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Bitcoin P2P Currency: The Most Dangerous Project We've Ever Seen

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posted on May, 17 2011 @ 03:13 PM
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Some comments here on Bitcoin;

Apenwarr: Why bitcoin will fail

Scroll towards the bottom of his comments, past all the gold-standard diatribes.

He makes several good observations about Bitcoin regarding it's value.

A hackers perspective on it:

Bitcoin mining: anyone doing it?


A typical system with a 5970 consumes just under 500 Watts lets say, including the GPU (some examples here: www.bitcoin.org... ).

That's 12kWh at let's say a $0.12/kWh residential electric rate ( www.bitcoinminer.com... ) that's about $1.44 per day for your electricity.

A 5970 hashes at just under 600 Mhash/s, per en.bitcoin.it... so punch that 600000 number in as khps here: www.alloscomp.com...

and it shows that at the current difficulty level, you should generate 50 BTC about every 3 days and 29 minutes.

So in a 24 hour period you get about 16.55 BTC per day. Converting that 16.55 BTC to USD: bitcoin.1t2l.net... shows you earn about $15.28 per day with a rig holding a single 5970.

Then to send those BTCs to your PayPal, you use coincard.ndrix.com... (starting again monday morning) and you lose 3% doing that conversion so you end up with $14.82 in revenue per day. Subtract the $1.44 in electricity that nets you $13.38 a day. If that were to hold, you'ld have the card paid off in well under two months.

That said, ... difficulty is rising (fast! ... bitcoin.sipa.be... ). If the BTC/USD exchange rises more ( it's had quite a run bitcoincharts.com... ), then that payout might continue at these levels. Otherwise, the payout from mining will decrease.


I wouldn't touch bitcoins anymore than I would be willing to invest my life savings in an ecurrency HYIP over at talkgold.

Another interesting discussion on Bitcoins;
Bitcoin - P2P currency
edit on 17-5-2011 by Blackmarketeer because: (no reason given)




posted on May, 17 2011 @ 03:20 PM
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reply to post by wayouttheredude
 


buy BITCOINS it might go up faster in value the Silver..

mtgox.com... to see todays Value



posted on May, 17 2011 @ 03:42 PM
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And the biggest reason Bitcoin is vulnerable - as admitted by it's creator:


In the same paper Nakamoto writes:

"The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes."

"If a majority of CPU power is controlled by honest nodes, the honest chain will grow the fastest and outpace any competing chains. "

"If a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or using it to generate new coins."

"we proposed a peer-to-peer network using proof-of-work to record a public history of transactions that quickly becomes computationally impractical for an attacker to change if honest nodes control a majority of CPU power. "
-source


Once scammers (or the government with it's super computers) decide to turn their botnets loose on the bitcoin api, they can make those "honest nodes" appear to be wrong, while their hacked one appear to be valid. And the whole system is then undermined.

It's hard to build an economy around such a fundamentally flawed system as this.



posted on May, 17 2011 @ 03:48 PM
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reply to post by darrman
 


I have seen the exchanges and that is facilitating bitcoin getting traded into the old monetary system. Where it should be headed I think is in providing value that can not be purchased any other way. I can foresee some big acts in movie or music accepting payment in bitcoin only for their digital wares. They will amass large numbers of bitcoin this way and merchants will flock to bitcoin to be able to offer these artists value products for their bitcoin.

I think if ebook authors only allow their books to be purchased with bitcoin and other artist followed suit then it will be programmers, then technicians, then other merchants that want to provide wares for those clients flush with bitcoin. The same goes for online games. If you have to use bitcoin to play and the only currency allowed in the game is bit coin a really large online game would become a marketplace for bitcoin as well as a place to play.



posted on May, 17 2011 @ 03:59 PM
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reply to post by Blackmarketeer
 


I agree that the existing exchanges are inherently vulnerable but an attack on the portals for transfer of bitcoin into old world monetary system will simply make bitcoin evolve into a strictly p2p value exchange system. If they allow their old system to be tied to the bitcoin system that will at least give them an access point to tax.

