Bitcoin & the crypto-currency revolution. (get some here).

[Xamonas Chegwé]

There have been scares about its safety. I remember this one a month or so back...

http://www.bbc.co.uk/news/technology-23664743

A flaw in Android software rather than bitcoin itself but anything that only exists virtually is potentially vulnerable to coding errors.

[mistermack]

There hasn't been enough gold in fort knox to cover all the imaginary money floating round for a very long time. you have seen what happens when too many people want to cash out on their imaginary money

Yes, of course that's true. But it covers part of it. Governments have vast assets besides gold. And potential assets.
Not all of it is instantly convertible, but it's still there. The same goes for reputable banks. They haven't got all of your money in cash, but they have loans and mortgages. Money lent out with various types of security.

Anyway, I really don't get all this antagonism towards governments. They might not be perfect, but they are a damn sight better than nothing. If someone kills your mother, the government investigates, and hunts them down, and puts them in jail for years. I can't see bitcoin doing that, or any of the other things that governments do. I'm perfectly happy for them to issue the money that I use.

[Skepticus]

Funnily enough I came across this concept just a few weeks ago and it seems (on the face of it) a great idea. (Nearly started a thead about it myself.)
I think it's had some problems, though. Such as a few people finding that their Bitcoin wallets have disappeared (I could be wrong there)?

Hi Jack. I cant help looking at your avatar and feeling safer about my bitcoin wallet.

Seriously. Bitcoin wallets are no different than ANY important valuable data. You back them up. You keep them in a safe (encrypted) place. and dont leave them where others can snoop. It pays not to hold any large amount on a machine that is connecetd to the net persistently. I send only a small amount to my android and spend from there. My stash is in cold (offline) storage. It's not realy very hard to stay safe. If you use an online wallet then you need to check the credibility of the company. There are a few large wallet and payment providers that are maturing and seem very proffesional. People who have had wallets stollen have done foolish things without exception.

[Skepticus]

Ah, I see you've met mistermack.

Yeah what a honor huh?

[Skepticus]

Thanks for taking the time to share the knowledge.

It's something I've been interested in for a while, but I still don't have my head completely around. Anyway, I just downloaded the android app and desktop client but I'm not sure what's next

Next.. I put on a BarryWhite CD and top up your wine glass (Shermer style), while you slip into something more... Oh wait a minute... that was just a dream. Sorry, must have nodded off for a bit.

Oh yeah! the bitcoin stuff. Well you should be able to use the desktop client to create an address which looks like this: 1MaRTwADnusTMQVoTcMD87jAHW3QxGdhc1

I dont actually have the current QTclient on the distro I'm using. I'll have to reboot into another linux distro and confirm the details were right but basicly.

Open the transactions tab and look for an adrdress like the one above.

That will be what you need to copy and paste anywhere you want to show others where to send bitcoin.

The desktop client will be taking quite a while to download the blockchain BTW, so dont expect it to be up to date with recent transactions for a while. You can still recieve with the address no probs, but the payments might not show up for a day or two.

If you want to get quick results then the andriod app will be the go. I don't know which one you have but mine shows and snaps QR codes, so the address above would look like this:

NB: I had to save that online somewhere (tinypic.com) for the forum software (no upload), but once you have that, you could even put a QR code in your signature so others could snap your address onto their android when they want to make a payment too (or request a payment from) you.

PS: As I discovered when I tried that, the signature limit of 200 pixels stoped me, so I'll have to resize and re post it to use in my sig. SO...

Smoke me a kipper; I'll be back for breakfast.

[Skepticus]

There have been scares about its safety. I remember this one a month or so back...

http://www.bbc.co.uk/news/technology-23664743

A flaw in Android software rather than bitcoin itself but anything that only exists virtually is potentially vulnerable to coding errors.

That's why software needs to be edge tested and used with caution. You can only loose what you risk. My bitcoin are kept offline in cold storage. They are backed up on a thumbdrive which is encypted. I only put on a hot wallet what I need for the time being. Bank money also exists (almost entirely) as a virtual digital commodity. The software they use is also prone to bugs, that can be exploited. The advantage of open source, is that many eyes on the code can far more promptly fix (in hours or days) what third party, proprietary software developers take weeks or months to discover and fix. I remember the FUD they used to publish as news when credit cards & ATMs first came out. Im sure there were plenty of real bugs to iron out, but as the average journo discovered the luxuary of 'plastic cash' the scare stories faded into the background of obscurity. You won't hear a fraction of the smarmy FUD that is actualy deserved about banks and wall street, from the vested intrests of the popular media. Anyhow, there's plenty of info out there that can teach the simple rules of playing it safe. Most of these scares only ever effect the blatently foolish.

