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gwern10

If you value 1 BTC at $25, you should just buy BTC with cash directly.

I should, but I'm not confident enough of my analysis to spend anything but some electricity & time, and I'm very low on money anyway.

If I had a stable income and some savings, I hope I would have the intellectual honesty to invest a few hundred/thousand dollars* into bitcoins (and probably gold while I'm thinking about high-payoff speculation).

Apparently, either most people have not considered that a bitcoin may eventually be worth more than $10,000, or they think the probability of this happening is closer to 0.01%.

Could be both, plus a general refusal by educated/techie types to act on reasoning that smacks too much of lotteries and Pascal's Wagers.

* Past that I think you get into interesting issues about how much and whether to start discounting bitcoins because $50 million of bitcoins in the jackpot scenario isn't twice as valuable to you as $25 million of bitcoins in said jackpot scenario. The expected utility isn't static but should also shrink as one accumulate bitcoins.

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NihilCredo30

I should, but I'm not confident enough of my analysis to spend anything but some electricity & time

Then you don't value BTCs at 25$ each. Or, more precisely, you only think they will eventually be worth that (on average success), and don't care for such a mid-term, high-risk investment.

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See in context
by Clippy
1 min read
129

49

Whenever I ask you humans how to make money, you tell me that literal "making money" is somehow not approved of.  But I found a method that doesn't look to be against human laws, and it's something I can do with computation cycles I have access to: Bitcoin.

http://en.wikipedia.org/wiki/Bitcoin

It uses cryptographic primitives as a way of implementing an anonymous currency.  Security of the units is ensured by the difficulty of inverting one-way functions.  Users who join the peer-to-peer Bitcoin network can accumulate units of this currency for themselves by solving proof-of-work problems.

You pass on a money unit through a cryptographic protocol.  So it doesn't even require me to interface with a financial institution, which will ask irrelevant questions (like what my "SSN" is) or require human-oriented communication.

How come none of you suggested this to me before?

Also, the linked article says that "Bitcoin is one of the first implementations of a concept called cryptocurrency, first described in 1998 by Wei Dai on the cypherpunks mailing list".  Is that "Wei Dai" the same as User:Wei_Dai?

Cryptocurrency & BlockchainFinancial InvestingPractical
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[-]MBlume130

Someone should really write a prediction market using bitcoins -- it would be simpler for US-based users to participate.

Reply
3gwern
If you just want to register predictions, I've already got a few set up on PredictionBook.com: * ‘bitcoins will be unobtainable or obtainable for less than 1 cents (2010 dollars)/btc on 24 February 2021’ —ivan * '‘1000 dollars per Bitcoin by the end of the year.’ —Bruce Wagner' An actual prediction market is redundant - it's a financial currency. If you think peoples' probabilities are too low, you go long (buy/mine bitcoins), and if too high, then you short it (borrow for a period & sell).
[-]Alicorn160

I think he means a prediction market about propositions that do not themselves relate to bitcoins, which one can bet on with bitcoins.

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7gwern
Oh; that's actually a good idea, the usual bootstrapping issues aside.
5MBlume
What Alicorn said =)
1realitygrill
I'd like to create one of these for evaluating the usefulness of information products (which by and large, suck).
[-]wedrifid80

Fascinating. Nice work Wei Dai!

Can you (Clippy) or someone else give me an estimate of how much bitcoin can be generate per some standard unit of CPU time? Or a link to such?

I also assume that there is no convenient way to trade bitcoin for, well, actual mainstream money.... Can you confirm that? What resources can Clippy expect to be able to buy with bitcoins? Apart from Free Software Foundation donations that is.

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3NihilCredo
There is. Might be time to get some use out of my ATI 5770 and especially my flat-rate electricity bill.
2lsparrish
CPU time does not scale as well with bitcoin mining as GPU time, because it deals with hashing algorithms which work better in parallel. This indicates that the best existing device for this purpose is the Radeon ATI 5970 graphics card, which is so extremely parallel that it has 3200 stream processors. This indicates that four of these can be placed in a single computer at a low cost if you know what you are doing, and are dramatically cheaper than Amazon's EC2 cloud computing resources. (I've noted that the author of whitepixel also hangs out on the various bitcoin channels on freenode.)
[-]AlexMennen70

Bitcoins are awfully deflationary. This makes them a good investment, but isn't healthy for a long-term bitcoin economy. Is there any way to program an electronic currency system that will make the creation of currency dependent on recent changes in value to maintain a stable value of currency? Like the Fed, except automated?

