Security Breach Forces Bitcoin Bank Inputs.io To Halt Operations 285
New submitter BitVulture writes "The hardcore Bitcoin community is abuzz with news of the closure of Inputs.io, a supposedly secure online Bitcoin wallet, after an attack resulted in the loss of 4100 Bitcoins. A PGP-signed message at the home page of the now mostly non-operational site briefly explains the situation: 'Two hacks totalling about 4100 BTC have left Inputs.io unable to pay all user balances. The attacker compromised the hosting account through compromising email accounts (some very old, and without phone numbers attached, so it was easy to reset). The attacker was able to bypass 2FA due to a flaw on the server host side.'
There's no word yet whether Inputs.io will eventually resume operations or whether the security breach will force the Bitcoin bank out of business."
For worst or better (Score:4, Insightful)
So simple... (Score:4, Funny)
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Except that was never its intent.
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And yet that's what every proponent of Bitcoin (including the paid shills that edit this site) has tried to convince us of from the very beginning -- that Bitcoin could supplant real currency. Now that the whole plan is crashing down in flames those same proponents have no defence other than "Bitcoin was never meant for that purpose." Funny how your perspective changes when you find out your "sacred cow" is more like "a big steaming pile of bullshit."
That's what you get for buying into an easy-money scheme.
Re:So simple... (Score:5, Insightful)
Now that the whole plan is crashing down in flames
What? Did you read the article, or even its summary? A site named inputs.io which used bitcoins was hacked. Bitcoin itself wasn't hacked. Your post is like complaining the US dollar is going up in flames because a bank robbery happened somewhere.
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And the dumb thing is, the whole point of Bitcoin is you don't need a bank. So why aren't these people using a local wallet like MultiBit?
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Encrypt your wallets.
Nowhere near enough defence. Once your computer is compromised, that is not going to stop it, when it can just keylog you or hook into the memory of the running bitcoin client.
" a flaw on the server " (Score:2)
Might want to make that more clear in story, it almost reads like an anti-bitcoin FUD thing.
So a 'bank' had their servers breached and money stolen... *yawn*.
exact (Score:3)
Re:exact (Score:5, Insightful)
This is the thing about BitCoin I never understood. The proponents of BitCoin claim that it was untraceable, but all transactions are traceable by looking at who spent the coin and who owns it now, at least by their public key. This information is included in the data blob that IS the coin and lots of people have to observe the transaction before it becomes valid. You may not know who's key is who's, but you certainly can trace ownership of the BitCoin.
So, you may not know who owns a single coin, but though simple observation of transactions and a bit of foot work you can easily piece together who's who and who's spending their coins on what. It becomes a data mining operation with a bit of detective work to trace where folks are converting traditional currency into and out of BitCoin. Which is totally different than trading say dollars in currency. You *might* be able to trace currency transactions though things like DNA traces left on the bills or serial numbers (if you know them), but if somebody passes a briefcase of money around, there will be no way to trace each transaction that might have taken place.
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It certainly isn't inherently untraceable, but it is trivial to launder. Wallets are anonymous and unlimited.
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It certainly isn't inherently untraceable, but it is trivial to launder. Wallets are anonymous and unlimited.
Is laundering effective if the entire record of all transactions is public information? At best, it would provide plausible deniability only.
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It is when you can create a wallet, use it for the transaction, and then destroy the wallet. You launder the money in the same way people do today with dollars - set up a sham business and use patsies. "Earn money from home!" When my step mother smoked, she bought cigarettes from Ukraine. Each carton came from a different return address. Yes the transaction record is there in the bitcoins that you used, but who cares? The trail stops at some woman in Oklahoma who was paid to convert bitcoins to cash and the
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True, but eventually to get your money out of the Maytag you will have to convert it to another currency so you can buy something. All law enforcement has to do is catch you converting your BitCoin or associate your wallet(s) with you and they can trace everything.
The problem with money laundering is always the same. You have illegal assets that you either have to hide by not spending (and where's the fun in that) or make them look like legitimate assets so you can use them. BitCoin doesn't make this conv
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...this is buttcoin...
Reminds me of that old "do you want that sausage sliced or whole?" joke...
Secure Online Wallet (Score:5, Insightful)
Pick any two.
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Okay... I pick Secure Online!
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Ok. Secure online.
Provide it if you can.
logo.png (Score:2)
Secure and online: http://a.fsdn.com/sd/logo_w_l.png [fsdn.com]
Re:Secure Online Wallet (Score:5, Funny)
Pick any two.
