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On April 19 2013 01:39 Snorkle wrote:
I wrote a paper on bitcoin for an upper division econ class that focused on international trade and currency. Although I don't own any I find them fascinating. So did the prof. Anyway if you are looking to invest you should probably look for something with utility outside of being a currency like precious metals. If you are looking to participate in an uprising against centralized banking or purchase items on a black market anonymously then gogo bitcoin.
Bingo.
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http://www.butterflylabs.com/bitcoin-mining/
i have still no idea what this is on about
you're talking about a replacement currency that is borderless
but it has a sci-fi twist that you can actually mine it like gold , like grinding for items in an mmo or researching genome...?
is it like cracking a passworded file, every so often you get the encryption code and a bitcoin materialises
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On April 19 2013 00:47 Superouman wrote:
Hah, finally this thread has been made. I was really surprised nobody did it after the craze of the previous weeks.
I was thinking about making one, but then I realized the amount of bullshit it would gather.
I didn't want to start to explain why it is not a pyramid scheme.
Explain to why it is risky and how risky it is.
And soooo on.
I will just read and see if someone post something smart.
The thing is that you can really convince a way or another.
The understanding or bitcoin and what money in general is, is very poor.
I've seen very smart people calling for a scam on it.
I've seen very stupid people buy all their money into bitcoins because of the way it was rising.
My view.
In the future, we will be using a cryptocurrency. Will it be the BitCoin or Another, we cannot say.
If the utopia becomes true, those who supported early should be rewarded.
The Bitcoin paradox:
The value of the bitcoin comes from how much people trust it. If the value is stable, people will trust it more, if they trust it more, the value rise and people suddenly have no reason trading it, as holding it benefit you more, the value start rising until it become untrusted again and lose value, it's a mathematical pendulum.
The optimal situation:
We want a situation were the bitcoins are distributed to as many people as possible, in as small quantity as possible.
That's why bubble burst situations are important, you can't hold much of them without taking a huge risk (count in the technological risk).
Conclusion:
BitCoin is a great form of cash money and is not going to replace the dollar anytime soon.
You want to calculate the trust in bitcoin, just take the ratio of the value in $ of the BTC and the amount of $, you'll understand why it is not stable.
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I had bought $1,000 worth of bitcoins at the value of $139 per bitcoin. I think within 2 days the value of it went up buy $115... then hackers stole my money.
If hackers didn't take all money, I'm sure I would have profited at least $2,000 easily within a week.
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On April 19 2013 01:41 FFGenerations wrote:http://www.butterflylabs.com/bitcoin-mining/i have still no idea what this is on about you're talking about a replacement currency that is borderless but it has a sci-fi twist that you can actually mine it like gold , like grinding for items in an mmo or researching genome...? is it like cracking a passworded file, every so often you get the encryption code and a bitcoin materialises
Haha, that's sort of how I'm viewing it.
I'm treating it like a stock market simulation videogame that has really steep graphics card requirements. Worst comes to worst, if it goes to $0, I have a really nice videocard (unlike stock, where you're left holding paper). If not, the money that I've made so far will continue to grow (so far still outpacing the cost of power consumption)  I got a taste for what it's like to be a day trader, it's actually pretty exciting especially on days when there's a lot of volatility. The BTC-E trollbox is hilarious as well.
I have these up on a couple of monitors, helps me decide what trades to make (though my thought process is not much more than poorly educated guesses, I'm sure someone who went to school for this stuff can do better):
http://bitcoinity.org/markets/mtgox/USD
http://bitcoin.clarkmoody.com/
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someone on reddit made a fortune after taking a loan out of 30,000. There is some money in this if you are wise much like the stock game.
I was wondering if someone could explain to me how exactly the bitcoins are "mined" out. I understand some fundamental "basics" but don't quite grasp it yet (each bitcoin has own unique ID, mined from source code?, mining gets exponentially more difficult and time consuming as more is "mined" out and getting closer to the "limit").
Still unsure as to how it is formed from groups of people "renting" out their cpu and gpu to "farm" them
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On April 19 2013 01:57 heroyi wrote:
someone on reddit made a fortune after taking a loan out of 30,000. There is some money in this if you are wise much like the stock game.
