4 ms·

Largest bitcoin bounty paid for animation about the system (8500BTC, ~$6000)

52 points by mike_esspe 16y ago

mike_esspe 16y ago
Animation that got the bounty: http://www.youtube.com/watch?v=Um63OQz3bjo http://www.youtube.com/watch?v=Um63OQz3bjo
kiba 16y ago
For those who don't know what Bitcoin is: It's an open source P2P cyrptocurrency. Here are some helpful links to get you started: 1. http://bitcoin.org http://bitcoin.org - The main site 2. https://en.bitcoin.it/wiki/How_bitcoin_works https://en.bitcoin.it/wiki/How_bitcoin_works - How Bitcoin works 3. https://en.bitcoin.it/wiki/Getting_started https://en.bitcoin.it/wiki/Getting_started - Getting Started Guide. 4. https://en.bitcoin.it/wiki/FAQ https://en.bitcoin.it/wiki/FAQ - The Bitcoin FAQ
- rodh257 16y ago
  When I first heard of this, I thought it would be something like seti@home where it uses your PC power to do jobs, and people would pay for those jobs to put onto the nextwork, if you were running it on your PC, you'd get some of that money. But from what I read, all it does is do complex calculations that don't actually get used for anything? Just uses electricity in return for 'bitcoins'? Does anyone know if there is such a thing as my original idea? Companies could buy distributed computing time that is sourced from home users idle clock cycles.
  - kiba 16y ago
    But from what I read, all it does is do complex calculations that don't actually get used for anything? Just uses electricity in return for 'bitcoins'? That's accurate. Does anyone know if there is such a thing as my original idea? Companies could buy distributed computing time that is sourced from home users idle clock cycles. That's a good idea. I think the owners of GPU farms or just any GPU cards or CPU could pivot to a business model that mine bitcoin when it's profitable or do computation works for companies when it's more profitable.
  - jerf 16y ago
    No, that's just the generation process you are referring to. The really interesting thing is moving them around like currency. The idea is that they can replace dollars, not that they are just empty computation. I am not aware of anyone selling home users idle clock cycles. This is probably because it doesn't work economically. The difference between a home desktop on 24/7 doing 'nothing' and on 24/7 doing its maximum compute load could be in the low tens of dollars of electricity per month for the user, so to actually sell the cycles you're going to have to not just charge that much, you're going to have to remit that much to the home user, plus extra for wear and tear. (Or hope for dumb users.) And then you have the problem that this cluster has low bandwidth and high heterogeneity, so pretty much the only thing you can sell it for is something like Seti where you have relatively small amounts of data that you want to run enormous computations on. In the end I just don't see how you can compete with Amazon.
  - wmf 16y ago
    http://en.wikipedia.org/wiki/United_Devices http://en.wikipedia.org/wiki/United_Devices It failed because the idle time on your PC is worth less than the overhead of organizing it. I wouldn't say that the CPU time used by mining bitcoins is wasted per se; in some sense that computation prevents attackers from falsifying transactions.
    - gojomo 16y ago
      And 'Centrata' (in its original incarnation). And a bunch of others in the same era: Popular Power, Applied Metacomputing, Parabon Computation, Distributed Science/ProcessTree, and DataSynapse ("get paid in Flooz!"). And kids today think they know what a bubble is!
  - nas 16y ago
    The complex calculations are used for something. They are used to create a peer-to-peer digital notary service that is very hard for an attacker to defeat. The proof of work is essential to prevent fraud. Early in bitcoin's life the "miners" (people who contribute CPU time to keep the system secure) are paid using monetary inflation (currently 50 bitcoin per solved block). After some time they will be paid by small transaction fees instead and the inflation will stop. Do not think of bitcoin in terms of CPU time creating money.
qixxiq 16y ago