I'm afraid it's pick any one.
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Look at the post's title.
It's not correct though, since not all "pick twos" are valid (e.g. "Secure Online")...
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Things can be done securely online, but he was making a joke and everyone here fails for ruining it.
Good. A hard lesson. (Score:2)
Keep your wallet safe by maintaining personal, physical possession of it and adhering to safe network practices.
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When I shutdown my laptop I store it in a safe to protect my bitcoins.
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And never let your hard drive crash, or your removable drive go through the washer.
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Not trusting bitcoins to web wallets doesn't mean you can't make encrypted backups.
"Bank" (Score:2)
I think it is a misuse of the word "bank" using it to describe these websites.
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Damn right. I don't see them getting any bailouts any time soon.
motives? (Score:3)
The attack was not so sophisticated that the infosec boys were left scratching their heads as to how the breach was made. In fact, for a so-called vault, Inputs.io leaving up the access to old accounts that skirt 2FA seems sloppy.
And, certainly, having 4100 BTC to spend for your porn and drugs would be motivation to some who are capable of such an attack.
But I assume central banks and gov'ts with propped up currencies don't want to see Bitcoin really take off. Just breaking everyone's trust in BTC is a win for them.
Re:motives? (Score:4, Insightful)
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There are consequences to inputs.io. People with bitcoins probably all panicked and pulled their coins out. That is why it is very unlikely to be an inside job.
Tired of bashing Bitcoin, yet? (Score:2)
Get over the hype and take Bitcoin for what it really is: a fascinating experiment that has, so far, withstood the amazing barrage of publicity, hacking attempts, legal uncertainties, and remains valuable for reason
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Speak for yourself. One of the founding principles of geekdom that I learned from geeks much older and much smarter and much wiser than me, and that I still believe wholeheartedly in is: KISS (Keep It Simple, Stupid). Bitcoin fails KISS, spectacularly.
Bitcoi
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You're joking, surely? For all that's wrong with it, it's as elegant as a decentralised digital transactions system could be. The issue is rather whether decentralised digital transactions systems, much less ones that also act as a novel unit of trade, are a good idea.
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If you tell me how you could move $10 million anywhere in the world, in 10 minutes, without third-parties, without fees, and without risk of reversal...then you just answered your own criticism.
Re:Tired of bashing Bitcoin, yet? (Score:4, Insightful)
It's much more complex than any other payment system
That partly has to do with it being a decentralized cryptocurrency. Without central authorities or trusted servers, it takes quite a bit more to force everyone in the network to work together and agree on the state of the system. (And as digital currency systems can go, it is still pretty far from the most complex. Look up older partially anonymous Chaumian currencies.)
it's value as a currency is wildly unstable
Because it's not widely used yet. You can't peg the value of a decentralized currency to a centralized one. Its value works just by supply and demand, and as demand fluctuates wildly, so will its value.
it's prone to all sorts of technical and security problems
The article is about a specific vulnerable site that got hacked, not the bitcoin system or software itself.
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Bitcoin didn't fail. Some site named "inputs.io" did.
Is my reasoning sound? (Score:5, Interesting)
I've been analyzing bitcoin lately, and have come up with the following reasoning:
As the coins are limited to 21M coins, you can, at this date, purchase 1/21Mth part of all the coins in the world for $300,-
Even if you put the odds of bitcoin supplanting US dollar very slim (1:1000), the only rational choice is to buy bitcoin.
If in 2030 the world uses bitcoins, you end up owning a sizeable portion (1/21M) of the entire money supply of the world's default currency.
How is this not a good deal? Heck, even at 1:1000000 odds of bitcoin supplanting US dollar would still make sense at $300,- per coin.
Where is fault in my logic? It seems too easy.
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If everyone agreed with this reasoning, the price would already be higher. The fact that the price is where it now shows that other people assess the probability of Bitcoin taking over a substantial fraction of the world economy *much* lower than you do. If you still think you're right and everyone else is wrong, then buy Bitcoins.
Re:Is my reasoning sound? (Score:4, Informative)
The value of owning 1/21M of the entire money supply depends entirely on the price level of the goods and services you can buy with that money.
Right now, someone might trade you an iPad for 1 bitcoin. Maybe in 2030 that bitcoin gets you a gallon of milk.
That does not make sense: it would mean that the worlds money supply in 2030 would be enough for just 21M gallons of milk and nothing more.
Bitcoins are set up for hyperdeflation, not inflation.
