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  #1  
Old 03-18-2018, 10:34 PM
ITR champion ITR champion is offline
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Should governments mine Bitcoin?

There's this story from Tampa, Florida. A state government employee used government computers to mine for Bitcoin and other cryptocurrencies for his personal enrichment. It appears that he used taxpayer money to purchase graphic processing units to do so, and ran up his agency's electric bill by over $800.

He's now been arrested for the scam. Reason Magazine makes the obvious point that the department he works for, the Department of Citrus, is a much bigger scam that costs the taxpayers a lot more money than one rogue employee.

But here's a bigger question. All levels of government, from federal down to county and city, presumably have computers, and countless government offices must surely have a decent amount of unused computing capacity sitting around. Shouldn't they be required to assess that unused capacity and then, when it's profitable to do so, put it to use mining Bitcoin and other cryptocurrencies? Whatever they create could then be sold at market value and the money used to pay government bills and the savings passed on in the form of lower taxes. Since it's the taxpayers who pay for all government computers in the first place, isn't it a ripoff if our computers aren't put to use saving us money?
  #2  
Old 03-19-2018, 12:36 AM
DPRK DPRK is offline
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You seem to believe that running a Bitcoin screensaver = free money, when in fact it wastes energy and wears out your hardware faster.

ETA beyond that, governments can print their own money, so they have no sudden need to generate Bitcoins.

Last edited by DPRK; 03-19-2018 at 12:40 AM.
  #3  
Old 03-19-2018, 12:46 AM
Lord Feldon Lord Feldon is offline
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Originally Posted by DPRK View Post
You seem to believe that running a Bitcoin screensaver = free money, when in fact it wastes energy and wears out your hardware faster.
I'm not saying the numbers do work out (I'm skeptical to say the least), but presumably there's some value of a bitcoin where the riches would in fact pay for the use of the hardware. It wouldn't need to be free money, just money that sells for more than it costs to produce (again, not saying it would).

Last edited by Lord Feldon; 03-19-2018 at 12:49 AM.
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Old 03-19-2018, 12:58 AM
Lord Feldon Lord Feldon is offline
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I'm playing with various Bitcoin calculators and not finding any way that an ordinary cheapo office PC would be able to mine anywhere near enough Bitcoin to pay its own power bill. So requiring departments to assess their ability to do this sounds like a way to waste even more time, since the answer is almost always going to be no.

Last edited by Lord Feldon; 03-19-2018 at 01:01 AM.
  #5  
Old 03-19-2018, 07:14 AM
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Mining Bitcoin is a huge waste of energy in an age when we are supposed to be more energy responsible, not less. Adding to the pool of Bitcoin miners just exacerbates the problem because, by design, the greater the total resource devoted to mining the harder mining becomes. The OP's proposal is both economically and morally wrong.
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Old 03-19-2018, 07:29 AM
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Maybe government should first engage in flipping houses and multi-level marketing... programs. THAT'S where the easy money is.

Oh, and daytrading.
  #7  
Old 03-19-2018, 07:31 AM
Left Hand of Dorkness Left Hand of Dorkness is online now
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Originally Posted by ITR champion View Post
He's now been arrested for the scam. Reason Magazine makes the obvious point that the department he works for, the Department of Citrus, is a much bigger scam that costs the taxpayers a lot more money than one rogue employee.
Reason magazine may be the most inaccurately-named magazine in history. They may disagree with the point of the Florida Department of Citrus, but that's because they're libertarians who disagree fundamentally about the role of government in public life.

Also, and this is gonna be a shock to a lot of people, you have inaccurately represented your cite. Nowhere in that cite does Reason Magazine call the DoC a "scam." You've taken their bad argument and made it even worse.
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Old 03-19-2018, 07:52 AM
RickJay RickJay is offline
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Economically speaking, "should governments mine Bitcoin" is the same question as "should governments buy Bitcoin."

