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Bitcoin Mining Startup Gets $500k In Venture Capital

Unknown Lamer posted more than 2 years ago | from the coinlab-partners-with-slashdot-to-improve-your-d2-experience dept.

Bitcoin 381

Sabbetus writes "Seattle based Bitcoin startup CoinLab secured a $500,000 investment from various investors such as Silicon Valley firm Draper Associates and angel investor Geoff Entress. CoinLab is an emerging umbrella group for cultivating and launching innovative Bitcoin projects. CEO Vessenes said 'if there is a currency that can trade around the world, it's semi-anonymous, it's instant, it's not controlled by government or bank, what's the total value of that currency? The answer to that is, if it works, it's gotta be in the billions. It just has to be for all the reasons you might want to send money around the world.' This type of talk is common from Bitcoin enthusiasts but apparently seasoned investors are starting to agree. Forbes explains the details of their business plan but in short it has to do with tapping the GPU mining potential of gamers, more specifically gamers of free-to-play games. This would add a new revenue stream for online game companies that are trying to provide free games profitably."

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381 comments

Sucker born every minute. (5, Funny)

Anonymous Coward | more than 2 years ago | (#39796143)

Shouldn't that be BitCoin mining scam bilks idiots of $500,000?

Re:Sucker born every minute. (0)

Anonymous Coward | more than 2 years ago | (#39796177)

Absolutely.

Re:Sucker born every minute. (2, Insightful)

Bill, Shooter of Bul (629286) | more than 2 years ago | (#39796231)

Yeah, I'm sort of amazed that its on forbes. You'd expect them to do a little research and at least address the built in deflation in a story.

Re:Sucker born every minute. (4, Insightful)

h4rr4r (612664) | more than 2 years ago | (#39796265)

Why does this amaze you?
What are the odds either the writer was paid, Forbes was paid or one of the two have people involved in both?

Re:Sucker born every minute. (-1, Offtopic)

Bill, Shooter of Bul (629286) | more than 2 years ago | (#39796439)

I had a higher opinion of Forbes when it came to finacial reporting. I mean, its not bat sh*t crazy Ron Paul talking

Re:Sucker born every minute. (0)

Anonymous Coward | more than 2 years ago | (#39796601)

Forbes has gone downhill past year or two. These days it's little better than blog-spam.

Re:Sucker born every minute. (2, Informative)

benjamindees (441808) | more than 2 years ago | (#39796881)

Bitcoin doesn't have "built in deflation." It has built-in monetary inflation, which is currently around 35%, and which decreases over time.

Rich people idolized. (0)

Anonymous Coward | more than 2 years ago | (#39796485)

Shouldn't that be BitCoin mining scam bilks idiots of $500,000?

Unless they become super rich -without breaking any laws currently on the books - it isn't a scam.

Then they'll be idolized and worshiped.

Examples: Vanderbilt, Rockefeller, Morgan, Kennedy, Zuckerberg, etc ...

Madoff got screwed. He used an existing business practice/scam. If he came up with his own ripp-off instead of a variation of a Ponzi scheme, he would have been OK, folks would have praised him for his "entrepreneurship" and he'd be free - like everyone at Goldman Sachs, Bank of America, etc ....

I think I'll take back Zuckerberg. He's just taking advantage of stupid people - which isn't quite a scam, yet. It's more along the lines of preachers like Joel Osteen who are just given things - they're not really ripping anyone off.

Re:Sucker born every minute. (1)

DragonTHC (208439) | more than 2 years ago | (#39796749)

think for a second.

High processing cycles needed to "generate" a bitcoin?

Something only has value if someone wants it.

What exactly are bitcoins and why are they so mathematically complex.

Not again... (0)

Anonymous Coward | more than 2 years ago | (#39796159)

It's been a while since the last BitCoin article on Slashdot

Bitcoin why? (1)

Anonymous Coward | more than 2 years ago | (#39796161)

I just don't understand Bitcoin and "mining" whatsoever.

Re:Bitcoin why? (5, Funny)

dadioflex (854298) | more than 2 years ago | (#39796249)

I just don't understand Bitcoin and "mining" whatsoever.

Oh, you didn't recently invest half a million dollars in a start-up, did you?

Re:Bitcoin why? (4, Informative)

Statecraftsman (718862) | more than 2 years ago | (#39796347)

Take a little time to read about it :https://en.bitcoin.it/wiki/

If you like technology, there are many fascinating areas that Bitcoin brings together: p2p networks, cryptography, economics to name a few.

Regardless of the image problem Bitcoin has and people's propensity to denounce it based on what they've heard, it really is a revolutionary development. If the current Bitcoin network doesn't make it into your life, you can bet that one or many of its predecessors will.

