https://tests.bitcoin.it/w/api.php?action=feedcontributions&user=Dree12&feedformat=atomBitcoin Wiki - User contributions [en]2024-03-29T12:52:52ZUser contributionsMediaWiki 1.30.0https://tests.bitcoin.it/w/index.php?title=Hardware_wallet&diff=34762Hardware wallet2013-01-07T00:49:06Z<p>Dree12: fix formatting</p>
<hr />
<div><br />
A hardware wallet is a device that stores a part of a user's [[wallet]] securely in mostly-offline hardware. They have major advantages over other wallet types:<br />
<br />
* the key is often stored in a protected area of a microcontroller, and cannot be transferred out of the device in plaintext<br />
* immune to computer viruses that steal from software wallets<br />
* can be used securely and interactively, as opposed to a [[paper wallet]] which much be imported to software at some point<br />
* much of the time, the software is open source, allowing a user to validate the entire operation of the device<br />
<br />
This page is an attempt to summarize all the known developments of hardware wallets that can use Bitcoin as part of their operation.<br />
<br />
== Hardware Wallets ==<br />
Some of the more feasible (prototype stage or better) wallets are:<br />
=== BitcoinCard Megion Technologies-Card based wallet ===<br />
[http://www.bitcoincard.org/ Bitcoincard Home Page]<br />
<br />
[http://blog.bitinstant.com/blog/2012/6/19/our-discovery-in-vienna-the-bitcoin-card.html Excellent review by evoorhees]<br />
<br />
[http://blog.bitinstant.com/storage/post-images/card_medley_large.jpg?__SQUARESPACE_CACHEVERSION=1340161076023 img]<br />
<br />
The closest so far to a mass market solution, incorporates a display, keypad, and radio (custom ISM band protocol.) Unfortunately it is fairly limited in terms of transaction I/O, requiring a radio gateway or another bitcoincard wherever funds need to be transferred. Possibly transactions could be delivered over giant QR codes.<br />
<br />
=== piglet slush/stick hardware wallet ===<br />
[https://bitcointalk.org/index.php?topic=122438.0 ANN Hardware wallet project]<br />
<br />
[http://i.imgur.com/A4Ga8.jpg img]<br />
<br />
A simple transaction-signing device, requires software on the receiving side to send and receive transactions. Talks over USB, no keypad for entering data.<br />
<br />
=== BitSafe allten's hardware wallet ===<br />
[https://bitcointalk.org/index.php?topic=127587.0 ANN BitSafe Hardware Wallet Development - BOM Ready - 50 kits being prepared]<br />
<br />
[http://i1148.photobucket.com/albums/o575/mqpickens/tmp_BitSafeDevelopment.png img]<br />
<br />
Signing transactions only, requires USB host software for transactions & USB power. Evolved out of someone42's prototype below, and has had significant contributions from someone42 as well.<br />
<br />
=== someone42's (prototype) hardware wallet ===<br />
[https://bitcointalk.org/index.php?topic=78614.0 Hardware Bitcoin wallet - a minimal Bitcoin wallet for embedded devices]<br />
<br />
[http://i.imgur.com/H0AVo.jpg img]<br />
<br />
Signing transactions only, requires USB host software for transactions & USB power. All work is rolled into the above BitSafe wallet currently.<br />
<br />
=== BTChip btchip USB based transaction signer and private key holder ===<br />
[https://bitcointalk.org/index.php?topic=134999.0 ANN Smartcard wallet project + btchip implementation (no reader required)]<br />
<br />
[http://www.btchip.com www.btchip.com]<br />
<br />
[http://www.btchip.com/btchip.jpg img]<br />
<br />
USB smartcard dedicated to bitcoins, no keypad or display so trust in the host device is required.<br />
<br />
=== Other/Defunct but with good discussion: ===<br />
* natman3400's BitClip Jun 2011 [https://bitcointalk.org/index.php?topic=24852.0 https://bitcointalk.org/index.php?topic=24852.0]<br />
:Seems to have gone defunct around Dec 2011. Some good ideas though and seemed to have started on execution.<br />
* jim618 hardware wallet proposal Apr 2012 [https://bitcointalk.org/index.php?topic=77553.0 Dedicated bitcoin devices - dealing with untrusted networks]<br />
:Great discussion and good ideas from jim618. Also linked the following video:<br />
* Prof. Clemens Cap's hardware wallet? (video:)[https://www.youtube.com/watch?v=IavQ-Wc8S1U Clemens Cap about electronic bitcoin wallet at EuroBit]<br />
:Clemens Cap of Uni Rostock explains the Electronic Bitcoin wallet device he's working on. It's based on adafruit microtouch device.<br />
* ripper234's discussion based on Yubikeys Aug 2012 [https://bitcointalk.org/index.php?topic=99492 Having a YUBIKEY as one of the parties for m-of-n signatures]<br />
:The use of Yubikeys. They only support symmetric crypto, so you'd have to trust the host device.<br />
* kalleguld's hardware wallet proposal Oct 2012 [https://bitcointalk.org/index.php?topic=115294.0 Proposal: Hardware wallet (Win 3 BTC)]<br />
* Vaporware: Matthew N Wright's ellet [https://bitcointalk.org/index.php?topic=85931.0 ANN The world's first handheld Bitcoin device, the Ellet!] (Vaporware)<br />
<br />
== Smart Card based wallets ==<br />
This type of device requires complete trust in the host device, as there is no method for user input.<br />
See [[Smart card wallet]]<br />
<br />
== Related Resources ==<br />
* piglet Hardware wallet wire protocol discussion: [https://bitcointalk.org/index.php?topic=125383.0 Hardware wallet wire protocol]<br />
* kjj's Todo List discussion for client protocol requirements: [https://bitcointalk.org/index.php?topic=19080.msg272348#msg272348 in topic Re: Split private keys]<br />
* paybitcoin's original post: [https://bitcointalk.org/index.php?topic=134277.0 Hardware Wallet Roundup]</div>Dree12https://tests.bitcoin.it/w/index.php?title=User:Dree12&diff=34760User:Dree122013-01-07T00:47:06Z<p>Dree12: </p>
<hr />
<div><includeonly>[https://bitcointalk.org/index.php?topic={{{1}}}.0 {{{2|}}}]</includeonly><noinclude><br />
== Using this template ==<br />
Use {{tl|Forum}}. The first parameter (1) is mandatory and refers to the topic number. The second parameter (2) is optional and is the link text to display. This template only supports BitcoinTalk.<br />
</noinclude></div>Dree12https://tests.bitcoin.it/w/index.php?title=User:Dree12&diff=34759User:Dree122013-01-07T00:45:39Z<p>Dree12: add default for 2</p>
<hr />
<div><includeonly>[https://bitcointalk.org/index.php?topic={{{1}}}.0 {{{2|}}}]</includeonly><noinclude><br />
== Using this template ==<br />
Use {{tl|Forum}}.<br />
</noinclude></div>Dree12https://tests.bitcoin.it/w/index.php?title=User:Dree12&diff=34757User:Dree122013-01-07T00:42:27Z<p>Dree12: testing template</p>
<hr />
<div><includeonly>[https://bitcointalk.org/index.php?topic={{{1}}}.0 {{{2}}}]</includeonly><noinclude><br />
== Using this template ==<br />
Use {{tl|Forum}}.<br />
</noinclude></div>Dree12https://tests.bitcoin.it/w/index.php?title=TradeHill&diff=33532TradeHill2012-12-10T03:04:08Z<p>Dree12: some modifications</p>
<hr />
<div>'''Tradehill''' was formerly a bitcoin [[currency exchange]]. At its peak, it was the second-largest; only [[Mt. Gox]] was higher.<br />
<br />
==History==<br />
<br />
First mention on the site was on June 8th, 2011<ref>[http://forum.bitcoin.org/index.php?topic=13650.0 Bitcoin Worldwide Exclusive: New Competitor to MtGox: http://TradeHill.com]</ref> which is also the "go live" date display on the exchange's status page<ref>[https://www.tradehill.com/Support/Status TradeHill Updates]</ref>.<br />
<br />