I was wondering if someone could explain to me how exactly the bitcoins are "mined" out. I understand some fundamental "basics" but don't quite grasp it yet (each bitcoin has own unique ID, mined from source code?, mining gets exponentially more difficult and time consuming as more is "mined" out and getting closer to the "limit").
Still unsure as to how it is formed from groups of people "renting" out their cpu and gpu to "farm" them
I've also read stories about people selling their cars and taking out loans to buy bitcoins... one day before the crash. I don't read reddit a lot, but the day of the crash at the top they had a suicide help post O_o
Basically, mining is finding valid solutions to complex math problems. When you find a valid solution to a block, you get rewarded with coins. I don't know about renting, but I know people participate in pools. Basically, a bunch of people connect to a server which divides the work amongst everyone. Every math problem your computer solves gets added up and counted as a share of the total number of math problems it takes to "mine" a block. Once the block is mined, the coins are divided up amongst the people in the pool proportional to the amount of shares that person has submitted.
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i dont understand
why do you mine money (bitcoins)? why is it even possible? how can that be
i thought its just a currency, you buy some bitcoins with your $ then thats it.
but theyre giving away bitcoins randomly to people aswell if you crack some computer encryption thing?
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On April 19 2013 02:02 SpeaKEaSY wrote:Show nested quote +On April 19 2013 01:57 heroyi wrote:
someone on reddit made a fortune after taking a loan out of 30,000. There is some money in this if you are wise much like the stock game.
I was wondering if someone could explain to me how exactly the bitcoins are "mined" out. I understand some fundamental "basics" but don't quite grasp it yet (each bitcoin has own unique ID, mined from source code?, mining gets exponentially more difficult and time consuming as more is "mined" out and getting closer to the "limit").
Still unsure as to how it is formed from groups of people "renting" out their cpu and gpu to "farm" them I've also read stories about people selling their cars and taking out loans to buy bitcoins... one day before the crash. I don't read reddit a lot, but the day of the crash at the top they had a suicide help post O_o Basically, mining is finding valid solutions to complex math problems. When you find a valid solution to a block, you get rewarded with coins. I don't know about renting, but I know people participate in pools. Basically, a bunch of people connect to a server which divides the work amongst everyone. Every math problem your computer solves gets added up and counted as a share of the total number of math problems it takes to "mine" a block. Once the block is mined, the coins are divided up amongst the people in the pool proportional to the amount of shares that person has submitted.
Really?? You just solve math problems and get rewarded as such? I am assuming it runs off of some random algorithm generator making these questions (that gets harder and harder as more is solved)?
edit: I'm sure the problems are difficult and i simplified it alot. Also, yea but its like the stock exchanges except this shit fluctuates much more crazily.
On April 19 2013 02:04 FFGenerations wrote:
i dont understand
why do you mine money (bitcoins)? why is it even possible? how can that be
i thought its just a currency, you buy some bitcoins with your $ then thats it.
but theyre giving away bitcoins randomly to people aswell if you crack some computer encryption thing?
Because bitcoins are money and the more, generally, trusted and used currency at the moment. There are MANY different types of coins out there but again bitcoin is more popular (just like how the US dollar is popular because the market says so). These things are very secure because each coins have a unique signature to them much like how the current dollar works (each with unique numbers) thus its pointless to just copy the coins over and over (electronic signatures prevent this again).
No one knows who but someone created the source code that creates these math problems (there was a man, can't remember name, who wrote a paper on the idea of this exact phenomena of internet currency that is secure etc...) and there is a set limit to how many can be bitcoins can be created (the closer the limit is reached or more blocks mined the harder the problems and thus more time to accrue more coins)
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On April 19 2013 02:02 SpeaKEaSY wrote:Show nested quote +On April 19 2013 01:57 heroyi wrote:
someone on reddit made a fortune after taking a loan out of 30,000. There is some money in this if you are wise much like the stock game.
I was wondering if someone could explain to me how exactly the bitcoins are "mined" out. I understand some fundamental "basics" but don't quite grasp it yet (each bitcoin has own unique ID, mined from source code?, mining gets exponentially more difficult and time consuming as more is "mined" out and getting closer to the "limit").