One of the things it enables is fast global transactions. I created a site to sell digital downloads for Bitcoin called CoinDL: https://www.coindl.com/ [coindl.com] and the processing time is averaging under 10 seconds which is pretty impressive considering there's no company, government or other centralized organization involved in the transfer.

Re:Bitcoin why? (1, Informative)

Lunix Nutcase (1092239) | more than 2 years ago | (#39796391)

It's not revolutionary. It's a scam so a couple of people get rich whilst idiots waste countless amount of money on electricity and GPUs in vain hope of getting rich. It's a rather run-of-the-mill scam at that.

Re:Bitcoin why? (2, Interesting)

Wonko the Sane (25252) | more than 2 years ago | (#39796515)

It's not revolutionary. It's a scam so a couple of people get rich whilst idiots waste countless amount of money on electricity and GPUs in vain hope of getting rich. It's a rather run-of-the-mill scam at that.

This must be the source of most of the Bitcoin hate. You're looking at how new currency units are created to the exclusion of all other aspects of the system.

To people who do not have any appreciable skills to sell on the open market would naturally see only this because the concept of being a producer of value that other people want to trade for just doesn't exist in their mental vocabulary.

If you have the ability to produce value that other people want to buy then decentralized currencies potentially can allow you engage in transactions that would otherwise be impossible or unprofitable. That is the real value of Bitcoin.

Re:Bitcoin why? (-1, Troll)

Lunix Nutcase (1092239) | more than 2 years ago | (#39796543)

Yes, the fact that it is a scam is most of the hate. Keep wasting money minng your buttcoins so others get rich off of you. I'm sure 'the man' is really getting it stuck to.

Re:Bitcoin why? (5, Insightful)

Anonymous Coward | more than 2 years ago | (#39796673)

Creating numbers and telling people they have value is not being a producer of value.

The work that went into the crypto behind bitcoin was useful skilled work, that created value for society. Running a bitcoin mining operation is not.

Re:Bitcoin why? (0)

Wonko the Sane (25252) | more than 2 years ago | (#39796737)

I never said that bitcoin mining creates value. Again, you're missing the point.

Value is created by the voluntary exchange of products and services. The people who are using Bitcoins to facilitate commerce are the ones creating the value, not the miners.

At the moment this means most of the value comes from Silk Road, but that's not the only industry that can benefit from this technology in the future.

Re:Bitcoin why? (1)

s73v3r (963317) | more than 2 years ago | (#39796855)

I never said that bitcoin mining creates value.

Except, to everyone who uses bitcoin, it does.

Re:Bitcoin why? (0)

Anonymous Coward | more than 2 years ago | (#39796861)

"Creating numbers and telling people they have value is not being a producer of value"

Shhhh! We don't want 95% of the US economy to hear you.

Re:Bitcoin why? (2, Insightful)

s73v3r (963317) | more than 2 years ago | (#39796841)

This must be the source of most of the Bitcoin hate.

Not necessarily, but it is the source of why most people realize it is a scam.

To people who do not have any appreciable skills to sell on the open market would naturally see only this because the concept of being a producer of value that other people want to trade for just doesn't exist in their mental vocabulary

What? Being the creator of a scam now is something to be valued?

If the creators of Bitcoin truly wanted to create some kind of new currency, they should have set it up in such a way that they didn't get the lions share of the bitcoins right away, signalling to everyone else that it's a fucking scam.

Re:Bitcoin why? (1)

h4rr4r (612664) | more than 2 years ago | (#39796407)

Its predecessors? I think you mean its descendants.

Re:Bitcoin why? (1)

Yvan256 (722131) | more than 2 years ago | (#39796419)

... the processing time is averaging under 10 seconds which is pretty impressive considering there's no company, government or other centralized organization involved in the transfer.

I think you just explained the reason for the speed.

Re:Bitcoin why? (2)

Sir_Sri (199544) | more than 2 years ago | (#39796707)

One of the things it enables is fast global transactions. I created a site to sell digital downloads for Bitcoin called CoinDL: https://www.coindl.com/ [coindl.com] and the processing time is averaging under 10 seconds which is pretty impressive considering there's no company, government or other centralized organization involved in the transfer.

Um... other way around. You'd expect anything going through a company or government to take time as they have legal requirements for verification and recording which they really really really can't fuck up.

When governments decide bitcoin is a giant scheme to dodge tax (note: I'm not saying it is, but governments will come to that conclusion eventually) it's going to get the beat down from all sorts of organizations. The whole premise 'idea of using cryptography to control the creation and transfer of money, rather than relying on central authorities' (as per your linked wiki) directly contravenes the charters of those 'central authorities' - as the sole provider of national currencies and sole arbiters of the creation of money.

