Depends what you put on them. You could make a superchip more powerful than the entire network right now for the right price, but it would be expensive as hell.

Is most of the cost going to be them not wanting to make < 20,000 of them?

don't forget the cost of designing custom hardware, this could cost more than the physical hardware itself

^ I'd be suprised if that was true (but I don't know anything in depth about HW) but I know circuit layouts are all computer worked out now, as for designing the chip itself to perform nothing but SHA calculations I can't see that being difficult for an experienced chip designer but what do I know.

No way. You can make a super computer that would more powerfull than the entire network, but a single chip is not even close. There are limits on how big a chip can be, and bigger chips are exponentially more difficult to make and design due to all kinds of issues. And you will need a serious amount of transistors if you want to 4+ Terahash/second and every hash is a few K of operations. If you think a single chip can provide that kind of computing power you have no idea what you are talking about.

an ASIC is basically a chip custom designed for a very specific task. Costs to develop one for a task like this are estimated in the millions.

One of the guys on the forum (Vlad, I think, who is a huge hero miner) said that if you took the top 500 supercomputers combined you'd have less hashing power than the current network, assuming the supercomputers got a similar flop/hash rate that we see on our hardware

wow really want to read this thread now. havent taken more than a cursory look at this thread, but just watched this video, 'Startups: Gavin Andresen and Amir Taaki, Bitcoin', and am now super interested. Interesting watch for probably anyone in this thread.

http://www.youtube.com/watch?v=TwNfB...bedded#at=3699

The hilarious thing about BTC...
Is after these super-geeks have "invented money"...
They are now going about inventing the "financial system".

Gavin calls ClearCoin an "escrow service"...
But it's actually a financial institution...
Some combination of bank and payment processor...
This is ABSOLUTELY subject to strict US regulation...
ABSOLUTELY subject to the everything PayPal is.

Everyone in the BTC community...
Acts as if US-EU laws do not apply to them...
Even though 90% of BTC activity is US-EU.

I used to own a US broker-dealer for 7 years...
Sure, you can do things out of a shoebox for a while...
But any serious business MUST be licensed/regulated.

I hope Gavin is lawyered up...
Because he will spend 5 years of his life in court..
Just like the E-Gold guy...
I suggest you read ONLY articles written by lawyers.
Legal opinions written by progammers = waste of time.

"specific violations = 18 USC 1960
(Operation of an unlicensed Money Transmitting Business)"

http://lawvibe.com/e-gold-founder-ad...ey-laundering/

These guys are trying to make quick Startup Money...
Then outrun the US Govt and keep the loot...
It's a worthwhile gamble if you have nothing to lose...
"Freedom is another word for nothing left to lose".

Me, myself...
BTC has got me back into Forex trading daily...
No issues/limitations beyond routine trading issues.

What killed it for me was this BTC trader interview:

"biggest risks are fraud"

"profit margins are tiny"

"1 fraudulent order wipes 1 month's profit"

http://www.bitcoinbulletin.com/2011/...the-trader-03/

I envy his lifestyle out in Wyoming...
But his trading business = very tough road.

How is ClearCoin not an escrow service?

But you are right that a lot of people think they are above the law. The big players will be smart enough to follow the laws (or get shut down). There's a reason why Mt. Gox is in Japan.

yeah it's funny how people are trying to say the appreciation of their BTC are not subject to taxes and how if they haven't been audited yet they must not be doing anything wrong =/

I am concerned about the block size growth I keep hearing about 4 MB/year as maximum possible. But doesn't the size depend on the number of transactions and they are all recorded.

http://www.youtube.com/watch?v=XQPSwA2Itbs

At minute 1:03 he says 4 mb/year.

However, when I check the block I get 2mb a day.

date time, block (MB), index (MB)
5/17/2011 02:24 163.86 94.17
5/24/2011 10:32 178.99 100.01
5/26/2011 10:37 184.28 102.01
5/28/2011 02:30 187.71 103.3

Compress the block, when and how is that determined?

A new Bitcoin options market is up. I don't know anything about the site or it's operators, so there's certainly that element of risk involved.

https://bitoption.org/

There's no interface, and I need to run a PERL script to do anything. Truly Bitcoinesque.

Options market seems like a good place to bet against the irrational exuberance that a lot of Bitcoiners have.

This exact same sentiment could be found when the price of bitcoins passed .30, .70, 1.10, 2.30, 3, 5, 6, 7, etc.

Truly one of the great gifts of bitcoin: second only to providing a unique way to quickly transfer money between people without needing any third party, is the fact that not only do the haters not understand it, they violently reject any value of exchange to USD, to the point that their self-hatred for not getting bitcoins sooner - when they first heard about it and missed the boat - must be overwhelming by this point.

But hitting $7 is reasonable. There are people who ACTUALLY think it will hit $1000 within the next 2 years. I want to make money off these fools.

It's a great system, but they don't understand a damn thing about economics.

Let me ask you this, what do you think the price will be on 1/1/2012?