I've been seriously considering purchasing 18000BTC as an investment. If bitcoins catch on in the next ten years, 18000 will be equal to 0.1% of the total available currency. Just wish I still had the money to do that (startup is busy digesting whatever I had)
- kiba 16y ago
  It's a big gamble, though. The bitcoin community don't know if the currency will succeed but we're trying our damn hardest to make sure it succeed. Other than that, bitcoin is an extremely fascinating subject. You can spend hours upon weeks upon years talking about it.
  - hugh3 16y ago
    You can spend hours upon weeks upon years talking about it. Yes, kiba, you can. We've noticed.
- trotsky 16y ago
  When you do have some extra money, consider talking to an investment advisor before you decide what to do with it.
jedsmith 16y ago
Wasn't there a transaction of > 300,000 BTC? Or does the headline specifically mean a bounty?
- kiba 16y ago
  Anybody can send 300,000 BTC back and forth between their computers. It doesn't mean something. However, it is significant when somebody won one of the largest bounty by performing immensely useful work such as the production of a well polished animation video that is designed to introduce users to bitcoin.
  - jedsmith 16y ago
    > Anybody can send 300,000 BTC back and forth between their computers. You assume that's what it was. Calling the bounty in the headline ~$6,000 is disingenuous, too, because dumping the BTC into the market would drop the price significantly. You'd never be able to move it for $6,000, currently. You're talking about more than the daily Mt. Gox volume. (Yes, you might be in your domain, but there are other people familiar with BitCoin present. It bugs me when those with domain-specific knowledge assume people in alternative forums don't have a clue.)
    - kiba 16y ago
      You assume that's what it was. Calling the bounty in the headline ~$6,000 is disingenuous, too, because dumping the BTC into the market would drop the price significantly. You'd never be able to move it for $6,000, currently. You're talking about more than the daily Mt. Gox volume. It's actually hard to say. Mt. Gox order volume is partly hidden because of dark pool order. What people see might not be an indicated amount of bitcoin on the market.
      - jedsmith 16y ago
        Dark liquidity still affects a market, it just affects it less. BitCoin is fascinating to me because there are people who are absolutely absorbed in it, but it's unlikely to get traction outside of its current domain. The fact that it's moving for real money is interesting, though, and mining or small trades is currently worth it. I wouldn't dump my life into it, though. Outside regulation picking up on it is likely to be interesting, as well. The system itself is a prime target for laundering money, if the market gets to a point where it can support enormous trades.
asdf333 16y ago
How do you avoid a deflationary spiral (same issue as gold standard)? You can kind of get around it by continuing below 8 decimal places but it seems like a potentially fatal issue as the bitcoin economy expands.
- kiba 16y ago
  Deflationary spiral is a heavily debated topic on the forum but I believe most bitcoiners come to accept it as a good thing, rather than a bad thing. Here's some of the search result: http://www.bitcoin.org/smf/index.php?action=search2 http://www.bitcoin.org/smf/index.php?action=search2
- gwern 16y ago
  Astoundingly, that's in the FAQ: https://en.bitcoin.it/wiki/FAQ#Bitcoin_s_monetary_policy_causes_a_deflationary_spiral https://en.bitcoin.it/wiki/FAQ#Bitcoin_s_monetary_policy_cau... Linking to https://en.bitcoin.it/wiki/Deflationary_spiral https://en.bitcoin.it/wiki/Deflationary_spiral (Answer may not be great, but someone has thought about it.)
- po 16y ago
  Another example of the issues faced by a private currency were related by Krugman in 1998. It describes the economic issues of a Capitol Hill baby-siting club that issued a limited amount of scrip to keep track of hours of time for people offering and using baby sitting services: http://www.slate.com/id/1937/ http://www.slate.com/id/1937/ It's a good description of an unexpected problem. Edit: also don't miss the sidebar about solving the problem of cycles with inflation: http://www.slate.com/id/1937/sidebar/42410/ http://www.slate.com/id/1937/sidebar/42410/