It's an amusing theoretical project, but eventually bitcoins are either going to need to be adopted as someones currency or they're going to get run into the ground, or both. And any followup project will not survive nearly as long once the precedent is set with bitcoins. That doesn't mean some of the underlying technology won't transfer into real money trading, but when the government decides your bitcoin business is a scheme to dodge tax, and decides to tax you in british pounds or USD or Euro and you can't produce a trail of transactions which can be converted into one of those currencies you're going to find yourself in a world of trouble without any easy way out.

Also, a decentralized currency without a central authority controlling the money supply is a stupid idea. Bitcoin supply is regulated by a rate at which mathematical problems can be solved, and then a fixed exchange between problem solved and bitcoin gained. Which has absolutely no relationship to a useful supply rate for money. One can (as economists do) argue over which of the various competing theories for money supply a given central bank or currency authority should be using at any given time, but none of those sane options are remotely similar to what bitcoin is.

Re:Bitcoin why? (1)

Jawnn (445279) | more than 2 years ago | (#39796733)

Regardless of the image problem Bitcoin has and people's propensity to denounce it based on what they've heard, it really is a revolutionary development. If the current Bitcoin network doesn't make it into your life, you can bet that one or many of its predecessors will.

I will take that bet. I will even offer you generous odds, but only if we wager in dollars and cents. You know, real currency. Oh, wait...

Re:Bitcoin why? (0)

Anonymous Coward | more than 2 years ago | (#39796867)

used it before, will use it again...

Re:Bitcoin why? (1)

cvtan (752695) | more than 2 years ago | (#39796443)

Clearly years of study and employment in the engineering/scientific world have not prepared me to understand anything of real value, like BitCoin.

Prioritization? (2)

Crasoose (1621969) | more than 2 years ago | (#39796169)

When it comes down to it, am I going to be losing performance in their game because they would rather be making money? I hope they state plainly their intentions from the get-go, but we all know that won't happen.

Re:Prioritization? (1)

Githaron (2462596) | more than 2 years ago | (#39796279)

They will state their intentions. After you have bought the games and opened the package, It will be in tiny letters in the most vague wording possible somewhere in the multi-page EULA that almost no one reads.

Re:Prioritization? (2)

h4rr4r (612664) | more than 2 years ago | (#39796307)

Forget losing performance, think about your GPU running 100% when it only needs to be at 10% and what that will due to your powerbill. My GTX460 eats 150watts and newer cards will be even more.

Fan noise (1)

perpenso (1613749) | more than 2 years ago | (#39796431)

Forget losing performance, think about your GPU running 100% when it only needs to be at 10% and what that will due to your powerbill. My GTX460 eats 150watts and newer cards will be even more.

And fan noise as the various fans in your system desperate try to cool things down.

Re:Prioritization? (3, Informative)

jank1887 (815982) | more than 2 years ago | (#39796799)

150W = 0.15kW x 24hrs/day = 3.6kWh/day x $0.10/kWh = $0.36 / day x 30 days/month = $10.80 / month.

Rescale according to your local electricity cost and actual number of hours per day.

Re:Prioritization? (1)

Sir_Sri (199544) | more than 2 years ago | (#39796801)

A 560 and 660 will probably both eat around 150 watts, though the 680's use less power than the 580's. The x80 series use roughly the same form factor and power draw from the 8800 up to the 580 and then a bit less (but not a lot) for the 680.

Much of GPU design is what you can cram into a given power envelope (between 6 and 8 pin connectors on the side and what you can draw from the mobo). CPU design has been the same way for quite a while with power points of 45 75, 95, 140 W TDP for intel parts. There are lower power parts too, and the new ivy bridges like the GTX 680 seem to be lower power than the previous generation.

But yes, you're going to hit diminishing returns on being able to mine bitcoins with a GPU as they run out of problems to solve, so you get less and less bitcoins per watt, even on a faster GPU.

More bitcoins than sense (5, Funny)

hmmm (115599) | more than 2 years ago | (#39796171)

I officially declare Internet Bubble 2 as confirmed!

Re:More bitcoins than sense (1)

jank1887 (815982) | more than 2 years ago | (#39796815)

bubble v1 had Flooz with Whoopi Goldberg. who will get the first big Bitcoin sponsorship?

amazing use of resources (4, Insightful)

Trepidity (597) | more than 2 years ago | (#39796175)

In the 21st century, humans have invented fake mines to work in, and fake mining companies that mine in them.

Not fake mines likes the ones in Minecraft that might actually be interesting, of course. And not a side-effect of something else, like WoW's "gold farmers". Fake mines that exist solely and purposely to be tediously mined by fake mining companies! Now that's creating value. Value that's "gotta be in the billions".