On July 25, 2011 the exchange reported anomalies with [[Dwolla]] payments and stopped accepting Dwolla for deposits<ref>[http://tradehillblog.com/2011/07/26/why-we-are-no-longer-accepting-dwolla/ Why We Are No Longer Accepting Dwolla]</ref>.<br />
<br />
On August 10, 2011 the exchange resumed providing methods for SEPA transfers for deposit and withdrawal<ref>[http://tradehillblog.com/2011/08/10/tradehill-is-back-on-the-sepa-zone TradeHill is Back on the SEPA Zone!]</ref>.<br />
<br />
On February 13, 2012 the exchange announced it was shutting down<ref>[http://tradehillblog.com/2012/02/13/tradehill-suspending-trading-and-returning-client-funds TradeHill suspending trading and returning client funds]</ref>.<br />
<br />
==See Also==<br />
<br />
* [[Buying bitcoins]]<br />
* [[Selling bitcoins]]<br />
<br />
==External Links==<br />
<br />
* [http://www.youtube.com/watch?v=4sEXmVsiVqM Interview with CEO of Tradehill (Youtube)]<br />
<br />
==References==<br />
<References /><br />
<br />
[[Category:Offline]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Crypto_X_Change&diff=33531Crypto X Change2012-12-10T03:00:57Z<p>Dree12: preserve Bitcoin history</p>
<hr />
<div>'''Crypto X Change''' was formerly a global Bitcoin [[currency exchange]] based in Australia. The exchange was owned and operated by the Australian company Kenseycol PNY LTD, which was based near Sydney, Australia.<br />
<br />
== Features ==<br />
Crypto X Change offered balances in Bitcoin, [[Namecoin]], USD, AUD, BRL, and RUB. A fully-transparent order book was provided with no dark pools. Crypto X Change also featured an API to make automated trading easier. They also provided customers with live chat support 24/7, and have phone numbers for most countries.<br />
<br />
A forum was also provided for users to discuss topics that are important to them. Crypto X Change also sold gold and silver products on a web store.<br />
<br />
Crypto X Change offered two-factor authentication with Yubikeys, pincodes, or SMS.<br />
<br />
== History ==<br />
The exchange launched on November 10, 2011<ref>[http://bitcointalk.org/index.php?topic=51457.0 Crypto X Change Now OPEN]</ref>. The exchange suspended all trading on November 19, 2012, slightly a year after it was launched.<br />
<br />
==References==<br />
<references /><br />
<br />
[[Category:Offline]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Why_pooled_mining&diff=33530Why pooled mining2012-12-10T02:46:49Z<p>Dree12: outdated</p>
<hr />
<div>{{stub}}<br />
{{old}}<br />
<br />
This page is an analysis of the costs/benefits of pooled mining.<br />
<br />
Some people say that no matter what, over the long run mining solo will provide the same return as mining in a pool. This is not true. Reality is subtly different from this: In reality, while competent solo mining has an equal _average_ return to competent, cheater-less, fee-less pooled mining the distribution of rewards is very different: Solo mining has higher odds of small or no payout at all, but also higher odds of large payout. The bitcoin system is not stationary, so you can't be promised to average out over time, but this doesn't change that your expected return (an average against alternative yous) is the same either way.<br />
<br />
However, even though the combination of good and bad luck results in the same "average" most people value very low returns disproportionally less: Most are willing to lose most of the chance of enormous returns in exchange for getting rid of most of the chance of no returns. <br />
<br />
Let's start with the current conditions...<br />
<br />
<table><br />
<tr><th style="width: 15em; text-align: right;">Current Difficulty</th><td><code>D = 567358.224571</code></td></tr><br />
<tr><th style="width: 15em; text-align: right;">Typical mining-rig speed</th><td><code>R<sub>typ</sub> = 500 MHash/s</code></td></tr><br />
<tr><th style="width: 15em; text-align: right; vertical-align: top;">Probability of generating within fourteen days</th><td><code>P<sub>single-hash</sub> = 0.0000000000000004104346850315179415225053105586994206532<br />
<br />P<sub>single-second</sub> = 1-(P'<sub>single-hash</sub> ^ R<sub>typ</sub>)<br />
<br /><span style="color: white;">P<sub>single-second</sub> </span>= 0.0000002052173214586726479267<br />
<br />P<sub>single-day</sub> = 1-(P'<sub>single-hash</sub> ^ (R<sub>typ</sub> * 3600 s/h * 24 h/day)<br />
<br /><span style="color: white;">P<sub>single-day</sub> </span>= 0.0175745130737448462862083548<br />
<br />P<sub>fourteen-days</sub> = 1-(P'<sub>single-day</sub> ^ (R<sub>typ</sub> * ... * 14 day)<br />
<br /><span style="color: white;">P<sub>fourteen-days</sub> </span>= 0.2198202190871503615128815272<br />
<br /><span style="color: white;">P<sub>fourteen-days</sub> </span>= <strong>21.98%</strong></code></td></tr><br />
<tr><th style="width: 15em; text-align: right;">Average time to generate</th><td>56 days, 9 hours, 47 minutes</td></tr><br />
</table><br />
<br />
<strike style="color: #777;">difficulty of 76193.9710474, and a hash rate of 1000 Khps (a run of the mill single core cpu). The probability to generate a block under these conditions in the course of 14 days (the target time between difficulty adjustments), is 0.00368942702934, and the 'average time' to generate a block is 10 years, 19 weeks, 4 days, 14 hours, 56 minutes, and 53 seconds.</strike><br />
<br />
Now let's assume that difficulty grows at 10% per period - that means that the average time between difficulty adjustments will be about 13 days. So we're looking at a base probability of 0.00342634853731. Further, the probability to generate a block in 13 days will also keep decreasing by about 10%, with every 10% rise in difficulty.<br />
<br />
So now, let's find what our cumulative probability will be to generate a block. As a rough approximation, our cumulative probability of generating a block under these conditions, after N difficulty periods, would be sum(probability for individual periods). Actually the approximation will be higher than actual probability, since they're not really additive - though the addition is a pretty good approximation when the probabilities are so low. So, designating p = 0.00342634853731, our cumulative probability approximation will be about: <br />
p + .9p + .9^2 p + .9^3 p ....<br />
which at infinity sums to 10p. Thus, under these conditions, the upper bound (remember that summing probabilities produces a higher value than the proper multiplicative cumulative probability) is going to be 0.0342634853731. so /at infinity/, your probability of generating a block is only 3.4% or so. And conversely, your probability of /never generating a block even after millions of years/ is about 96+ percent.<br />
<br />
Now, let's consider a pooled mining setup. In a fixed-payout mining pool, you get paid for each difficulty-1 share you generate. The probability to generate at least 1 share at difficulty 1, at 1000 khps in 13 days is so close to 1 that my calculator rounds it to 1. :) So with a pool, you have virtually 100% certainty that you will generate at least one share. You will in fact on average generate about 20 shares per day, or 260 shares in the 13 day period. A pool would pay out approximately 0.000656219899 BTC per share, so over the 13 day period you can expect to generate about 0.17 BTC.<br />
<br />
So now you have to ask yourself one question (punk), do you want .17 btc with (almost) certainty, (with that amount decreasing by about 9% per period, under our assumptions of 10% difficulty growth per period), or would you like a 96+ percent chance of /never seeing a dime, ever/? And this is a question that every person would answer differently, depending on his risk preference.<br />