Wikipedia calls this 'its deflationary bias'. (http://en.wikipedia.org/wiki/Bitcoin#Economics)
Daylight robbery (Score:2)
As far i know, you can see the history of each bitcoin in the blockchain, each wallet that have and had it, each transaction that it had been involved into. If those bitcoins where moved to a particular wallet, any participant in the bitcoin network can see to which wallet it went it all, and what that person did after that. Maybe the name of that person is not known yet, but the people that will receive some of those bitcoins in exchange of something may have a hint on who they are or where they are living
A bank going out of business? Sign me up! (Score:2)
This is great. Usually when a bank loses everything the taxpayers are forced to bail them out. The customers actually losing is a breath of fresh air.
How to profit (Score:4, Insightful)
Not that this is what's going on, of course, but this came to mind:
1. open bitcoin "bank"
2. get lots of deposits
3. "get hacked" and close up shop
There is no step four, the profit's in step three.
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Holy shit, 4100? Is that ALL the bitcoins!?!? XD
No, but it is about $1.23M at current exchange rates.
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Holy shit, 4100? Is that ALL the bitcoins!?!? XD
That's roughly 1.2 million dollars, my friend, at current exchange rates. And incidentally, there are aproximately 12 million bitcoins.
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That can only mean one thing. Aliens hacked inputs.io!
Re:So? (Score:4, Interesting)
It's computer fraud and abuse. It's not like they really robbed a bank.
which, amazingly enough, in mots of the west gets a lot more of jailtime for you even if you stole nothing of actual monetary tangible value....
though, again as usual, one needs to ask if they just took it themselves, their ex-employee took it or..
Re:So? (Score:5, Funny)
Dillinger lives. He drives a Tesla, and carries ultrabook instead of a machine gun.
Re:So? (Score:5, Insightful)
We seem to be fast approaching the point where computer-based theft will be the way you "really rob a bank".
It's not like today's banks have all got huge safes full of bags with dollar signs on them -- not in the U.S., anyway. Money is becoming increasingly virtual. A dollar bill doesn't actually represent value; it represents debt, an IOU. A bank doesn't need to keep one physical dollar bill on hand for every dollar in its bank accounts; it only needs a fraction, because you don't expect 100% of your customers to come in on the same day to cash out. And thanks to the Federal Reserve system, there aren't even physical assets (like gold bars) of equal value to all the Federal Reserve notes in circulation. It's a bizarre system that only works as long as debt keeps circulating (buying and selling) and accumulating (loans with interest).
Re:So? (Score:5, Informative)
Credit existed long before the Federal Reserve. J. P. Morgan used created money to help out banks in the Panic of 1907. The Bank of England created money to get its country out of panics in the 1800s. The private banking system evolved the system that the Fed later put in place on a more equitable basis (loaning to all banks instead of only to those that Morgan had a personal affinity for, for example). Elasticity was necessary for the banking system to function. The Fed just made that elasticity more under the public's control, so that it could be used for the General Welfare instead of for Morgan's private profits.
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Credit existed in fourth (and probably fifth) century BC Athens. It was also largely responsible for inflation then: the monetary system was metal-based, but even the ancients noticed that old inscriptions and laws mandated unreasonably low prices for sacrificial animals, while people in their own time were buying and selling real estate for amounts of credit that couldn't be physically transported in any reasonable way as cash and that might not have even been available in circulation. The Athenians didn
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and well that's why pre ww2 stock crash was actually something causing massive panic and the crash of 21st century is something people barely notice...
because on the whole masses are not going hungry over it. on the whole they have more - more tools, bigger tv's... that's whats wonderful about modern day - even if you're technically poor* you got access to a wealth of information and entertainment - and even if you're supermegafuckingrich what you eat is pretty much the same as what the people earning 1/10
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I am going to propose that wealth really needs to be measured in energy. The more energy available, that can be converted into almost anything. Garbage can be "boiled" via thermal depolymerization into usable monomers, mine tailings can be processed and the toxic metals isolated. Even very inefficient processes like making hydrogen from water can be made useful. Of course, BitCoin mining requires a good amount of wattage, especially at this late date in the mining curve.
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For larger amounts ,many will actually require you notify them in advance.
Want $10,000 in actual cash at once? You need to call a day or two in advance so they can have a shipment made.
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At least you won't have to worry about security, as you step out the door you'll probably be followed by more Federal, state, county and local cops of various flavors than would respond to a presidential assassination attempt. I've always wanted to do something like pay for a new car in cash rather than by check, just to see how many hoops there are and what the law enforcement response would be, but my wife always puts down my more entertaining ideas before I can actually carry them out.
