Bitcoin

[Grix]

Some of you have probably heard about Bitcoin, I've posted a bit about it before. But I wanted to create a dedicated thread about this, because I think it's a really interesting subject and it deserves some more exposure and discussion.

Basically, bitcoin is the first completely decentralized and open currency. It's completely digital, and not tied to any government or organization, it's run and maintained by the users themselves. It uses cryptography to stay secure, like credit cards for example, and P2P to communicate, like bittorrent. The value is completely determined by supply and demand, currently one bitcoin is worth a little over 13 US dollars.
Current price can be seen here: http://preev.com

So what makes bitcoin different from traditional currencies? As I said, it's completely open. This means that there's no arbitrary restrictions about where and how you spend your money. From the blog of wordpress on why they now accept bitcoin:

PayPal alone blocks access from over 60 countries, and many credit card companies have similar restrictions. Some are blocked for political reasons, some because of higher fraud rates, and some for other financial reasons. Whatever the reason, we don’t think an individual blogger from Haiti, Ethiopia, or Kenya should have diminished access to the blogosphere because of payment issues they can’t control. Our goal is to enable people, not block them.

This issue is related to lasers as well, as you probably know sites like dealextreme are no longer selling high powered lasers to the US because of paypal's restrictions. Also this forum had some really successful donation raffles going on a few years ago, but it was stopped partly because "gambling" was against paypal's policy. With bitcoin you are free to spend your money however you wish.

Some more advantages are: Zero transaction fees, near instant global transactions, potential of anonymity, etc.

Already there are thousands of stores accepting bitcoin worldwide, so if you know what you're looking for, you can buy pretty much anything for bitcoin. See https://en.bitcoin.it/wiki/Trade . But the economy is still growing steadily, I can't wait to see where bitcoin stands in a few years.

The biggest problem with bitcoin is that it can be quite complicated and hard to get started with for non-technical users. But progress is being made all the time to make bitcoin more available and easier. To get started, you can download a client which will automatically create a "wallet" for you. A wallet is where your bitcoins are stored. Wallets have one or more bitcoin addresses associated with it. To send bitcoin from one wallet to another, you simply enter the receiver's bitcoin address and the amount of bitcoin, in your client and click send.

There are several ways to exchange bitcoin to and from regular currencies. You can try dedicated exchangers like https://www.bitinstant.com/ , or maybe check http://localbitcoins.com if there are any individuals close to you that wants to trade.

The most common client is bitcoin-qt, it can be found here: Bitcoin - P2P digital currency
However, I would recommend Multibit ( MultiBit ? Secure lightweight international Bitcoin wallet ) for starters, it is much faster to start up with than bitcoin-qt, because the latter requires you to download and verify a "blockchain" before you can properly use it, which can take days if you have a slow computer/internet.


To spark interest, I will give out half a bitcoin (worth $6-7) to the first three people to download the client and set up a wallet!


More info can be found at for example http://weusecoins.com

 

[ryansoh3]

Interesting... I just set up my Multibit wallet.

Are there any mainstream websites that support bitcoin? Or is it more like P2P transfer?

Cheers!

Edit: What's the transaction fee under Preferences? It has a default of 0.000BTC.
Would changing it affect anything?

 

[Grix]

Interesting... I just set up my Multibit wallet.

Are there any mainstream websites that support bitcoin? Or is it more like P2P transfer?

Cheers!

Edit: What's the transaction fee under Preferences? It has a default of 0.000BTC.
Would changing it affect anything?

You can choose to pay a small fee for every transaction you send, which will be paid to people called "miners", people running complex programs that validates the transactions. It's optional, but it's possible that it can speed up the validation process. It's very technical, you can read more about it here https://en.bitcoin.it/wiki/Transaction_fees

The most mainstream site that accepts bitcoin would be wordpress.com, and many organizations accept it as donations, like wikileaks. But you won't really find many sites accepting bitcoin unless you actively search for the ones that do (yet ). This is a list as complete as you will find of every company accepting bitcoin: https://en.bitcoin.it/wiki/Trade

Post your address and I'll send you half a bitcoin to play with! I not too familar with multibit but I think you can find an address under the "Request" tab.

