Silk Road forums
Discussion => Off topic => Topic started by: surmer on April 17, 2013, 02:04 pm
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OK, I can't help but wonder how the arbiters of BTC--BitInstant, Mt Gox, and the myriad of BTC brokers--generate BTC from cash... Do brokers have a secret code that confirms that money is deposited? What's to keep me from running a script that creates coins in the same manner as Mt Gox. I'm completely ignorant about this celestial phenomena.
Also, it the manner in which BTC is protected, is that every miner and every wallet has a copy of the transaction history of BTC--a BTC Transcript, if you will, or Black Book. So, if we wanted to spoof the system, then all we needed would be a million or so computers, all running the BTC open source software. Then the system could be spoofed into thinking my million computers just transacted a million bitcoins. How much would that cost? One hundred million dollars? Now, for the conspiracy theorists, the banks can cause a run... It IS possible to rip off BTC if you have the resources...
Like every system in nature, it is not a question of if, but when, the system will see a transformation. I know a lot of this is too far-fetched for all your stoner minds, but I'll be patient and wait for intelligent responses.
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Whoa dude! Far out! Look at the colors on that question!!
Here's my stoner understanding below - feel free to correct my misinterpretations:
There are no arbiters - the beauty of bitcoin is that it relies on no central authority to manage the system. Mt. Gox doesn't generate bitcoins from cash. Mt. Gox is a broker; it moves bitcoins around, stores them, and charges a fee. It provides the connection between the bitcoin blockchain and individual real people and their bank accounts. The bitcoin blockchain is a virtual entity that perpetuates itself via 100% sharing of all activity among any CPU that happens to be interested. When Mt. Gox gets your order to buy bitcoins, it matches that with orders from someone else who wants to sell (I have no idea if Mt. Gox maintains a bitcoin inventory to help fill orders or not, and that doesn't affect this discussion). The price that you get is determined by how difficult it is to find a seller. If sellers are lined up trying to get rid of their coins, like this weekend, the price will go down and you will get more bitcoins per unit of money spent, and vice versa.
There's nothing to prevent you from doing EXACTLY what Mt. Gox does; you could do it and call yourself bitfloor or BTC-e, for instance. Like Mt. Gox, you would not be creating bitcoins, just transferring them from one wallet to another.
There is also nothing to stop you from buying powerful CPUs and begin mining on your own. As I understand it (and, as a stoner, I'm quite possibly confused), mining is the activity of adding and verifying transactions to the blockchain. You add your CPU to the distributed network that is busy calculating chains (verifying transactions by proving that the cryptographic signatures are correct and that no other transactions with that signature exist). Multiple CPUs working on the blockchain have to agree that a particular transaction was valid before it is permanently added to the chain (this is the 6 confirmations that you see being required for your transaction to clear) I believe that new coins (which are introduced at a predetermined rate?) are apportioned based on how much your CPU has contributed to the overall progress of the blockchain. I have no clue if Mt. Gox does any mining - I'm thinking that it's much easier and much more profitable to spend their CPU power skimming a few percent off of each transaction. I do know that specialized hardware is being introduced to increase the efficiency of mining, so my little pentium whatever can't compete. Mining is the incentive that is designed into the system to have CPU power dedicated to working on the blockchain.
Satoshi has a very good explanation for why it is not practical for an attacker to spoof the system and modify chains backwards (which is the only way to game the system). His summary of bitcoin is here
http://bitcoin.org/bitcoin.pdf
It's surprisingly short and readable, and I recommend it for anyone interested in an overview straight from the source.
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SRSLY?
Math and computers weren't your born with talents were they OP.
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SRSLY?
Math and computers weren't your born with talents were they OP.
Maths and Hal can go fuck themselves.... :P
Thanks Catharidin!
Man, this thread is a testament to the high quality drugs on the Road. I didn't even feel like googling it, so I just created this thread instead.
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Man, this thread is a testament to the high quality drugs on the Road. I didn't even feel like googling it, so I just created this thread instead.
Hah! +1 for creatively fucking off...
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You guys are a hoot.
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You guys are hillarious
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;D
Stay high, my friends.
I don't often do heroin, but when I do, I buy it from the Road.