Bitcoin, Learned Something New Today

[tnguy]

Yeah, only ever bought from reputable gold dealers.

 

These have been being found in reputable gold dealers' stocks. It's quite concerning.

[tnguy]

There is no tangible backing, same as the US dollar. The reason that there is so much speculation in bitcoin is that unlike the US dollar the supply is not infinite. There is no government printing more on demand to drive inflation.

 

Absolutely. If you don't understand it, you probably shouldn't be buying it.

 

For myself, I started reading about it last year. From the various things I have knowledge of (some would argue flawed knowledge) I saw immediately that it was a fantastic design and bought in immediately.

 

Here's a fun picture for you.

 

[JohnC]

These have been being found in reputable gold dealers' stocks. It's quite concerning.

Seeing as you can't cut a vintage gold coin open without destroying it's value (except for the gold itself in weight), I don't see how anyone can check to see what's inside their coins and gold bars. Is there a way to test or check without destroying the value? X-Ray? :shrug:

[tnguy]

Seeing as you can't cut a vintage gold coin open without destroying it's value (except for the gold itself in weight), I don't see how anyone can check to see what's inside their coins and gold bars. Is there a way to test or check without destroying the value? X-Ray? :shrug:

 

 

You can check density (a little tricky) or there are electrical tests which use induction. Both are kinda out of the reach of your average punter doing a casual transaction.

 

*Gold's density is 19.30 gm/cm3. Tungsten's density is 19.25 gm/cm3, only 0.26% different.

Edited December 9, 2013 by tnguy

[R_Bert]

The easiest way would be by neutron irradiation (neutron generator tube or a Californium source), then looking at the resulting prompt gamma & X-Ray spectrum (pure gold would have no tungsten signature)

 

There are also testing services that have X-Ray fluorescence units (many are portable).

 

In my old line of work, I could have done the analysis in minutes.

 

B.

Edited December 9, 2013 by R_Bert

[runco]

I guess I will be a little patient a little longer!

 

Story on Fox today:

 

http://www.foxnews.com/tech/2014/02/25/major-bitcoin-exchange-website-goes-offline/

 

A major bitcoin exchange has gone bust after secretly racking up catastrophic losses, other virtual currency companies said Tuesday — a potentially fatal blow for the exotic new form of money. 

 

The website of Tokyo-based Mt. Gox was returning a blank page Tuesday. The disappearance of the site follows the resignation Sunday of Mt. Gox CEO Mark Karpeles from the board of the Bitcoin Foundation, a group seeking legitimacy for the currency, and a withdrawal ban imposed at the exchange earlier this month. 

 

At the risk of appearing hyperbolic, this could be the end of Bitcoin.'

 

Prominent members of the Bitcoin community — including San Francisco-based wallet service Coinbase and Chinese exchange BTC China — sought to shore up confidence in the currency by saying Mt. Gox's collapse was an isolated case of mismanagement. They said it had abused users' trust, but did not offer details on how.

 

"As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today," the statement said.

 

Documents purportedly leaked from the company lay out the scale of the problem. An 11-page "Crisis Strategy Draft" published on the blog of entrepreneur and Bitcoin enthusiast Ryan Selkis says that 740,000 bitcoins are missing from Mt. Gox, which roughly translates to hundreds of millions of dollars' worth of losses, although figures are fuzzy given Bitcoin's extreme volatility.

 

"At the risk of appearing hyperbolic, this could be the end of Bitcoin, at least for most of the public," the draft said.

In a post to his blog, Selkis said that the document was handed to him by a "reliable source" and that several people close to the company had confirmed the figures. Reached by phone, he declined further comment. The Japanese government, meanwhile, has not announced any formal investigation.

 

The scandal may cost customers dear.

 

At the Tokyo office tower housing Mt. Gox, bitcoin trader Kolin Burges said he had picketed the building since Feb. 14 after flying in from London, hoping to get back $320,000 he has tied up in bitcoins with Mt. Gox.

