith in Dollars and Euros because they consider them "stable", something they can trust to not lose their value. Should they do, you'll see them becoming worthless. The value of Bitcoins is exactly in the inability to track their flow. Should they become trackable, you'll see their value plummet.

So if China takes control of Bitcoins, fear not (unless you have a lot of Bitcoins, of course): They'll drop into insignificance and another fiat cryptocurrency will take over.

Re:All but for one fatal flaw

[Anonymous Coward]

The fact that the Chinese are so committed to bitcoin, makes it a 'de facto' fiat currency. They will go great lengths to protect its value.

Re:All but for one fatal flaw

[Anonymous Coward]

Bitcoin is tied to energy, which is a real physical anchor. In fact, Energy is more of a currency-anchor than Gold itself.

Re:All but for one fatal flaw

[Thelasko]

A very well written comment. However, I have one objection.

free market fundamentalists who think inequality, no matter how severe, is the proper state of the world

Those that believe that don't understand free market economics. True free market economists believe the free market provides equality. They believe that people are paid fairly based on their contribution to society. i.e. Poor people don't contribute as much as rich people. However, in reality that is not the case, and rich people manipulate the system for their further financial gain.

The example of free market economics in action that I like to use is US trade with China. Allowing (more or less) free trade with China has allowed the poor of China to find gainful employment and move into the middle class. However, this was at the expense of the US middle class. Although, it can be argued that the US middle class was far wealthier than the Chinese poor to begin with. Unfortunately, the wealthy saw the greatest benefit from this transaction due the reason I mentioned above.

My point is, equality is a two way street. To make everyone equal, some "rich" people become poorer, and some poor people become richer. It doesn't matter how you go about it, socialism, or free market capitalism. The end result is the same.

Re:All but for one fatal flaw

[silentcoder]

I don't think anybody seriously thinks everybody should earn the same. But I do think the degree of inequality matters. Too much is just as bad for the economy as too little.
You need some, because some people are only motivated by money - so you need the ability to have more as the only way to get those people to do anything. But too much and you end up with severe wealth concentration, which utterly skews the entire economy - and can leave you with productive economies that, nevertheless, fail at their most basic function: distributing goods to where they are needed.
It is also (and unsurprisingly) a fact that severe inequality harms both GDP and economic growth - ultimately, the end result of too much wealth concentration is that everybody makes less money than they otherwise would have. Even the rich.

Generally - I think a well functioning society would see the wealthiest person earn roughly twice what the poorest person earns. And by definition a functioning society does not have anybody who earns nothing (even if some people's earnings are from charity or social safety nets). But those figures are debateable. Better economists than me can give better numbers.
Currently though the difference is rather larger than that. In most companies the CEO earns roughly 800 times what the lowest paid worker does. I'm sorry - but it's simply mathematically and physically impossible that he could EVER be producing 800 times as much value.

The biggest problem here is that we've let market rates determine wages - which is silly because wages are not like any other goods or services, they are not constrained in the same way or produced in the same way - they are not governed by the same economic rules, and what's worse - this flat out ignores that wages are the ONLY product the vast majority have to sell - so de facto wages are life. It's people's time, their hopes and dreams. It's human beings trading parts of their life for the means to survive - and they don't get limited liability protection. That is simply not the same thing.
Yet the fundamentalist free marketeers always call on the market when it suits them to justify inequality, yet pretends it isn't one whenever it suits them. They tend to be anti-union while ignoring what, under their own theory, a union is: a comglomerate of small businesses who found they could be more profitable by merging. Then they call unions evil - because they don't WANT this kind of business to be more profitable, it's profits are costs to the businesses they actually like. Suddenly the market can no longer be trusted to make it's own rules and they advocate for things like so-called "right-to-work" laws that prevent the formation of union-shops. Ignoring that no company in history has ever been forced to be a union shop - becoming a union shop is a contract freely signed between two businesses which, by their own logic, both businesses believed they were better off from. A contract you can actually believe that about since both businesses have fairly equal power to negotiate (but oh they will do everything to prevent workers ever having real power in negotiations - contracts are only supposed to be "free" for the business owners).
The greatest example of libertarian hypocrisy is that every libertarian I have ever met opposed anti-trust laws and supported right-to-work laws and didn't even REALIZE that philosophically they regulate exactly the same thing: what type of exclusive supplier arrangements are acceptable.
Here, I am on safer ground philosophicallly - I support anti-trust laws and oppose right-to-work, but since I never claimed all market regulations are evil I haven't painted myself into a corner with an overly simplistic ideology. I can state that the former is good and the latter is bad because their effects differ - and I believe that regulation should be measured by it's effects, if the pros outweight the cons it's good regulation, if you can make the pro list longer or the con list shorter it can be better regulation - but it's only BAD regulation is the cons outweigh the pros.

Re:All but for one fatal flaw

[Thelasko]

Generally - I think a well functioning society would see the wealthiest person earn roughly twice what the poorest person earns.

Ben And Jerry's used to use a 5 to 1 ratio. I've heard others use a 7 to 1. But most companies are just ridiculous. CEO's don't add much value. Most of them are simply asserting their power over the employees by paying themselves that much money.

The greatest example of libertarian hypocrisy is that every libertarian I have ever met opposed anti-trust laws and supported right-to-work laws and didn't even REALIZE that philosophically they regulate exactly the same thing: what type of exclusive supplier arrangements are acceptable.

I have only recently come to this realization myself. But you're right. If companies can't form a cartel to manipulate a market, why should union's be allowed to? And vice versa. The answer is power. How do you measure power? How do you make sure the union and management are on equal ground during a negotiation?

I believe there are companies that take unfair advantage of their employees (Walmart, PetSmart). However, there are some unions that take advantage of corporations (GM, Hostess). There needs to be a balance.

My personal belief is market regulation is acceptable only to monetize some externality for businesses. (e.g. a carbon tax to combat climate change) Businesses should be responsible for keeping those externality costs down, because that's what businesses are good at.

Re:All but for one fatal flaw

[silentcoder]

> If companies can't form a cartel to manipulate a market, why should union's be allowed to?

Now for me, this is easier to answer: because union formation will most likely increase the overall fairness of the market by raising the negotiation power of people who individually have very little or (often) none at all. While cartel formation decreases the fairness of the market by increasing the negotiation power of organisations that already have too much.
Since I measure the validity of regulation by outcomes rather than having a principle either way (I don't think it's a matter of principle - economics should be a purely pragmatic exercise and the pragmatism should be focused around giving the best possible outcomes for the largest possible number of people) I can say that. Those who claim that it's an infringement on personal liberty to regulate markets however, cannot be consistent if they are then happy to regulate unions. If anything the latter type reduces individual liberty for a far greater number of people so should violate their principles more.