Still unsure as to how it is formed from groups of people "renting" out their cpu and gpu to "farm" them I've also read stories about people selling their cars and taking out loans to buy bitcoins... one day before the crash. I don't read reddit a lot, but the day of the crash at the top they had a suicide help post O_o Basically, mining is finding valid solutions to complex math problems. When you find a valid solution to a block, you get rewarded with coins. I don't know about renting, but I know people participate in pools. Basically, a bunch of people connect to a server which divides the work amongst everyone. Every math problem your computer solves gets added up and counted as a share of the total number of math problems it takes to "mine" a block. Once the block is mined, the coins are divided up amongst the people in the pool proportional to the amount of shares that person has submitted.
Do you guys use pools or mine individually?
Btw I expected TL to be a good place to learn more about the technical details and the mechanics of bit coins. I suspect that this isn't the right place to talk about the economics though.
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On April 19 2013 01:57 heroyi wrote:
someone on reddit made a fortune after taking a loan out of 30,000. There is some money in this if you are wise much like the stock game.
I was wondering if someone could explain to me how exactly the bitcoins are "mined" out. I understand some fundamental "basics" but don't quite grasp it yet (each bitcoin has own unique ID, mined from source code?, mining gets exponentially more difficult and time consuming as more is "mined" out and getting closer to the "limit").
Still unsure as to how it is formed from groups of people "renting" out their cpu and gpu to "farm" them
How Bitcoin mining works is that your computer generates SHA-256 hashes of numbers based on the existing blockchain (the total record of all Bitcoins mined and of all transactions), and if one of your hashes begins with a certain number of zeros, the system rewards you with X (currently 25) number of BTC, lottery-style.
The funny thing is that the rate of Bitcoin generation is always constant: the number of zeros that your hash needs for you to receive the Bitcoin reward changes based on how much processing power is in the entire system, so the rate at which you earn Bitcoins is based on your share of the system's total computing power. For example, even if you multiply your total processing power by a hundred-fold, if everyone else does the same thing, you'll still earn the same amount of Bitcoins in the long-term. (This is actually what is happening with CPUs -> GPUs -> FPGAs -> ASICs) It's an arms race where everyone has to spend money to add more and more hardware and use up more electricity just to stay still.
Anyways Bitcoin speculation is a zero-sum game so you will probably lose your money, don't do it
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On April 19 2013 02:12 wozzot wrote:Show nested quote +On April 19 2013 01:57 heroyi wrote:
someone on reddit made a fortune after taking a loan out of 30,000. There is some money in this if you are wise much like the stock game.
I was wondering if someone could explain to me how exactly the bitcoins are "mined" out. I understand some fundamental "basics" but don't quite grasp it yet (each bitcoin has own unique ID, mined from source code?, mining gets exponentially more difficult and time consuming as more is "mined" out and getting closer to the "limit").
Still unsure as to how it is formed from groups of people "renting" out their cpu and gpu to "farm" them How Bitcoin mining works is that your computer generates SHA-256 hashes of numbers based on the existing blockchain (the total record of all Bitcoins mined and of all transactions), and if one of your hashes begins with a certain number of zeros, the system rewards you with X (currently 25) number of BTC, lottery-style. The funny thing is that the rate of Bitcoin generation is always constant: the number of zeros that your hash needs for you to receive the Bitcoin reward changes based on how much processing power is in the entire system, so the rate at which you earn Bitcoins is based on your share of the system's total computing power. For example, even if you multiply your total processing power by a hundred-fold, if everyone else does the same thing, you'll still earn the same amount of Bitcoins in the long-term. (This is actually what is happening with CPUs -> GPUs -> FPGUs -> ASICs) It's an arms race where everyone has to spend money to add more and more hardware and use up more electricity just to stay still. Anyways Bitcoin speculation is a zero-sum game so you will probably lose your money, don't do it
ahhh ok this really clears a lot of things up. Thank you very much.
edit: been on reddit so long now I was trying to upvote you 
On April 19 2013 02:09 c0ldfusion wrote:Show nested quote +On April 19 2013 02:02 SpeaKEaSY wrote:On April 19 2013 01:57 heroyi wrote:+ Show Spoiler +someone on reddit made a fortune after taking a loan out of 30,000. There is some money in this if you are wise much like the stock game.
I was wondering if someone could explain to me how exactly the bitcoins are "mined" out. I understand some fundamental "basics" but don't quite grasp it yet (each bitcoin has own unique ID, mined from source code?, mining gets exponentially more difficult and time consuming as more is "mined" out and getting closer to the "limit").
