Bitcoin - any comments?

There was a thread a while back about Bitcoin, but I'm interested in what experiences people have had recently, if any.

If you haven't heard of Bitcoin, try: http://bitcoin.org/en/

I am in the process of installing a client, and so far have not actually used it (it takes a day to synchronize with the network), but I wonder if anyone has any positive or negative comments about it? I notice one frequent poster here asks for Bitcoin "tips" by putting his Bitcoin address in his signature. I wonder if that leads to any significant income?

From what I can make out Bitcoin is a peer-to-peer payment system where there is no central authority. A useful aspect, compared to paying by credit card, is that you can make a one-off payment to a particular person of a particular amount. Contrast to giving out your credit card number where you hope they will take, only once, the amount you have agreed to pay. If the person with your credit card number takes out more, uses it multiple times, or carelessly loses it, the best you can hope for is to reverse those extra transactions.

I gather that Bitcoins are worth what people think they are worth (well, you could say that about anything) and are currently trading for around $US 1000 per Bitcoin. You can make payments in fractions of a Bitcoin so that is not a particular problem.

It's a very unstable currency! as such Chinese folks offloaded it and siezed the trading etc for it so its value went down back some days.

For us people the news is that the Mining hardware for BitCoins is selling like hot cakes! Want to make it ? I can help mass manufacture $) and selling ;)

I am sticking wtih paypal. I create invoices, and folks pay them, or I pay for stuff. Then I transfer out real money when I start accumulating a balance. No credit card involved, so I can’t lose more than whatever balance is in there.

I am sticking wtih paypal.

Yes Sir that's good ,better stick to the oldies till the newbies make a reasonable mark!

Yes, well PayPal charges (for transactions under $5000) a rate of 2.4% plus 30 cents, so to receive $10 you are paying 54 cents in fees (around 5%). I believe the Bitcoin transaction rate is somewhat lower than that.

I remember when I was selling Shareware, to sell a $10 program I would lose around $2.50 in fees, so the amount I actually pocketed was somewhat less than what the purchaser paid. This would have been a good place for Bitcoin. Plus you wouldn't need a lot of elaborate encryption, and worry about storing credit card numbers securely, etc.

Obviously if there is a big spike in the exchange rate that will hurt or help you in the short term, but in the longer term it would hopefully be more stable (like shares).

[quote author=Nick Gammon link=topic=203952.msg1502086#msg1502086 date=1386708784] I believe the Bitcoin transaction rate is somewhat lower than that. [/quote]

Well, by definition, it is!

The only "transaction rate" is in the exchanges. Private transactions just occur.

I'm staying far away. But the technology is interesting and I certainly don't understand it completely, or even mostly. The mining craze is also quite entertaining, there was quite a race going on there. And I guess it's still going, to the extent that ASICs (and malware to use unsuspecting folks' hardware) are now being produced. I believe there is a finite number of Bitcoins that will ultimately be created, so I wonder if a person that got into the mining business today wouldn't be a ways behind the curve.

PS: Here's a bit of an introductory article: http://spectrum.ieee.org/computing/software/bitcoin-the-cryptoanarchists-answer-to-cash

There was a Sci-Fi story a while ago about someone who became a "non-person" because the government simply cancelled his ID card and his credit card. Without ID, or access to his money, he became powerless.

Something like Bitcoin would make this impossible as there is no central place that can be used to deny access to your money.

I can see one issue is the volatile exchange rate, but say I wanted to buy a book from Amazon, and they quoted 0.03 Bitcoins (based on today's exchange rate) and I converted the appropriate amount of cash that day, then unless there is a big change in the exchange rate during the transaction, we would both be OK.

It seems to me that Bitcoins solve the problem of giving out your credit card details to lots of vendors, not all of whom you can necessarily trust to keep them safe, because a Bitcoin payment is a once-off transaction. Of course you then have the problem of what to do if the goods don't arrive, but I suppose there has to be an element of trust there somewhere. With a Bitcoin transaction, the most I would lose is the value of the transaction (say, $50) but if my credit card is misused I might lose thousands.

CrossRoads: I am sticking wtih paypal. I create invoices, and folks pay them, or I pay for stuff. Then I transfer out real money when I start accumulating a balance. No credit card involved, so I can't lose more than whatever balance is in there.

(slightly off topic)

Till I found out that there is absolutely no seller protection on paypal. Yeah, you can protect from buyer claiming item not received but they can just damage it and claim it was damaged when they received it then file a claim against you. Paypal will be happy to take that money away from you (showing negative balance if you cleared out your paypal account). I had that happen once recently. It took about a month and thanks to the buyer that never bothered to return the "damaged" item, paypal finally reversed the charge back. If he'd returned it damaged, then I'll lose the sale and the parts I shipped out plus shipping fee. Don't dream about security over paypal. They will screw you over.

I'd be happy to take bank issued checks or checks from universities for project consulting fees :) What's bitcoin? You can pay me in 80386 or 8008 too if you have some.

One of the credit cards I have used to have virtual card numbers that you use just for 24 hours with a limit on spending. Then the number would expire and it's a pain to generate another number to pay for another purchase. I think CC companies lack the abilities to receive requests from buyers and then send payment to a seller, like what paypal is doing. If they do have this ability, then there will not be need for paypal.

I'd stay away from bitcoin mining unless you have loads of cash. The difficulty has gotten so high, you have zero chance of making any money with consumer hardware. Especially with businesses building large mining warehouses with ASIC miners. Litecoins are much better, You can still make a few coin a week ($60 - $100 USD) with a modern graphics card if you work in a mining pool.

