read:2 cents:

Great.

We don't want you to trust us. That's why we have a Bitcoin forward feature.

As each sale is processed by MyBitcoin, we bounce the coins to your wallet instantly. The wallet is stored locally on your computer. You literally hold the crypto keys to your own money. (Be sure to back that file up. It's called "wallet.dat".)

Great. Our service is 100% free. I know this seems 'odd'. We make our money in other areas of the Bitcoin economy currently.

We do plan on adding some fancy (optional) services that we will charge for in the future. Such as integration support, subscription management software, etc.

why is it peer to peer?

If you put a mirror at bitcoin.info and bitcoin.net
and run them on seperate servers in different countries
you could manage transactions using a website
with the same functionality and same security.

You don't need peer to peer to store the account
information in each users accounts.

It's like using a courier to go from person A to person B
to tell them a phone number.

Sure, that could happen in theory. If everyone were to sell their coins at the same time they could crash the price down. Fortunately, there are enough people transacting with Bitcoins now that we've reached price stability. :)

The US dollar is not immune to this problem either. If China were to sell all of their treasury bonds they would crash the US's economy overnight.

People would only flee Bitcoin for something better, or if there was a fundamental problem with the design of the currency. So far (2 years) it has been rock solid. :)

I don't see a flee happening. In fact, we are seeing people flee other payment systems to Bitcoin. Mainly because Bitcoins can't be frozen and have no chargebacks.

How so? Do you mean that the development of the software is centralized? It isn't. It's an open source project on GIT and Source Forge.

It is true that bitcoin.org could be shut down, but not unlike common file-sharing apps, the currency will continue to function. :)

It's truly revolutionary.

I didn't answer your questions regarding a time-sensitive cryptography system because it is outside of the scope of this thread.

where exactly do I find this wallet.dat file?

Also, I read on one of the BitCoin sites, that in all likelihood, the US government (or Canadian government, or [you fill in the blanks]) will simply make running the BitCoin software, or accepting BitCoin on your website(s) etc. illegal, when and if BitCoin starts to gain enough popularity for the government(s) to lose taxation revenue in quantities for them to be concerned over - ie: when BitCoin is used by more than a few hundred 'hobbyist' users ...

Could you give me your take on this?

Why are file-sharing applications peer to peer? So they can't be shut down. It also makes the network more robust.

You can't just take down one or two websites and take Bitcoin offline. Bitcoin is a software application that runs on hundreds of thousands of PCs (like yours) - all at once.

You'd have to fly all over the world and knock out all of them to stop Bitcoin from running. That, of course, is impossible. :)

That's the old way of thinking. :)

Bitcoin runs on a few hundred thousands of PCs around the globe. Each PC is a "mirror". The ledger of transactions is mirrored across all of the nodes like a bit torrent movie is.

The system you are comparing this to is obsolete. Centralizing currency and power in one spot leads to corruption.

Let's say I ran the system you are proposing. What is stopping me from just creating money and putting it in my account? Nothing. Bitcoin's P2P model and cryptographic checking stops this.

Nope. Each Bitcoin node (a computer running the Bitcoin software) has it's own wallet file. You literally hold the coins on your own computer. There isn't a website that holds the coins for you. (With the small exception of MyBitcoin. It can hold your coins temporarily until you forward them off to some other place. Usually this is to the client running on your PC.)

Lets say I have no intention of 'mining' coins .... and I am not running the CPU-intensive SETI software, where do I keep my coins then??

Also ... what would stop a cyber criminal from "stealing" your wallet.dat file?? I mean they can steal banking info off your computer (which is supposed to be "secure" ...), Why can they not steal your wallet.dat file??

So? Whoever owns BITCOIN.ORG can substitute any software he wants at any time

If you allowed people to TOP UP THEIR ACCOUNT with cash it's just another payment provider.

Oldest software trick in the book, DISABLE the key features and people will buy an upgrade, done to death by Microsoft.

Top marks for trying to get a reliable eCommerce solution, but it's just crippleware disguised as something new.

What's to stop people from using botnets to generate bitcoins?