If they attack the exchange portals they lose any leverage they had to begin with. If people start to use it as a strictly p2p value exchange TPTB lose any way to tax the system on the edges. They can not penetrate the encryption if there is nothing external to the p2p system of exchange.

I say it will adapt to dangers and evolve. People want this and are willing to spend thousands of hours in programming without pay to make it happen. It will happen bet on it.

For those who doubt bitcoin as something that is going to be big take a look at this sourceforge link: sourceforge.net...


edit on 17-5-2011 by wayouttheredude because: added link



posted on May, 17 2011 @ 07:03 PM
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My ecurrency of choice is...dun dun dun...Runescape gold!!! The exchange rates are reasonable: www.runescapeseller.com...

reply to post by wayouttheredude
 




If you have to use bitcoin to play and the only currency allowed in the game is bit coin a really large online game would become a marketplace for bitcoin as well as a place to play.
That's an interesting idea actually. A game(s) where the currency isn't bitcoins, but can be converted to bitcoins. Also, in game currency could obviously be purchased with bitcoins. It would give the bitcoin currency some sort of "backing". A post on the first page of this thread was saying it's a useless currency because it's not backed by any commodity.

While in game currencies aren't commodities, they are generated by hours of tedious and often repetitive jobs by players. The games have their own virtual economies where labor generates items that can be exchanged for in-game currency, and the laws of supply and demand are in effect. That is a fairly strong backing IMO.

EDIT: I even think there are certain online games where the in-game currency can be directly converted into real world money without having to deal with shady websites and making in-game trades.

EDIT: Here we go guys...check this out, this website apparently lets you convert Bitcoins into Linden Dollars (SecondLife currency): bitlex.org...

EDIT: Or we have this absolutely amazing website: www.virwox.com...

It's just as I suspected:


VirWoX, Buy or sell Bitcoins for Linden Dollars, which are in turn convertible to EUR, USD, GBP, and CHF. Supports PayPal, Moneybookers, NETELLER, paysafecard, and bank transfers. It is not necessary to have a Second Life avatar to trade on VirWoX!


EDIT: See here for a list of websites that accept bitcoin: en.bitcoin.it...

EDIT: Check out this video:



edit on 17-5-2011 by ChaoticOrder because: (no reason given)



posted on May, 17 2011 @ 09:13 PM
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reply to post by ChaoticOrder
 


Thanks for the edited parts of your post but they deserved another post of their own don't you think? Any way thanks for the added review of the information on bitcoin available all over the web.



posted on May, 17 2011 @ 09:39 PM
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reply to post by wayouttheredude
 




Thanks for the edited parts of your post but they deserved another post of their own don't you think?
Nah, I prefer to make edits unless there have been a few posts after me.

I'm about to try and "generate" some Bitcoins. The conversion rate is pretty good. Like $7 US or something for 1 Bitcoin. This is really interesting stuff, I've been reading up on it and downloaded the Bitcoin client. I'm going to offer my web development services in return Bitcoins on my website.



posted on May, 17 2011 @ 09:46 PM
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Originally posted by Blackmarketeer
Paypal isn't an "ecurrency", comparing it to one isn't fair, it's an online bank and subject to all those laws and regulations (not to mention they have a nasty habit of seizing accounts on pretty flimsy excuses).
edit on 17-5-2011 by Blackmarketeer because: (no reason given)


PayPal isn't an online bank according to wikipedia. It does not practice fractional reserve banking. It's classified as a money transmitter, though it is subject to some of the same laws as banks.



edit on 17-5-2011 by daynight42 because: removed link to video that someone already posted



posted on May, 18 2011 @ 02:14 AM
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video on how to "mine" bitcoins



posted on May, 18 2011 @ 08:42 AM
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reply to post by Thermo Klein
 


I would hate to see that guys electric bill lol.
That is a lot of hardware.



posted on May, 18 2011 @ 02:33 PM
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reply to post by imasecretspy
 


