Reply With QuoteIMO, this has got The South Sea Company written all over it!
This ten-step guide will tell you all you need to know...
http://www.tomshardware.com/reviews/...oney,3514.html
IMO, this has got The South Sea Company written all over it!
You won't make anything mining Bitcoins any more, but there are plenty of other coins to mine then buy the Bitcoins with those. I'm currently using a 7970 on my home PC and mining about 0.3LTC/24hrs, that's about £8 a day in profit. Though I'd just bank them in your wallet and wait. Still have some BTC banked from 2011, staggering the increase in value. As for Bitcoins, the full 21 million coins won't be have been created until 2040, fixed amount with a consistent demand then prices could keep escalating.
Last edited by fornowagain; 1st December 2013 at 03:53.
I'm sure I have an old shoe box full of the things somewhere in the attic.
"Once is happenstance. Twice is coincidence. The third time it's enemy action."
'Populism, the last refuge of a Tory scoundrel'.
In short, Bitcoin mining is how new Bitcoins are issued (and how transactions are validated, more of which below). Mining works by someone (a 'miner'), working alone or in a group, computationally solving cryptographic puzzles. When one of these puzzles is solved, a new Bitcoin is created (or 'mined'). The term 'mining' is inspired by gold mining. The cryptographic algorithm on which Bitcoin is based limits the total number of Bitcoins that can ever be generated and it also ensures that the process of generating new Bitcoins gets harder and harder as time goes on, meaning that it costs more and more (in terms of real world energy requirements) to generate each Bitcoin. This aspect of the protocol is very clever (both technically and psychologically): It means that the 'resource' of Bitcoins can never be devalued due to over-easy supply. If it was too easy to get new Bitcoins then people would not value them and they (Bitcoins) would not be trusted as a medium of exchange or value storage.Originally Posted by AlphaOmega
Miners are rewarded for their increasingly significant energy investment in two ways. These two ways will vary in relative importance as time goes on. The first way is by the direct reward of a new Bitcoin. Direct reward of Bitcoin for mining is the form of reward that is most important at the moment. The second form of reward for miners is to collect fees for validating Bitcoin transactions. In time, as the supply of new Bitcoins is exhausted, transaction validation will become the most important source of income for miners. It is also crucial for the working existence of the network.
It will be when new Bitcoins have been exhausted (a couple of years away) that the success or failure of Bitcoin will truly be sealed. I am not sure how it will pan out.
Note that Bitcoins can be subdivided into very small chunks, so the relatively small limit on the total number of Bitcoins does not represent a constraint on the practical liquidity of Bitcoins in day to day use.
For further information it's probably best to start with the Wikipedia article and work from there: http://en.wikipedia.org/wiki/Bitcoin
As an aside: I suspect that part of the high price of Bitcoins at the moment is due to the increasing energy requirements to generate new Bitcoins. In other words, the nature of Bitcoin mining is in part driving high prices. BUT that is not all. Bitcoin prices are, I believe, being driven by fundamental issues that are external to Bitcoin itself (i.e. freedom, flexibility, and resilience that conventional national currencies cannot match).
No, Bitcoin is not a pyramid scheme or Ponzi scheme. A pyramid/Ponzi scheme is predicated on the sale of a product that may not exist or may be worthless, and payouts to existing members come not from sales of the product but only (or mostly) from new members paying joining fees.
Bitcoin is a store of value. Just like a gram of gold, just like a US Dollar, just like a tin of sardines[1], just like a conch shell, just like a Pound Sterling, just like a watch, a Bitcoin is worth what a potential buyer thinks it is worth (which is reflected in the market price). The value of Bitcoin (measured in conventional national currencies) rises not because new entrants must pay an entrance fee (as in a pyramid/Ponzi scheme) but because buyers think that Bitcoins should be worth more. Another way to look at it is as a commodity. It is worth what people feel it is worth.
