Bitcoins

Anybody else dabbling in bitcoins? Any bitcoin millionaires?


www.bitcoin.org

Cliffs : Online peer to peer currency. Buy them or mine them using CPU or GPU's

Pros : You can mine bitcoins w\ your computer hardware, quasi anonymous, easy transactions

Cons : Security issues, rampant hackers/crackers/and other unsavory charactors, market prone to manipulation, ever increasing difficulty makes mining gains less and less.


I started around 45 days ago and regret not having started mining sooner. Invested around $1500 in hardware and cashed out around $800 by the end of my first month.

Probably too late to jump into the mining aspect of it, but it has been a fun ride over the last month or so.

Here's how my office is looking nowadays. Also roaring loud and a toasty 80-90f at all times.
http://i940.photobucket.com/albums/a...IMG_1327-1.jpg

I am thinking of getting some hardware and doing this. I just need to raise the capital.

Someone explain it to me? :(

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Originally Posted by Sapphire

Someone explain it to me? :(

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It's a high-tech pyramid scheme.

The vast majority of all bitcoins are owned by its creators. Something like half of all possible bitcoins (the total amount is limited) in the first month or so. Then they or others that hopped on toward the beginning periodically drum up business for it (often by spamming an article to a site such as Slashdot) to raise its value and make their imaginary fiat currency worth something. The more total coins that have been "mined," the longer it takes to get the next bunch, part of the useless algorithm crunching process that "mines" the coins.

The people at the beginning try to get others to join in such that all the time, money, and effort they spent can be worth something. The coins gained some legitimacy when the Electronic Frontier Foundation began accepting them as a form of donation, but after the recent hackings, the EFF has since rescinded that option, and bitcoins are less reputable than ever.

Meanwhile, bitcoins are most commonly used for illegal transactions (drugs, etc.) because they are "untraceable."

Ryllharu :

Most bitcoins being used for illegal transactions is a misconception. In fact, I think they shut down new account creation for silk road and the fed's are investigating them... not like anything is stopping people from buying drugs w\ USD.

It's really late to be mining because the difficulty has gone up so high whereas the price of bitcoins has dropped and been hovering around 13-14 for a couple of weeks. Probably not worth making a huge investment at this point.

I would just like to kindly point out that the us dollar is also an imaginary currency. Literally backed by nothing aside from debt and the faith that we can keep it afloat. Or I've also seen people honestly saying that the dollar is backed by our military and the fact that if you don't use it, we'll bomb your country. If everybody knew the USD was worthless we'd already have seen the dollar collapse.

I still don't understand how this works. What exactly is "mining" and what does your hardware do to mine bitcoins? Why is mining getting "harder"? Once you mine bitcoins how do you turn it into cash?

Also, I have an HD6950 and i5 2500k@4.5ghz. Is it worth it to try to mine bitcoins using this equipment? I see that most people are using multiple video cards.

@Janice: Your hardware is cracking useless encryptions. The encryptions get more complex the more coins are mined. Think of it like Folding@home but with no actual useful math being performed.

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Originally Posted by itadakimasu

I would just like to kindly point out that the us dollar is also an imaginary currency. Literally backed by nothing aside from debt and the faith that we can keep it afloat. Or I've also seen people honestly saying that the dollar is backed by our military and the fact that if you don't use it, we'll bomb your country. If everybody knew the USD was worthless we'd already have seen the dollar collapse.

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That is totally true about the US dollar. You'll notice that I didn't make any claim about other fiat currencies not existing (there are many).

As for the US dollar being backed by the military threat...given the US's actions in Iraq (which switched to the Euro to deal in oil), the government's hatred of all things Iran (which also has switched to the Euro but is far stronger militarily), and the rumor that Libya was also threatening something similar, I wouldn't say that statement is a totally baseless assertion. ;)

That the US Dollar is a fiat currency doesn't make bitcoins any less of a pyramid-scheme.

Can you go more into this "cracking useless encryptions"?

