Apple's Tumultuous Relationship With Bitcoin Apps

[cppguy]

But it does ultimately mean that we will use more and more electricity to produce - what? To produce tokens of value. But, to me, that electricity is completely wasted.

You got it backwards. The electricity is not used to mine bitcoins, but to make the system secure. Miners get a compensation in return for their trouble. Without bitcoin mining, it would be impossible to guarantee security.

These days everything can be hacked. However, the security comes in when you consider that all of these miners work hard to solve insanely complex mathematical problems. If you wanted to hack the system, you would have to single-handedly put nearly as much computing capacity as the rest of the world combined, which is unfeasible. That gives the security.

Also consider that banks, too, have to spend significant resources and money on security. How much fuel do you think armored cars consume, when they're super heavy, and they never turn the engine off? Huh! Security always costs money.

 

[cclloyd]

I haven't a clue what it is.

To fully understand it, you must use it.

Think of it as digital gold, but back when gold was used as currency.

 

[jlgolson]

You've got it completely backwards. It's the U.S. government that relies on people to do business with it, not the other way around. No need to pay taxes when the government can't enforce them due to having no access to your bitcoin accounts. Once the government loses the ability to steal money from people via taxation and printing more fiat currency (thus devaluing all existing currency), it loses all political power and people's natural rights will be restored from the grip of violent government aggression.

The U.S. Government has guns and prisons and courts to force you to pay your taxes. They don't need to have access to your bitcoin accounts to throw you in jail.

You know that's how they finally caught Al Capone, right?

 

[nagromme]

Meanwhile, my knapsack full of wampum varies in value almost not at all.

 

[jtara]

The electricity is not used to mine bitcoins, but to make the system secure. Miners get a compensation in return for their trouble. Without bitcoin mining, it would be impossible to guarantee security.

Irrelevant. In order to mine bitcoins, you have to prove that you expended X effort guaranteeing security. The amount of electricity needed to guarantee security is an ever-increasing amount.

It's the same difference.

Ultimately, you either run out of electrical generating capacity, or you can no longer mine bitcoins, or you can no longer guarantee security.

In any case, the whole thing eventually comes crashing down. You can't have everybody doing nothing but guarding the coins. But that's where this winds-up.

It "works" for now (albiet totally impractical as a store of value - a store of value can't fluctuate by 50% in a day...) because it's a tiny, tiny fraction of overall monetary value.

Another way of looking at it - minting pennies and nickels works only because they represent a small fraction of currency. It costs more than a penny to create a penny, and more than a nickel to create a nickel. It wouldn't work if we had to pay for everything in pennies and nickels. Most money exists as ledger balances. Even paper certificates would be a horrible burden today, though their cost of production is much less than that of pennies and nickels.

 

[Meandmunch]

Mafia money, nothing more.

And about that electricity thing, even some makers of miners said they have designed and shipped the last machines that will actually run on a typical household grid. You now need industrial power levels to mine properly thus reducing the number of miners to the very few, even fewer actually with the computational power AND electrical access to do the job with. What a joke.

 

[lewisd25]

Allow me to put on my paranoid-survivalist tin-foil hat for a moment...the whole allure of investing/owning/collecting in commodities such as gold is it's ability to not only hedge against the inflation/volatility of traditional currency, but to act as a valuable physical currency in the event of a disaster that cripples our nation and economy. What happens if we get hit with an EMP? I'd rather horde American Eagles than bitcoins...

 

[hogo]

bitcoin or some variant will ultimately be the major currency used on the planet. What i enjoy is its somewhat mysterious beginnings and its complex algorythms. If you dig deeper, the story is intriguing. Cicada 3301 anyone?

 

[felixgun]

Well, keep in mind, most (All?) of the big bitcoin thefts have been done from online wallets. I wouldn't keep any in one longer than I needed to buy or sell. Coinbase is probably pretty safe, but still... It's probably safer to keep your encrypted wallet on encrypted media somewhere only you have access to (just don't contract some kind of keylogging, disk scanning malware

Thanks for the heads up. After reading up on Coinbase, I figure'd it'd be safe to use their wallet system but now you've got me thinking lol. Looks like I will be mining to an offline wallet soon haha.

