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Satoshi Nakamoto

Satoshi’s node-to-power ratio

The utility of the exchanges made possible by Bitcoin will far exceed the cost of electricity used.

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The following content was written by satoshi on August 07, 2010, 05:46:09 PM in the thread Bitcoin minting is thermodynamically perverse. All content is owned by the author of the bitcointalk.org post. (original)


It’s the same situation as gold and gold mining.  The marginal cost of gold mining tends to stay near the price of gold.  Gold mining is a waste, but that waste is far less than the utility of having gold available as a medium of exchange.

I think the case will be the same for Bitcoin.  The utility of the exchanges made possible by Bitcoin will far exceed the cost of electricity used.  Therefore, not having Bitcoin would be the net waste.

As an overall point, I also do not agree with the idea that the very high computational burden of coin generation is in fact a necessity of the current system. As I understand it, currency creation is fundamentally metered by TIME – and if that is the fundamental controlling variable, what is the need for everyone to “roll as many dice as posible” within that given time period? The “chain of proof” for coin ownership and transactions doesn’t depend on the method for spawning coins.
Each node’s influence on the network is proportional to its CPU power.  The only way to show the network how much CPU power you have is to actually use it.

If there’s something else each person has a finite amount of that we could count for one-person-one-vote, I can’t think of it.  IP addresses… much easier to get lots of them than CPUs.

I suppose it might be possible to measure CPU power at certain times.  For instance, if the CPU power challenge was only run for an average of 1 minute every 10 minutes.  You could still prove your total power at given times without running it all the time.  I’m not sure how that could be implemented though.  There’s no way for a node that wasn’t present at the time to know that a past chain was actually generated in a duty cycle with 9 minute breaks, not back to back.

Proof-of-work has the nice property that it can be relayed through untrusted middlemen.  We don’t have to worry about a chain of custody of communication.  It doesn’t matter who tells you a longest chain, the proof-of-work speaks for itself.

The following content was written by gridecon on August 07, 2010, 10:43:17 PM in the thread Bitcoin minting is thermodynamically perverse. All content is owned by the author of the bitcointalk.org post. (original)


It’s the same situation as gold and gold mining.  The marginal cost of gold mining tends to stay near the price of gold.  Gold mining is a waste, but that waste is far less than the utility of having gold available as a medium of exchange. I think the case will be the same for Bitcoin.  The utility of the exchanges made possible by Bitcoin will far exceed the cost of electricity used.  Therefore, not having Bitcoin would be the net waste.
[…]
Proof-of-work has the nice property that it can be relayed through untrusted middlemen.  We don’t have to worry about a chain of custody of communication.  It doesn’t matter who tells you a longest chain, the proof-of-work speaks for itself.

Thanks very much for your reply. I agree with your analysis, and this thread has actually changed my mind as to my initial criticism. After more careful study of the design of the Bitcoin network and trying to understand the exact manner in which Bitcoin attempts to create value from the computational work invested, I am now inclined to think that bitcoin is in fact high EFFICIENT rather than inefficient. My thinking now is that bitcoin does not, in fact “waste” computational work at all – instead it works hard to deliver the most value possible from that computational work. Something like a governnment issued fiat currency may not have any obvious energy burden beyond its printing – but in fact, maintaining the value of a fiat currency requires a substantial investment in maintaining police enforcement, a legal system, and national defense. In comparison to the energy cost of hiring police officers to enforce economic honesty, the energy costs of investing cpu cycles in guaranteeing that honesty mathematically seem very small!

The following content was written by joechip on August 09, 2010, 02:23:15 PM in the thread Bitcoin minting is thermodynamically perverse. All content is owned by the author of the bitcointalk.org post. (original)


It’s the same situation as gold and gold mining.  The marginal cost of gold mining tends to stay near the price of gold.  Gold mining is a waste, but that waste is far less than the utility of having gold available as a medium of exchange.

I think the case will be the same for Bitcoin.  The utility of the exchanges made possible by Bitcoin will far exceed the cost of electricity used.  Therefore, not having Bitcoin would be the net waste.

I agree with nearly everything you said, but I disagree, fundamentally, with the bolded.  Gold mining is not a waste of energy.  It is the opposite of waste, it is the measure of value people place in the ‘utility of having gold as a medium of exchange’ or a store of wealth, jewelry around their body parts or connectors on their home theater system.  If there was no demand for gold, the price would be zero.  Hence it is not a ‘waste,’ by definition.