<br />
Even with losses on pooled mining due to network latency, and pool fees, it is not irrational to choose pooled mining over solo mining, if the ratio of hashrate to difficulty (and difficulty growth) is low enough.<br />
<br />
TODO: write in the details of calculating the probabilities, make some pretty charts?, calculate out the hash rate at which you have 25,50,75 percent chance of never generating a block solo under various assumptions.<br />
<br />
== Alternative Perspective ==<br />
Mathematically the profit is the same for these conditions:<br />
* chance to make 10,000$ is 0.01%<br />
* chance to make 1$ is 100%<br />
<br />
=== What are the chances to not ever get a block? ===<br />
While a mathematician toying around with bitCoin mining might be fine with knowing it is mathematically fine to not see a BTC forever as the lucky case of getting 50 at a time will totally balance the odds of not finding it, others, especially those who want to get their hands on first bitCoins, might have a different feeling about it.<br />
<br />
So what are the odds of never finding a BTC?<br />
<br />
==== How BitCoin Works / Simplifications ====<br />
The bitCoin block chain readjusts its [[difficulty]] every 2016 blocks trying to make the next 2016 blocks be processed in 10 minutes each given an average performance of the past 2016 blocks.<br />
This process brings in some unsteadiness but to be conform with above equations time frame, we also look at periods of 2016 blocks but take difficulty only into consideration to determine the time frame for 2016 blocks and look at bitCoin as a lottery.<br />
<br />
==== The Maths ====<br />
* [[genesis block|block 0]] was created January 3rd 2009<br />
* [http://blockexplorer.com/b/20160 block 2160] was created '''July 25th 2009'''<br />
* block 0 to 2160 took 202 days at difficulty 1.<br />
* 202 days / 20160 blocks = 14 minutes / block<br />
* hashrate = difficulty * 2**32 / time<br />
* The Average hashing speed back then was (2**32 / 14 minutes) '''5Mh/s'''<br />
* Today is June 24th 2011<br />
* Since block 20160 there have been [http://blockexplorer.com/b/133056 133056] - 20160 = 112896 blocks in 689 days.<br />
* There were '''163''' blocks created per day.<br />
* Net performance increase was on average '''i=0.00013 per block''' using this formula: ((1+i)**112896=(11Th/s)/(5Mh/s))<br />
<br />
==== Assumptions ====<br />
* 500Mh/s<br />
* total net performance of 11Th/s<br />
* total net performance increase of i=0.013% per block over a long time<br />
* 163 blocks per day over a long time<br />
<br />
==== Results for not finding a single block in 10 years ====<br />
* For each block odds are o(#block)=1-500M/(11T*(1+i)**#block)<br />
* For all blocks odds are the product of o(0) to o(3600*163)<br />
Until someone brings up the analytic solution to this product, here is a code snipped to calculate it:<br />
private double calculate() {<br />
double odds = 1.0d;<br />
for (int i = 0; i < 3600 * 163; i++) {<br />
if (i % (360 * 163) == 0)<br />
Log.d("", Double.toString(odds));<br />
odds *= odds(i);<br />
}<br />
return odds;<br />
}<br />
<br />
private double odds(int i) {<br />
return 1.0d - 5E8 / (11E12 * Math.pow(1.00013d, i));<br />
}<br />
Probability for finding no block at all after n years are:<br />
{| cellpadding="10" cellspacing="0" border="1"<br />
|time<br />
|cumulative probability of not finding a single block<br />
|-<br />
|1 month<br />
|84.83%<br />
|-<br />
|3 months<br />
|74.25%<br />
|-<br />
|6 months<br />
|71.04%<br />
|-<br />
|1 year<br />
|70.50%<br />
|-<br />
|2 - 10 years<br />
|70.49%<br />
|}<br />
<br />
[[Category:Mining]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Talk:Pool_vs._solo_mining&diff=33528Talk:Pool vs. solo mining2012-12-10T02:39:42Z<p>Dree12: Dree12 moved page Talk:Pool Mining vs Solo Mining to Talk:Pool vs. solo mining: Capitalization</p>
<hr />
<div>There already had been the [[Why_pooled_mining]] article though this article provides different information through a different presentation.<br />
<br />
Should the original be merged into this one? - [[User:Sgornick|Sgornick]] 02:36, 24 May 2011 (GMT)<br />
<br />
This article seems biased toward a) pooled mining and b) eligius. This would be fine on a page like Why Pooled Mining. But since this page indicates it has pros/cons of both, there should be pros/cons of both. As is, it almost sounds like a commercial for eligius. --[[User:Hawks5999|Hawks5999]] 19:04, 14 June 2011 (GMT)<br />
<br />
Pooled mining is basically superior in every way nowadays, so there's not much one can do to avoid the "biased" feel. As for the Eligius bit, some other pool had a blatent advertisement in there, so I changed it to Eligius as a kind of "backfired!" expecting someone else to make it neutral fairly quick. --[[User:Luke-jr|Luke-jr]] 22:04, 14 June 2011 (GMT)<br />
<br />
"Pooled mining is basically superior in every way nowadays" is called an opinion. And when the opinion is given by someone who runs a pool, it is ''ipso facto'' biased toward pool mining. There's no problem with a biased opinion - every opinion is a bias by definition. However, for this content it seems it should be more fact and less commentary... and definitely not advertising. But, if I were in your position, I'd likely do the same thing ;) --[[User:Hawks5999|Hawks5999]] 23:20, 14 June 2011 (GMT)<br />
<br />
Not really an opinion when there's hard facts behind it. I can't think of any good reason someone would solo mine anymore. --[[User:Luke-jr|Luke-jr]] 20:58, 15 June 2011 (GMT)</div>Dree12https://tests.bitcoin.it/w/index.php?title=Talk:Pool_Mining_vs_Solo_Mining&diff=33529Talk:Pool Mining vs Solo Mining2012-12-10T02:39:42Z<p>Dree12: Dree12 moved page Talk:Pool Mining vs Solo Mining to Talk:Pool vs. solo mining: Capitalization</p>
<hr />
<div>#REDIRECT [[Talk:Pool vs. solo mining]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Pool_vs._solo_mining&diff=33526Pool vs. solo mining2012-12-10T02:39:42Z<p>Dree12: Dree12 moved page Pool Mining vs Solo Mining to Pool vs. solo mining: Capitalization</p>
<hr />
<div>{{old}}<br />
Although most miners prefer to mine in pools, there are still merits to solo mining.<br />
<br />
==Why You Are Here==<br />
An article addressing the pros and cons of solo and pooled mining can often answer questions easier than simply asking in: [http://webchat.freenode.net/?channels=bitcoin-mining #bitcoin-mining].<br />
<br /><br />
Additionally, this page can serve as a reference for members of [http://webchat.freenode.net/?channels=bitcoin-mining #bitcoin-mining] to direct those with questions.<br />
<br />
==What this topic discusses==<br />
The purpose of this page is to explain what the differences between pooled mining and solo mining. This Topic will give pros and cons of each to aid in the decision of a mining approach.<br />
<br />
==What is Pooled Mining?==<br />
Pooled mining "pools" all of the resources of the clients in that pool to generate the solution to a given block. When the pool solves a block, the 25 BTC generated by that block's solution is split and distributed between the pools participants.<br />
<br />
==What is Solo Mining?==<br />
Solo mining is when a miner performs the mining operations alone without joining a pool. All mined blocks are generated to the miner's credit.<br />
<br />
==Pros/Cons==<br />
<br />
;Pool Mining Pros:<br />
* Pooled mining generates a steadier income.<br />