  - nickpinkston 16y ago
    Though really that analogy isn't to say small groups shouldn't use non-fiat currencies. It's referring to an economy as a whole using them and not being able to use Keynesian techniques to smooth boom/bust cycles. No one could stop "ByteCoins" from coming out and issuing similar currency that might be backed similarly - unlike the problem of not having anymore gold. As this happened more, people would create synthetic currencies (like the IMF's SDR) to hold a basket of these goods - which would probably be adopted by many, or used for collateral for risk-mitigation instruments. TL;DR: Yes, there are some problems, but this doesn't have many of the issues the gold-standard did.
aristidb 16y ago
In that link, there are a couple of links to a Ponzi scheme which is openly advertised as such. Weird. (Or is this just a big fat joke?)
- kiba 16y ago
  Some people play ponzi schemes for fun.
- trotsky 16y ago
  People who are willing to invest in what they think is an economic bubble are probably pretty willing to invest in what they know is a ponzi scheme as well. After all, both can be pretty profitable as long as you get out right before the bottom drops out.
  - wmf 16y ago
    And Bitcoin has no clawbacks. (A concept I'd never heard of until Madoff.)
- dublinclontarf 16y ago
  Yeah, I think it is a kind of joke. When bitcoins were worth something like 1000 for 1USD a lot of the early users would kind of just use it to playaround with. Monopoly money. Hey at least they're being honest about them being ponzi schemes, quite refreshing.
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trotsky 16y ago
There sure seems to be a ton of bitcoin articles that show up on HN, with many of the same usual subjects showing up to comment as soon as they're posted. I know you guys want to drum up as much interest as possible in bitcoin for the obvious reasons, but it comes across a bit spammy/scammy at least to me. Besides, if you really want people to set up shop trading things of actual value for BTC you're going to need to get the bullish forces under control so that you don't have this runaway strength in the currency. Promoting it so heavily looking for those slashdot type bumps in the value makes the community come across as just a bunch of greater fool theory speculators.
- kiba 16y ago
  There sure seems to be a ton of bitcoin articles that show up on HN, with many of the same usual subjects showing up to comment as soon as they're posted. I know you guys want to drum up as much interest as possible in bitcoin for the obvious reasons, but it comes across a bit spammy/scammy at least to me. Who's going to answer HNers' questions and criticism? Besides, if you really want people to set up shop trading things of actual value for BTC you're going to need to get the bullish forces under control so that you don't have this runaway strength in the currency. Promoting it so heavily looking for those slashdot type bumps in the value makes the community come across as just a bunch of greater fool theory speculators. Maybe Bitcoin is just a very viral idea. Bitcoin prices functuate and they don't alway goes straight up, so it's not always bullish. Corrections are part of the natural part of the market.
  - wmf 16y ago
    Your enthusiasm for Bitcoin may be innocent, but shills and astroturfers abound on the Internet. If Bitcoin is so interesting, other people will take up the conversation; you don't need to dominate it.
- hugh3 16y ago
  It's fascinating, in an aggravating kind of way. It's a particularly virulent sort of meme -- one that you spread because the meme basically says "spread this meme and you'll get rewards!" And unlike a religion, there actually are genuine rewards. If you play it just right, then sometime before everybody loses interest in the game (around about the time people start saying things like "If you mention bitcoins one more time I will shove a very large economics textbook up your ass") you might make a few dollars. Economic bubbles and religions have another thing in common, too -- I'm only interested in playing if I'm starting it myself.