[Azathoth]

What distros you using? Derail tiem

[Skepticus]

The major issue I foresee with a bit based currency is how many bits are out there - probably more than I'd care to speculate about and then some.

You mean the number of bitcoins out there?

If so, the number of bitcoins in existance as of this moment is 11,723,375 BTC

Google bitcoin watch.

[Skepticus]

What distros you using? Derail tiem

They're both crap bro. Ubuntu 12.04 LTS with that poxy new KDE desktop and no multimedia codecs & the other one is Netrunner (something) with numerous config problems which I have yet to sort out. I installed on a new drive a few months back now and never got things properly sorted. I need a week or so just on planning partitioning and re-installing a good system for day to day work & play.
I'm enjoying my android phone more than anything these days.

[Tyrannical]

Bitcoin also seems a bit environmentally unfriendly. If I understand correctly, bit coins are mined through CPU cycles being used to solve complex math equations. But the solution for these equations have no use except to require physical resources to create virtual currency.
Why I bet you could even calculate the amount of natural resources wasted through electricity it takes to make a bit coin

[Skepticus]

Bitcoin also seems a bit environmentally unfriendly. If I understand correctly, bit coins are mined through CPU cycles being used to solve complex math equations. But the solution for these equations have no use except to require physical resources to create virtual currency.
Why I bet you could even calculate the amount of natural resources wasted through electricity it takes to make a bit coin

CPU cycles? Yeah... That takes me back... [where's the nostalgia smilie?]... [puts on grampa voice]... 'In them days you could buy a bag of candy biger than yer head, two packs of fire crackers, and still have change enough from 350Mh/s to go to the 'talkies' ta see Charlie Chapplin.'

Then they discovered that GPUs could do a far more efficient job, but I never did that. I waited until FGPA (field programable gate arrays) were first being designed and jumped on that waggon ASAP. You could do 10x as much hashing for 1/10th the power. Until... A couple of years later, (lastyear) along came ASICS (application specific intergrated circuts) and they sell these boxes you just plug into USB and mine on a Rasberry Pi that use a tiny fraction of the energy for a huge increase of hashing power. The efficiency is of course only such a huge advantage if all other variables stay the same (which they don't). For instance, a 10 fold increase in hashing power will make no difference if at the same time, 10 times as many people start mining with the same equiptment. It's a thing that has to be determined by free market economics. Sure we'd love to make the hashing power more economical, (and it does happen all the time that new generations of equiptment are much more economical), but you can't limit the number of people who take up mining and increased numbers of miners, will drive down efficiency as the rate of coinage is held constant.

Nevertheless, we cant just say that the engery expended on hashing is a 'waste' because it's what enables the network to exist and produce the bitcoin in the firstplace. Furthermore it's not just the creation of economic goods (of the bitcoin themselves), but the ongoing security of the network that is being serviced by all those mining nodes. The incredible hashing power is what makes bitcoin so hard (virtualy imposible) to attack. Since we cant have our cake and eat it too (for now at least), it's best if we accept that the hashing power is a valuable comodity, generated with electricity, that is spent on both producing bitcoin and securing the network. Personaly, I think these are priceless products of hashing power and the cost in electricity is insignificant by comparison. If the power costs become too prohibitive from an individual POV, that is because the mining is not profitable enough to pay the electricity bill. People with the least efficient mining equiptment are forced to shutdown their mining rigs first, then there are that many less mining rigs out there to share the supply of bitcoin with. Up goes the dividend for each miner. So it's a trade off that is settled by market forces in a feemarket economy.

Meanwhile there is much promising research being done in cryptocurrencies to try and make the hashing algorhythm do some usefull work. The market leader in this is an alternative currency called Prime Coin, that uses a similar 'proof of work' algorhthm to find prime numbers, and has broken several records for the scientific quest to find new primes. I'm not sure how or why this translates into an economic comodity, in the scientific community, but evidently it does. That may lead to new growth in research on cryptocurency proof of work schemes that employ even more clever ways to do usefull things with hash power.

Another way to look at the hashing cost issue, is covered in an interview of the lead developer of bicoin, Gavin Andreesen, who had this to say:

New bitcoins are generated, or "mined," when computers succeed at solving increasingly complex equations. Bloomberg recently described this mining process as an "environmental disaster" because of the energy required to power the machines working on the problems.