Still unsure as to how it is formed from groups of people "renting" out their cpu and gpu to "farm" them I've also read stories about people selling their cars and taking out loans to buy bitcoins... one day before the crash. I don't read reddit a lot, but the day of the crash at the top they had a suicide help post O_o Basically, mining is finding valid solutions to complex math problems. When you find a valid solution to a block, you get rewarded with coins. I don't know about renting, but I know people participate in pools. Basically, a bunch of people connect to a server which divides the work amongst everyone. Every math problem your computer solves gets added up and counted as a share of the total number of math problems it takes to "mine" a block. Once the block is mined, the coins are divided up amongst the people in the pool proportional to the amount of shares that person has submitted. Do you guys use pools or mine individually? Btw I expected TL to be a good place to learn more about the technical details and the mechanics of bit coins. I suspect that this isn't the right place to talk about the economics though.
TL has quite the pool of knowledge to give some good idea (not saying everyone including I). From what I understand you want to to mine in pools (unless you have an extensive power grid behind your house) also makes you less, albeit not much, prone to attacks from crackers
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By the way if someone has useful information that wants to get added to the op just PM me.
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On April 19 2013 02:04 FFGenerations wrote:
i dont understand
why do you mine money (bitcoins)? why is it even possible? how can that be
i thought its just a currency, you buy some bitcoins with your $ then thats it.
but theyre giving away bitcoins randomly to people aswell if you crack some computer encryption thing?
I don't fully understand exactly what is going on, but the computations they are doing are basically to confirm that when someone sells/transfers a bitcoin, that they actually own it. This ends up being quite computationally intensive, so to encourage people to do these computations they provide them bitcoins as compensation. As processing power increases, the amount paid per computation goes down. At this point the only real way to make any money mining bitcoins is to use specialized chips which cost a ton to do the computations. Your graphics card could do them, but you would spend more in electricity then you would make.
edit: wozzot has a better explanation 3 posts above me that I missed
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Unless you have an interest in using bitcoins to purchase drugs or other illicit materials within the next year or so, do not bother investing in them. It will not pan out.
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Dont think bitcoins will be useable to do transactions as long as the price fluctuates so much.
If you accept 5 bitcoins at 100 ea for a 500$ payment by the time you try to exchange thoose for $ they might be worth either 250 or 1000, there is no way companys could work with this besides accepting bitcoins at a verry low price but then it wont be atractive for the customer to pay with them.
I dont realy see a big future for them and consider them more to be a gimmick then a real solution or alternative for gold and currencys, but they can be nice to speculate with as their amount is limited, a bit like artificial gold.
If they crash again back to the price before the whole rise started (wich is below 10) i will definatly buy some for fun and giggles.
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On April 19 2013 02:09 c0ldfusion wrote:Show nested quote +On April 19 2013 02:02 SpeaKEaSY wrote:On April 19 2013 01:57 heroyi wrote:
someone on reddit made a fortune after taking a loan out of 30,000. There is some money in this if you are wise much like the stock game.
I was wondering if someone could explain to me how exactly the bitcoins are "mined" out. I understand some fundamental "basics" but don't quite grasp it yet (each bitcoin has own unique ID, mined from source code?, mining gets exponentially more difficult and time consuming as more is "mined" out and getting closer to the "limit").
Still unsure as to how it is formed from groups of people "renting" out their cpu and gpu to "farm" them I've also read stories about people selling their cars and taking out loans to buy bitcoins... one day before the crash. I don't read reddit a lot, but the day of the crash at the top they had a suicide help post O_o Basically, mining is finding valid solutions to complex math problems. When you find a valid solution to a block, you get rewarded with coins. I don't know about renting, but I know people participate in pools. Basically, a bunch of people connect to a server which divides the work amongst everyone. Every math problem your computer solves gets added up and counted as a share of the total number of math problems it takes to "mine" a block. Once the block is mined, the coins are divided up amongst the people in the pool proportional to the amount of shares that person has submitted. Do you guys use pools or mine individually? Btw I expected TL to be a good place to learn more about the technical details and the mechanics of bit coins. I suspect that this isn't the right place to talk about the economics though.