52 points by mike_esspe 16y ago

Animation that got the bounty: http://www.youtube.com/watch?v=Um63OQz3bjo http://www.youtube.com/watch?v=Um63OQz3bjo

kiba 16y ago

For those who don't know what Bitcoin is: It's an open source P2P cyrptocurrency. Here are some helpful links to get you started: 1. http://bitcoin.org http://bitcoin.org - The main site 2. https://en.bitcoin.it/wiki/How_bitcoin_works https://en.bitcoin.it/wiki/How_bitcoin_works - How Bitcoin works 3. https://en.bitcoin.it/wiki/Getting_started https://en.bitcoin.it/wiki/Getting_started - Getting Started Guide. 4. https://en.bitcoin.it/wiki/FAQ https://en.bitcoin.it/wiki/FAQ - The Bitcoin FAQ

rodh257 16y ago
When I first heard of this, I thought it would be something like seti@home where it uses your PC power to do jobs, and people would pay for those jobs to put onto the nextwork, if you were running it on your PC, you'd get some of that money. But from what I read, all it does is do complex calculations that don't actually get used for anything? Just uses electricity in return for 'bitcoins'? Does anyone know if there is such a thing as my original idea? Companies could buy distributed computing time that is sourced from home users idle clock cycles.
- kiba 16y ago
  But from what I read, all it does is do complex calculations that don't actually get used for anything? Just uses electricity in return for 'bitcoins'? That's accurate. Does anyone know if there is such a thing as my original idea? Companies could buy distributed computing time that is sourced from home users idle clock cycles. That's a good idea. I think the owners of GPU farms or just any GPU cards or CPU could pivot to a business model that mine bitcoin when it's profitable or do computation works for companies when it's more profitable.
- jerf 16y ago
  No, that's just the generation process you are referring to. The really interesting thing is moving them around like currency. The idea is that they can replace dollars, not that they are just empty computation. I am not aware of anyone selling home users idle clock cycles. This is probably because it doesn't work economically. The difference between a home desktop on 24/7 doing 'nothing' and on 24/7 doing its maximum compute load could be in the low tens of dollars of electricity per month for the user, so to actually sell the cycles you're going to have to not just charge that much, you're going to have to remit that much to the home user, plus extra for wear and tear. (Or hope for dumb users.) And then you have the problem that this cluster has low bandwidth and high heterogeneity, so pretty much the only thing you can sell it for is something like Seti where you have relatively small amounts of data that you want to run enormous computations on. In the end I just don't see how you can compete with Amazon.
- wmf 16y ago
  http://en.wikipedia.org/wiki/United_Devices http://en.wikipedia.org/wiki/United_Devices It failed because the idle time on your PC is worth less than the overhead of organizing it. I wouldn't say that the CPU time used by mining bitcoins is wasted per se; in some sense that computation prevents attackers from falsifying transactions.
  - gojomo 16y ago
    And 'Centrata' (in its original incarnation). And a bunch of others in the same era: Popular Power, Applied Metacomputing, Parabon Computation, Distributed Science/ProcessTree, and DataSynapse ("get paid in Flooz!"). And kids today think they know what a bubble is!
- nas 16y ago
  The complex calculations are used for something. They are used to create a peer-to-peer digital notary service that is very hard for an attacker to defeat. The proof of work is essential to prevent fraud. Early in bitcoin's life the "miners" (people who contribute CPU time to keep the system secure) are paid using monetary inflation (currently 50 bitcoin per solved block). After some time they will be paid by small transaction fees instead and the inflation will stop. Do not think of bitcoin in terms of CPU time creating money.

qixxiq 16y ago

I've been seriously considering purchasing 18000BTC as an investment. If bitcoins catch on in the next ten years, 18000 will be equal to 0.1% of the total available currency. Just wish I still had the money to do that (startup is busy digesting whatever I had)

kiba 16y ago
It's a big gamble, though. The bitcoin community don't know if the currency will succeed but we're trying our damn hardest to make sure it succeed. Other than that, bitcoin is an extremely fascinating subject. You can spend hours upon weeks upon years talking about it.
- hugh3 16y ago
  You can spend hours upon weeks upon years talking about it. Yes, kiba, you can. We've noticed.
trotsky 16y ago
When you do have some extra money, consider talking to an investment advisor before you decide what to do with it.

jedsmith 16y ago

Wasn't there a transaction of > 300,000 BTC? Or does the headline specifically mean a bounty?

kiba 16y ago
Anybody can send 300,000 BTC back and forth between their computers. It doesn't mean something. However, it is significant when somebody won one of the largest bounty by performing immensely useful work such as the production of a well polished animation video that is designed to introduce users to bitcoin.
- jedsmith 16y ago
  > Anybody can send 300,000 BTC back and forth between their computers. You assume that's what it was. Calling the bounty in the headline ~$6,000 is disingenuous, too, because dumping the BTC into the market would drop the price significantly. You'd never be able to move it for $6,000, currently. You're talking about more than the daily Mt. Gox volume. (Yes, you might be in your domain, but there are other people familiar with BitCoin present. It bugs me when those with domain-specific knowledge assume people in alternative forums don't have a clue.)
  - kiba 16y ago
    You assume that's what it was. Calling the bounty in the headline ~$6,000 is disingenuous, too, because dumping the BTC into the market would drop the price significantly. You'd never be able to move it for $6,000, currently. You're talking about more than the daily Mt. Gox volume. It's actually hard to say. Mt. Gox order volume is partly hidden because of dark pool order. What people see might not be an indicated amount of bitcoin on the market.
    - jedsmith 16y ago
      Dark liquidity still affects a market, it just affects it less. BitCoin is fascinating to me because there are people who are absolutely absorbed in it, but it's unlikely to get traction outside of its current domain. The fact that it's moving for real money is interesting, though, and mining or small trades is currently worth it. I wouldn't dump my life into it, though. Outside regulation picking up on it is likely to be interesting, as well. The system itself is a prime target for laundering money, if the market gets to a point where it can support enormous trades.

asdf333 16y ago

How do you avoid a deflationary spiral (same issue as gold standard)? You can kind of get around it by continuing below 8 decimal places but it seems like a potentially fatal issue as the bitcoin economy expands.