 

[sransari]

I can't wait until bitcoin becomes a mainstream currency and destroys the rigged fiat currency that the Fed prints, steals, taxes, wastes, gives to the megarich and the prideless beggars and siphons off from everyone else. The influence of political machines on Americans' lives depends on monopolizing their currency and once bitcoin and other competing digital currencies make the dollar irrelevant it will bring this corrupt crony capitalist colossus to its knees. I'm not going to name drop because it realy doesn't matter between Democrats and Republicans, they pretend to be sworn enemies but in reality they're just colluding with each other to hoard as much political power and influence as they can between them. The proof is that they do everything possible to shut out every other candidate from the debates and even the ballot so they can protect and manipulate their political cartel in perpetuity.

100% agree...well said

 

[waldobushman]

With Wall Street creating a fake economy with only negative economic value for the rest of society, yes we need another fake money supply with BitCoin.

 

[rmatthewware]

Bitcoin is not a good thing. This is the first thing to understand. It appeals to people who don't like government controlled currencies. However, for any currency to last, it has to have some kind of guaranteeing force. Bitcoin has no entity that guarantees its value. This is why the value is so volatile. How do you use a currency when one day a coin is worth $1500, the next $500?

The biggest concern is that the people who will really flock to this are criminals. This can finance human trafficking, mob activity, anything that could be used to hurt someone, without a way to track them. Governments are too invasive and controlling and we need reform, but government is better than anarchy.

 

[cclloyd]

Thanks for the heads up. After reading up on Coinbase, I figure'd it'd be safe to use their wallet system but now you've got me thinking lol. Looks like I will be mining to an offline wallet soon haha.

Use Blockchain.info. It is like a web wallet, but they don't host the bitcoins.

You can store the wallet yourself. It has the security of a desktop wallet with convenience of web wallet. If a hacker were to ever infiltrate them, they could only get the encrypted JSON of your wallet, which at that point, you just change your password before they crack into it and their copy becomes unusable.

If ya need more info, just ask.

 

[cppguy]

Ultimately, you either run out of electrical generating capacity, or you can no longer mine bitcoins, or you can no longer guarantee security.

Yes, if you use JavaScript mining. But efficiency increases over time, too, not just the computing power. Mining ASICs are not only thousands of times faster than CPUs, they're much more energy efficient, too. A CPU spends the majority of its energy moving registers around, and preparing the next instruction. The actual maths only uses a fraction of the power. The whole CPU architecture is very inefficient.

 

[luckydcxx]

Is there anything less then 1 bitcoin? Like the way a quarter or dime is to a dollar?

Let's just say places started accepting bitcoins. If I wanted to buy a coffee from Starbucks and went to pay with a bitcoin, how do I get change back? Can I give them .02 bitcoins?

 

[brianb568]

Is there anything less then 1 bitcoin? Like the way a quarter or dime is to a dollar?

Let's just say places started accepting bitcoins. If I wanted to buy a coffee from Starbucks and went to pay with a bitcoin, how do I get change back? Can I give them .02 bitcoins?

Yes.

 

[MacSince1990]

Out of curiosity, if you transition to only bitcoin, how will you pay your taxes?

Couldn't help but note the irony, given his user name.

 

[blackcrayon]

Is there anything less then 1 bitcoin? Like the way a quarter or dime is to a dollar?

Let's just say places started accepting bitcoins. If I wanted to buy a coffee from Starbucks and went to pay with a bitcoin, how do I get change back? Can I give them .02 bitcoins?

Bitcoins are divisible to something like 8 decimal places, and the clients can be updated for more if it becomes necessary.

 

[jtara]

...efficiency increases over time, too, not just the computing power. Mining ASICs are not only thousands of times faster than CPUs, they're much more energy efficient, too. A CPU spends the majority of its energy moving registers around, and preparing the next instruction. The actual maths only uses a fraction of the power. The whole CPU architecture is very inefficient.