The cost of mining a Bitcoin is pretty much the same as buying one, which is, of course, precisely what economics and logic would suggest should happen. An entity with massive underused computing power could in theory shave some cost off the process, but in practice I doubt you'd save much:

1. I sincerely doubt there is really that much appropriate computer power lying around. Effective Bitcoin mining setups aren't just random CPUs.
2. You'd need to pay someone to find all that unused CPU power and organize it.
3. Now you need to pay to keep it that way, and
4. The input of electricity is inevitably a massive added cost, and it's a huge portion of Bitcoin mining costs - it's also a geographically specific cost.

Even if you can shave, say 10% off the price an ordinary shmoe pays, ten percent off what? Bitcoin has lost more than half its peak value. It would appear the real money to be lost or won in Bitcoin is not in mining it, but in speculation, and there you might as well cut to the chase and just buy or short it.
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Last edited by RickJay; 03-19-2018 at 09:55 AM. Reason: Thanks Ludovic!
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Old 03-19-2018, 08:08 AM
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I amend my earlier statement.... what government really needs to do is find the next bubble and get in early. Like, I hear stuff about the upcoming Agriculture Department report on frozen concentrated orange juice. I bet the Department of Citrus would know how to do that.
  #10  
Old 03-19-2018, 08:15 AM
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Economically speaking, "should governments buy Bitcoin" is the same question as "should governments buy Bitcoin."
Yes, yes it is
  #11  
Old 03-19-2018, 09:31 AM
Alessan Alessan is offline
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If the OP were right and the government could, in fact, make a profit mining bitcoins, how is that different than the government just printing more dollars?
  #12  
Old 03-19-2018, 09:59 AM
chappachula chappachula is offline
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Originally Posted by Alessan View Post
If the OP were right and the government could, in fact, make a profit mining bitcoins, how is that different than the government just printing more dollars?
Well, I know absolutely nothing about cybercurrencies.*
But your comment has made me curious : if the government could "print" (i.e. mine) bitcoins in huge numbers, wouldn't that defeat the purpose of a cyber currency? If so, it would seem logical for the government to invest a LOT of effort mining them, and gain control of the market.

I thought that the main point was to create a currency which is beyond the control of any government.But if the government with its huge resources would invest vast amounts in a "manahatten project" of bitcoin mining, could they become the main source of bitcoins, just like they are the source of dollars?

Or am I totally wrong?





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*and, as a layman, I'm staying far away from them.
For the reason that the comedian John Oliver said: it combines everything you don't understand about international finance, with everything you don't understand about computers.

Last edited by chappachula; 03-19-2018 at 10:00 AM.
  #13  
Old 03-19-2018, 10:09 AM
watchwolf49 watchwolf49 is offline
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I amend my earlier statement.... what government really needs to do is find the next bubble and get in early. Like, I hear stuff about the upcoming Agriculture Department report on frozen concentrated orange juice. I bet the Department of Citrus would know how to do that.
Isn't this a plot device from an old Eddie Murphy movie? ...

Anywho ... we don't want government seeking profit ... that's puts them in competition with business ... how does one compete against someone with nuclear weapons? ...
  #14  
Old 03-19-2018, 10:28 AM
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In the US (and all other countries I'm aware of) only the Federal government can print money so an internal government (lie a state, provence, etc.) might get into Bitcoining. But it likely wouldn't pay for all the reasons given
  #15  
Old 03-19-2018, 10:39 AM
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Isn't this a plot device from an old Eddie Murphy movie? ...

Anywho ... we don't want government seeking profit ... that's puts them in competition with business
That ship has sailed long ago. Many cities have municipal owned parking structures competing with ones owned by businesses.
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Old 03-19-2018, 10:41 AM
PatrickLondon PatrickLondon is offline
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Originally Posted by Lord Feldon View Post
I'm not saying the numbers do work out (I'm skeptical to say the least), but presumably there's some value of a bitcoin where the riches would in fact pay for the use of the hardware. It wouldn't need to be free money, just money that sells for more than it costs to produce (again, not saying it would).
All government currency already sells for more than it costs to produce, whether you're looking at coins, banknotes or electronic counterparts. You don't imagine it all depends on the precise quantity of gold actually mined, do you?
  #17  
Old 03-19-2018, 11:46 AM
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That ship has sailed long ago. Many cities have municipal owned parking structures competing with ones owned by businesses.
No, that ship did not sail long ago. There are very active debates on where the line should be drawn in terms of the government providing various services, versus what should be left to the private sector.