* Pooled mining can generate a 1-2% higher income (before fees, if any) due to long polling provided by the pools.<br />
<br />
;Pool Mining Cons:<br />
* Pool mining can suffer interruptions from outages at the pool provider.<br />
*: ''Pools are subject to DOS attacks and have other downtimes, too. Backup pools and solo mining can be configured for these cases.''<br />
* Pooled mining tends to generate a smaller income due to fees being charged and transaction fees not being cashed out.<br />
*: ''There are zero fee pools. Until now, transaction fees are not cashed out by any pool.''<br />
* Pools might be part of attack scenarios.<br />
<br />
;Solo Mining Pros:<br />
* Solo mining is less prone to outages resulting in higher uptime.<br />
* Solo mining doesn't incur any fees. For each discovered block, 25 BTC and the transaction fees are paid to the miner.<br />
<br />
;Solo Mining Cons:<br />
* Solo mining tends to generate more erratic income.<br />
* Solo mining wastes time due to only supporting getwork pull.<br />
<br />
==See Also==<br />
<br />
* [[Why pooled mining]] An article in favor of pooled mining.<br />
<br />
[[Category:Mining]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Pool_Mining_vs_Solo_Mining&diff=33527Pool Mining vs Solo Mining2012-12-10T02:39:42Z<p>Dree12: Dree12 moved page Pool Mining vs Solo Mining to Pool vs. solo mining: Capitalization</p>
<hr />
<div>#REDIRECT [[Pool vs. solo mining]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Pool_vs._solo_mining&diff=33525Pool vs. solo mining2012-12-10T02:39:10Z<p>Dree12: tag with old</p>
<hr />
<div>{{old}}<br />
Although most miners prefer to mine in pools, there are still merits to solo mining.<br />
<br />
==Why You Are Here==<br />
An article addressing the pros and cons of solo and pooled mining can often answer questions easier than simply asking in: [http://webchat.freenode.net/?channels=bitcoin-mining #bitcoin-mining].<br />
<br /><br />
Additionally, this page can serve as a reference for members of [http://webchat.freenode.net/?channels=bitcoin-mining #bitcoin-mining] to direct those with questions.<br />
<br />
==What this topic discusses==<br />
The purpose of this page is to explain what the differences between pooled mining and solo mining. This Topic will give pros and cons of each to aid in the decision of a mining approach.<br />
<br />
==What is Pooled Mining?==<br />
Pooled mining "pools" all of the resources of the clients in that pool to generate the solution to a given block. When the pool solves a block, the 25 BTC generated by that block's solution is split and distributed between the pools participants.<br />
<br />
==What is Solo Mining?==<br />
Solo mining is when a miner performs the mining operations alone without joining a pool. All mined blocks are generated to the miner's credit.<br />
<br />
==Pros/Cons==<br />
<br />
;Pool Mining Pros:<br />
* Pooled mining generates a steadier income.<br />
* Pooled mining can generate a 1-2% higher income (before fees, if any) due to long polling provided by the pools.<br />
<br />
;Pool Mining Cons:<br />
* Pool mining can suffer interruptions from outages at the pool provider.<br />
*: ''Pools are subject to DOS attacks and have other downtimes, too. Backup pools and solo mining can be configured for these cases.''<br />
* Pooled mining tends to generate a smaller income due to fees being charged and transaction fees not being cashed out.<br />
*: ''There are zero fee pools. Until now, transaction fees are not cashed out by any pool.''<br />
* Pools might be part of attack scenarios.<br />
<br />
;Solo Mining Pros:<br />
* Solo mining is less prone to outages resulting in higher uptime.<br />
* Solo mining doesn't incur any fees. For each discovered block, 25 BTC and the transaction fees are paid to the miner.<br />
<br />
;Solo Mining Cons:<br />
* Solo mining tends to generate more erratic income.<br />
* Solo mining wastes time due to only supporting getwork pull.<br />
<br />
==See Also==<br />
<br />
* [[Why pooled mining]] An article in favor of pooled mining.<br />
<br />
[[Category:Mining]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Pool_vs._solo_mining&diff=33524Pool vs. solo mining2012-12-10T02:38:09Z<p>Dree12: 50 -> 25</p>
<hr />
<div>==Why You Are Here==<br />
An article addressing the pros and cons of solo and pooled mining can often answer questions easier than simply asking in: [http://webchat.freenode.net/?channels=bitcoin-mining #bitcoin-mining].<br />
<br /><br />
Additionally, this page can serve as a reference for members of [http://webchat.freenode.net/?channels=bitcoin-mining #bitcoin-mining] to direct those with questions.<br />
<br />
==What this topic discusses==<br />
The purpose of this page is to explain what the differences between pooled mining and solo mining. This Topic will give pros and cons of each to aid in the decision of a mining approach.<br />
<br />
==What is Pooled Mining?==<br />
Pooled mining "pools" all of the resources of the clients in that pool to generate the solution to a given block. When the pool solves a block, the 25 BTC generated by that block's solution is split and distributed between the pools participants.<br />
<br />
==What is Solo Mining?==<br />
Solo mining is when a miner performs the mining operations alone without joining a pool. All mined blocks are generated to the miner's credit.<br />
<br />
==Pros/Cons==<br />
<br />
;Pool Mining Pros:<br />
* Pooled mining generates a steadier income.<br />
* Pooled mining can generate a 1-2% higher income (before fees, if any) due to long polling provided by the pools.<br />
<br />
;Pool Mining Cons:<br />
* Pool mining can suffer interruptions from outages at the pool provider.<br />
*: ''Pools are subject to DOS attacks and have other downtimes, too. Backup pools and solo mining can be configured for these cases.''<br />
* Pooled mining tends to generate a smaller income due to fees being charged and transaction fees not being cashed out.<br />
*: ''There are zero fee pools. Until now, transaction fees are not cashed out by any pool.''<br />
* Pools might be part of attack scenarios.<br />
<br />
;Solo Mining Pros:<br />
* Solo mining is less prone to outages resulting in higher uptime.<br />
* Solo mining doesn't incur any fees. For each discovered block, 25 BTC and the transaction fees are paid to the miner.<br />
<br />
;Solo Mining Cons:<br />
* Solo mining tends to generate more erratic income.<br />
* Solo mining wastes time due to only supporting getwork pull.<br />
<br />
==See Also==<br />
<br />
* [[Why pooled mining]] An article in favor of pooled mining.<br />
<br />
[[Category:Mining]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Comparison_of_mining_pools&diff=33523Comparison of mining pools2012-12-10T02:37:31Z<p>Dree12: 50 -> 25</p>
<hr />
<div>Reward types & explanation:<br />
* '''DGM''' - Double Geometric Method. A hybrid between PPLNS and Geometric reward types that enables to operator to absorb some of the variance risk. Operator receives portion of payout on short rounds and returns it on longer rounds to normalize payments. [https://bitcointalk.org/index.php?topic=39497.0]<br />
* '''Prop.''' - Proportional. When block is found, the reward is distributed among all workers proportionally to how much shares each of them has found.<br />
* '''PPLNS''' - Pay Per Last N Shares. Similar to proportional, but instead of looking at the number of shares in the round, instead looks at the last N shares, regardless of round boundaries.<br />