So why do people think Bitcoins have any value? Well, it's a complex question. Why do people feel that gold has value way above what it costs to mine it? Why do people feel that a US Dollar or a Pound Sterling have value over and above the near-trivial value of the paper in the note or metal in the coin? If you can answer these questions, you'll know why Bitcoin has a perceived value. In short it's because of an implicit, mutually agreed, shared trust model. Everyone has agreed that Bitcoins can be trusted as a store of value and as a medium of value exchange. Just as with conventional, national currencies, there has to be a reason for this trust. The cryptographic algorithm that underpins Bitcoin provides a very large amount of the trust because it limits how many Bitcoins can be produced in total, it limits how fast they can be produced, and it ensures that they cannot be faked or spent twice. Furthermore, Bitcoin has great utility because it is not based on the successes or failures of any nation state or central bank; it is utterly decentralised and fully independent, totally free (free as in liberty).
There is nothing to prevent the market price of Bitcoins dropping below what it costs to mine (manufacture) them but, if that happened, the supply of new Bitcoins and the ability to validate transactions would dry up quickly. It could happen, though, if trust in Bitcoin was lost for whatever reason (just as the value of nation state-backed currencies can plummet if trust is lost in them or the governments that back them -- see hyperinflation).
In short, you could still take the view, if you like, that Bitcoin is a pyramid or Ponzi scheme BUT, if you do take this view, you must remember that so too are all conventional nation state currencies! They exist and are trusted (or not trusted!) for similar conceptual reasons to Bitcoin. People value them because there is an implicit shared idea that they should be trusted and should be used to represent value (and that they will not be magically produced in too large quantities such that they become devalued). Neither conventional nation state currencies nor Bitcoin have any inherent value of their own.
Footnote:-
1: When used for currency, which is perfectly feasible.
Last edited by markrlondon; 1st December 2013 at 16:21. Reason: Fixed typos; added text
I'm not comparing Bitcoin with the others but parabolic moves on charts will ALWAYS collapse and return to the mean. But saying that investors with balls of steel can make alot of money depending on where on the chart we are, its just knowing when to get out at the top!
Mining will be more cost effective (in UK anyway) this time of year when homes need heating anyway. If anyone is heating homes with electricity mining will be virtually free.
The current value (in terms of what you can convert a Bitcoin for in terms of resources or other currencies) depends entirely on what people think it is worth. In this respect it is identical to any other currency (e.g. US Dollars, Pounds Sterling) or second hand watches or gold or anything else.
Did I answer this (albeit not directly) in one of my posts above?
Indeed, if Bitcoins could be freely or trivially generated then there would be no trust in then. But the Bitcoin algorithm very cleverly ensures that generating (mining) new Bitcoins is non-trivial (and increasingly so). In fact it has a very significant real world energy cost associated with it. I suspect that some of the most successful miners are using other people's electricity.
That is exactly what it is.
No, it is what gives Bitcoin its trust model. It is identical in function to central bank liquidity controls over fractional reserve banking and lending.
The market is open. There is no need for Bitcoin to be dominant. There can be multiple currencies (oh, wait, there are multiple currencies!). If you can think of a better way to create a crypto-based currency[1] then go to it. There is nothing stopping you.
Footnotes:-
1: It doesn't have to be crypto-based. If, say, you can get people to trust your judgement then you could issue new 'Omegamanics' on your personal say-so. So, instead of relying on cryptography to limit supply (such that the currency is not devalued by over-supply), Omegamanics would have supply limited by your good sense and the trust that people have in you as a person with good sense. Think this sounds wacky? Well, it is exactly what governments and central banks do when they alter allowed liquidity ratios for lending banks and when they control processes such as quantitive easing.
Compared to the meddling of nation states and banks, a fully decentralised crypto-controlled currency has many advantages. It is not subject to political control or meddling and does not rely on the comparative success or failure of any country or power bloc. This is one of the reason for the growth in value of Bitcoin: It is reliable and inherently trustworthy (compared to conventional, nation state-backed currencies)[2].
