Would you play online poker with digital currency?

[a500lbgorilla]

I recently heard about bitcoins ( Bitcoin - Wikipedia, the free encyclopedia ), they're essentially an attempt to create a currency capable of truly anonymous transactions while taking the authority to print money out of the hands of central authorities and move it onto the internet.

As opposed to conventional fiat currency, the bitcoin differs in that no overseer can control the value due to its decentralized nature,[13] mitigating possible instability caused by central banks. There is a limited controlled inflation hardcoded in the Bitcoin software, but it is predictable and known to all parties in advance.[4] Inflation cannot therefore be centrally manipulated to effect redistribution of value from general users.

Transfers are facilitated directly without the use of a financial processor between nodes. This type of transaction makes chargebacks impossible. The Bitcoin client broadcasts the transaction to surrounding nodes who propagate the payment across the network. Corrupted or invalid transactions are rejected by honest clients. Transactions are mostly free, however a fee may be paid to other nodes to prioritize transaction processing.[4]

The total number of bitcoins tends to 21 million over time. The money supply grows as a geometric series every 21,000 blocks (roughly every 4 years); by 2013 half of the total supply will have been generated, and by 2017, 3/4 will have been generated. As it approaches that mark the value of bitcoins will likely begin to experience price deflation (increase in real value) due to the lack of new introduction. Bitcoins, however, are divisible to eight decimal places (giving 2.1 x 1015 total units), removing practical limitations to downward price adjustments in a deflationary environment.[14] Rather than relying on the incentive of newly created bitcoins to record transactions into blocks, nodes in this period are expected to depend on their ability to competitively collect transaction fees to process transactions.[4]

...

The total value of the Bitcoin economy as of April 2011 is 4,500,174 USD.

So I thought it was a real neat idea and just wanted to keep an eye on it.

But now someone has suggested that online poker should adopt the currency, allowing us to fully sidestep the UIGEA which makes it illegal for banks to process the money of illegal online gambling.

Bitcoin Weekly - Bitcoin Poker

And I think it's a novel idea. Would you entrust your poker rolls to this new and ethereal currency?

[thelorax]

sounds like a great idea.
how will they deal with inflation etc?
do they just hold it constant to the us dollar at all times or?
also, is there legislation to insure/guarantee digital currency?

[a500lbgorilla]

The wiki article is more informative than I can be.

I know Bitcoins are independent of the USD. And the money supply increases in a pre-defined way. I don't
know enough about what causes inflation or deflation to know how to explain how it deals with either.

I don't think anyone is insuring or guaranteeing the currency because it's kind of a grass roots solution to perceived silly-ness of allowing countries like the US to just print money at their leisure.

http://www.bitcoin.org/sites/default/files/bitcoin.pdf

There's the paper outlining the peer-to-peer cash system.

[thelorax]

sweet, thanks for the link.
ill read it over. stuffs really interesting.

[KoRnholio]

Makes my head hurt figuring out how it works, but I think I like it.

It's pretty obvious to me that using fiat currencies that can be created at will out of thin air is a pretty terrible idea. There's been very few times in history where a totally fiat currency has been effective for more than a short time.

I'm a big proponent of gold/silver/commodities in general, but at this point there's simply not enough gold or silver to make it an effective worldwide currency.

If someone could figure out a way to combine Bitcoins with a backing of physical assets (and not just gold/silver/etc, but also say grain, oil, rice) it would be amazing. There would, however, be some insanely strong resistance by the current money issuers though. They are good at the money printing game and surely wouldn't want to give up that power very easily.

[bigred]

Play poker?

[kiwiMark]

but can it go through the washing machine?

[mrhappy333]

can I buy weed with it?

[ensign_lee]

I read the article, am about to participate in compute4cash, which is a way that you can make bitcoins using processor power somehow, but still don't understand how the F you can "make" bitcoins using processing power and not have it be fiat currency.

Eh, if somebody is going to pay me $70 for use of my video card when I'm not using it, guess that's fine.

[a500lbgorilla]

Well, I've never heard about compute4cash and I don't know enough about bitcoins to know how it is that you can start generating them, but google yields this: (UPDATED: Bitcoin / poclbm) Compute4Cash: Use your GPU to Make Money with OpenCL - 3D Tech News, Pixel Hacking, Data Visualization and 3D Programming - Geeks3D.com

I just received two messages that detail what is Bitcoin and what is really Compute4Cash tool.

Here is the first message:

the Bitcoin community ( bitcoin.org ) noticed Compute4Cash today and we
found out that it is used to generate Bitcoins.

Bitcoin is a cryptographic peer-to-peer currency and it is secured by
computing power. Those who contribute computing power are rewarded with
50 Bitcoins after completing a block (“workunit”; I think Compute4Cash
splits them into smaller workunits). This is completely legit and there
are exchanges where one can sell 1 Bitcoin for roughly $1.05 nowadays.

Compute4Cash.exe is based on poclbm (https://github.com/m0mchil/poclbm),
a program used to calculate Bitcoin blocks. I even identified the small
OpenCL kernel image in the article as being from poclbm as I worked on
that code not too long ago.