Im not arguing "bitcoin" will be the thing. but E-money will continue to become more popular as it circumvents governments. So you can cover your ears and go "na-na-na" all ya want. cyberculture wont be going away soon.



posted on May, 18 2011 @ 05:58 PM
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reply to post by TKDRL
 


I estimate he is burning about 2KW per hour with that rig. If he is paying on the high side say 17 cents per KWH and is making 2 bitcoin per day he is at break even. If he is not making more than 2 bitcoin per day he is losing money. Most bitcoin miners are making money. If your setup runs efficient you can net about $15 per day in passive income with a small home setup.

It is also important to know when they make bitcoin they are also providing services to the network so there is work involved there as well as power being used.


edit on 18-5-2011 by wayouttheredude because: dyslexic



posted on May, 18 2011 @ 06:15 PM
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reply to post by wayouttheredude
 


So set up another optimal machine (I'm assuming that network sharing is irrelevant since it is the program uses GPU) and at say $10 per machine per day transferred for real cash via PayPal, so just shy of $300 per month. You could buy a new machine each month with this and actually turn a nice passive profit - but it's exponential. Once you have a few up and running, rinse and repeat buying more gradually and enjoying the real money. Money for nothing interests me! But it also makes me think it will have a very short life span. We'll see.



posted on May, 18 2011 @ 06:36 PM
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reply to post by Pr0t0
 




That was funny but of course in my line of work I figure my life might be cut short by THEM/THEY if I am not careful. I have been working on some appliance ideas for bitcoin mining. For the big outfit they can deploy a rack of these babies. ServMax AS-3160G 3U 16X-GPU server Imagine about 10 of these monsters ganged together.

For the little guy side I am thinking of developing a USB external GPUs designed for bitcoin mining. With these you can gang a number of them on a USB port multiplier. Such a thing does not exist of course but the hardware software and knowlege for it does already exist. This is another opportunity waiting for development.

For the mid sized budget I will likely build on these motherboards that offer 3 PCI Express ports which can have a total of 6 GPUs running at the same time on the same board.



It uses icore7 technology and can host up to 24GB of main memory which is not that critical for bitcoin mining but nice to have if needed later.




edit on 18-5-2011 by wayouttheredude because: added link



posted on May, 18 2011 @ 07:20 PM
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reply to post by wayouttheredude
 


I hope china never hears about this, they will ruin it fast. These people set up werehouses full of people to play MMORPG and make fake money in the game, to sell it for real money.
If they find out about this, they will start setting up warehouses full of bitmining servers and no one else will be able to compete.



posted on May, 18 2011 @ 07:36 PM
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reply to post by TKDRL
 




they will start setting up warehouses full of bitmining servers and no one else will be able to compete.
It already seems that way to me. I'm finding it hard to mine a reasonable amount of bitcoins and I'm using a GTX285 black edition. Is solo better than pool mining? I heard you get like 50 at a time, but how long will that take me?


edit on 18-5-2011 by ChaoticOrder because: (no reason given)



posted on May, 18 2011 @ 07:49 PM
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reply to post by ChaoticOrder
 


I understand that the complexity for completing a coin increases with the bitmining traffic, Perhaps this mechanism weeds out the flash in the pan types to keep the system balanced.



posted on May, 19 2011 @ 09:19 AM
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Here is some relevant bitcoin news. Gavin Andresen the bitcoin development head will talk to CIA in June

This is nearly month old info but it tells you that bitcoin is certainly on their radar.



posted on May, 19 2011 @ 09:46 AM
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Originally posted by wayouttheredude
Here is some relevant bitcoin news. Gavin Andresen the bitcoin development head will talk to CIA in June

This is nearly month old info but it tells you that bitcoin is certainly on their radar.


I would love to be a fly on that wall.....

If the branch of the Federal government that is responsible for foreign intelligence is 'interested' I can only presume that at least some bankers are worried.... which kind of lends credence that they recognize this as a development in personal commerce in which they have no 'hook.'







 
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