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Visualizing How A Bitcoin Transaction Works

Tyler Durden's picture





 

Following our last primer on the digital currency, prices have somewhat stabilized (despite the ongoing efforts of TPTB to regulate it out of existence). The following infographic provides a step-by-step illustration of how a bitcoin transaction occurs.

 

(via bitcoincharts.com)

(click image for legible large version)

 

(h/t Dr. Constantin Gurdgiev via True Economics blog)

 


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Sun, 05/12/2013 - 22:23 | Link to Comment otto skorzeny
otto skorzeny's picture

Ridonkulous.

Sun, 05/12/2013 - 22:30 | Link to Comment Alpo for Granny
Alpo for Granny's picture

Granny needs Alpo.

Bob has Alpo to sell her.

Granny hands Bob some mercury dimes.

Bob hands Granny the Alpo.

The End.

Sun, 05/12/2013 - 22:32 | Link to Comment Dr. Engali
Dr. Engali's picture

Granny keep your Mercury dimes for now and give them the shitty copper/nickel dimes. Save your Mercury dimes for the Fancy Feast.

Sun, 05/12/2013 - 22:35 | Link to Comment SHEEPFUKKER
SHEEPFUKKER's picture

Doc- I believe you are referencing Gresham's law here.  Nailed it. 

 

http://en.wikipedia.org/wiki/Gresham's_law

Sun, 05/12/2013 - 23:29 | Link to Comment TwoShortPlanks
TwoShortPlanks's picture

I've just realised what BitCoin is missing, this: http://blogs-images.forbes.com/afontevecchia/files/2011/11/Gold-Bars-in-Fort-Knox.jpg, along with Central Banks too, I might add.

MBS = Over The Counter Synthetic Derivative

BitCoin = Under The Counter Synthetic Derivative

Mon, 05/13/2013 - 02:11 | Link to Comment SafelyGraze
SafelyGraze's picture

and here is How A Bill Becomes A Law!

http://thumbnails.visually.netdna-cdn.com/how-does-a-bill-become-a-law_5...

next week: How A Life Form Becomes Patented!

How War Is Declared!

How Government Contracts Are Awarded!

How A Check Is Cleared!

Mon, 05/13/2013 - 04:00 | Link to Comment Lore
Lore's picture

Re: "Bob, an online merchant, decides to begin accepting bitcoins as payment. Alice, a buyer, has bitcoins and wants to purchase merchandise from Bob." 

ANALOGY:

"Bob, a global warming pusher, decides to begin accepting carbon tribute. Alice, a sucker, has money and wants to buy carbon offsets from Bob."

Mon, 05/13/2013 - 04:00 | Link to Comment francis_sawyer
francis_sawyer's picture

Where's the part in that flow description where the IRS takes it's cut?

Mon, 05/13/2013 - 07:14 | Link to Comment clymer
clymer's picture

Look ZH, I love how BC uses 256bit PKI with salted hash to regulate and restrict the number of coins mined. I love how buyers and sellers can agree on it as a medium of exchange to work together without 3rd party interference. I get it. But here's the thing that prevents me from biting: it ain't backed by anything. And what the fuck is Keiser talking about when he says there will never be a competitor to bitcoin? Here's a novel idea: Anonymous puts a little time into understanding as much about banking and finance as they understand about scientology. As this understanding spreads between their more entrepreneurial members, say an offshoot, sub group that happens to work in certificate / key store management, they develop a similar algorithm, only they say, "look, we developed a similar model called 'crypto coin' won't just allow this to denominate in fiat that the 'cryptocoin' marketplace will back, we will tie specifically to gold and silver. The algo will ultimately mine 15x more silver colored cryptocoins than th gold colored ones, to represent what exists naturally in the crust of the earth. They then correspondingly create their own exchange (even say a virtual exchange represented by members), collectively owned by all cryptocoin holders. The balance of actual metal in the exchange is verified on a quarterly basis by the top 100 cryptocoin holders to verify that they maintain the same amount of precious metals in the exchange, as there exists cryptocoins in circulation. The crypto coins can then be redeemed in gold and / or silver. The same concept could be applied to oil contracts, shares in organic beef farms, or stock at company xyz. Till I see the next evolution cryptographic digital currency, I will keep hitting the coin shop and stacking. 

Intrinsic value is one thing. Tangible value is another. Combining the two is key

Observation: The bitcoin buyers / holders appear to be vitriolic toward those that prefer PM's. Understand that we are on the same side of this argument. Don't lose sight of the bigger picture; that we all now recognize how the monopolized private issuance of currency and credit has led us to this point

Mon, 05/13/2013 - 07:44 | Link to Comment 13thWarrior
13thWarrior's picture

So bigger printer will be replaced by bigger mining computer?

Mon, 05/13/2013 - 13:36 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Indeed. Those with the most powerful computers, bought with fiat that can be printed by central banker allies, would be able to mine more btc than anyone else. Simultaneously they would be able to print endless fiat to purchase btc to control those already mined. Worse still these central bankers control all bank regulations so all accounts for fiat used for exchanges like Mt.Gox can all be shut down using those regulations.

My what a pretty picture that is.

Mon, 05/13/2013 - 09:14 | Link to Comment The Mist
The Mist's picture

That's exactly the arguement I make when it comes to BitCoin. The idea can fairly easily be copied and the markets might be flooded with these Crypto Currencies

Mon, 05/13/2013 - 11:11 | Link to Comment Matt
Matt's picture

There are hundreds of paper monies in the world, but everyone prefers USD. 

Mon, 05/13/2013 - 12:12 | Link to Comment French Frog
French Frog's picture

Modifying a Verified Bitcoin Transaction ---> "Such a feat is nearly impossible".

I always worry when I see 'nearly' !

Mon, 05/13/2013 - 16:32 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

not me.

In fact if you've watched the Amazing race in the last year you'll see contestants frequently failed to carry local currency, brandished USD, and were threatened with ARREST for owing for things like a taxi and having NO MONEY to pay with. FREQUENTLY.

Mon, 05/13/2013 - 11:46 | Link to Comment LostAtSea
LostAtSea's picture

clymer, it could be argued that since the total number of bitcoins that will ever exist is 21 million, and the total gold produced (so far) from the Earth is 5.5 Billion troy onces, then there already exists a relationship between gold and bitcoin:  5.5 B oz Au/21 M BTC = 262 oz/bitcoin.  Therefore it could be argued that each bitcoin could be worth 262 oz Au, or about $375K/bitcoin at current gold prices.

Regarding a slver equivalent, there is already Litecoin. 