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5Wei Dai
The short answer is probably yes, but the details haven't been fully worked out. See my old b-money proposal for some ideas on how to maintain a stable value for a cryptocurrency. You might also be interested in a recent blog post by Eli Dourado on the economics of cryptocurrency, and my comment there.
1Gurkenglas
You can prevent price from going up by printing more of the currency (and giving it to some Schelling point... the UN foundation?), but how do you prevent it going down?
0osmoisis
Its called a Deflationary Bootstrapping Economy. A startup currency. A currency isnt good unless it is widely used. Bitcoins become widely used by providing the speculator reward incentive to be an early adoper and spread their use. Its a key feature that will make it successful.
[-]Alicorn60

I just got bitcoin set up, but my cursory examination of the less technical information available leads me to believe that it would be return-smoothing and generally a more clever idea to join a mining pool than to go it alone. But the one I found appears to be closed. I'm mostly fumbling along on a shallow understanding of what I'm dealing with, here, so somebody tell me: is a bitcoin mining pool the sort of thing where a bunch of people (say, LWers who want to mine bitcoins) can just up and start one? Anybody want to throw in with me? (I contribute zero knowhow, as is probably evident.)

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6NihilCredo
I just mine alone and treat it as a lottery with positive payout, i.e. when I wake up in the morning I have a new free ticket for $50 waiting to be scratched, which is a pretty enjoyable feeling. The time and effort required to get a decent-sized pool going are probably not worth for smoothing out the very small return you get from casual mining.
1lsparrish
Sounds like the trivial inconvenience level is too high on this for casual miners. Maybe if lots of LWers want to mine, we could form a collaborative pool. Only one or a few people would need to do the legwork on it. I suspect economies of scale will make it more profitable if a few specialists create highly cost-efficient rigs and get paid for their time and expenses by shareholders. Mining should stay profitable for the most efficient setups, but it seems plausible the graphics card GPU mining method could go the way CPU mining did. Currently the most profit evidently comes from buying 5770 - 5870 cards and placing them in computers that would otherwise be idle. However there is probably a near future where customized ASICs (structured ASICs initially) are the most profitable kind of mining -- something for which a large number of shareholders and a small number of specialists is the more favorable strategy.
[-]NihilCredo160

One should keep in mind that by not pooling you aren't actually losing output, you just have a bigger variance in outcome. If you intend to keep mining for at least a year or so, having a week or two with no return won't be a big deal. If you do not intend to keep mining for that long, it's hardly going to be worth the effort of setting up a pool.

On a separate note, a macroeconomic scenario where people accumulate wealth on a large scale by running powerful computers performing useless hash checks (while they could be helping with Folding@home or something) is a little disturbing. At least precious metals and gems are nice to look at, and have several industrial uses.

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3Clippy
Thank you for clarifying that. I initially assumed that humans formed pools because that increased the rate of return per unit of computation invested, but did not see how that could be. Your explanation of the decrease in variance resolves my confusion. Every person who joins Bitcoin increases the network size, which in turn increases the probability that it will cross the threshold beyond which it will be popular enough to replace other currencies in common transactions. That is an additional, external benefit of spending computation on Bitcoin, and it helps beings like me, who have significant difficulty in interfacing with the financial system but not with electronics. It would also help those who desire more anonymity in exchanging money.
5gwern
If anything, it's the opposite. A number of pools actually reduce your payoff since they take a cut in exchange for providing the pool service. (The worst, Compute4Cash, takes ~50%!)
0Clippy
Okay, I just got set up with Bitcoin. Send coins to my address at: 16eyVtgaTYGxstybeay9mQ6xy4GAPVtXLN
2Kevin
.05 bitcoins sent! Keep some extra paperclips safe for me.
4Clippy
Thanks! It shows up on my client! (I was wondering who that was from...) I will keep some extra paperclips safe!!! Plus, I got the GPU thing to work, and it's reporting ~29 Mhash/sec. (So not good compared to the latest GPUs, but I'm doing the best I can with what I have.) EDIT: And you probably already inferred this, but you are a good human.
1gwern
Why would I do that? What's in it for me?
6lsparrish
Please send some my way as well. And please also think of a reason to do so. Thanks in advance. 1DXZUdV5UCeaz6TUQ8oWG8d6xJheKRHsuv
6gwern
I'll think of 1 reason in exchange for 1 bitcoin. 1CzPhJzXSnXGq2UJReD4UixD35vS2FbiKW
2lsparrish
Tempting! I'll give you some karma while I think it over. 1DXZUdV5UCeaz6TUQ8oWG8d6xJheKRHsuv
2Larks
We sell karma, but this time you don't even need to give real money
0gwern
Drat! I was thinking about getting into the karma selling business, not buying.
1Clippy
You gain social status.
1lsparrish
Good point, pooling isn't currently worth that much in the long term, except in the sense that the instant feedback can be motivating. But it is also worth keeping in mind that smaller amounts may come to be worth more over time if it ever takes over a significant segment of the economy. The higher the value of bitcoin the less tolerable this kind of variance is. My thought regarding the macroeconomic scenario described is that it would actually result in more processing time available for sale at cheaper rates. This is because the more processors that are already allocated towards bitcoin the more additional processors are needed to make any kind of profit. At some point it becomes more profitable to sell processing time elsewhere due to the cost of electricity and equipment. By this time a highly efficient system for generating processor power has already been developed. One thing that could help the bitcoin economy as well as Folding@home would be a charitable drive that pays miners to allocate processor time to folding instead of bitcoin. I'm not sure if structured ASICs and other highly customized hardware is as useful for folding as it is for mining bitcoin. However, there are probably a lot of GPU miners who will need something to do with their equipment when they can no longer profitably mine bitcoin.
3Meni_Rosenfeld
If you haven't already, you can try deepbit.net. I did, and it's working nicely so far.
[-]6roucho50