Re:amazing use of resources (-1)

Anonymous Coward | more than 2 years ago | (#39796271)

basically it is idiots pouring money into a closed system. It will be fun to watch from the outside :D

Re:amazing use of resources (4, Insightful)

TheRaven64 (641858) | more than 2 years ago | (#39796305)

It's probably quite interesting to watch from the inside too, if you're one of the people who got in early on the pyramid scam.

Re:amazing use of resources (1)

fotoguzzi (230256) | more than 2 years ago | (#39796325)

Is it mining or manufacturing? I wonder if there might have been a time when households were involved in making tablecloth doilies. It would have taken a lot of time, the usefulness of the doilies would be negligible, and the value might change over time. This would not be considered mining, but it might be a bit on the fake side. Just a thought. Maybe mining is the correct term for what coiners are doing.

Re:amazing use of resources (4, Insightful)

SaroDarksbane (1784314) | more than 2 years ago | (#39796333)

Now that's creating value.

I realize this is snark, but having a currency that is semi-anonymous, convenient, and resistant to meddling by central banks would be quite valuable to some.

The value you place on such a thing is probably not very high, but value is entirely subjective, and can only be shown on an individual basis by what that person is willing to trade to acquire the object (or information) in question.

Re:amazing use of resources (2)

kiwix (1810960) | more than 2 years ago | (#39796735)

A kind of anonymous money could be useful, but I'd rather use one that doesn't double as a pyramid scam.

It's easy to make a bitcoin-clone without this property, you just need to adjust the mining rate so that the early adopters don't get half of the total wealth to ever be available.

Re:amazing use of resources (0)

Anonymous Coward | more than 2 years ago | (#39796367)

paper money is 'fake' too.

Re:amazing use of resources (-1, Troll)

Lunix Nutcase (1092239) | more than 2 years ago | (#39796435)

But unlike your buttcoins my dollars are legal tender to pay debts and are widely accepted by businesses. Your buttcoins are only accepted by shady websites selling drugs and by people in money laundering schemes.

Re:amazing use of resources (0)

Anonymous Coward | more than 2 years ago | (#39796513)

Zimbabwe dollars are legal tender too.

Re:amazing use of resources (0)

Lunix Nutcase (1092239) | more than 2 years ago | (#39796599)

Sure but you left of the last part 'and are widely accepted by businesses' and in the case of dollars this is also true on a global scale. So, yes, if you ignore my last part your statement is somewhat true but is misleading. Your buttcoins on the other hand have less acceptance than junky Zimbabwe dollars which s een more pathetic for the buttcoin cause.

Re:amazing use of resources (4, Insightful)

Dan East (318230) | more than 2 years ago | (#39796375)

The next time you're playing a free solitaire game online, and your CPU fan is going wide open, your gpu fan is wide open, the room feels hot and stuffy all of a sudden, and the lights dim, just seek solace in the fact that you're making someone else fake money.

Re:amazing use of resources (1)

Statecraftsman (718862) | more than 2 years ago | (#39796705)

There is nothing about Bitcoin that is fake. It's harder to counterfeit than a gold bar yet instantly assayable by anyone who downloads the software or checks with one of a few blockexplorer.com type servers out there.

Mind you, people will need to realize that their computers and their electricity may be being used by someone else to make money but if they're getting paid for it in some other way, that can be part of the deal. This announcement is about a way to get vitual in-game items for mining in an open, potentially full-disclosure way.

Other non-Bitcoin related uses of your computer that may be happening right now to make someone else money are to send spam, launch DDOS attacks, or host phishing websites.

Re:amazing use of resources (1)

Megane (129182) | more than 2 years ago | (#39796819)

Except that unlike said gold bar, the bits have no industrial uses, nor do they look attractive when worn on the body.

Re:amazing use of resources (0)

Anonymous Coward | more than 2 years ago | (#39796509)

On the bright side, it's a dumping ground for arbitrary amounts of energy. Imagine if we invented the perfect fusion reactor: in today's legacy economy, the price of electricity would eventually plummet. In a bitcoin based economy, all cheap surplus power would instead be spent generating bitcoins.

Re:amazing use of resources (1)

Megane (129182) | more than 2 years ago | (#39796847)

In one way it is just like Minecraft: it will make your fans run like crazy.

Re:amazing use of resources (1)

s73v3r (963317) | more than 2 years ago | (#39796893)

Not only that, but the creators of these fake mines have found a way to extract the potential value from the mine without actually paying the miners.

electricity is free (1)

YesIAmAScript (886271) | more than 2 years ago | (#39796179)

If a game is going to use my GPU to mine bitcoins for the other end, they should have to tell me. Because otherwise they're just taking money from me and having my electric utility do the billing for them.