2: Well, it is reliable and trustworthy unless or until a major hole is found in the algorithm. None has been found yet.
Last edited by markrlondon; 1st December 2013 at 13:48.
Only if you can switch off the electric heating and just use the waste heat output from one's mining kit for heating. It's potentially feasible if you have enough kit (which is damned expensive nowadays for Bitcoin competitive mining).
Whilst you are correct that bubbles always burst and prices always return to the mean, I think it is still way too early to know what Bitcoin's mean will be. I suspect we won't know this until most new Bitcoins that can be mined have been mined (at which time most income from miners will come from transaction validation fees). Only then will Bitcoin begin to act in a more conventional manner.
It is possible that prices will continue to rise nearly exponentially (with the occasional, temporary mini-crash, as we have in fact already seen!) and then drop significantly (disastrously for some) when Bitcoins become infeasible to mine in large quantities. After that, we'll see the more conventional behaviour emerge.
Last edited by markrlondon; 1st December 2013 at 16:18.
Thank you for that detailed response. I still fail to see the benefit to the inventor, unless they have a lot of bitcoins themselves.
I have a distrust on the area, so will stay away from personal investment. It is something I have to deal with though in my working life, so I'll keep abreast of developments.
It's just a matter of time...
Don't need enough kit - just anything you have will lessen load on electric heating.
That only matters if you feel the need to fully understand it. Most people couldn't care less. Very, very few people can even begin to explain fractional reserve banking and yet we all use currency based on it.
In other words, the exact technicalities behind Bitcoin will not and do not prevent it being increasingly widely used. The average user does not know, does not care, and does not need to know how it works.
I think it most likely that there are flaws in Bitcoin that are as yet unrealised. But it has shown what is possible. New crypto-based currencies will very likely arise in time.
As it happens, I don't think the limit of 21M Bitcoins is a flaw; it seems to be a key strength to me. It is necessary to limit things to help create and maintain trust.
There is no need to own a whole one. It's not a problem. Bitcoins can be subdivided into very small units. I forget the exact component size but it's very small. The relatively small total number of possible Bitcoins and the relatively high value that each Bitcoin will inevitably attain (far higher, I suspect, than at present) is not in any way a limit to practical ownership, use, or liquidity.
Indeed. This is part of why they are increasingly popular.
And one will appear if need be. Seriously, as I said in another post, it's an open market that responds to market desires. If Bitcoin is shown to be fatally flawed then other crypto-backed currencies will be invented to take its place. There already are other crypto-backed currencies but they do not have Bitcoin's fame because Bitcoin is currently sufficient for the market.
As above, I rather suspect that Bitcoin will not be THE mega crypto-currency of the future. The 'one' (or ones) has/have not yet been invented. But Bitcoin has shown the way and is doing a good job of it so far.
You're only guilty of tax evasion if you don't pay whatever tax is due in your local jurisdiction (and err.. if you're caught). In the case of Bitcoin, it might be Capital Gains Tax in the UK or possibly not, if they are to be treated as currency. As ever, states will catch up and try to contain and control the new phenomenon (they didn't invent it so will really, really hate it) but, luckily, the nature of Bitcoin moves people's control of value outside of any state control. (See also my comments in http://forum.tz-uk.com/showthread.ph...=1#post2947681).
**edit -- additional **
To add to this, each Bitcoin can be divided to 8 decimal places. This is 0.00000001 of a Bitcoin, known as a "satoshi". This in turn means that each Bitcoin contains up to 100 million units of value! This equates to a final total of 2,100,000,000,000,000 units of total available liquidity. This should be adequate to maintain market liquidity.
Last edited by markrlondon; 3rd July 2014 at 13:25. Reason: Added additional info
There are two possible answers to this (which are not mutually exclusive):
(1) The inventors did not intend to directly benefit from it. They intended it either as an interesting experiment (that was far more popular than they believed would be the case) and/or to benefit the community at large[1].