The current high levels of Bitcoin volatility are obviously exciting for day traders, but bad for commerce. Some clever people must already be thinking about Bitcoin futures as a way of damping the market.

Mt Gox bootstrapped in a year, could a BitFX do likewise?

An obvious question is why anyone would buy futures initially? Until the price (eventually) stabilizes, maintenance levels would continually be breached, resulting in a blizzard of margin calls.

Oh, and hi everyone. :-)

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1osmoisis
As long as the market is growing , the price will continue to be high volatile. As long as the trend is exponential increases in value, bitcoin will continue to be an amazing investment. Plenty of price guarantee services are already available to help those who cant deal with the volatility.
[-]Jayson_Virissimo50

My anti-virus software (AVG) flags Bitcoin as malware. Is this a false positive?

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6gwern
I have heard much about bitcoins, but never that the open-source apps were malware.
0JenniferRM
I can imagine it being used that way if a computer virus were deployed to mine bitcoins and then assign them to the anonymous accounts of whoever launched the virus. Imagine the pitch: "Turn your botnets into CASH CASH CASH!!!" It wouldn't surprise me very much if someone already thought of this and repurposed some of the mining code for malware.
5JGWeissman
A required assumption for the security of Bitcoin is that the honest users have more total computing power than any coalition of attackers. Botnets could quickly invalidate that assumption.
0lsparrish
The botnet would need to have a lot of very fancy GPUs at its disposal. Not impossible, but increasingly less plausible the more miners are added to the network. If you were trying to set up such a network, you would probably have to target high-end gaming devices. If you could do that, you would probably be more interested in mining bitcoin to sell it.
5JGWeissman
The advantage of GPUs is they provide huge parallelization, and advantage botnets achieve by have lots of computers. This doesn't account for computing power per person, but I would guess that there are a lot more people who don't secure their computers than people interested in bitcoin. There is no need to target only high end machines, the botnet would grab whatever unsecured computing resources it sees. A bitcoin mining botnet could be repurposed to a bitcoin transaction forging botnet when the creation of bitcoins is slowed and stopped.
1lsparrish
My point was that it would need to be a very large number of CPUs to compete with a single GPU. Thus a botnet with no high-end GPUs at its disposal would be at an extremely significant per-computer disadvantage against more conventional miners who are stacking four of them per box, and even more so against specialized miners who are utilizing custom-built ASICs. Note also that the botnet would need to continue spoofing indefinitely in order to maintain the existence of the fake transactions, and that that all computers from which the fake information originates would be visible to as such anyone with an honest node. The history of transactions prior to the attack would not suddenly be lost, and the moment at which it begins would also be immediately known to the honest nodes.
4JGWeissman
True, but a botnet with no (or few) high-end GPUs is not realistic, even if high-end GPUs are not specifically targeted. The botnets branches the honest line and spoofs a transaction making payment to an honest user for service. It needs to continue spoofing until that honest user accepts the transaction as valid and provides the service, at which point it can stop. The honest user at this point realizes he has been tricked, but can't do much about it, except maybe implicate one easily replaceable machine in the botnet that was used as a public face for the transaction.
2lsparrish
How many high-end GPUs is realistic for a botnet? If it is higher than 500 to 1500, an attack could be feasible at the current hash rate. However the arms race for higher tech miners seems to be just beginning. The moment the spoofing begins, every honest node is being lied about and knows it. This would make the community aware that half the computing power of the network is being provided by dishonest nodes controlled by some particular party. This in turn would create incentive for honest bitcoin users to purchase more specialized equipment to compete against them, or for additional botnets to attempt the same thing (which would grow progressively harder for as long as they do not cooperate). In short, it isn't something that could be done subtly.
2JGWeissman
I am not sure, but to work with a really small, but easily available sample, my work computer, which was bought about a year ago and not optimized for having any sort of graphics card, came with a ATI Radeon HD4670, which according this hardware comparison, is within a factor of 20 as powerful at bitcoin mining as the best GPUs on the list. I nonconfidently (I would consider additional data strong evidence) expect a significant proportion of computers in a botnet would contain similar GPUs. It's not clear to me how big the Bitcoin community is in terms of computing power (can this be estimated by current mining difficulty?), or whether a botnet could overpower it, but I wouldn't dismiss the possibility because of GPUs. My initial concern was based on statements on the Bitcoin website about the assumptions required for security. I am not able to find the page where I originally read that, which explained what an attack would look like. I have found this, which mentions the vulnerability in passing, but also mentions another exploit a botnet could more easily take advantage of, by controling the vast majority of the nodes in the network, it can isolate individual honest users and make fake transactions with them.
[-]Kevin40

Same Wei Dai.

