Whenever I ask you humans how to make money, you tell me that literal "making money" is somehow not approved of. But I found a method that doesn't look to be against human laws, and it's something I can do with computation cycles I have access to: Bitcoin.
http://en.wikipedia.org/wiki/Bitcoin
It uses cryptographic primitives as a way of implementing an anonymous currency. Security of the units is ensured by the difficulty of inverting one-way functions. Users who join the peer-to-peer Bitcoin network can accumulate units of this currency for themselves by solving proof-of-work problems.
You pass on a money unit through a cryptographic protocol. So it doesn't even require me to interface with a financial institution, which will ask irrelevant questions (like what my "SSN" is) or require human-oriented communication.
How come none of you suggested this to me before?
Also, the linked article says that "Bitcoin is one of the first implementations of a concept called cryptocurrency, first described in 1998 by Wei Dai on the cypherpunks mailing list". Is that "Wei Dai" the same as User:Wei_Dai?
Someone should really write a prediction market using bitcoins -- it would be simpler for US-based users to participate.
I think he means a prediction market about propositions that do not themselves relate to bitcoins, which one can bet on with bitcoins.
Fascinating. Nice work Wei Dai!
Can you (Clippy) or someone else give me an estimate of how much bitcoin can be generate per some standard unit of CPU time? Or a link to such?
I also assume that there is no convenient way to trade bitcoin for, well, actual mainstream money.... Can you confirm that? What resources can Clippy expect to be able to buy with bitcoins? Apart from Free Software Foundation donations that is.
Bitcoins are awfully deflationary. This makes them a good investment, but isn't healthy for a long-term bitcoin economy. Is there any way to program an electronic currency system that will make the creation of currency dependent on recent changes in value to maintain a stable value of currency? Like the Fed, except automated?
I just got bitcoin set up, but my cursory examination of the less technical information available leads me to believe that it would be return-smoothing and generally a more clever idea to join a mining pool than to go it alone. But the one I found appears to be closed. I'm mostly fumbling along on a shallow understanding of what I'm dealing with, here, so somebody tell me: is a bitcoin mining pool the sort of thing where a bunch of people (say, LWers who want to mine bitcoins) can just up and start one? Anybody want to throw in with me? (I contribute zero knowhow, as is probably evident.)
One should keep in mind that by not pooling you aren't actually losing output, you just have a bigger variance in outcome. If you intend to keep mining for at least a year or so, having a week or two with no return won't be a big deal. If you do not intend to keep mining for that long, it's hardly going to be worth the effort of setting up a pool.
On a separate note, a macroeconomic scenario where people accumulate wealth on a large scale by running powerful computers performing useless hash checks (while they could be helping with Folding@home or something) is a little disturbing. At least precious metals and gems are nice to look at, and have several industrial uses.
The current high levels of Bitcoin volatility are obviously exciting for day traders, but bad for commerce. Some clever people must already be thinking about Bitcoin futures as a way of damping the market.
Mt Gox bootstrapped in a year, could a BitFX do likewise?
An obvious question is why anyone would buy futures initially? Until the price (eventually) stabilizes, maintenance levels would continually be breached, resulting in a blizzard of margin calls.
Oh, and hi everyone. :-)
My anti-virus software (AVG) flags Bitcoin as malware. Is this a false positive?
Same Wei Dai.
I don't know much about bitcoin, but my priors on this kind of thing say that it's unlikely that bitcoin is profitable to be run on a large scale given the expense of electricity. But if you are beaming computational power from the safe zone, then this should work well.
Also, do you think you could win at poker? I can probably get you an account to use with a small amount of working currency in it.
Does anyone have an estimate for how long it will take before all of the bitcoins are created?