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Talorat
Sep 18, 2007

Hahaha! Aw come on, I can't tell you everything right away! That would make for a boring story, don't you think?


A lot has happened since the original creation of this thread, and the price of bitcoins has mostly stabilized (for now). If you are unfamiliar with Bitcoin, Heresiarch made an FAQ to get you up to speed.

Heresiarch posted:

Because I am between tech writing jobs and am apparently some kind of masochist:


A Bitcoin FAQ for GBS


-Short version-

1) Should I buy bitcoins?

No.

2) But if they drop down to a dollar, then I can snap some up and

No. You are one of thousands of people who want to do this. Telling the thread that you are going to do this doesn't make you look smart.

3) How does this poo poo work? It doesn't make any sense!

No, it really doesn't. It's impossible to explain bitcoin in anything less than tl;dr terms so you should probably just not worry about it. Go do something useful instead of reading this awful thread full of socially inept people laughing at another group of socially inept people.


-Long version-

1) I really want to understand how bitcoin works. Please.

Okay, you asked for it. With some severe simplifications and a painfully neutral pov:

Bitcoin is a decentralized "cryptocurrency". It is a network of software that shares a common protocol designed to allow secure transfer of bitcoins between users. It uses distributed cryptography to verify transfers and balances.

Bitcoin is also the subculture that has sprung up around this software, which includes additional software that is not part of the core design. The most high-profile of these are trading services that allow users to buy and sell bitcoins using US dollars and other real-world currencies.

Bitcoins users have files called "wallets". This is sort of a misnomer, because these wallets do not actually contain anything except a cryptographic private key. One's bitcoin balance is actually recorded inside the distributed network, which is why you cannot edit your wallet file to give yourself more bitcoins. Bitcoins can be added to a particular balance using a public bitcoin address, which acts as a cryptographic public key. The private key is contained in the wallet, and bitcoins cannot be transferred out of a balance without that private key.

(If you don't understand public-key cryptography, do some reading because you can't understand bitcoin without it. While you're at it, read up on cryptographic hash functions.)

Transfers between wallets are recorded in "blocks", which are verified by the distributed cryptography system. The act of verifying transactions and then adding those transactions to the historical "blockchain" is called "mining". Transactions are stored in the blockchain using cryptographic hashing methods which allow the entire blockchain to be independently verified for consistency and integrity. In order to make blockchain verification an attractive prospect, the design of bitcoin gives "bitcoin miners" two reasons to tie up their computing hardware to maintain the network, both based around competition.

The first reason is that bitcoin transfers can contain optional transaction fees which are paid to the miner that verifies the transaction. Paying a transaction fee makes it more likely that your transaction will be processed in a timely manner, because those transactions are more attractive to the miners.

The second reason is that mining gives the miner a chance of receiving a batch of newly created bitcoins. The more cryptographic power one brings to bear, the more likely it is that the next batch of new bitcoins will be yours. There are a fixed number of bitcoins which can ever be mined, and the difficulty of the cryptography will continue to increase over time.

An important aspect of mining is that the network is designed to handle one complete block (containing a specific number of transactions) every ten minutes. If more computing power is added to the distributed network, making the blocks take less time to process, the difficulty of the cryptography increases. The inverse is also true. This scaling difficulty is meant to help prevent a single user or group of users from gaining complete control over the network by using more computational power.

The distributed verification process determines the "truth" of a transaction block by whether or not the majority of the network (as measured by contributed cryptographic work) considers it valid. The original designer thought it unlikely that any one user or organization could acquire a majority of the network's cryptographic power and therefore "cheat" the system in some way.

Bitcoin verification power is typically measured in the speed at which a system can perform cryptographic hashes, which are required to verify the blockchain and to add transactions to it. The difficulty of the mining process is determined by the amount of "hashing" required to add a new block to the chain.

These are the core aspects of the original bitcoin design. In short, bitcoins are assigned to "wallet" addresses, with balances stored in a distributed "blockchain". The accuracy of the blockchain is verified by "miners", who have a vested interest in doing so through a reward system. Attacks (such as double-spending) are prevented by the distributed nature of the network, where any invalid transactions will be caught by other mining systems.