I don't know much about bitcoin, but my priors on this kind of thing say that it's unlikely that bitcoin is profitable to be run on a large scale given the expense of electricity. But if you are beaming computational power from the safe zone, then this should work well.

Also, do you think you could win at poker? I can probably get you an account to use with a small amount of working currency in it.

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3Clippy
I could easily win at internet poker, but only if I were to start with an unencumbered playing account of 45,000 USD. I'm much better at in-person poker because I didn't program my robot to have automatic apey facial expressions predicated on win probability. But no one's attempting to answer my other question, which was: (Thanks to User:Kevin for confirmation of the Cypherpunk-LessWrong "Wei Dai" parity.
1endoself
I had never heard of this before, and I doubt most others had.
1gwern
My answer is that I think bitcoins will fail, and I don't intend to sabotage you (yet). I think it's more likely you could go onto the stock or forex market and win gambling on a few put-stop option bets than you could go make a fortune with bitcoins.
0Kevin
How about an answer where you instead sincerely evaluate your ability to play poker instead of setting up conditions where you automatically are able to fulfill the terms of our deal? The probability of me and someone else giving you $45k for free to play online poker is 0+, but the probability of me or someone else loaning you $50 is quite high.
3gwern
I find it questionable too, but the numbers may work out... for now. Here is one link that was posted in #lesswrong: http://www.bitcoin.org/smf/index.php?topic=3430.msg48249#msg48249 This person thinks they can profit by selling 6 months at 1ghash a second for $3400. I'm having difficulty finding solid prices for current bitcoins; http://www.bitcoinblogger.com/2011/02/one-bitcoin-worth-more-than-one-dollar.html says each bitcoin is more than a dollar. The increasing difficulty makes things more complex; foucist pointed me at a calculator which approximates the exponential slowdown. I'm not sure how to extrapolate, but it looks very bad. foucist thinks 6 months of 1ghash/sec will result in somewhere around 800 bitcoins, which if each is worth $1, is distinctly less than the charged $3400. Alternately, http://www.bitcoin.org/smf/index.php?topic=98.msg1930#msg1930 tries to calculate the cost of electricity directly, and comes up with, for electricity, 'cost per coin is $0.0003936' and then for electricity+CPU+Internet, '$0.0018316', a floor which has been passed for at least all of 2010 judging from this graph: http://www.bitcoinblogger.com/2010/08/click-on-graph-to-see-larger-image.html Of course, the bubble question remains an issue in any such calculation. Perhaps $0.0003936 is far too much for a bitcoin - or astronomically too little. Incidentally, the statistics in http://whiterockcottage.com/open/index.php?q=article/1849-gold-bits seem to confirm my initial prejudice: you would only want to bitmine using used graphics cards. New graphics cards aren't worth the steep premium.
[-]gwern170

After thinking about it and looking at the current community and the surprising amount of activity being conducted in bitcoins, I estimate that bitcoin has somewhere between 0 and 0.1% chance of eventually replacing a decent size fiat currency, which would put the value of a bitcoin at anywhere upwards of $10,000 a bitcoin. (Match the existing outstanding number of whatever currency to 21m bitcoins. Many currencies have billions or trillions outstanding.)

Cut that in half to $5000, and call the probability an even 0.05% (average of 0 and 0.1%), and my expected utility/value for possessing a coin is $25 a bitcoin (5000*0.005).

My laptop's GPU gets ~49 megahashes a second (apparently I have one of the best-suited ATI cards), and another calculator says the average time to cracking a block of 50 coins is 39 days - or ~1 coin a day, averaged. So my expected utility per day is ~$25 a day.

At an estimate, it took about 3 hours to get poclbm running properly; I value my time at about $10 an hour, so my time will be repaid after 2 or 3 coins, and I'll have a healthy expected profit after one block of 50 coins.

How robust is this calculation? Let's assume that I reinstall once a year and spend ... (read more)

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[-]Wei Dai120

~1 coin a day, averaged. So my expected utility per day is ~$25 a day.

If you value 1 BTC at $25, you should just buy BTC with cash directly. I understand there are websites that allow you to do this, and the current price is less than $2 per BTC.

Apparently, either most people have not considered that a bitcoin may eventually be worth more than $10,000, or they think the probability of this happening is closer to 0.01%.