Right. That's why it's no longer practical to mine on CPUs, or even GPUs. (Except, of course, on stolen CPU and GPU capacity...) Now you *have* to use ASICs. But ASICs will still bump-up against known physics.

BY DESIGN the amount of work will increase until the cost of the work needed approximately equals the value of the bitcoin mined.

It doesn't matter how much you increase effiency. It is an always will be an "arms race". You can't win an arms race. You can only get ahead for a bit until it all blows up.

 

[glitch44]

100% agree...well said

Yeah, no. If you agree with what he said as both plausible and desirable, I urge you to seek psychiatric help. The collapse of the Federal reserve, and thus the dollar, and thus our ability to collect taxes and pay for things like roads, firefighters, schools, and hospitals? Those things we kinda need to have a functioning society? It's nothing more than a nut job libertarian fever dream.

 

[MacSince1990]

all this bit coin talk makes me miss Silk Road

From everything I've read about the Silk Road, I'm pretty happy that it's been taken down... along with the guy who created it..

 

[blackcrayon]

Right. That's why it's no longer practical to mine on CPUs, or even GPUs. (Except, of course, on stolen CPU and GPU capacity...) Now you *have* to use ASICs. But ASICs will still bump-up against known physics.

BY DESIGN the amount of work will increase until the cost of the work needed approximately equals the value of the bitcoin mined.

Is that so? I thought by design, a certain number of bitcoins were able to be mined at a given time, so the difficulty increases as more and faster miners start mining coins. But this is only indirectly related to the value of the bitcoin mined. For example, the value of bitcoin increased by huge amount in a very short time recently, much faster than any changes in the total hash rate.

I agree with you that it is an "arms race" of miners though. But the value of bitcoin vs. $USD is a separate thing.

 

[JoeRito]

Am I the only one who still doesn't totally understand this bitcoin thing?

No, you are one of many. I try to avoid virtual currency and fiat currency (not backed by gold, just the word & stability of the government). Invest in gold or silver while the price is down... Just a recommendation from fellow Mac lover who studies hard assets. Give silver bullion coins to your loved ones this holiday season... Cost ~$25 for a shiny one ounce silver bullion coin.

 

[Arndroid]

Bitcoins primary existence right now is a speculative investment. As a currency used to buy goods and services the overwhelming majority of the marketplace is for stuff that is illegal in many countries.

The volatility makes it useless as a tool for commerce an the price is currently controlled by a small number of people who hold the bulk of coins. Some have said some vendors just convert into a state currency right away but that begs why would anyone use bitcoin? Just to add another layer in the transaction process.

At this point and time there little to no benefit for a vendor to use it as a payment method and I don't see that changing any time soon. It is not insured or protected in any way, shape or form. Thefts are not that uncommon.

 

[kappaknight]

Allow me to put on my paranoid-survivalist tin-foil hat for a moment...the whole allure of investing/owning/collecting in commodities such as gold is it's ability to not only hedge against the inflation/volatility of traditional currency, but to act as a valuable physical currency in the event of a disaster that cripples our nation and economy. What happens if we get hit with an EMP? I'd rather horde American Eagles than bitcoins...

An EMP? Someone's been watching too many movies or TV shows. There's no way we'd suffer a global EMP, so unless something to the effect of the TV show Revolution happens where we can't turn anything on for years and years, things will move forward. Remember, in Terminator 3 SkyNET was unstoppable - there was no central core.

Besides, EMP shuts systems down. It doesn't erase everything.

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Bitcoins primary existence right now is a speculative investment. As a currency used to buy goods and services the overwhelming majority of the marketplace is for stuff that is illegal in many countries.

The volatility makes it useless as a tool for commerce an the price is currently controlled by a small number of people who hold the bulk of coins. Some have said some vendors just convert into a state currency right away but that begs why would anyone use bitcoin? Just to add another layer in the transaction process.

At this point and time there little to no benefit for a vendor to use it as a payment method and I don't see that changing any time soon. It is not insured or protected in any way, shape or form. Thefts are not that uncommon.

The same could be said for anything new... until an equilibrium is reached and the value stabilizes.