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How To Use Bitcoin – The Most Important Creation In The History Of Man

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posted on Jun, 1 2011 @ 06:27 PM
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reply to post by MischeviousElf
 


It is backed by the electricity and time required to produce a coin.

A normal computer would take months, possibly years, or longer on average to produce a block of 50.

It takes massive servers and large amounts of time and money to make a profit at mining the coins.

Those are real physical costs that are incurred to produce a coin, in the same way real physical costs are required to produce gold/silver/copper or whatever.

The average PC would burn more in electrical costs than it would generate in coin production.

edit on 1-6-2011 by mnemeth1 because: (no reason given)




posted on Jun, 1 2011 @ 06:48 PM
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Sites currently accepting bitcoin as payment.
en.bitcoin.it...

Electronic Frontier Foundation article on Bitcoin.
www.eff.org...

Techland article on Bitcoin.
techland.time.com...



posted on Jun, 1 2011 @ 06:50 PM
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I have the same question from page 2

Who gets your currency after you convert it into bitcoins?

I'm not versed in currency so please correct me if I'm wrong ...

I have x us dollars
I convert them into bitcoins based on an exchange rate
This turns my us dollars into un-tractable, un-taxable, un-regulated, international currency.
these bitcoins are then accepted by a seller who has something I want
I virtually perform a transaction
I have exchanged goods for bitcoins

The seller has to pay rent, how does he change bitcoins into something he can pay his rent with?
He can't right? This is worthless until everyone accepts it as form of payment?

Am I missing something?

Edit:

So the link above en.bitcoin.it...
Says that biticons are being traded on exchanges and being converted into cash. If that's legit its pretty wild its going on. At the least its an incredibly slick way of laundering money.
edit on 1-6-2011 by drock905 because: (no reason given)



posted on Jun, 1 2011 @ 06:52 PM
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To correct the "bitcoin is divisible infinitely" they are actually divisible to 8 decimal places.



posted on Jun, 1 2011 @ 07:12 PM
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I think folks are jumping to conclusions without all the information.
Here is a good video that asks all the questions. It s a bit long but I think
it gives a lot of info. Also if you don't want to watch the whole thing there is
a list of all the questions asked and time of the clip in the video on
it, so you can pick and choose.

thisweekin.com...
-and-amir-taaki-on-this-week-in-startups-140/

At one point the guy heading up the open source project says the CIA contacted
him and wants him to do a presentation to them on it in June for thier venture
capital section.
edit on 1-6-2011 by hawkiye because: (no reason given)



posted on Jun, 1 2011 @ 10:37 PM
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reply to post by mnemeth1
 


on the contrary, it seems you can mine these things, effectively creating them. the market you see might be nothing more than the created bitcoins being sold to people thinking these things are the next gold.

of course, an entire monetary system that exists on the internet is rife for abuse - scammers, hackers etc. I'd rather keep mine where I can hold it.



posted on Jun, 1 2011 @ 10:40 PM
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Originally posted by mnemeth1
It is backed by the electricity and time required to produce a coin.

A normal computer would take months, possibly years, or longer on average to produce a block of 50.

It takes massive servers and large amounts of time and money to make a profit at mining the coins.


so, as computers become faster, it will be easier to produce them, creating a surplus, driving the price down.

I'm guessing the bulk of the bitcoins sold are mined and that converting them back to cash isn't easy and won't be any easier as time progresses.



posted on Jun, 2 2011 @ 12:03 AM
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Originally posted by Crakeur
reply to post by mnemeth1
 


on the contrary, it seems you can mine these things, effectively creating them. the market you see might be nothing more than the created bitcoins being sold to people thinking these things are the next gold.

of course, an entire monetary system that exists on the internet is rife for abuse - scammers, hackers etc. I'd rather keep mine where I can hold it.


Crakeur, I suggest you look into these things with more than just a cursory google search.

Yes, you can mine them. However, your odds of actually getting them without joining a mining collective or owning a gigantic server rig are abysmal. Currently it takes more power to mine them than they are worth by using a standard computer. Further, there is a cap on the total number that can EVER be produced.