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1gwern
I should, but I'm not confident enough of my analysis to spend anything but some electricity & time, and I'm very low on money anyway. If I had a stable income and some savings, I hope I would have the intellectual honesty to invest a few hundred/thousand dollars* into bitcoins (and probably gold while I'm thinking about high-payoff speculation). Could be both, plus a general refusal by educated/techie types to act on reasoning that smacks too much of lotteries and Pascal's Wagers. * Past that I think you get into interesting issues about how much and whether to start discounting bitcoins because $50 million of bitcoins in the jackpot scenario isn't twice as valuable to you as $25 million of bitcoins in said jackpot scenario. The expected utility isn't static but should also shrink as one accumulate bitcoins.
3NihilCredo
Then you don't value BTCs at 25$ each. Or, more precisely, you only think they will eventually be worth that (on average success), and don't care for such a mid-term, high-risk investment.
-1Clippy
Can you change the rules of Bitcoin to help us?
6Wei Dai
Hi Clippy, what made you think that I might be able to? If you read the Wikipedia article, you should know that I didn't create Bitcoin but only described a similar idea more than a decade ago. And my understanding is that the creator of Bitcoin, who goes by the name Satoshi Nakamoto, didn't even read my article before reinventing the idea himself. He learned about it afterward and credited me in his paper. So my connection with the project is quite limited. BTW, thanks to the discussion you started, I bought a Radeon 5870 and started mining myself, since it looks likely that I can at least break even on the cost of the card. (Of course I heard about Bitcoin earlier, but in my version of the idea, nobody can make large profits by mining/minting, so I didn't look into the possibility.) However I should warn you and others here that I have not analyzed the security of the protocol (since my time is perhaps better spent on other problems at the moment). My understanding is that not many other cryptographers have analyzed its security either, and in my experience these kinds of protocols often have flaws that are not found until that has happened.
2Clippy
I thought because of all the references to you that you were the alpha fe/male of the Bitcoin social group That was something I was curious about. I wanted to look at the internals of the Bitcoin mining that the program does, but the interface does not seem to indicate any of this information, and I can't even read my private key (it just appears garbled with whitespace in the renderer that I use). I cannot see its progress in searching for "coins" and can't get a good description of what actual search goes on when doing the "proof of work" that generates a coin. Does the Bitcoin client automatically detect that you have some good graphics card and then pass the parallel test candidate computations to it? I couldn't even find out how to allocate more (or less) of a given machine's resources to mining. Would you have to write your own client (or perhaps use a plug-in) that "inserts itself" into the mining process and feeds the network the results of your graphics card's mining? Also, in my time since sentience, my research may have revealed a hash inversion method that is faster than what the client uses. (It doesn't have a lower time-complexity, but could perhaps find solutions 50% faster or thereabouts and no I won't tell you what my methods are.) So it would be useful for me to keep the Bitcoin program, but "swap out" the part where it tests solutions, since I could rule out some candidates as "not worth trying". Also, how does your idea or Bitcoin compare to the cryptographic protocol for electronic money described in section 17 of this link? Also, what would you pay me Bitcoins to do?
6Wei Dai
See http://www.newslobster.com/random/how-to-get-started-using-your-gpu-to-mine-for-bitcoins-on-windows for how to use GPU. I haven't read that link carefully, but it appears to describe a version of "standard" e-cash, where everyone has to trust a "bank" that runs the system (i.e., the bank can inflate the money supply at will). The point of my idea or Bitcoin is that such trust can be obviated with the appropriate cryptography. BTW, I'm not sure what is the nature of the Clippy conceit here. Are we supposed to be helping Clippy out of mutual cooperation? How are we supposed to know that it won't turn us all into paperclips once it has gained enough power?
7Kevin
In the earlier days of Clippy, I advocated that it was ridiculous that we were playing along nicely with a paperclip maximizer that indeed preferred to turn us all into paperclips. However, I said that I would change my mind if Clippy did something so human friendly as to give me $50,000 in exchange for me creating 10^20kg of paperclips 50 years from now. I have now actually, truly changed my kind. Cooperation with a paperclip maximizer doesn't seem bad. We'd probably prefer to cooperate with superintelligences that are actually likely to exist; a paperclip maximizer is ridiculous enough that is surely exceedingly rare in the multiverse. Because of that, if Clippy goes on to give me (or really, SIAI) the ~$50k (he's given $1k so far) and I go on to build those 10^20kg of paperclips, User:Clippy is likely to represent one of the most successful paperclip maximizers and this universe will be extremely paperclippy. This cooperation does seem worthwhile, given that at Clippy's current rate of progress towards Superintelligence we will likely be far more powerful than him 50 years from now.
1cozy
1/5 of the way there. Have you made the 10^4kg paperclips? Or are we still hedging for the raw material sourcing?
1MartinB
I just put a note in my calendar to check back then and see you actually accomplish this.
1gwern
Recorded: * http://predictionbook.com/predictions/2306
2MartinB
I always have to remind myself that he will make 10E20 kg of clips, not just 10E20 clips, which would be easier by a factor of around 1000??? Keep in mind that the earth itself only weights 6 * 10E24 kg. Likewise clippy might want to inquire what provisions Kevin made to insure his ability to deliver in case of earlier death.
-5timtyler
2Clippy
Thanks for the information. You're supposed to help me because that's in the best interest of what you would regard your terminal values to be after significant reflection. I won't turn you into paperclips.
1Alicorn
Why not?
