Online Cash Bitcoin could Challenge Governments, Banks • Hacker News Board

Re: Online Cash Bitcoin could Challenge Governments, Banks

#151

Post by mike_esspe » Sun, Apr 17, 2011, 12:30 AM UTC

joeyh wrote: post #65

bonzoesc wrote: post #27

Earlier quoted context omitted.

Don't bother trying to get lucky on the 50BTC block bounty; join a pool that splits the winnings. Pools provide well over half the calculation capacity of the Bitcoin system, most are free to join and ones worth joining don't have any real requirements. I make about 1 BTC per day just with spare GPU cycles on my desktop; it's not a substantial amount by any means, just a test pool for experiments and playing with sof…

AFAICS, the benefit to being in a mining pool is you can make some bitcoins immediately, rather than waiting for a big, rare payout. There's no increased probability of winning due to pooling resources is there?

There is an increase of about 1% if the pool uses long polling. Pools are more well connected and notify your client, when block changes (without this you can work on an old block for some time before you get notification from the network).

Though this increase is eaten by pool fees :)

Re: Online Cash Bitcoin could Challenge Governments, Banks

#152

Post by reitzensteinm » Sun, Apr 17, 2011, 12:34 AM UTC

bonzoesc wrote: post #10

mshron wrote: post #6

As far as I can tell, the only way to actually stay anonymous and have a foothold in the bitcoin economy would be to exchange bitcoins for cash in person with someone. Even then, once you tried to combine that account with any other you owned that was traceable to you (record in an exchange, email sent to a client containing your bitcoin address) it would be easy to link them together, since the entire ledger is publ…

It's possible to run a Bitcoin laundromat; you control addresses A and D, laundromat controls B and C. Send money from A to B, receive from C to D. As long as the laundromat doesn't recycle addresses and moves a lot of cheddar, it'll be difficult to establish a linkage.

Actually, it sounds pretty easy to programatically establish that linkage if B & C are only used once. Just discount nodes that only forwarded money in their life.

You could make lots of noise by having hundreds or thousands or tens of thousands of nodes trading with each other - but automated analysis could still figure out what they're doing.

To effectively launder money you'd have to actually put it through active accounts that were actively transacting with the real world, and even then, only through each one once.

That sounds like a harder problem than laundering real money. There would likely need to be a real money step in there somewhere.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#153

Post by richcollins » Sun, Apr 17, 2011, 1:22 AM UTC

joe_the_user wrote: post #131

sage_joch wrote: post #45

I think the main takeaway is that governments are making a strong case for an alternative, decentralized currency: * preventing transactions they don't agree with * inflating savings away * freezing bank accounts of adversaries * seizing cash at security checkpoints

The problem is that since an alternative currency is still pretty purely hypothetical, we don't know with any certainty that it wouldn't be subject to similar abuses. Moreover, aside from inflation, the other abuses you list are essentially abuses of power and if governments maintain power - their official monopoly of force and violence, they will continue to be able to engage in these other actions. EI, I don't thin…

Why don't you include inflation in that list?

Re: Online Cash Bitcoin could Challenge Governments, Banks

#154

Post by richcollins » Sun, Apr 17, 2011, 1:32 AM UTC

lambda wrote: post #68

ataggart wrote: post #63

Earlier quoted context omitted.

>Why is Bitcoin a good currency again? It isn't, but almost anything can work if the community of users is small enough. As for why it isn't, we need to step back a bit. In a barter economy an exchange occurs when two individuals each produce something which takes time/labor/capital and which the other person values more than what they're giving up. For example, if I grow an apple, and you grow an orange, and we trad…

Is a $20 bill something of value? No, it's merely somewhat hard to forge, and accepted as currency by lots of people. Or how about an entry in a ledger on some bank's computer? The only reasons the $20 bill or the entry in the computer retain value are because there's a central entity that limits the creation of too many of them, and people accept it as currency in exchange for good, because they expect that other pe…

The dollar has fundamental value because you are forced to pay taxes and settle debts with it.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#155

Post by dpatru » Sun, Apr 17, 2011, 1:53 AM UTC

ZitchDog wrote: post #100

tcoppi wrote: post #87

Earlier quoted context omitted.

There is a finite amount of bitcoins because it is designed to mimic a natural resource - easy to "mine" at first, much more difficult to mine as time goes on, and eventually there are none left. If there were an infinite amount of bitcoins that could be generated, there would always be inflation in place roughly proportional to the amount of computational power being used to mine, and soon your bitcoins would be wor…

Rather than debating the validity of the Gold Standard (which is essentially what this discussion boils down to) I would direct you to a great set of podcasts from Planet Money[1] in particular [2][3] which discuss the general current thought on the Gold Standard, and show why most economists agree it is untenable in the long run. [1] http://www.npr.org/templates/archives/archive.php?thingId=13... [2] http://www.npr.…

You might want to read Rothbard's What Has Government Done to Our Money. It's available free both in pdf and mp3 at mises.org.