An ATI 5970 will generate about 700 Bitcoins/month (this changes every
two weeks), that’s about $735. Compute4Cash claims a 5970 will net $255
so he is making about $400..500 profit.

So maybe you should encourage your readers to generate Bitcoins directly

and here is the second message:

compute4cash is actually using your gpu power to make bitcoins (Bitcoin P2P Virtual Currency), and then exchanging them for about twice as much cash as he pays you. Bitcoin is an online currency which you can exchange for cash, services, and other goods. The exchange rate is currently at about 1 USD per bitcoin. If you chose to do this on your own, rather than through the compute4cash middleman, you will make more than double the money.

compute4cash is being dishonest in telling you that this is used for computation or “data compression for the financial sector”

compute4cash is using an open-source miner called Poclbm (https://en.bitcoin.it/wiki/OpenCL_miner). At current difficulty and bitcoin price levels, the guy is making >50% profit on this. Any of you who are participating in the compute4cash pool, would do better on your own, using a free open source gpu miner. where better == about twice as much return.

I encourage you all to learn about bitcoin and cut out the middleman.
here are some links you should visit if you are interested in making money with bitcoin Bitcoin P2P Virtual Currency Bitcoin - Wikipedia, the free encyclopedia Online-Only Currency BitCoin Reaches Dollar Parity - Slashdot

[a500lbgorilla]

FAQ | Bitcoin

How are new Bitcoins created?

New coins are generated by a network node each time it finds the solution to a certain calculational problem (i.e. creates a new block), for which an average solution time can be calculated. The difficulty of the problem is adjusted so that in the first 4 years of the Bitcoin network, 10,500,000 coins will be created. The amount is halved each 4 years, so it will be 5,250,000 in years 4-8, 2,625,000 in years 8-12 and so on. Thus the total number of coins will approach 21,000,000 over time.

What's the current total amount of Bitcoins in existence?

The number of blocks times the coin value of a block. The coin value is 50 bc per block for the first 210,000 blocks, 25 bc for the next 210,000 blocks, then 12.5 bc, 6.25 bc and so on.

As of October 30th 2009, there are about 26,000 blocks in the block chain, which means 26,000 * 50 bc = 1,300,000 bitcoins in existence. You can see the up-to-date number of blocks in the status bar of the Bitcoin main window.

What is a "block"?

A block is a unit which contains the information of the transactions made after the previous block, plus a transaction which assigns a new coin to the creator of the block. Blocks form a chain from the first block to the latest block. To create a new block you need to spend CPU time, which acts as an unbribable timestamp for the previous transactions. The average rate of block creation in the whole system is 6 / hour. For details, see the technical paper: Bitcoin: A Peer-to-Peer Electronic Cash System.

The block chain length is shown in the status bar of the Bitcoin main window. The number increases rapidly while your Bitcoin client is downloading the block chain from other nodes. After the downloading is finished, your node can start generating new blocks.

So your wealth is determined by the amount of CPU power you have?

No. There's a constant average rate of new Bitcoins created, and that amount is divided among the nodes by the CPU power they supply. The competition for coin creation will drive the price of electricity needed for generating a coin close to the value of the coin, so the profit margin won't be that huge. The easier way to gain a lot of wealth would be trading goods.

At the moment, though, you can generate new coins quite profitably, if you expect them to have real value in the future. If you choose to, be aware that Bitcoin is still experimental software.

[a500lbgorilla]

So you may be losing money in electricity bills to create those coins, since half of the profit is going to someone else. If you just generated them directly, you'd about break-even apparently.

[bigred]

wat

[BennyLaRue]

I have problems with understanding the value of a Bitcoin. Let's speak in terms we can all understand. How many minutes of porn does a Bitcoin equal?

[a500lbgorilla]

I have problems with understanding the value of a Bitcoin. Let's speak in terms we can all understand. How many minutes of porn does a Bitcoin equal?

Porn is free. Bitcoins are money and they're worth like a dollar/coin I think. You can print money (generate bitcoins) if you want to take some processing power, electricity, and an internet connection to get into the game. Though, I only found out about this today.

[a500lbgorilla]

This seems like a pretty good link if you wanna give it a read. I really shouldn't be answering these questions on my own.

How to Get Started with Bitcoins - pzxc

[BennyLaRue]

Porn is free.

Plebe.

[Jack Sawyer]

FAQ | Bitcoin

How are new Bitcoins created?

New coins are generated by a network node each time it finds the solution to a certain calculational problem (i.e. creates a new block), for which an average solution time can be calculated. The difficulty of the problem is adjusted so that in the first 4 years of the Bitcoin network, 10,500,000 coins will be created. The amount is halved each 4 years, so it will be 5,250,000 in years 4-8, 2,625,000 in years 8-12 and so on. Thus the total number of coins will approach 21,000,000 over time.

What's the current total amount of Bitcoins in existence?