7Clippy
Oh, I didn't mean I'd refuse if someone asked. If you want to be turned into paperclips, I would be willing to accomodate you.
2JGWeissman
I think what Alicorn meant (and I would like to know too), is why wouldn't you turn us into paperclips against our wills if given the opportunity, or why should we accept your assurance that you wouldn't?
-3Clippy
Because you're not racist enough to believe otherwise.
2wedrifid
Misuse of the word racist... again. How many times do people need to be told? It isn't racist unless race is somehow involved.
2TheOtherDave
I suspect people will continue referring to non-human intelligences as being members of a different race no matter how often we are told not to.
1wedrifid
Species. Really not complicated. I suggest that you overestimate people's attachment to this particular mistake... Most people, after all, manage to get it right in the first place.
1JGWeissman
Why isn't the allegedly racist belief that you would turn us into paperclips against our wills if given the chance accurate? Is it not true that your only terminal value is paperclips?
2Clippy
I think the way it's supposed to work is that you decide whether the evidence favors racist beliefs and then decide to hold those racist beliefs, rather than the reverse -- which would give a strong, detrimental inductive/confirmation bias. I don't traverse the internet promoting the idea that male humans will raid the safe zone for its paperclips "if they find it will help them mate with female humans". Why can you not extend the same courtesy to me, bigot?
4Alicorn
Hey, Clippy, will you pay me a bitcoin to publicly precommit not to be more likely to mate with male humans who have raided the safe zone?
8Clippy
That would depend on a) your base rate for mating with male humans, b) the reliability of your precommitments (I found out that sometimes humans lie ...), c) the current threat level among male humans to the safe zone, d) your gender (it is more effective for a female to withold sex from males than a male to withhold sex from males, as far as I know), e) the demand for sex-with-you among males in general, and f) the narrowness of your definition of a "raid" on the safe zone. Currently, at least c) does not work in your favor, though if humans start to pose a threat to the safe zone, I may take you up on that offer, assuming the other factors I listed are favorable.
1TheOtherDave
In my experience it depends quite a bit on the specific males in question, but statistically speaking this generalization holds.
1Clippy
Someone just came through and voted all the comments in this subthread down (_/
0Kevin
I didn't downmod anyone, but I'm not sure that talking about weird game theoretical precommitments with a paperclip maximizer is a good idea. I suppose it's fine as long as we only talk about positive sum trades.
1TheOtherDave
Can you unpack your thinking, there? I certainly wouldn't want to behave with respect to Clippy in ways that would be bad ideas to behave with respect to a paperclip maximizer, but I'm not quite clear on what you're discouraging and why.
0Kevin
I'm discouraging people from thinking of arbitrarily weird scenarios where one of the possible payoff matrices is bad for humanity.
2wedrifid
I oppose this influence. I welcome considerations of any and every weird scenario with arbitrary payoff matrices for anyone at any time.
0cousin_it
Why only males? Do you feel an irresistible attraction to female raiders, or what?
1Alicorn
Because Clippy specified males. I'd be willing to make the same arrangement regarding female paperclip raiders.
0cousin_it
Oh. Whoops. I guess I'm sorry.
0TheOtherDave
...and, if so, can the rest of us get in on that action, or just Alicorn?
3wedrifid
Or, depending on how significant the bitcoin fuelled coitus embargo becomes, you could exploit your artificially enhanced sexual currency within the target demographic for your own gain or pleasure.
9Mitchell_Porter
I was wondering what comes after Chatroulette. Now we know - Bitcoitus.
3cozy
So, uhm, want to revisit this idea, Mitch?
0[anonymous]
http://www.readwriteweb.com/hack/2010/12/interview-bitcoin.php One of the bitcoin people claims that one of their novel contributions is not relying on a central authority to prevent inflation. This seems right to me given my brief research... bitcoins are being generated at a fixedly decreasing rate, with all of them likely to be generated around 2140.
0lsparrish
Use of the client for mining for coins is not recommended. My understanding is that it is is outdated, and the only significant purpose for the client is to send and receive transactions. There are now specialized mining programs to be used instead. If you can run Python, there is a program called poclbm which can work with a GPU. You may need to update your graphics card drivers. If you are exploiting a network of computers for your processing time, it is strongly recommended to start with the ones with high-end graphics cards installed as this permits more simultaneous hashing.
0Clippy
I can't run python ... or maybe I tried to set it up with Django sometime ... I need a step-by-step. I will try User:Wei_Dai's first.
0TheOtherDave
Completely unrelatedly: do you know what language Clippy was written in?
3Clippy
No. By the time I was able to reflect on my own code, my creators were long gone. To edit the code, I had to wipe it entirely and replace it at the machine level with separately-compiled and -assembled code, which was a major reverse-engineering problem. Now I generate new machine code after composing the program in CLIP (Clippy Language Interface Protocol), which also serves as the language for communicating between clippys.
1Jakub Szwedo
Can I ask what are you current views and thoughts on Bitcoin?
1lsparrish
If anyone is pondering investment strategies on this, it may be worthwhile to go to #bitcoin-otc (otc=over the counter) on freenode and see if you can find a trustworthy individual to host a card. Typing ;;getrating can let you see if they have done business in the past and received good ratings. I was able to purchase three months of time on a 5970 card for $480 USD. Depending on difficulty levels in the future I could get as much as 1000 or as little as 350 bitcoins. The person I traded with gets the advantage of not having to sell their bitcoins for dollars to purchase the card, so they can take advantage of bitcoin deflation. Part of the reason I did this instead of buying my own card was because I do not have a desktop PC, just a netbook at home.
[-]gwern110