2) That was painful to read.

It was painful to write.

3) So what went wrong?

A lot of things, some of which are due to problems with the original design, and others which are due to problems with the bitcoin community.

Bitcoin was originally a proof-of-concept project by an anonymous crypto specialist who used the pseudonym "Satoshi Nakamoto". It is unlikely that he was actually Japanese, but his identity still remains a mystery. Bitcoin was meant to be a testing ground for theories about how cryptocurrencies might work. Initially, bitcoin was a curiosity and there was little participation in the network, as bitcoins had no real-world worth.

This all changed as bitcoin was discovered by three types of people. First, there were the internet libertarian types who liked the idea of a currency that was not controlled by a government. For them, bitcoin represented an ideology. Second, there were people who wanted to use bitcoin as a semi-anonymous international currency for illegal transactions, such as drugs, weapons, or illicit pornography, as well as a possible method for laundering money. For them, bitcoin represented safety from the law. Third, there were people who viewed bitcoin as a method to get rich by getting in on the ground floor of a new kind of money. These people saw bitcoin as an investment.

The history of bitcoin is too complicated to go into detail here, but these three groups shaped the bitcoin network and community into what it is today, which is a gigantic goddamn mess of idiocy, greed, and bad decisions.

4) What happened to the neutral pov?

I'm tired.

5) Well, then where is bitcoin right now?

Right now, the bitcoin community has been overwhelmed by the use of bitcoin as, essentially, a commodity to be bought and sold. Individual bitcoiners may talk about the future of bitcoin as a currency, but the vast majority of bitcoin transactions today are the buying and selling of bitcoins themselves using real-world money, and not the buying of goods or services using bitcoins. There is an extremely limited number of things you can spend bitcoins on without first converting them to dollars (or whatever), and many of those are done through third-party bitcoin-to-dollars systems where the merchant never sees any bitcoins.

Bitcoins are purchased and sold much like other commodities such as gold, petroleum, and the like. Exchange services are set up, where people who wish to buy the commodity put forth "buy orders", where they offer to buy a certain amount of the commodity at a given price, and these buy orders are matched with "sell orders" put in by people who wish to sell that commodity.

There are several bitcoin exchanges that let one buy and sell bitcoins using dollars and other currencies, but the most important one is "mtgox". Amusingly, Mtgox started life as "Magic: The Gathering Online eXchange", an exchange service for virtual Magic: The Gathering cards.

When someone says "bitcoin is at $50" or something similar, usually they mean that the most recent buy order on mtgox was for $50 a bitcoin.

The market prices for bitcoin have historically tended to rapidly inflate and then crash spectacularly. Bitcoin's market value has dropped by 50% in less than a day on multiple occasions.

Regardless, true believers in bitcoin (typically the libertarians or the investors, who are sometimes one and the same) keep throwing more money at the speculative market, in the hopes that one day their currency will be treated with respect by the world, or at least they'll eventually make up for their losses. Neither scenario is likely.

6) Why is this funny?

Because we're children who like laughing at dumb people, and bitcoin people are a truly spectacular level of stupid.

7) So could bitcoin ever be a real currency?

No, for one simple reason. Bitcoin does not scale. The network is already creaking under the weight of relatively few transactions, and more importantly, the blockchain size is increasing rapidly. The blockchain file is currently several gigabytes in size, and the entire chain must be downloaded in order to mine or verify your own transactions. You can use a third-party service to store and transfer your bitcoins, but these services have historically tended to get hacked or just suddenly vanish, taking all your internet funny-money with it.

If bitcoin actually became popular as a currency and not just as a speculative commodity, the network would rapidly become even more unusably slow than it already is, and the blockchain would swell to an absurd and unmanageable size.

8) Some people seem legitimately angry about bitcoin.

Bitcoin would appear to be a mostly harmless way for idiots to throw money at each other, except for the fact that bitcoin mining has (not surprisingly) become an arms race to see who can get the most hashing power online.