The bitcoin mining process incentivizes people to be as efficient as possible and use as little power as possible to create bitcoins and to validate the transactions. The more efficient you are, less you spend on electricity and the more profitable you’ll be. In the future, I expect to see bitcoin mining in places where electricity is free or cheap. You could put solar array in the Arizona desert attached to bitcoin miners and instead of trying to ship that electricity all over world, you could ship Bitcoin all over the world. The output of bitcoin mining is heat. You’ll see bitcoin mining happening in places where people need heat anyway. I could imagine bitcoin heaters that, in addition to generating heat, generate bitcoin.]

So energy is just another comodity that can be digitaly represented as value spent on the comodities it is traded to produce. That by the way, puts another hole in the 'bitcoin is backed by nothing' argument. Energy is scarce and to create bitcoin requires significant investment in hardware and energy, that once paid for gives, a digital unit of trade. That in turn, I believe, will eventualy fund much more research, on how to efficiently produce electricity and hardware that is evermore economical at mining the ever decreasing remnants of bitcoin that are left to be mined. I have personaly been working on a solar power bitcoin technology idea for some time, and now the efficiencies of mining hardware are getting very close to that sweet spot that will make it viable. Viewed this way Bitcoin could actually finance a green revolution and generate a technological heyday in green power economics. For that to work the market for bitcoin as currency must keep advancing. That BTW, is why I have a dog in this race. I want MY inovations to have a future market to move into and to see a shift from just 'energy consumption' by bitcoin, to bitcoin driving the economic demand for green power technology.

[Azathoth]

What distros you using? Derail tiem

They're both crap bro. Ubuntu 12.04 LTS with that poxy new KDE desktop and no multimedia codecs & the other one is Netrunner (something) with numerous config problems which I have yet to sort out. I installed on a new drive a few months back now and never got things properly sorted. I need a week or so just on planning partitioning and re-installing a good system for day to day work & play.
I'm enjoying my android phone more than anything these days.

Give arch a shot. Best distro ever. FACT!

[MrFungus420]

The pizza-delivery boy just showed up.

What good are bit-coins?

[Skepticus]

The pizza-delivery boy just showed up.

What good are bit-coins?

Hi MrFungus,

Well clearly they will be of no use to somebody who doesn't yet accept them. You might have to pay in fiat cash this time but... (if you have a smart phone) go to the door and ask "do you accept bitcoin?" and he will probably say: "what's bitcoin?" and you just show him on your smartphone the bitcoin wallet app and tell him how you can send bitcoins from one person to another without any middle man or bank fees. If he is keen to try it out and has a smartphone too, he might just download and install a wallet app on the spot. Otherwise tell him to check it out and promise to tip him well if he comes back next time accepting bitcoin. Ask for a number you can TXT him on to send your next order. He may have special benifits like free pizzas (sometimes they get made with wrong toppings or dilivered to wrong adresses) that are unwanted for some reason. You might be able to hook up pizzas for half price or less, if you are not fussy about the topings etc. With bitcoin you don't need management to be involved. If the guy wants to pick up some bitcoin himself, then he has the perfect job to do it.

On the other hand. If you talk to your local pizza delivery shop manager, they might be very interested in supporting bitcoin. Apart from the usual exorbitant bank fees they pay on transactions, their guys usualy have to carry very expensive rental POS machines to accept creditcard transactions. Usualy a merchant will just want a small number of bitcoin customers at first, to save a litle bitcoin each week, but once they learn to exchange online for fiat, then they may even put up the We Accept Bitcoin Here sign.

Remember; Business people tend to quickly understand why bitcoin is in their best intrest, and they will see how it is growing fast and understand why. Banks are killing them and this is a fantastic win win. You are not a sales rep of a private firm trying to sell them bolloks. You are a customer doing them a huge favor. So tell them about it.

[Skepticus]

What distros you using? Derail tiem

They're both crap bro. Ubuntu 12.04 LTS with that poxy new KDE desktop and no multimedia codecs & the other one is Netrunner (something) with numerous config problems which I have yet to sort out. I installed on a new drive a few months back now and never got things properly sorted. I need a week or so just on planning partitioning and re-installing a good system for day to day work & play.
I'm enjoying my android phone more than anything these days.

Give arch a shot. Best distro ever. FACT!

Oh! yeah... I think I have a recent cover disk with a distro of arch on it here somewhere. That has more configarable back end stuff if I recall, and less futsy/glam GUI gimmiks. Thanks Az. I'll wack it on a virtual machine and take it for a spin first and if it's as good as you say I'll put it into my partition and install plan.