Inside the Mega-Hack of Bitcoin: the Full Story
The storm had been building for over a week now. Last Monday at around 5 p.m. 25,000 Bitcoins were transferred from 478 accounts on the currency's largest exchange -- Mt. Gox. But that was just the beginning. Now Mt. Gox is admitting to a major breach and has shut down, in an unprecedented action. In all, approximately $8.75M USD worth of Bitcoins appear to have -- at least temporarily -- been stolen in the intrusion.
Well it has lasted a couple of years now.
Personally I just feel its too untested and there are too many things that can happen, as above.
Practicality is the foundation of Bitcoin.
I think the system has an internal elegance but I'm not sure it can be made both safe and practical enough to get a mass audience.
Haha. Well they already sort of are. You "pay" respect to a post by giving it a star.
I'm waiting for the day ATS stars can be used as digital currency
That's what I thought at first. But I've come to understand they are quite secure.
I hadnt heard of bitcoins untill now... seems like it would be easy to exploit.
It is digital currency but it isn't restricted to data or media. It could be used to purchase anything where the seller is accepting Bitcoins. You can already buy food and even accommodation in some places. It does have a dollar worth and can be exchanged for "real" money. One BTC is currently worth about $14.
If it is used as some type of digital currency for the trade of data or media then it would have to have some type of real currency exchange rate wouldnt it?
You are misunderstanding the definition of P2P, it is simply a technology that enables peer-to-peer networks which are hard to attack or take down. One of the reasons Bitcoin is quite resilient.
I thought P2P was already free
Bitcoins don't need to be backed by a commodity like gold because they are in themselves a commodity. They probably do get some of their value from the electricity it costs to make them, but the real value is in supply and demand. Demand will go up when more merchants start accepting Bitcoins.
Bitcoins, to me, suffer from this same issue. I understand the whole concept of 'mining' bitcoins, but I don't understand how leaving your computer to calculate endlessly for days gives Bitcoins any real value.
You could encrypt your wallet and store it on a flash drive then hide that flashdrive in the same place you hide all your other valuables. Then even if a criminal does get the flashdrive and find your encrypted wallet file he still wont be able to decrypt it 99% of the time depending on how you encrypted it.
Also, seeing as they're not controlled by any sort of legal governing body, from my point of view the risk of having them stolen is higher.
Yes, it is a big difference, but there will only ever 21 million BTC in existence, and there is currently about 6 or 7 million floating around. The US dollar is worth a lot less because there is a lot more of it. From my website: "Because only so many Bitcoins can exist, people worry they can get lost over time, or that a few entities might gain and withhold a large amount of Bitcoins, but the value of Bitcoin will always adjust according to the total size of the circulating money pool. Bitcoin has a precision of 8 decimal places, so even with a very small amount of Bitcoins in existence, the value can still adjust accordingly."
Yikes 1BC to $14 - thats a big exchange difference.
What is gold backed by? Why does it have value? Isn't the value of gold dictated by supply and demand? Would you consider gold a currency?
Bitcoins are still a fiat currency and are backed by nothing tangible. Scarcity can't add value as they can make as many bitcoins as they like. Saying it has value is based on supply and demand is also bunk due to the fact that no one will take it seriously as a currency.
So we should all stop using cash because people use it to fund crime?
basically linking bitcoin to illegal drug trade
You clearly don't even understand the basics of Bitcoin if you are going to say things like that. The rules (protocols) of bitcoin are decided by the entire network. I recommend that learn more about Bitcoin before making completely baseless claims as if they were fact.
Lol its a computer program so of course they can make as many as they like, one line of code can change the max amount.
]Bitcoins don't need to be backed by a commodity like gold because they are in themselves a commodity. They probably do get some of their value from the electricity it costs to make them, but the real value is in supply and demand. Demand will go up when more merchants start accepting Bitcoins.
The electricity used to "mine" them has no transferable value. Thats just like saying the computers that print digital money at big banks and the federal reserve electrical source adds value to our US dollars.edit on 25-7-2011 by wiandiii because: trying to figure out this kooky qoute function
Bitcoins are designed so that the computing power required to "mine" them is very high (and the difficulty increases with time). It can be very costly yo run a GPU at full capacity for excessive amounts of time, and you need a good set up to actually make a profit. Furthermore, I believe the cost of printing money is taken into consideration.
The electricity used to "mine" them has no transferable value. Thats just like saying the computers that print digital money at big banks and the federal reserve electrical source adds value to our US dollars.
Bitcoins are generated via a complex algorithm that works towards "solving" a block, this process is known as "mining". Using a GPU instead of a CPU can be up to 100x faster at generating hashes. If you aren't using the right equipment, it can cost more in electricity to mine Bitcoins than what the Bitcoins are actually worth.
You may be asking if simply running your computer to create money out of thin air is a scam, but they also create regular money out of thin air, and there is no end to how much they can inject into the money pool. You can make a profit in mining Bitcoins if you have the right set up, but the Bitcoins will not come free. It's just like mining gold, which is also a commodity. You pay for all the mining equipment, and then expect to make a profit, like any business.