bitcoins

[Shadow]

Bitcoin came up in the presidents thread. I was aware of their existence, but hadn't bothered to read up a bit until now. I am intrigued. Would someone with more knowledge of bitcoin explain the state of the currency at the moment? Is it worth taking part in? Can an average PC generate bitcoins at a reasonable rate, or are there other channels to go through? etc etc.

[Neobaron]

Why is this in UMD?

Wired Magazine summary.

Running your own PC to generate coins is like running a lemonade stand. Part of the problem with the rapid rise (and spectacular fall) was folks putting a lot of computing power behind their generatrion.

http://bitcoincharts.com/charts/

Obvious. Check the spike in June '11. People were cashing in big time, and then a bunch of human problems happened which caused a loss of faith in the system and people jettisoned the darn things as fast as they could, and the price dropped like a rock. But at the same time, they are better off now than they were before the spike, and like I said in the other thread are more or less stable... for the time being. :)

[cloud]

They were profitable for anyone with a high end GPU when they first came out. My friend said he was making about $30/month with his mid range computer, and I heard the higher end ones were pumping out about $100/month each. Unfortunately the longer bitcoins were around the harder they were to unlock and the amount of profit has decreased to the point that they are about equal to the power consumption of the computer. This was the state of the currency a few months back, I'm not sure how dramatic things have changed since then.

[Shadow]

right, not UMD topic

[windhound]

Shadow, if you'd like to do some reading go here - http://slashdot.org/tag/bitcoin

Bitcoin is an interesting idea, but eh. 
If you're paying the electricity bill its not worth it to jump in now.

imho, your computer cycles are better spent at Folding@Home or even Seti.  As far as I can tell, Bitcoin "mining" isn't doing anything useful. 
https://en.bitcoin.it/wiki/FAQ#Is_mining_used_for_some_useful_computation.3F 
That alone is enough to put me off.  They wont tell you what they're doing with your cycles? 
They're probably just running a random number generator one to a trillion and gives you a bitcoin if your computer guesses a number.  IE, wasting electricity, generating heat, and decreasing your computer's longevity (running full tilt 24/7 is not conducive to a long life).

BitCoins are only valuable as long as someone with money wants to buy them.
https://bitcointalk.org/index.php?topic=37720.0  <- that is a strange topic.
Apparently people buy silver/gold with them, others donate them to Wikipedia / FSF (the EFF is now refusing them), and others sell for a (real) currency.  There's very few actual goods and services being exchanged for BitCoins.
There was some talk of using it as an alternative to PayPal...  but who accepts them?  Better question, the people who buy BitCoins, what do they do with them?  Turn around and sell them to someone else?

"Con Artist 1: I'll buy a bitcoin from you for $1.
Con Artist 2: OK, here it is. Actually, I think I'll buy it back from you for $2!
Con Artist 1: OK, here it is. Will you sell it back to me for $4?
Con Artist 2: Absolutely!
Victim: Wow, the value of bitcoins has quadrupled in the past few minutes! They seem like a wise investment! Can I get in on the action?
Con Artist 1: Sure! In fact, I'll sell you as many bitcoins as you want for only $3.50 each. That's below the market rate.
Victim: What a bargain! I'll take a thousand!
Con Artist 1: Done!
Victim: So, who wants to buy bitcoins? The bidding starts at $8 each!
Con Artists 1 & 2: My, my, look at the time! We must be going!"
- http://interviews.slashdot.org/comments.pl?sid=2260634&cid=36535450

Obviously this can (and does) happen with other things (like stocks), but its the only use I can think of for BitCoins.

[Neobaron]

That is a bit unfair. Bitcoin brings a lot of new ideas to the e-currency table and the fact that every article on slashdot concerning bitcoin was written in the last year proves it. It isn't an entirely new gimmick, but it is different from the things that came before it, and we generally call that progress.

I think it is an excellent concept for an inflation proof currency that expands to and caps at a limit. It also provides a means for bypassing financial institutions, which cuts costs to users.

To imply that it is fake money or to suggest that it is only valuable if someone wants to buy them is kind of silly. Think for a second on what gives the dollar or the euro their values... faith, trust, and flimsy economic guesswork. Any currency not backed by hard resources (precious metals, oil, rice, etc) is only valuable as long as someone wants to buy (into) it.

I do agree that it is probably too late to get into the game, but to suggest it is a waste of time isn't really an aid to progress or helpful to anyone. Folding has accomplished just short of nothing substantial and I am pretty sure that Bitcoin has a better chance of success than SETI does scanning the galaxy in the miniscule range of frequencies we perceive for alien life, yet both of those things have potentially valid and helpful outcomes which are no less valid than a hard coded/regulated digital currency.

Just like a lot of things we don't really think twice about today, electronic currency has been tried before and will inevitably be tried again and again until someone gets it right. Bitcoin is not the end all, though I do certainly appreciate the open source approach to the whole thing, but it is a step on the road like the cold steam engine or any historical example of the development of medicine.

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Also your scam dialogue is basically what wall street has become. It doesn't just apply to digital currency or futures exchanges or any other thing you can think of. People will always find a way to make money off of other, less informed (or stupid) people.

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Here is the original paper which for whatever reason I didn't link previously.

[windhound]

If BitCoin was doing something, anything, with the cycles it burns I could be more appreciative.  But according to their wiki its just straightup waste.  I just can't get behind that. 
There's various distributed clusters out there doing scientific work, they could pretty easily bolt in or create their own so that the computers that are "mining" are also crunching numbers.  But no.  In their arrogance they declare that running a random number generator which outputs to /dev/null is equally important.

"Since the project's launch on October 1st 2000,[9] the Pande lab has produced ninety-five scientific research papers as a direct result of the [Folding@Home] project using simulation methodology that is a paradigm shift away from traditional computational approaches.[14][15] These techniques have demonstrated accuracy compared to results from laboratory research, a "grand challenge" in computational biology.

Folding@home pioneered the uses of GPUs, PlayStation 3s, and Message Passing Interface (designed for multi-core processors) for distributed computing. In January 2010 the Folding@home project successfully simulated protein folding in the 1.5 millisecond range — a simulation thousands of times longer than previously achieved. It remains one of the world's fastest computing systems, and is more powerful than all distributed computing projects under BOINC combined. The Pande lab collaborates with and shares this resource with various scientific institutions and laboratories across the world.[16]"
- http://en.wikipedia.org/wiki/Folding@home
I wouldn't call that amazing progress, true, but it ain't bad.

I think BitCoin is interesting on an academic level.  There's some cool stuff going on with it. 
Doesn't mean I want any part of it.

[Genevieve]

more like... buttcoins

[Rakefur]

If you don't mind me asking, what is that in your avatar?

[Genevieve]

It is a crow stealing food from a wallaby.