This debate even involves things like prison labor: for a very long time, Federal prisoners made an awful lot of the furniture used in government offices. It gave the prisoners something productive to do, and they got a very small paycheck. Commercial furniture makers revolted against this, leading to a back-and-forth on whether it was better not to undermine private businesses, or better to have orderly prisons.

Any assertion that the line between public policy and private profit has been settled one way or another is really wrong.
  #18  
Old 03-19-2018, 12:12 PM
steronz steronz is offline
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Originally Posted by Lord Feldon View Post
I'm playing with various Bitcoin calculators and not finding any way that an ordinary cheapo office PC would be able to mine anywhere near enough Bitcoin to pay its own power bill. So requiring departments to assess their ability to do this sounds like a way to waste even more time, since the answer is almost always going to be no.
I'm going to bump this because it's the only answer that matters.

To the OP, most (all?) office PC hardware lacks sufficient grunt to mine bitcoin at anything nearing a profitable level. The short answer is, "No, governments shouldn't mine bitcoin, because they're not equipped to do so." That's why the employee in the original story had to buy his own video cards.

You could then say, Why don't they fit each and every idle computer with a video card capable of mining bitcoin at a profitable level? And the answer is that the whole scheme is utterly dependent on the current market price of a bitcoin. Bitcoin recently surged in price and has been steadily declining for the last few months. It's only within this fleeting surge (and until it drops below a certain point) that mining bitcoin with consumer grade video cards has been profitable. If government ran out and bought a bunch of video cards, they'd run the risk that the price would tank and they'd be left with a bunch of expensive, useless hardware.

Last edited by steronz; 03-19-2018 at 12:13 PM.
  #19  
Old 03-19-2018, 01:23 PM
Alessan Alessan is offline
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What if the NSA assigned a couple of its supercomputers to bitcoin mining? Or NASA? How efficient would they be?
  #20  
Old 03-19-2018, 01:41 PM
steronz steronz is offline
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What if the NSA assigned a couple of its supercomputers to bitcoin mining? Or NASA? How efficient would they be?
It depends on a lot of details that are over my head, most mining farms are ASIC based, custom designed for mining, and a I don't think a general purpose supercomputer could compete with them in terms of efficiency. I think they could easily be profitable, but unlike most office workstations, I doubt they're ever sitting idle.
  #21  
Old 03-19-2018, 01:48 PM
Lemur866 Lemur866 is online now
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Why does NASA have expensive supercomputers just sitting there doing nothing productive? A supercomputer is used intensively, it doesn't just sit there in the back storeroom because nobody can think of something for it to do. If it does, why did you buy the damn thing in the first place? So the supercomputer is either fully utilized by all the various research teams that wanted it, or they just decided to light a bunch of taxpayer money on fire and dance around the pile.

The days when you could mine bitcoins with your desktop PC overnight are long over. Nowadays it takes warehouses full of special-purpose GPUs consuming vast amounts of electricity. And the break-even point depends highly on the cost of the hardware, the price of electricity at the hosting site, and the spot price of Bitcoin. Which means that only places where the price of electricity is much lower than average is Bitcoin mining profitable, and that's only as long as the price stays in it's current bubble.

If you want to economize you're much better off telling your government employees to turn off their computers overnight rather than leaving them in idle mode. That would save much more money than trying to mine Bitcoins overnight with the unused capacity of all those government computers. And note that the employee here wasn't mining Bitcoins using the unused capacity of his office computers, he was fraudulently ordering GPUs to do it.

The real money in Bitcoin nowadays isn't mining, it's manufacturing and selling GPUs to gullible miners.

There are all sorts of ways the Government could raise money. Why aren't they hiring out cops as Uber drivers? Why aren't they renting out floor space in office buildings for AirBnB? Why aren't they hawking Herbalife?