 

"I may have lost all of my money," said Burgess, next to placards asking if Mt. Gox is bankrupt. "It hasn't shaken my trust in Bitcoin, but it has shaken my trust in bitcoin exchanges."

 

Mt. Gox CEO Karpeles did not immediately return several messages seeking comment. A security officer at the office tower said no one from Mt. Gox was in the building. Tibbane, an Internet company that Karpeles is CEO of, still has its name listed on the building's directory.

 

"I have no idea" where they are, said Burges, the trader. "I'm both annoyed and worried."

 

On bitcoin exchanges, the currency's value has fallen to about $470 from $550 in the past few hours, a figure already down more than 50 percent on the price of $1,200 per bitcoin reached on Mt. Gox three months ago.

 

The disappearance of Mt. Gox could be fatal for Bitcoin, which was started in 2009 as a currency free from government controls. Bitcoin's boosters say the currency's design make it impossible to counterfeit and difficult to manipulate, and the virtual money has won an eclectic mix of die-hard fans, including libertarians, tech enthusiasts and adventurous investors.

 

But the currency has struggled to shake off its associations with criminality, particularly its role in powering the now-defunct online drug marketplace Silk Road. Only last month another member of the Bitcoin Foundation, Vice Chairman Charlie Shrem, was arrested at New York's Kennedy Airport on charges of money laundering.

Authorities have been taking an increasingly hard look at Bitcoin and related virtual currencies including Litecoin, Namecoin, Ripple, and countless others. Some countries, including Russia, have effectively banned the currency. In other jurisdictions, authorities are weighing whether to try to tame the marketplace through licenses or other mechanisms.

 

Even if Mt. Gox doesn't drag Bitcoin down with it, there's fear that the exchange's demise will push officials to take an even more skeptical stance.

"I think this is disastrous from a (regulatory) standpoint," Selkis, the enthusiast, said in a message posted to Twitter. "The hammer will now come down hard."

[tnguy]

I still have mine. Plan to keep it that way for a while

Edited February 26, 2014 by tnguy

[gregintenn]

Absolutely. If you don't understand it, you probably shouldn't be buying it.

 

For myself, I started reading about it last year. From the various things I have knowledge of (some would argue flawed knowledge) I saw immediately that it was a fantastic design and bought in immediately.

 

Here's a fun picture for you.

 

I'm all ears if you care to explain it to us. I've done a bit of looking, and so far I haven't been able to get a grasp on how this thing works.

[RC3]

I hope it goes away soon. Looking to get back into engineering and the new amd cards are almost as good as the dedicated cards. For a lot less. I am not paying $690 for a $400 card. 

[tnguy]

I hope it goes away soon. Looking to get back into engineering and the new amd cards are almost as good as the dedicated cards. For a lot less. I am not paying $690 for a $400 card. 

 

GPU mining is about done. ASICS are the only real way now. You should be able to pick up used cards for cheap.

[tnguy]

I'm all ears if you care to explain it to us. I've done a bit of looking, and so far I haven't been able to get a grasp on how this thing works.

 

Sure. There are several moving parts, some of them arbitrary but here are the essential points:

 

Bitcoin is a protocol.

 

It is distributed. This means no central control. Changes can only effectively be made if agreement is reached by the owners of more than 51% of computing power.

 

Bitcoin is a transaction ledger. There are no "bitcoins" as such. It just records that one person has transferred a value to another (or, more strictly, that the owner of a private key has signed the transaction of transferring a value to a public key). It can actually also be used to record other things as well.

 

A Bitcoin "Wallet" is actually just a collection of private keys used to sign the aforementioned transactions. It contains no bitcoins at all.

 

Obviously, if this were just the case, there would be no value to transfer. Initial values are created by "miners" solving cryptographic puzzles. When the puzzle is solved the miner (or miners in the case of pooled mining, which is the majority case these days) receive a block payout (Or rather, it is recorded in the ledger that they mined that value).

 

The block reward is adjusted on a schedule such that there will never be more than 21million bitcoins mined (the block reward is halved periodically). The protocol is designed so that blocks are found on a fairly regular basis (with some fluctuation).

