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bigfoot66
bigfoot66
Joined: Feb 5, 2010
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April 8th, 2013 at 11:53:52 AM permalink
Quote: slyther

The article I read talked about how you can write computer programs to 'mine' (create?) bit coins by solving complex math problems. How is that different from a government or reserve bank printing money?



Great question. There is a small amount of inflation in bitcoins right now as they pay the miners in new bitcoin. In other wortds, it is true that they are "solving complex math problems" but my understanding is that these miners are also helping to make the whole thing work. The amount of inflation from this is negligable(especially compared to Uncle Ben who has trippled the monetary base) and, at least for now, the plan is to end the inflation when the total number of bitcoins reaches 21,000,000. At that point no more will be created unless the bitcoin "market" agrees to continue using inflation to pay the miners instead of, say, small transaction fees.
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bbvk05
bbvk05
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April 8th, 2013 at 12:28:56 PM permalink
I've been mining bitcoins since early 2011. I am pretty experienced and it has been very profitable. If anybody has any questions feel free to ask them.

The talk of bitcoins being a scam is obviously wrong. It isn't a scam. It is just excessively risky due to price fluctuations.
bigfoot66
bigfoot66
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April 8th, 2013 at 12:30:29 PM permalink
Quote: bbvk05

I've been mining bitcoins since early 2011. I am pretty experienced and it has been very profitable. If anybody has any questions feel free to ask them.

The talk of bitcoins being a scam is obviously wrong. It isn't a scam. It is just excessively risky due to price fluctuations.



Cool. How does the cost of electricity compare to what you make daily/weekly mining?
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Boney526
Boney526
Joined: Sep 25, 2011
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April 8th, 2013 at 12:32:11 PM permalink
Quote: EvenBob

The guy standing on the corner in the hood
selling crack takes Bitcoin? Really? I'd bet real
money he's never heard of it.



At a poker game... I had a guy talking about how he uses Bitcoins to buy his weed... and have it shipped in from the West Coast/Oversees....

Well he was actually talking about some of those weed products that are being sold mostly in States like California and Colorada.... but also Amsterdam. Like THC Oils and what-not. I don't know the specifics of how all of it works... but I can confirm that people use Bitcoins to buy and sell drugs...
EvenBob
EvenBob
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April 8th, 2013 at 12:33:44 PM permalink
Quote: bbvk05

I've been mining bitcoins since early 2011. I am pretty experienced and it has been very profitable. If anybody has any questions feel free to ask them.
.



A lot of experts say Bitcoin has a limited shelf life
and it will go bust sooner or later, when something
happens to make people lose faith in it. Do you agree?
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bbvk05
bbvk05
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April 8th, 2013 at 12:37:26 PM permalink
Quote: bigfoot66

Cool. How does the cost of electricity compare to what you make daily/weekly mining?




2011-mid2012:

-there were months were it was breakeven or a slight loss at the exchange rate of the time. I mostly held during this time.
-most months had something like 250 in profit with all factors included. I carried forward a lot of coins because I expected the price to rise.

mid2012 to now:

-it is unbelievably profitable. I luckily timed a hardware upgrade during a major downturn in price. Accordingly I mined quite a few coins and held during the low period. I believed their price would go up, and fortunately was right.
-more miners come online during price increases. There are 3x more miners online now than 2 months ago.
-electricity is a drop in the bucket right now.


I felt that bitcoins had good utility due to the anonymous nature of it. There are several types of people using bitcoins to evade laws. While I don't really want to directly assist these people I am benefiting from the market effects they create.
MangoJ
MangoJ
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April 8th, 2013 at 12:45:30 PM permalink
If bitcoin are backed up by drugs ... so be it.

I would rather use a currency formed on strict mathematics and backed up by a very real and long-living market than a currency formed by the will of some heavily indebted economy and backed up by ... well, paper.

