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Original author: 
Cyrus Farivar

Aurich Lawson

This is the first in a two-part series exploring Butterfly Labs and its lineup of dedicated Bitcoin-mining hardware. In part one, we look at the company and the experiences customers have had with it. In part two, to be published on June 29, we share our experiences running a Bitcoin miner for a couple weeks. Spoiler alert: we made money.

The more I dig into Bitcoin, the stranger it gets. There’s gray-market online gambling and Russian-operated futures markets—to say nothing of the virtual currency’s wild ride over the last several months. It’s full of characters with names like “artforz” and “Tycho,” supposedly two of the largest Bitcoin holders out there. Of course, like most things Bitcoin, it’s nearly impossible to know for sure.

While reporting on a Bitcoin-based gambling story earlier this year, I interviewed Bryan Micon, who works with a Bitcoin-based poker site called Seals With Clubs. (To continue the lack of information, Micon won’t say who owns the site.) Micon has taken it upon himself to investigate what he believes are Bitcoin-related scams—such as the ill-fated Bitcoin Savings and Trust online bank—and he makes public pronouncements about them.

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Original author: 
Nate Anderson


Bitcoin mining takes a lot of computing power—so naturally someone created a piece of malware to mine on other people's computers.

Kaspersky Lab

Mark Gimein is something of a Bitcoin skeptic, but in addition to his concerns about Bitcoin not being a "real currency," he's now charging that it has created "a real-world environmental disaster."

Writing in Bloomberg News, Gimein notes that mining Bitcoins—performing the computationally expensive calculations needed to define new Bitcoins—uses power. A lot of power. (Read our 2011 Bitcoin primer for more details.) He writes:

About 982 megawatt hours a day, to be exact. That’s enough to power roughly 31,000 US homes, or about half a Large Hadron Collider. If the dreams of Bitcoin proponents are realized, and the currency is adopted for widespread commerce, the power demands of bitcoin mines would rise dramatically.

If that makes you think of the vast efforts devoted to the mining of precious metals in the centuries of gold- and silver-based economies, it should. One of the strangest aspects of the Bitcoin frenzy is that the Bitcoin economy replicates some of the most archaic features of the gold standard. Real-world mining of precious metals for currency was a resource-hungry and value-destroying process. Bitcoin mining is too.

Gimein draws on the stats provided by Bitcoin-focused site Blockchain.info. The numbers fluctuate a bit with each day of calculations being tracked. According to Blockchain's stats this weekend, the last 24 hours of worldwide mining activity burned through 928.24 megawatt hours of power while miners calculated 59,502.6 gigahashes per second. Total power bill: $139,236.07.

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Original author: 
Adrianne Jeffries

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Businessweek has a thoughtful and well-written defense of Bitcoin, the open source virtual currency that approximates cash on the internet. Writer and programmer Paul Ford points out that the Bitcoin experiment, so far, is working: it's actually being exchanged as money, and the underlying technology has proved "to be impeccable and completely functional." He makes a persuasive point that Bitcoin is "no more arbitrary than derivatives or credit default swaps." At the time of this writing, a single Bitcoin is being traded for $91.67 USD (although The Economist, at least, expects the bubble will pop soon).

Unfortunately, Ford also repeats the unsubstantiated claim that Bitcoin's meteoric price rise was sparked by fears over the Cyprus...

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Bitcoins (Casascius)

Bitcoin, a virtual currency "mined" from computer transactions, could one day challenge the hegemony of nation-issued money and create a truly viable decentralized, anonymous currency. Along the way, though, supporters must deal with the challenges of building a new exchange system — and the inevitable winners and losers that creates.

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