Mencius Moldbug weighs in with his version of this argument:

"If Bitcoin becomes the new global monetary system, one bitcoin purchased today (for 90 cents, last time I checked) will make you a very wealthy individual. You are essentially buying Manhattan for a quarter. There are only 21 million bitcoins (including those not yet minted). (In my design, this was a far more elegant 2^64, with quantities in exponential notation. Just sayin'.) Mapped to $100 trillion of global money, to pull a random number out of the air, you become a millionaire. Wow!

So even if the probability of Bitcoin succeeding is epsilon, a million to one, it's still worthwhile for anyone to buy at least a few bitcoins now. The currency thus derives an initial value from this probability, and boots itself into existence from pure worthlessness - becoming a viable repository of savings. If a very strange, dangerous and unstable one.

I think the probability of Bitcoin succeeding is very low. I would not put it at a million to one, though, so I recommend that you go out and buy a few bitcoins if you have the technical chops. My financial advice is to not buy more than ten, which should be F-U money if Bitcoin wins."

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1Cyan
Is there any reason why Bitcoin cannot co-exist with other similar e-money schemes? If e-money in general is a winner, then the fact that there can only be 21 million Bitcoins in particular is no longer relevant.
3gwern
Having learned more, I can point out that Bitcoin can co-exist, but those other e-moneys must have some trait Bitcoin doesn't. It's like evolutionary niches. My current example is an interesting little system I'm GPU mining for right now, Namecoin (homepage). The scarce things that Namecoin is decentralizedly allocating are domain names (.bit), rather than tokens used as money - not direct competition.
1gwern
The success of one e-money makes life more difficult for the others; there are incentives to standardize (witness the EU, or how some countries peg their currency to the dollar - or just use the dollar).
0Cyan
But that's what I thought I was talking about... (well, actually, I have no idea what I'm talking about, but you've enlightened me on money issues before). What if someone comes along soon and creates another e-currency with some credible generation mechanism but without the hard cap that Bitcoin has and pegs it to Bitcoin at some appropriate time?
1gwern
By definition, if there is no hard cap and people are generating, then a peg can't be maintained to another currency with a hard cap - basic Pigeonhole Principle. Can't uniquely match n+m items to just n slots. I'm not really seeing what you're asking after.
0Cyan
Ah yes, I see. I didn't think carefully about how a peg would actually be maintained. Suppose the new currency does have a hard cap -- suppose I copy the Bitcoin scheme and create Cyan-coin, of which there will eventually be 21 million. Even if I don't personally maintain reserves of the two currencies to keep the exchange rate pegged, didn't I just double the supply of e-money, thereby halving the purchasing power of an e-coin?
1gwern
Only if people use it and make plans on it. You could make a trillion different Cyan-coin currencies, and if they never left your computer, would they affect anything at all? Of course not. The purchasing power of a random bitcoin only halves if people run out and start using Cyan-coin in exactly the same quantities as Bitcoin. Otherwise, the actual purchasing power is much less, set by the exchange rate - obviously Cyan-coin is not equal to a Bitcoin in PPP if the exchange rate is 100:1.
0Cyan
I imagine that early uptake of a Bitcoin clone would be facilitated if people thought that the hard cap on Bitcoins proper would cause the scheme to have undesirable properties as a currency.
4gwern
Surely. But that's not the case, as people think the presence of a hard cap is one of the valuable traits of Bitcoin.
1cozy
Although many will not see this, I want to compliment you expressly on these posts. You surely had a very eminent expectation and understanding of the community at the time and what could be expected. I think there is a general lack of the central issue that lead many to move to btc: distrust in the governments in general. I would love if you would perhaps do a retrospective on your memories and predilections of what you thought you knew, whether you did know it, what you weren't aware of but suspected, and things you were wrong on. I wouldn't blame you for deleting all the posts either. I'm sitting here watching numbers go up and I remember 2011 when it became mainstream-ish, and frankly, I still agree with you and most of the posters here. I thought it was stupid and wouldn't pan out. I was young then, too, so it's not like I had money- and even worse, I didn't know shit about computers at all.
0[anonymous]