* '''PPS''' - Pay Per Share. Each submitted share is worth certain amount of BC. Since finding a block requires <current difficulty> shares ''on average'', a PPS method with 0% fee would be 25 BTC divided by <current difficulty>. It is risky for pool operators, hence the fee is highest.<br />
* '''SMPPS''' - Shared Maximum Pay Per Share. Like Pay Per Share, but never pays more than the pool earns. [http://eligius.st/wiki/index.php/Shared_Maximum_PPS]<br />
* '''ESMPPS''' - Equalized Shared Maximum Pay Per Share. Like SMPPS, but equalizes payments fairly among all those who are owed. [http://forum.bitcoin.org/index.php?topic=12181.msg378851#msg378851]<br />
* '''RSMPPS''' - Recent Shared Maximum Pay Per Share. Like SMPPS, but system aims to prioritize the most recent miners first. [http://eligius.st/wiki/index.php/Shared_Maximum_PPS]<br />
* '''CPPSRB''' - Capped Pay Per Share with Recent Backpay. [http://eligius.st/wiki/index.php/Capped_PPS_with_Recent_Backpay]<br />
* '''Score''' - Score based system: a proportional reward, but weighed by time submitted. Each submitted share is worth more in the function of time ''t'' since start of current round. For each share score is updated by: score += exp(t/C). This makes later shares worth much more than earlier shares, thus the miner's score quickly diminishes when they stop mining on the pool. Rewards are calculated proportionally to scores (and not to shares). (at slush's pool C=300 seconds, and every hour scores are normalized)<br />
[http://eligius.st/~luke-jr/samples/800MH-3/ Visual examples of the various payout methods]<br />
<br />
{| class="wikitable sortable"<br />
|-<br />
! Name !! Location !! GH/s<ref name="hashrate2">Note that pool hashrate is largely irrelevant but can be seen as a popularity measurement. Note however that it is a theoretical security issue if one pool gains above 50% of the total computational power of the network, thus consider joining a pool based on other metrics.</ref> !! Merged Mining<ref name="merged">Merged mining allows miners to mine on multiple [[block chains]] at the same time with the same hashing.</ref> !! Reward Type !! Transaction fees !! PPS Fee !! Reward Fee !! Protocol !! Launched !! Difficulty<ref name="diff">The share difficulty the pool uses</ref> !! Forum !! Website<br />
|-<br />
| [[50BTC]] || Germany || 5100 || No || PPS<ref name="stales">Pool also rewards stale shares</ref> || kept by pool ||3% || || [[getwork]] || 2011-11-11 || 1 || [http://bitcointalk.org/index.php?topic=54673.0 1] || [http://50btc.com/ Link]<br />
|-<br />
| [[BTC Oxygen]] || EU || 1 || No || PPS || kept by pool || 0% || || [[getwork]] || 1-11-2012 || 1 || [https://bitcointalk.org/index.php?topic=120976.0 1] || [http://www.btcoxygen.com/ Link]<br />
|-<br />
| [[BitArena]] || Romania || 1 || No || Prop. || kept by pool || || 0% || [[getblocktemplate]] || 2012-09-22 || 1 || [https://bitcointalk.org/index.php?topic=112243.0 1] ||[https://www.bitarena.net/ Link]<br />
|-<br />
| [[Bitcash.cz|Bitcash.cz]] || Czech Republic || 5 || No || Prop. || kept by pool || || 0% || [[getwork]] || 2012-09-14 || 1 || [http://bitcash.cz/forum/ 1] || <br />
[http://bitcash.cz/pool/ Link]<br />
|-<br />
| [[Bitclockers|BitClockers]] || USA/EU || 250 || [[NMC]] || PPS || kept by pool || 8% || || [[getwork]] || 2011-05-27 || 1 || [http://forum.bitcoin.org/index.php?topic=10127.0 1] || [http://bitclockers.com/ Link]<br />
|-<br />
| [[Bitcoin_Pool|Bitcoin Mining Pool]] || USA || 70 || No || Prop. || kept by pool || || 0%<ref name="donations">Donations are possible</ref> || [[getwork]] || Unknown || 1 || [http://bitcoinpool.com/forum/ 1] || [http://www.bitcoinpool.com/ Link]<br />
|-<br />
| [[Bitcoin_Pooled_Mining|Slush's pool (mining.bitcoin.cz)]] || EU/France || 2000 || [[NMC]] || Score || shared || || 2% || [[getwork]], [http://mining.bitcoin.cz/stratum-mining stratum] || 2010-11-27 || Dynamic || [http://forum.bitcoin.org/index.php?topic=1976.0 1] || [http://mining.bitcoin.cz/ Link]<br />
|- <br />
| [[Bitcoins.lc]] || EU || 60 || No || Prop. || kept by pool || || 0% || [[getwork]] || 2011-05-27 || 1 || [http://forum.bitcoin.org/index.php?topic=10121.0 1] || [http://www.bitcoins.lc/ Link]<br />
|-<br />
| [[Bitparking]] || USA || 130 || [[NMC]], I0C, IXC, [[Devcoin]] || PPS || kept by pool || 2.5% || || [[getwork]] || 2012-01-08 || Choosable<ref name="changeable"/> || [https://bitcointalk.org/index.php?topic=57148.0 1] || [http://mmpool.bitparking.com/pool Link]<br />
|-<br />
| [[BitMinter]] || Germany || 2000 || [[NMC]] || PPLNS || shared || || 0% || [[getwork]], [[getblocktemplate]] || 2011-06-26 || 1 || [https://bitcointalk.org/index.php?topic=27062.0 1] || [https://bitminter.com Link]<br />
|-<br />
| [[BitPenny]] || USA || 4 || No || CPPSRB || 97% shared || 3% || || BlkPrep<ref name="local">Miner-local getwork proxy available.</ref> || 2011-02-08 || 8 || [https://bitcointalk.org/index.php?topic=36371.0 1] || [http://bitpenny.com/ Link]<br />
|-<br />
| [[BTC Canada]] || Canada || 2 || No || PPLNS || kept by pool || || 1.5% || [[getwork]] || 2012-08-08 || 1 || [https://bitcointalk.org/index.php?topic=99741.0/ 1] || [https://btccan.com/ Link]<br />
|-<br />
| [[BTC Guild]] || USA/EU || 2300 || [[NMC]] || PPS || kept by pool || 5% || || [[getwork]], [http://mining.bitcoin.cz/stratum-mining stratum] || 2011-05-09 || Choosable<ref name="changeable"/> || [http://forum.bitcoin.org/index.php?topic=7760.0 1] || [http://www.btcguild.com/ Link]<br />
|-<br />
| [[BTCMine]] || UK || 65 || No || Score || kept by pool || || 0% || [[getwork]] || 2011-03-11 || 1 || [http://forum.bitcoin.org/index.php?topic=4251.0 1] || [http://www.btcmine.com/ Link]<br />
|-<br />
| [[btcmp.com]] || Germany || 60 || No || PPS || kept by pool || 4% || || [[getwork]] || 2011-06-28 || 1 || || [http://www.btcmp.com/ Link]<br />
|-<br />
| [[BTCWarp]] || USA || 50 || No || Score || kept by pool || || 0% || [[getwork]] || ? || 1 || [http://www.bitcoinbalkan.com/forum 1] ||[http://www.btcwarp.com/ Link]<br />
|-<br />
| [[CoinLab Protected Pool]] || USA || ? || No || PPS || kept by pool || 2-5% || || [[getwork]] || 2012-08-09 || 1 || [https://bitcointalk.org/index.php?topic=99643 1] ||[https://bitcointalk.org/index.php?topic=99643 Link]<br />
|-<br />
| [[Coinotron|Coinotron]] || Poland || 70 || No || DGM || kept by pool || || 0% || [[getwork]] || 2011-07-06 || 1 || [http://forum.bitcoin.org/index.php?topic=26727.0 1] || [http://www.coinotron.com Link]<br />
|-<br />
| [[DeepBit]] || Germany || 4200 || No || PPS/Prop. || kept by pool || 10% || 3% || [[getwork]] || 2011-02-26 ||1 || [http://forum.bitcoin.org/index.php?topic=3889.0 1] || [http://deepbit.net/ Link]<br />
|-<br />
| [[Eclipse Mining Consortium]] || USA/EU/AU/Asia || 1900 || [[NMC]] || DGM/PPS || kept by pool || 5% || 0% || [[getwork]], [[getblocktemplate]]<ref name="local"/> || 2011-06-14 || 1/Choosable<ref name="changeable"/>/Dynamic || [http://forum.bitcoin.org/index.php?topic=16385.0 1] || [https://eclipsemc.com Link]<br />
|-<br />
| [[Eligius]] || Germany || 300 || [[NMC]] || SMPPS || kept by pool || 0%<ref name="donations">Donations are possible</ref> || || [[getwork]], [[getblocktemplate]]<ref name="local"/> || 2011-04-27 || 1 || [https://bitcointalk.org/index.php?topic=23768.msg298069#msg298069 1] || [http://eligius.st Link]<br />
|-<br />
