Bitcoin - digital currency reaches dollar parity

[David Merrill]

This is amazing! I was on a small engineering team and we invented the early FRAM arrays now 64GB mini-SD cards. I left there to go into the Optical markets now CDs and DVDs. Memory was and still is currency.

Processor cycles is like if you can imagine, convincing somebody that debt has value. Now you have a derivative and that opens up an opportunity for a derivative market. If you convince people that there is a potential value in cranking out heat, like the photo above, then you can start a market for bitcoins!

Amazing!

[stoneFree]

Amazing, yes! in many ways. Let me tell you, I have more faith in bitcoin than Federal Reserve money. I trust open-source apps, cryptography, and mathematics more than a central banker.

TREEFARMER: We got caught up here with mining bitcoin, which gets technical; sorry about that. You don't need to mine (generate) bitcoin to use it.

WHAT IS BITCOIN?

Bitcoin is a digital currency that enables instant payments to anyone, anywhere in the world. Bitcoin uses peer-to-peer technology to operate with no central authority: managing transactions and issuing money are carried out collectively by the network. Bitcoins can be easily exchanged to common currencies by several exchange services.

To answer your question, a bitcoin is just data, bits on a computer, 0s and 1s. We talk about Bitcoin the software system, and then bitcoin the currency. One bitcoin currently trades for about $12 USD. One can download the bitcoin client, install it, and then you'd have a digital bitcoin wallet and access to the Bitcoin network (allow several hours for it to sync up). There is no account to setup.

Here's a nice eBook You Can Learn Bitcoin: http://www.lulu.com/shop/david-r-ste...-20423608.html

http://www.coindl.com/page/item/391

http://itunes.apple.com/us/book/you-can-learn-bitcoin/id569230042

And here is Scientific American: http://www.scientificamerican.com/ar...gains-momentum

Another fun way to learn is setup an account at Bitmit, the eBay of bitcoin. They give you a bitcoin wallet and anything you sell puts bitcoin (BTC) into your wallet. It's a fairly new site with not a lot of users - good for buyers, maybe not so good for sellers.

[Treefarmer]

Amazing, yes! in many ways. Let me tell you, I have more faith in bitcoin than Federal Reserve money. I trust open-source apps, cryptography, and mathematics more than a central banker.

TREEFARMER: We got caught up here with mining bitcoin, which gets technical; sorry about that. You don't need to mine (generate) bitcoin to use it.

WHAT IS BITCOIN?
To answer your question, a bitcoin is just data, bits on a computer, 0s and 1s. We talk about Bitcoin the software system, and then bitcoin the currency. One bitcoin currently trades for about $12 USD. One can download the bitcoin client, install it, and then you'd have a digital bitcoin wallet and access to the Bitcoin network (allow several hours for it to sync up). There is no account to setup.

Here's a nice eBook You Can Learn Bitcoin: http://www.lulu.com/shop/david-r-ste...-20423608.html

http://www.coindl.com/page/item/391

http://itunes.apple.com/us/book/you-can-learn-bitcoin/id569230042

And here is Scientific American: http://www.scientificamerican.com/ar...gains-momentum

Another fun way to learn is setup an account at Bitmit, the eBay of bitcoin. They give you a bitcoin wallet and anything you sell puts bitcoin (BTC) into your wallet. It's a fairly new site with not a lot of users - good for buyers, maybe not so good for sellers.

No need to apologize to me, because I'm the one that specifically asked about the mining.
The ebook Introduction To Bitcoin Mining, found on this website, answered some of my questions.
According to that ebook, the process of "mining" bitcoins generates computing power which supports the bitcoin network and other software operations of an unspecified nature.

In the Chapter entitled What is Mining? it says:

"Bitcoin is really three things. First it is a protocol (or set of rules)
that defines how the network should operate. Second it is a
software project that implements that protocol. Third it is a network
of computers and devices running software that uses to [sic] protocol to
create and manage the Bitcoin currency.

Mining is defined in the protocol, implemented in software, and is
an essential function in managing the Bitcoin network. Mining
verifies transactions, prevents double-spending, collects transaction
fees and creates the money supply. Mining also protects the
network by piling tons of processing power on top of past
transactions.

Mining verifies transactions by evaluating them against the
transactions that happened before. Transactions cannot spend
bitcoins that do not exist or that were spent before. They must send
bitcoins to valid addresses and adhere to every rule defined by the
protocol.

With a frequency that is targeted at every 10 minutes, mining
creates new blocks from the latest transactions and produces the
amount of bitcoins defined by the current block reward (50 BTC until
late 2012). Miners also verify blocks produced by other miners to
allow the entire network to continue building on the blockchain."

It looks to me like bitcoin mining is a good way to support the computer industry.
It encourages people to buy more computer equipment to support their mining operations, without which it appears that bitcoin would not exist.

Apart from the unusual "mining" process, bitcoin looks like any other token currency to me, which can be exchanged for other useful currency, whose value depends entirely on its perceived usefulness in the minds of the users.

[stoneFree]

Nice find Treefarmer. That mining ebook is somewhat outdated now, FGPA technology has surpassed GPU mining as the most efficient way to mine, and ASIC miners should surpass that once they start shipping (any day now).

The European Central Bank has released this 55-page book: VIRTUAL CURRENCY SCHEMES with case studies on Bitcoin and Second Life (a computer game using "Linden Dollars"):

http://docs.google.com/viewer?url=www.ecb.europa.eu%2Fpub%2Fpdf%2Fother%2Fvirtualcurrencyschemes201210en.pdf

[Noah]

I am looking at this with interest...

