Hesche on 31/5/2011 at 08:14
(
http://www.bitcoin.org/) So, money transfer apparently no longer needs financial institutions like banks or states? WTF? I read this (
http://bitcoin.org/bitcoin.pdf) publication about the scientific background and must admit I am not enough of a computer geek to fully get it.
So the essential trust connected with every currency or any other kind of instrument of payment will no longer come from an institution (state or bank) but from cryptography? That sounds....awesome from a technical and sociological point of view.
Quote Posted by bitcoin.org
Bitcoin is the first digital currency that is completely distributed. The network is made up of users like yourself so no bank or payment processor is required between you and whoever you're trading with. This decentralization is the basis for Bitcoin's security and freedom.
You can buy bitcoins (
https://mtgox.com/) online with your creditcard. Also, the Bitcoin-Dollar exchange rate apparently went from 8 to 9 US$ in the last 48 hours. I wish my bank account had intrest rates like that.
There is money to be made by "mining" (I didn´t quite get the principle), provided you have the hardware to do it.
Apparently it sounds potentially dangerous to some, since the CIA (
http://forum.bitcoin.org/?topic=6652.0) invited the inofficial head of the bitcoin development team to a meeting.:cool:
Together with the killing of Osama Bin Laden, the downfall of dictatorships in North Africa, the foreseeable end of Joseph Blatter as head of the FIFA, the leaving of honorable silverbacks from this very forum and the change of federal law for immission control in Germany, (
http://www.bmu.bund.de/english/current_press_releases/pm/print/47035.php) where noise immissions from children will no longer be considered equivalent to industrial noise immissions, this makes me think the TEH END OF THE WORLD IS NEAR.
Hello 2012.
Yakoob on 31/5/2011 at 10:56
the problem with this is that their currency has no backing, unlike regular cash which used to be backed by the actual gold/precious metals inside the coins and later by banks and government. It will pick up if and only if businesses start recognizing this virtual currency, and for the love of god I cannot see a reason one would. Unless, of course, it becomes so big on the peer 2 peer side that supporting it directly (without requiring people to "withdraw cash" first) becomes convenient enough to draw customers and increase profit, kind of like how credit cards started being accepted in stores.
We'll see...
EDIT: also don't get the mining thing. But it gives me bad images of chinese-outsourced WoW miners :/
Fingernail on 31/5/2011 at 11:33
They would do well (as would everyone, actually) to watch Adam Curtis's current documentary series on BBC 2, "All Watched Over By Machines of Loving Grace".... all about the illusion of self-regulating systems, how these ideas came about and how, assisted by our faith and understanding of computers, they dominate our thinking about the world.
Good related article here: (
http://www.guardian.co.uk/environment/2011/may/29/adam-curtis-ecosystems-tansley-smuts)
Hesche on 31/5/2011 at 12:00
Quote Posted by Yakoob
the problem with this is that their currency has no backing, unlike regular cash which used to be backed by the actual gold/precious metals inside the coins and later by banks and government.
I read a statement from a monetary expert who says that the actual backing of a currency isn´t relevant, but the trust in the currency is. If a receiver can trust a currency to be accepted by other buyers/receivers he will use it. If this system establishes streetcred it might as well function like any other currency.
I guess Bitcoin relies on its free convertibility to every "real" currency. The real currencies supply the solid ground a currency needs, like an authority provided by a juridical system to make sure debts are recoverable.
I guess this goes into philosophical discussions on what money and the value of things actually are. Like these (
http://www.youtube.com/watch?v=sanOXoWl0kc) Money as Debt videos that have been floating around for a while.
When I got this right the only danger to this peer to peer system would be a organized attack by a coordinated cluster? Makes me think of China too for some reason.
Advantages are anonymity (which might also be a disadvantage considering the possibilities for weapon dealers, mafia members and terrorists) independence from institutions and their agendas.
Muzman on 31/5/2011 at 16:15
At the risk of sounding terribly hack-Weberian, it's still going to die in the arse at some point and someone with guns will have to pick up the tab, perhaps only too happy to assume that kind of authority over people's debts.
I've been meaning to take a closer look at Paypal and the like recently, since they profess to be a mere exchange service but are functioning more and more as banks. Yet because of the domain they operate in do far more blocking and freezing of people's money for security reasons. There's been a few tales of grumpy people trying to get their money out of them. As their popularity increases I can only see increasing numbers of civil complaints and an increasing need for government bodies to bring them to heel.