(2) The Bitcoin algorithm makes it harder to mine Bitcoins as time goes on. At the beginning it was easy to mine Bitcoins and so we can assume that the inventors mined quite a few when it was easy to do so. But, then again, they didn't know it was going to take off as much as it has done. Perhaps they are looking back at it and wishing they had mined more when the hardware and electricity was more affordable. ;-)
I think you are right to distrust it but, if you do distrust it, then (for very similar reasons) you should probably distrust conventional nation state-backed currencies just as much or more. ;-)
Footnote:-
1: What, benefiting the community at large with no (direct) expectation of reward!? Sure, it is how many open source projects work. People put in effort in return for... well, at most some kudos and possibly indirect benefits down the road (e.g. better job opportunities, the warmth of fame, etc.).
True, but I don't think ASICs or GPUs are very efficient heaters. In other words, you will get some heat out of them (a lot in fact) but it will still likely cost a good deal more (taking into account today's energy cost to mine Bitcoins) then the conventional heating would. In other words, it won't be free; it will significantly increase your electricity bills. If you just want heating, it could probably be more cost efficient to use conventional heaters.
In theory the increased electrical (and hardware) cost of mining will be repaid by the appreciating value of your Bitcoins but that's still a risk I'm not willing to take. I am truly a risk-averse investor, I am sorry to say. :-(
No, all electrical energy used by mining hardware will be converted into heat energy.
1kW of electricity used will produce the same 'heat' as (for example) a 1kW heater.
Unless you are running an air source heat pump. Like me.
"Bite my shiny metal ass."
- Bender Bending Rodríguez
That's not really electrical heating is it? Rather like comparing the electricity consumption of a gas CH system.
No, but even direct heating methods differ in effectiveness, radiant, convection.
And in summer the heat is not needed, or at night. It's a spurious justification.
"Bite my shiny metal ass."
- Bender Bending Rodríguez
It's not spurious. I was suggesting for winter use.
Extra heating at night will not be wasted and less will be required in the mornings. I'm not suggesting that mining be the main source of heating just that any heat (electricity) is not wasted and savings will be made elsewhere.
For a well insulated house all electrical heating methods should ultimately heat the house to the same extent.
+1 That's much clearer.
I once read a book on Whit Diffie and asymmetric keys. It was about cryptography, factoring primes (IIRC) and various other interesting fields including the decipherment of lost texts. Anyway, I thought I understood it. On reflection though, I'm not sure I did.
Appreciate you taking the time to explain this - I can see that further reading is needed.
The code book by Simon Singh is worth a read. Slightly old now, but fascinating.
"Bite my shiny metal ass."
- Bender Bending Rodríguez
Good shot, Sir! That was it.
Bitcoin value has already peaked according to that Tomshardware article - of course the value might rise again... as indeed the value of nation currencies fluctuate.
I guess the only people really making money are the Exchanges, the Hardware companies & the Power Utility companies.
It might be argued that the real benefit is to have a currency "free" from political interference though I would argue that nations only tinker & try to react to the real power of the commercial money markets & exchanges.
In that respect Bitcoin will be/is no different.
Bitcoins have gone up very significantly in value since the date of that article, if I remember correctly! ;-)
[Edit: They have very, very, very significantly increased in value since June!]
I suspect that Bitcoin prices will continue rising in fits and starts (with relatively small mini-crashes along the way, some of which have already occurred) UNTIL the bulk of the possible supply of new Bitcoins has been mined[1]. When the primary income for miners moves from the direct production of new Bitcoins to transaction validation fees, then I think we'll see a sudden drop in Bitcoin prices (but probably still to a level very much higher than today's prices[2]) and thereafter they will cease to act like a bubble and will settle down to a more 'normal' cycle of price variations.
Conventional nation state-backed currency issuance is under the direct control of governments and central banks. They can allow more money to be 'printed' by implementing QE or they can allow more or less money to be created through lending book entries by lending banks (by controlling permitted liquidity ratios). Bitcoin is substantively and fundamentally different in that there is no central control of any sort, except for the underlying algorithm. No one can make miners mine it or prevent them from mining it. There is no central control or influence on how much Bitcoin is in circulation. It cannot be tinkered with or meddled with.