I hear your argument about other crypto currencies could be invented, and some already do exist.  This is one threat to the to whole concept.  But I guess it really comes down to faith in the system, as is so with any monetary instrument.  Thus far, Bitcoin has the most faith and popularity, kind of like the US Dollar (used to) have.

 

Mon, 05/13/2013 - 06:57 | Link to Comment Go Tribe
Go Tribe's picture

The person with the last roll of Eagles will rule the world.

Mon, 05/13/2013 - 07:46 | Link to Comment 13thWarrior
13thWarrior's picture

Everything would be 1 ounce of eagle then.

http://www.sjsu.edu/faculty/watkins/CIAinfl.htm

Mon, 05/13/2013 - 04:16 | Link to Comment Urban Redneck
Urban Redneck's picture

Last time I checked - sausage was made with either sheeple intestines or soylent greenbacks, and it doesn't look like anything has changed.

Sun, 05/12/2013 - 22:37 | Link to Comment flacon
flacon's picture

I love how bitcoin is always represented as a PHYSICAL COIN.(usually gold or silver) LOL!

Sun, 05/12/2013 - 22:43 | Link to Comment RideTheWalrus
RideTheWalrus's picture

It's a precursor to 'BitCoins 4 Gold' stalls at the mall - associate programming.

 

Sun, 05/12/2013 - 23:09 | Link to Comment macholatte
macholatte's picture

 

Bitcoins 4 Fiat

 

I got widgets to sell at $199 USD. Presumably there is a way to make change with Bitcoin using fractional reserve Bitcoinage. But what about the sales tax? Now my $199 item is $214.50 (That's right, I ain't ready to mess with the tax man), so I will need to pay the State with Bitcoins or change them back to fiat. But say the value of the Bitcoins tanks between the time I collect and when I have to pay the tax man. I guess I get screwed.

Sooner or later, the electrons get converted into paper.

Sun, 05/12/2013 - 23:27 | Link to Comment Ignatius
Ignatius's picture

If I gave you 10 BTC would you take 'em or toss 'em?

If you'd take 'em, they have value.

Sun, 05/12/2013 - 23:35 | Link to Comment TwoShortPlanks
TwoShortPlanks's picture

I would gladly take them, then I'd sell them as fast as possible to the Greater Fool. Then buy physical.

Funny, this sounds familiar......China!

Sun, 05/12/2013 - 23:39 | Link to Comment Ignatius
Ignatius's picture

Right!  They have exchange value.

Mon, 05/13/2013 - 00:08 | Link to Comment TwoShortPlanks
TwoShortPlanks's picture

Yes, like Fiat. Just buy real PMs.

Mon, 05/13/2013 - 00:16 | Link to Comment Ignatius
Ignatius's picture

Yes, when the goal is to store value.

Gold = wealth reserve asset

Mon, 05/13/2013 - 04:09 | Link to Comment Lore
Lore's picture

When my local grocer prefers bitcoins, THEN I'll take them seriously.  Until then, they're no more useful as currency than baseball cards, points programs or pogs.

Mon, 05/13/2013 - 06:52 | Link to Comment wintermute
wintermute's picture

Ha Ha Ha. By the time your grocer accepts them they will exchange at $10k per USD. You will be kicking yourself silly that you read about them on ZH and did nothing except slam them.

Mon, 05/13/2013 - 09:05 | Link to Comment Blano
Blano's picture

Unless you're buying 10k in groceries, why would the grocer take it?  How does he make change?  Too damn complicated.

Mon, 05/13/2013 - 11:14 | Link to Comment Matt
Matt's picture

Unless you're buying $1500 in groceries, why would you own gold?

You understand that bitcoins are divisible, right? Just like how a kilogram of gold can be divided into grams, or a dollar can be broken into cents?

Mon, 05/13/2013 - 10:02 | Link to Comment Saro
Saro's picture

Do you think your local grocer will routinely accept gold bullion before or after they routinely accept bitcoins?

I'm betting bitcoin adoption comes first.

Mon, 05/13/2013 - 14:21 | Link to Comment Lore
Lore's picture

I don't think. I KNOW. Thanks for playing.

(Hint removed for protection of third parties)

Mon, 05/13/2013 - 16:25 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

I'll take the opposite bet.

Sun, 05/12/2013 - 23:34 | Link to Comment lickspitler
lickspitler's picture

it ain't gold

it ain't silver

it ain't ammo

it ain't pussy

bitcoins... who cares

Mon, 05/13/2013 - 06:58 | Link to Comment Go Tribe
Go Tribe's picture

It's Obamacoin.

Mon, 05/13/2013 - 00:19 | Link to Comment SpykerSpeed
SpykerSpeed's picture

It's represented that way so that simpletons like yourself can comprehend it.  In reality, Bitcoin is a shared ledger that is validated with a proof of work chain and secured with SHA 256 bit encryption.  But that flies over the head of goldbugs.  And the subjective theory of value is completely lost on you guys, too.  You think that in order for something to have value, it must be shiny and physical.

Mon, 05/13/2013 - 01:48 | Link to Comment Pure Evil
Pure Evil's picture

No, just something that will continue to exist after I've either forgotten or lost my encryption key.

(ok, it'll still exist in the ether, until the grid goes down, and like gold lost in a boating accident, it doesn't do anyone any good if you can't access either your bitcoins or your gold.)

Mon, 05/13/2013 - 02:38 | Link to Comment All Out Of Bubblegum
All Out Of Bubblegum's picture

So if you forget where you put your wallet or lose a benjamin, you don't like cash either?

Sounds like you're really limited in how you can move and manage funds. Sorry to hear that. I make silver doing the (fiat > silver > bitcoin > fiat) loop.

You should check out the 21st century sometime, Mr. Evil.

Mon, 05/13/2013 - 03:46 | Link to Comment RideTheWalrus
RideTheWalrus's picture

I make silver doing the (fiat > silver > bitcoin > fiat) loop.

Just be careful that hot potato doesn't become cold spaghetti

http://www.youtube.com/watch?v=NBWQCHb95rg

Mon, 05/13/2013 - 04:02 | Link to Comment francis_sawyer
francis_sawyer's picture

The IRS is very interested in your disclosure, & proud of your achievements...

Mon, 05/13/2013 - 10:06 | Link to Comment Pure Evil
Pure Evil's picture

Mr. Bubblehead, um bubblegum, I can afford to lose my wallet, don't carry a crapload of cash, but if I were to exchange 10K USD for bitcoin and lost or forgot my key, then I'd be shit out of luck.