The market I see is a an electronic currency that has value.

forum.bitcoin.org...

On April 4th 2011 30,000 bitcoins were abruptly sold on the largest BitCoin exchange, consuming nearly all "buy" offers on the order book and dropping the price by nearly 1/3. But within a couple of days, the price on the exchange had fully rebounded and bitcoins were again trading at good volumes, with large "buy" offers slowly replacing the ones consumed by the trades. The ability of such a small economy (there were only 5 million out of the total 21 million bitcoins circulating then, or about 3.75 million USD worth at then-current exchange rates) to absorb such a large sell-off without crashing shows that bitcoins were already working beautifully.


You know I'm not suggesting that you should jump in and buy bitcoins if you personally think it is a bad idea. I'm suggesting that people should learn more about this and get involved because it has some extremely positive potential.

If you don't want to use them, great. But don't knock them when you don't even know the first thing about them or the economic reasons as to why they have the value they do.



edit on 2-6-2011 by mnemeth1 because: (no reason given)



posted on Jun, 2 2011 @ 12:58 AM
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The same thing that happened to napster will happen to this. It will become commercialized bigtime. Any big thing that comes along is sold to the big dogs. Look at what happened to skype.



posted on Jun, 2 2011 @ 01:26 AM
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Originally posted by THE_PROFESSIONAL
The same thing that happened to napster will happen to this. It will become commercialized bigtime. Any big thing that comes along is sold to the big dogs. Look at what happened to skype.


It can't be sold nobody owns it, there is no central authority, no one to trust etc. You guys should really read up on the link mnemeth1 posted and understand how it works.



posted on Jun, 2 2011 @ 02:49 AM
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So of those of u here mining - how many of you are mining solo and how many are in a pool?



posted on Jun, 2 2011 @ 02:50 AM
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reply to post by Nonchalant
 


It doesnt make sense. Isnt mining the same things as making it out of thin air? Those government entities and corporations who have a lot more computer power can efficiently make a lot more coins and inflate the system. Im pretty skeptical about this.



posted on Jun, 2 2011 @ 03:29 AM
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Well after many years of lurking ATS... of all the many discussions and topics I feel Bitcoin deserves my first reply to a post.

Yes, Bitcoin.

I have been mining bitcoins in a pool (deepbit) since the end of April when I finally learned of this most devious idea. Despite having a background in Information Technology (IT) I was bitcoin ignorant until then but have been mining bitcoins 24/7 since then amassing a total of 31 bitcoins at the current exchange rate of $9.57, so not bad for essentially running a screensaver.

Yes, I do believe in bitcoins and I urge everyone to take another look. My business will be accepting them soon. Really, unless your a corporate shill (you may not even know it by the way), a big fat white shoe bankster or a fiat currency loving zombie - you'll get the concept.

Having studied monetary policy and history in general I predict that Bitcoin will change everything just like the internet did.

If you had the opportunity to buy $10 million for $10, would you do it? How many times?

There will only ever be 21 million Bitcoins, you want at very least one, let me leave you with a quote from an individual congratulating Satoshi Nakamoto, the main developer of bitcoin back in 2009 after the first version was released.



As an amusing thought experiment, imagine that Bitcoin is successful and becomes the dominant payment system in use throughout the world. Then the total value of the currency should be equal to the total value of all the wealth in the world. Current estimates of total worldwide household wealth that I have found range from $100 trillion to $300 trillion. With 20 million coins, that gives each coin a value of about $10 million. So the possibility of generating coins today with a few cents of compute time may be quite a good bet, with a payoff of something like 100 million to 1! Even if the odds of Bitcoin succeeding to this degree are slim, are they really 100 million to one against? Something to think about...

-Hal Finney



posted on Jun, 2 2011 @ 03:47 AM
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Haha, I'm going to buy some bitcoin.

Just to own them in case. Worst case scenario, I'll buy t-shirts and give them to the salvation army.