The original design of bitcoin did not account for the possibility of specialized, expensive hardware which could make mining without that hardware almost useless. Certain kinds of ATI Radeon video cards proved so effective at performing bitcoin hashing that mining solely on a general-purpose PC CPU gives negligible results, due to the vastly increased hashing difficulty. Miners purchased huge amounts of these video cards to create custom (and often hilarous) "mining rigs", essentially converting electricity into heat and bitcoins.

The stakes have been raised again with the advent of specialized bitcoin-only ASIC hardware which is even more effective than the video cards were. The future of bitcoin mining appears to be in the hands of a small minority of users who can afford this specialized equipment, making the "distributed" nature of bitcoin something of a joke.

The bitcoin network now must use vast amounts of power, far out of proportion to its actual usefulness and typically generated by fossil fuel plants, just to maintain itself. It is a tremendous waste of actual real-world resources that could be better used on something important (like, for example, watching cat videos) and this makes some people actually angry at the situation.

9) Wait, what about this "BFL" thing, and who's "Atlas"? What the hell are you people talking about?

Look at all these loving words I've already written. God, what a waste of effort.

I've decided to ignore all the advice in this thread and purchase bitcoin for some reason. How do I do it?

Powered Descent posted:

There are basically two methods to buy bitcoins.

Above-board. You transfer money to one of the surviving "exchanges", or to a bitcoin "ATM" if there happens to be one nearby. Either one will involve giving several groups of anonymous strangers more than enough info about yourself to allow them to easily steal your identity at any point in the future. (ID card scans, bank account info, photos, palmprint scans, etc.) Then, if you're lucky, they'll actually put some bitcoins in your account, which you may or may not actually be able to withdraw before the entire business folds up and disappears. Oh, and in a few weeks when the banks catch up, they'll freeze your accounts for suspicious activity (i.e. touching Bitcoins with your bare hand) and start a money-laundering investigation.

On the down-low. You can make a deal with an anonymous stranger on the Internet whereby you mail him a prepaid cash card of some sort and then he will send you bitcoins. The result: you send the card and he vanishes. Or, you can try to find a local bitcoiner so you can meet up in a dark deserted parking garage and exchange cash for bitcoins. The result: you get robbed and/or stabbed.

But since your goal is really to acquire bitcoins and not necessarily to buy them, there are other methods. You could trawl Reddit with a sob story and beg for bitcoin spare change. People have been known to make as much as nine or ten cents (in bitcoins) of their hundred-thousand-dollar goal this way. Or you could mine them yourself. A ten-thousand dollar rig from BFL might be able to produce a hundred bucks' worth of bitcoins in only a few months (plus a year or so for delivery time), unless in the meantime the mining difficulty goes up, the price of bitcoins goes down, or the shoddy wiring in the mining rig burns your house down.

Finally, you could always turn to the dark side and become the scammer instead of the scammed. This will probably the method with the best chance of success. Try posting on a bitcoin forum that you're starting a new investment opportunity offering a totally-believable interest rate. Say, twenty percent per week. Include a few stock photos of an expensive-looking office to prove that you're legit. Since bitcoiners never ever learn, they'll send you their bitcoins, at which point you disappear. Ta-da! Success!

Oh, one last note: do be aware that when you do finally spend your ill-gotten bitcoins on illegal drugs, that's now a taxable event, so make sure to declare it as capital gains on next year's tax return. Make sure to individually itemize the pot, heroin and ecstasy on Form 1040 Schedule D.




Some horrible monster made a bitcoin erotica, and then some incredible soul decided to martyr himself to read it for us. May his sacrifice not be in vain.

JossiRossi posted:

As I edit them down I am uploading the chapters. Whole thing is recorded (kill me) but the editing may push the total completion into tomorrow.

Oh and as a warning it gets very

https://soundcloud.com/king-of-bitcoin




Just a reminder everyone we are under safari rules here. Look at the poop, smell the poop, appreciate the poop, but never ever touch the poop.