Truth is, there's risk in every thing a person does. Never know if today is your last day on planet Abnormal.

Plus, it sounds like you lead a complicated life just to cycle fiat back to fiat. Let's see the number of steps. From fiat to silver to bitcoin all the way back to fiat.

Yep, that's so 21st century of you. You should get a job at Goldman Sucks with that type of skill.

Mon, 05/13/2013 - 10:05 | Link to Comment Saro
Saro's picture

What if your gold continues to exist in the pockets of the thieves who take it from you?

With bitcoin, it is literally possible to keep the keys to your account completely in your head and nowhere else.  That's never been done before, to my knowledge.

Mon, 05/13/2013 - 04:29 | Link to Comment Row Well Number 41
Row Well Number 41's picture

Notes on Bitcoin:

Anybody who studied with Dave and Charlie in the late 90s knows, it is always easier to encrypt data then to decrypt it. Even if some government, don't think the US is the only one working on it, has the ablility to decrypt the data, it will always require a focused effort, and they won't be doing it realtime. In addition, more robust encryption alogrithms can always be written. So I don't worry to much about it being tracked or hacked.

Bitcoin is the ultimate fiat currency. It is backed by nothing except faith in the software and hardware infrastructure it is based on. That said, the software infrastructure is completely opensource, effectively transparent, can't say that about the FRN, Euro, Yen, or Yuan, other Central Bank currencies.

If you're holding for the long term, Bitcoin is like a startup, a high risk high return speculation on what you believe is a good idea, not a bad thing. It is not a safe long term store of value, if for no other reason then the infrastructure that supports it has not been stress tested. The "Web" as we know it is only 20 years old, the internet itself is only 60. This is a flash in the pan compared with Gold, Silver, or even traditional CB fiat. It hasn't even seen it's first total war situation.

All digital money is fiat, and it has its place, I don't want to have to go and pay my power bill in person with silver dollars. So as digital fiat, I see Bitcoin as an interesting alternative to CB Fiat. It is not beholden to bankers, or politicans, and its intergity is enforced by the open source nature of the software. However, I will not be cashing out my physical for Bitcoins, though I might speculate a little.

#41

Mon, 05/13/2013 - 16:20 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Crypto-geeks also know that computing power with Moore's law is something not to be dismissed which is why keys need to expire, and newer keys need to be BIGGER and data itself can't just live forever, just live long enough undisturbed to be useful. This means eventually BTC wallets will need to expire.

Mon, 05/13/2013 - 06:36 | Link to Comment thisandthat
thisandthat's picture

It takes a mere 8 lines of perl to decode sha160 - how long until 12 lines of perl decode sha256?

Mon, 05/13/2013 - 10:09 | Link to Comment Saro
Saro's picture

292 times harder?

Yeah, good luck with that.

Mon, 05/13/2013 - 11:57 | Link to Comment LostAtSea
LostAtSea's picture

thisandthat: is that a brute-force algorithm?

if so....assuming each line of code executes in *one* assembly instruction (highly unlikely), and is executing each one at 2 Ghz, it would take about 9^37 YEARS to decode sha160.

Mon, 05/13/2013 - 16:18 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

That’s a pretty poor assumption. I’d more likely assume that many GPU units would be farmed out, perhaps over a network as well, to simultaneously compute many 8 ghz attempts all at once. You know NVIDIA makes a 128 core gpu STRICTLY for this purpose? Just ONE card. Now imagine 3 per machine with 100 machines farmed out. It could instead be MILLIONS of machines. EACH with a dozen GPU cards EACH with 128 or more cores.

Tue, 05/14/2013 - 02:56 | Link to Comment thisandthat
thisandthat's picture

Sorry, that was dumb - that's for an *implementation* of sha, not crack lol; was looking up cracks and it came up and I just assumed it to be one, without actually looking into it :(

Either way, sha1 weaknesses have been found, public (http://en.wikipedia.org/wiki/SHA-1#Attacks) or private (http://www.youtube.com/watch?v=7YebpMoK9VQ), and these are just the "known knowns" and "known unknowns"; we obviously don't know anything about any possible "unknown unknowns", but we do know, for instance, that Aes candidates were getting disqualified as weaknesses were being found, and have to assume Us gov wouldn't publish an algo it didn't know how to crack...

 

Mon, 05/13/2013 - 07:00 | Link to Comment malikai
malikai's picture

One of my best friends is a die hard Marxist/Trotskyite. He and I have the best arguments. Nevertheless, even he is somewhat veering from LTV and recognizing STV and more importantly, the trade value in BTC.

But we're all just old school hackers so I guess that's the way it goes.

Amazing watching people squirm when the scary guy with the BSD shows up at the party.

Mon, 05/13/2013 - 09:39 | Link to Comment funthea
funthea's picture

spyderspeed, that may all be true... that is all until the power goes out. Then one is left to barter the computer and bitcoin wallet key, with the promise that when the power returns the coins will be retrievable. Of course an EMP could just as well leave every bitcoin holder holding nothing but their dick.

Mon, 05/13/2013 - 16:11 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

256 bit encryption = garbage

2048 is the smallest I'd consider useful today.

Sun, 05/12/2013 - 23:08 | Link to Comment Scro
Scro's picture

This guy could have used some bitcoin.

ONE YEAR IN HELL…SURVIVING A FULL SHTF COLLAPSE IN BOSNIA

http://silverdoctors.com/one-year-in-hellsurviving-a-full-shtf-collapse-...

Sun, 05/12/2013 - 23:38 | Link to Comment TwoShortPlanks
TwoShortPlanks's picture

"Our city was blockaded by the army"....Bosnia or Boston?

Mon, 05/13/2013 - 07:48 | Link to Comment SilverDOG
SilverDOG's picture

TwoShortPlanks,

 

 

That is just how fast enclosure will occur.

Sun, 05/12/2013 - 23:42 | Link to Comment seek
seek's picture

Pretty sure this was written by Selco, who has a website now: http://www.shtfschool.com

He has lots of interesting things to say.

Mon, 05/13/2013 - 00:59 | Link to Comment TwoShortPlanks
TwoShortPlanks's picture

The greatest threat to people in a western society in a SHTF situation is Gen-Y. There are always exceptions however, as a general rule, you cannot trust them, you cannot work with them, they are lazy, they know nothing of importance, they are loud, they cannot fix anything meaningful, they are selfish, they have limited values and morals, they will steal from you and let you down, they complain endlessly, and they will be the first to form gangs as taking is easier than building or creating.