Yes it's SUPER SECURE!

But taking down 3 independant nodes is almost as hard as taking down 100,000

If some agency were to specifically target BITCOIN nodes they could just take down the BITCOIN to cash processors instead.

So you solved 1/3 of the security problem, and still have no way to add funds!

It depends on the version of Windows/Linux/OSX you are running. After installing the Bitcoin software you can just use your computer's search function to find the file. :)

To get up and running with Bitcoin (assuming you are processing for a paysite or something) you'll want a MyBitcoin (for the web-based processing piece) and you'll likely want the Bitcoin software from bitcoin.org too. (If you want to store your money on your own computer.) If you want me to elaborate and explain a simple setup for a paysite I can. :)

After you have coins (from sales) you can either hold the coins and buy something with them (it's currency after all), or convert them back into dollars.

Sure. The following is without legal advice.

Currently, Bitcoins are not regulated by any government. Some governments don't even have laws that make you liable for taxes. I expect this to change quickly. In the US there is a vague law about 'stored money items' that appears to make a US Citizen liable for "Bitcoin taxes".

Governments of the world can make Bitcoin illegal. Sure. But they can't block or stop it. Much in the same way that P2P file-sharing (bit torrent and the like) still work even though they are illegal.

You could, of course, just move your website to a host in another country and keep accepting Bitcoin there is nothing they can do about it.

They can't even tell you are receiving the coins. Bitcoin transaction are much like cash transactions in the real world. They are anonymous.

Of course, I don't advocate breaking the laws in your country. But if you did, there is nothing they can do about it. Again I point to the copyright/file-sharing battle.

Also, make no mistake: Bitcoin is no longer a hobbyist system with a few hundred users anymore. Over $100,000 USD's worth of Bitcoins change hands every day. There are $4.4 Million USD's worth of value in the system at any given time. I'd hardly call that a hobby. :)

You don't have to mine. It's purely optional.

If your computer is holding your wallet.dat and it is hacked, you now have a duplicate wallet file "in the wild". It's like me making a copy of your credit card. If you catch the hack fast enough you can quickly spend all of your coins to another computer. This would make the other copy of your wallet.dat obsolete. :)

Get a copy from a trusted friend then. Or a copy from source forge. Or a copy from GIT.

The software is open source. You can audit every line of it before you install it if you want. :)

Not really. It's a global stateless floating currency, due to the fact that it is self-minting.


I have no idea what you are talking about. Bitcoin's code is free.

Again, I have no idea what you are talking about. Please elaborate. I'm intrigued. :)

Nothing. :)

This will sound strange at first but a botnet actually strengthens the network. I'm serious.

A "botnet miner" would initially cause a little bit of inflation until the network adjusted the mining difficulty.

The miner would most likely sell the coins for dollars. This would increase the market capitalization of Bitcoin. ("More money in the system").

The additional crypto operations available to the network would strengthen the block chain (the ledger) from forgery or attack from other botnets.

This is all in the Bitcoin whitepaper (PDF), as written by Satoshi Nakomoto. It's available on bitcoin.org

So what you are telling me in effect, is that provided I monitor my computer 24 hours a day, and catch the hack immediately, and immediately send (SPEND?!?!?!?) all my coins to another computer (in effect send all my money to another user/entity), before the hacker is able to spend them, then the system is fairly secure? So it is now a race who - me or the hacker - is able to spend the funds quicker?!? :(

What am I missing here?!?

I, for one, like being able to sleep in really late, and start my work day at 10am. This is why I chose to be self-employed. So you're saying that to keep my funds safe from being hacked, I should fore-go the sleep I enjoy so much, so that I can quickly send all my funds to another user - if I get hacked?!? :Oh crap

And for the record, no I am not being facetious here, I am really trying to understand how this works, and if it is something that I can integrate into my business.

the peer to peer may be a good sales point.

but coin mining is a poor substitute for DEPOSITS

Ok, one thing I'm trying to understand... the math problem that CPUs must solve is solely to decide (in a fair-ish way) who receives their "free" coins as more virtual currency gets released? It's not actually doing any useful work that a third party is paying real-world $ for?