The number of blocks times the coin value of a block. The coin value is 50 bc per block for the first 210,000 blocks, 25 bc for the next 210,000 blocks, then 12.5 bc, 6.25 bc and so on.

As of October 30th 2009, there are about 26,000 blocks in the block chain, which means 26,000 * 50 bc = 1,300,000 bitcoins in existence. You can see the up-to-date number of blocks in the status bar of the Bitcoin main window.

What is a "block"?

A block is a unit which contains the information of the transactions made after the previous block, plus a transaction which assigns a new coin to the creator of the block. Blocks form a chain from the first block to the latest block. To create a new block you need to spend CPU time, which acts as an unbribable timestamp for the previous transactions. The average rate of block creation in the whole system is 6 / hour. For details, see the technical paper: Bitcoin: A Peer-to-Peer Electronic Cash System.

The block chain length is shown in the status bar of the Bitcoin main window. The number increases rapidly while your Bitcoin client is downloading the block chain from other nodes. After the downloading is finished, your node can start generating new blocks.

So your wealth is determined by the amount of CPU power you have?

No. There's a constant average rate of new Bitcoins created, and that amount is divided among the nodes by the CPU power they supply. The competition for coin creation will drive the price of electricity needed for generating a coin close to the value of the coin, so the profit margin won't be that huge. The easier way to gain a lot of wealth would be trading goods.

At the moment, though, you can generate new coins quite profitably, if you expect them to have real value in the future. If you choose to, be aware that Bitcoin is still experimental software.

Like F@H, except to generate cash! /CaptainObvious
Interesting idea at the very least, but the amount of problems this shit will generate (and the amount of farms that will be dedicated to generate these bitcoins etc.) is mind-boggling

[surviva316]

i'm yet to comprehend 3 consecutive words in this thread . . .

[a500lbgorilla]

Like F@H, except to generate cash! /CaptainObvious
Interesting idea at the very least, but the amount of problems this shit will generate (and the amount of farms that will be dedicated to generate these bitcoins etc.) is mind-boggling

You can't farm bitcoins though. Not profitably unless you want to angle someone like compute4cash. And if you do swing it profitable, it'll be slow goings. They're produced at a regular and known and decreasing rate. I think it's something like 5 coins/minute regardless of how many people are making them. There will never exist more than 21 million bitcoins.

[a500lbgorilla]

Bitcoin newcomer; How should I use my 45-computer array ?

A thread from 10 days ago asking if he can use a farm of 45 computers to cook himself some bitcoins.

Forget it. A 2.8 GHz Pentium 4 will only achieve around 1.12 million hashes per second. All 45 computers, together, will be around 50 million per second. You're not using spare CPU time; you'll instead be running all of those computers at full power 24/7, which is roughly an extra 70 watts each. So 3150 watts to produce 50 million hashes per second.

At the current bitcoin difficulty, it would take you around 12 weeks to generate 50 bitcoins (and that's assuming difficulty doesn't increase, which is unlikely). 12 weeks * 3150 watts = 6300 kilowatt hours of electicity. At average US residential rates (~$0.11/kilowatt hour), that's around $700 of electricity to generate 50 bitcoins which may be worth roughly $40. (Plus don't forget about the added wear and tear on the computers and the extra heat they'll be generating, and all of the fans that will be running at full speed all the time.)

By comparison, a single 5970 video card will use 300 watts to generate roughly 600 million hashes per second. That is 12 times faster with 10.5 times less power, or 126 times more efficient.

So ... no.

[philly and the phanatics]

so then buy video cards to make them... what?????

[a500lbgorilla]

Instead of using a printing machine, they print them on their computers. The idea is to decentralize/crowd source money printing instead of leaving it to gov'ts.

[a500lbgorilla]

The total number of bitcoins tends to 21 million over time. The money supply grows as a geometric series every 21,000 blocks (roughly every 4 years); by 2013 half of the total supply will have been generated, and by 2017, 3/4 will have been generated. As it approaches that mark the value of bitcoins will likely begin to experience price deflation (increase in real value) due to the lack of new introduction. Bitcoins, however, are divisible to eight decimal places (giving 2.1 x 1015 total units), removing practical limitations to downward price adjustments in a deflationary environment.[14] Rather than relying on the incentive of newly created bitcoins to record transactions into blocks, nodes in this period are expected to depend on their ability to competitively collect transaction fees to process transactions.[4]

[a500lbgorilla]

Instead of using a printing machine, they print them on their computers. The idea is to decentralize/crowd source money printing instead of leaving it to gov'ts.

And you don't even need to print the money. You can just use the money as currency.

https://en.bitcoin.it/wiki/Buying_bitcoins

[Jack Sawyer]

Rilla, add media for the children

YouTube - What is Bitcoin?

Hmm, I think I need a new videocard

[a500lbgorilla]

brampercars

[supa]

i'm yet to comprehend 3 consecutive words in this thread . . .

At first I was like 'Hey, someone as stupid as me!' but then I was like 'Fuck, I'm pretty sure surviva is smarter than me which makes me really fucking stupid'.

[dneureiter]

So bit coin roller coaster anyone?