Respect, trust, commitment, honour, reliable, dependable, honest, compassion, fortitude, flexibility, stability, resilience, friendship, loyalty…very few Gen-Y possess these traits/virtues. Think about this.

Gen-Y are not themselves to blame; they have been bred and conditioned to be that way, but that does not exempt them from you and your reality.

Because of their conditioning, Gen-Y have many weaknesses. They give-up easily. In groups (gangs) they behave more like Seagulls (group of individuals) than Wolves (coordinated team), so they are not efficient or tactically sound. They are very superstitious and easily unnerved. They are mentally weak and easily fooled. They think they know everything instead of thinking about what they don’t know. They live in the now and rarely prepare.

For me, in that situation, any Gen-Y unknown to me represents a threat, possibly today, definitely tomorrow, and would be treated as such. I would exploit their weaknesses relentlessly.

I don’t care if you find my words harsh, just remember them.

Mon, 05/13/2013 - 06:32 | Link to Comment YHC-FTSE
YHC-FTSE's picture

Nice post, although that could apply to quite a few in every generation,  none of the others celebrate their shortcomings as much as the Y-gen. Their natural habitat seems to be the mom's basement. 

Don't be offended if you too are Y-gen. The fact that you're reading this on ZH means you're the high sigma in the population distribution. 

Mon, 05/13/2013 - 07:11 | Link to Comment TwoShortPlanks
TwoShortPlanks's picture

Too true. Some are exempt from my thoughts/beliefs.

Mon, 05/13/2013 - 07:26 | Link to Comment Ghordius
Ghordius's picture

I do find your words a bit harsh, yes

Gen-Y is barraged by tons of informations, for example, and it's a less free generation than the ones before (talking America, here)

Meanwhile if you really think that those generational differences are indeed part of the flux of how every generation is raised than consider this: in the Strauss–Howe generational theory Gen X is the Nomad Generation and Gen Y is the Hero Generation

Nomads - like George Washington and the Founders - aren't yet at the helm. Your selection of virtues is by the way a Nomad one, particularly Honour.

Heros - well, what are they? They are the one generation that can be shaped. What they usually got from history is a chance as soon as the cultural/religious wars of the Prophets end and the Nomad generations has enough, and a new "fit for all" social model is selected by the Nomad generation - to which then Heros conform "en masse" and fully

Heros are then afterwards the defenders of a new society until new Prophets are disgusted by Silent "don't care, it's ok" and Hero's enforced and antiquated morals and views and propose new ways

Mon, 05/13/2013 - 14:35 | Link to Comment Element
Element's picture

Gen Y Hero = cannon fodder

Gen Z = Zombie

Mon, 05/13/2013 - 11:33 | Link to Comment Jekyll_n_Hyde_Island
Jekyll_n_Hyde_Island's picture

2stubbyplanks -- You're right.  Most of your assertions regarding my generation are true.  Unfortunately, you've failed to understand origins and the meaning of how people became this way and how it relates to bitcoin.

  Gen Y'ers (born somewhere between 1976 and 1982, loosely) -- have been taught and parented by the generation that grew up and achieved mental emancipation in the 60's and 70's; an antinomian orgy where authority and tradition and rules and hard work were considered fascist and inhuman -- where an all encompassing tide of poorly or undefined 'love' was all that was needed and anything that flew against this was uncool.

  This in turn infected our schools, our philosophies, our work ethics, our relationships to the Church and 20 years later, our attitudes.  After the hippy bullshit Hare Krishna, Tibetan vagueness, moral relativism and spiritual but anti church movement -- here's your generation:

  -- Most of you are divorced and estranged from your children.  Don't get me wrong, you play nice and see them on the weekend, but the bond has been broken.

  -- You went on all sorts of newly tested pills to deal with your guilt, and then shoved the same pharma down our throats because we started acting out as children because we wanted your attention.

  -- You're self divided from religious community because you decided it was "just a bunch of fundamentalists" and dismissed the entire thing as either judgmental Catholic Nuns or fascist Southern Baptist, and you've divorced yourself from Christian Truth which was responsible for the formation of a large part of this country.

  -- You're bitter, and sarcastic and postmodern.  You don't believe in anything except not believing in anything.  You impose that morality is a function of the mind, not the self, and the mind interprets data.  Therfor, morality is an empirical behavior sculpted by society to 'dupe' people into falling in line.

  You want to know why we don't posses the traits and virtues you talk about above?

  #1.  We don't want to work for you anymore than we want to be around our parents.  You've rejected us, you've rejected the church, you've rejected your family and expect us to trust systematic authority?  Sorry buddy.

  #2.  You believed in teaching us empirical truth, liberal arts and science and math -- not virtue and honesty and compassion.  The teachers of our students are just as bad as the parents.  Still soul searching, counter-positional and lost.

  #3.  You are completely unaccountable for your actions.  You are secret victims of the idiocy that was the 60's and 70's and you call us "the greatest threat to western society."  it was your generation that made and celebrated such media abortions as Pleasantville, American Beauty and Moulin Rouge -- it's your generation in love with making gayness a celebration and divorce a normality and God something we don't talk about anymore.

  So you know what we're going to do?  Start our own businesses and our own operations within your companies and be successful.  Because some of us don't want to fuck up our marriages for some quick pussy in the name of free love, man, or decide that we're gay somewhere in our huberistic development, and then spend the next 40 years justifying our behavior.  We believe in origins and meaning and sources and history and we love tradition because it made our houses happy when we had it.

  You think you're going to exploit our weaknesses?  You've already done that to yourself.

Mon, 05/13/2013 - 15:56 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Sounds like you’re forgetting the largely anti-freedom and very unsafe conditions (living at all, living without torture, etc). I realize some churches didn’t participate & some people were never were stained with this torture or executions but it did happen and that was enough to make many people “anti-church” as a matter of survival instinct.

Mon, 05/13/2013 - 12:05 | Link to Comment LostAtSea
LostAtSea's picture

twoshort planks:  +1 for excellent post, although I hate stereotyping groups of people.  There are always some very fine individuals from all generations.....  Cody Wilson for example.

 

Mon, 05/13/2013 - 15:49 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Just remember if you incorrectly identify who to treat in this manner it will probably be something you’ll regret. I recommend caution in who to help & who to exploit.