| [[Horrible Horrendous TT]] || USA || 15 || No || PPS<ref name="stales">Pool also rewards stale shares</ref> || kept by pool || 1% || || [[getwork]] || 2012-08-29 || Choosable<ref name="changeable">The difficulty of the shares can be changed by the user.</ref> || [https://bitcointalk.org/index.php?topic=95378.0 1] || [http://hhtt.1209k.com/ Link]<br />
|-<br />
| [[Mining Team Reddit (MtRed)]] || USA/EU || 650 || [[NMC]] || PPS<ref name="stales">Pool also rewards stale shares</ref> || shared || 0% || || [[getwork]] || 2011-05-25 || 1 || [http://forum.bitcoin.org/index.php?topic=15929.0 1] [http://reddit.com/r/mtred/ 2] || [http://www.mtred.com/ Link]<br />
|-<br />
| [[MaxBTC]] || USA || 220 || [[NMC]] || DGM || kept by pool || || 0% || [[getwork]] || 2012-03-15 || 1 || [https://bitcointalk.org/index.php?topic=68734.0 1] || [https://www.maxbtc.com/ Link]<br />
|-<br />
| [[NMCBit]] || USA || 20 || [[NMC]] || PPS/Prop. || kept by pool || 6.6% || 3% || [[getwork]] || 2011-08-01 || 1 || [https://bitcointalk.org/index.php?topic=33612.0 1] [http://dot-bit.org/forum/viewtopic.php?f=6&t=268 2] || [http://www.nmcbit.com/ Link]<br />
|-<br />
| [[Ozco.in]] || USA/EU/AUS || 900 || [[NMC]] on DGM || DGM/PPS || shared on DGM || 4% || 2% || [[Stratum, getwork]] || 2011-06-07 || 1 || [https://bitcointalk.org/index.php?topic=14085.0 1] || [https://www.ozcoin.net Link]<br />
|-<br />
| [[P2Pool]] || Earth (P2P) || 300 || Solo Mining<ref>P2Pool supports merged mining but payouts in the merged chain are not pooled.</ref> || PPLNS || shared || || 0%<ref>People are donating ''to'' P2Pool miners to encourage people to use it. The P2Pool author also accepts optional donations.</ref> || Proprietary<ref name="local"/> || 2011-06-17 || Choosable<ref name="changeable"/> || [http://forum.bitcoin.org/index.php?topic=18313.0 1] || [https://en.bitcoin.it/wiki/P2Pool Link]<br />
|-<br />
| [[pool.itzod.ru]] || Russia || 420 || No || RSMPPS || shared || 0% || || [[getwork]], [[getblocktemplate]]<ref name="local"/>, [[stratum]]<ref name="local"/> || 2011-08-01 || Choosable<ref name="changeable"/> || [https://bitcointalk.org/index.php?topic=25127.0 1] [https://bitcointalk.org/index.php?topic=44024.0 2] || [https://pool.itzod.ru/ Link]<br />
|- <br />
| [[PolMine]] || Poland || 160 || No || SMPPS || shared || 1% || || [[getwork]], [[getblocktemplate]] || 2011-06-13 || 1 || [http://forum.polmine.pl/ 1] || [https://polmine.pl/?setlang=en Link]<br />
|-<br />
| [[Triplemining]] || EU || 90 || No || PPLNS || kept by pool || || 0% <ref name="jackpot">Triplemining keeps 1% to redistribute using a weekly jackpot and affiliations</ref> || [[getwork]], [[getblocktemplate]]<ref name="local"/> || 2011-06-28 || 1 || [http://forum.bitcoin.org/index.php?topic=23664.0 1] || [http://tinyurl.com/triplemining Link]<br />
|-<br />
| [[pool.mkalinin.ru]] || Russia || 27 || No || PPLNS || kept by pool || || 0% || [[getwork]] || 2011-07-20 || 1 || [https://bitcointalk.org/index.php?topic=30703.0 1] || [http://pool.mkalinin.ru/ Link]<br />
|-<br />
| [[alvarez.sfek.kz]] || Kazakhstan || 3.7 || No || PPLNS || kept by pool || || 0% || [[getwork]] || 2012-04-19 || 1 || [https://bitcointalk.org/index.php?topic=80135.0 1] || [http://alvarez.sfek.kz/ Link]<br />
|}<br />
<references/><br />
<br />
== See also ==<br />
*[[Pooled mining]]<br />
*[http://bcx.me/ Bitcoin Mining Pool Tracker]<br />
*[http://blockorigin.pfoe.be/chart.php Hashrate distribution pie chart]<br />
<br />
[[Category:Mining]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Protocol_rules&diff=33522Protocol rules2012-12-10T02:36:21Z<p>Dree12: update</p>
<hr />
<div>'''Rules''' for [[:Category:Clients|clients]].<br />
<br />
The wiki substantially documents the [[Protocol_specification|Bitcoin protocol]], but equally important are the rules used by the client to process messages. It's crucial that clients follow certain rules in order to maintain consistency across the network, and to protect the Bitcoin security guarantees.<br />
<br />
Here, the focus is on handling tx and block messages, because that is the tricky logic. This will skip over the method of requesting and forwarding these messages for now, and describe what to do when they are received. Also, this will describe the minimal data structures in rather abstract terms, ignoring the client's various indexes, maps and hash tables used for efficiency. This will be a conceptual description. This is all based on a fairly literal reading of the source code.<br />
<br />
Mining (block generation) rules are not yet presented.<br />
<br />
== Data structures ==<br />
<br />
The main data structures are [[transactions]] and [[blocks]]. Blocks are composed of the ''block header'' followed by transactions in the block. Transactions are identified by their hash; blocks by the hash of their header. Blocks have prev pointers that link them into a graph.<br />
<br />
Conceptually, the client has the following data structures:<br />
<br />
=== Transactions ===<br />
<br />
There are two collections of transactions:<br />
<br />
;transaction pool<br />
: an unordered collection of transactions that are not in blocks in the main chain, but for which we have input transactions<br />
<br />
;orphan transactions<br />
: transactions that can't go into the pool due to one or more missing input transactions<br />
<br />
=== Blocks ===<br />
<br />
There are 3 categories of blocks:<br />
<br />
;blocks in the main branch<br />
: the transactions in these blocks are considered at least tentatively confirmed<br />
<br />
;blocks on side branches off the main branch<br />
: these blocks have at least tentatively lost the race to be in the main branch<br />
<br />
;orphan blocks<br />
: these are blocks which don't link into the main branch, normally because of a missing predecessor or nth-level predecessor<br />
<br />
Blocks in the first two categories form a tree rooted at the [[genesis block]], linked by the prev pointer, which points toward the root. (It is a very linear tree with few and short branches off the main branch.) The main branch is defined as the branch with highest total difficulty, summing the difficulties for each block in the branch.<br />
<br />
See also [[Block Status]].<br />
<br />
== Difficulty change ==<br />
<br />
The difficulty changes every 2016 blocks. This choice is designed to occur approximately every two weeks.<br />
<br />
: 2 weeks / 10 minutes = 14 * 24 * 60 / 10 = 2016<br />
<br />
Once 2016 blocks has been reached we loop back until we hit the 2016th block before the current one. We find the difference in time between the current block and that one. This difference (called the actual timespan) is limited in bounds between [2 weeks/4, 2 weeks*4].<br />
<br />
Then we get the last target for this old 2 week window and multiply it by the ratio of the actual timespan / the target timespan (2 weeks in secs).<br />
<br />
: new target = old target * time for 2016 blocks / 2 weeks.<br />
<br />
If the old set of blocks completed too fast then the target is lowered (difficulty goes up) ensuring it takes longer to solve these new blocks... and vice versa. This way the difficulty oscillates around the ideal of 2 weeks (and 10 mins per block).<br />
<br />
== Block creation fee ==<br />
<br />
The block creation fee changes at every 210000 blocks. <br />
The block creation fee is a function of block height on the chain (genesis=0), and is calculated using 64 bit integer operations <br />
(in satoshis) as:<br />
<br />
(50 * 100000000) >> (height / 210000) <br />
<br />
The block creation fee started with 50 BTC, has fallen to 25 BTC at block 210000, will fall to 12.5 BTC at block 420000, and finally down to 0 satoshi with block 6930000. <br />