I object strenuously to this idea, promulgated by the Monetarists, that the production of money is wasted capital which could be spent on other wealth-building projects.  It’s a short-sighted argument which does not fully encompass the value we place in our money.

It’s semantics, yes, but the negative connotations associated with the word “waste” is a tool of the money masters designed to confuse us and elevate their bankrupt system.

Ta,

The following content was written by MoonShadow on August 09, 2010, 07:12:09 PM in the thread Bitcoin minting is thermodynamically perverse. All content is owned by the author of the bitcointalk.org post. (original)


The power used is not wasteful.  It is simply what the owner is willing to commit to the project.  Even so, it may be used even as “waste heat”.  I am an electritian by trade, and years ago I had the following idea form, while installing a ‘heat trace’ network on insulated sprinkler lines inside an open air parking garage.

The ‘heat trace’ is a fairly expensive cable that has a continuous resistive core to produce low intensity electric heat along the length of the pipe that it’s taped onto.  Insulation is then wrapped around this assembly.  The best, and most efficient, systems have a temp reactive core; so that the closer to the freezing point that the cable itself becomes at any given length, the lower the resistance across the core becomes, resulting in an increase in heat output along the colder and less well insulated sections. 

At the time, I was playing with an early form of distributed computing called “Condor”, which allowed single processes to be exported to other computers upon a network and their disk I/O shipped back across the network to a master server without the process being able to tell the difference.  I thought then that a small “computer on a chip” wired upon a flat network cable would be able to effectively perform the same functions of keeping the pipes above freezing with local temp sensitivity while also crunching numbers in exactly the same way that bitcoin requires.  Such an idea would require a network that permited quite a bit of power in order to not need an unacceptable number of power points along the pipe, but imagine the usefulness of such a system for companies that have such needs in very high (or very low) latitudes.

What if such a system were retrofitted onto the Alaskan Oil Pipeline, for example, one mile at a time?

The following content was written by satoshi on August 09, 2010, 09:28:39 PM in the thread Bitcoin minting is thermodynamically perverse. All content is owned by the author of the bitcointalk.org post. (original)


The heat from your computer is not wasted if you need to heat your home.  If you’re using electric heat where you live, then your computer’s heat isn’t a waste.  It’s equal cost if you generate the heat with your computer.

If you have other cheaper heating than electric, then the waste is only the difference in cost.

If it’s summer and you’re using A/C, then it’s twice.

Bitcoin generation should end up where it’s cheapest.  Maybe that will be in cold climates where there’s electric heat, where it would be essentially free.
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Satoshi Nakamoto

Has someone made a “buy with bitcoins” button?

I mean an image. You know a nice one that people can put on their checkout webpages.

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The following content was written by mtgox on July 21, 2010, 08:48:44 PM in the thread Has someone made a “buy with bitcoins” button?. All content is owned by the author of the bitcointalk.org post. (original)


I mean an image. You know a nice one that people can put on their checkout webpages.

The following content was written by jgarzik on July 21, 2010, 09:01:11 PM in the thread Has someone made a “buy with bitcoins” button?. All content is owned by the author of the bitcointalk.org post. (original)


More than just an image…

Even though the bitcoin network itself handles fundamental transaction processing, web shopping carts will need additional amounts of payment processing to match purchases to incoming payments, be notified when a payment is processed (currently bitcoin purchase can take multiple hours to be confirmed), though order fulfillment and completion.

Even a simple “donate” button will require some sort of payment processing gadgetry a la Paypal’s web button engine, if you want people to provide names and/or messages along with their donation.

It’s tempting to code up a button engine myself, actually…

The following content was written by mtgox on July 21, 2010, 09:14:07 PM in the thread Has someone made a “buy with bitcoins” button?. All content is owned by the author of the bitcointalk.org post. (original)


Yeah I know. I’m 90% done with the code part of it. Just seeing if someone had already made a button image before breaking out photoshop.

So wait to code yours since hopefully you can just use mine 🙂
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Satoshi Nakamoto

On bitcoin generation, and bitcoin organizations

Bitcoin is a currency, literally, in its infancy. The concept is, as far as I know, the first of its kind.

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The following content was written by jgarzik on February 20, 2011, 06:44:53 AM in the thread Pros and cons of using new Bitcoin addresses for each transaction?. All content is owned by the author of the bitcointalk.org post. (original)


Can someone please give me a list of the pros and cons of using new Bitcoin addresses for each transaction? It seems very inconvenient to use a new address each time.

warning, I am a newbie…liked the videos presentations, did some research…and tried it.  Bitcoin.exe on an i7 –only application—24/7 x 10 days—on generate mode.  Only successful in the gratuitous .05 BTC from faucet per computer per public ip address.  I had plans to accept Bitcoins on all my websites…hired web developers  …faced ZERO SUPPORT ANYWHERE.