Sorry, that might be insanely naive....
bbvk05
bbvk05
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April 8th, 2013 at 12:46:14 PM permalink
Quote: EvenBob

A lot of experts say Bitcoin has a limited shelf life
and it will go bust sooner or later, when something
happens to make people lose faith in it. Do you agree?




The losing faith thing will lower the value, perhaps, but not reduce who takes it.

I used to think it would get swept away though. The reason is that bitcoin is the most popular but not best cryptocurrency. There are other competing currencies that would have been better if they had been designed first. I think one of these currencies could come sweep bitcoin away.

I thought that would happen earlier. It hasn't. Now bitcoin is gaining real recognition and adoption among the tech savvy. One something gets entrenched it is much more likely to stay.

In either case I think that decentralized cryptocurrencies are here to stay.
Boney526
Boney526
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April 8th, 2013 at 1:13:54 PM permalink
Quote: MangoJ

If bitcoin are backed up by drugs ... so be it.

I would rather use a currency formed on strict mathematics and backed up by a very real and long-living market than a currency formed by the will of some heavily indebted economy and backed up by ... well, paper.

Sorry, that might be insanely naive....



I wouldn't say it's backed by drugs... I don't really know though. That certainly doesn't seem accurate, even if it is being used for the sale of drugs at times.

I thought Bitcoins were interesting but never got into them. The only reason I noticed that conversation was because I noticed Bitcoins being talked about... From what I can tell a few major, or at very least legitimate, online companies accept Bitcoins. It's just an alternative currency, so why not? But I'm sure you agree with that.

For a short while it looked like Bitcoin was going to grow in e-stores, but I don't know how far that went. I really only posted here b/c I two people talking about it recently. The guy I already mentioned (just some random guy) and a classmate who mined them for a good while. I don't really know a whole lot about how Bitcoins work.
Ahigh
Ahigh
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April 8th, 2013 at 10:42:55 PM permalink
There still needs to be an easier way to go from bitcoins to cash.

It would be awesome if I could take bitcoins to the craps table and leave with bitcoins, though.

I would probably gamble more money if I could do that and avoid ATM surcharges.

For one thing I would have a lot more gambling money if all my spending money had been in bitcoins for the last week instead of just a couple hundred bucks.

I just started mining bitcoins using a gpu miner. It took me about five minutes to download and fire up the miner with a newly created account.

I knew about this part, but I didn't know how easy it was to become a miner.

Definitely enjoying this little journey and wasn't expecting to become a miner so quickly!

I seems like I make a penny pretty quick. I'm up to five cents after firing it up a few minutes ago. I may have to start mining on all my computers with advanced hardware for that kind of thing. I have some really fast computers with awesome graphics cards being a gamer type.

So an update, I've been tweaking with settings, and I've made about $0.50 in about two hours on a computer not specifically set up for mining. I don't know if that means I will be able to make over $100/month .. maybe I got lucky somehow or maybe I don't know what I'm doing.

But either way, it's interesting stuff that I can just have my computer generate a bunch of heat to put money in my bitcoin wallet. LOLz.

Thanks for the poster above mentioning mining as I hadn't really even tried to look into how that works. The major reason I went and bought a couple of bitcoins was to learn more about it, and this is pretty interesting stuff.

These Giga-hash computers are the ones that really have the potential to make money! I think you can pull down more than $500/month easily. It's pretty weird considering it seems like people would just be building computer farms specifically to mine bitcoins now that the prices are so high. I mean at some point, it's just like people are subsidizing development of processing power by funding computers doing computations in exchange for money. That part is cool too.

I think the logical extension to bitcoin is a model that requires you to burn up network bandwidth circling the globe instead of CPU power in order to generate money. Adding monetary incentives to build higher bandwidth networks and/or to chew up networking bandwidth for no other purpose than to generate currency is pretty cool.

The problem with the bitcoin model is the need to generate heat in order to make money. If you made a bitcoin computer farm, you'd probably be suspected of growing marijuana in some places that fly over and look for unusual heat signatures typical of grow operations.

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