[AFAIK]

This thread is intended to be a technical discussion of bitcoin.
I will create another thread to discuss political implications.

viewtopic.php?f=85&t=151140

A simple way to picture Bitcoin is to think of it as digital gold. Coins are mined and traded anonymously. Inflation is fixed and no further mining will occur after 2014 (?).

Bitcoin is a digital currency, a protocol, and a software that enables;
-Instant peer-to-peer transactions
-Worldwide payments
-Almost no processing fees
-And much more

Bitcoin uses peer-to-peer technology to operate with no central authority; managing transactions and the issuing of bitcoins is carried out collectively by the network. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment systems.

The software is a community-driven, free, open-source project released under the MIT license.

Technical features

These are the basic features of any Bitcoin-like network;
-Bitcoins can be transferred between arbitrary nodes on the network.
-Transactions are irreversible.
-Double spending is prevented by using a block chain.
-Transactions are broadcast within seconds and verified within 10 to 60 minutes.
-Transaction processing and money issuance are carried out collectively through mining.
-Transactions can be received at any time, regardless of whether your computer is turned on or off.

Economic rules

These rules are enforced collectively by the Bitcoin network;
-Hard limit of about 21 million bitcoins.
-Bitcoins are divisible to 8 decimal places, yielding a total of approximately 21×1014 currency units. [Decimal places can be added in the future.]
-Transactions are cheap and mostly free.

Statistics

The Bitcoin network has been running continuously for more than 48 months, yielded impressive security features and grown significantly in the past year. As of April 2013:
Long block chain with more than 232,000 blocks.
One of the largest distributed computing network in the world with more than 65 terahashes/s.
Millions of USD in daily trade volume distributed across 50,000 transactions.
Total value of all bitcoins in circulation is over US$1.3 billion.
Only one major security incident in the protocol which was fixed in August 2010.

http://bitcoin.org/en/

There is a lot of misinformation/ ignorance being circulated about bitcoin.
To learn what money is read What has the government done with our money by Murray N Rothbard.

http://mises.org/money.asp

[Baff]

I tried farming bitcoin for a day...

But ultimately I was left with the very uncertain feeling that I was making any money.

The calculations are very arcane.

It's alot to work out. The number of cycles your GPU is kicking out. The amount of electricity it is using to do it.
The cost of that electricity. The exchange rate of bitcoin. The probability of mining a bitcoin.
The exchange rate from $ to £. (Bitcoins may only be exchanged for USD).

All these are so variable that anything as marginal as bitcoin mining is strongly precarious in my opinion.



I should get around to looking for some other method of processor farming I expect. Slave my machines out to movie renderers etc.

[AFAIK]

I think many miners have access to free electricity at their workplaces.

[Eran]

With bitcoins being so well known (and much more expensive than they used to be), I expect most mining is done by dedicated hardware of specialised people.

Much like gold mining, come to think of it.


What I love about bitcoin is that it is open source. That means that any security holes can very easily be exposed. The fact that few if any were, suggests to me that it is very solid.

[Baff]

According to what I've been reading...

There is a company that proposed making dedicated hardware.... and they advertise it, but they haven't yet delivered one.
They started at $500 and went up to $10,000.

Currently the optimum hardware is an ATI graphics card. (Which mines bitcoins about 2 x the speed of an Nvidia).

I think it's just too fast moving and small market to get dedicated equipment before all the bitcoins have been mined or the drop rate reduces the point fo doing so even more.

It could only ever have been a marginal profit at best for me with pre owned equiped. Perhaps £1-2 per computer per day. Add the overheads of a new computer into the equation and the maths gets even more ropey.

[AFAIK]

How long is the bit-chain now?
This could pose a major inconvenience as it grows longer.