Bitcoin definitely needs to grow some organizations that can offer technical advice and software support for bitcoin itself.  Most major open source projects have one or more companies doing this.  That would help with bitcoin adoption, too.

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So question number ONE.  What happens to the Bitcoin if I don’t use it, save it?  I speculate it ONLY serves to increase the value of those users and optimists who are “fan boys”.  I have spent too much time…wasting…which cost me more money than I could have possibly made  in two weeks.

Bitcoin is a currency, literally, in its infancy.  The concept (distributed notary service with digital signatures) is, as far as I know, the first of its kind.  It is still being “bootstrapped,” meaning that bitcoin does not have a self-supporting economy — which must, by its nature, encompass mundane things like buying gasoline with BTC, paying rent or mortgage with BTC, buying groceries with BTC.

So, what can you do with the bitcoins you have right now?  Not a lot, if you ignore bootstrapping services (services like currency exchanges or bitcointo.com).  Mostly software services like web hosting, and an odd assortment of tangible goods.

But it seems like most folks in the bitcoin community recognize that we just started construction of a very interesting and unique experiment in currency.  Any endeavour is, unfortunately, very high risk from an investment standpoint.  It might fail for dozens of reasons…  but wouldn’t be fun and interesting if it succeeded?

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Question Number Two.  My PC’s were set up by my SYSADMIN’s.  After a few bouts of “actvity”….I ended up with 100% CPU on all cores…and the “connect” prompt  says unconnected.  Thats a lot of power and CPU cycles for Nothing…a big fat waste of time.  You want me to be impressed so we can get the concept moving?  Put up simple to understand “NOOB” isms…so that morons like myself…can learn HOW to connect.  If no connect…why the 100% CPU on all cores and NOTHING going on?  FOR DAYS?  I don’t have time for games.  When you guys are serious…I’ll be back.   I love all the concepts supporting it…but I will not GIVE AWAY valuable product from my websites for coins that have no value TO ME.

Step 1: Turn off “Generate coins” option.  It is a waste of time and electricity.

Step 2: Wait for all the blocks to download.  As of this writing, there are 109245 of them.

Step 3: Don’t panic, and read the forums.  If you can post specific problems you are seeing after following steps #1 and #2, you can get answers.

Step 4: Hire better SYSADMIN’s.  They should be able to answer these basic questions and offer basic support, or not install software that neither you or they understand.


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Satoshi Nakamoto

How many bitcoin addresses exist?

The larger the hash160 is, the more base58 characters required to represent its address.

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The following content was written by davux on November 10, 2010, 10:21:15 PM in the thread Pros and cons of using new Bitcoin addresses for each transaction?. All content is owned by the author of the bitcointalk.org post. (original)


It’s not. It’s 62^33, which is slightly over 10^59.
How did you arrive to this result?

An address has 33 significant characters, each of which has 62 possible values (10 numbers, 26 uppercase letters, 26 lowercase).
So you have 62 * 62 * … * 62 possibilities (33 times).

Actually, now that I remember, it’s 58 (uppercase i and lowercase L are not included because they look too similar, same for zero and uppercase o).

So there are 58^33 possibles values, which is slightly more than 10^58. Still high, but not quite as high as 10^92.

The following content was written by theymos on November 10, 2010, 10:40:57 PM in the thread Pros and cons of using new Bitcoin addresses for each transaction?. All content is owned by the author of the bitcointalk.org post. (original)


An address has 33 significant characters, each of which has 62 possible values (10 numbers, 26 uppercase letters, 26 lowercase).
So you have 62 * 62 * … * 62 possibilities (33 times).

Actually, now that I remember, it’s 58 (uppercase i and lowercase L are not included because they look too similar, same for zero and uppercase o).

So there are 58^33 possibles values, which is slightly more than 10^58. Still high, but not quite as high as 10^92.

As ByteCoin already explained earlier in the topic, an address contains a non-data check code and version number. There are actually “only” 160 bits of randomness in each address: 2^160, or 1.46×10^48 possible addresses.

Addresses can also be 25-34 characters in length, depending on how numerically large the hash160+check code is (the larger it is, the more base58 characters required).
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