I agree with Haru about USD, when I get the funds I'll GTFO and buy gold/silver or something.

Your computer is crunching numbers. Like how folding@home performs segments of computational simulations of protein folding, or how a fluid dynamics program analyzes by iteration. Only bitcoin mining doesn't do anything nor are the results used for anything. It is only crunching numbers for the sake of crunching numbers.

How does that create monetary value??!?!!

Well that's a shame. At first I thought this was a service where people can loan out their computer hardware in exchange for income, but if there's no gain to be made out of the used cycles, then I can't see how this currency could maintain legitimacy.

Sounds like that old AllAdvantage bullshit.

Edit: http://forum.bitcoin.org/index.php?topic=7427.0
....this looks like some technical analysis crap to me. Fuck that noise.

Hey, I made about $40 a month in fifth grade with AllAdvantage :)

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Originally Posted by Janice

Hey, I made about $40 a month in fifth grade with AllAdvantage :)

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Yeah and probably used up all of your mom's AOL minutes!

So, bitcoin breaks $1000/coin now. I remember back when this thing was like $16/coin. Anybody become millionaires from this?

Mining isn't useless.

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Mining is a distributed consensus system that is used to confirm waiting transactions by including them in the block chain. It enforces a chronological order in the block chain, protects the neutrality of the network, and allows different computers to agree on the state of the system. To be confirmed, transactions must be packed in a block that fits very strict cryptographic rules that will be verified by the network. These rules prevent previous blocks from being modified because doing so would invalidate all following blocks.

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So the point of mining is to consolidate the records of bitcoin transfers in a way that the transaction record can't be tampered with. Miners are "paid" in bitcoin for performing that service to the community of bitcoin users.

I wonder if mining even pays the electricity bill anymore. The original inventors surely have already cashed in.

I'm not a bitcoin fanboy, but I do think bitcoin is valuable as a currency. It's for moving money around.

There's one thing it's not: an investment*.

Yeah, the prices are volatile at the moment. Businesses aren't going to like using bitcoin until the prices have a "correction" and stabilize. But there are already enough out there taking the gamble to make it worth at least considering buying bitcoins instead of using your VISA or debit card, which have pretty darn high transaction costs.

* You can, in principle, treat it like forex. But that is beside the point. Bitcoin's value is driven by low transaction costs.

Either that or itadakimasu is too busy joyriding in his shiny new lambo to reply to this thread.

now i'm kinda sad that i formated my hdd few years ago - it had 100 bitcoints on it or pretty close to it.

I always looked at it as a virtual Ponzi scheme that in the end, cause it's not moderated by any government institution or bank will cause a lot of people to go bankrupt as they are treating Bitcoins as an investment. Like any virtual currency, it gains it's momentum through the trade of real life currency in to these virtual currencies that are eventually going to pop and deflate and the early adopters who created this and quite possibly cashed out by now, are probably laughing at people still trying to keep it going as they attempt to buy one bitcoin with their paycheque lol.

This new influx of cash flow that new people fall for it that keep trying to induce new life in to it, will eventually catch up as the value of bitcoin is far exceeding the value of the real life currency by 10000 fold. That in itself means that real life currency traded for bitcoin is long gone and anyone caught with a bitcoin at the end cannot get it back as the cash flow is not there anymore with this kind of transaction. Gone, invisible, taken by someone else. As government do not govern or have laws for this, people will be out of luck and there is no legal ground to sue anyone. The exchange from cash to bitcoin and bitcoin to cash is just not plausible. Once you have bitcoin, better prepare to keep it. Money well wasted. :P

The only real currency is Gold. Don't be fooled. Bitcoin is the greatest Ponzi scheme ever as no government wants to pass laws to govern it or protect the people from making this unwise investment even though it's not an investment lol.

Just my thoughts on the matter. I've had a bad feeling about Bitcoin since first reading about it 2 1/2 years ago. I don't see any good from it or about it.