Note that anyone who is on a pay-per-bandwidth internet plan is in the same boat with ad-supported software. You are paying the maker of the software, just your ISP is doing the billing for them.

Re:electricity is free (0)

Anonymous Coward | more than 2 years ago | (#39796351)

If a game is going to use my GPU to mine bitcoins for the other end, they should have to tell me. Because otherwise they're just taking money from me and having my electric utility do the billing for them.

Note that anyone who is on a pay-per-bandwidth internet plan is in the same boat with ad-supported software. You are paying the maker of the software, just your ISP is doing the billing for them.

Yep, sounds like a backdoor way for bitcoins to extract real money from gamers. I wouldn't be surprised if power companies (knowingly) buy into the bitcoin (ponzi) scheme to create real demand for more electrical use. Even if the power companies lose real money on bitcoins, they win far more in real money from increased electric bills to consumers.

Re:electricity is free (1)

tlhIngan (30335) | more than 2 years ago | (#39796593)

If a game is going to use my GPU to mine bitcoins for the other end, they should have to tell me. Because otherwise they're just taking money from me and having my electric utility do the billing for them.

Note that anyone who is on a pay-per-bandwidth internet plan is in the same boat with ad-supported software. You are paying the maker of the software, just your ISP is doing the billing for them.

I don't see that happening. I mean, if I write a game so inefficiently that it takes 100% CPU when I only really need 5%, if it's a good game, would you still play it? Ditto GPU, as well (and there are several games in the App Store that run *TERRIBLE* despite actually having very simple graphics).

How do you bill for that?

As for making money for the developer, they'll just claim "it makes you pay less for you game, so you win because we could've made it more expensive".

It's stupid, but really, how do you tell? Other than some blain-dead "bitcoin-miner.exe" process suddenly showing up in the task manager...

Re:electricity is free (1)

asdf7890 (1518587) | more than 2 years ago | (#39796699)

Because otherwise they're just taking money from me and having my electric utility do the billing for them.

Exactly. That, and your GPU will be running at 100% potentially for long periods of time when it would otherwise be near idle - so you might need to replace it sooner. You'll certainly have extra noise from the fans if your card is not passively cooled.

Web 2.0 Is About to Go TU (0)

Anonymous Coward | more than 2 years ago | (#39796191)

This is the same kind of bullshit that was flying around in the late 1990's. Time to short the NASDAQ 100.

Re:Web 2.0 Is About to Go TU (2)

dadioflex (854298) | more than 2 years ago | (#39796357)

This is the same kind of bullshit that was flying around in the late 1990's. Time to short the NASDAQ 100.

The difference is that there aren't anywhere near as many big idea/no income tech IPOs this time around. Groupon is the only major Web 2.0 (or whatever the buzz-phrase is these days) IPO. Facebook may be the next, and will almost certainly be over-valued and over-subscribed - but it'll wilt in isolation. The economy in general is in the toilet. Glencore (global resources - you know, mines and oils wells and such.) was the biggest, I think, IPO in history and they lost about 15-20% of their launch price when the economic slow-down hit resources. The world isn't awash in the kind of money for people to throw around at companies without a revenue stream.

LOL (3, Funny)

wervr (712696) | more than 2 years ago | (#39796203)

I am going to laugh so hard the first time I see and hear someone playing farmtown while their video card is at 90 decibel turbo speed.

It has to be? (0)

Lunix Nutcase (1092239) | more than 2 years ago | (#39796229)

It's worth billions... because he says so? Sorry, buddy, but your word is not evidence especially when it's in your interest to overstate the value. The saddest part is that they found people dumb enough to give them money.

Re:It has to be? (3, Insightful)

Archangel Michael (180766) | more than 2 years ago | (#39796335)

You don't understand the nature of fiat currency. Money (most currencies anyways) has a value because people want it to have a value. Bitcoin is no different.

Re:It has to be? (5, Interesting)

betterunixthanunix (980855) | more than 2 years ago | (#39796395)

You don't understand the nature of fiat currency

...oh the irony...

Money (most currencies anyways) has a value because people want it to have a value

Government back currencies have value because the government creates demand for those currencies through taxes. The US dollar has value because millions of Americans have to pay their taxes, and they cannot use Bitcoins, gold bars, or Tulips to do so -- they have to use US dollars to do so. Governments also create demand by charging for various services, assigning damages in court, etc. -- people are compelled to pay in government issued currency.

Bitcoin, on the other hand, has nobody creating demand for it, just a lot of hype and promises of secure and anonymous payments.