However, Michael Parsons, a former executive with Emirates Bank (Dubai), Moscow Narodny Bank, and KPMG Moscow, believes that those efforts will prove futile and he explains, "Bitcoin is 'regulated' by its peers and mathematics. And Bitcoin is not a currency like fiat money. It is a value transfer system which is given value only by its users. So the ECB, FED, etc. have no mandate to control a 'virtual currency' just because they call it (bitcoin) that! It will just go underground. Bitcoin is like Light and Air. Free to use and transfer. Owned and issued by the people and NOT the State!"

It evokes an image of central bankers huddled comfortably on the safe shoreline as they look out into the horizon and see the dangerous, unstable virtual currencies approaching. The opposite is actually the truth because it is the central bankers who are floating precipitously out at sea. As James Turk famously said about bitcoin's analog cousin, "When standing in a boat and looking at the shore, it is the boat (currencies) - and not the land (gold) - that is bobbing up and down."

http://www.forbes.com/sites/jonmaton...-of-economics/

[stoneFree]

China Wins

BREAKING NEWS:

Jeff Garzik has just received the first ASIC mining computer to hit the consumer market, and has confirmed on Bitcoin IRC that the machine functions as expected.

http://bitcoinmagazine.com/working-a...sic-confirmed/
68GH per second! ASIC refers to the new IC technology, a chip specifically designed to mine bitcoin at a rate approximately 20 times faster than the previous generation FPGA chips. What does this mean? It means Jeff's ASIC miner will earn over $200 per day; the box will pay for itself in about a week. With 2 companies (Avalon & BFL) putting up big money for a custom chip-run, it means bitcoin is becoming mainstream - a serious currency - a real alternative to central bank fiat-fraud debt-as-money (a/k/a FEDERAL RESERVE notes).

Before you get $ signs in your eyes ... realize that Avalon is producing only small batches of a few hundred units and the first batch sold out in 20 minutes. Butterfly Labs appears poised to ship in larger quantities, but they haven't received chip yets; if you order a BFL ASIC unit today it will likely ship about May when difficulty will likely be much higher (smaller profit), and who knows where the value of bitcoin will be. One Bitcoin currently trades for about $20 USD.

[walter]

Bitcoin Should Get Ready for an Attack

http://oneradionetwork.com/latest/bi...attack-articl/

[stoneFree]

Great article; thanks. Here's the original: http://www.freemansperspective.com/b...for-an-attack/

We've already seen DDoS attacks on many BTC-related sites yet bitcoin keeps chuggin' along. The banking cartel is getting hit from all sides now - a beautiful thing to behold. I don't think they'll make it more than a month.

Thank you all!

[stoneFree]

bitcoin on TV news this morning:

http://www.actionnewsjax.com/mostpopular/story/Clark-Howard-Bitcoin/cPM1uQw8hEaNvD728kTlRQ.cspx

[fishnet]

United States Homeland Security Investigations (HSI) of U.S. Immigration and Customs Enforcement agent signs affidavit for Warrant against Mt Gox, worlds largest bitcoin exchange. Mt Gox's U.S. bank account seized.

I wonder if Mt. Gox were trading in lawful money, instead of Federal Reserve Notes, what would be the outcome.

The U.S. bank account I use that is linked to Mt. Gox has demand for lawful money verbiage on the signature card.

Seizure Warrant here.

[David Merrill]

Good question! I am glad you know about redeeming lawful money.

Thank you for the link. I do not find the case on PACER yet.

[Treefarmer]

This is what jimstone freelance has got on the subject.
(Link here)


Re-posted from Jim Stone's website:

I have checked up on MtGox a few times and the formal statement regarding the account seizure has been removed with nothing replacing it, and everything appears to be normal. It may have been real, but I think they dealt with it, and I also figured out it was an ambush.

The case was based around the fact that MtGox had a bank account that was not registered for international "money exchanges". At the time this account was set up, Bitcoin was not considered by TPTB to be a currency, so setting up the type of bank account MtGox had was perfectly legitimate. Once Canada delcared bitcoin to be a taxable currency, the U.S. hopped on it and instantly took action against MtGox for having an illigitimate account. This is of course how tyranny functions, it will do background investigations to find ways to make people in violation of the law just because the tyranny tweaked a law somewhere, when all intention on the part of the victim was above board. So it looks to me like MtGox handled this technicality and all is well, as usual they are up and running, and bitcoin is perfectly stable.

Is MtGox seizure a silly internet rumor? MtGox will not suffer from this AT ALL.

[David Merrill]

That explains nothing on PACER! Thank you Treefarmer.

[Treefarmer]

I like what Paul Rosenberg said on Free-Man's Perspective dot com:

The following is a copy and paste of the article:

Bitcoin: The Tyranny TestProspective ReasonsIt can be used for money laundering.
It could destabilize the current system.Bitcoin provides no customer protection.In the End

In the end, it is said, we judge ourselves. Bitcoin has now put governments and banks in the position of judging themselves. They will write their own verdicts.

It should be interesting to watch.

Paul Rosenberg
FreemansPerspective.com

[walter]

http://innovatedeconomy.com/uncategorized/the-bitcoin-network-is-more-powerful-than-the-top-500-supercomputers-combined.html?__lsa=646d-4771

The bitcoin network is more powerful than the top 500 supercomputers combined