Footnotes:-
1: Unless, that is, some sort of terrible hole is found in the Bitcoin protocol OR some other crypto-currency or currencies become more massively more popular.
2: In other words I feel that Bitcoin (barring any terrible disaster as per footnote 1) is still fundamentally deeply undervalued due to the limited total supply vs. overall desire for such a currency. However, this desire could, in and of itself, generate desire for alternative crypto-currencies which could, in turn, limit the rise in growth of the value of Bitcoin. In short, the future is uncertain, except to say that crypto-backed, decentralised currencies are here to stay and will most probably cause (are already causing[3]) a paradigm shift in what we think of as money and in who controls it.
3: We don't know it's happening because we are still on the inside looking out. The magnitude of the changes currently under way will only become apparent 10 to 30 years in the future.
Last edited by markrlondon; 1st December 2013 at 16:23. Reason: Additional
S'ok. I do not partake in garbology just for my own ends. I kept my copy.
Last edited by stooo; 1st December 2013 at 17:29.
"Bite my shiny metal ass."
- Bender Bending Rodríguez
Except for the fact that it is now the commercial money markets that realistically control the 'value' of a currency - not nations, as much as they would desire it to be so. And as such Bitcoin will eventually fall under their influence, if it hasn't already done so.
The key point in this context is that market forces (which have always controlled Bitcoin prices) are not the same as centralised state control.
More problems.
http://www.bbc.co.uk/news/technology-25185225
Why is this a problem?
"Bite my shiny metal ass."
- Bender Bending Rodríguez
Would have been a problem a year ago, when bitcoins were being primarily being bought and mined to be used as currency on sites like this. However, they are now being bought as investments, more like shares in a company, so not really a problem anymore.
That is not a problem related to Bitcoin, per se. The involvement of Bitcoin is purely peripheral there.
I don't really think that has ever been true of Bitcoin.
Does illustrate that Bitcoins are perhaps not as secure as either physical cash or currency held in bank accounts.
Not really. You've got a currency that is nowere near as secure as people think (I know this is because of lax security by the people holding the bitcoins but still) and this is coupled to a system with no regulation and absolutely zero way of getting your bitcoins back.
No, there is no evidence of insecurity of Bitcoins there. There is only evidence of poor security and backup procedures, which are problems that are independent of Bitcoin.
As you say, the problem is one of lax security by the people holding the coins. That is a problem that is nothing to do with Bitcoins (other than that the data stolen in this case represented Bitcoins, rather than any other sort of data). The Bitcoin protocol is still secure.
No regulation is one of its goals and key strengths! It is not a flaw; it is a design goal and it is part of why it is successful.
Zero way of getting your Bitcoins back (if they are not backed up, see also below) is just like cash. Again this is not a weakness or a flaw; it is a design goal and part of why it is successful.
In summary, if you feel that anything we have recently seen demonstrates a weakness in Bitcoin's protocol or security then you are misunderstanding what Bitcoin is. Bitcoin has performed perfectly and correctly in the scenarios at hand. The losses are, as noted, due to poor computer security, not any form of weakness or problem with Bitcoin.
Indeed, one of Bitcoins great strengths is that it can be backed up! You can't back up cash or your bank account.
In other words, if your Bitcoins go missing and they weren't backed up, that's not a fault with Bitcoin; it is a fault with your storage and security procedures. Never, ever assume that a third party will handle it better than you can.
I can't disagree with that. The use of Cryptographic technologies in Bitcoin can lead to a false sense of security surrounding them. But as above - if you lose (or have stolen) your private key you are by and large goosed.
You can operate an 'offline' wallet - one which has no internet connection. These may become commonplace.
And as far as anonymity goes - it's anonymous until someone links your wallet address to you after that it's all in plain sight (assuming you also know the identities of those which transactions are happening with).
