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Posted

The Hole In Bitcoin

 

"Over the past few weeks, our more observant readers may have noticed increasing media coverage of Bitcoin, the decentralised cryptocurrency designed (or should we say, "coined") by a clever developer known pseudonymously as Satoshi Nakamoto (anagram solutions welcome).

We've yet to find an article which combines a grounding in the technology and economic analysis that a layperson can grasp, so this is our attempt to explain what all the fuss is about, and why you are probably looking at one big, energy-consuming bubble..."

 

http://webb-site.com/articles/bitcoinhole.asp

 

Thanks for posting this. I guess the title should be "Holes" since there appear to be more than one.

 

Agreed. Looks very much like a piece of Swiss cheese to me.

 

Funnily enough, that's also usually the kind you see in images of mousetraps...

Posted

Coincidentally, I noticed a few Bitcoin related articles popping up in my news reader related to online fraud and digital heists. Now I'm just waiting for an email from the daughter of the former president of Gondwanaland asking for my help to to transfer her Bitcoin inheritance to a safe haven.

Posted

Coincidentally, I noticed a few Bitcoin related articles popping up in my news reader related to online fraud and digital heists. Now I'm just waiting for an email from the daughter of the former president of Gondwanaland asking for my help to to transfer her Bitcoin inheritance to a safe haven.

 

Haha I've seen those appear ~1.5 year ago.

 

The fool and his money are soon parted, and this happens faster with Bitcoin ;)

Posted

China's PBOC (Central Bank) Bans Banks From Bitcoin Transactions (bloomberg.com):

https://news.ycombinator.com/item?id=6853305

 

Chart:

http://bitcoincharts.com/charts/mtgoxUSD#rg60ztgSzm1g10zm2g25zv

 

Trading between 870 and 1240 in one day.

 

What's next, "Soros buys bitcoins"? Oh, I forgot the Winkelwoss brothers ("The Soros of bitcoins") own 1% of all bitcoins ;D

 

Oh you ain't seen nothing yet. Bitcoin can be much much more volatile than this and has in the past. Still an excellent store of value though.

 

Oh, and the Winkeloss twins have made an ETF out of their 1% holding and are in the process of getting it approved.

  • 2 weeks later...
Posted

 

;D

 

Thanks for the link. Honestly I still don't see bitcoin as anything more than a bubble. I wouldn't mind playing in it, however, but the whole procedure of buying and securely storing the bitcoins looks like a pain.

 

I do like that Winklevoss's favorite thing he bought with coins so far was a sriracha lollipop. I looked at the places accepting bitcoins for now and it's just a bunch of junk.

 

I may be mistaken, but I don't see what problems bitcoin solves. I like being able to chargeback a transaction if needed and not needing to worry if my card number is stolen and if it is, being compensated for it. If I was a merchant, I wouldn't accept bitcoin for anything serious due to the volatility. Today it's down 4.1% That's a larger fee than what most people would pay for processing.

 

In about the last week, another 10 coins have been added to http://coinmarketcap.com/. Some are specialized in use, like Sexcoins and Craftcoins. Overall, this whole crypto stuff just reminds me of store reward programs, which are annoying as hell.

 

I still wouldn't mind putting some into each coin if I could find a way to easily and securely do that for 50+ altcoins. It's a complete gamble, but maybe it's time for another bubble.

 

 

Posted

I have been making some $ mining the alternative digital currencies that have come out in the bitcoin craze. I trade them for bitcoin and then trade the bitcoin for USD which then goes straight into my investment account. I try to hold the alternatives as little time as possible and then will hold the BTC for a day or so before converting to cash.

Posted

I have been making some $ mining the alternative digital currencies that have come out in the bitcoin craze. I trade them for bitcoin and then trade the bitcoin for USD which then goes straight into my investment account. I try to hold the alternatives as little time as possible and then will hold the BTC for a day or so before converting to cash.

 

Do you have specialized hardware to mine or are these new cryptocurrencies still easy to mine with just regular cpus/gpus?

 

If you don't mind sharing, what kind of money have you made so far?

Posted

I have been making some $ mining the alternative digital currencies that have come out in the bitcoin craze. I trade them for bitcoin and then trade the bitcoin for USD which then goes straight into my investment account. I try to hold the alternatives as little time as possible and then will hold the BTC for a day or so before converting to cash.

 

Do you have specialized hardware to mine or are these new cryptocurrencies still easy to mine with just regular cpus/gpus?

 

If you don't mind sharing, what kind of money have you made so far?

 

A good portion of the alternatives require you to do scrypt (http://en.wikipedia.org/wiki/Scrypt) instead of SHA-256 hashing. While supposedly there are ASICs being made to focus on this they are not wide spread. So it still makes sense to mine alot of the alternatives with a GPU. I would only do CPU if I was not paying for the power.