Talorat fucked around with this message at Apr 7, 2014 around 17:21

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Walkin Goon
Apr 4, 2011


The last time I checked in on the old Bitcoin thread, the price was like $5 per monopoly-dollar.

Can someone summarize what happened to cause them jump that high in price in the first place.

Civil
Apr 21, 2003

Do you see this? This means "Have a nice day".

Poppycock! 'Tis only a market adjustment. It will resume its sustainable growth of 10% per day in a couple of hours. Good time to buy, gents.

Only registered members can see post attachments!

Muppet Danny Brown
Sep 24, 2006

Smell like a penguin

It's gone down over $100 dollars http://bitcoinity.org/markets, its at about $110. Today the internet libertarians die by their own hand invisible hand of the free market.

The Duke of Ben
Jul 12, 2005
Listen, if you're not going to tell me how the entire world economic, political, and social order can be completely replaced in every detail, then I think maybe you should consider that this is the best of all possible worlds.

Check and mate.


So apparently everyone set their "sell if it gets this high" rates at about $250.

Seriously, what do the true believers say when the market crashes like this?

Atoramos
Aug 31, 2003

Jim's now a Blind Cave Salamander!


Walkin Goon posted:

Can someone summarize what happened to cause them jump that high in price in the first place.

People don't understand what it means to have a currency as broken as Bitcoin but want to be at the cutting edge of technology.

mangler103
Jun 6, 2003

You'll get those cats when you get those cats, Jane.


I just saw prices of $110 and $150 back to back.

Totally insane.

Samsquamsch
Jun 6, 2011

Mexican touchdown, Mexican touchdown, Mexican touchdooooown!

I was watching this over lunch, it fell from over $200 down to about $180 in the time it took me to eat. Last I checked it had lost 30% of its value in less than 6 hours, with the Magic the Gathering Online Exchange lagging by over a loving hour. http://www.reddit.com/r/bitcoin and http://www.bitcointalk.org are abuzz with "HAHA TRANSFER OF COINS FROM WEAK HANDS TO STRONG ONES" but if it's truly below half its value, this is magnificent. As much as I'd like to have bought in at $10 and sold at $260, I will not be buying in because God only knows what the future holds for this shamble of a "currency".

Also, can I just say that it was so sad to see the megathread closed due to some irresponsible guy stealing Bitcoins from someone and bragging about it? That was a real shame. I read that thread every day and it was my major source of news, opinion, and spinoff discussion relating to Bitcoins.

GROVER CURES HOUSE
Aug 26, 2007

Go on...


This is what a healthy market looks like.



Walkin Goon
Apr 4, 2011


Atoramos posted:

People don't understand what it means to have a currency as broken as Bitcoin but want to be at the cutting edge of technology.

Thinking about it, that is a sensible explanation.

The Duke of Ben posted:

Seriously, what do the true believers say when the market crashes like this?

Why, it's time to sell sell sell BUY BUY BUY!

oxford_town
Aug 6, 2009


Haha, wow. That is something special.

Moonshine Rhyme
Mar 26, 2010


There goes my doritos and dew fund.

50 Foot Ant
May 7, 2007

Good people deserve good things.


drat, I can't believe it got over $200 a coin.

This crash is going to be nasty. Mt Gox has a problem letting you cash out already. When everyone jumps on the SELL SELL SELL bandwagon it's just going to go down in flames.

Wish the thread would have kept going, I'd have enjoyed reading when it cleared $200 a coin.

A jargogle
Feb 22, 2011


Nobody saw it coming.

Save me jeebus
May 6, 2009


My boyfriend (a normally sensible fellow) bought two, which I have been mercilessly teasing him about pretty much every day for the last three weeks.

Me yesterday: "It's gonna crash. There's a bubble. Your internet money is stupid."
Him: "There is no bubble."

I am really looking forward to dinner this evening.

kazmeyer
Jul 26, 2001

'Cause we're the good guys.



Walkin Goon posted:

Can someone summarize what happened to cause them jump that high in price in the first place.

Someone apparently recommended Bitcoin to the people of Cyprus while their economy was making GBS threads the bed with the lights on and they fell for it.

