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I've spent a bit of time looking at Bitcoin and I really don't know why the mining portion is brought to the forefront as an introduction (I've seen this sentiment on Bitcoin forums as well). For people new to Bitcoin, you should not think about the mining part at all. It is minimally profitable even for those with focused mining hardware. The concept around mining that new people should understand is simply that it is the mechanism by which new coins are added into the Bitcoin economy for the near future.
The key points to Bitcoin are: - No central authority. The entire network itself verifies the validity of each transaction. Now that the Bitcoin system has started, no single entity can cheat the system in their favor. It's not like WoW gold where Blizzard is the central authority, or the US dollar with the US government. (The caveat is that if you have >50% of the computing power in the network, then you CAN cheat the system.) - Anonymity. There is no link between you and your Bitcoin account, which is just a random 160-bit string which you know the private key of (think of it like a random password). The caveat here is that if you make known your account address so that someone else can send Bitcoins to it, obviously it's no longer anonymous. - Deflationary. Eventually mining slows and the total number of Bitcoins reaches 21 million, and then no more.
Overall it's an interesting concept but the businesses that currently accept Bitcoins are fairly limited to small internet companies. The other problem is that its most attractive use cases are all illegal.
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Bitcoins is basically coins that are made from computing power and have no real value unless we make it have value. Also couldn't the makers of bitcoins just say they have 1 million bitcoins?
If bitcoins are used as a real money it would deflate since theres no tax and bitcoins are constantly being produced, like printing out money nonstop IRL .
Correct me if i'm wrong
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bitcoin is interesting social experiment. I'll love it if it catches on.
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On May 25 2011 08:19 onmach wrote: Obviously you can't be taxed, either.
Anytime someone tells you that you can transact business or make income without paying taxes, and don't cite a specific tax exemption, assume they are taking you for a ride. There may be some advantages to BitCoin, but avoiding taxes is not one of them.
See, generally, this comment in response to a BitCoin post: http://timothyblee.com/2011/04/18/the-bitcoin-bubble/comment-page-1/#comment-103511
...or, more specifically, the IRS page on barter exchanges: http://www.irs.gov/businesses/small/article/0,,id=187920,00.html
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On May 26 2011 03:45 spancho wrote: tl;dr Now is the time to start a BTC oriented tourney, and the longer you wait the less value the prise money will have. This should encourage top players to get involved now, before the BTC conversion rate drops. Why would they want to get involved? They would be forced to use their BCs immediately for fear of the value dropping. Might as well just have real money as the prize.
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The thing is, its design actually stimulates kapitalism-like situations. In an ideal world everyone would have roughly the same computing power and thus the generated coins would be distributed more of less equally amongst the people that offer their computing power to bitcoin.
However, there are some guys out there with huge GPU setups (think along the lines of 30 systems with Radeon HD 5970 cards) who are generating the majority of the coins. Actually, it's a big computing-power race which drives the difficulty level up pretty fast. This makes it less and less probable that single-system owners will ever generate a coin.
This actually opposes the idea that the strength of bitcoin lies in the distribution of computing power for its security..
Really, I don't know what to think of it but I stopped using it. Too idealistic and I don't see the point of the coinfarmers ending up with all the coins.
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On May 26 2011 03:50 Nuttyguy wrote: Bitcoins is basically coins that are made from computing power and have no real value unless we make it have value. Also couldn't the makers of bitcoins just say they have 1 million bitcoins?
If bitcoins are used as a real money it would deflate since theres no tax and bitcoins are constantly being produced, like printing out money nonstop IRL .
Correct me if i'm wrong
You're wrong. Most of your points are refuted in on the front page of their site in the video.
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The mining side of Bitcoin is really just to give an incentive to help bootstrap the network. I find it to be quite clever.