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Go to the teller. Ask for cash. If they ask why, feel fee to give them the honest answer that you're buying a car at auction. Fill out the CTR. Leave with cash.
Nobody cares.
Why this strange fixation on physical currency? (Score:3)
Well, I agree with you on one point: Robbing a bank by walking into the lobby of your local branch is very romantic, but it's a horrible and dangerous way to steal money, and has lousy returns. I'd say we've long past the point where that was the best way to rob a bank. (I'd say owning or running a bank is probably the best way to rob it...)
A bank doesn't need to keep ANY dollar bills on hand for dollars in their bank accounts; only branch banks need physical currency at all. There are plenty of non-bran
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Sorry; I must have missed the part where I blamed the Fed for anything, or even said that they created fractional reserve banking, or said that we should be on the gold standard. Let me re-read my comment. Hmmm... nope, still not seeing it. I just said:
And then explained why. You may object to the word "bizarre", but fractional reserve banking is pretty surprising to most people who think that ban
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Which IS also by now pretty much the only way you could possibly rob a bank.
Banks around here don't have big bullet-proof glasses between you and the teller anymore. Simply because there is no cash drawer anymore. The cash is inside a safe that doubles as the table you're sitting at and only if the teller withdraws some amount from an account that amount of money appears automagically from a slit in the table. The teller CANNOT even give you the money in the safe since he simply has no access whatsoever to
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Do these banks somehow use a digital signature? Computer recognition of a written signature is still way too unreliable to use it as a primary means of access.
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Mostly the teller can override the system, but the amount of money you can get out of him without some additional means is ridiculous for the average bank holdup. It's more a matter of time vs. money where getting much money out of the safe takes a lot of time (also one of the reasons why it takes ridiculous amounts of time for "processing" the withdrawal, it's an artificial block that should ensure that you don't get more than a few hundred bucks out of it every minute).
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I think it must depend on where you are. When I went to the credit union and did a withdrawal fairly recently she had a drawer full of cash in front of her, and since it was a couple thousand dollars she filled out a form and took what was lacking from the next teller's drawer.
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No you need to keep your wallet encrypted on your own computer with a backup in a strongbox off site and remember to never entrust your valuables to random clowns on the internet.
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Yes. My in-laws in Peru have ATM cards for our accounts, we've even had them buy property for us. Costs an extra $1.50 for the international ATM charge.
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>All the advantages of bitcoin, none of the disadvantages.
Really? Your bank offers free international money transfers? Immunity to asset freezing and seizure? Guaranteed irreversible deposits? Who are they, I want an account!
Bitcoin has it's issues, but the biggest seem to be associated with the self-named "banks" that deal in it, and there's no particular reason you have to deal with them at all - if you can keep your wallet secure and backed up then your money is safer than in any bank. It's strength
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"Real" money? Just FYI *all* money exists only as a social fiction. Even gold coins have value only because as a society we agree that it does.
"Real" banks on the other hand - the kind that carry insurance in case of theft, that's another thing. Still only as secure as the organization backing it, but better. Your biggest worry there is probably that someone with an axe to grind will trump up some charges to get your assets frozen. I can't see why anyone would trust their money to some random person tha
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And if your house burns down and takes your computer with the wallet? I can cash in fragments of burned bank notes for new ones, but I think that might be a problem with Bitcoins.,
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But what else is there? ;-)
It was people smelling the underlying complexity (and security vulnerabilities) of grain sacks, gold bars, paper-dollars, bank-dollars, credit cards, Paypal, etc that led to the succession of those things, with Bitcoin being the latest solution-to-it-all.
Every one of Bitcoin's ancestors had failures, and due to grass-is-always-greener psychology, the most recent ones (dollars and financial server institutions) are naturally viewed as the "worst" (because their failures, unlike gra
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Heh, "financial server institutions." My fingers insist that root just always has to end in "-er."
Re: Virtual Currency (Score:2)
And digital WoW gold is tax avoiding too? Pull your head out of your arse. The government has NO valid jurisdiction over arbitrary digital currencies.
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Then I guess they also have no business prosecuting the theft thereof?
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Probably not. If you can't tax it, why bother?
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WoW gold is ultimately money in Blizzard's bank accounts, which are indeed taxed.