>There needs to be a balance
Now you're starting to sound like a socialist libertarian. Left libertarians say a free and fair contract cannot exist unless everybody involved has equal negotiating power, anything else must inevitably be coercion. The right libertarians on the other hand deny that most forms of coercion are in fact coercive (flying directly in the face of the vast majority of people's life experience - and thus rarely convincing anybody).

>My personal belief is market regulation is acceptable only to monetize some externality [wikipedia.org] for businesses
I don't agree that's the only acceptable regulation - but it is in a very needed one. Though externalities are a form of market failure and most libertarians deny that market failures exist (it's amazing how people who pride themselves on their objectivity so frequently deny the existence of things people see happening every day). Externalities are, in fact, one of the worst market failures - it means that contracts have shifted most of their cost onto third-parties who have no consented to being part of the contract. It's actually a far worse and far more illiberal thing than taxes. Being forced to subsidise somebody else's business without my consent is much worse than giving money to the government - because in the latter case at least SOME of that money will be spent on things I benefit from, heck some of it will be given to me (state pensions and such), in the former case it is simply stolen from me and I will never get any of it back.

Nuke China

[Anonymous Coward]

Take control of Bitcoin away from those bastards. China is not to be trusted. Only Europe is responsible enough to control a global currency like Bitcoin.

Re:Nuke China

[Anonymous Coward]

Waste of nukes. Dump your BTC for some other cryptocurrency. BTC's blockchain has horrible limits anyway.

All your Bitcoin

[Anonymous Coward]

Are Mine!

Re: Bitcoin is for cows.

[Anonymous Coward]

Zebras are better platform for qr coding though

Could not RTFA

[Anonymous Coward]

Anyone have a good alt article that's not hosted on effing NYtimes?

Re:Could not RTFA

[Anonymous Coward]

http://archive.is/RxRjq

Re:Could not RTFA

[ArchieBunker]

Works fine for me. Maybe Linux is your problem.

I THINK I see what you did there...

[Anonymous Coward]

getting the leading bits all to 0. Or not. Not sure.

Re: I THINK I see what you did there...

[Anonymous Coward]

WHOOSH that down-moderator

Good thing for dogecoin!

[Anonymous Coward]

But dogecoin now! NOW!

Re:Good thing for dogecoin!

[Anonymous Coward]

Many Woof!

Not surprising

[somenickname]

Bitcoin as an idea is very interesting but, in actual function, it's a scam. I wanted to learn more about it a year ago and so bought some mining ASICs. It doesn't take long before you realize that your magic money printing device was sold to you at a cost that means you will invariably lose money. Which makes sense. If I have a magic money printing device, why the hell would I sell it to you instead of running it myself?

At the time when I bought my ASICs, the Chinese companies that were making them started changing directions and were moving towards a model of letting you rent ASICs that they would host. It's kind of a brilliant plan because it means they can reduce the costs of ASICs by creating WAY more than people will ever buy and then just renting people as many as they want. The rent more than pays for the electricity and manufacturing costs so, no matter what happens, the ASIC manufacturers always win. Unfortunately, they are the *only* people that win.

It's not surprising at all that China controls the bitcoin market. They *are* the market. All the ASICs come from China and if they don't sell the ASICs, they make a profit by running them. If they do sell the ASICs, they make more profit by selling them at an inflated price that speculators will pay. It's a hell of a racket.

Re:Not surprising

[Anonymous Coward]

By scam you mean, there is no such thing as free bitcoin? I guess all commodities are a scam, then.

Re:Not surprising

[cfalcon]

I mean, this shouldn't be overly surprising. If it is a gold rush, the money is in making shovels. The same is mostly true even if it is a scam gold rush...

Re:Not surprising

[somenickname]

Agreed. But, it's not something you realize until you've bought your shovels. I did it as an experiment so, I didn't mind losing some money to learn about the industry but, I'd like to educate potential miners: The magic money printing machine you bought was sold to you because the people who made it thought it was more profitable to sell it to you than to run it themselves.

Re:Not surprising

[somenickname]

No, by "scam" I mean exactly what I said: Why would someone sell you a magic money printing machine instead of running it themselves? The answer is: Because they can make more money selling it to you than they would make by running it themselves. Which kind of implies that buying a mining rig is a losing proposition. A scam.

Re:Not surprising

[khallow]

It doesn't take long before you realize that your magic money printing device was sold to you at a cost that means you will invariably lose money. Which makes sense. If I have a magic money printing device, why the hell would I sell it to you instead of running it myself?

No, what happened is that the cheap bitcoins went away. A cursory examination of the dynamics of the thing would have revealed that mining bit coins increases in computational/electricity cost over time. So as long as value of bit coins exceeds the electricity cost of mining them, then there will be massive computational resources thrown at them.

There's no such thing as a free lunch.

Re:Not surprising

[somenickname]

No, what happened is that the cheap bitcoins went away. A cursory examination of the dynamics of the thing would have revealed that mining bit coins increases in computational/electricity cost over time. So as long as value of bit coins exceeds the electricity cost of mining them, then there will be massive computational resources thrown at them.

This is wrong. You have to take into account the cost of the mining rig as well. If a $1000 mining rig is generating enough bitcoin to pay the electricity bill (which is non-trivial) then you have to look at how long it will take to pay back that $1000. Bitcoins are highly volatile so, today it might seem like it will repay itself in a few weeks. Tomorrow, it might literally look like centuries.

I stand by my statement that the only people that make money from bitcoin mining are the people that make the mining equipment.

Re:Not surprising

[Anonymous Coward]

This just points out your fundamental misunderstanding and how much of a sucker you are.

They aren't printing money arbitrarily, and you bought into a system that intentionally declines in value.
Why did you buy ASICs in the first place and who told you that was a good idea?

This post is tantamount to an old Gold Bug heading west, investing thousands of dollars in mining equipment and contracts, only to find nothing and complain endlessly about it. The only difference being that Bitcoin is obscure enough for people to be sympathetic to your stupidity.

Re:Not surprising

[Troed]

What has you buying a mining rig with the intention to make a profit to do with Bitcoin? You're claiming that the former proves the latter is a "scam".

Obviously some people are indeed "mining" (the better term is "verifying transactions on the Bitcoin network") for a profit. And a user of Bitcoin need not care about "mining".

Re:Not surprising

[TeknoHog]

It's a completely open-source scam. If you don't like or understand it, just keep using proprietary alternatives.

The "understanding" bit involves doing your homework when it comes to mining profitability. If you expect Bitcoin value to increase in the future, it's much easier to buy some directly. If not, then maybe there's not much point in mining either.

Re:Not surprising

[Anonymous Coward]

"So as long as value of bit coins exceeds the electricity cost of mining them, then there will be massive computational resources thrown at them."

Or as long as the electricity cost is something somebody else pays for. Further reason to be concerned when a government, totalitarian or otherwise, makes this an intended profit center.