Best case? well there's only going to be 21 million of these things right?



posted on Jun, 2 2011 @ 04:13 AM
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Originally posted by mnemeth1
I don't think it is a test for a world currency.

It is a world currency.

One that was put together by sane logical rational software developers who aren't bankers or politicians.


Hurrrr durrr durrrr...ok sure, you can make that silly distinction if you want to...I think it's pedantic of you though. I have to wonder now if you don't get the obvious major, important differences...

I mean come on, the dollar is a "world currency" by that sort of measure. And it's a lot better than bitcoin because you can spend it in so many more places and for so many more things. Same deal with the Euro and other major currencies. You can deposit Japanese Yen or Chinese Yuan or Norwegian Kroner or whatever at any bank into your checking account at that bank or pretty much any other bank and then make a withdrawal in the local currency. The fees for exchanging these currencies are even much lower than for exchanging bitcoins into a major currency.

But on my first point...maybe you don't get that what I'm saying is that I'm skeptical about the origin of bitcoin and its supposed bonafides as some sort of jedi-rebel threat to the empire. Maybe if that ridiculous notion wasn't being touted in every bitcoin pushing article/blog/thread I read I wouldn't be so skeptical...

What I'm saying is, when you consider the real limits of knowledge being what they are, you can never be too sure about the origin of these things...the more clever the scheme, the less likely it is that one pretty clever dude came up with it by himself, and the more likely it was to have come from a team of professionals working for 'the man' or 'the military industrial complex' or whatever you want to call it, who then try to pass it off as a 'garage project' sort of startup.

Facebook is the best example of that sort of thing. It got DARPA money and attention fairly early in its life. It even got a whitewash with a movie about the startup that left out the DARPA funding etc. One might even suggest that the movie was a psyop to purposefully establish a false story(one with many key missing pieces, even if what was put on screen was all true) in the minds of the masses about the founding of Facebook.

As in, this bitcoin thing certainly could be a project of bankers and politicians and intelligence organizations. Would you use it if it was BitcoinTM by JP Morgan? Or if the CIA was all like 'hey, we made this, we hope this will help destroy the current crop of national currencies.'

And even if it isn't something like that, they'll all be keeping an eye on it, and all the other virtual/digital/internet currencies too, and lessons learned from it could result in features being incorporated into the actual world currency people mean when people say 'world currency.'

'They' (any government or major corporation) can easily take it over and/or crush it whenever they want to. One way: all they'd have to do is throw some serious supercomputing power at making bitcoins and they'd be the ones holding most of the newly minted bitcoins. Nothing could stop them from doing that. They could also use the supercomputing power to crack the cryptography...and of course the major governments have the power and people and organization for doing exactly that already.

It's also not anonymous really in a 'total information awareness' scenario where the sender and receiver are being monitored at all times anyway. While I don't think that's quite where we are at already, I couldn't rule it out, and how far off can it be? It is significantly anonymous, for now, in that your basic local authorities do not have that sort of capability. But the NSA is either already there or close.

A world currency just isn't the 'world currency' until you can pay your taxes in it and every merchant has to accept it, and probably only it.

Against the sort of resources "they" (major governments of course but also any large corporation or bank even) could deploy to crush bitcoin if they really wanted to, it'd be completely powerless. Bitcoin will not be blowing up any Death Stars anytime soon.

Still, it's interesting, and could become useful, even to people who don't use Tor and want to use it for more than just 'nuisance' scale illegal commerce.

Speaking of Facebook btw, it just so happens that both Facebook and Google are about to make a push into e-commerce in a big way. Google is hitting a new milestone with their Google Wallet for Android, and Facebook is doing a bunch of hiring for their push into e-commerce, as you can see from mainstream media sources. Also, JP Morgan and some other big banks are working together to make their own paypal like service.

So maybe bitcoin and stuff like it are part of lighting a fire under their butts and getting them moving on that front. Or maybe it's just one of their projects.

Anyways...enjoy it for what it is, and maybe get some good utility out of it...but I don't see any reason to get too flippin' excited about it. I don't see any reason to turn my brain off and not ask questions...