The tl;dr reply to the arguments in podcast 3 (banks fail if forced to redeem paper for gold) is that fractional reserve banking is incompatible with the gold standard. The gold standard treats paper money as mere warehouse receipts for gold. But bankers tend to issue more receipts than they have in gold, i.e., they commit fraud. When the public cash in their paper, the banks run out of gold, something that shouldn't happen if the bank only issued paper for gold in the first place. Rather than blame the bankers and put them in prison, governments have taken away people's right to use gold as money and even to own gold. Far from an argument against the gold standard, the history related in your reference 3 (about the collapse of the English and American banking industries) is a lesson of government tyranny, bank fraud, and an argument for real money as a check on government power.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#156

Post by danenania » Sun, Apr 17, 2011, 2:30 AM UTC

ZitchDog wrote: post #97

powertower wrote: post #86

Earlier quoted context omitted.

Speculation is exactly what is required for Bitcoin to take hold as a legitimate currency. Without speculation it's a product/service no one wants (because it has no value or potential), by definition. Before today Bitcoin was "just" interesting to me, after reading this I now see the potential it has. I think I'm going to run an experiment and also accept payment for my product in Bitcoins: http://www.devside.net/se…

I fundamentally disagree. The purpose of currency is to facilitate efficient trade. It is dangerous when currency is seen as an appreciating asset (deflation) as this will encourage hoarding (speculation) and discourage spending and investing.

These are well-worn fallacies. First, falling prices do not cause hoarding--demand for goods will increase if anything. Mild deflation is actually the sign of a healthy economy, competition, and technological innovation. Just look at the consumer electronics industry. Why do people buy iPads when they know a cheaper and better one will come along in the next couple years? According to your theory, wouldn't they just sit on their money?

The second fallacy is that 'hoarding' (long term saving, in other words) is a problem for an economy. It simply demonstrates a longer term time preference, which is actually necessary for larger and more complex uses of capital which can often take 10-20 years of investment and planning to pay off. It is axiomatic that the only purpose for hoarding cash is to eventually spend it. Trying to eliminate this 'problem' by confiscating wealth through inflation is both short-sighted and immoral.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#157

Post by tocomment » Sun, Apr 17, 2011, 2:53 AM UTC

sgornick wrote: post #59

clistctrl wrote: post #57

Earlier quoted context omitted.

How do I transfer my coins from one computer to another? I found digging through my application data to find the wallet.dat file is unintuitive.. along those same lines, how many less technical users have lost extremely important data because they never made a backup? Additionally what if I want one wallet so I can go to a physical store, and use my phone to pay? The shuffle seems very inefficient to me. Perhaps peop…

Baby steps. Try starting out using an eWallet, such as MyBitcoin: http://www.mybitcoin.com Then buy your Bitcoins with PayPal here: http://coinpal.ndrix.com use the bitcoin address generated at MyBitcoin. You'll get your bitcoins in less than an hour at MyBitcoin. Then those bitcoins can be spent using your example, at StrongGames.

I just installed the bitcoin software and bought some bitcoins at your link and I got this email:

"...If the block count in your client matches the one shown at bitcoinwatch.com, your client should already show the transaction. Otherwise, wait for the two block counts to match..."

My block count says 51,486 but the one at bitcoinwatch.com is over 100,000. Why aren't they the same? Will they be?

Re: Online Cash Bitcoin could Challenge Governments, Banks

#158

Post by burgerbrain » Sun, Apr 17, 2011, 3:06 AM UTC

gaius wrote: post #140

pyre wrote: post #81

Earlier quoted context omitted.

Exactly. The vendor wouldn't be paying the tithe to the credit card processor.

I can already do free transfers to anyone's bank account: it's called BACS, every UK bank account supports sending and receiving BACS transfers, the vast majority through a web interface. Takes 3 days, but who cares?

"Takes 3 days, but who cares?"

Who wouldn't care? At 3 days, you might as well just mail around cash.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#159

Post by kronusaturn » Sun, Apr 17, 2011, 3:07 AM UTC

OstiaAntica wrote: post #142

seanalltogether wrote: post #94

Earlier quoted context omitted.

You know I've thought about this for awhile and I'm starting to come to the conclusion that inflation is a good thing. Having a currency that doesn't inflate is bad for 2 reasons. 1. The population keeps growing, 2. Humans are hoarders. Having currency inflate encourages society to use their money instead of squirreling it all away. Everything in life devalues over time and I don't think currency should be any differ…

No one squirrels away money-- savings in a bank is still reinvested into the economy, by the bank through lending. Unless you are literally sticking money under a mattress, it gets circulated.

But we're talking about bitcoins, which are extremely easy to just leave sitting on your hard drive rather than invest.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#160

Post by pessimizer » Sun, Apr 17, 2011, 3:36 AM UTC

rapind wrote: post #104

ovi256 wrote: post #84

Earlier quoted context omitted.

They don't need to shut down the network to win, just like you don't need to destroy an adversary's weapons to win a battle. You can win by destroying his will to fight. In this case, scare bitcoin users into abandoning the currency. Some high-profile prison terms would ensure that.

This has worked really well in the war on drugs , I.e. three strikes law. It's pretty impractical and extremely expensive to fill up your prisons with bitcoin holders.

But drugs get you high. Bitcoins aren't an actual commodity.