Mon, 05/13/2013 - 00:48 | Link to Comment auntiesocial
auntiesocial's picture

The mad max scenario will not play out the way everyone think it will. Cops will still go to work, convenience stores will still be open and you will still buy gas. The prices will just be sky high. Will people flip out and do desperate things? yes. Will we be patrolling our neighborhoods? doubtful. Will the police presence be everywhere? yes. We are the system. The system is us. We will still carry insurance and pay our phone bills. Now that will be interesting... will cell phone bills go up significantly? is the gubbermint gonna shut off the grid and water? no. Sounds to me like everything will just be overpriced but you will still live breath and fart and be a citizen with a computer and a cell phone. and eat 100.00 boloney sammiches. agree? disagree? got your mad max car / sand rail in the garage? 

Mon, 05/13/2013 - 01:25 | Link to Comment Money Squid
Money Squid's picture

Youtubes has plenty of vids of what happens when the lights go out just for a few hours. Watch the vidoes of LA riots the cops ran for the hills, shoot outs in the streets, total chaos...for while. The lights went out in New York just before sunset and looting started immediately. Its not if shit will hit the fan, its a question of how bad and where. If you are in a poor urban area where most are on SNAP cards you are probably goin to have trouble with Ray Ray. Look at the crap in Detroit, or watch the vids for Super Mall Cop and the shit he delt with before getting fired.

Mon, 05/13/2013 - 03:58 | Link to Comment animalspirit
animalspirit's picture

You nailed it Squid.

All the combined effort of law enforcement focused on a single target (or local, contained threat) is mighty, no doubt  (see the hunt for the Boston bombers as an example).   But in an environment where people have delegated the role of protection and cannot protect themselves, fences will get tested and within a few days (if not hours) there will be neighborhoods where things are no longer under control.  Or, as Squid describes it ... under Ray Ray's control from there on out.

Mon, 05/13/2013 - 06:53 | Link to Comment malikai
malikai's picture

Whos'e Ray Ray?

I need to get him working for me.

Mon, 05/13/2013 - 15:36 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

clearly wrong as in some countries they couldn't be paid, that's why it went mad-max, and cops didn't show up for work. Greece has seen a bit, Zimbabwe too. That's likely in many regions.

Mon, 05/13/2013 - 00:49 | Link to Comment auntiesocial
auntiesocial's picture

1

Mon, 05/13/2013 - 01:19 | Link to Comment Money Squid
Money Squid's picture

while reading the article I see the cops came calling to confiscate the guns when things started to go bad.

Mon, 05/13/2013 - 02:28 | Link to Comment SoCalBusted
SoCalBusted's picture

Red Flag.  It looks too fucking complicated, kinda like CDS.

 

Mon, 05/13/2013 - 04:07 | Link to Comment animalspirit
animalspirit's picture

It may seem complicated because it is a new concept.  

Never before has there been a historical record that is resistant to corruption.

That's all that bitcoin is.  A ledger of transaction activity in which every ten minutes (on average) it gets exponentially harder to change the history.   After about an hour it is essentially impossible to change even a single transaction in the books so therefore you can trust the transactions in the ledger after they are in there for an hour (again, roughly about an hour).  

No court order can do it, no dishonest employee can do it, no political tyrant, no mob boss, no careless programmer, etc. ...  can change the history.

When you think of it that way, there's nothing too complcated about it.

Mon, 05/13/2013 - 04:24 | Link to Comment Urban Redneck
Urban Redneck's picture

That sounds nice - but because block chains have to reconcile with each other, it is possible to change transactions once they are on the books, so history can in fact be changed.

Your blanket dismissal of the dishonest employee, political tyrant, mob boss, and careless programmer alike is unwarranted. 

Mon, 05/13/2013 - 06:56 | Link to Comment malikai
malikai's picture

...resulting in a fork in the blockchain.

Which has happened, and has been dealt with. Not to mention the difficulty of a malicious attack.

Mon, 05/13/2013 - 07:04 | Link to Comment Go Tribe
Go Tribe's picture

If it cannot be manipulated or corrupted, then we will not be free. Bitcons is anti-freedom.

Mon, 05/13/2013 - 08:38 | Link to Comment Urban Redneck
Urban Redneck's picture

It's not an insurmountable problem, but the existing solution doesn't scale.  A mechanism of actual reconciliation needs to be designed, developed, tested, and deployed - picking winners and losers might very well lead to losing when survival matters most. 

Mon, 05/13/2013 - 10:14 | Link to Comment Saro
Saro's picture

Anyone who tried to change the history would have to change every block that came after it too, and do it faster than miners on the legit chain can generate new blocks, and even if somehow, someone managed to do it (good luck with that), the worst that could happen is a small fork of the blockchain, which would quickly be discovered and ignored.

Sun, 05/12/2013 - 22:23 | Link to Comment zorba THE GREEK
zorba THE GREEK's picture

Forget the 2-bit bit-coins, and buy some silver rounds.

Sun, 05/12/2013 - 23:10 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

I found the article interesting and instructive.  Thanks, Tyler!

But, I will stick to gold all the same.

Mon, 05/13/2013 - 00:20 | Link to Comment SpykerSpeed
SpykerSpeed's picture

I'm up 10x in my Bitcoin investment.  What's silver been doing lately?  Ah right.  It's been going down.  Pretty significantly.

Mon, 05/13/2013 - 00:41 | Link to Comment Pure Evil
Pure Evil's picture

Different strokes for different folks.

Mon, 05/13/2013 - 02:17 | Link to Comment OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

What is Bitcoin? It is a private money designed specifically for the internet.

Q: What can you do with Bitcoin today?

A: It can be exchanged instantly for Dollars, Euros, Yen, gold, etc.

It can be sent just like an email to anyone in the world, anywhere, instantly and with no fee, with no bank account required, and with no third party involved.

It can be used to buy on any website in the world (Amazon, eBay, etc, via Bitspend).

It can be used to fund a credit card and spent like cash at more than 30 million merchants worldwide.

It can be stored on a laptop, on a mobile phone, in the cloud, or offline in paper form in a safe deposit box.

Banks: imagine it's 1992, you're the Postal Service, and you just learned about something called email.

 

Mon, 05/13/2013 - 08:14 | Link to Comment francis_sawyer
francis_sawyer's picture

Congrats SpykerSpeed ~ Another darling #winner... [& the IRS is very glad you're so forthcoming about your profits on a public internet blog]... I'm tellin' ya... That's what's so great about ZH... Every single day we have people who are willing to publicly share their intelligence with the rest of poor ol saps... Your intellectual prowess rivals only that of the Woodward & Bernsteins who know everything there is to know about the Loyal Order of Luciferian Cheese Popes...

Mon, 05/13/2013 - 15:30 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

You have 10x the tangible silver, gold, cars, property, tools due to bitcoin? Fiat dollars aren’t “up” they are a means to an end, a means which is quickly failing. Showing you measure in btc and dollars as value / profit / “up” shows me your failure completely.