 

[ryansoh3]

I see... However, I think the minimum transaction fee is 0.0001BTC, and cannot be zero.

Here's my address: 146ypasYQGCZ9BkRdLmXtVaEuxhowQEk3z

Another question: How do I transfer real $$ into Bitcoin currency?

Thanks for the boost!

 

[Grix]

There are numerous ways, which is best depends on where you live and how you would like to pay.

For you, maybe one of these would be convenient:

https://localbitcoins.com/accounts/profile/gareth/
????? ???? ?????.

 

[lasersbee]

Hmmm....:thinking:
https://www.canadianbitcoins.com/

Not really interested... PayPal works for me and
millions of other users.


Jerry

You can contact us at any time on our Website: J.BAUER Electronics

 

[Grix]

Not really interested... PayPal works for me and
millions of other users.

Not if you live in the US and want to buy a laser. Also not for the millions of people living in restricted third world countries. Basically, just because the issue isn't apparent to us lucky ones, doesn't mean it doesn't exist.

 

[Bionic-Badger]

While I like the idea of Bitcoins, the problem is that it's like cash: once sent, there is no kind of protection for your transfer. The upside is that if you trust the seller you get to enjoy all the benefits highlighted above.

Anyway, I'll bite. I've been wanted to get into bitcoins for a while, after having read about them for a while, but was always too lazy* to set up a wallet and see how they really work. I'll send it via PM for privacy sake.

* Actually, not lazy, but never jumped in and tried it.

 

[Benm]

There are numerous situations where you would want to paper trail. This could include things like selling illicit items and such, but also much more trivial things.

One example would be VPN services to protect yourself while using torrent downloads and such. The VPN company would not need to get any of your personal data if you pay for the service in bitcoin. If you used paypal, for example, there would be records of that transaction possibly linking you as person to the vpn service provided.

Another thing would be anonymous hosting with features you will not find with any free hosting services. Bitcoin is ideal for that since the hosting company has no need to know about your details as long as they get paid. Bitcoin is very much the equivalent to cash in real live: you can own it, spend it, and transfer it witout leaving much of a trace.

 

[Grix]

Do you use bitcoin regularly, Benm?

I use it to pay for web hosting, domains and my VPN myself. Also various things on for example bitmit.net.

 

[Bionic-Badger]

Awesome it worked! 0.50 BTC transferred. Setting up a wallet was easy as cake (I used https://blockchain.info).

Thanks for getting me started Grix!

 

[benmwv]

Ive read around about this, but im still not totally clear. Can you explain what exactly is bitcoin mining?

At first I thought it was people cracking the encryption to get free bitcoins, but after I read about it seems like they are actually porividing some service to the bitcoin users not stealing. Idk, the more I read about it the more confused I got. All I know is they are brute forcing some kind of encryption.

 

[Bionic-Badger]

I've done some reading on this and the era of mining bitcoins by the normal man is over. The returns are poor, and you need a supercluster of specially programmed FPGAs or GPGPUs cranking out hashes to even begin to compete.

Use bitcoins as an anonymous, trans-national currency. That's all you need to know and use it for.

 

[ryansoh3]

Thanks Grix for the $6.68 worth of bitcoins!

I'll certainly have a fun time playing around with it. If I don't find any use for it, I'll probably return it back to you.

Cheers!

 

[Grix]

Ive read around about this, but im still not totally clear. Can you explain what exactly is bitcoin mining?

At first I thought it was people cracking the encryption to get free bitcoins, but after I read about it seems like they are actually porividing some service to the bitcoin users not stealing. Idk, the more I read about it the more confused I got. All I know is they are brute forcing some kind of encryption.

To be honest I don't fully understand it myself. It's probably explained well in the original whitepaper ( http://bitcoin.org/bitcoin.pdf ) somewhere.


I still have another 50 bitcents to give out! :beer:

 

[benmwv]

Well I created a wallet at the website BB posted and I download the bitcoin program. Its downloading the chain right now. Is there some way to connect the program and the website, because I don't see anything about signing in?

Do I even need a program if I have it on that website?