 

Transactions are processed at the discretion of the miners. Each transaction can include a transaction fee. Miners receive the transaction fee. As the mining reward drops, it is designed so that miners continue to mine to receive these fees rather than new coins. Competition between miners should ensure that these fees are kept to a reasonable level.

 

Bitcoin is not anonymous. Though it can be made nearly so with some effort.

 

Exchanges, gambling sites, sites selling illicit materials and so on are not part of the Bitcoin protocol.

 

Many things that people think are Bitcoin problems often turn out to be fiat problems (when they're not just plain old people problems).

 

 

 

The usual dismissal of Bitcoin is that it is not backed by anything. In truth, it is backed by its utility (as with all things). It depends on what you think the utility of an inflation-proof global distributed transaction ledger is.

Edited February 26, 2014 by tnguy

[TripleDigitRide]

Based on much of what I've read about Bitcoin, it seems little more than an extremely volatile gamble. Not to mention, if hackers gain access to your account and wipe you clean, there is no method to get them back. I'm not much of a risk taker when it comes to money, so my opinion is a bit skewed. 

[bersaguy]

It took a pretty bad hit yesterday as what I heard on Channel 5 nightly News. They did show some items that were bought with bitcoins and it had some firearms in the batch of items shown. I don't know thta much about it but sound to much like a Ponzi scheme for me to even consider it + I don't have two nickels to run together most of the time............jmho

[Oh Shoot]

Well, seems the whole shebang may be just as volatile and perhaps even more fragile than other segments of world economy? One big case of fraud triggers death knell sell off?

 

Lots of dire predictions today, like:

 

Bitcoin virtual currency is on verge of collapse

http://www.latimes.com/business/la-fi-bitcoin-collapse-20140226,0,5968430.story#ixzz2uSRPRpm7

 

- OS

Edited February 26, 2014 by Oh Shoot

[Guest Brutnus]

I like the idea behind cryptocurrency, trade safely without having to meet in person, no governments jumping in and taking a portion, get paid instantly, etc.

 

Times be changin. 

 

 

https://www.youtube.com/watch?v=Um63OQz3bjo

[hipower]

Based on much of what I've read about Bitcoin, it seems little more than an extremely volatile gamble. Not to mention, if hackers gain access to your account and wipe you clean, there is no method to get them back. I'm not much of a risk taker when it comes to money, so my opinion is a bit skewed. 

 

My thoughts exactly.

[Guest Brutnus]

Based on much of what I've read about Bitcoin, it seems little more than an extremely volatile gamble. Not to mention, if hackers gain access to your account and wipe you clean, there is no method to get them back. I'm not much of a risk taker when it comes to money, so my opinion is a bit skewed. 

 

The same way someone steals from your home is the same way hackers can steal your bitcoins... by you leaving it unprotected. I am going to say a lot of the money stolen was fraud/illegal money that people did not want not connected to and that is why they stored millions of dollars worth of bitcoins on these sites instead of their personal computers.

 

Think about it. If you had 2 million dollars worth of something perfectly legal wouldn't you store it somewhere safe and local?

[tnguy]

 

Well, seems the whole shebang may be just as volatile and perhaps even more fragile than other segments of world economy? One big case of fraud triggers death knell sell off?

 

Lots of dire predictions today, like:

 

Bitcoin virtual currency is on verge of collapse

http://www.latimes.com/business/la-fi-bitcoin-collapse-20140226,0,5968430.story#ixzz2uSRPRpm7

 

- OS

 

 

Up 60 dollars since yesterday and more than that (180) since the bottom of the last few days. Seems real dead to me...

 

(Oh, actually touched 610 last night).
 

Edited February 26, 2014 by tnguy

[tnguy]

My thoughts exactly.

 

Nothing wrong with waiting. If you don't understand it and why some of us believe it will become ubiquitous, it would just be a gamble (one that has proven fairly lucrative so far but nonetheless.)