Sun, 05/12/2013 - 22:26 | Link to Comment RideTheWalrus
RideTheWalrus's picture

This diagram is contained within a much larger diagram that shows the process of the NSA's Utah datamine centre.

 

Sun, 05/12/2013 - 22:43 | Link to Comment Ignatius
Ignatius's picture

One has got to wonder about that, but this is some pretty clever shit.

Sun, 05/12/2013 - 22:46 | Link to Comment RideTheWalrus
RideTheWalrus's picture

It's so stupid it's genius!

 

Sun, 05/12/2013 - 22:25 | Link to Comment Tango in the Blight
Tango in the Blight's picture

Just bash Bitcoin Tyler, it will make you more popular with the ZH regulars and thus will generate more advertizing revenue.

Sun, 05/12/2013 - 22:28 | Link to Comment SilverIsKing
SilverIsKing's picture

Where does Tyler bash Bitcoin? Show me please. C'mon show me.

There's a reason why I call it ShitCoin though.

Sun, 05/12/2013 - 23:03 | Link to Comment wintermute
wintermute's picture

Tyler presents yet more evidence that Bitcoin is a new and intrinsically sound form of money. However, it goes over the head of some ZH readers who can't think beyond "Bash. Bash. Bash." ad nauseum

Sun, 05/12/2013 - 23:27 | Link to Comment akak
akak's picture

I find it informative to note that when I spend a dollar, or use a gold or silver coin or bar in a barter transaction, neither I nor the recipient inherently needs to know and download the ENTIRE transactional history of that dollar or piece of precious metal in order to make the transaction valid. 

I have absolutely nothing against Bitcoin, or those who wish to use it, but personally I would not touch it with a ten foot pole (or even a ten foot Italian, for that matter).

Sun, 05/12/2013 - 23:39 | Link to Comment lickspitler
lickspitler's picture

plus you can't stack it, screw it or shoot with it,   rite akak

Mon, 05/13/2013 - 00:23 | Link to Comment SpykerSpeed
SpykerSpeed's picture

I'm actually really happy people like you exist.  Your inability to do the basic research required to see that not every node requires a full transactional history of bitcoin, coupled with your inability to recognize the complete failure of dollars and gold to safeguard the wealth of individuals against government tyranny... is what keeps Bitcoin's value relatively low for the time being so I can buy more of it.  Thanks.

Mon, 05/13/2013 - 00:49 | Link to Comment RideTheWalrus
RideTheWalrus's picture

But Bitcoins haven't proven themselves to safeguard wealth of individuals either. You've had no real tests to prove they can maintain value or maintain security or avoid legislative onslaughts. People assume they'll be fine because until a few months ago no one paid any attention to them.

The future is quantum computing - already developed and proven at lab level by multiple developers, probably going to be installed heavily in Utah in the next 10 years - and at that point your bitcoin security is DONE, the encryption is null and void. At this stage what safeguards do you have?

When they master the power of the sun and the alchemists can create gold atoms in their labs - then we need to take another look at Gold but you can bet every cent you have they will clock quantam computing many many decades before they master rumpelstiltskining.

 

Mon, 05/13/2013 - 00:56 | Link to Comment SpykerSpeed
SpykerSpeed's picture

Bitcoin's security can be upgraded to account for quantum computers:  https://en.bitcoin.it/wiki/Myths#Quantum_computers_would_break_Bitcoin.2...

Mon, 05/13/2013 - 01:34 | Link to Comment RideTheWalrus
RideTheWalrus's picture

We know NSA types are making massive inroads to track and record every digital 1 & 0 going through the exchanges no matter what cryptography is used.

We're left to assume bitcoins will adapt.

It's future is a clusterfuck if it even makes it that far. 

Your brave to be involved in an experiment but your naive if your involved thinking it's the path to fortunes.

 

Mon, 05/13/2013 - 08:21 | Link to Comment francis_sawyer
francis_sawyer's picture

Not to mention the 10X 'profits' he claims to have already made... As mentioned above, I'm sure there are 'certain parties' interested in that beyond the 'ooh's & aaahs' he gets from ZH'ers... [Now go ahead & junk me, after all, like with everything else, francis_sawyer is the one responsible that you have to pay your taxes]... I pay mine [to MYSELF, I presume... though the payment never seems to get credited to my account]... Weird... [must have something to do with all that 'fancy-dancy' cryptology... I'm sure someone smart as you could break it all down for me]...

Mon, 05/13/2013 - 09:11 | Link to Comment Blano
Blano's picture

Get back to us in 10 years on that.

Mon, 05/13/2013 - 10:43 | Link to Comment funthea
funthea's picture

I too have no problem with bitcoin. I even like it for all the reasons you mention. But... I just can get passed the part were it is dependent on the internet and the power grid. Both of which I find to be suspect in a SHTF environment. In a perfect world, it sounds great, perfect even. Everything an anarchist could every want to disenpower TPTB. I just don't see them taking to kindly to it. And it is certainly within their perview of power to pull its plug, at a time not so condusive to your choice of transactions.

I have yet to hear any bitcoin-bugs explain to me a contingency plan for this very real possibility of power/internet loss/limit, and why in such scenario it would not be better to hold something else. And what the ramifications of an EMP would do to the future retrieval of your bitcoin wallet.

To all bitcoin-bugs, bit coin seems like a great idea. Now, instead of bashing all gold-bugs for their lack of faith in bitcoin, why not address these very real concerns in an open discussion. Perhaps there is a solution; a solution that may very well address these very real concerns, propelling bitcoin's popularity.

Mon, 05/13/2013 - 00:34 | Link to Comment RebelDevil
RebelDevil's picture

You're right akak. The same is true for bitcoin. Niether YOU or I needs to know the blockchain, but the COMPUTERS on the network however absolutely needs to know what the blockchain is. The entire crediblity of the network lies upon it. Computers do all the hard work, while bitcoin acts as digital cash. :)

Mon, 05/13/2013 - 09:32 | Link to Comment jonytk
jonytk's picture

Precisely that way anyone can verify that your bitcoin is not a fake one, you can trace any bitcoin or part there-off to the moment it was mined.

 

That said, the bitcoin protocol and program is safe, what it is likely NOT safe it's your computer if you are running windows XP or don't have an antivirus and are up-to-date with all of the updates.

 

For more information www.getbitcoins.tk i just added the Secure it! page.