(fun flights of fancy involving this sort of thing involve governments banding together in a free and frank exchange of virtual banking regulation after theri citizens are screwed on a grand scale, creating all kinds of hilarious conspiracy theory opportunities. They talk about the creeping construction of secret socialist one world governments. I tell ya, nothing will bring it about quicker than so-called economic freedom.)
Sg3 on 31/5/2011 at 20:18
I may be a Bear of Very Little Brain, but, for the life of me, I can't see a significant difference between this Bitcoin and a bank.
Al_B on 31/5/2011 at 21:38
Quote Posted by Fingernail
"All Watched Over By Machines of Loving Grace"
It's definitely worth a watch, although I couldn't help feeling at times that it was the sort of programme that would have suited radio more than television. Some aspects (e.g. the feedback flowcharts) that benefited from the visual presentation but there were so many other scenes that were recycled that it distracted from what was being said.
Quote Posted by Sg3
I may be a Bear of Very Little Brain, but, for the life of me, I can't see a significant difference between this Bitcoin and a bank.
(snide on)A working website for one - the FAQ, Wiki, "Sites that accept bitcoins" and "Merchant howto" are all broken at this end(/snide off).
In all seriousness, however, I don't see the advantage. If this is meant to be truly free of "real world" currency then I can't see how it will manage stability.
demagogue on 1/6/2011 at 02:08
First thing this reminds me of is the "Freedom Dollars" movement they have in the US, where an anti-govt leaning group (the kind of people you imagine stock food in their basements "just in case") came up with their own currency, convertible to and from dollars, and a little book of places that accept it as currency. Sort of a pop-anarchic recreational thing for that group. But this isn't really offering any kind of "statement" like that.
Here it reminds me more like they were reading all these articles on monetization strategies for all these online ventures -- from online games & apps, etc -- and a recurring theme is virtual cash. Then they just generalized from the idea and thought they'd get a run on the market for a unified universal online currency. I don't know if the translation from Farmville Coins to this is going to fly unless it gets some big players exclusively using this currency. Like if there were a unified Zynga currency that some other apps started using as well, I could maybe see it taking off to a limited extent.
But anyway, I have to imagine that that monetization strategy is what's really driving this, and the stuff about more convenience for the user and less hassle with banks and conversions (as if PayPal is soo terrible...) is just a justification they're using to sell it.
Hesche on 1/6/2011 at 05:44
Quote Posted by Muzman
I've been meaning to take a closer look at Paypal and the like recently, since they profess to be a mere exchange service but are functioning more and more as banks.
Well Paypal certainly doesn´t like the new competitor since it just (
http://coinpal.ndrix.com/) shut out a Bitcoin dealer.
Quote Posted by Sg3
I may be a Bear of Very Little Brain, but, for the life of me, I can't see a significant difference between this Bitcoin and a bank.
The thing is you don´t need an institution like a bank no more. It´s a direct transfer without any distributor cutting off his interest margin. Also this
Quote Posted by Muzman
Yet because of the domain they operate in do far more blocking and freezing of people's money for security reasons.
would not fly any more with this system.
I read up some more ((
https://en.bitcoin.it/wiki/FAQ) Wiki Main Page FAQ):
Quote Posted by https://en.bitcoin.it/wiki/Main_Page
Q. How does Bitcoin work?
A. Bitcoin utilises public-key cryptography. A coin contains the owner's public key. When a coin is transferred from user A to user B, A adds B's public key to the coin, and the coin is signed using A's private key. B now owns the coin and can transfer it further. A is prevented from transferring the already spent coin to other users because a public list of all previous transactions is collectively maintained by the network. Before each transaction the coin's validity will be checked.
Mining is providing your CPU (or rather GPU) power to proof read generated code thereby verifying transactions.
There is a (
http://www.bitcoinmonitor.com/) Bitcoin monitor that visualizes the activities on the Bitcoin network.
I can´t quite put my finger on this. It sounds like an awesome concept, especially their claim to be more stable than the current monetary system with its spectacular crash 3 years ago.
Muzman on 1/6/2011 at 06:22
Oh, I agree actually. It's a fascinating idea. There's gonna be room for something to go wrong in there somewhere though. I don't know enough about network security to be at all specific but it's not just an exchange system between parties facilitated by bitcoin's system. There's a point there where your account says you don't have the money any more and the other guy doesn't have it yet either. They recognise this and have apparently built it to minimise the time this moment can exist with overlapping checks and such, but it still exists.
Definitely better than Paypal and so on.
Indeed probably the bigger risk to it, as opposed to what I was saying before, is if the big boys decide they don't like it and refuse to play ball, like you said. It'll be interesting to see how it goes.