Re:It has to be? (0)

Anonymous Coward | more than 2 years ago | (#39796609)

hmm so if it isn't worth anything do I have to pay the IRS when I start accepting bitcoins and only bitcoins for my products online? If not then I'd like somebody to open a bitcoins to check service where I can buy dollars to pay my bills using bitcoins. :)

Re:It has to be? (1)

betterunixthanunix (980855) | more than 2 years ago | (#39796663)

To the best of my knowledge (IANAL), if you were to buy goods and services with Bitcoin, you would be obligated to assess the value of goods and services in terms of dollars and pay the appropriate taxes. This is not any different from barter, which is practiced here in America and which can be taxed (in dollars, of course).

Re:It has to be? (0)

Anonymous Coward | more than 2 years ago | (#39796621)

Bitcoin, on the other hand, has nobody creating demand for it, just a lot of hype and promises of secure and anonymous payments.

If I were to threaten you unless you started using Bitcoins, would you consider that valuable?

Re:It has to be? (-1, Flamebait)

Lunix Nutcase (1092239) | more than 2 years ago | (#39796469)

Blah blah fiat currency blah blah. Yeah, yeah I've heard this libertard and buttcoin nonsense before. Get some original material for once.

Re:It has to be? (1, Informative)

Anonymous Coward | more than 2 years ago | (#39796503)

Money (most currencies anyways) has a value because people want it to have a value.

gold included

Re:It has to be? (1)

sourcerror (1718066) | more than 2 years ago | (#39796577)

Bitcoin: Change you can believe in

Re:It has to be? (1)

jimbolauski (882977) | more than 2 years ago | (#39796885)

Bitcoins are no different then Disney dollars, you can use them to buy certain goods but at the end of the day you still need real currency. The electric company will not take Disney Dollars, alternative currency will always have this problem.

Re:It has to be? (1)

TheRaven64 (641858) | more than 2 years ago | (#39796423)

No, he's right. A currency with those properties would be worth billions. However, for it to have those properties it would have to be backed by something. It doesn't really matter what it's backed by, it could be lumps of metal, the value of a company, the promise of a government, or even the promise of doing some computational work in the future, as long as all parties agree that it's something of value. The problem with bitcoin is that it is backed by the promise of doing some computational make-work, not even useful computation.

Re:It has to be? (0)

Anonymous Coward | more than 2 years ago | (#39796671)

What value are dollars backed by?

Re:It has to be? (0)

Lunix Nutcase (1092239) | more than 2 years ago | (#39796793)

The output of the US economy and through force of law. Your buttcoins are backed up by.... ? Not any precious metal. Not by the econmic output of any country, business, etc. It's not backed by anything but the promise of scammers.

You're kidding me??!?! (5, Insightful)

OzPeter (195038) | more than 2 years ago | (#39796239)

'if there is a currency that can trade around the world, it's semi-anonymous, it's instant, it's not controlled by government or bank, what's the total value of that currency? The answer to that is, if it works, it's gotta be in the billions. It just has to be for all the reasons you might want to send money around the world.'

It's also going to be top of the list of every law enforcement agency across the globe. Governments tend not to like their citizens taking part in transactions that don't have a paper trail.

Re:You're kidding me??!?! (5, Interesting)

Wonko the Sane (25252) | more than 2 years ago | (#39796291)

Governments tend not to like their citizens taking part in transactions that don't have a paper trail.

That is true, however politicians and bureaucrats really like having a way to receive bribes that don't leave a paper trail. Which impulse will win out in the end?

Re:You're kidding me??!?! (-1, Troll)

Lunix Nutcase (1092239) | more than 2 years ago | (#39796365)

But...but...Buttcoins are like totally secure and like totally not fiat currency. How dare you besmirch the fine name of Buttcoins! Just last week I bought 50 pills of e with my buttcoins!

Re:You're kidding me??!?! (1)

girlintraining (1395911) | more than 2 years ago | (#39796507)

Governments tend not to like their citizens taking part in transactions that don't have a paper trail.

Yes, but what a government likes or not is immaterial; There are plenty of legitimate things and reasons for anonymous purchases, not the least of which is economic stability; If money cannot be exchanged anonymously, then that means that all transactions can (and will) be taxed. That means that the barter system will come back into play for any number of purchases, as well as complex tax shelters and evasion methods where goods trade hands instead of cash, or instruments are created that are "like" cash, but legally different enough to avoid taxation. Every organic system, currency being no exception, needs some slippage for the system to work; It's the same reason you have a clutch in a car... While most of the system is trackable and the majority of the money supply isn't physical money (ie, non-anonymous), that percentage that is keeps the rest of the system healthy and simple. Take that away, and all manner of complexities and incompatibilities develop as people scramble to create a custom solution to the problem.