[TripleDigitRide]

[quote name="Cannon Fodder" post="103" timestamp="1169352056"]MS Windders?[/quote] Was I misunderstanding when I read that the "owners" of Bitcoins must rely on the exchanges to keep their bankroll and personal information safe? Edited February 26, 2014 by TripleDigitRide

[2.ooohhh]

Was I misunderstanding when I read that the "owners" of Bitcoins must rely on the exchanges to keep their bankroll and personal information safe?

Depends, if your trading bitcoin back and forth into other currencies online then likely yes. If you purchased BTC from an individual or mined it yourself then no. Very little of my coins have ever been through an exchange even though I own several thousand. The first few thousand were purchased from an individual and have never left my wallet.

[gregintenn]

Sure. There are several moving parts, some of them arbitrary but here are the essential points:

 

Bitcoin is a protocol.

 

It is distributed. This means no central control. Changes can only effectively be made if agreement is reached by the owners of more than 51% of computing power.

 

Bitcoin is a transaction ledger. There are no "bitcoins" as such. It just records that one person has transferred a value to another (or, more strictly, that the owner of a private key has signed the transaction of transferring a value to a public key). It can actually also be used to record other things as well.

 

A Bitcoin "Wallet" is actually just a collection of private keys used to sign the aforementioned transactions. It contains no bitcoins at all.

 

Obviously, if this were just the case, there would be no value to transfer. Initial values are created by "miners" solving cryptographic puzzles. When the puzzle is solved the miner (or miners in the case of pooled mining, which is the majority case these days) receive a block payout (Or rather, it is recorded in the ledger that they mined that value).

 

The block reward is adjusted on a schedule such that there will never be more than 21million bitcoins mined (the block reward is halved periodically). The protocol is designed so that blocks are found on a fairly regular basis (with some fluctuation).

 

Transactions are processed at the discretion of the miners. Each transaction can include a transaction fee. Miners receive the transaction fee. As the mining reward drops, it is designed so that miners continue to mine to receive these fees rather than new coins. Competition between miners should ensure that these fees are kept to a reasonable level.

 

Bitcoin is not anonymous. Though it can be made nearly so with some effort.

 

Exchanges, gambling sites, sites selling illicit materials and so on are not part of the Bitcoin protocol.

 

Many things that people think are Bitcoin problems often turn out to be fiat problems (when they're not just plain old people problems).

 

 

 

The usual dismissal of Bitcoin is that it is not backed by anything. In truth, it is backed by its utility (as with all things). It depends on what you think the utility of an inflation-proof global distributed transaction ledger is.

Thanks, That is about as good an explanation as I've seen. Who originated the bitcoin?

[Oh Shoot]

Up 60 dollars since yesterday and more than that (180) since the bottom of the last few days. Seems real dead to me...

 

(Oh, actually touched 610 last night).
 

 

I admit I know little about it, even though I've given it some degree of inquiry.   So the rumors of its decline are greatly exaggerated then, eh?

 

- OS

[TripleDigitRide]

Depends, if your trading bitcoin back and forth into other currencies online then likely yes. If you purchased BTC from an individual or mined it yourself then no. Very little of my coins have ever been through an exchange even though I own several thousand. The first few thousand were purchased from an individual and have never left my wallet.

Is the "wallet" somewhere in cyberspace? The article I read was referring to hackers gaining access and cleaning out your wallet, leaving you no way to retrieve your coins. Maybe I am more confused than I thought.  

[2.ooohhh]

Is the "wallet" somewhere in cyberspace? The article I read was referring to hackers gaining access and cleaning out your wallet, leaving you no way to retrieve your coins. Maybe I am more confused than I thought.  

The wallet is digital, it can be stored online, on a flash drive, phone, or hard disk. As with nearly anything digital if is accessible to someone who would steal it, it is only as secure as the user's password. That is why I recommend everyone use a both a good password manager and a secure password generator for everything not just bitcoin wallets, as well as using 2 factor authentication wherever it is offered.