If anyone's checked out the bitcoin source and tried to compile it, you might notice that it is... well, kind of bloated. By my standards anyway. It requires huge numbers of gigantic libraries and so forth. Way more than what it actually does. All you really need are some TCP/IP, database, and crypto algorithms.
In fact, unless I'm missing something major, seems like we're really just talking about a glorified IRC bot with some security features... Does anyone else get the impression that Bitcoin's current back end is over-complicated? Also, does this argue in favor of writing (or anticipating someone writing) a cleaner/smaller version?
I've kind of stayed out of this discussion because I think one's interpretation of the product depends on more on your views about economics and politics than any disagreement about bitcoin's properties. And Tyler Cowen's skepticism makes me think that bitcoin proponents are deep enough into Rothbardville that our lines of engagement would get fruitlessly broad.
But I'm curious on one point - why do some people have this dramatic 'coins'll be worth thousands or nothing" attitude. I can see the zero, and I can get my head round the viewpoint where it's...
66% pullback in price this weekend. This certainly isn't a market for the fainthearted.
My probability distribution looks something like 90% chance of going to 0 and 10% chance of going to multiple hundreds of dollars.
My downside is limited to having paid market price for 2 video cards and a power supply if bitcoins go to zero. My friend just built a mining rig with three cards for around $650. I tried to talk him out of it but the concept of free money seems to override people's ability to make cost benefit analysis.
Would anyone care to comment on the recent Mt Gox hack n' crash?
Personally, I'm thinking that this very bad. The currency won't look as good the mainstream, and I'm anticipating panic sells as soon as the exchanges get up and running again. I'm agnostic as to whether Bitcoin will die or not though...
So I had a thought about cryptographically secure titles of ownership.
Let's say we make a public-private key pair that is a hash of some uniquely identifying biometric data. Much like namecoin we then use the blockchain to encode information, specifically contracts. You can sign contracts with your private key and anyone can check what contracts you've signed with your public key. This allows you to reliably signal certain sorts of intentions and know that everyone knows that you are signalling these intentions.
Let me preface by saying that I haven't thought in depth about bitcoin so I am definitely willing to change any of the opinions I currently hold.
I do not understand why people are especially excited about bitcoin. It's certainly moderately interesting and could provide some benefits but doesn't seem revolutionary in any sense I can see. I'd like to hear solid arguments for why bitcoin is something radically different from other currencies rather than a moderate upgrade on currency technology which will eventually be incorporated into existing currencies.
I...
I share with your general impression, but I think your phrasing casts bitcoin advocates as idiots which is a poor discussion tactic.
Yes, I had an ulterior motive in starting this topic right this moment. See, I'm trying to close the inferential gap in explaining Bitcoin to the layperson, so I wrote up a blog post explaining the relevant cryptographic pre-requisites. (It's based on discussions with an economist who plans to write about Bitcoin soon.)
I would appreciate any corrections. Also, this is another case of me claiming to be better at explaining stuff than most people, so see if I live up to the standard (preferably from those that don't already understand this stuff). The ec...
UPDATE: For those of you who are interested in comparing your hash-fast mining rig to FLOP-fast supercomputers out there, I just recently noticed that Bitcoin Watch reports both the network's hashrate per second and its FLOP rate per second. I don't know how they derived the second figure (see "User:"jimrandomh's comments on the difficulty of comparing hash-type and floating point computations).
Dividing the two, it's implicitly assuming ~12,700 floating point operation equivalents per computed SHA-256 hash. For the 2+ users among us that have a...
Just got my second card running a few hours ago. If it all goes bust at least it will have been an entertaining ride.
Building a mining rig is no longer that attractive with the price doubling for the video cards that are good at it.
edit: looks like you can still build a 1Gh rig for $800 with a payoff time of <30 days presuming power is cheap and price/difficulty doesnt drop too hard.
Well, this is just the difference in worldview between two camps, based on their differences in experiences and research.
See, the anti-inflation types among us have been trying to live responsible lives, saving for the future. We thought that the economy rewards those that defer their consumption until later and who invest for the future. But at every turn, those in charge of managing the money supply have stymied us. They've jacked up the money supply, making our purchases more expensive, all while denying the severity of it. (In the case of technological improvements that imply a lower effective price, they've made them more expensive than they would otherwise be.)
This debasement of the currency has amounted to a subtly-hidden transfer of wealth to privileged classes. The government has granted financial intermediaries privileged positions and, through the central bank, funded new spending with printed money that will never be paid back, murdering our ability to earn a fair inflation-beating return on our savings, when the market is supposed to reward those who defer consumption. And then it takes even more to bail out failing business, making it impossible to decouple ourselves from the rot in the economy, all while telling us to lock up our money in IRAs invested in government approved dinosaur businesses .
Folks that have actually had to live through this economic insanity "get it". Those who go ever deeper into debt to double-down on economy's increasingly lost production structures don't see the problem -- they want their debts inflated away. They want that new money to slosh around and get the dumb rubes back spending spending, spending -- on anything, it doesn't matter how short-sighted, how wasteful, how ill-considered: an arbitrary economic metric needs to act like it did in the glory days of 2005 (when the financial sector was busy defrauding pensions), and, well, that's that. That's the key to economic prosperity.
Well, the responsible class is fed up with this. That's what drives these people to alternative currencies that can potentially protect them from Fed asininity, reasoning that an appreciating currency doesn't quite sound so bad. They like the idea of a currency with a predictable supply so a tiny committee can't arbitrarily decide to give a big f***-you to the savings of the only folks actually driving the real production these days. And, when a bank wants to make irresponsible loans with the currency, they want to be able to decouple themselves from the shenanigans by holding onto real, uncopiable units that will keep their value when the house of cards comes tumbling down.
But unless you've tried to actually save for the future, none of this makes a lick of sense to you, and I can understand that. But maybe now you can see why an un-debasable currency might appeal to some folks that we should care about quite a bit. [/rant]
See, the anti-inflation types among us have been trying to live responsible lives, saving for the future. We thought that the economy rewards those that defer their consumption until later and who invest for the future. ...
I know that this is labeled as a [rant] but it really is a terrible argument. Inflation rates do not affect investment returns in the long run. High inflation only hurts those who directly hold currency. High surprise rises in inflation only affect those who have fixed-income investments, or those who are exposed to nominal fluctua...
We've started a habit of creating periodic Bitcoin threads to confine discussion thereof to those threads and prevent excessive proliferation of Bitcoin topics in the discussion section. Here is a link to the last one, which links the other discussions. Lot's to talk about, and another bounce in Bitcoin's value (up to 33 then down to 24), so share your links and thoughts!