The belief here is that there is a vast amount of unused government capital and labor that could be mobilized for productive use. Except if that really were the case, the smart thing wouldn't be to try to get the government in on the Gig Economy, it would be to sell off the superfluous capital goods and fire the superfluous workers, not try to figure out a side hustle.
  #22  
Old 03-19-2018, 02:14 PM
iamthewalrus(:3= iamthewalrus(:3= is online now
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Originally Posted by Lemur866 View Post
There are all sorts of ways the Government could raise money. Why aren't they hiring out cops as Uber drivers? Why aren't they renting out floor space in office buildings for AirBnB? Why aren't they hawking Herbalife?

The belief here is that there is a vast amount of unused government capital and labor that could be mobilized for productive use. Except if that really were the case, the smart thing wouldn't be to try to get the government in on the Gig Economy, it would be to sell off the superfluous capital goods and fire the superfluous workers, not try to figure out a side hustle.
I don't think there's any mainstream economic or political theory that says that government should try to make some extra money on side-hustles.

Most of the time, government is simply going to be inefficient at this. In this specific case, random office computers are not going to efficiently generate bitcoins, so we'd end up wasting a bunch of electricity doing so. But, realistically, some employee of the office of whatever isn't going to be a good entrepreneur. In addition, if you have government employees casting about for ways to generate a little extra revenue, they're not doing whatever job those employees are supposed to be doing.

There's also the risk that the government will try to out-compete private enterprise, potentially by using its considerable power to do so unfairly.

If, like, the Department of the Treasury decides to set up a cryptocurrency unit and come up with a real plan and program, possibly even using idle local government computing resources, then the above issues might not be a problem.

Still probably a dumb idea, though.

Last edited by iamthewalrus(:3=; 03-19-2018 at 02:15 PM.
  #23  
Old 03-19-2018, 03:00 PM
Alessan Alessan is offline
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What is the global Bitcoin production rate, anyway? How many are mined every day around the world?
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Old 03-19-2018, 03:19 PM
steronz steronz is offline
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What is the global Bitcoin production rate, anyway? How many are mined every day around the world?
Just under 2000 per day at the moment, or about $16 million worth. Roughly.
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Old 03-19-2018, 03:22 PM
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The government trying to mine Bitcoin on a large scale would likely generate a self-reinforcing crash. One of the major cornerstones of Bitcoin is that it is free from government control. However, if a single entity controls more than 50% of the network (through mining), they can effectively control the entire system and do things like double-spending or arbitrarily blocking transactions. In the past, mining groups have voluntarily limited their capacity to avoid the 50% mark. Many people would interpret a huge government mining effort as the government attempting to hijack Bitcoin.

Last edited by Cleophus; 03-19-2018 at 03:23 PM.
  #26  
Old 03-19-2018, 03:55 PM
FoieGrasIsEvil FoieGrasIsEvil is offline
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Why does it take so much computing power to mine bitcoins? Is it really that much more more stressful on CPU's/GPU's than running a high end PC game on maximum graphics settings?
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Old 03-19-2018, 03:58 PM
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Originally Posted by Cleophus View Post
The government trying to mine Bitcoin on a large scale would likely generate a self-reinforcing crash. One of the major cornerstones of Bitcoin is that it is free from government control. However, if a single entity controls more than 50% of the network (through mining), they can effectively control the entire system and do things like double-spending or arbitrarily blocking transactions. In the past, mining groups have voluntarily limited their capacity to avoid the 50% mark. Many people would interpret a huge government mining effort as the government attempting to hijack Bitcoin.
Interesting--so how much would it cost to crash the system? I'm guessing it'd be tremendously expensive.
  #28  
Old 03-19-2018, 04:42 PM
steronz steronz is offline
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Why does it take so much computing power to mine bitcoins? Is it really that much more more stressful on CPU's/GPU's than running a high end PC game on maximum graphics settings?
"Mining" a block means solving an arbitrary math problem intended to take about 10 minutes, in order to for blockchain propagation to happen and allow everyone to verify the transaction as unique. As computer hardware has progressed, the bitcoin devs have had to increase the difficulty of the problems in order to keep the solve time around 10 minutes. When ASICs came on the scene, the problems had to get so hard that they left CPUs/GPUs in the dust.
  #29  
Old 03-19-2018, 06:24 PM
FoieGrasIsEvil FoieGrasIsEvil is offline
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"Mining" a block means solving an arbitrary math problem intended to take about 10 minutes, in order to for blockchain propagation to happen and allow everyone to verify the transaction as unique. As computer hardware has progressed, the bitcoin devs have had to increase the difficulty of the problems in order to keep the solve time around 10 minutes. When ASICs came on the scene, the problems had to get so hard that they left CPUs/GPUs in the dust.
Thanks. I should probably have looked all this up, but...why is mining even an option? Is this some "game" that the Bitcoin overlords have set into place to force people to "earn" them? Why have mining at all? Is it stealing from other Bitcoin owners? Why not just have it be an online, free of government control currency that people just buy with other currencies and use in online trading and purchases? I guess I'm just not seeing the point in the value of Bitcoins, or how they even become valuable.
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Old 03-19-2018, 07:07 PM
Great Antibob Great Antibob is offline
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Thanks. I should probably have looked all this up, but...why is mining even an option? Is this some "game" that the Bitcoin overlords have set into place to force people to "earn" them? Why have mining at all?
There actually is a fixed supply, though it hasn't been reached quite yet. The developer(s) of the original Bitcoin standard have some dogmatic issues with fiat currency and central banks, which explains most of the rest.