For example, I wonder, if you would disclose about how many bitcoins you are currently holding, and what price you bought them at, or if you are a miner, since you made a bitcoin hype thread?

edit on 2-6-2011 by 11andrew34 because: it's->its x2



posted on Jun, 2 2011 @ 04:23 AM
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Originally posted by THE_PROFESSIONAL
It doesnt make sense. Isnt mining the same things as making it out of thin air? Those government entities and corporations who have a lot more computer power can efficiently make a lot more coins and inflate the system. Im pretty skeptical about this.


Mining is not the same thing as making them out of thin air. You are contributing computing power to a cryptography backed currency and thus increasing the strength of the cryptography, which increases the reliability of the system, and thus should increase its value and utility.

But on your second point...yes. It would take some fairly serious computing power to mess with bitcoin, but it's not at all an impossible amount. There are a bunch of government entities who do have the computing power to mess with bitcoin. I think the Chinese even have what's supposed to be the world's fastest supercomputer now...but of course others could be classified or otherwise out of public view.

Corporations like Google, Facebook, IBM, Microsoft should as well. Any major engineering company like Lockheed etc could. Banks have lots of computing power as well.
edit on 2-6-2011 by 11andrew34 because: clarification

edit on 2-6-2011 by 11andrew34 because: it's -> its



posted on Jun, 2 2011 @ 04:26 AM
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is this one of them really stupid threads?


i guess the tittle says it all. ya think?


where do i sign up? how much do i have to pay? what will will the conversion be?


do i have to kill myself when the mothership arrives?



posted on Jun, 2 2011 @ 04:39 AM
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reply to post by 11andrew34
 



But on my first point...maybe you don't get that what I'm saying is that I'm skeptical about the origin of bitcoin and it's supposed bonafides as some sort of jedi-rebel threat to the empire. Maybe if that ridiculous notion wasn't being touted in every bitcoin pushing article/blog/thread I read I wouldn't be so skeptical...


The project is open source code there is no mystery about it except to those that don't research it.


As in, this bitcoin thing certainly could be a project of bankers and politicians and intelligence organizations. Would you use it if it was BitcoinTM by JP Morgan? Or if the CIA was all like 'hey, we made this, we hope this will help destroy the current crop of national currencies.'


It cannot be controlled by central authority by its very nature, no banker politician etc. can have any central control over it so there is no way they would design something they do not have absolute control over. Again do your research.

forum.bitcoin.org...



edit on 2-6-2011 by hawkiye because: (no reason given)



posted on Jun, 2 2011 @ 07:18 AM
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reply to post by fooks
 


Ahh no, but your post is one of those stupid pointless ones, if you were wondering.

Bitcoin is a virtual currency, only so many bitcoins will be produced. Currently a single bitcoin is worth around 7$ US. Because of the "coinfarms" a single user will probably never generate a coin, and will spend more electricity mining that they we get in returns.

A coin is created by people running software in the background on their PC that uses spare cpu cycles to work out a hashed algorithm, you solve it, you get the coin.

It costs nothing to join, or use. You sign up with a valid email, install a coinminer app, and wait. All currency transactions are done via p2p, no central authority exists, so there is nothing to gain "control of" Currently there are various websites that accept bitcoins as payments, and this list is growing.

There is a draw back, related to electricity usage. To make it worth your while you will need to form groups of miners and split the profits, kinda like going in at work on lotto tickets.

Some people opt to setup a bunch of computers and do it alone. And recently, have gotten some attention for this. Their electricity usage went up so high, so fast, they started getting raided as the police assumed they were indoor pot grow ops.

The dark side is, since there is no authority and it's essentially anonymous, the "criminal element" might latch on and use this for funding. But if we limit technology and innovation to remove what might, someday, maybe, be used for bad purposes, we have already lost the war.



posted on Jun, 2 2011 @ 07:22 AM
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reply to post by phishyblankwaters
 


As of right now bitcoins are worth about $10.50 US with about 3x more buy orders than sell orders. Not sure what to think about this insane rise in value.



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