[quote author=Nick Gammon link=topic=203952.msg1502226#msg1502226 date=1386715542] ...if my credit card is misused I might lose thousands. [/quote]

First, at least here in the US, I don't think I'm liable to pay fraudulent transactions. Second, I don't know anyone nor have I ever heard of anyone that has lost money like that. I attribute this to the phenomenal job that the credit card companies do in detecting fraud. I've had probably three problems in the last 15-20 years. In every case, the card company has called me to verify a transaction, and when it wasn't one that I had made, they immediately cancel the account and issue a new card. Never has anything shown up on my bill that didn't belong there. I do get the occasional false positive call but those number about the same as the actual problems so it's a very small price to pay.

I don't know how they do it, I'm pretty impressed. I can travel, buy stuff online, etc. etc. and they just seem to figure it all out.

I think the greater problem here is not a single $1000 transaction, but small transactions that might slip by your attention. A small purchase from the "FUBAR CLOTHING SHOP" for $15, you might skip over thinking "I must have bought that, just can't remember what it was" unless you are very strict with your paper trail, and obsessively check each credit card statement.

This is why I like the idea of a "once-off" credit card number.

The other side of the coin too, is that I heard of people (one in my own family) who had a credit card with plenty of credit on it, but had a transaction declined for an undisclosed reason, when time was of the essence (eg. paying a restaurant bill).

Usually a phone call resolves those issues quickly enough. Often the thieves will try a small transaction first as a test. I remember two of the times the credit card company called me. One was a long distance call charged to the card (I assume some nominal amount), and the other was $10 charged at a bar on the other side of the country. Somehow they are good at catching those. I do obsessively check each statement (with the help of Quicken and a little additional automation), and I've never found a charge that we didn't make. So I hope you're worrying about a problem that hardly ever happens.

OTOH, given what the NSA has done to the encryption that secures our financial systems, perhaps you are correct to worry. Hmm.

[quote author=Nick Gammon link=topic=203952.msg1502336#msg1502336 date=1386722968] I think the greater problem here is not a single $1000 transaction, but small transactions that might slip by your attention. A small purchase from the "FUBAR CLOTHING SHOP" for $15, you might skip over thinking "I must have bought that, just can't remember what it was" unless you are very strict with your paper trail, and obsessively check each credit card statement. [/quote] My wife works as the office manager for a financial management agency, and she does check every single charge on our bank accounts. I get called on the carpet if I forget to put a receipt or equivalent in the bill basket by the time she pays the bills. It does make it hard to buy Christmas presents and surprise her.

[quote author=Jack Christensen link=topic=203952.msg1502362#msg1502362 date=1386725489] Usually a phone call resolves those issues quickly enough. Often the thieves will try a small transaction first as a test. I remember two of the times the credit card company called me. One was a long distance call charged to the card (I assume some nominal amount), and the other was $10 charged at a bar on the other side of the country. Somehow they are good at catching those. I do obsessively check each statement (with the help of Quicken and a little additional automation), and I've never found a charge that we didn't make. So I hope you're worrying about a problem that hardly ever happens.

OTOH, given what the NSA has done to the encryption that secures our financial systems, perhaps you are correct to worry. Hmm. [/quote]

Same here. I triggered the fraud detection on my card by ordering two small items from Chinese importers on eBay, then loaning my friend $700. The bank called me about 30 minutes after I made the $700 transfer.

I've received follow up calls for company purchases made for Canadian purchases (parts they purchased from Digikey and mounted on SMD adapters). I don't mind them checking up at all.

Bitcoins in Space! http://spectrum.ieee.org/computing/networks/bitcoins-in-space/

Jeff Garzik, one of the developers of the software for trading Bitcoins, is well aware that the cryptocurrency will become the target of cybercriminals. Hackers could possibly take down Bitcoin’s peer-to-peer payment network with a well-designed distributed denial-of-service attack. To keep an engineered traffic jam from damming up the stream of data on the most recent Bitcoin transactions, Garzik has come up with an alternate route: via satellite. Says Garzik, “Satellite distribution of [the] data would facilitate some level of resilience, as well as perhaps enabling use in geographic areas where Internet connectivity is unavailable or spotty.” He is raising money to build and launch a satellite; if the plan works, he hopes to launch a constellation of them.

Well I always like to say, anything worth doing is worth over-doing. I'm liking the buried fruit jar concept better all the time.

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[quote author=Jack Christensen link=topic=203952.msg1503111#msg1503111 date=1386780904] Well I always like to say, anything worth doing is worth over-doing. I'm liking the buried fruit jar concept better all the time. [/quote] Have to agree. What's even easier than "mining" BTC? Stealing BTC. There have been several major BTC "heists" over the last few months, a recent one in Europe amounting to over 96,000 BTC (or ~$96M, if you actually believe the touted "exchange rate".)

Here's a recent story. The comments are interesting -- apparently not a lot of sympathy for the victims, either.

http://www.tomsguide.com/us/sheep-marketplace-bitcoin-theft,news-17942.html

Some strange people with some strange beliefs out there.

Wowsers! The full node software is certainly [u]not[/u] lean. This afternoon it started at "255 weeks behind". About twelve hours later it's "55 weeks behind", has eaten 1/2 gig of RAM, is burning about 20% of the CPU, and has performed about 94 gig of I/O. It's going to be difficult squeezing that into my Arduino server farm.

I wonder if it remembers where it left off?