Mining is intended to keep bitcoin viable. Without a large pool of miners, an individual or an oligarchy can essentially make arbitrary changes to the blockchain and the whole thing falls apart. For example, they could add blocks that basically take ownership of all the bitcoins at will. But with a sufficiently large pool of miners, this becomes harder, if not virtually impossible. I suppose they could do the legwork themselves, but that puts them in the position of a government or central bank, which is anathema to their principles

Short(er) version: the creators don't like central banks or authority, so they need a decentralized network of computing units, which we call miners. The whole thing falls apart without a sufficiently distributed network.

So, that leads to the incentives to mine, since bitcoin itself relies on the existence of them. Until we get to the bitcoin cap, a miner who successfully adds a block to the chain is rewarded with bitcoins, so there's a direct gain there, too. After the cap is reached, miners will have to mine for the transaction fees alone. We have to hope that's sufficient motivation, because the whole thing falls apart if enough miners decide it's not worth the hassle.

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Originally Posted by FoieGrasIsEvil View Post
Why not just have it be an online, free of government control currency that people just buy with other currencies and use in online trading and purchases?
That's basically what it's used for, though there's some debate whether it's a proper currency or not. The mining is necessary for the reasons mentioned above.

You still need some kind of database for the currency, though, to maintain a record of ownership/transactions. And the blockchain and miners are one way to securely develop and maintain that database.

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I guess I'm just not seeing the point in the value of Bitcoins, or how they even become valuable.
I don't know why baseball cards are valuable, but they are to some people.

You're not entirely alone in not seeing the point of Bitcoins. Much of their purpose can be served with existing currencies and encryption. Though if you believe fiat currencies are evil, they're great. And if you don't like central banks, the blockchain is a clever way to handle that.

The development of blockchain technology itself is pretty neato keen. A distributed database without the need for a central authority is still useful outside the content of currency, and we're finding uses across different fields.

Last edited by Great Antibob; 03-19-2018 at 07:10 PM.
  #31  
Old 03-19-2018, 07:09 PM
Dr. Strangelove Dr. Strangelove is online now
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Why have mining at all? Is it stealing from other Bitcoin owners?
Cryptocurrecies are designed to work without a central authority. But without an authority to tell you which transactions are legit or not, how do you prevent individuals from creating fraudulent transactions? Bitcoin and others use a kind of democratic system where transactions are verified based on how much work was put into it. As long as >50% of the computing horsepower agrees on which transactions are valid, the system works. It doesn't matter that the mining work is completely artificial and useless; the point is just that it's unreasonable for one malicious party to gather up enough computing power to subvert things.

