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I can't honestly think that anyone is surprised? PayPal plays it safe and this has been proven again and again. At the end of the day, this Bitcoin hype is get

by romland 15y ago

I can't honestly think that anyone is surprised? PayPal plays it safe and this has been proven again and again. At the end of the day, this Bitcoin hype is getting slightly tiresome. I do apologize for being negative here, but the only thing I take away from this whole spectacle is that investing in energy is a wise move. The amazing thing is, that was news a long, long time ago.

sgornick 15y ago
Investing in energy? huh?
- ascott 15y ago
  I think he's alluding to mining bitcoins with electricity (cpu / gpu farms). The energy companies certainly haven't come out behind.
- jarin 15y ago
  Essentially, Bitcoin generation is tied to energy usage, which means not only do the power companies profit from Bitcoin generation, they can essentially regulate the price of it (until BTC is mined out, anyway).
  - javert 15y ago
    Power companies can't regulate the price of Bitcoin because they don't control the price of electricity, which is determined by the government and/or the market. Nobody ever regulates or controls the price of anything, except if they're the only supplier or the government.
    - eru 15y ago
      You forgot the "only buyer" case.
      - javert 15y ago
        Well, if there's only one buyer, then it's a negotiation between the seller and the buyer. The seller has to answer the question, "Where is the cut-off point where it's no longer in the buyer's economic interest to buy from me," and charge right below that. Of course, in such a situation, new sellers will typically emerge.
    - eru 15y ago
      You forgot the "only buyer" case.
  - weavejester 15y ago
    It's not quite that simple, because you can't just exchange X bitcoins for Y watts. Let's say you want 1000 BTC. You could get this by investing several thousand dollars in a mining rig, and then waiting a year. In that time, you'll likely succeed in generating your 1000 BTC. Alternatively, you could buy bitcoins from an exchange for $3000. The current price of bitcoins is several times higher than the cost of the electricity used to generate them, because there's a significant initial cost to mining, in both capital and time.
    - stcredzero 15y ago
      It's not quite that simple, because you can't just exchange X bitcoins for Y watts. Well, you can, if you're also willing to pony up some cash to Amazon for some EC2 time. It's more like you can just exchange X bitcoins for Y BogoMIPS, but this also varies over time.
      - weavejester 15y ago
        EC2 instances don't have high-end graphics cards, and the payout from CPU-mining is not usually cost effective. It would be far cheaper to buy bitcoins over an exchange than spend money mining them on a EC2 instance. There's also a limit to how many coins you can generate per day. Even if your grid of EC2 instances accounted for say, a quarter of all Bitcoin processing power, you'd still only make 15 coins an hour.
        wmf 15y ago
        EC2 does have GPUs: http://aws.amazon.com/about-aws/whats-new/2010/11/15/announcing-cluster-gpu-instances-for-amazon-ec2/ http://aws.amazon.com/about-aws/whats-new/2010/11/15/announc... People have calculated that you still can't make money mining Bitcoins on EC2, though.
        stcredzero 15y ago
        My point was that you can do this, not that it would be profitable.
  - orblivion 15y ago
    So if I'm correct, this is based on the assumption that rarity creates value, correct? (which I am personally not convinced of). You spend energy to create a bitcoin, but you can't take a bitcoin and create energy. This adds value to the energy because it can create bitcoins (assuming bitcoins have any value), but it doesn't do the reverse. Or is there something about the Bitcoin economy that I missed?
- talaketu 15y ago
  People are speculating on the future value of a conserved and limited quantity. Bitcoin consumes energy to mine.
PassTheAmmo 15y ago
I do not think that this is a hype. It seems to me that a fully decentralized payment system would be of huge value to buyers and sellers. Don't you agree with this? Or do you believe that while useful, bitcoin won't be the system that prevails, or that no system like this can prevail because of government and/or special interests? And on the issue of energy.. The sha256 generation is only to prove that you did invest time into it, and it is not a specific amount of time or energy either, but in relation to the total time spend by ALL miners during the past hours. I'm not saying that you don't know this, but it seems to be a common misconception.
- anamax 15y ago
  > It seems to me that a fully decentralized payment system would be of huge value to buyers and sellers. You seem to believe that "huge value" is somehow decisive. It isn't. > that no system like this can prevail because of government And you're dismissive of that factor because ? Govts require taxes. You want a system that makes it trivial to avoid taxes. Guess which one is going to win?
  - noglorp 15y ago
    The one that cannot possibly be stopped? How are they going to "crack down on bitcoin"? Note how well the crack down on filesharing is going...
    - gbelote 15y ago
      If you make it illegal to accept BC as a business that will deter many websites from using it. And the best way to kill BC is to make sure it doesn't hit critical mass. The difference between filesharing and BC is that in the former the value is in the files, but BC is only valuable if you can trade them for something you value.
    - anamax 15y ago
      > How are they going to "crack down on bitcoin"? Govt can crack down at any point where bitcoin is convertible into something that they can affect. For example, they can stop many biz from accepting bitcoin. Sure, you'll probably be able to buy foreign porn with bitcoin, but .... > Note how well the crack down on filesharing is going... That's a very different problem.