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It's ultimately the product of people's computer time in WoW, which is a service provided by Blizzard through their paid-for and taxed-up business. If you're buying it with real cash, you pay for it through some perfectly ordinary, fully-taxed transaction. It's not a medium of barter outside of WoW so it strikes me that you're essentially trading some nominal portion of Blizzard's net worth.
Basically it's no more legally problematic than those vouchers towns put out that can only be spent at local businesse
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If Blizzard are obliged to provide goods or services in exchange for the WoW gold, then it will be on their balance sheet as a liability.
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That's what I said when the stock exchange hit rock bottom a few years ago, but boy did that handwaving create a shitstorm!
Re:Bitcoin is it just a scheme? (Score:4, Insightful)
Hey, if there was a country behind it we'd call it currency despite being pretty much the same system, where someone says one blubber is worth x dollars and you can create some by ... well, by creating some.
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If there was a country behind it, you could use it to pay your taxes, and that is what gives it its value.
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The very fact that I have to pay taxes with and for it lowers its value to me.
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Most countries tax income earned in bitcoin in exactly the same way as they tax income earned in their own currency or any other country's currency.
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The 'mining' sounds stranger then it really is. There are an end number of bitcoins that will exist, but instead of having a central system that hands them out (like when the fed increases the money supply), there is a set of mathmatical problems that produce valid coins when being solved. It
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"Why someone can just say a bitcoin is worth X dollars"
That's how it works. Everyone buying and selling has a different value for X in mind and when trades take place these values converge to a real number, a number that has been rising rapidly lately.
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Bitcoin is a solution to the problem of creating digital cash without a central authority to prevent double spending. "Miners" act as notaries. When Alice sends Bob some BTC, "miners" witness this and if they manage to create a new block on the blockchain, they note this transaction down in the distributed ledger. Without this ledger, Alice could simply send the
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Please tell me the dollar value of, say, a sword from Warcraft. Or a Steam Trading Card. Or a TF2 item.
It's EXACTLY the same - a virtual item gains "value" from the amount others are willing to pay for it. Enough people like that makes a market, and the item a commodity.
Hell, we deal in "frozen concentrated orange juice futures" in the "real" world of stock markets, I see no reason that Bitcoin is any different.
There can only ever be X amount of BitCoin. Like there are only one thousand "foil" cards in
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why someone can just say a bitcoin is worth X dollars
Anyone is allowed to offer to buy bitcoins from you at a price they choose. That's normal free market bartering.
it's extremely confusing to actually try to use the "currency"
Have you ever used any bitcoin wallet software? It's pretty simple once you know that bitcoins are stored in addresses, and you can have as many addresses as you want. (Though it is sometimes a bit hard to find an exchange you can actually buy bitcoins from.)
and you can create money by "mining" for it with a graphics card
Bitcoin mining is the process of creating proof-of-work statements that verify the transaction history of the Bitcoin network. As a reward fo
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When you 'mine' a bitcoin have you actually produced something of tangible value other than an electronic token which a group of people have agreed to exchange goods and services for?
ie does the process of 'mining' bitcoins actually generate some kind of useful computational result? Something thats useful in genomics, or crypto or whatever, outside of just 'more bitcoins'.
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Yes, mining performs the cryptographic operations that the entire Bitcoin transaction network depends upon.
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If I recall correctly, and maybe someone can describe this better, there is another area for growth that comes out of the math behind handling transactions. So having a machine sit and help wrangle the chains, which is critical for bitcoin working, can also produce new coins, which is computationally useful (at least within the ecosystem).
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So, for security, you had to provide a telephone number? Ahahahahaha.
Bitcoin makes everything about currency handling harder for the average person.
That's not a feature of Bitcoin.
The only interesting thing with Bitcoin is that there's a limit to the amount of bitcoins. But just as a govenrment mandate detached the dollar from gold, a government mandate could change relevant representations+algorithms to allow the government to produce more bitcoins at will. And, just as everyone accepted who accepted US dollars accepted the former change, they'd accept the latter change too.
Bitcoin is an open source project, used by many to get away from centralized controls like that. Many people would stop using it, or work on making the proper version more anonymous rather than switch to some specific government's fork of Bitcoin.
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So, like any other nascent currency.
1. Grows until enough of the people are using it;
2. Gets regulated by the people, through the government;
3. The usual suspects don't like joining in, and keep their wealth in other forms.
Bitcoin has no features except that anti-money laundering laws aren't applied to it yet, as they are with mainstream currencies.
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Which currency isn't used as a tool for speculators, drug dealers, and criminals?
Exactly. We don't need another one.