Mining is not stealing, but it can be thought of as a kind of tax. The mined bitcoins are created out of nowhere. That means that the currency is inflated somewhat, since there are now more bitcoins chasing the same store of value. But it's such a small amount that it's not really noticeable (and is completely dominated by speculation and other forces).
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Old 03-19-2018, 07:16 PM
Dr. Strangelove Dr. Strangelove is online now
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Though if you believe fiat currencies are evil, they're great.
That's a weird statement. Bitcoin is the ultimate fiat currency. The only property the coins have is that they can't be easily duplicated--they have no utility otherwise, not even the ability to pay tax.

Anti-fiat types are usually goldbugs in my observation, and have bizarre views on the nature of currencies, seeming to think that there needs to be something "real" backing the currency for it to be legitimate. Bitcoin obviously doesn't solve that problem.

The centralization argument is the stronger one. Bitcoin may create coins out of nowhere, just like the US government does with dollars, but it's only with the permission of the rest of the system.
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Old 03-19-2018, 07:24 PM
Great Antibob Great Antibob is offline
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I now realize in hindsight that my reply may still be opaque.

The basic problem: we need to establish who owns a bitcoin. If I buy something with a bitcoin, I and other party need to be assured I control the coin and that there is a secure method to transfer ownership.

We do this with a database. This database records (in an encrypted fashion) all transactions involving bitcoins.

That leads to a problem: who control the database?

If I control the database, there's nothing stopping me from hatching nefarious plots to screw with the currency. There's also little to stop governments and central banks, but they are usually old, large and have developed a measure of faith and credit from people over the years.

Not so true for me. Nor would I trust Joe Random Internetguy who keeps the books on some fabulous new internet currency.

So, we use a distributed database, instead. Anybody and everybody can have a copy of the database. This database is composed of "blocks". When a sufficient number of transactions occur, we add a block to the end of the chain. A miner is simply somebody who encodes the transactions to be added to the chain.

Why do we need multiple miners if all we need to do is add a block from known transactions? To avoid shenanigans. There's nothing stopping a single miner from adding a block that basically 'steals' bitcoins.

How does the distributed nature of the blockchain and multiple miners stop this problem? Through paranoia. When a block is submitted to be added to the chain, anybody can check the work and make sure the last batch of transactions was appropriately encoded. If a block is found to be faulty, nobody else has to accept it.

So, miners are necessary for bitcoins in particular (though not necessarily for online currencies in general) because that's how the bookkeeping is done for this particular 'currency'.

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Originally Posted by Dr. Strangelove View Post
That's a weird statement. Bitcoin is the ultimate fiat currency.
Not really. These true believers are ok with it because the supply can't be arbitrarily changed. There's a fixed amount and no more will ever be made or removed.

Anti-fiat types are usually goldbugs but they occasionally exhibit odd moments of clarity, like the idea that even something that isn't 'real' can have utility, even as a form of currency. And many of them like the encryption aspect. As true believers, they think it's only a matter of time because bitcoin (or something similar) can effectively be universally employed, perhaps through currency brokers who are willing to exchange digital currencies as required.

Last edited by Great Antibob; 03-19-2018 at 07:28 PM.
  #34  
Old 03-19-2018, 07:59 PM
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Should the government also invest in lottery tickets?

I'd prefer the government not gamble with taxpayer dollars.
  #35  
Old 03-19-2018, 08:12 PM
Dewey Finn Dewey Finn is offline
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If you really want the government to make a guaranteed profit, tell your representative that you want the IRS to greatly expand the number of tax auditors and inspectors, as they return multiples of their salaries in increased tax revenues.
  #36  
Old 03-19-2018, 08:19 PM
Dr. Strangelove Dr. Strangelove is online now
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There's a fixed amount and no more will ever be made or removed.
Not true. If you can convince 51% of (computing-weighted) people to go along with it, you can create a billion bitcoins out of nothing and grant them to whomever. The commonly-cited 21 million number is just based on the current mining payout schedule. It's not fundamental to the algorithm.

Of course, this is unlikely because there's no reason for anyone to go along with that scheme. A government-controlled currency doesn't have the same constraint. But that's an anti-centralization argument, not an anti-fiat one. Bitcoin is still a fiat currency; it's almost the Platonic ideal of one.