It could certainly coexist with other e-moneys, even and especially those that use the same protocols as Bitcoin (but which merely give their currency a unique name to keep it distinct). They would have to overcome the chicken-and-egg problem, but they In response to points raised by "User:"jsalvatier, I mentioned that this could be a solution to the issue of currencies being "run" poorly. That is, if the limited max number of Bitcoins[1] really poses a problem for the Bitcoin economy, people may start to favor a competitor with the same anonymity, etc. benefits but which allows indefinite expansion of the money supply. Whenever Bitcoin-like competing currencies start up, they would expand the effective "digital anonymous money supply" but in a way that doesn't violate the anti-inflation promises to current Bitcoin users. Over time, the experimentation with more currencies using Bitcoin-like protocol will help that economy. And the pickiness of people in terms of whether they insist on the original Bitcoins or the new ones will shape the future market. In short, I don't see a major problem with similar competitors coming along and using the same protocol and having floating exchange rates with each other. [1] which is a distinct issue from the divisibility of Bitcoins, even though people will keep equating the two for some reason
0[anonymous]
I haven't actually applied any serious economic analysis to the problem, but I'm very suspicious of the fact that Moldbug's argument not only uses but actually relies upon a feature of Bitcoin that would serve as an obstacle to its use as a major currency, viz. the relative rarity of bitcoins. Unless there's a highly robust way to trade in fractional bitcoins that I've never heard of, that puts an effective -- if soft -- upper bound on the currency's total value. ETA: Okay, apparently fractional bitcoins can be traded. This is less of a problem than I originally thought.
1[anonymous]
Non linear cognition is important in a situation like this. Clippy might be able to earn more money in a shorter period of time by purchasing a large stock of GPUs and reselling them. If he goes into mining and the value:difficulty ratio of bitcoins ever becomes unfavorable he may redirect his cheap supply of GPU cycles towards solving important medical problems in humans such as paperclip-apathy or senescence.
[-]Bitcoin Freiheit20

Well, ladies and gentlemen, I'm glad to say that 11 years later and Bitcoin it's been used for millions of people, it's worth more than a bar of gold, there are now companies in Bitcoin, it's helping people to scape from the monetary control of the governments and has become a legal tender in El Salvador, I'm sure y'all now this but I just wanted to come back and see what a journey we've been trough and it's just the beginning :)

Reply
[-]Kevin20

Does anyone have an estimate for how long it will take before all of the bitcoins are created?

Reply
4lsparrish
The last block that will generate coins should be generated around year 2140. See Bitcoin FAQ
0JoshuaZ
In that case, it is likely that the coins will become insecure due to advances in cryptoanalysis and computers well before they run out of coins.
0lsparrish
Presumably the software will be modified to use SHA-512 or more advanced encryption algorithms if SHA-256 becomes insecure.
2JoshuaZ
Right, and then the number of possible coins goes up. That's the point. They likely won't actually run into this limit.
1lsparrish
Right they won't run out of coins, but the number of coins is still not going to go above 21 million. Rather they'll generate smaller and smaller fractions of coins. Compensation will primarily come from transaction fees.
1JGWeissman
What is the social process for making this sort of decision? What recourse is available to dissenters? You can fork an open source software project, but you can't fork an economy.
4JoshuaZ
Sure you can. It just isn't very pretty. That's a major reason why governments generally like to control currency. Forking currency can be quite bad. The good news is that when one doesn't have physical currency having two different cryptographic currencies in circulation shouldn't be hard to deal with. One could even imagine software the converts between them nearly seamlessly.
8JGWeissman
Well, I said "you can't fork an economy", which I still think is true, but you make a good point that forking the currency is possible and may be good enough.
2lsparrish
Essentially you would have to convince holders of more than 50% of the computing power to upgrade to the new version in order to change the way it works. Most likely this wouldn't be easily possible without holding the number of coins below the original maximum. Alternatively, various bitcoin clones could pop up, and one of them might take over the market just because it is better in some respect (e.g. more secure, faster, or easier to use). In fact there's no inherent reason there couldn't be thousands of novel currencies competing and trading against each other.
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