Topic: Google & Co. Mining ?!?? - page 2. (Read 6630 times)

TAKEN FROM ANOTHER DISCUSSION ON THIS FORUM. NONE OF THE CONTENT IS MINE. BUT I LIKE IT

"The money comes from the effort of their mining and the value in the blocks they've mined. It's the same as when someone mine's gold -- the value comes from the effort of their mining and the rarity of gold. BitCoins don't need to be backed because they're scarce. You only need to back something that's not scarce. (That's why gold itself doesn't need to be backed.)" [Quoted]


My poo is scarce.  There is a limited supply of it produced over time.  Therefore my poo is a valuable currency that need not be backed by anything. 

Realistically, Bitcoins have value not because they are scarce, but because there is demand for them. 

This demand is created because Bitcoins are cool, and you can have fun buying things with them, and playing with all the Bitcoin-related Web charts and the open source software and the crypto.

You could fork Bitcoin right now, and have your own identical system, and the coins in it would be just as rare and difficult to produce as Bitcoins are.  They would also be worthless, unless you could make them cool, and make it possible for people to have fun doing things with them.

Bitcoins, like stocks, are a "psychological market."  When stock is issued, the company gets its money from the initial sale, and no matter what happens to the stock value, the company never has to give the money back.

You can't do anything with the company, unless you have control, so for the average stock owner having less than 51%, the stock trades in its own little world, supported only by the belief that its value bears some relationship to the value of the company whose name is printed on the financial statement.

Bitcoins are like that.  Should people ever become bored with Bitcoins, or not be able to do things with them they find satisfying, like thumb their nose at the government while buying Alpaca Socks, they will quickly become worthless.

No need to apologise ) But again I have to say that I am speaking of something else. I am not assuming BTC would become a treat either for governments at all.

Sorry, I lol'd at this.

In the good old USofA they outlawed drugs and that hasn't worked out very well. It'd be faster and cheaper to trash the block chain.

I am not assuming that at all. I am saying that there is no need for governments to go mining; they just need to outlaw BTC.

Beside this, I am speaking of something else...

You are assuming the Government would only get involved in BTC because of it's perceived value. My point is:

A Government could apply the compute resources at its disposal to corrupt the process because it wants to. All it would take is some congressman from one of the stupid states to appropriate a few billion $ to stamping out them bitcoins that's being used to buy drugs, kiddie porn and weapons for terrorists.

A bigger risk is a governmental entity deciding to step in. A small fraction of the compute horsepower they have on hand to crack cryptosystems could be used to subvert the block chain, effectively destroying all credibility. They also have the incentive to prevent others from using Bitcoins as a payment system, for example they can't tax it.
[/quote]

Government and any other big organization, will never go mining BTC.
BTC have NO value except for the speculative markets that have been created. The merchants that accept BTC as a form of payment, they do it for speculative purposes only. Cancel the speculative markets and BTC have no actual value. They would dye.

 Satoshi Nakamoto,  presenting the project, writes:


Abstract. A purely peer-to-peer version of electronic cash would allow online
payments to be sent directly from one party to another without going through a
financial institution. Digital signatures provide part of the solution, but the main
benefits are lost if a trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-to-peer network.



So BTC is a solution to a specific problem i.e. " .....a solution to the double-spending problem ....."

If you read my posts with ONLY this goal in mind, surely we will never understand each others. Ok, my wrong choice to post into this blog, probably. I might agree on that, or at least on what it appears to be.

In my post Bitcoin Paradigm, I stated that BTC is merely a tool that might be useful to implement the " Paradigm shift".

Obviously the Paradigm Shift to which I refer to in that post is much wider that a solution to double-spending problems that occurs in transactions. What I am suggesting is that the economy as it is today (taken in its widest meaning ) is obsolete and that we are all understanding this by noticing those that I have described as "anomalies " in the current system.
This is probably the main reason why so many people are investing so much intellectual's capital into BTC, I guess. Again, double-spending problem on transactions is just a specific anomaly of the whole system that is now being analyzed by many, thanks to BTC' s inventor. But this is only one of the many anomalies that are inherent in the present economic system.

Needless to say that it is the technology progress that allows all of us to see this specific anomaly and many others. With technology, we have reached a point where people can actually become Prime Actors in the economic system rather than being just passive. See Mr Google interview :

http://www.mckinseyquarterly.com/Googles_view_on_the_future_of_business_An_interview_with_CEO_Eric_Schmidt_2229


I am not suggesting that Mr Schmidt has in mind what I have in mind, but clearly he is drawing a pattern where the main focus is on people using the internet ( which is nothing new to Google ). Only this time there is a difference. They want you to let them know what you want. And I am not talking about what kind of app would be most useful or staff like this. They want to know from us what we would like to buy and possibly when we would by what we want. Google, in my opinion, has simply found another anomaly in the economic system. And this one has nothing to do with transactions at all.

A bigger risk is a governmental entity deciding to step in. A small fraction of the compute horsepower they have on hand to crack cryptosystems could be used to subvert the block chain, effectively destroying all credibility. They also have the incentive to prevent others from using Bitcoins as a payment system, for example they can't tax it.

On the other hand, someone wielding 51% of the compute power could control which blocks made it into the block chain, effectively blocking transaction unless a fee was paid to the appropriate party.

Estimates of the number of CPU cores owned by Google varies wildly.  ZDNet did an one back in 2007.  They reckoned that Google had the capacity for 654,400 processor cores (so maybe 300,000 actual CPUs).

That's in just one building.

The site in question has two such buildings.

And that's just one site out of many.

