Bitcoins were (briefly) featured on NPR's All Things Considered. It doesn't really do them justice, but it is some pretty big national exposure.

http://www.npr.org/2011/05/24/136620...t-are-bitcoins

been tons of news recently. NPR, Gizmodo, Slashdot a few times, MIT Tech Review (decent piece: http://www.technologyreview.com/comp...9/?ref=rss&a=f).

Even though I'm a total long term bull, if you look at the difficulty change you can see why prices haven't taken off. Currently there are double the number of blocks being created than target (12+/hr vs. 6 - that is more than 14,000btc/day). That's a lot of fresh supply and a lot of these new miners are immediately selling to pay off costs.

Even after the 70%+ difficulty adjustment in the next 2 days, there will still be more than 6 blocks/hr as the network keeps growing. This is good for the network long term, but keeps prices down in the short term.

last graph I saw showed closer to 100% increase...

It's also considerably harder to go from $7 to $20 than $1 to $7, so that's going to keep it from taking off. The supply issue isn't helping either.

Miners are going to get crushed and that will be interesting to see what happens. The difficulty increases have been incredibly high. I wish I had my projections spreadsheet. Based on the 3.5 price, the difficulty was *way* too low compared to historical averages, and I predicted it increasing pretty fast until it hit a more normal rate.

I'm trying to figure out how the network hash rate is going up so fast. Is it that there are a lot of people with existing cards figuring out they can get money for it? Is it people just buying and expanding rigs? Is it someone who found a super cheap way to mine a lot more efficiently who opened up an FPGA farm or something super efficient and easy to duplicate cheaply just going in and raping everyone?

this would be true, and over 100%, if the network used the latest values for the difficulty change - but it uses a smoother moving average, with a current target of up 72%. I expect it will be up 76-80% at the time of the change tomorrow.

But it also shows this "target" change for tomorrow, 420k or so, is well below actual network power (approx 550k difficulty currently), so we'll be seeing another rise next time.

And yes, miners will be crushed by the next two difficulty increases. The question is, will they stop, or continue with marginal returns? Those with 'free' or non-transparent electricity costs (mining in dorm rooms, colleges, or at the office) will obviously continue. I don't expect it to go down and I expect over 1million difficulty by end of June.

Those still mining, will obviously want more usd per bitcoin, as they will be be receiving approx 30% of the btc they receive today for the same effort/cost. So I do expect a slow gradual rise in exchange rate. The days of huge spikes are over for the most part, which is probably good for the economy.

The miners are stuck with fixed costs. We are a LONG way before mining is not profitable compared to electricity. So they will keep going trying to recoup costs. New rigs may stop, though. Electricity is so minor compared to fixed startup costs.

They can want all they want, but they also need to recover costs, so they will have to sell more of them which will lower the price. I feel bad for anyone who bought a mining rig recently. Well, not really, since doing any actual forecasts and calculations would have let them know it was a foolish investment.

Mining is still more profitable than in January, February, March, April. However, this next difficulty was a surprise. More capacity has been added in last 6 days than almost the entire network 2 weeks ago. Maybe someone found a cheap easy way to hash. All the pools also seem to be growing fast. There is a liquid cooled 6990 coming out that only takes up one slot, thus a 3.5 Gh/s box might be possible. Also AMD probably is setting up systems now. I am sure some hardware engineer probably made a chip specifically designed to mine a low cost and low power, maybe even the government.

The government will take down bitcoin imho, by buying up mining equipment and connecting to their free energy sources like Hoover Dam. When the price of electricity exceeds the price of mining/transactions. The government will continue to add and use cheap equipment to control the system and then crash it. That is the spectator show to watch now.

It seems like the network is defenseless against a government that wants to take it over, but maybe I'm missing something.

I've heard the argument that nobody would take over the network to destroy it because they'd make a lot more money by piling up BTC/transaction fees, but that seems irrelevant if the US government ever considers bitcoin a threat.

RE Government taking it down, could someone expand on how a government would execute this?

Buy enough GPUs to have the majority of the network power. Then you can inflate the currency as much as you want through double spending

According to http://forum.bitcoin.org/index.php?topic=8555.0;all it would only cost a few million to do that right now

fyp

they are magic and that's why I always vote and never speed.

They really cant afaik. The biggest risk in my opinion is a type of a sybil attack where a pool operator goes rogue. Some of the main forum users downplay the possibility, but I think it's not too far fetched for a pool operator to go "evil" when we're talking about money.

See http://forum.bitcoin.org/index.php?t...7838#msg117838 or search "sybil attack" on the bitcoin forums.

This is a common myth - that anyone with 51% of the network instantly takes control of everything and thus bitcoin value instantly drops to 0 and it's game over.

This is not true. The most important thing someone can do is double-spend, their own coins. They can spend multiple times with each making it into the blockchain (assuming their nodes get the next block). These can be identified of course, and quickly identified via the inputs on blockexpolorer. they don't instantly gain access to everyone private keys. They can't double spend anyone else's coins. They can isolate nodes and cause problems with future block creation, but it is not the end of the world.

Please read up a bit. And as mentioned any rational actor has far more to lose by trying to double-spend or cause network problems if they get 51%. It would be far more profitable to just use the system as intended.

One thing everyone overlooks is that governments are slow. It took 5 years to take out stars/ftp, 2 years for the recent sportsbooks. Nothing moves fast. By the time they get involved who knows what the network size may be.

You won't actually be increasing the money supply, you will be yanking back the first spend by "rewriting" a new block without the tx in it.

Alright, I realized as soon as I wrote it that I wasn't actually sure about that.

So if someone has half the network power, the worst they can do is cheat people who don't care enough to wait 10 minutes for a confirmation?

edit: via double spending at least.

I thought they could also block confirmations of transactions, which is the most dangerous IMO

You couldn't inflate it, you could double-spend certain blocks. As long as you had a non-inflation version of your client, everyone would just ignore the inflation versions.

You don't need 50% to do that, anyone can do that now. But as long as someone was processing transactions, it might not be at huge frequency, but it would still happen. I'm surprised miners accept transactions without fees right now.

Nah, you can not process transactions with < 50% but as you say somebody else will process them. With >50% you can block transactions completely by only referencing your own blocks, which will eventually become the longest blockchain and undo all the blocks and transactions processed by others. Realistically you'd probably need quite a bit more than 50% to pull this off.

Yeah.

Right now the fixed block reward is much higher than the fees, but in the future fees would build up so much that miners would have large incentive to add power to pick them all up. Also some people would probably pay larger fees knowing this.

What fees are you referring to?

Also, BTC/USD is close to $8 again

Up to 8.6. Some guy bought $200k worth over an hour or so it looks like.

I'm expecting prices to go way up over the next week or two after the press we've seen recently.

Then I think prices will slowly (compared to what's been happening at least) rise as infrastructure gets built, with the specter of a government-gets-mad crash always looming

Glad I picked up 1k worth yesterday =/

This looks very promising. Felix provides some commentary here.