Very interesting if this is the case, since it would initially have zero tangible value, this would only grow due to speculators exchanging it with a real-world currency... seems like a chicken and egg situation, but I guess if there's $4m worth floating around it must have worked. :thumbsup

Does this statement come from experience? If so, can you please halt all Bit Torrent traffic. I'm sure you'd win a metal or something if you could do that. lol.

I didn't say the currency exchangers were immune to a large scale DDoS. However, there are already tons of them all over the world. Some even do exchanges 'in person' (aka "meatspace"). How do you stop the "in person" Bitcoin exchangers? Beat them all up?

If, in bizzaro-land, all of the exchangers were DDoS'd or beaten up and in hospital you could still mine coins into existence.

Your wallet.dat is just like your real wallet. Do you carry all of your net worth in your back pocket? No, of course you don't. :)

There are many solutions here. You can split your coins into many wallet.dat files and keep them on thumb drives. You can even print (yes, print) your coins to paper and put the pages in a safe deposit box. If you happen to trust me (I'm not saying that you should), you could even keep some of your Bitcoins over at MyBitcoin.com.

In my previous statement I was just illustrating a unique way to make a copied wallet.dat file useless to an attacker. You can just spend them to another computer you control. Ie: your desktop to your laptop. :)

We can talk about "what ifs" forever. :) Really.

"What if someone hacks your website and sends your joins to their processor?" etc etc

Hey, no problem. :) I'm not easily offended or deterred. Ask me more questions! :)

I'll hack it if you want! I am CyberChrist might be a fun afternoon.

so everyone mining their few 1000 coins a year is wasting their time since any large botnets could do 1,000,000 times that making their small computer made kitties worthless.

A PDF document doesn't mean anything, last time I'm telling you coin mining is B/S.

Okay, tell me how the USD would work without a mint then. :)

Not really. The nodes are essentially trying to crack the cryptographic hash of the next block in the blockchain. The node which wins is allowed (by all of the other nodes) to pay itself 50 Bitcoins. If the node didn't actually solve the puzzle, the other nodes ignore its claim to the block.

It's completely decentralized. :) Decentralized minting, spending, double-spend checking, and clock synchronization.

Yup. :) I hope that thumbs up isn't for me. I didn't invent it. I'm just trying to adapt it to include the adult industry.

Please hack it then. Many have tried already. It's not like Bitcoin was invented by a cryptographer or anything.. oh wait.. it was! ;)

I am an Internet Service Provider, and in my line of work, we deal with hacks and exploits all day long ...

The operative term is not "what if", but rather "when" ...

hacks, exploits, and roots are up a staggering 40% over this time last year ...

We no longer live in a cyber "what if" world ... cyber crime profits are snowballing, and attracting more and more people to the "business" every day, as they see how profitable it really is, with limited effort and even more limited risks ....

I am just playing Devil's Advocate to how secure this system really is ... before I go investing my time into integrating it into my business model, only to find out later that it sounded much better in theory than in practicality ...

thank you very much for your prompt answers!

The Bitcoin client is telling me "You should generate a new address every time you accept a payment." How am I supposed to integrate THAT into my website??? :Oh crap

I think you may be onto something here - but holy shit man - if its too complicated, only security extremists/alarmists will ever use it!!

Well, you are better prepared than most people are then. :)

Sure. I'm not saying that you should run Bitcoin, keep all of your money in a single wallet file and never back it up or patch your system. I was merely remarking on a situation of "what ifs" that could spiral out of control and get rather outrageous. It seems to happen when people are talking about foreign concepts. :)

Most businesses have operating capital (the money you use to service your debts), and other assets that are somewhat frozen. (The chair you are sitting on, the computers your business purchased, etc.)

The same can be done with Bitcoin. The wallet on your local machine could contain your operating Bitcoin capital. You can "freeze" 1/2 or 2/3rds of it onto a encrypted thumbdrive, or print it to paper and store it in a safe.