The block creation fee of all coinbase transactions will sum up to 2099999997690000 satoshis, practically 21million BTC.<br />
<br />
== [[Protocol_specification#tx|"tx"]] messages ==<br />
<br />
These messages hold a single transaction.<br />
<br />
# Check syntactic correctness<br />
# Make sure neither in or out lists are empty<br />
# Size in bytes < MAX_BLOCK_SIZE<br />
# Each output value, as well as the total, must be in legal money range<br />
# Make sure none of the inputs have hash=0, n=-1 (''coinbase'' transactions)<br />
# Check that nLockTime <= INT_MAX<ref>nLockTime must not exceed 31 bits, as some clients will interpret it incorrectly</ref>, size in bytes >= 100<ref>A valid transaction requires at least 100 bytes. If it's any less, the transaction is not valid</ref>, and sig opcount <= 2<ref>The number of signature operands in the signature (no, that is not redundant) for standard transactions will never exceed two</ref><br />
# Reject "nonstandard" transactions: scriptSig doing anything other than pushing numbers on the stack, or scriptPubkey not matching the two usual forms<ref>Note that this is not a hard requirement on clients.</ref><br />
# Reject if we already have matching tx in the pool, or in a block in the main branch<br />
# Reject if any other tx in the pool uses the same transaction output as one used by this tx.<ref>Note that this is not a hard requirement on clients. The network-enforced rule is that only <i>one</i> transaction spending a particular output can be in the blockchain, thus preventing double-spending. Technically miners can choose which one they want to put into the block they're working on as long as no other transaction has spent that output either previously in the blockchain, or in the same block. The in-memory transaction pool can technically be managed in whatever way the miner is willing to implement.</ref><br />
# For each input, look in the main branch and the transaction pool to find the referenced output transaction. If the output transaction is missing for any input, this will be an orphan transaction. Add to the orphan transactions, if a matching transaction is not in there already.<br />
# For each input, if we are using the ''n''th output of the earlier transaction, but it has fewer than n+1 outputs, reject this transaction<br />
# For each input, if the referenced output transaction is coinbase (i.e. only 1 input, with hash=0, n=-1), it must have at least COINBASE_MATURITY (100) confirmations; else reject this transaction<br />
# Verify crypto signatures for each input; reject if any are bad<br />
# For each input, if the referenced output has already been spent by a transaction in the main branch, reject this transaction<ref>This is the protection against double-spending</ref><br />
# Using the referenced output transactions to get input values, check that each input value, as well as the sum, are in legal money range<br />
# Reject if the sum of input values < sum of output values<br />
# Reject if transaction fee (defined as sum of input values minus sum of output values) would be too low to get into an empty block<br />
# Add to transaction pool<ref>Note that when the transaction is accepted into the memory pool, an additional check is made to ensure that the coinbase value does not exceed the transaction fees plus the expected BTC value (50BTC as of this writing).</ref><br />
# "Add to wallet if mine"<br />
# Relay transaction to peers<br />
# For each orphan transaction that uses this one as one of its inputs, run all these steps (including this one) recursively on that orphan<br />
<br />
===Explanation of Some Rules===<br />
Most rules are self-explanatory. This section explains why some of the less obvious rules are in place.<br />
<br />
== [[Protocol_specification#block|"block"]] messages ==<br />
<br />
These messages hold a single block.<br />
<br />
# Check syntactic correctness<br />
# Reject if duplicate of block we have in any of the three categories<br />
# Transaction list must be non-empty<br />
# Block hash must satisfy claimed ''nBits'' proof of work<br />
# Block timestamp must not be more than two hours in the future<br />
# First transaction must be coinbase (i.e. only 1 input, with hash=0, n=-1), the rest must not be<br />
# For each transaction, apply "tx" checks 2-4<br />
# For the coinbase (first) transaction, scriptSig length must be 2-100<br />
# Reject if sum of transaction sig opcounts > MAX_BLOCK_SIGOPS<br />
# Verify Merkle hash<br />
# Check if prev block (matching ''prev'' hash) is in main branch or side branches. If not, add this to orphan blocks, then query peer we got this from for 1st missing orphan block in ''prev'' chain; done with block<br />
# Check that ''nBits'' value matches the difficulty rules<br />
# Reject if timestamp is the median time of the last 11 blocks or before<br />
# For certain old blocks (i.e. on initial block download) check that hash matches known values<br />
# Add block into the tree. There are three cases: 1. block further extends the main branch; 2. block extends a side branch but does not add enough difficulty to make it become the new main branch; 3. block extends a side branch and makes it the new main branch.<br />
# For case 1, adding to main branch:<br />
## For all but the coinbase transaction, apply the following:<br />
### For each input, look in the main branch to find the referenced output transaction. Reject if the output transaction is missing for any input.<br />
### For each input, if we are using the ''n''th output of the earlier transaction, but it has fewer than n+1 outputs, reject.<br />
### For each input, if the referenced output transaction is coinbase (i.e. only 1 input, with hash=0, n=-1), it must have at least COINBASE_MATURITY (100) confirmations; else reject.<br />
### Verify crypto signatures for each input; reject if any are bad<br />
### For each input, if the referenced output has already been spent by a transaction in the main branch, reject<br />
### Using the referenced output transactions to get input values, check that each input value, as well as the sum, are in legal money range<br />
### Reject if the sum of input values < sum of output values<br />
## Reject if coinbase value > sum of block creation fee and transaction fees<br />
## (If we have not rejected):<br />
## For each transaction, "Add to wallet if mine"<br />
## For each transaction in the block, delete any matching transaction from the transaction pool<br />
## Relay block to our peers<br />
## If we rejected, the block is not counted as part of the main branch<br />
# For case 2, adding to a side branch, we don't do anything.<br />
# For case 3, a side branch becoming the main branch:<br />
## Find the ''fork'' block on the main branch which this side branch forks off of<br />
## Redefine the main branch to only go up to this ''fork'' block<br />
## For each block on the side branch, from the child of the ''fork'' block to the leaf, add to the main branch:<br />
### Do "branch" checks 3-11<br />
### For all but the coinbase transaction, apply the following:<br />
#### For each input, look in the main branch to find the referenced output transaction. Reject if the output transaction is missing for any input.<br />
#### For each input, if we are using the ''n''th output of the earlier transaction, but it has fewer than n+1 outputs, reject.<br />
#### For each input, if the referenced output transaction is coinbase (i.e. only 1 input, with hash=0, n=-1), it must have at least COINBASE_MATURITY (100) confirmations; else reject.