Mon, 05/13/2013 - 10:20 | Link to Comment Saro
Saro's picture

There are already bitcoin clients that don't require a full blockchain download, which are perfectly fine for small, day-to-day transactions.  If you are trading millions of dollars worth of goods or something, then sure, you want to use a client with the full blockchain, but I have one of those on my home computer

Are you seriously suggesting that businesses can't afford to use an consumer-grade computer for conducting business?

Sun, 05/12/2013 - 23:50 | Link to Comment GFKjunior
GFKjunior's picture

Yes I agree. I feel there is a big dissonance on bitcoin (and tech in general) articles here and the comments.

This post and the 3d guns both seemed positive but the comments hate both. The internet isn't going anywhere. With the growing, encroaching state we should be happy there are people out there to using technology to further the ideas of freedom and liberty. 

 

Bitcoin is a libertarian thought experiment. And even if it doesn't work out the fact that people can create and use independent currencies is amazing. That's one of Rothbard's tenets.

Sun, 05/12/2013 - 23:58 | Link to Comment salvadordaly
salvadordaly's picture

I've said it before and I will say it again. Without electricty there is no bitcoin! Think about it.

Mon, 05/13/2013 - 00:32 | Link to Comment gwar5
gwar5's picture

UR right, but would there be access to digital fiat without electricity?

 

I like PMs but I'm thinking bitcoin has at least a niche right now as a great way to move cash when traveling. Who needs the bank gestapo tracking you....

Mon, 05/13/2013 - 04:12 | Link to Comment fredquimby
fredquimby's picture

Without electricity there is no fuck-all matey. The last thing I will be worrying about when the lights go out is my bitcoins. They are for spending in the present on the internet and for personal payments; not for SHTF wealth security. Think about it. 

 

 

 

Mon, 05/13/2013 - 06:38 | Link to Comment wintermute
wintermute's picture

Agreed. If electricity is gone then its Mad Max-ville for everyone. Good luck holding onto gold in a society of total anarchy

Mon, 05/13/2013 - 15:25 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Utter nonsense. Most of human civilization wasn’t utter anarchy and precisely matches these conditions. What would be a bigger shock than a downed grid for power or internet is a loss of oil supply without suitable LIQUID replacement. Solar won’t cut it. Natural gas may.

Mon, 05/13/2013 - 15:23 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

What the hell’s wrong with you? We’ve had electricity less than 200 years yet we’ve had money longer than we’ve had LANGUAGE.

Mon, 05/13/2013 - 15:21 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Yup. Currency that fails to be a store of value isn’t money. I want money. Transaction units that fail to store value AND fail to work without a grid aren’t even currency – they’re a gimmick. We need MONEY to (re)build grids with no grid around to rely upon for payment during the rebuilding, or to live without a grid for generations. GENERATIONS. Bitcoin FAILS.

Mon, 05/13/2013 - 15:19 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Clearly there’s a large number of Tylers and they don’t all agree with each other. They don’t need to.

Sun, 05/12/2013 - 22:28 | Link to Comment otto skorzeny
otto skorzeny's picture

Why should we bash Bitcoin Tyler?

Sun, 05/12/2013 - 22:35 | Link to Comment Mad Max
Mad Max's picture

Because he's just a hash of regular ol' Tyler.

Sun, 05/12/2013 - 22:35 | Link to Comment Dr. Engali
Dr. Engali's picture

Did you even bother to look at the piece?

Sun, 05/12/2013 - 22:29 | Link to Comment Dr. Engali
Dr. Engali's picture

I know how a silver and gold transaction works. I take funny money Bernanke fiat to my dealer and exchange it for real money.

Sun, 05/12/2013 - 22:32 | Link to Comment otto skorzeny
otto skorzeny's picture

Do you have to re-exchange it to be able to buy gas and food?

Sun, 05/12/2013 - 22:39 | Link to Comment Dr. Engali
Dr. Engali's picture

By the time I need to exchange it, we will have a new currency in place.

Sun, 05/12/2013 - 23:48 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

If TPTB/ClubFed is dumping paper and bullion gold, it means they have something sinister up their sleeve. Really sinister.

Mon, 05/13/2013 - 03:53 | Link to Comment RideTheWalrus
RideTheWalrus's picture

By the time I need to exchange it, we will have a new currency in place.

At that stage the robots and their makers that run everything will want silver like a crackwhore wants the rock. 
Skynet won't have any use for a bitcoin that only had perceived value when computer power was the equivalent of a light bulb to what it is at that stage in time.

 

 

Mon, 05/13/2013 - 15:18 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

by that time we'll be trading entire robots or useful modular parts for them. Robots themselves simply can't replace human evolutionary benefits like self-improvement, self-repair & survival instinct. Robots that can't do this still require maintenance & still fail to work forever, just like sleep, eat & death come for living things, but their disposable and/or durable nature is only needed for some jobs, not all jobs.

Sun, 05/12/2013 - 22:30 | Link to Comment BLOTTO
BLOTTO's picture

Im lost after step 1...

Mon, 05/13/2013 - 06:40 | Link to Comment wintermute
wintermute's picture

Just accept that it works. Have you kept track of what the Barnank is up to with all his smoke and mirrors around the dollar?

Mon, 05/13/2013 - 15:15 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

I have, that’s why I don’t use much dollars anymore, it’s gold & silver for me. Since I kept track of btc I can see they are much more dangerous to me than dollars which is why I have NONE.

Sun, 05/12/2013 - 22:35 | Link to Comment nmewn
nmewn's picture

Pull the plug and its useless.

The grain will be grown and there will be no buyers. The wood will be cut, made into furniture that no one has the ability (or utility) to buy.

Labor would stop apart from ones own survival.

I don't know how many times I have to say...its not money.

Sun, 05/12/2013 - 22:39 | Link to Comment wisefool
wisefool's picture

They would argue that the merit required to crack cryptography, or developed on discovery of new "prime numbers" adds a better effect than the number of fingers left on the hard working guy digging gold out of the ground at a "nominal" pace.

Mon, 05/13/2013 - 06:42 | Link to Comment wintermute
wintermute's picture

Wow. A survivor of the old Klondike Gold Rush of '98 commenting on ZH. Are you immortal like the Highlander as well?

Mon, 05/13/2013 - 00:25 | Link to Comment SpykerSpeed
SpykerSpeed's picture

"Pulling the plug" would reduce government tax revenue far more than simply allowing Bitcoin to exist alongside fiat, dumbass.

Mon, 05/13/2013 - 02:02 | Link to Comment Pure Evil
Pure Evil's picture

Yeah, we're all just ignorant hicks here using corncobs to wipe our arses.