GROVER CURES HOUSE
Aug 26, 2007

Go on...


Save me jeebus posted:

My boyfriend (a normally sensible fellow) bought two,

He touched the poop, sever.

Sandweed
Sep 7, 2006

War so serious?


The Duke of Ben posted:

So apparently everyone set their "sell if it gets this high" rates at about $250.

Seriously, what do the true believers say when the market crashes like this?

actual reddit quote: The yearly average is still like 19$/BTC, I don't see it going down that low so we're still up.

up uP UP!!!

WastedJoker
Oct 29, 2011

Fiery the angels fell. Deep thunder rolled around their shoulders... burning with the fires of Orc.


Save me jeebus posted:

My boyfriend (a normally sensible fellow) bought two, which I have been mercilessly teasing him about pretty much every day for the last three weeks.

Me yesterday: "It's gonna crash. There's a bubble. Your internet money is stupid."
Him: "There is no bubble."

I am really looking forward to dinner this evening.

Unless he tries buying groceries with bitcoin

Konar
Dec 14, 2006


Is this good or bad for me if I want to buy a poo poo load of drugs online? That's the only thing propping this crap up right?

happyhippy
Feb 21, 2005


Save me jeebus posted:

My boyfriend (a normally sensible fellow) bought two, which I have been mercilessly teasing him about pretty much every day for the last three weeks.

Me yesterday: "It's gonna crash. There's a bubble. Your internet money is stupid."
Him: "There is no bubble."

I am really looking forward to dinner this evening.

Pretend that you wanted to join in and bought a lot of them at 270, then ask how much profit will you make tomorrow from it.

RC Cola
Aug 1, 2011

I PITY THE PUCK!



Please make sure to show your boyfriend this thread

areyoucontagious
Jun 13, 2007

Hell is other people.


Save me jeebus posted:

My boyfriend (a normally sensible fellow) bought two, which I have been mercilessly teasing him about pretty much every day for the last three weeks.

Me yesterday: "It's gonna crash. There's a bubble. Your internet money is stupid."
Him: "There is no bubble."

I am really looking forward to dinner this evening.

So he sunk like $500 in fake internet money and you tease him, as opposed to "why the gently caress did you waste $500 on fake internet money? "

That aside, I also am looking forward to your dinner. Offer to let him pay for dinner using bitcoi- "Oh wait, they probably can't cover this Taco Bell order anymore, huh?"

edit:

happyhippy posted:

Pretend that you wanted to join in and bought a lot of them at 270, then ask how much profit will you make tomorrow from it.

This is way better!

Dolphin
Dec 5, 2008
I SNIFF BUTTS

Hahahahaha. Anyone that spent real money on bitcoins deserves this.

Someone on /r/bitcoin posted this:

It's cute how people actually believe that bitcoin will return to the "mean" and not just crash outright.

Minorkos
Feb 20, 2010

very high player looking for a small son to coach - m4m - 41

Broken Knees Club posted:

This is what a healthy market looks like.



At first I didn't think it looked too bad but then I realized it was days instead of months

ArbitraryC
Jan 28, 2009
Pick a number, any number.

As much fun as I'd like to make fun of bitcoins and their constant crashes, it seems like pretty much everytime we start a thread over the fall of bitcoin it just bounces back up again even higher than it was before. At this point I'm starting to wonder if it's ever going to completely crash or if it'll stabilize around some value conducive to trading for drugs and child porn.

Tubgirl Cosplay
Jan 10, 2011


Bitcoin has no actual value beyond as a speculative chit, so what would it stabilize around?

Dolphin posted:

Hahahahaha. Anyone that spent real money on bitcoins deserves this.

Someone on /r/bitcoin posted this:

It's cute how people actually believe that bitcoin will return to the "mean" and not just crash outright.

This is roughly correct if you note that in Bitcoin's case, the "smart money" and "institutional investors" phases are entirely comprised of the handful of "inventors" reserving themselves roughly half of the bitcoin market before they became publicly traded at all, and that the 'return to the mean' still denotes a net loss of value to anyone who arrived after that point.