Now, how much of that is speculation, and how much of the capacity is actually filled I have absolutely no idea.  But to underestimte what Google is capable of is, I think, a dangerous thing to do.

I do not believe that enough useful GPUs exist in the world, in purchasable form, right now for any entity to take over the network.  It would require a door to door search and confiscation in at least one major western country.

If you wanted to do it with CPUs, it would take about 150,000 quad core Xeon E7450s.  But that is the top end CPU, and it certainly doesn't exist in that quantity worldwide.  Go down a tier, and you need about 300,000 of them.

For reference, google had about 150,000 CPUs back in 2007.  They've probably grown considerably, and might have 300,000 CPUs total by now.  But they will be a mix of CPUs from the last few years, probably none were ever top of the line at time of purchase.  If you operation is massively parallel, you don't need the fastest CPUs, you need the ones that give the best bang for the buck.  And google is using whatever CPUs they have to make money hand over fist already, so it seems unlikely that they would want to shut down their search operations to take on bitcoin in a big way.

If a player with enough mining capacity came online, he could undermine the chain integrity, enabling himself to double-spend his btc (otherwise known as inflation, or money printing), correct?

The only reason why I don't see anyone doing that is that the only motivation to do so would be to undermine btc, since you can't buy anything of substance with btc directly.

Not so much with offers like this - Now tell me BTC won't buy you something.
http://forum.bitcoin.org/index.php?topic=22870.0;topicseen
[/quote]

This is a clever one. Thanks for posting it !!

New World Economy !!: BASIC STUFF - PART THREE http://t.co/nNUiwTz Please Retweet this

I can see that most of the discussing is on technical issue whether it is possible for the big guys to mine and how much might cost them to do so. I am surprised only a few of the answers on this discussing are addressed to what the my initial provocation was all about !!

Let's try again : HOW COME THE BIG GUYS SEAMS TO HAVE NO INTEREST AT ALL IN BTC

It has been suggested in one of the answers that if they would find BTC economy interesting, rather than mining they would start accepting BTC as a new form of payment.

Again : why this is not happening ?? And please do not answer me that may be they are not aware of BTC yet.......

Thanks.

Wouldn't Big Company X need to do this covertly to avoid atrocious PR which would probably cost them far more than any gain?

Not so much with offers like this - Now tell me BTC won't buy you something.
http://forum.bitcoin.org/index.php?topic=22870.0;topicseen

Thanks for making that clear Joel.

How many transactions he can reverse depends on how much computing power he has. The more transactions he wishes to reverse, the more he needs. (And the software can be tweaked to make it as hard as we want to reverse larger numbers of transactions without any change to the protocol.)

Control of the block chain gives you no ability to create transactions. At the very worst, you can block transactions and undo transactions. Nothing stops the recipient from redoing an undone transaction so long as a conflicting transaction hasn't been placed by the original sender.

Overtaking 50% of the network right now is no small endeavor.  If you look at the "total computational speed" graph here

http://bitcoin.sipa.be/

you'll see that it's up to a collective 10 THash/s.  Assuming the GPU miners are the most efficient miners out there, the fastest a *single* device can hash at is 835 MHash/s (ATI 6990, according to https://en.bitcoin.it/wiki/Mining_Hardware_Comparison).  Let's say such a GPU costs $100 apiece (maybe you get a huge volume discount because you'll be buying so many).  Taking over half the network takes another 10 THash/s of additional hashing power, or just over 10,000 new GPUs.  Already, that's costing you $1,000,000 just to buy the equipment.  The actual price of the fast GPUs is closer to $500-$1000, so a more realistic total cost is $5M.

But the network's total hashing power is going up exponentially and has been for some time, increasing tenfold roughly every three months.  There's only ~100,000 Bitcoin users out there, so there's probably quite some time left before the exponential growth tapers off.

So while it might cost Big Company X only $1M-$5M today to overturn the network, it may well cost them $100M-$500M to do the same by the end of the year (not to mention that making and installing 1,000,000 new GPUs takes some time).

It's not unthinkable yet, but it soon will be.

So, by extension, it's practical for the bitcoin economy to continue as it is now, with no more coins being created or introduced than are currently in circulation?


I think there's a 'perceived value' thing to be addressed.  I think that people are unlikey to be drawn in if the price of a single coin is excessively high (in fiat terms).


Yes, I agree that it's unrelated to mining, but it's a very real possibilty if someone decides to throw enough power at it.

Unless I'm misunderstanding things (which is quite possible) then it seems to me that it's also a much much bigger issue than the time it takes to confirm a transaction.  Doesn't control of the block chain enable the controller to reverse every transaction (or at least a significant proprotion of them), and also create fraudulent transcations?

Well, I have started this discussion and I am happy to see that it is taken into consideration.

I fully agree with Missy's answers given in the discussion. Always remember that the big guys, not only have the hardware resources and the money to mine but also they have a lot of intellectual's added value of so many smart guys working for them. This means to me they are fully aware of BTC and they might even have taken it into consideration for a sort of brain storming section on the subject.

To me, BTC has a value only in the terms presented by its inventor. Quoting from the original document of Mr.Satoshi Nakamoto:

"Abstract. A purely peer-to-peer version of electronic cash would allow online
payments to be sent directly from one party to another without going through a
financial institution. Digital signatures provide part of the solution, but the main
benefits are lost if a trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-to-peer network."

Therefore BTC, is merely a way to avoid double spending transactions on Internet Commerce.

I would address you to read my post about a Paradigm Shift @ http://pointapp.blogspot.com/2011/06/comment-to-bitcoin-uncensored-blog.html

Than, let's continue the discussion.