Re:Not surprising

[Anonymous Coward]

False

there are lots of reasons to sell.
Energy costs in your location are too high, not enough space, bitcoin idealism in that you need tons of people to do it.

however bitcoin is stupid, just not for reasons stated.

Re:Not surprising

[somenickname]

For a pure user of bitcoin, the Chinese control of the mining is not really an issue, sure. But, when you pull back the curtains, it's very, very obvious that the currency exists solely for the benefit of the companies that produce the ASICs that allow the computational complexity of the algorithms to grow. I understand that the difficulty of computing a bitcoin grows with the CPU power that is utilized to compute it. That's *exactly* what the Chinese manufacturers are banking on you *not* understanding.

When they sell you powerful ASICs that can compute bitcoins, they are banking on the fact that, in 6 months, when they've produce a chip that is 10x as fast, they'll be able to sell it to miners *again* at an absurd premium. And, for a short time, those miners might make a small amount of money. But, in the end, the profits will mostly lie with the company that sells you the ASIC. Because they control the computational price of the currency.

Re:Not surprising

[Anonymous Coward]

Bitcoin as an idea is very interesting but, in actual function, it's a scam. I wanted to learn more about it a year ago and so bought some mining ASICs. It doesn't take long before you realize that your magic money printing device was sold to you at a cost that means you will invariably lose money. Which makes sense. If I have a magic money printing device, why the hell would I sell it to you instead of running it myself?

That doesn't mean Bitcoin is a scam. It might mean that the sale of Bitcoin mining machines is a scam, but that's not the same thing.

Re:Not surprising

[hodet]

There are scams around bitcoin just as there are around regular money.

Make $10k a week sitting on your couch, only $299 for the complete package. Is that a problem with regular money? It is well known now that small time folks can't make money mining, yet the whole thing is a scam because some people continue to dump money on mining equipment. Where there is money to be made you will always find suckers throwing it away, that does not mean the money itself is a scam.

Re:Not surprising

[Actually, I do RTFA]

You mean the free coins are going away. The bitcoins allocated to miners as rewards is drying up rapidly. And all the hypothesized infrastructure that would keep them mining hasn't materialized. So, I'd guess that there is a publicly visible countdown til bitcoins become practically untradable.

Re:Not surprising

[Anonymous Coward]

So basically, a pyramid scheme.

Re:Not surprising

[khallow]

You have to take into account the cost of the mining rig as well.

I was operating under the assumption that the cost of electricity over the lifetime of the machine would be much greater, but doing the math, I don't think that is the case.

I stand by my statement that the only people that make money from bitcoin mining are the people that make the mining equipment.

Do you also stand by your statement that the makers are deliberately selling their product "at a cost that means you will invariably lose money". My point is that even in the face of sincere manufacturers, the costs of bitcoin mining will stabilize a bit below the expected return in bitcoins.

Re:Not surprising

[khallow]

And all the hypothesized infrastructure that would keep them mining hasn't materialized.

That infrastructure has been baked into bitcoins from the beginning. Every transaction requires computation which can be done by bitcoin miners.

Re:Not surprising

[PRMan]

Therefore, gold is a scam. It's all clear now...

Re:Not surprising

[Anonymous Coward]

By this logic, all examples of voluntary exchange are scams and mutually beneficial trade is impossible.

If there's one thing Bitcoin has taught me, it's how little humans understand economics. The Bitcoin stories here display economic ignorance on the part of Slashdotters like little else (although it has to be said the idiocy in the Landlords + ISPs thread is impressive).

Re: Not surprising

[Anonymous Coward]

The same reason someone would sell you a truck and shovel to mine gold instead of pulling it out of the ground themselves?

Re:Not surprising

[somenickname]

If people don't pump money into mining, what will happen to the currency? I think it's pretty obvious that the "currency" will crash because it's largely propped up by Chinese miners and miner hype. It really is genuinely as scam. Sure, a handful of people have gotten rich from bitcoins but, unless you were in on the ground floor, trying to mine bitcoins is going to be a money loss. Trying to triage them on a meta-market to make some money is pure insanity. Unless you own a silicon fabrication plant, in China, your ability to make money with bitcoin is just a flip of a coin.

Re:Not surprising

[rickb928]

There were never any free bitcoins, just cheaper ones.

And if you weren't in on the ground floor, yes, you missed the easy money. Now mining is only an exercise in value speculation.

Re:Not surprising

[Gorobei]

Bitcoin as an idea is very interesting but, in actual function, it's a scam. I wanted to learn more about it a year ago and so bought some mining ASICs. It doesn't take long before you realize that your magic money printing device was sold to you at a cost that means you will invariably lose money. Which makes sense. If I have a magic money printing device, why the hell would I sell it to you instead of running it myself?

Um, because of reality? In this case, cost of capital:

If I can make a machine for $900 that generates $100/year forever, I get an 11% return on capital.
If I can sell it for $1000, I get an immediate return of $100, and can build another machine and repeat the process. At one per day, I make $36,500 in my first year.

If the risk free interest rate is around 3%, the second plan is worth 10x as much as the first plan.

Re:Not surprising

[SydShamino]

Not that I like bitcoin, but it's farming ASICs aren't magic money-printing machines. They are electricity-consuming (pseudo-)money-printing machines.

Someone could conceivably design and build the ASIC, and sell the ASIC, but not want to invest the resources or pay the costs associated with actual farming. It's sort-of like multi-level marketing companies like Mary Kay or whatever. They could sell their own products and keep more of the revenue, but then they'd have to pay the costs associated with retail business (salary, shipping) when instead they can sell the raw product and let some third-party person try to make the rest while taking on all the costs.

Re:Not surprising

[dbIII]

Indeed a lot of stuff around gold mining in various gold (and silver) rushes were scams. Claim salting and a lot of more subtle things. A lot has been written but I'd say bits of Mark Twain's mostly autobiographical "roughing it" sums it up better than most.
Hence the words "gold rush mentality" applied to shiny new things where you know a lot of the players are going to crash and burn before it's over (dotcom crash, shale mining, etc).

Re:Not surprising

[Anonymous Coward]

What will happen when new gold becomes prohibitively expensive to mine? The price of existing gold will go to zero (crash)?

Re:Not surprising

[Anonymous Coward]

so selling those machines might be a scam but why does that make bit coin a scam..

Re:Not surprising

[Khyber]

" it's very, very obvious that the currency exists solely for the benefit of the companies that produce the ASICs that allow the computational complexity of the algorithms to grow."

That's fairly narrow-minded thinking. What about all those *SERVICES* (Like bitcoin ATMs) to provide as well?

It's more than just to drive the sale of ASICs.

Re:Not surprising

[Anonymous Coward]

Bitcoin legit but what it isn't is a get-rich-quick scheme. Sounds like you scammed yourself.