kiba 16y ago
Deflationary spiral is a heavily debated topic on the forum but I believe most bitcoiners come to accept it as a good thing, rather than a bad thing. Here's some of the search result: http://www.bitcoin.org/smf/index.php?action=search2 http://www.bitcoin.org/smf/index.php?action=search2
gwern 16y ago
Astoundingly, that's in the FAQ: https://en.bitcoin.it/wiki/FAQ#Bitcoin_s_monetary_policy_causes_a_deflationary_spiral https://en.bitcoin.it/wiki/FAQ#Bitcoin_s_monetary_policy_cau... Linking to https://en.bitcoin.it/wiki/Deflationary_spiral https://en.bitcoin.it/wiki/Deflationary_spiral (Answer may not be great, but someone has thought about it.)
po 16y ago
Another example of the issues faced by a private currency were related by Krugman in 1998. It describes the economic issues of a Capitol Hill baby-siting club that issued a limited amount of scrip to keep track of hours of time for people offering and using baby sitting services: http://www.slate.com/id/1937/ http://www.slate.com/id/1937/ It's a good description of an unexpected problem. Edit: also don't miss the sidebar about solving the problem of cycles with inflation: http://www.slate.com/id/1937/sidebar/42410/ http://www.slate.com/id/1937/sidebar/42410/
- nickpinkston 16y ago
  Though really that analogy isn't to say small groups shouldn't use non-fiat currencies. It's referring to an economy as a whole using them and not being able to use Keynesian techniques to smooth boom/bust cycles. No one could stop "ByteCoins" from coming out and issuing similar currency that might be backed similarly - unlike the problem of not having anymore gold. As this happened more, people would create synthetic currencies (like the IMF's SDR) to hold a basket of these goods - which would probably be adopted by many, or used for collateral for risk-mitigation instruments. TL;DR: Yes, there are some problems, but this doesn't have many of the issues the gold-standard did.

aristidb 16y ago

In that link, there are a couple of links to a Ponzi scheme which is openly advertised as such. Weird. (Or is this just a big fat joke?)

kiba 16y ago
Some people play ponzi schemes for fun.
trotsky 16y ago
People who are willing to invest in what they think is an economic bubble are probably pretty willing to invest in what they know is a ponzi scheme as well. After all, both can be pretty profitable as long as you get out right before the bottom drops out.
- wmf 16y ago
  And Bitcoin has no clawbacks. (A concept I'd never heard of until Madoff.)
dublinclontarf 16y ago
Yeah, I think it is a kind of joke. When bitcoins were worth something like 1000 for 1USD a lot of the early users would kind of just use it to playaround with. Monopoly money. Hey at least they're being honest about them being ponzi schemes, quite refreshing.

ghktyw 16y ago

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trotsky 16y ago

There sure seems to be a ton of bitcoin articles that show up on HN, with many of the same usual subjects showing up to comment as soon as they're posted. I know you guys want to drum up as much interest as possible in bitcoin for the obvious reasons, but it comes across a bit spammy/scammy at least to me. Besides, if you really want people to set up shop trading things of actual value for BTC you're going to need to get the bullish forces under control so that you don't have this runaway strength in the currency. Promoting it so heavily looking for those slashdot type bumps in the value makes the community come across as just a bunch of greater fool theory speculators.

kiba 16y ago
There sure seems to be a ton of bitcoin articles that show up on HN, with many of the same usual subjects showing up to comment as soon as they're posted. I know you guys want to drum up as much interest as possible in bitcoin for the obvious reasons, but it comes across a bit spammy/scammy at least to me. Who's going to answer HNers' questions and criticism? Besides, if you really want people to set up shop trading things of actual value for BTC you're going to need to get the bullish forces under control so that you don't have this runaway strength in the currency. Promoting it so heavily looking for those slashdot type bumps in the value makes the community come across as just a bunch of greater fool theory speculators. Maybe Bitcoin is just a very viral idea. Bitcoin prices functuate and they don't alway goes straight up, so it's not always bullish. Corrections are part of the natural part of the market.
- wmf 16y ago
  Your enthusiasm for Bitcoin may be innocent, but shills and astroturfers abound on the Internet. If Bitcoin is so interesting, other people will take up the conversation; you don't need to dominate it.
hugh3 16y ago
It's fascinating, in an aggravating kind of way. It's a particularly virulent sort of meme -- one that you spread because the meme basically says "spread this meme and you'll get rewards!" And unlike a religion, there actually are genuine rewards. If you play it just right, then sometime before everybody loses interest in the game (around about the time people start saying things like "If you mention bitcoins one more time I will shove a very large economics textbook up your ass") you might make a few dollars. Economic bubbles and religions have another thing in common, too -- I'm only interested in playing if I'm starting it myself.