I agree the 1000 people are insane. But the current price is still _tiny_ when you are talking about global scale and global demand.

my most-likely outcome for 1/1/2012 is 25-50$/btc. Could be 0. Could be 100. Extremely unlikely to be above that.

But currently at $8, market cap of ~50 Mil USD, seems to be a great value considering the recent growth of the economy (miners, merchants, etc.)

The problem is each $1 increase means that you need an extra $7200/day flowing into coins (or being hoarded). $2.62M per year. So going from 8 to 15 requires just as much money as going from 1 to 8. Except more people will be profit takers at $15 than $8.

Miners are not growing the economy. Miners are just people trying to get money for free. Merchants- how much economic activity do you think is going on per day? Just want to see a ballpark figure here.

Miners help protect the network and process transactions, so are good for the economy. The higher the difficulty the better, in my book.

Sure some are just after a quick buck, but others are buying webhosting or doing other things with their coins. Some are saving.

I can't put a number on the commerce. There seems to be ~200k btc/day moving thru the system (bitcoinwatch) - even if HALF of that is people sending to themselves/re organizing wallets, etc. 100kbtc in commerce per day is 800k USD. Also, some of the economic activity is hidden - money/btc user transfers on mtgox, other sites that let users open accounts and deposit, and then trade with other users from within the site, those don't hit the blockchain.

And that btc sent/day number is growing, so it's pretty clear the economic activity is growing. Look a the wiki site for merchants. Just because *you* don't see it, doesn't mean it is not happening. That's the beauty of bitcoin.

I say $40 on 1/1/2012 and $100 1/1/2013. I read a post 1 year ago 5/25/2010 someone paid 10000 BTC for a $25 pizza. I still haven't figure out why WSEX or BODOG does not allow player transfers so people can deposit into their existing sites. US has not gone after any Antigua sites. But once the price of BTC hits the price of electricity, it will get interesting again. I expect it to be about $5 per BTC for electricity at end of June, the large miners will move to Texas to get $0.05 deregulated power.

PayPal worked long and hard to get themselves classified and licensed as a "money transmitter" rather than a bank. Anyone thinking services like ClearCoin, or mtgox will not have to do the same is kidding themselves. Anyone thinking services like ClearCoin, or mtgox CANT do the same is a being Negative Nancy.

And no, not everyone can manage the fraud and still make a buck. But, these guys are middle men anyways, the grease that makes the economy move. Frankly I'm less concerned with their profitability than I am with there being a highly liquid market in real world currency for bitcoin. These two things are not mutually exclusive.

The btc sent/day may have nothing to do with commerce. Someone trades on mtgox, that's a transfer. A miner sells his coins to get a VISA gift card or a check, that's a transfer. Is that commerce? Just seems like moving money around to me.

So there is a wiki site with a few merchants, BFD. How many people do you think are using Bitcoin? I have an estimate but I'd like to see yours.

There are ~15,000 nodes - but many people use bitcoin without running their own node. I have personally given bitcoins to others that just keep them in a mybitcoin account without ever running a node. Some are using instawallet now too. So it's not transparent.

I'd say 20,000 people currently, but if you look at the node chart, it was 5,000 only a couple months ago. How can that not be growth?

So I've answered a bunch of your questions, how bout answering mine - what date/price did you first come across bitcoin? How much time did it take from first finding it until you actually understood how it works? How much self-loathing do you have for not getting some btc right away instead of nit-picking yourself with 'zomg, it's already gone up enough' or 'nobody is using it' or 'it will be shut down'?

Trades on Mtgox don't show in the chain. I don't know if currency trading is commerce or not, it is what it is.

In the last 2 weeks I've used bitcoin to buy a domain and hosting, hire a programmer, hire a graphic designer, get paid to write an article, pay my brother for sending me something, play online poker, play video poker, make 3 donations. Oh, and I'm about to win a bet I made on silver. Ah, two loans I made for interest were paid back. I probably forget some things. Bitcoin is useful to me.

I also met someone in person to sell coins for cash. That was like 3 weeks ago, and I guess doesn't count since I was buying money with my money.

I was looking around youtube and it seems all the videos are speculation, donations, or mining. Donations, prizes might take up 20%, actual commerce 5%, Speculation/Mining/Wallet Reorganization the rest. If you look at blockexplor I see lots of transfers from one recipient to what look like 2 recipients

191KofyHedTyGB1pzp3Vy8f1f4pnLso4eZ: 14.54

14XDtKPia9x2Ce1nJeYaxYYsJ4LALQY9N2: 12.54
17NB3L5JZPoTAnnehebg1fApjpr1MTF65S: 2

Seems like a payment and a fee?

When you send bitcoin to somebody you send it from the outputs of previous transactions rather than from one of your addresses (although the output is obviously associated with one of your addresses). When you're using an output of a transaction you have to use the entire amount of the output (failing to do so will forfeit the remainder as a fee to the solving miner). The usual way of dealing with this is to send whatever you want to the target address and the rest back to another address that you own. The "official" bitcoin client does this automatically. In your example it's very likely that the person was sending 2 BTC to soembody and the 12.65 BTC is being sent to another address that his client generated for him.