Re: Not surprising

[Anonymous Coward]

You could mine at a slight loss with the expectation that the price of your bitcoins will rise, no?

Re: Not surprising

[WarJolt]

Saying bitcoin exists to sell ASICs is like saying banks exists so that they can sell bank safes. Bitcoin exists because there's demand for a currency with special properties. Bitcoin mining exists because people need to trust a currency and people are willing to pay for it. Unfortunately the proof of work function used by bitcoin is susceptible to manipulation because ASICs scale so well and governments have the resources to build enough of them to manipulate them.

Memory hard proof of work functions are not as susceptible to manipulation because of the way the economics work out. You simply can't make memory significantly cheaper.

Re:Not surprising

[Troed]

it's very, very obvious that the currency exists solely for the benefit of the companies that produce the ASICs

It's very, very obvious that it isn't since for many years Bitcoin proponents didn't even believe there would be ASIC rigs built.

Re: Not surprising

[vux984]

You could mine at a slight loss with the expectation that the price of your bitcoins will rise, no?

If that's your strategy, you'd be better off just buying someone else's already mined coins; and then holding them.

Then you don't take a 'slight loss'.

Re:Not surprising

[ET3D]

Bitcoin wasn't designed as a scam, it was just too optimistic. The concept isn't one of a magic money printing device; the miners do valuable work which keeps the currency functioning. It was originally mined on CPU's then GPU's, so was initially truly the 'people's coin'. It wasn't until ASIC's mining arrived that things started going downhill in this respect.

That's indeed a problem with cryptocurrencies in general, but it's a more serious problem with bitcoin because it uses a relatively simple function, one that became quite easy to solve. It was the first, and therefore it has unfortunately both the largest mind share and the most problems.

Re:Not surprising

[silentcoder]

If gold's value was based on it's actual usefulness it would have crashed decades ago. The total gold used for industrial and jewelry purposes is less than 1 thousandth of a percent of the gold we've mined. Nearly all of it was mined as currency and despite not having been used as such for decades it keeps being traded by people who treat it as such (and this even now when 2/3rds of the gold trade is flagrant fraud - same ounce gold owned by 3 different people).

All currency is just a collective agreement to pretend something is valuable, frankly since none of that value is EVER actually *real* (money is never valuable - it merely represents things which could possibly have value) - it makes perfect sense to use the cheapest possible thing to represent it with. Why use something that has to be mined at great expense in incredibly dangerous conditions when you can do the same job with a sheet of paper ?

Re:Not surprising

[Anonymous Coward]

I mean, this shouldn't be overly surprising. If it is a gold rush, the money is in making shovels. The same is mostly true even if it is a scam gold rush...

actually if it were a gold rush, and you were supplying shovels wouldnt the real money be in supplying the iron? i.e. a gold rush would cause a rise in iron price?
if that were true. oh but wait. people can make their own shovels. they dont HAVE TO buy the shovels from the chinese shovel makers and their monopoly..

all i see is this:
tears tears tears tears china is becoming stronger because we're all dumb and lazy tears tears tears tears tears

If there were ASIC builders outside of China, they would prosper too. alas nobody could be fucked because the world is full of naysayers "ahh bitcoin will just collapse there's no point". or maybe more the point China just happen to do it first.

CNY owns USD. bout time you all realized it :P

Re:Not surprising

[Anonymous Coward]

By the same logic, commercial coffee machines do not exist.

Re:Not surprising

[Anonymous Coward]

So, a +5 Insightful post explains that Bitcoin is a scam because author believes that you cannot get rich from mining ?

Is Football a scam ? Most people will put in lots more work into it than they ever get paid for. And that argument is not even considering that Bitcoin is not about mining only.

Sure, if Bitcoin as a system of payment and an investment object (not the intended use but still) is being controlled by the entities that control mining, then you might end up with a scam. But that is a far cry from what the author talks about.

By the logic of the ones who gave parent +5 I suppose this reply will be a -1 not enough anti Bitcoin propaganda.

Re: Not surprising

[Opportunist]

If I had to actually DO anything to "mine" Bitcoins, you could have a point.

The problem is, "mining" bitcoins means "turning on the ASICs and wait". I guess it's safe to assume that this kind of "work" can even be done by upper management.

Re:Not surprising

[thegarbz]

The problem with this often misused analogy is that you can only make money by making shovels if you're the only one doing it. Otherwise you create a shovel rush which is even worse since the maximum size of the market is significantly smaller for shovels than it is for gold.

It's a fun analogy but no one ever got rich from selling shovels unless they were the only ones, or had a very unique shovel.

Re:Not surprising

[thegarbz]

They are very different for several reasons.
1. Your ability to sell a coffee is not dependent on simply owning a machine. You need to be in a right location.
2. The location can saturate, there's only so many people to convert to money so you can't simply buy another coffee machine and double the value.
3. The coffee machine requires a full time trained operator who's skill is critical in selling your product. If you scale up the number of machines you need to scale up the number of trained operators.
4. Coffee requires an input that is fungible and highly specific to quality of results.

Compared to an ASIC which you buy, plug in and it starts mining coins with only the cost of electricity as an input and the value of BTC as the output coffee machines are very different.

Re:Not surprising

[somenickname]

But, that's not how it works at all. It probably costs less than $100 to build the ASICs and their planned obsolescence is measured in months. So, they will sell you a mining rig that *might* pay for itself in a year. But, they are taking the money you paid and building more efficient mining rigs. The more powerful rigs, once in use, increase the complexity of computing the bitcoins and, pretty quickly, the cost of running your mining rig doesn't cover the electricity costs of running it.

It really is the ultimate scam and I found the entire experience to be fascinating. Costly but fascinating.

Re:Not surprising

[xvan]

Commercial coffee machines require inputs, distribution logistics and maintenance that make it so "somebody else" can provide a better service for cheaper price than you can.
If you need a coffee machine, you usually are interested in the productivity of the people who drinking that coffee, not in selling coffee.

Re:Not surprising

[Anonymous Coward]

My back of the envelope calculations show me that off-grid solar energy generation for your 30 Gh/s mining can have the costs recovered in ~3 years [which is the time you'll take to resolve your first block].

Re:Not surprising

[Anonymous Coward]

By your logic we all have to fly to China for our morning cuppa joe because one company is building coffee machines for their own use.

Re:Not surprising

[Anonymous Coward]

Gold mine: a hole in the ground with a liar at the top.

Re:Not surprising

[Anonymous Coward]

> but no one ever got rich from selling shovels
Except Samuel Brannan, who got rich selling shovels in the California gold rush.

Re:Not surprising

[Anonymous Coward]

The total gold used for industrial and jewelry purposes is less than 1 thousandth of a percent of the gold we've mined.

Well, I can't find historical data, but given that 52% of gold mined annually is used to make jewelry and 12% is used for industrial uses 1, I believe you are massively wrong.