Witness the FBI's bitcoin wallet....
https://blockchain.info/address/1Ffm...TjJJusN455paPH
Dig back past the spam-donations and you will see the silk-road seizure.
There are ways to further enhance anonymity... but those might need Bitcoin v2.
I do not believe the crypto-currency de-facto standard has yet been defined.
"Bite my shiny metal ass."
- Bender Bending Rodríguez
Surely you should disagree with it because the points made are substantively and objectively wrong or irrelevant; they appear to me to be based upon a misunderstanding of Bitcoin's goals, USPs and strengths. I.e. The points amde are based upon expecting Bitcoin to be something that it is not (and cannot and should not be). See my response in my message above, http://forum.tz-uk.com/showthread.ph...=1#post2950378.I can't disagree with that.
This is very true of all cryptographic techniques. People always, always think that security, secrecy or privacy are easier than they are and do not take into account the need to alter behaviour patterns as well as to use cryptography. Most people seem to think that it's fine once you've clicked 'Encrypt'.
But none of this indicates a weakness in cryptography in general or any particular implementation of cryptography; instead it indicates a weakness in human nature. People just don't tend to want to understand what they are doing.
Which is not a flaw. It is to be expected and how it is supposed to be.
I am amazed that any other way is common but then people have become enamoured by the 'cloud'.
As I said earlier on in this thread, I think you are correct that the de facto standard (or standards, there is no need for there just to be one) have not yet arrived. But there are certainly no significant flaws so far found in Bitcoin. So far, everything with Bitcoin has worked perfectly. The issues that marcus fenix mentioned are not flaws but are design goals, key USPs, and part of its strength.
They are insecure insofar as they have been stolen. That should be evidence enough.
They may be secure cryptographically but that is not the whole story. Unless they can be held safely (and compensation paid if stolen) the general public people will be wary of using them.
No, that is not insecure. Cash, gold and watches can be stolen but that doesn't mean that cash, gold or watches are 'insecure' in any inherent way. If your cash, gold or watches are stolen it means that your security procedures were insecure, not that the underlying object has an inherent security problem.
They can be. They can be and should be backed up. The fact that they were stolen is, as I said, a failure of security procedures and is not a failure of the protocol. Indeed, the fact that Bitcoins can be backed up makes them inherently far more secure than cash!
To think that Bitcoins being stolen from someone means that Bitcoins are insecure in any way is a conflation of entirely separate things.
Whom do you think should pay this compensation, and what exactly should it be paid for?
You seem to be looking for obstacles that are nothing whatsoever to do with Bitcoin.
Let me re-iterate: The whole point of Bitcoin, the key thing that gives it is strength, is that it is in the owner's hands (unless they choose to hand over that responsibility to someone else). There is no come back against anyone else. There is no regulation. These are features, goals, strengths; they are not problems. These thing only appear to be problems if you are expecting Bitcoin to be something it is not, something it certainly should not be.
The general public have no reason to be wary of using Bitcoin. It has performed admirably so far. Losses from an incompetent third party are not a valid or sensible reason to be put off using Bitcoin (no more than losses from incompetent third parties are a reason to be put off using nation state-backed currencies). Bitcoin has worked exactly as expected and exactly as it must do in order to be successful.
Last edited by markrlondon; 2nd December 2013 at 18:14.
I'm not looking for obstacles I'm just pointing out a flaw that exist in the use/holding of Bitcoins.
As I understand the way they work (and mentioned in this thread) is that eventually it will be difficult for individuals to 'keep' their own Bitcoins due to the size of file(s) involved. There will then be no alternative to handing them over to a third party for safe-keeping. If they are then stolen or otherwise misappropriated I would expect them to pay compensation in the same way a bank holding a deposit or a vault storing gold would be expected to if their incompetence resulted in loss.