Anytime someone tells you that you can transact business or make income without paying taxes, and don't cite a specific tax exemption, assume they are taking you for a ride. There may be some advantages to BitCoin, but avoiding taxes is not one of them. You cannot know who is the owner of "this" bitcoin, or "this one". This means the government has to trust you on the amount you say you have earned in a year.
Not everyone has a credit card. Not everyone wants to face chargeback in a transaction. Not everyone wants to use Paypal. Not everyone wants to use a currency depreciated at the whim of some central banker. Not everyone wants to use Western Union when they travel and need money.
Bitcoin is an alternative, which I believe has many advantages.
This is why I have made a pledge to donate 10 BTC (~ 85 $ USD at current rate) at Day9 if he adds a Bitcoin donate button on his stream or blip.tv by the end of July. See http://forum.bitcoin.org/index.php?topic=10271.0 This way I accomplish two goals: I help Bitcoin, but also Day9, whom I've watched and enjoyed since last summer.
(If someone could let him know, I would really appreciate!)
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[QUOTE]On May 28 2011 13:23 Frozenlock wrote: The mining side of Bitcoin is really just to give an incentive to help bootstrap the network. I find it to be quite clever.
[quote]You cannot know who is the owner of "this" bitcoin, or "this one". This means the government has to trust you on the amount you say you have earned in a year.[/QUOTE]
Whether you can attribute any given 'bitcoin' to an individual is irrelevant to whether their transfer is taxable. If you pay someone cash, "under the table," for example, you still have a duty to report and tax it.
I do not recommend telling your IRS auditor that they "have to trust you on the amount you say you earned." They don't have to, they won't, and I promise that when they calculate the fair market value of your bitcoin income (be it from bartered exchange, tournament winnings, or whatever,) the taxes and penalties will be higher than had you made an honest appraisal of their worth on your return in the first place.
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This is a weird idea I have never heard of. I understand the advantages of them over regular currency but I just don't get how people gave bitcoins value in the first place.
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On May 26 2011 03:45 spancho wrote:Could you clarify this point please? Show nested quote +So in the long run it won't matter what kind of computer you have; the expense of generating one will be such that you wouldn't use the electricity, time and hardware capital cost / failure rate from use cost. The BTC system encourages people to use other peoples cycles and electricity (botnet), and consolidates buying power ie. people with lots of spare cycles can make more money so they can buy themselves more cycles. Here is a pretty good discussion on the economics of BTC production. Here is another discussion talking about the Storm botnet's ability to produce BTC. Once large CPU farms start producing BTC the difficulty rating will skyrocket, effectively pushing mom and pop BTC producers out of the market. The BTC to dollar conversion is only ever going to go down. This means that the best time to host a BTC oriented tournament is RIGHT NOW, and that players that get involved now will reap better rewards then players getting BTC prise 'money' 6 months or a year from now. tl;dr Now is the time to start a BTC oriented tourney, and the longer you wait the less value the prise money will have. This should encourage top players to get involved now, before the BTC conversion rate drops.
The point is overall corret but this is the problem. its hard to actually generate enough BTC for a big enough prize money, i dont have enough power and neither do the many friends i have found on the BTC forums, though i do hope to find people who can help me
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I was mining bitcoins for a while, then just got kinda lazy and stopped. Even with like 30k hashes/s, I wasn't really making any.
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On May 28 2011 14:54 AirbladeOrange wrote: This is a weird idea I have never heard of. I understand the advantages of them over regular currency but I just don't get how people gave bitcoins value in the first place.
BTC has value because of its superior properties to State-currency, just like why Silver and Gold have monetary value over State-currency. People generally do not like Central Bankers or Central Authorities stealing their labor and property from them through inflation.
What Is Money? -- Frederic Bastiat
https://mises.org/journals/qjae/pdf/QJAE5_3_6.pdf http://bastiat.org/en/what_is_money.html
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I do not recommend telling your IRS auditor that they "have to trust you on the amount you say you earned." They don't have to, they won't ...