Tubgirl Cosplay fucked around with this message at Apr 10, 2013 around 20:10

cr0y
Mar 24, 2005

IRONKNUCKLE PERMBANNED! READ HERE

Mtgox trading engine lag: 763.20s

$105!

The lag is what makes things so fun to watch, people are basically flying blind in an obscenely volatile market. This poo poo is too much fun to watch.

Sandweed
Sep 7, 2006

War so serious?


One of my heroes used Dunning-Kruggerands on twitter today.

https://twitter.com/GreatDismal/sta...961201670168577

Grifter
Jul 24, 2003

I do this technique called a suplex. You probably haven't heard of it, it's pretty obscure.

This is after radio shows in my area have done two pieces on bitcoins in about a week. The first was a pretty serious news piece, the second was a joke piece about happenings on the internet. Maybe bitcoin has popped up in the public's consciousness now and the weird price behavior is being caused by a lot of people entering and exiting the market.

GROVER CURES HOUSE
Aug 26, 2007

Go on...


Minorkos posted:

At first I didn't think it looked too bad but then I realized it was days instead of months



Ceci n'est pas une bulle.

THE MOON!
Jul 16, 2011

IT'S PARTY TIME, BITCHES!


What the gently caress are bitcoins even good for? I have never heard of anyone being able to pay their mortgage with them.

This will teach them to invest in worthless money.

Dolphin
Dec 5, 2008
I SNIFF BUTTS

Tubgirl Cosplay posted:

This is roughly correct if you note that in Bitcoin's case, the "smart money" and "institutional investors" phases are entirely comprised of the half-dozen-odd "inventors" reserving themselves roughly half of the bitcoin market, and that the 'return to the mean' still denotes a net loss of value to anyone who arrived after that point.
Sure, but that graph refers to bubbles based on securities with intrinsic value, not fun non-government-backed play money.

Jew Macklemore
Sep 4, 2011

by The Finn


I love laughing at buttcoiners so much, I'm almost as emotionally invested in the market as the people who actually buy bitcoin.

So I wonder who is really winning here.

GROVER CURES HOUSE
Aug 26, 2007

Go on...


^ You, because you'll walk away satisfied, while the others do a murder-suicide.

I am the M00N posted:

What the gently caress are bitcoins even good for? I have never heard of anyone being able to pay their mortgage with them.

This will teach them to invest in worthless money.

and small-scale scams and money laundering.

Grifter
Jul 24, 2003

I do this technique called a suplex. You probably haven't heard of it, it's pretty obscure.

I am the M00N posted:

What the gently caress are bitcoins even good for? I have never heard of anyone being able to pay their mortgage with them.
Drugs, guns and apparently magic cards. I'm not an expert on bitcoins, but judging by how many nerd things I just mentioned, I bet you can get old Ranma 1/2 box sets too.

Tubgirl Cosplay
Jan 10, 2011


I am the M00N posted:

What the gently caress are bitcoins even good for? I have never heard of anyone being able to pay their mortgage with them.

This will teach them to invest in worthless money.

Speculation, also buying drugs and child porn if your comprehension of law enforcement is on par with the guys who think their sentencing doesn't count if there's a flag with a gold fringe in the room. It's basically WoW money where the computer plays the game for you.

k3nn
Jan 20, 2007


Buy the loving dip!

e: Every time I've looked at bitcoin it's been higher and made me wish I bought in months ago. The last SA thread I saw was gleefully celebrating the end of BTC every time it dropped a dollar in value, and worrying for the welfare of all the people who dumped their life savings in at like $10. I have a feeling they've come out of it okay even if the price has 'crashed' to only $100.

k3nn fucked around with this message at Apr 10, 2013 around 20:16

El-ahrairah
Dec 24, 2007


Atoramos posted:

People don't understand what it means to have a currency as broken as Bitcoin but want to be at the cutting edge of technology.

The recent media blitz made a lot of people realize it's safer than lottery tickets for money laundering. Almost.

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wb
Nov 19, 2004
im cool

Sorry about your bits of corn fellas.

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