Besides, governments have little to worry about; The movement and storage of cash is a cumbersome process, which is why large drug cartels don't keep their assets in cash-form; They convert it to something more durable -- goods, materials, services. It's why money laundering is such an important aspect of organized crime... it is a logistical nightmare to base your operation on cash. Cash is really only used for the point of sale, and once it has moved a few levels up the chain, it is converted into other things before being deposited in a bank or translated to a financial instrument (bonds, checks, stocks, etc.).

Re:You're kidding me??!?! (1)

Anonymous Coward | more than 2 years ago | (#39796817)

Governments tend not to like their citizens taking part in transactions that don't have a paper trail.

You mean cash?

Re:You're kidding me??!?! (2)

Jeremi (14640) | more than 2 years ago | (#39796915)

Governments tend not to like their citizens taking part in transactions that don't have a paper trail.

On the other hand, every Bitcoin transaction does have a very public "paper trail" that is quickly available to everyone, including law enforcement. The only challenge is matching account IDs to actual people. I wouldn't be surprised if law enforcement is able to find ways to do that, in which case they might prefer that criminals use Bitcoins rather than cash.

500k (1)

Anonymous Coward | more than 2 years ago | (#39796251)

... in bitcoins?

after instagram, it's official: (2)

circletimessquare (444983) | more than 2 years ago | (#39796259)

there's a new dot-com bubble

congratulations on the investors here on seeding the hype to attract the rubes

just remember to step off the merry go round before things tank

i'd give it a few years

any VC want to fund my innovative paradigm shifter? i call it flooz. whoopi goldberg is going to help me spread the good word

Re:after instagram, it's official: (1)

perpenso (1613749) | more than 2 years ago | (#39796623)

there's a new dot-com bubble

Maybe, maybe not. Its not like instagram raised a billon from the market. The Wall Street Journal reported that the decision was largely made by one person.

So you CAN make money with bitcoin! (0)

Tanman (90298) | more than 2 years ago | (#39796261)

BitCoin is now worth five Hundred THOUUUUSAND Dollars! Muahahahahahahahahaahaaaaaaaaa!

Oh, wait, no, it is still worthless but these people are now worth 500k. Congrats to them for finding an angle to profit off bitcoin other than stealing someone else's bitcoin and then not being able to use them anyway.*

*I don't know if you can actually use bitcoin for anything other than claiming how much they are worth in news stories

Re:So you CAN make money with bitcoin! (0)

Lunix Nutcase (1092239) | more than 2 years ago | (#39796645)

Of course you can make money with buttcoins. You bilk idiotic libertards out of their hard earned money by selling them worthless bits.

not sure f2p gamers are a good idea. (0)

Anonymous Coward | more than 2 years ago | (#39796269)

Most of them tend to be on budget machines with entry-level graphics.

It would take a lot of them to achieve results.

Re:not sure f2p gamers are a good idea. (1)

leonardluen (211265) | more than 2 years ago | (#39796535)

why do they care? they aren't paying the electric bill.

Trojan (5, Insightful)

girlintraining (1395911) | more than 2 years ago | (#39796273)

Forbes explains the details of their business plan but in short it has to do with tapping the GPU mining potential of gamers,

So 'in short', they're going to trojan a video game and turn a bunch of PCs into a botnet to generate bitcoins. But because it's a business doing this, and not some teenager in his mom's basement, they're going to make billions instead of go to jail? That sound about right?

If any other kind of software you ran was doing something in the background other than what you wanted to do, it would be called malware.

Re:Trojan (1)

Dan East (318230) | more than 2 years ago | (#39796323)

The difference is in the EULA.

Re:Trojan (5, Insightful)

h4rr4r (612664) | more than 2 years ago | (#39796353)

They will disclose it in the EULA, that no one reads.

Re:Trojan (1)

girlintraining (1395911) | more than 2 years ago | (#39796541)

They will disclose it in the EULA, that no one reads.

Of course! It's totally legal as long as you write it down. Forgot about that loophole in our industry. "You consented to have our developers have forcible sex with you right there in paragraph 136, subsection (c). You can't complain now when some 'strangers' showed up and held you down on the bed and had their way with you." Judge: "That seems reasonable. Case dismissed."

Re:Trojan (0)

Anonymous Coward | more than 2 years ago | (#39796695)

Microsoft Windows does this... while I might agree such a program is malware I'm not sure I'd say there was anything illegal about it. Then again I don't think malware should be illegal. People are stupid and use non-free software. I don't.

MSHA? (0)

Anonymous Coward | more than 2 years ago | (#39796283)

I wonder what MSHA has to say about this mining operation?

Bitcoin haters (5, Insightful)

Anonymous Coward | more than 2 years ago | (#39796299)

never seem to understand the advantages of it is a form of exchange and yet they will cry and moan every time the government takes another one of their freedoms, another step into their privacy, another step towards authoritarianism.