But now we have the chance to bask in the glow of a polished turd you consider your intellect.

Mon, 05/13/2013 - 06:25 | Link to Comment nmewn
nmewn's picture

I've been clear on what bitcoin is, dumbass.

Its a conduit for money...among those who have the means to access both ends of said pipe.

Its NOT actual money.

Your other point is well taken by me, you should only be taxed once, not multiple times on the same dollar/pound/yen.

Mon, 05/13/2013 - 15:46 | Link to Comment dark pools of soros
dark pools of soros's picture

You've been pretty clear to be a dumbass about bitcoins

 

Keep talking about 'pull the plug' scenarios..  how many other things in the economy dies with same logic?   You are using the internet right now, why don't you go back to printed news?  If you can't hold it, it must not be news

 

Mon, 05/13/2013 - 18:54 | Link to Comment nmewn
nmewn's picture

Good luck in your reinvention of the wheel, clearly when the next hurricane or earthquake hits you'll have plenty of bitcoin to spend for necessities, so there won't be any problem at all.

In fact, you'll be the talk of the town ;-)

Mon, 05/13/2013 - 15:11 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Explain your assertion: it's not bitcoins that are taxed, it's fiat. BTC values in fiat are highly unstable, probably will hit $3 usd very soon, and that will mean you pay 1000x more in tax than just holding dollars for tax day.

Mon, 05/13/2013 - 04:18 | Link to Comment fredquimby
fredquimby's picture

I don't know how many times I have to say...its not money.

Until sombody slaps you perhaps? I paid somebody for something with bitcoins last week. How then is it not money?

Mon, 05/13/2013 - 06:18 | Link to Comment nmewn
nmewn's picture

Are you gonna slap me?...lol.

The transaction only happened because both parties had the means to PROCESS bitcoin. Now, go try the very same transaction in the jungles of Burma or on a sand dune in the Sahara.

I'm starting to get a little pissed that you elitist jackoffs would keep your "money" away from the poor of the world just because they don't have the MEANS to exchange with you.

Think about what money is universally and get back to me with your plan to subsidize internet/power/device so the poor can participate in your new money ponzi ;-)

Mon, 05/13/2013 - 10:30 | Link to Comment Saro
Saro's picture

"People in the jungle don't accept bitcoins, so bitcoins aren't money."
"The restaurants around me here in the US don't accept euros, so euros aren't money."

Flawless logic, there. And by the by, even Somalia has cellphones. Does Somalia use Visa?

(If you really care about the poor and want them to not be poor anymore, perhaps a good way to start would be to develop a money not controlled by a central bank and used to benefit the rich? Think about it.)

 

Mon, 05/13/2013 - 18:45 | Link to Comment nmewn
nmewn's picture

Thanks for making my point.

"Does Somalia use Visa?"

Visa is not money either, its credit, grasshopper ;-)

Anything that needs another thing, to make it pass for money, is not real money.

Sun, 05/12/2013 - 22:39 | Link to Comment Toilet
Toilet's picture

For everyone bashin' bitcoin. I mine 24/7 on a spare PC & turn the earnings into silver eagles. Far from a bad deal if you ask me.

Sun, 05/12/2013 - 22:44 | Link to Comment RideTheWalrus
RideTheWalrus's picture

Whats your power bill like?

Sun, 05/12/2013 - 23:07 | Link to Comment Toilet
Toilet's picture

I just paid $67 for April, in a 2 bedroom apartment. 

Sun, 05/12/2013 - 23:48 | Link to Comment seek
seek's picture

The return on bitcoin far exceeds the power costs.

ASIC miners are ~ 6W/gigahash, and at current prices 1 gigahash/s over a full day generates about $3.60, whereas the power usage cost is about 2 cents per day.

Even a PC using a graphics card at 1 gigahash burning 600 watts an hour is profitable ($3.60 in bitcoin v. $2.16 in power.)

Mon, 05/13/2013 - 00:17 | Link to Comment gwar5
gwar5's picture

That would certainly add up over time. Is that at current rate of USD/Bitcoin? So as Bitcoin goes up you would earn more per day? I see adds for the mining, they do look a little expensive. 

 

Mon, 05/13/2013 - 00:20 | Link to Comment RebelDevil
RebelDevil's picture

In terms of fiat, yes. But die-hard bitcoiners say "fuck fiat!" lol

Mon, 05/13/2013 - 06:45 | Link to Comment wintermute
wintermute's picture

Yes. All fiat is just milk from the government teat.

Mon, 05/13/2013 - 00:33 | Link to Comment seek
seek's picture

Yes, this is at the current exchange rate (I used a ballpark number of $100USD/BTC.) It goes both ways, you make more when bitcoin goes up, or less when it goes down.

It's actually quite fascinating to watch the network hash rate during price moves -- you can see "old" less-profitable mining systems going online on price spikes and be taken offline during price dumps. I find the elasticity comforting as it is evidence that the market isn't manipulated much.

The ASIC rigs that are advertised here have doubled in price since the increase in the excahnge rate, and the delivery times are such that they may not be profitable once they're delivered -- and the delivery schedule is iffy at best.

Conversely, ASIC rigs that sold for $1300 that have been delivered are catching bids of $30K on ebay, because they're so profitable right now. As more mining capacity comes online everyone's share of the coins mined declines, which is what makes the timing of having a mining system online (sooner rather than later) so important.

Mon, 05/13/2013 - 04:23 | Link to Comment RebelDevil
RebelDevil's picture

seek, I saw a video recently where a guy found a PCI-card that hosts an FGPA cluster for $1. His friend did some calculations, and apparently the cluster could do 21Ghash, so long has he could get the drivers. (Unfortantely, the card was too old to be possible to find drivers for, especially when the cluster was a custom board.)
http://www.youtube.com/watch?v=jW1hFQndX2I

Why go for ASICs when FGPAs are just a good but may be cheaper! I'd rather buy a car for $30K than an ASIC miner.

Anyhow, seek, if you have info on mining with PCI FPGA cards, shoot me a link/message. I'm trying to find some for cheap, but it's hard. Apparently they're pretty expensive when new.

Mon, 05/13/2013 - 04:49 | Link to Comment i-dog
i-dog's picture

 

"I'd rather buy a car for $30K than an ASIC miner."

The demise of the West encapsulated in one sentence!

Mon, 05/13/2013 - 05:44 | Link to Comment thisandthat
thisandthat's picture

you can make money with a car - just saying...

Do NOT follow this link or you will be banned from the site!