Mixing backup and theft together across a few sentences like that is quite misleading. These are separate issues. If you backup your wallet but I access your wallet, compromise your private key or your passphrase, and steal your bitcoins, your backup is worthless. You cannot get your coins back by using it. I know you understand this, but just to make it clear to others.
Until urine and faeces have tangible monetary value, there will be a way for possessed value to be stolen. Indemnification is another matter, possibly borne out of regulation.
In reality anyone can hold your wallet without holding your key or access to your funds. They are just blockchain content providers at that point.
"Bite my shiny metal ass."
- Bender Bending Rodríguez
As I've explained, there is in reality no such flaw. There is no inherent security flaw in the use or holding of Bitcoins. It is more inherently secure than cash, for example. The only flaws in this context are in individual implementations.
You seem to be confusing a problem with one particular security implementation with a flaw in the entire protocol. They are different things.
This could be an issue eventually but time will tell. It's certainly not a problem in reality yet. I suspect that it never will be a problem in practice in general. (Individual implementations may vary, of course).
Ah, that's something which is external to Bitcoin.
Well, right now here in reality, you could quite legitimately sue the person or the business that lost your Bitcoins just as you could sue a bank for its failures. The situations are no different. Indeed, banks do make errors and people do sue them (rarely) and do win (even less rarely). The only substantive difference here is that if your bank fails completely (such that it can't be sued because it has no assets) then the government (in the UK at least) underwrites a certain proportion of private individual's assets held with that bank.
But, just because the government doesn't underwrite Bitcoin holdings, that still does not mean that there is a weakness in Bitcoin! It just means that the government is meddling in the banking industry. Remember that lack of state meddling is one of Bitcoin's key goals and features.
Last edited by markrlondon; 2nd December 2013 at 18:32. Reason: Added clarifying text
Good points.
I understand everything you've said and I am not confusing anything. I understand there is no flaw in the security protocol.
I just think there is a flaw in the way in which they will actually be held.
Fair enough. It's just that the type of flaw in the way they are held can and does apply equally to any other kind of asset: Poor security is always a problem. It applies equally to money in bank accounts, to data of any sort stored on a computer (e.g. usernames and passwords), to physical currency, to physically held gold bars, to a watch collection, and so on. The principle of poor security due to human error and fallibility encompasses both digital and physical assets.
What this means is that the problem to which you refer is not unique to Bitcoin and is not enhanced by Bitcoin. Indeed, Bitcoin provides ways to mitigate it that other currencies cannot! The problem is in fact a fundamental problem of human nature.
If this facet of human nature seems more readily apparent when considering the security of Bitcoin then I think this is just a result of the newness and novelty of Bitcoin and of inevitable mental association with the extra layers of state involvement that apply to nation state-backed currency and to which people have become complacent, and which do not and cannot apply to a decentralised currency. Similarly, people ask why should they trust Bitcoin when they trust nation state-based currencies without a second thought (nation state-backed currencies being trusted on exactly the same logical basis as is Bitcoin). They only consider Bitcoin in this light because of its novelty.
In short, questions naturally arise when a new idea comes along, even when those questions apply equally to existing ideas.
I'm still struggling to see the point of them, it would seem to be an investment commodity rather than a currency, is that the idea? If it is supposed to be a currency I would have thought stability and consistancy would be a 'goal' amongst the community using them, otherwise if there is the continued rise in 'value' then they will be hoarded and not spent so defeating the object... If they are an investment like a stock or share, what is it exactly you own?
Cheers..
Jase
Just been reading about the $100 million heist:
http://www.newstatesman.com/future-p...atch-real-time
I don't fully understand it. I think they can see this guys wallet, who is trying to launder the money, but by donating him small change they can continue to track where his money is going....constantly trying to trace him so that he can't cash the money out.
Kind of like a great train robbery for geeks.
Thanks for the explanations in this thread, I feel I understand the whole bit coin concept a little better.
Despite the volatility of it I'd consider speculating with a small cash amount as an investment - not to purchase with. If I wanted to buy a few hundred quids worth, where would I start?
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