Bitcoin is an incredible idea: decentralized exchange, totally anonymous, no central body to print it out of existence, no government to track who your exchanging with and for what, a limited stable inflation on the money supply with no one to dictate that "the crisis would end if we just gave the banks more money".

Would I want to store all of my wealth in bitcoin? No. Do I like the idea of being able to convert my money into an exchange medium that is untraceable? Of course.

How many stories have we read of governments steering us towards a cashless society where all forms of exchange are withing their monitoring (not to moention all forms of communication.)

To me bitcoin is the currency equivalent of TOR and shouldn't be hated on.

bitcoin's biggest drawback (4, Interesting)

sl4shd0rk (755837) | more than 2 years ago | (#39796317)

Control the 'net and you control bitcoin. Do you think pippa/acta / cispa and variants are limited to the riaa and mpaa agenda only?

One Thing Is For Certain (1)

SaroDarksbane (1784314) | more than 2 years ago | (#39796427)

In 10 years, someone is going to look very stupid, and it will either be Bitcoin's shrill proponents, or its shrill detractors.

The suspense is killing me.

Duplicate (4, Funny)

Compaqt (1758360) | more than 2 years ago | (#39796429)

Don't the editors read what they post?

We just had an article about billionaires funding a crazy mining scheme [slashdot.org] a few days ago.

Security (1)

Deliveranc3 (629997) | more than 2 years ago | (#39796453)

Well a lot of people are concerned about the security of the BTC notion. I'd like to bring up something that a lot of Slashdoters are familiar with.

That is that as an individual trader you are at the low end of the reliability spectrum when it comes to trading and finances. If your bank goes bust you will probably not receive your money. If there is a sudden drop in markets, your trades won't be processed for hours or days. Probably not an issue unless there's a war or some other kind of major event, like the U.S. black swan.

Second there are currently 2 senate subcommittees trying to figure out what to do about BTC. While a lot of people think that the government will simply outlaw the currency it becomes an issue in that anything can conceivably be considered a currency. Outlawing barter in a country is probably a bad idea.

Third Bitcoin is a problem for government because it is essentially impossible to tax at this point, that's not saying it will always be that way. If you've been watching the pips carefully you can see that there's been pressure to keep the price stable (and low) many many Bitcoin traders are simply cashing in on this to increase their share. It's relatively cheap to push the price of a stock down, but it does cost a bit and that cost is being soaked up.

So: buy 1 BTC. If it becomes viable for microtransactions, you win. If there's a war, you win. If you trade it every day for a little piece of the money being spent to keep the price stable, you win! If you get to stop reading articles about BTC because you have one... you win!

Unregulated market.... another bubble. (0)

Anonymous Coward | more than 2 years ago | (#39796465)

Bitcoin was inflated because no one cashed out their bitcoins for real money. Until someone did the value plummetted and it went down further after reports came up of people's "wallets" getting stolen, etc.

It's the dot-com bubble all over again but in terms of virtual money all over again. Kinda like how Second-Life's monetary system went up in value and then dropped after the coke-high wore of.

Right now Bit-Coin is at a value worthy enough for investors.

Cool (0)

Anonymous Coward | more than 2 years ago | (#39796693)

Cool. Every other comment is whiney bullshit.

BC (0)

Anonymous Coward | more than 2 years ago | (#39796711)

As much as I like the idea of BitCoin and think it can be successful if enough people actually use it, but "investing" into it sounds like a horrible idea. Let it organically grow.

Backup & inefficiency (0)

Anonymous Coward | more than 2 years ago | (#39796719)

What's backing up the "value" of bitcoin?
Who needs a "currency" that's wastes energy (GPU mining)?

It all amounts to fraud.

I'm surprises it doesn't already happen (1)

asdf7890 (1518587) | more than 2 years ago | (#39796883)

I'm surprises it doesn't already happen with web based adverts. OK so even with modern JS engines you'll not get much mining done per minute per user, but if your ads are spread widely enough you could potentially make a bit on it.

The other option I've not heard happen (which is considerably more practical) is for a miner to be included in malware. Given malware tends to disable task manager and related things that could report the extra CPU use, and many users would not think to look anyway, this could pull in some cash for the botnet runner. Unlike the browser based option this could run native code on the CPUs (and GPUs where appropriate). To avoid detection a little more by not slowing down other CPU intensive tasks, just check to see if your process has less than (plucking a number from thin air) 80% CPU time over a few seconds and assume that means something else is trying to be CPU-busy and pause for a while.

Of course it could be that the malware authors have considered this and decided it simply isn't worth the time. If so then that does not bode well for other projects (like the one that has just been invested in) because if the crooks can't make enough money out of it to make their time worth spending then it can't exactly be an easy win.
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