by romland 15y ago

sgornick 15y ago

Investing in energy? huh?

ascott 15y ago
I think he's alluding to mining bitcoins with electricity (cpu / gpu farms). The energy companies certainly haven't come out behind.
jarin 15y ago
Essentially, Bitcoin generation is tied to energy usage, which means not only do the power companies profit from Bitcoin generation, they can essentially regulate the price of it (until BTC is mined out, anyway).
- javert 15y ago
  Power companies can't regulate the price of Bitcoin because they don't control the price of electricity, which is determined by the government and/or the market. Nobody ever regulates or controls the price of anything, except if they're the only supplier or the government.
  - eru 15y ago
    You forgot the "only buyer" case.
    - javert 15y ago
      Well, if there's only one buyer, then it's a negotiation between the seller and the buyer. The seller has to answer the question, "Where is the cut-off point where it's no longer in the buyer's economic interest to buy from me," and charge right below that. Of course, in such a situation, new sellers will typically emerge.
  - eru 15y ago
    You forgot the "only buyer" case.
- weavejester 15y ago
  It's not quite that simple, because you can't just exchange X bitcoins for Y watts. Let's say you want 1000 BTC. You could get this by investing several thousand dollars in a mining rig, and then waiting a year. In that time, you'll likely succeed in generating your 1000 BTC. Alternatively, you could buy bitcoins from an exchange for $3000. The current price of bitcoins is several times higher than the cost of the electricity used to generate them, because there's a significant initial cost to mining, in both capital and time.
  - stcredzero 15y ago
    It's not quite that simple, because you can't just exchange X bitcoins for Y watts. Well, you can, if you're also willing to pony up some cash to Amazon for some EC2 time. It's more like you can just exchange X bitcoins for Y BogoMIPS, but this also varies over time.
    - weavejester 15y ago
      EC2 instances don't have high-end graphics cards, and the payout from CPU-mining is not usually cost effective. It would be far cheaper to buy bitcoins over an exchange than spend money mining them on a EC2 instance. There's also a limit to how many coins you can generate per day. Even if your grid of EC2 instances accounted for say, a quarter of all Bitcoin processing power, you'd still only make 15 coins an hour.
      - wmf 15y ago
        EC2 does have GPUs: http://aws.amazon.com/about-aws/whats-new/2010/11/15/announcing-cluster-gpu-instances-for-amazon-ec2/ http://aws.amazon.com/about-aws/whats-new/2010/11/15/announc... People have calculated that you still can't make money mining Bitcoins on EC2, though.
        stcredzero 15y ago
        My point was that you can do this, not that it would be profitable.
- orblivion 15y ago
  So if I'm correct, this is based on the assumption that rarity creates value, correct? (which I am personally not convinced of). You spend energy to create a bitcoin, but you can't take a bitcoin and create energy. This adds value to the energy because it can create bitcoins (assuming bitcoins have any value), but it doesn't do the reverse. Or is there something about the Bitcoin economy that I missed?
talaketu 15y ago
People are speculating on the future value of a conserved and limited quantity. Bitcoin consumes energy to mine.

PassTheAmmo 15y ago

I do not think that this is a hype. It seems to me that a fully decentralized payment system would be of huge value to buyers and sellers. Don't you agree with this? Or do you believe that while useful, bitcoin won't be the system that prevails, or that no system like this can prevail because of government and/or special interests? And on the issue of energy.. The sha256 generation is only to prove that you did invest time into it, and it is not a specific amount of time or energy either, but in relation to the total time spend by ALL miners during the past hours. I'm not saying that you don't know this, but it seems to be a common misconception.

anamax 15y ago
> It seems to me that a fully decentralized payment system would be of huge value to buyers and sellers. You seem to believe that "huge value" is somehow decisive. It isn't. > that no system like this can prevail because of government And you're dismissive of that factor because ? Govts require taxes. You want a system that makes it trivial to avoid taxes. Guess which one is going to win?
- noglorp 15y ago
  The one that cannot possibly be stopped? How are they going to "crack down on bitcoin"? Note how well the crack down on filesharing is going...
  - gbelote 15y ago
    If you make it illegal to accept BC as a business that will deter many websites from using it. And the best way to kill BC is to make sure it doesn't hit critical mass. The difference between filesharing and BC is that in the former the value is in the files, but BC is only valuable if you can trade them for something you value.
  - anamax 15y ago
    > How are they going to "crack down on bitcoin"? Govt can crack down at any point where bitcoin is convertible into something that they can affect. For example, they can stop many biz from accepting bitcoin. Sure, you'll probably be able to buy foreign porn with bitcoin, but .... > Note how well the crack down on filesharing is going... That's a very different problem.