Re:Not surprising

[Actually, I do RTFA]

Right, it requires bitcoin miners. The bitcoins for mining are running out. There was supposed to be an infrastructure that paid miners from each transaction in a block. It has not materialized yet.

Re:Not surprising

[Actually, I do RTFA]

They were "free" in that the bitcoins were unclaimed by anyone, and mining a new block earned you the bitcoins. Those unclaimed bitcoins are of finite number and running out. Hence, the point is rapidly approaching where there is no incentive to mine because there is no bitcoin reward. In theory, there was supposed to be an infrastructure where people paid to have their transactions' verified. But, that hasn't grown into a thing, and time is running out.

Re: Not surprising

[rickb928]

Free as in electricity to run your average PC.

And fees are pretty much required to get your transaction processed.

You get out much?

Re: Not surprising

[Actually, I do RTFA]

I never said free as in beer. I said free as in unclaimed.

The transaction fees are too low to be sustainable right now. They are being subsidized by the free bitcoins.

It's unclear if, once the fees rise to the level to encourage mining once the unclaimed bitcoins run out, bitcoins will lose popularity.

Re: Not surprising

[rickb928]

It looks, upon casual examination, that the max bitcoins (roughly halfing every 210k blocks) is about 21 million. We know of about 14.5+ million minted, and it will likely take until 2033 to get near 20.75 million, unless some massive (2 orders of magnitude) increase in mining activity occurs, given the current mining growth predictions.

Maybe someone will go to work trying to reclaim lost coins. That's an interesting proposition.

Technically, not all possible coins will be minted, due to rounding issues. Before that point, since mining will have long since ceased to be productive for finding new coins, and transaction fees will need to sustain the work. I would expect that before then either miners will executing cycles for coins, and focus on transaction fees, or a cartel will in fact overcome the community and rule Bitcoin, setting fees and crushing competition until everyone gives up.

I don't see a future for blockchain currency, which is why I'm working on a blockchain application that uses it for transaction security, which seems to be a valid use case. But

Re: Not surprising

[Actually, I do RTFA]

The max bitcoins, by spec, is supposed to be 16M. Which makes peak bitcoin pretty darn soon. Even with the rewards recently halving in size.

"Reclaiming lost coins" sounds like "stealing coins" in many ways that are indistinguishable if bitcoin is supposed to be an asset you can store under a rock for later.

Re:Not surprising

[khallow]

Right, it requires bitcoin miners. The bitcoins for mining are running out. There was supposed to be an infrastructure that paid miners from each transaction in a block.

It's already there and has been there since the beginning.

Told lots of people this was going to happen

[Khyber]

And this is why I did not bother with Bitcoin. That currency value is way too high for its own good and was bound to attract the greedy Chinese speculators once it started gaining 'value.' It is seriously hyper-inflated. I do better with mining and selling gems and mineral samples.

Re:Told lots of people this was going to happen

[Black Parrot]

Greedy communist speculators: How droll.

Re: Told lots of people this was going to happen

[Anonymous Coward]

Sure one can for example smuggle some drugs and weapons to the nearest star system and make good profit, but Bitcoin is a way to diversify one's investments, and goes well with the risk seeking personality.

Re: Told lots of people this was going to happen

[somenickname]

Sure one can for example smuggle some drugs and weapons to the nearest star system and make good profit

Hello. Out of curiosity, can you point me towards those star systems? I've got a few bars of gold plated latinum for you, if you would be so kind...

Re:Told lots of people this was going to happen

[SuricouRaven]

I think it's an interesting concept and technology. I got a little mining setup, just a cheap one, as a toy. Interesting, but a basic understanding of economics is enough to see why it's inherently a very unstable currency at any time scale.

I learned two things from my miner: That they can run really fast when you immerse them in silicone oil, and that only a fool invests in bitcoin mining at anything less than mass-scale.

Re:Told lots of people this was going to happen

[dbIII]

Maybe funny in 1975 but you should have worked out a bit more about China since then :)

Re:Told lots of people this was going to happen

[AmiMoJo]

Actually, if you look at the history of Bitcoin the Chinese are the good guys.

Early Bitcoin mining was with western developed software, first on CPUs, then GPUs, then FPGAs and finally on ASICs. A number of western companies appeared offering ASICs, but failed to deliver any working hardware and mostly just stole people's money.

Some Chinese companies then started making actual working ASIC hardware and selling it at reasonable prices. They met the market demand in a way that western companies had completely failed to, with an honest product (not considering the scammy nature or otherwise of Bitcoin and similar currencies) at an honest price.

Then they found a way to let even more people join in by renting expensive miners, which is actually how most Bitcoin mining works anyway. Few people mine on their own, they mostly join a pool where they get paid for the computation they do, not the coins they discover which are pooled and shared out. The Chinese just pooled the ownership of the hardware too.

Re:Told lots of people this was going to happen

[Anonymous Coward]

You don't know the Chinese so well. There is no scam or get-rich-quick scheme they won't peruse with steadfast zeal. There is an ingrained desperation to make as much money as fast as possible, any way possible. Everything is acceptable to them if you want to make money. Such concepts as morality and ethics take a back seat. I've lived in China going on 10 years now and they are only growing more desperate as the cities grow richer but the larger majority of country folk are getting left behind.

Re:Told lots of people this was going to happen

[silentcoder]

China is actually a perfect example of late-stage communism. Most people don't know this but Eastern Europe in 1985 and China today are virtually indistinguishable and they took identical paths about 20 years apart.
Communist countries (and here I am using the term as it was used of the soviet union and such - more correctly called Bolshevism, none of the other versions) were fantastically productive economies, in fact they are wonderful at making things - much better than capitalist countries actually. They make things - and they make them cheaply.
But when your focus is on making things cheaply, and you don't pay people well - you end up having trouble selling what you made. Whether your businesses is state-owned (as in Russia) or owned by private and mixed-state-and-private consortiums like in China, either way your local market does not have the demand to buy what your industries produce. So you become a major exporter. Eastern Europe did it in the 1970's and 1980's and China did it in the late 1990's.

You start exporting and because you can make things very cheaply you soon rule the market for consumer goods in other countries. China was better at this than Eastern Europe since they didn't have a cold war and sanctions limiting their destinations but that just meant they could export to countries like the USA as well (and get US companies to move factories there) while Eastern Europe was mostly limited to exporting to places like Africa and South America.

Either way - this works really well, you get very rich and very profitable businesses follow, but your own people mostly stay fairly poor. You may uplift them a little but you can't do it very much, if you do then they start demanding decent pay - and you lose the reason people are buying your goods in the first place.
For a long time, this works - but eventually the supply starts to exceed demands. A recession in your customer countries can hasten this of course but sooner or later you are simply exporting more stuff than the world wants to buy. Your economy starts to contract, you are too good at making things and you've yet again run out of customers to buy them.
Now you desperately try to turn yourself into a consumer-society, you try to uplift your own people rapidly so they can branch into new types of industries and become buyers of your own goods. China is busy doing that now, Eastern Europe was trying the same in the 1980s.