 

I have 6 GPUs that I setup last weekend and had pulling in around $25. However there is fairly popular coin at the moment which is easy to mine and I am getting around $100 a day with the 6 GPUs. A the moment it is worth while to do on Amazon. I am currently mining that on 14 EC2 GPU instances and pulling in around $350-$450 (depending on the market price when I sell for BTC) a day with an amazon bill of $223 a day. I could be making more by doing some strategic selling, for example the market price for the coin I am mining seems to go down quite a bit later in the evening. So I could avoid selling then and wait for the morning. However I almost always sell right away to ensure that I have covered my AWS spend for that time period. Also worth mentioning that my GPUs are ATI and the AWS GPUs are Nvidia. The Nvidia ones are not nearly as performant for this type of workload, I would be making much more if AWS had ATI GPUs.

 

I am doing it on "on demand" GPU instances which they limit to 5 per region. I am maxed out in 2 of the 4 regions that have them and have 4 in another region. I would be maxed out in all regions except there is not enough capacity available. Spot market prices for GPU instances are high enough that I don't feel there is enough margin of safety to try and get in on that.

 

Posted

I find it crazy that we are wasting useful GPU resources around the world to mine Bitcoins instead of applying to more useful purposes...but people go where there are some short term gains to be made, I understand that.

Posted

I find it crazy that we are wasting useful GPU resources around the world to mine Bitcoins instead of applying to more useful purposes...but people go where there are some short term gains to be made, I understand that.

 

Indeed. Second-level thinking makes it look a bit better, though; CPU/GPU development will happen faster thanks to things like this, so the pros might outweigh the cons in the end.  Similarly to how many people buy cutting-edge hardware to play video games, not to calculate the long-term orbits of near earth objects.

 

Personally, I have electric heating here, so during the cold time of the year I run Rosetta@home distributed computing on all my computers. It's a computational biology program from the University of Washington. Good way to use idle CPU resources productively (and if I had good GPUs, I'd probably run Folding@home).

 

http://boinc.bakerlab.org/

Posted

If you're serious: I have done paid consultancy on the Bitcoin forums explaining thing such as this and helping the client in creating a secure wallet-setup.

 

Thanks. Selling shovels I see :) Are you doing pretty well with this?

 

I understand the mechanics of setting up a secure BTC wallet, it's just that I would rather hold equal weighted portions of all cryptocurrencies, but honestly don't feel like being paranoid and setting up all the separate wallets in a secure fashion. The only site that allows easy exchange between the currencies is cryptsy, which honestly seems scammy as hell to me.

 

I find it crazy that we are wasting useful GPU resources around the world to mine Bitcoins instead of applying to more useful purposes...but people go where there are some short term gains to be made, I understand that.

 

Absolutely agree. It's sort of sickening to be honest. The combined computing power of bitcoin is more than 256 times that of the largest 500 supercomputers combined.

 

It's things like this that remind me why we don't have flying cars. We'd rather foam at the mouth when an iPad is released with 128GB than actually make anything useful.

Posted

If you're serious: I have done paid consultancy on the Bitcoin forums explaining thing such as this and helping the client in creating a secure wallet-setup.

 

Thanks. Selling shovels I see :) Are you doing pretty well with this?

 

 

Not especially. I've done it once and the guy approached me (because I'm an long time member of the Bitcoin forums and 'seemed intelligent'). It kind of fun and easy to do as all I'm basically doing is explaining my own setup (which is secure), why it works and talking him through setting it up in the same way (he's also asking general Bitcoin questions to understand it better). The guy is very satisfied :)

 

I find it crazy that we are wasting useful GPU resources around the world to mine Bitcoins instead of applying to more useful purposes...but people go where there are some short term gains to be made, I understand that.

 

Absolutely agree. It's sort of sickening to be honest. The combined computing power of bitcoin is more than 256 times that of the largest 500 supercomputers combined.

 

It's things like this that remind me why we don't have flying cars. We'd rather foam at the mouth when an iPad is released with 128GB than actually make anything useful.

 

I'm going to be blunt, that's absolute bullshit. It's not wasteful it's for securing the network. What do you think the sum of financial institutions complete with ATMs cost? What do you think the computer networks of VISA and AMEX costs? What do you think the entire network of WU costs? Let me tell you Bitcoin's approach is not only cheaper it's also real security instead of the false security the other institutions offer (a bank can transfer funds from your account without your consent).

 

The computing power needs to go up a bit further to make it completely financially unviable to attack it even for superpowers (USA/China). Not tha i's possible to profitable attack it today, but at a huge loss it's still feasible.

Posted

And the madness continues! http://motherboard.vice.com/blog/dogecoin-brings-the-cryptocurrency-craze-to-its-logical-conclusion

 

Dogecoin is very similar to bitcoin, except it was started as a joke based off of the Doge meme http://knowyourmeme.com/memes/doge.

And now the total value of all mined dogecoins is $2,538,701. Does anyone see the viability of all these crypto currencies? Maybe one or two make sense, but it starts going off into bizarre world when a currency seemingly backed by internet sarcasm is worth over 2 million dollars.

 

Maybe I'll just buy a few for kicks.

 

Yes, but the only way to discover which 1 or 2 make sense is to let the market create a thousand of them and see which 2 survive.  Does the Diners Club card still exist?  Maybe in 20 years everyone uses one of 2 or 3 virtual crypto-currencies, but bitcoin isn't one of them, or maybe it is. Who knows?

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