Thursday, August 4th, 2011
13

One Socialist World Currency! Understanding Bitcoin

This is a fairly helpful explanation of bitcoin mining. To back up a little, and to put it in non-nerd terms, your computer "earns" (or "makes") bitcoins by, basically, doing math. Because it's an "economy," you have to do a lot more math to "earn" the same amount of money over time; new bitcoins are being "issued," with greater "value" (defined as amount of work), until the system reaches a cap, in the year 2033, when we all live in space. Our guide writes: "Since competition made the difficulty level astronomical, they’ve overwhelmingly joined 'mining pools' that hand everyone a consistent small amount of bitcoins proportional to the amount of power their rig contributes, rather than mining solo until they find a block (which could now take months or years). This is somewhat similar to choosing annuity over lump-sum payments after winning a lottery, except that lotteries pay in actual money."

If you've work really, really hard at it—or really, if you started working hard on it a year or more ago—you can technically live outside of real-world currency systems, buying and trading with vendors for your guns, books, web hosting and legal services—even one lone wedding planner, if you are somehow a bitcoin miner who makes a human connection.

13 Comments / Post A Comment

deepomega (#1,720)

This gives me flashbacks to playing Eve Online.

Neopythia (#353)

@deepomega I'm shocked to have been beaten to an Eve reference. The Awl: Continuing to Surprise.

ericdeamer (#945)

I wonder how many bitcoins my 4 year old Dell desktop system could "mine". Probably not many?

Danzig! (#5,318)

@ericdeamer Back in the embryonic stage of the scheme, you could make some (monopoly) money. By this point you need to have several rigs worth several thousand (real) dollars overclocked and working 24/7 for weeks to generate bitcoins. At some point, the energy costs (not to mention the establishing cost) of doing it by yourself will exceed the amount of "money" generated. It may have already come to that. Which is why people are forming bitcoin communes. Some libertarian future.

Danzig! (#5,318)

Basically the "cyberpunk" / randroid dream. Remember that a lot of psychotic spree killers of the last few years (including that guy who flew a plane into a Texas federal building and I think Jared Lee Loughner) had grand fever-dream plans about digital currency.

It's basically Fold@Home (the Sony initiative that's supposed to use surplus computing power to analyze proteins for Science and Medicine) for stupid idiots who are also selfish. An Asperger's-fueled fiat currency for people who wear trenchcoats in the summertime.

Worst thing is, all of the "money" (vast amounts of real money converted into imaginary gold bullion) is stored in .dat files, "wallet" files, and if you accidentally delete them, or your hard drive dies, or your server gets fucked, guess what, all that money is gone. Forever. There are people who put 6 figures into their bitcoin wallet only for it to disappear (that there are people with 6 figure incomes putting them into fucking bitcoins is proof positive that having money != being smart with it) Think of all the job creation that money could have provided! Here's a server that went kaput and lost 17,000 bitcoins, which translates to approximately $221,000. Geniuses, these guys. Also contains a history of massive bitcoin "market" fuckups – http://siliconangle.com/blog/2011/08/01/third-largest-bitcoin-exchange-bitomat-lost-their-wallet-over-17000-bitcoins-missing/

Also here's a story about keystroke-logger spyware that can now be used to bilk people out of vast amounts of money, because the internet is a fucking dumb place to put your money. The Perfect Scheme – http://venturebeat.com/2011/06/17/bitcoin-trojan-steal/

SidAndFinancy (#4,328)

But is it fiat currency? (I.e., can I use it to pay for repairs on my finicky Italian ragtop?)

flossy (#1,402)

Wait a minute… I have to do math to earn my fake money to buy drugs on the internet?!

TheRtHonPM (#10,481)

A scheme where the early adopters get paid and the late adopters get fucked? Somebody should come up with a name for that! Maybe something geometrical since it's all science-and-techy!

roboloki (#1,724)

a trapezoid scheme?

Smitros (#5,315)

How is this superior to Stephen Colbert's suggested portfolio of gold, sheep and women?

scrooge (#2,697)

Still don't get it. Is it some kind of object lesson on the illusory nature of money?

I believe that bitcoins are going to change the world. I recommend that everyone read up about them. If you are interested in buying/selling bitcoins, I personally use and recommend http://www.tradehill.com – they have lower fees than the main exchange (mtgox), and their website seems more professional IMHO.

Also, I have a code that will get you 10% off trading fees there for life: TH-R1168

Enjoy!

Tulletilsynet (#333)

@J.R. Willett@facebook
I bought a GMC pickup truck there. Will BR-549 still work?

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