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Originally Posted by Great Antibob View Post
Anti-fiat types are usually goldbugs but they occasionally exhibit odd moments of clarity, like the idea that even something that isn't 'real' can have utility, even as a form of currency.
I have never observed these moments of clarity in goldbugs. Which isn't to say there's no overlap between goldbuggery and Bitcoin enthusiasm; it's just that they didn't get there via logical reasoning.
  #37  
Old 03-19-2018, 09:01 PM
ITR champion ITR champion is offline
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Originally Posted by Lord Feldon View Post
I'm playing with various Bitcoin calculators and not finding any way that an ordinary cheapo office PC would be able to mine anywhere near enough Bitcoin to pay its own power bill. So requiring departments to assess their ability to do this sounds like a way to waste even more time, since the answer is almost always going to be no.
Thank you for informing me. I did not know that.

There are other cryptocurrencies out there; is the same true for all of them? Salon magazine offers content in exchange for users making their computers available for mining something called Monero. Presumably they wouldn't do so if it weren't feasible to make a meaningful amount of money off an ordinary user's PC.
  #38  
Old 03-19-2018, 09:24 PM
steronz steronz is offline
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Originally Posted by ITR champion View Post
There are other cryptocurrencies out there; is the same true for all of them?
Yes.
  #39  
Old 03-19-2018, 11:24 PM
Great Antibob Great Antibob is offline
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Originally Posted by ITR champion View Post
There are other cryptocurrencies out there; is the same true for all of them?
So far, yes. Pretty much all the current cryptocurrencies are variants of Bitcoin, though some have some interesting technical twists or amusement value.

You would want a combination of one whose blockchain that hasn't gotten too big yet but is somehow worth a lot of money, which doesn't exist.

Or, as in the case of bitcoin, the ability to look into the future and determine which cryptocurrencies, if any, will one day be worth enough to recoup your investment in equipment and electricity, i.e. a speculative boom you can take advantage of at the cost of some willing sucker. Of course, this is essentially no different from many other speculative investments. Very high risk, potentially high reward and not a particularly good investment strategy for anything more than a small proportion of your portfolio.

Salon offers content because the marginal value of the content given away is less than the value of the computational power and electricity they receive. It's a way Salon can make a small but real profit and for a lot of people to have a vanishingly small chance at striking it rich plus some paywalled web content. That's not necessarily true for government PCs and unused capacity. All that number crunching costs extra electricity and wear/tear on the machines. It's one thing to have other people pay that cost and another to pay for it yourself.
  #40  
Old 03-20-2018, 12:38 AM
Lord Feldon Lord Feldon is offline
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Originally Posted by ITR champion View Post
Salon magazine offers content in exchange for users making their computers available for mining something called Monero. Presumably they wouldn't do so if it weren't feasible to make a meaningful amount of money off an ordinary user's PC.
The Salon model is that your computer and your electricity are used to mine their cryptocurrency. They make a meaningful amount of money off of it because other people give it to them.

The government equivalent would be, I don't know, a city making you run their mining malware in order to access city council minutes. Good luck.

Last edited by Lord Feldon; 03-20-2018 at 12:43 AM.
  #41  
Old 03-21-2018, 11:04 AM
iamthewalrus(:3= iamthewalrus(:3= is online now
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Quote:
Originally Posted by ITR champion View Post
Salon magazine offers content in exchange for users making their computers available for mining something called Monero. Presumably they wouldn't do so if it weren't feasible to make a meaningful amount of money off an ordinary user's PC.
You can make a meaningful amount of money off of someone's PC if "meaningful" is measured against the $0.0001 per ad view you'd get, and you're not paying for the input hardware or electricity.

As far as I know, all proof-of-work cryptocurrencies scale difficulty with the amount of processing power, so if there were any profits to be gained from commodity hardware, they would be temporary at best.
  #42  
Old 03-27-2018, 05:31 AM
foolsguinea foolsguinea is offline
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No one should mine Bitcoin. Anyone who understands math analysis at even a high-school level should have figured out pretty quickly that the blockchain was going to get absurdly long before ceasing to work at all once all possible bitcoins are mined. The way it's built, Bitcoin is doomed to be a Ponzi scheme.
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