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[Jimmy]

To get the theoretical share of 51%, at current bitcoin rates you'd either need to invest $128USD per coin to have a controlling share of the 11M currently in circulation, or datamine the remaining quantity, which is theoretically more expensive than simply buying them based on electricity cost.

So provided a country is willing to sink about $720M into sinking bitcoin permanently, it's possible. Doubtful it would happen, though.

[Scelly9]

To get the theoretical share of 51%, at current bitcoin rates you'd either need to invest $128USD per coin to have a controlling share of the 11M currently in circulation

Except most of those are sitting in accounts, unused and untraded.

[alway]

It's not 51% of the coins, it's 51% of the book-keeping. You could own 0.0000000001 bitcoins and pull it off so long as you have sufficient network bandwidth. At the moment, that network bandwidth is very very high.

What sites have been talking about is this: What happens when the mining rate declines below feasible levels? When the plug is pulled even on the ASICs due to unprofitability from the inherent decline in results. Mining drops off to a few units whose owners are either too daft to realize they're losing money to power bills, or whose owners are hackers controlling a botnet who don't care about electricity bills. At which point, where there are very few miners remaining, you apply a big botnet for the final 51% attack. Or at least that's the understanding I've gotten from articles about it.

[Another]

Nothing can compete with cost-effectiveness of botnets so in the end only botnets will be mining bitcoins. (And a byproduct of mining is validation of all bitcoin transactions in the last couple of minutes. You control most of the mining - you can add whatever bogus transactions you like.) I still don't know how modern botnet computing power compares to say that new NSA datacenter in Utah.

[Aklyon]

So, a friend was looking at TPB and saw a new link at the bottom, and we talked about it for a bit after he mentioned it, called Litecoin. I don't expect it to be any better in the end than bitcoin, but it could be soemthing interesting to bring up here and from having read the front page it says it plans to have 4 times the amount of bitcoin.

[alway]

Yep; that's one from the link I added a few posts up: http://arstechnica.com/business/2013/05/wary-of-bitcoin-a-guide-to-some-other-cryptocurrencies/

[nenjin]

I still don't know how modern botnet computing power compares to say that new NSA datacenter in Utah.

If it's anything like password cracking, a decent processor and video card is all you need. It just becomes a question of how many you have doing it. I imagine it would take a very large operation to meet or surpass what's capable up in Utah. Like, a warehouse full of quad cores running top end cross-fired videocards.

[noodle0117]

When this thread started, the bitcoin value was at about ~$150
Now its at ~$1000.

Curios world this is.

[misko27]

Oh yeah good, I get to post this now:  http://www.nytimes.com/2013/11/27/opinion/much-ado-about-bitcoin.html?_r=0

[alway]

Oh yeah good, I get to post this now:  http://www.nytimes.com/2013/11/27/opinion/much-ado-about-bitcoin.html?_r=0

Pretty much, yeah. The problem is, the whole thing is build on bubble economics. It's too unstable to be a currency, and that is ostensibly its source of value. There's a lot of people who made a lot of money off it; but here's the thing about bubbles: they're a zero-sum game. Every penny of wealth given to those few first-adopters comes out of the pockets of the later adopters. Which means just about anyone who buys in now. It's generally impossible to predict when a bubble will burst, but I don't see how this could last even 5 more years at the very most; and that's assuming widespread adoption.

[jimboo]

Where things really get interesting is money laundering. The exchanges and BTC vendors all have strict anti-laundering policies and report large purchases but SR allows individuals to move money around without all of the questions and forms.

Also, my personal favorite aspect of BTC? No capital gains taxes to report and pay.

Well, the capital gains thing is questionable and certain to be clarified soon (ever notice how IRS rulings are made retroactive?) 

from today's financial headlines,  (Wm. Alden, writing for DealBook)

IN BITCOIN, FRAUD IS QUICKER THAN THE LAW Pump-and-dump schemes are shut down in the financial markets all the time. But such frauds involving digital money like Bitcoin have gone unchecked, Nathaniel Popper reports in DealBook. Government authorities do not agree on which laws apply to Bitcoin, the popular virtual currency - or even on what Bitcoin is.

One recent scam began with a call on Twitter: "For insane profits come and join the pump." The person behind it, a trader known on Twitter as Fontas, told Mr. Popper in a secure Internet chat that he operated with little fear of a crackdown. "For now, the lack of regulations allows everything to happen," Fontas said in the chat, where he verified his control of the Twitter account but did not give his identity. He added that the world of Bitcoin would benefit when someone steps in to police it, and would stop his schemes when they do.