Actually, yes, they do. Unless you openly tell to everyone what are your public keys, there is no way to associate you with any amount. See the 100 rich list.
PMed Day[9]... I hope he still reads his PMs
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Frozen's right
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Lurking for a long time, but I found this thread because I had the same idea this morning. Anyway, Bitcoin gives us a lot more than just another way to pay off players at a tournament. All a player has to do is post their wallet address at the start of a casted match and people will start sending them money. Why? Because we have the best damn fan base of any esport and people love to support their favorite players. Secondly, I could send 10 cents (.12 BTC at today's price) to someone for a ggwp and incur zero transaction fees. By the way, tournaments and tip jars can come later. In the not-to-distant future, a decent player could easily live entirely on tips. Same goes for casters. EDIT: Bitcoin is technically more auditable than your bank account once you've published your public address. For a pro starcraft player, the IRS can easily look up how much money has been sent to their wallet.
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On May 30 2011 04:55 asherp wrote: Lurking for a long time, but I found this thread because I had the same idea this morning. Anyway, Bitcoin gives us a lot more than just another way to pay off players at a tournament. All a player has to do is post their wallet address at the start of a casted match and people will start sending them money. Why? Because we have the best damn fan base of any esport and people love to support their favorite players. Secondly, I could send 10 cents (.12 BTC at today's price) to someone for a ggwp and incur zero transaction fees. By the way, tournaments and tip jars can come later. In the not-to-distant future, a decent player could easily live entirely on tips. Same goes for casters. EDIT: Bitcoin is technically more auditable than your bank account once you've published your public address. For a pro starcraft player, the IRS can easily look up how much money has been sent to their wallet.
<3 ur idea
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Okay forgive me if i missed something, but what do you actually mine? I don't get the concept of "mining" this coins. Please someone explain what you are mining? How does one know what to look for? Wheres the best place to mine? Enlighten me on the subject please.
EDIT: I get that you mine in order to make this coins, but what's the purpose of the mining process? Is it just some random stuff you can do in order to get the economy going or is it something that actually serves a purpose rather than just being there as a neat feature?
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On May 30 2011 10:06 Svartstol wrote:Okay forgive me if i missed something, but what do you actually mine? I don't get the concept of "mining" this coins. Please someone explain what you are mining? How does one know what to look for? Wheres the best place to mine? Enlighten me on the subject please. EDIT: I get that you mine in order to make this coins, but what's the purpose of the mining process? Is it just some random stuff you can do in order to get the economy going or is it something that actually serves a purpose rather than just being there as a neat feature?
U need either CPU mining or u can mine with your graphics card, some people having mining rigs which are motherboards with GTX cards on them.
The purpose of mining is to get coins you can then spend the coins atm they're worth around $7/coin and with a neat rig (1 motherboard and an good gtx card = $600 you can get around 3-6 coins a day) My friend has 3 mining rigs mining all day long
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That didn't really answer his question rubens. For anyone wondering, all of the calculations that are done in order to generate bitcoins go toward the stability and security of the bitcoin network itself. It is designed to be a "free" currency system that only relies on computing time put in. For people with weaker hardware, or who are planning on CPU mining, it is advisable to join a large mining pool (all explained on the bitcoin forums). According to my ticker, the exchange rate at the moment is approximately 1 BTC = 8.30 USD. Bitcoins can be used to purchase goods on specific sites that accept them, and can also be sold to traders for real-world currency. The system is completely protected, because each person has a wallet address which is automatically generated each time they open their Bitcoin client. The address is specifically generated by each client so that the chances of two people getting the same wallet ID is slim to none.
For people who are interested, and even skeptics, please go look at the Bitcoin wiki and forums for more information. The real draw is the possibility of solving a "block," which can grant you a bonus of up to $400, so check out information regarding that as well. If anyone is having trouble setting up their mining software and would like to get started with bitcoin, you can either post on the forums or email me here on TL.
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