http://www.youtube.com/watch?v=XQPSwA2Itbs

So they have mined about half of all there is..And its not very old.. what happens when all is mined then?

Also, are all these complex calculations actually calculating something useful (besides "finding" bitcoins?) It would be cool if they used it for protein folding or something.

If I had not spent mine I would have a small fortune right now : o O well.

*animation

Adding video to channels (Animation) - requested by shagen454.

mined coins do not stop until 2140, but the rate of mining is defined by the protocol in such a way that it drops by 50% every 210,000 cycles, so it asymptotically approaches 21Mil.

The "useful" thing that the system is calculating is actually the bookkeeping for the entire network.

Machines that mine are the accountants/auditors for the network, and the mined coins are their probabilistic payment for bootstrapping the economy.

As the mining reward drops low it becomes needful for the mining machines to generate revenue through transaction fees, which people can elect to pay to prioritize their transactions over people who don't elect to add fees to their transaction.

I'm Confused.

I still dont understand how these have any value. Is it driven by the marketplace? How are they tracked? Since they are digital is there some kind of serial key or crypto key to prevent people from 'making' bitcoins? It seems like a really cool concept, but I have a hard time putting any faith into it.

Hardly an original idea...

That's exactly it.. it is a social experiment. Paper money to me only has enough value of what another thinks its worth, the same way with bitcoins. I personally believe that money is completely evil and only gives power to the ones who have it. Money is not needed for our society anymore. The reason the job growth rate sucks and everyone is unemployed is because we don't need any more jobs. The only reason people gets jobs now is to have money, so they can buy things they want.

But that doesn't have to be that way. Currency can go kaput for all I care. Shelter, food/water, joy/love are the only things that are needed. Everything else is a want. There is enough food and shelter for everyone on the planet, yet we as a species can't seem to figure out why people starve. The reason is money. If everything was free people would go around the world many times over with food to feed those who are hungry and love doing it.

I'm not saying people shouldn't work, but there's enough people who love work to do all the jobs necessary for us to survive, the rest can work on what they love or die happy in a place they love. Money stops this.


sorry I had to rant for some stupid reason.

They have "value" the same way all currencies have "value", in that they are a reliable way to determine if somebody else has stored value in the currency market in question.

Calling them "coins" is probably confusing, people don't have bitcoins, people have bitcoin accounts, which you can make as many of as you wish, but new bitcoin accounts are always empty.

To get "coins" the central p2p accounting ledger called the block-chain has to show that some other account transferred coins to your account, that transfer log has to go all the way back to coins generating through mining.

The specifics of how the accounting is verified is some very cool crypto, but suffice it to say it is functionally impossible to forge bitcoin transactions.

This video suggests Bitcoins are mainly used on the "dark web". As if that's its main use. And real cash doesn't have that use in "dark alleys".

As I see it, Bitcoin has use in:

-fast, low-cost electronic (not face-to-face) transactions
-transactions frowned upon or outlawed by governments or other sufficiently powerful entities.

It isn't like government currency, although it can be used for many of the same things.

It should be noted that creating a currency other than the existing Dollar, is illegal in the USA. (that won't stop people from using bitcoin, just not legally accepted). Not sure of laws governing Euro...

It used to be computationally easy to generate bitcoins, but nowadays you need a fast GPU or large cluster to even have a chance.

Also, I remember a story of guy who generated a ton of bitcoins early on. Someone found out, broke into his house and stole all his computers - and with them, his bitcoins (~ 5 million). Good luck trying to tell the insurance company that you had $350 Million worth of bitcoins stolen...

So it's got something to do with Minecraft?

Source please? It's illegal to create a currency that can be confused with the dollar, but private currencies exist in the USA:
https://en.wikipedia.org/wiki/Private_currency#United_States

And that's not to mention virtual currencies in games like WOW, which can be traded for other currencies.

The case I remember was the Liberty Dollar - http://en.wikipedia.org/wiki/Liberty_Dollar (also mentioned in the wiki article you posted).

That guy was convicted of http://www.law.cornell.edu/uscode/text/18/485 and others counts - basically conspiracy to undermine the legitimacy of the US Treasury.

Certainly since bitcoin is digital, you couldn't get arrested for the "making your own coins" but it could still pose a problem.

In-game currencies have no cash value, and never claim to be "legal tender". All EULAs for MMOs forbid "mining" and reselling of in-game property outside of the game. Therefore the game companies are off-the-hook for users' actions.

Watch my first link (start halfway through to skip to BtC; @Mobius as well) and read this.

Essentially you're mistaken with this assertion.

@rebuilder : FYI

@schlub : this was the first crypto currency to get the execution right; therein a very original idea.



Back in my hole.

Wow. You clearly have no idea what you're talking about. You make so many false and ridiculous points that I don't even know where to begin.

I stand corrected. The video was nice (you should post to the sift with the 40 minute offset, and mark as related to this video). But the link you sent mentions (just before the footnotes) that Virtual Currency is not considered "legal tender", and with that, you wouldn't have the same legal problems that the Liberty Dollar had. It also mentions the banking regulations apply to those that convert to/from real currency, not to users.

So, invest all you like in Bitcoin. It will be nice until a (reasonably sized) quantum computer comes around. After that, Bitcoins will be useless (along with all other systems built around asymmetric cryptography).