_n6th

Check out IOTA. In theory (and so far in practice) it solves the problems you describe. It does not yet have as solid a theoretical foundation as blockchain currencies, though, so there's higher risk that it turns out to have some flaw that nobody's seen yet.

You are aware that Ethereum Classic is not the same as the much, much higher-hashpower Ethereum chain, right?

Unless you have some ETH or BTC laying around, it's a bit of a hassle, but if you go to https://daohub.org/ and click "Get DAO Tokens" and then "Start Wizard" it will walk you through the process.

One solution for this already exists: P2Pool. From the wiki page, "P2Pool is a decentralized Bitcoin mining pool that works by creating a peer-to-peer network of miner nodes." The key thing is that since it's p2p, there's no owner of the network who can use it to perform a 51% attack.

P2Pool is not perfect, but it works and it shows that decentralized pools mining are possible. With some improvement, it (or something like it) could be a replacement for all centralized mining pools.

https://en.bitcoin.it/wiki/P2Pool

Why does this guy think that Bitcoin can't be taxed? It's not like the government has magical dollar taxing beams. My employer would be in a terrible legal situation if they did not withhold taxes from my income, and I would be in a similarly bad situation if I knowingly did not pay my taxes. Really, nothing should have to change if my income is in Bitcoins -- my employer will withold, and I will file taxes every year.

Yet another failure to understand the purpose of mining. The energy is NOT being wasted. In fact, the energy spent mining is the exact thing that makes the Bitcoin network function. The energy is being converted into trust. The more energy that is spent on mining, the more difficult it will be for a well-capitalized entity to perform an attack on the network.

Aaron Greenspan, repeat after me: Mining energy is not wasted. Mining energy is not wasted. Mining energy is not wasted.

Now, it is an open question as to whether the cost of running the Bitcoin network is worthwhile. However, for the moment, it clearly is. The fact that some miners can turn even a small profit on the Bitcoins they're rewarded with demonstrates that the utility they provide has positive market value.

Of course at some point it may be that it costs substantially more to mine new Bitcoins than they are worth on the market. If this happens soon, Bitcoin will likely fail. If it happens later, it's possible that transaction fees could prop up the network, but that's purely speculative.

Another thing to consider when assessing the energy efficiency of the Bitcoin network is how it compares to the efficiency of existing currencies. Cash has a physical component and must be manufactured. Electronic fiat is backed by huge, complex, and expensive networks. Visa's datacenters are not free. Keep in mind that credit card transactions typically have a transaction cost of 3%, which in some way represents the cost of operating the Visa network. 3% is kind of a staggeringly huge number, and off the cuff I expect that's actually quite a bit higher than the total Bitcoin network cost to volume ratio...

Whoever runs bitcoinfog might want to revise this statement on their gateway page:

> And once again, running through Tor makes it not likely for us to be shut down under pressure from the authorities. When in doubt about this, consider Silk Road.

When I consider Silk Road, it makes me less confident that this service won't be shut down.

By the calculations above, you would be far, far better off just buying Bitcoins on an exchange than you would be mining them with non-free electricity.

If you hold your own gold, and it gets stolen, nobody is going to pay you back (unless you have some kind of insurance, which presumably could cover Bitcoins as well). Similarly, if you hold a gold certificate and a trusted party actually stores your gold, and it is stolen from them, you're in the same boat. Maybe they have a refund policy and enough capital to cover the loss. Maybe they don't. The point is, equal protections could be offered for Bitcoin.

Personally, I think that hardware wallets have the potential to solve this problem. Picture a device that contains your private key, and is capable of signing transactions (after you press a physical button). This thing could be designed such that it is physically incapable of leaking your private key via its USB port (or whatever). And maybe it has a little LCD screen that shows the transaction it's about to sign before you confirm. With something like that, there's really not a whole lot a bad guy could do to steal your Bitcoins.

Of course, if a bad guys does coax you into sending them Bitcoins via some more social-engineery-type means, that could be a problem. E.g. if they briefly took over a popular website and made it show their Bitcoin address rather than the real one, there wouldn't be a whole lot of recourse.

> Everybody would generally be better off to throttle the rate [...]

You're wrong about this. The Bitcoin network would be _much_ worse off (verging on useless) if the global hashrate was throttled. The purpose of mining is not, as you said, to distribute Bitcoins. The purpose is to make it extremely difficult to append a forged block to the blockchain. The higher the hashrate, the more difficult forgery is. The reason that so-called miners receive Bitcoins is because the hashing takes resources (e.g. machines and electricity), so there needs to be some incentive to perform this service. The fact that it happens to distribute Bitcoins is convenient, but ancillary. (There are other ways distribution could have been done.)

Read this link for further information on why you want the global hashrate to be as high as possible. Basically, if a single attacker could match the hashrate of the network, they could do very bad things:

https://en.bitcoin.it/wiki/Weaknesses#Attacker_has_a_lot_of_...

> Of course in hindsight it sounds like a great investment. But this stuff is highly volatile and not backed by anything. I'm not rushing to convert my bank account to bitcoin yet.

It's backed by math and computational complexity, which is decidedly not "nothing." If, as you say, it is backed by nothing, go ahead and forge some Bitcoins. Except, of course, you cannot forge them. You can only create them via the investment of hardware, electricity, time, and luck.

It's not like gold is actually worth $1,500 an ounce due to its value in making jewelry or in manufacturing. The value of gold is set by the speculative market, just like Bitcoin.

Of course, you're right that it's volatile. But that has nothing to do with its "backing" and everything to do with the fact that 99% of the world has no idea what the hell to make of it yet. That, and the fact that there has never been a decentralized digital currency before, so nobody knows what's going to happen.