In Eastern Europe it didn't work - they could not change their economies and societies fast enough, and their economies ultimately collapsed, which precipitated the end of the cold war. China has better odds of success, they don't have the trade barriers that made it harder for Eastern Europe to change their economies and they have a lot more people - so they can afford to lose a lot more in the transition before facing a collapse or insurrection.

China may well succeed where Eastern Europe failed. What you would call the end result of that is anybodies guess. You would still have a Bolshevist totalitarian state with a planned economy, but now it's a consumer society - so it's not really ANY kind of communism anymore (even though THEY are likely to keep calling it that). I suppose if it goes far enough - you could actually end up with a China that resembles the Pinochet regime, hardcore free-market-fundamentalist economies with a dictatorship in charge...

Re:Told lots of people this was going to happen

[dbIII]

China is a perfect example of China. Drawing parallels with Albania or wherever is a mugs game. Communism is a patina on top and doesn't tell much of the story at all.

Re:Told lots of people this was going to happen

[silentcoder]

Except that you deliberately chose the worst possible example while I generalized over a region that included the Soviet Union and East Germany - both major production centres in the past. And if you think communism is a thin patina on top in China - then what you're failing to realize is that from about 1970 onwards that's exactly how it was in the Soviet Union. The communism you know from American movies and propaganda never actually existed.

Re:Told lots of people this was going to happen

[dbIII]

then what you're failing to realize is that from about 1970 onwards that's exactly how it was in the Soviet Union

What makes you think I fail to realise that? The underlying culture of that nations is very different, as show with the tensions between the USSR and China.

Re:Told lots of people this was going to happen

[silentcoder]

>What makes you think I fail to realise that? The underlying culture of that nations is very different, as show with the tensions between the USSR and China.

What's that got to do with their economies ? Which is the subject I was discussing.

Re:Told lots of people this was going to happen

[dbIII]

What's that got to do with their economies ? Which is the subject I was discussing.

A vast amount. Centuries of merchants versus centuries of serfs. Go speak to someone old from China and it's a very strong bet that they were quietly chasing after profit even while Mao was around.

How the media FUDded up Bitcoin

[Anonymous Coward]

...quotes the New York Times:

I'll believe the bitcoin-hatters long before I'll believe Wall Street's number one propaganda rag.
It's not ad hominem if the source has no credibility to begin with.

Re:How the media FUDded up Bitcoin

[supremebob]

I thought that the Wall Street Journal was the Wall Street propaganda rag.

If the New York Times was going to be considered as a propaganda rag, it would be for Liberal minded intellectuals and not businessmen.

More power!

[fustakrakich]

How much of all our generated electricity is being thrown into this pit?

not just BitCoin

[Anonymous Coward]

hello sheeple, though its the choir here we preach toward on /.

China wants to control Earth, period.

Manufacturing - gone, business - gone, you name it -gone. Gone meaning overrun or taken over by China.

China induced the silly West to pariah a few strategic countries. Now China has access to mineral wealth of Southern Africa - Namibian mines, South Africa and the riches of Zimbabwe - while those nations are getting poorer and left to descend into chaos. Pattern repeated around a few other places in the world.

This escalated in the last decade to cleaning out all IP (intellectual property) from Europe / USA. They have hacked every system, control every network. You can now just about only buy goods made in China, China, China or China. Clothing, shoes, toys, network switches, cameras, and increasingly food.

Re:not just BitCoin

[Anonymous Coward]

You're singing the same tune they sang about Japan in the 80's. And you're only doing it because you've been taught to parrot the fearmongering rhetoric that has been sold to you.

we're pissed

[slashmydots]

If you're wondering how OG bitcoin enthusiasts that have been with bitcoins from late 2009 feel about it (aka me) we're PISSED! Every last person thinks China can go straight to hell. People threw parties when one of the major bitcoin mining facilities in China burned to the ground. I hope they all burn down in fact. Fuck those greedy, lying, ASIC-hoarding, patent-stealing, rip-off artist assholes and their control of the bitcoin network and manipulation of its price on a daily basis.

Re: we're pissed

[Anonymous Coward]

Errr? HAH! at you. Zero sympathy here.

Re:we're pissed

[Anonymous Coward]

Yeah right, you bought Bitcoins in 2009 and you're pissed? Why? Because you're a multi millionaire and evil Chinese speculators made it possible?

Re:we're pissed

[Anonymous Coward]

They beat you fair and square. They took advantage of your greed and gave you the reaming you knew you deserved.

Re:we're pissed

[Anonymous Coward]

My guess is that he is one of the guys that was sitting on about 20000 of them in 2009/2010 and got bored with it and sold them for a 100 bucks. That would sting.

Re:we're pissed

[h33t l4x0r]

Every last person thinks China can go straight to hell.

They sound like likely Trump voters.

Re:we're pissed

[Anonymous Coward]

You know, if they change the rules, you can just hardfork. They may have more CPU power but far less people who actively use it.

Re:we're pissed

[DerekLyons]

If you're wondering how OG bitcoin enthusiasts that have been with bitcoins from late 2009 feel about it (aka me) we're PISSED!

I wasn't. And that you're "PISSED" just makes me laugh at your self entitlement. (And at your ignorance.)

Anyone with a clue has seen this coming for years.

Re:we're pissed

[PRMan]

This seems to be the case every time with people that hate on bitcoin this much.

Re:we're pissed

[Anonymous Coward]

I bought bitcoins in 2009. I bought 80 of them for 20 dollars, I sold most of them for about 40 dollars each IIRC a couple years later. If I hadn't sold I would have about 70k now, not quite a years salary, not a millionaire. You can't make assumptions. As for how I feel about the control of the network and the price manipulation, I think I'm gonna buy me a little ethereum now. If it recovers it's a better product, and a lot of lessons were learned from the ongoing slow motion train wreck of bitcoin. I love the idea of bitcoin but since the fees soared, control centralized, and transactions became unpredictably slow, it's become a mostly failed project.

Re:we're pissed

[Tom]

They are exploiting a design flaw in the Bitcoin network. One that was known pretty much from the start. One that was obvious as being a breaking point. As soon as Bitcoin becomes important enough for national governments to worry, you really thought this wouldn't happen? If the USA wants to destroy Bitcoin, they wouldn't turn on the NSA supercomputers as miners for a few days and be done with it? Please.

Re:we're pissed

[AmiMoJo]

Maybe he invested a small fortune in mining equipment, which back then would have been fast CPUs and then GPUs. I remember people paying insane amounts of money for certain high end Radeon cards that had the best power/hashes ratios, and then building PCs with multiple PCI-e expanders and 1000+W power supplies to run them all.