I mine in a pool, because at the rate I mine, it could take me a month before I found a block. This is for litecoin by the way, for bitcoin, the difficulty is so high that it's not profitable for someone like me to mine them (you can forget about solo mining in bitcoin, it's too difficult so people just participate in pools). The reason bitcoin is much more difficult to mine is partially because it's been around longer, but also because it's easier to mine with specialized hardware called ASICs and FPGAs that are designed to mine way more efficiently than your CPU or GPU. Some people spent tens of thousands of dollars on hardware so they can mine like 50+ coins a day, but that's out of reach for the average Joe.
Litecoin is designed not to be able to be mined with this hardware, so right now it's profitable to mine with GPUs (but no longer profitable to mine with CPUs). Of course, there are people who are running 50+ GPUs across several computers so they can mine 100+ litecoins a day.
In the short term though, you're probably better off just buying the coins themselves and trading them on an exchange. The $300 you spend on a graphics card could buy you 150 lite coins at the current price of $2.
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On April 19 2013 02:24 SpeaKEaSY wrote:Show nested quote +On April 19 2013 02:09 c0ldfusion wrote:On April 19 2013 02:02 SpeaKEaSY wrote:On April 19 2013 01:57 heroyi wrote:
someone on reddit made a fortune after taking a loan out of 30,000. There is some money in this if you are wise much like the stock game.
I was wondering if someone could explain to me how exactly the bitcoins are "mined" out. I understand some fundamental "basics" but don't quite grasp it yet (each bitcoin has own unique ID, mined from source code?, mining gets exponentially more difficult and time consuming as more is "mined" out and getting closer to the "limit").
Still unsure as to how it is formed from groups of people "renting" out their cpu and gpu to "farm" them I've also read stories about people selling their cars and taking out loans to buy bitcoins... one day before the crash. I don't read reddit a lot, but the day of the crash at the top they had a suicide help post O_o Basically, mining is finding valid solutions to complex math problems. When you find a valid solution to a block, you get rewarded with coins. I don't know about renting, but I know people participate in pools. Basically, a bunch of people connect to a server which divides the work amongst everyone. Every math problem your computer solves gets added up and counted as a share of the total number of math problems it takes to "mine" a block. Once the block is mined, the coins are divided up amongst the people in the pool proportional to the amount of shares that person has submitted. Do you guys use pools or mine individually? Btw I expected TL to be a good place to learn more about the technical details and the mechanics of bit coins. I suspect that this isn't the right place to talk about the economics though. I mine in a pool, because at the rate I mine, it could take me a month before I found a block. This is for litecoin by the way, for bitcoin, the difficulty is so high that it's not profitable for someone like me to mine them (you can forget about solo mining in bitcoin, it's too difficult so people just participate in pools). The reason bitcoin is much more difficult to mine is partially because it's been around longer, but also because it's easier to mine with specialized hardware called ASICs and FPGAs that are designed to mine way more efficiently than your CPU or GPU. Some people spent tens of thousands of dollars on hardware so they can mine like 50+ coins a day, but that's out of reach for the average Joe. Litecoin is designed not to be able to be mined with this hardware, so right now it's profitable to mine with GPUs (but no longer profitable to mine with CPUs). Of course, there are people who are running 50+ GPUs across several computers so they can mine 100+ litecoins a day. In the short term though, you're probably better off just buying the coins themselves and trading them on an exchange. The $300 you spend on a graphics card could buy you 150 lite coins at the current price of $2.
Very interesting info. Thanks bro.
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On April 19 2013 01:42 0x64 wrote:
The Bitcoin paradox:
The value of the bitcoin comes from how much people trust it. If the value is stable, people will trust it more, if they trust it more, the value rise and people suddenly have no reason trading it, as holding it benefit you more, the value start rising until it become untrusted again and lose value, it's a mathematical pendulum.
That's exactly the point I was trying to make earlier. This seems so obvious, especially as the number of BC is limited. Getting even close to the limit could definitely start a selling frenzy that would burst that bubble.
In a way, I think bitcoin are a a uncluttered representation of our monetary system. As much as it is independant, it is not different, because people are attracted by the rising value of the coin, not what they can trade for it. Story of our greedy world...
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If I read that correctly, Bitcoins require an exponentially increasing amount of storage space and processing power as the number of users and transactions increases. Not exactly something I would consider a long term solution...
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EPT