Mr. Popper writes: "Chinese authorities drew attention to the issue on Thursday when they announced that they were barring Chinese banks from making Bitcoin transactions. The same day, the Bank of France issued its own warning about the potential risks. The news sent the price of Bitcoin tumbling, but it quickly bounced back to near its all-time high of around $1,200.

"Bitcoins are little more than computer code - created according to a set algorithm and traded between online wallets using virtual keys. Some people insist that virtual currencies could become a revolutionary new form of payment in the real world. Bank of America became the first major Wall Street bank to release research about Bitcoin on Thursday, noting that it could become 'a major player in both e-commerce and money transfer.'"


Anyway, it's interesting to watch.  Wish I'd taken a flyer back in '09 with a few bucks.  Cypress is the only country currently with a banking system dealing with Bitcoin.

[alway]

Where things really get interesting is money laundering. The exchanges and BTC vendors all have strict anti-laundering policies and report large purchases but SR allows individuals to move money around without all of the questions and forms.

Also, my personal favorite aspect of BTC? No capital gains taxes to report and pay.

Well, the capital gains thing is questionable and certain to be clarified soon (ever notice how IRS rulings are made retroactive?) 

This. Anyone who thinks they're getting away without paying taxes is an idiot of the highest degree. Bitcoin even keeps a record of all transactions in the block-chain! It is "anonymous," but nothing some good analysis software can't pull apart. If not now, then in a few more years. All you're doing is making them angry at you 5 years down the road. The IRS does not forget, nor do they forgive.

[sneakey pete]

Hindsight is a bitch.

Point still stands. Wish i'd bought some..... or a lot....

[mainiac]

Point still stands. Wish i'd bought some..... or a lot....

Because a speculative bubble has gone up 7 times in value over the course of a year?

There are stocks that have gone up more than that amount over the course of a year and represent actual assets, capable of paying dividends.  Stocks aren't open to theft in the way that bitcoins are.

Bitcoins are just one among countless get-rich-quick schemes.  They happened to be a successful one and a high profile one.  That doesn't mean that you should be kicking yourself over failing to "invest" in a get rich quick scheme.  The expected result of such a scheme is still loosing money.  And I would bet you that looking back in 20 years, we will see that the typical bitcoin "investor" came out a sucker, probably including most of those who bought in at $150 a year ago.  High risk stocks on the other hand actually have a positive expected value, I believe the 1 year returns on US IPO (a risky category) indexed to market capitalization is somewhere around 8%.  There is a huge variation within this category however, some even beat bitcoins while others became worthless.

It's not just socially irresponsible to do your gambling through the medium of worthless bitcoins instead of a risky but tangible long shot stock, it's personally foolish.  If you can't see the sucker at the table than you are the sucker.  A stock, even a long range one on the other hand can be something where everybody wins, including you.

So don't kick yourself for not joining this pyramid scheme.  Get yourself signed up for a 401k today if you aren't already and make sure that you are maximizing your contributions and getting your employer to match them if possible.  It is a get rich slow scheme and it's one where both you and society as a whole will be much better off.

[lue]

It's funny, when it comes to arguments that "Bitcoin is just computer code, it's too easy to hack", the programmer in me thinks those statements are uninformed and would make me lean towards "Bitcoins are safe after all!".

But, the economic arguments against Bitcoin seems more sound and worrisome, if only because I'm not an economist .

I also want to say that arguments along the line of "it's small and unstable and thus can't be trusted as a 'real' currency" are just plain wrong. Every currency you come across had at one point been just as unstable and untrusted. Those currencies are accepted forms of money today because they've been accepted forms of money. I've known of Bitcoin for a few years now (I remember a news post back when I read Slashdot that guffawed over Bitcoin reaching parity with the dollar ), and it's nice to see that it either has or is about to clear that hurdle where enough people have to accept Bitcoin in order for people to accept Bitcoin.

It's still unsure what exactly Currency the Internet Way™ looks like, at from where I stand (existing currencies using the Internet to transfer funds doesn't really count as an internet-based currency). Win or lose, Bitcoin will at least help us better figure that out.

Now to read more of that arstechnica article on the alternatives. Litecoin in particular seems interesting so far...