Now all that gear is worthless because a single $10 ASIC is an order of magnitude more powerful. It went from being a hobby that individuals could excel to to being a commercial enterprise dominated by companies with ASIC engineers.

Re:we're pissed

[Anonymous Coward]

You supported a system based purely around handing out power and money to people with high computational capacity without governmental restrictions, and now you're pissed off that people under the rule of a foreign government are able to leverage economies of scale and greater manufacturing capacity to generate computational power that grants them power and money? How *dare* they.

Re:we're pissed

[Anonymous Coward]

The Chinese are incredibly competitive people, it's a cultural thing, be it due to there being a billion of them or something else but they are hugely competitive, they all seem to want to build an empire and they love flashy gaudy shit when they do score money (just look into what's going on in Vancouver)
All (yes, all) of my asian friends, including my Chinese friends (!!?) whinge about them and specifically say that they 'don't trust them'

Worse than bitcoins we're letting these people buy a shitload, utter shitload of property across the planet, we got stupid and bought all their manufactured goods, they got fucking smart and bought all our land in return. If you didn't own a house before the year 2008 or so, you've probably been utterly fucked by this. I know in my city the chances of buying a home are rapidly dwindling to zero.

I suppose as westerners, we've done the same thing to other people, hugely destablising economies, waged war and what have you but it doesn't mean I have to like it. I fucking adore Chinese food, I enjoy some Chinese cinema, I have Chinese friends, I think a lot of Chinese girls are attractive but I feel like the modern, younger Chinese ruthlessness and carelessness, along with just greed upon greed is not a nice thing to deal with. At all. Especially now that they are so god damn powerful.

I really do feel like they want to build empires, sure there's greedy westerners, definitely but many Chinese seem god damned SUPER focused on acquiring wealth at any expense.
I'm opting for anon post for this one, lest it be taken out of context.

Good luck with the bitcoins, I suspect you'all are fucked vs those guys, seriously.

Re:we're pissed

[slashmydots]

I lost out on over a million by selling about 6 months after a major crash when it finally recovered to around $5.25.

Re:we're pissed

[slashmydots]

$5 actually because I needed the money to open a computer repair shop.

Fiat demand via taxes

[raymorris]

> Any value attributed to bitcoin is essentially in the eyes of the people who choose to use it. I know this could be said of any fiat currency

It's been said, by people who forgot about one essential element of fiat currency. Almost everyone in the US is required to pay taxes in US dollars. (Many of them get "back" more than they pay, but even they have to pay it first.) Because people have to pay taxes in US$, they need US$. That creates guaranteed demand for dollars. The US dollar is valuable, if for no other reason, because you need dollars to pay taxes with.

On top of that you have the fed managing inflation, a long history of being relatively stable, etc.

Re:Fiat demand via taxes

[SydShamino]

Not only that, but the sovereign debt of the U.S. is issued in U.S. dollars. Lots of governments and individuals around the world own U.S. debt, and they are all invested in the dollar remaining strong so as to maintain the value of that investment.

And this ignores commerce conducted in U.S. dollars, like the international oil market, which while beneficial to the dollar as a whole, could probably be swapped out for another currency (the yuan renminbi I assume at this point, given that the euro doesn't look too good) if given enough notice.

Re:Fiat demand via taxes

[Opportunist]

Erh... no.

The value of the dollar is mainly that there is a huge economy behind it and that economy stabilizes the currency. If that was not the case, it would be trivial to buy dollars come April, because everyone wants to get rid of them and would love to take your "hard" currency in exchange so you can pay your taxes.

For reference, see any country in existence with a runaway inflation.

CureCoin benefits the USA & the World

[davisconnorscot]

From a purely futuristic perspective, the altcoin CURE (aka CureCoin) prevents mining silos ... and even if China took over mining/folding of CURE, it benefits the entire global community since the only way to mine it is through protein folding research (ok 80% is folded, and 20% is still SHA-256). But if you're feeling patriotic, or slightly xenophobic ... the research being done is seeded by the NIH and NSF. Food for thought.

Re:CureCoin benefits the USA & the World

[Anonymous Coward]

How is it different from other coins like decred?

Re:CureCoin benefits the USA & the World

[davisconnorscot]

It is a hybrid as well, however the primary means of earning the coin is through running folding@home bio-medical research software. The coin rewards participants from an 80% pre-mine (something that will change in the future (see SigmaX)). That being said, the system has been very stable for over a two years with only one minor security update required for the wallet along the way. In its current status, PoS is probably earning more coins than SHA-256 PoW mining right now: https://www.curecoin.net/knowl... It is trade-able on three major exchanges and listed on bnktothefuture's coinpayments.net (your business can actually accept CURE with at least some consumer protections)

rule changes

[mrlibertarian]

there are fears that China's government could decide, at some point, to pressure miners in the country to use their influence to alter the rules of the Bitcoin network

The Chinese miners can't change the rules of the bitcoin network, because the bitcoin network uses cryptography to see if anyone is breaking the rules. The Chinese government could attempt to pressure miners into using their influence over the bitcoin world, but Chinese miners only have influence because the rest of the world does not currently view them as anti-bitcoin. However, if Chinese miners suggested, for example, that the supply limit be changed to something other than 21 million, they would be seen as anti-bitcoin by the rest of the bitcoin world, and then they would lose their influence. Chinese miners could launch a 51% double-spending attack (and possibly destroy the value of their own coins in the process), but no amount of computing power would give them the ability to change the rules (because cryptography).

Re:rule changes

[PRMan]

The rules are whatever client the vast majority of bitcoin miners are running. If they get past 75%, they can change the rules to whatever they want, but then bitcoin would probably become a Chinese currency only, which would dump the price drastically.

Re:rule changes

[mrlibertarian]

If coinbase.com, bitpay.com, circle.com, etc. do not change their bitcoin software, then anyone who uses those sites will still be operating on the old network...even if the miners on the old network only account for 25% of the hash power.

Re:rule changes

[Time_Ngler]

If the miner of the new network have 75% of the hashing power, they can spare 2/3 of it to launch an attack on the old network without any fear of reprisal. Depending on how evil they want to be they could:

1. Effect a DDos by producing empty blocks. All transactions would grind to a halt
2. Commit a double spend
3. Create a longer fork in private for several days, and then publish it, causing all of the transactions within that time period to roll back and completely destroying the faith of those invested in Bitcoin.

Whoever has significant more computing power than anyone else wins. Period.

Re:rule changes

[mrlibertarian]

Those attacks would not change the rules of the old network, which was my original point. Also, there is defense. However, even if that defense fails, then all that means is that the attacks will damage faith in both the old and new networks. After all, if the old network can be attacked successfully, who is to say the same thing won't happen to the new network in the future when there is another disagreement? This uncertainty lowers the value of bitcoin as a whole, which means these attacks would be suicidal from a financial perspective. So, the question isn't how evil they want to be; it's how much money they're willing to burn to destroy their own wealth.

