There is about $200M USD in the bitcoin system total right now.

A friend of mine uses bitcoin. He apparently missed out on a few thousand dollars worth by selling when they were steady at around .6 for a few months... and is rage-facing now that they're at 4-5.

Because it's open source, bugs are likely to be found and fixed as you say. That's good, but is it good enough? What if there is a fundamental flaw which results in the whole system being compromised such that no transactions can be trusted? Such a flaw is extremely unlikely, but it would also be extremely bad. Meanwhile, in the conventional currency "security" of that kind of basically provided by anti-counterfeit measures on printed currency, and various security systems implemented by banks for electronic currency. It certainly isn't perfect. It fact, in the anti-counterfeit measures on US currency are very weak (compared to Australian currency, which has very strong anti-counterfeit technology). But the fact is that conventional currency is more tested, better understood, and perhaps more able to evolve to new security systems (I don't really really know what mechanisms are in place for bitcoins to implement new security checks).

But all that's really beside the point. You're right that stability is the bigger concern. You originally called me stupid for saying that I trusted the reserve bank (of Australia) more than I trust the bincoin system. Well the reserve bank basically has nothing to do with the kinds of security that we've been talking about. The job of the reserve bank is to keep the currency stable. So when I say that I trust the reserve bank, and that I'm not willing to transfer my wealth into bitcoins, what I'm saying is that I think my money is safer in conventional currency than in bitcoins. I'm not necessarily talking about it being stole by some security loophole; but rather talking about loss of value in general.

I'm not saying that I think bincoin is a doomed or flawed system. I'm not saying that I'll never use it or that I'll never trust it. I'm just saying that I don't trust it yet – which surely isn't surprising, since I only learn of its existence recently; and I've been using conventional currency my entire life.

Unless the exploit isn't discovered for quite a while. Then, quite a bit may be depending on that fraudulent transaction.

What's to stop an update from invalidating a random transaction that the development community just doesn't like?

A CPU just isn't fast enough to generate the hash before someone with a bunch of GPUs does it.

It's not that it's bad for it, but it's that it won't actually get me anything unless I leave it running all day, every day; IF THEN. I'm sure maxing out all 6 cores 24/7 will slowly degrade the processor and hasten its inevitable failure. It's just not worth it.

Of course not. But the first two pages of retarded crap are things you can find out have already been solved by looking at the wikipedia article on Bitcoin -- and likely were solved before the first line of code was ever written.

Obviously there are still issues, and will be issues. That's why I think it's great that this is open source. Anyone can fix anything, and anyone can review the fixes.

If a non-expert can pull it out of their ass as an issue, don't you think those are the things the designers discussed before building it? At least in the case of Bitcoin, I'd feel confident guessing they were.

So instead of wasting time pondering about problems that have already been solved, go and contribute already!

I thought Liberty Reserve got shut down and raided by the fed ... in 2007?

And what if the economy collapses tomorrow?

Actually I'd venture that if the system was so compromised -- a LOT of people -- people with money in the system, and with talent would rack their brains to come up with a good compromising fix which allowed most users to remain unharmed by the process -- and they'd probably get one -- or a something close -- or find a way to build a new system even better that takes care of the disadvantages, and allows the importing of old backed up, pre-fubar'd data...

That's actually what I based the above answer on. If you look in that thread you posted people were saying to not trade at all until the patch came out. I assume some other history may have been rolled back as well? Also for the few people who rendered tangible currency or other services for the exploited bit coins... well, they got ripped. So again, the exploit caused some damage, but the community ended up with a fix that was agreeable for most people.

Agreed. Have you seen "Catch me if you can"? It's worth watching, but basically about how weak our counterfeiting measures USED to be. At any rate I think that's the basic model of things with closed source: Ignore problems until someone starts exploiting it, and then rush to make a patch. Whereas with open source, some nerd in college will find a new way to break things, decides he wants to wear a white hat that day and fix it. Heck even in closed source (I work for an extension of Microsoft after all) we find bugs. But if no one is willing to pay for them to be fixed... they sit in a database somewhere.

Also if you've been following recent events, I think they just broke debit cards again -- I think the basic gist is something like you copy the card with a slight modification and now knowing the pin # isn't necessary (that is a guess, I didn't look deeply into the technical side of it, but that's what I think they're doing.) Instead of fixing the issue, the banks are trying to sue the university students who presented it to them and were attempting to help them fix it... Fun times! >.<

Sigh, apologies, don't take it so harshly, I mostly meant it in jest. ;-) -- Also I wasn't calling you stupid for trusting the stability or security of the reserve bank of one over the other, but more the people -- I could never trust a banker or broker after what they're putting the world economy through right now. No -- not the teller at the counter, but the people actually running the banks. I need to stop being so lazy and move my money to a credit union!

Is it? I didn't know that. I thought their job was to make a profit -- like all corporations... If their job is to stabalize the national fiat currency, they're failing in the US and we should fire them and hire a new bank!

Right, you're worried about stability. Will I get back $.40 for every $1 I put in, or will I get back $1 for every .40 I put in? The problem is, we're still thinking about them as a currency to exchange with USD/AUD/etc, and not one to just buy/sell with and forget about other currencies. (Just think! No sales tax!) I mean if you go to Japan, you buy some yen, and you spend it. You don't (usually) worry about converting it back. I think Bitcoin has future potential to be the Internet's currency (if we embrace it.)

And fyi, that stability risk is always going to be there for any currency you trade in -- even ones backed in gold (because of inflation/deflation) -- Over time as it becomes more accepted and widely used (if it does, remember, Bitcoin is an experiment!), that will be more and more negated. But even the USD is declining in value now, that $1 cheese burger at mc donalds might still be $1, but it has less cheese burger in it, I assure you... -- As I posted earlier though, some people make a living trading currencies -- like on the ForEx market.

Then I think we're on the same page.

How do they decide to like or dislike a transaction Dustin? There are no names, just public keys. There are no records of what the transaction was in exchange for... On top of that, why would they compromise the legitimacy of their own system; don't you think that would cause people to "jump the boat" rather quickly, so to speak, lowering the value of their own Bitcoins?

From what I've been reading, it sounds like even then you will get nothing. It sounds like GPU mining is where it's at.

Nothing ... until someone notices. Then the dev team gets "fired" and new updates to the client will come from somewhere else. At which point their change will be reverted and the transaction will be valid again.

They've been planning to remove that option from the GUI for awhile. Yes, it is doing something, but as others pointed out a CPU just doesn't have the power necessary to succeed in generating a block any time soon (unless you're insanely lucky). You could try downloading a CPU miner and joining a Mining Pool. This tool will tell you how many BTC you are likely to generate (through a pool).

You were thinking of the wrong thing. Liberty Reserve.

Apparently you can also use Dwolla to fund a Mt. Gox account. But I haven't personally used it, or know of its reputation (TF might want to check there U.S. only).

EDIT:

The Bitcoin Client only uses CPU, and as I said that feature is slated to be removed. You need a dedicated GPU mining client, like this fancy GUI interface.

It is unthinkable that some hacker replaces millions of Windows instances with his own version

He would only be able to trade with his own modified software, since other clients would not validate his transactions, essentially creating a miniature bitcoin network inside the network.

It would be very hard to actually single someone out. There is as far as I know no way to find out what physical person is the recipient of a specific transaction.

It's also a pretty unlikely scenario, and one that could happen with regular currencies as well (except, unlike trade embargos, everyone who actually use the currency would have to agree to it)

Math check :
2400/6 = 400
6/2400 = .0025

Not sure what that proves though.