Optionally, you can just convert them into dollars again and hold the dollars if you are more comfortable with that. No one is forcing you to hold onto the Bitcoins. You can easily find someone who will eagerly buy them from you. :)

I agree. I see fraud increasing too. I am involved in other online businesses. I'd argue that credit cards are far more insecure than Bitcoin is.

Sure. I understand. :) No problem.

These are problems that were solved with MyBitcoin.com. That's why we built it. :)

Go to chainedgirls.com and try to buy one of the sets. That's a working example.

ahh I put up with people who dodge questions all day every day, I don't need it here.

I'm confused. You didn't even pose a question for me to 'dodge'.

So are you telling me that his payment buttons dynamically create a new Bitcoin address every time they are used?? - Because I don't see that in the HTML code when I created a test button.

How do you print paper money from the wallet.dat file? Just open it up in notepad?

You're [EDITED]

A botnet is not going to STRENGTHEN the system.

It's like me going to my bank and hacking $100,000,000 into my account and the bank paying out all the other clients 1/2 of what they used to have because they can only cover half the original assets the bank had.

Don't believe me I'm sure I can buy 10,000,000 PCs CPU time for a week and try it.

EDIT: anyway G/L, I won't start a flame war since you have to be diplomatic here.. and now I know a simple number crunching problem for my encyption time lock, brute force cracking encryptions.. too easy!

oh wait ofcourse I already thought of that.... I need a number crunching problem that can't be attacked in parallel. Might be a solution to your botnet problem too!

Yup, it does all of that. It also guides the customer through the process. It takes the customer back to your site when it is finished and you'll receive a back-end HTTP POST from the mybitcoin SCI system.

Check out the SCI toolkit. It's a set of PHP scripts to integrate your site with mybitcoin's processor. (The download link is at the bottom of mybitcoin.com's login screen.) It's not unlike PayPal's IPN or Liberty Reserve's SCI.

You can optionally forward each payment as it happens to your local Bitcoin software client too. (As discussed before). No need to trust mybitcoin.com with your money.

You can get a few Bitcoins to test everything with from this site: freebitcoins.appspot.com

That's the "Bitcoin Faucet". That site will give away 0.05 Bitcoins for testing/playing around with for free.

Since you are in Canada, you might also find this interesting: bitcoin2cc.com

It's a site that will convert your Bitcoins into a pre-loaded virtual VISA card in CAD or USD.

No. There are tools to convert the wallet.dat into a printable format.

You can convert it, print it, stuff the paper into an envelope and put it in your safe deposit box.

Years later, you can OCR it (with a scanner) and get your coins back again. :)

P.S. Bitcoin is being developed for the mobile market too. Soon you'll be able to move them around from your mobile phone. The Nokia N900 can already run Bitcoin natively. And yes, the handset participates in the P2P network.

A google employee recently ported Bitcoin to Java. So it's only a matter of time until Bitcoin will run on the BlackBerry. An iPhone port is also in the works.

Either read the whitepaper or don't read it. It's your choice. I wish you all the best. No hard feelings. :)

U need a number crunching problem that can't be attacked in parallel. Might be a solution to your botnet problem!

https://secure.wikimedia.org/wikipedia/en/wiki/Bitcoin
http://www.bitcoin.org/sites/default/files/bitcoin.pdf

Interesting concept indeed!! I will have my on-staff security guru look through it most definitely!

So now I have BitCoin added to this week's TO-DO list, as well as buying SILVER ...

My investment tip for the day, for anybody reading this, is RIGHT NOW is the time to jump on the silver bandwagon!! Silver and gold are both poised to jump significantly in value in as soon as TWO WEEKS -- and silver (currently just under $38. an ounce) is set to go as high as $150 (by conservative forecast models) or even $200 before the end of this year!!

Cool. I'm no stranger to gold/silver myself. :)

Any more questions? Anyone?

Both Bitcoin and all my torrents seem to run fine, when are you going to put them down? :1orglaugh


You can exchange any currency to bitcoins. Just like LibertyReserve, you cant exchange directly on their website, you have to go to a middleman.