Re:rule changes

[Time_Ngler]

That defense is a pretty handwavy answer. You can't sum up the high priority transacations(whatever that is... based on bitcoin days destroyed, I guess??) against hashpower without assigning weights to each, so what are those weights? And even then, you're simply trading one type of security, hashpower, for another, high priority coin ownership. It's a risky idea, by closing one avenue of attack, you open up another, only you're not familiar with the second. Computer programmers have the nasty habit of assuming if they don't see a flaw, there isn't one, and historically this blows up in their face a lot.

If the old network is attacked and falls because of the majority of miners attacked it, it does not mean financial suicide. Rather it's that if you don't follow whatever fork the majority of miners choose you are in danger of losing your transactions, and therefore the value of your balance. Bitcoin has always been based on that notion, "the moral majority will have the most hashing power", it's just that now the owners of that hashing power are centralized, cloaked in secrecy, and probably far from moral.

Re:rule changes

[mrlibertarian]

Bitcoin has always been based on that notion, "the moral majority will have the most hashing power"

Yes, that's true. And, if the majority of miners use their hashing power to attack the old network, then they will be proving that notion false, which will destroy faith in bitcoin and ultimately hurt those same miners. People hold bitcoin because they believe 1) their money will be safe, and 2) the fundamental rules won't change. If miners successfully attack the old network, then they will have proven at least one of those beliefs to be false, which means that many users (myself included) will dump their bitcoins. But, if you don't buy that, then I guess we'll have to agree to disagree.

Re: rule changes

[Time_Ngler]

You might as well be talking about the miners as royalty who rule over a village. "Yes, the rulers have the power to change the rules anytime they want to. But if they were to do that, then the citizens would revolt, and take away all their power. See, so we're free after all!"

You may think everyone would revolt. You may also think the people would demand autonomy over the currency they are invested in, but no one has tested that so far. There are no longer just purists like yourself invested in Bitcoin, but businessmen, too, and their numbers are growing. They might not be so quick to join the rallying cry against minor infringements like yourself.

Re: rule changes

[mrlibertarian]

You may think everyone would revolt.

Actually, I see bitcoin as the revolution, and if the rebels turn on each other, then the revolution stops. In other words, if the bitcoin world goes to war, then that creates a climate of uncertainty that drives the average investor away.

It's true that the businessmen probably outnumber the purists. However, businessmen like certainty, and certainty is especially important when you're buying something that is supposed to rival the certainty of owning a hard asset like gold. If the 75% network starts attacking the 25% one, and the 25% one happens to be the one used by all the western websites, then there's going to be a major disruption and a lot of uncertainty. I think that uncertainty is going to scare the average person away.

Re: rule changes

[Time_Ngler]

A rebel fiefdom is still a fiefdom

Re: rule changes

[Anonymous Coward]

The Chinese don't give a fuck about any of your dumbass Libertarian principals or your silly little coins. They are in it to get rich as fast as possible. If crashing the market makes that happen, they'll do it when the time it right.

Re:rule changes

[petermgreen]

but no amount of computing power would give them the ability to change the rules (because cryptography).

That depends.

If you have more than half the hashing power then you can unilaterally make the rules tighter. Blocks contining transactions that do not satisfy your rules will not be used as a base to mine on by your miners and so will be quickly forked off. For example you could require a transaction fee of a minimum percentage of the transaction value or you could require that all bitcoin addresses were registered in a govrnment database.

On the other hand you cannot unilaterally make the rules looser without forking the network.

The irony of uncontrolled currencies

[Anonymous Coward]

If a currency isn't controlled by any anyone, then it becomes an irresistible temptation for someone to control.

As long as BitCoin keeps growing, its endgame is absolutely inevitable: someone (very likely a government) will seize control of it.

SouthPark Reference

[Anonymous Coward]

Bitcoin = Spacecash

Comment removed

[account_deleted]

Comment removed based on user account deletion

Re:Non-story - Vaporware

[Anonymous Coward]

Slashdot is dead because of people like you. It was cool like 10-15 years ago (maybe?). Now it's full of people whose heads are so far up each other's asses they can't see that y2k has passed and the world hasn't ended.

Chinese government, or just corruption?

[Anonymous Coward]

Is it the Chinese government taking control of bitcoin, or Chinese who use bitcoin to remain anonymous in a constantly monitored society? Since Chinese computers that are capable of mining lots of bitcoins are probably all government owned, it might just be corrupt public workers who install a mining program on those super computers for their own profit. I would not be surprised that the party people don't understand anything about computers and they just don't know what's going on and have to trust their computer experts to do the 'right thing'.

A stable economy doesn't force people to use USD

[raymorris]

The proposition out forward is that "like Bitcoin, any fiat currency has value -only- because people choose to use it".

You mentioned one of many reasons that people do choose to use USD. What you mentioned is an important reason. That's already covered under "people choose to use it".

There is ALSO another category that applies to fiat currency, but not Bitcoin. People are forced to use USD. Fifty million people get their monthly checks from the government denominated in US dollars; they can't choose to get paid in Bitcoin instead. Most people HAVE to pay taxes in USD; they can't pay in Bitcoin. They are forced to use US dollars.

If you bought it a year ago....

[Anonymous Coward]

Then you're an incompetent idiot.

ASIC miners haven't been financially profitable to buy since at least 2013, and even THEN you never got them sent to you by the company (who you had to PREORDER through, they had from 3 to 9 month leadtimes to actually getting sent hardware.) GPUs, depending on the model were good for 2010-2012 (Give or take on either side for software/ASIC rampup)

I divested myself of my first and last mined bitcoin recently. While the concept was cool, and you can make money 'playing the game', they never lived up to their potential, as with most things, because of the human element.

Re:A stable economy doesn't force people to use US

[Opportunist]

Just because you get your wage in a currency and that you have to use it to buy stuff in that country doesn't mean that the currency has any "real" value. For reference, take any ex-East Bloc country. There has even been that old joke:

There's little difference between West and East: For West-Money, you can buy anything!

And that was quite true. When you drove over to Eastern Europe, you could rest assured that at every parking lot near a mall you'd find a LOT of people offering you money. For exchange rates that differed VASTLY from the official ones. Because everything you really wanted, you could only buy for hard cash. Marks, Dollars, Franks, Schillings, Pounds. Not Zloty, Forint, Ostmarks or Lei. You could get cheap crap for that, and you could use restaurants only of course with the official money (even though if you tipped in West money the service improved significantly!).

So just because you "have" to use some kind of currency due to official requirements doesn't mean that people want to have it. Usually, they have more than they want of that junk. What they need is money that buys them something.