<br />
#### Verify crypto signatures for each input; reject if any are bad<br />
#### For each input, if the referenced output has already been spent by a transaction in the main branch, reject<br />
#### Using the referenced output transactions to get input values, check that each input value, as well as the sum, are in legal money range<br />
#### Reject if the sum of input values < sum of output values<br />
### Reject if coinbase value > sum of block creation fee and transaction fees<br />
### (If we have not rejected):<br />
### For each transaction, "Add to wallet if mine"<br />
## If we reject at any point, leave the main branch as what it was originally, done with block<br />
## For each block in the old main branch, from the leaf down to the child of the ''fork'' block:<br />
### For each non-coinbase transaction in the block:<br />
#### Apply "tx" checks 2-9, except in step 8, only look in the transaction pool for duplicates, not the main branch<br />
#### Add to transaction pool if accepted, else go on to next transaction<br />
## For each block in the new main branch, from the child of the ''fork'' node to the leaf:<br />
### For each transaction in the block, delete any matching transaction from the transaction pool<br />
## Relay block to our peers<br />
# For each orphan block for which this block is its ''prev'', run all these steps (including this one) recursively on that orphan<br />
<br />
== See Also ==<br />
<br />
* [[Protocol specification]]<br />
* [[Bitcoin Improvement Proposals]]<br />
* [[Hardfork Wishlist]]<br />
<br />
==References==<br />
<references /><br />
<br />
[[Category:Technical]][[Category:Developer]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Myths&diff=33521Myths2012-12-10T02:35:14Z<p>Dree12: 50 -> 25</p>
<hr />
<div>Let's clear up some common Bitcoin misconceptions.<br />
<br />
== Bitcoin is just like all other digital currencies; nothing new ==<br />
<br />
Nearly all other digital currencies are centrally controlled. This means that:<br />
* They can be printed at the subjective whims of the controllers<br />
* They can be destroyed by attacking the central point of control<br />
* Arbitrary rules can be imposed upon their users by the controllers<br />
<br />
Being decentralized, Bitcoin solves all of these problems.<br />
<br />
== Bitcoins don't solve any problems that fiat currency and/or gold doesn't solve ==<br />
<br />
Unlike gold, bitcoins are:<br />
* Easy to transfer<br />
* Easy to secure<br />
* Easy to verify<br />
* Easy to granulate<br />
<br />
Unlike fiat currencies, bitcoins are:<br />
* Predictable and limited in [[Controlled_Currency_Supply|supply]]<br />
* Not controlled by a central authority (such as [http://en.wikipedia.org/wiki/Federal_Reserve The United States Federal Reserve])<br />
<br />
Unlike electronic fiat currency systems, bitcoins are:<br />
* Potentially anonymous<br />
* Freeze-proof<br />
* Faster to transfer<br />
* Cheaper to transfer<br />
<br />
== Bitcoin is backed by processing power ==<br />
<br />
It is not correct to say that Bitcoin is "backed by" processing power. A currency being "backed" means that it is pegged to something else via a central party at a certain exchange rate yet you cannot exchange bitcoins for the computing power that was used to create them. Bitcoin is in this sense not backed by anything. It is a currency in its own right. Just as gold is not backed by anything, the same applies to Bitcoin. <br />
<br />
The Bitcoin currency is ''created'' via processing power, and the integrity of the block chain is ''protected'' by the existence of a network of powerful computing nodes from certain [[Weaknesses#Attacker_has_a_lot_of_computing_power|attacks]].<br />
<br />
== Bitcoins are worthless because they aren't backed by anything ==<br />
<br />
One could argue that gold isn't backed by anything either. Bitcoins have properties resulting from the system's design that allows them to be subjectively valued by individuals. This valuation is demonstrated when individuals freely exchange for or with bitcoins. Please refer to the [http://en.wikipedia.org/wiki/Subjective_theory_of_value Subjective Theory of Value].<br />
<br />
See also: the "[[#Bitcoin_is_backed_by_processing_power|Bitcoin is backed by processing power]]" myth.<br />
<br />
== The value of bitcoins are based on how much electricity and computing power it takes to mine them ==<br />
<br />
This statement is an attempt to apply to Bitcoin the [http://en.wikipedia.org/wiki/Labor_theory_of_value labor theory of value], which is generally accepted as false. Just because something takes X resources to create does not mean that the resulting product will be worth X. It can be worth more, or less, depending on the utility thereof to its users.<br />
<br />
In fact the causality is the reverse of that (this applies to the labor theory of value in general). The cost to mine bitcoins is based on how much they are worth. If bitcoins go up in value, more people will mine (because [[Mining|mining]] is profitable), thus [[difficulty]] will go up, thus the cost of mining will go up. The inverse happens if bitcoins go down in value. These effects balance out to cause mining to always cost an amount proportional to the value of bitcoins it produces.<br />
<br />
== Bitcoins have no intrinsic value (unlike some other things) ==<br />
<br />
It is true that bitcoins have no intrinsic value, in the [http://en.wikipedia.org/wiki/Intrinsic_value_%28numismatics%29 numismatic sense], in other words, value in any realm outside of being used as a medium of exchange.<br />
<br />
However, while some tangible commodities do have intrinsic value, that value is generally much less than its trading price. Consider for example that gold, if it were not used as an inflation-proof store of value, but rather only for its industrial uses, would certainly not be worth what it is today, since the industrial requirements for gold are far smaller than the available supply thereof.<br />
<br />
While historically intrinsic value, as well as other attributes like divisibility, fungibility, scarcity, durability, helped establish certain commodities as mediums of exchange, it is certainly not a prerequisite. While bitcoins lack 'intrinsic value' in this sense, they make up for it in spades by possessing the other qualities necessary to make it a good medium of exchange, equal to or better than [http://en.wikipedia.org/wiki/Commodity_money commodity money].<br />
<br />
Value is ultimately determined by what people are willing to trade for - by supply and demand.<br />
<br />
== Bitcoins are illegal because they're not legal tender ==<br />
<br />
Chickens aren't legal tender either, but bartering with chickens is not illegal.<br />
<br />
There are a [http://en.wikipedia.org/wiki/Local_currency number of currencies] in existence that are not official government-backed currencies. A currency is, after all, nothing more than a convenient unit of account. While national laws may vary from country to country, and you should certainly check the laws of your jurisdiction, in general trading in any commodity, including digital currency like Bitcoin, [http://en.wikipedia.org/wiki/BerkShares BerkShares], game currencies like WoW gold, or Linden dollars, is not illegal.<br />
<br />
== Bitcoin is a form of domestic terrorism because it only harms the economic stability of the USA and its currency ==<br />
<br />
http://en.wikipedia.org/wiki/Definitions_of_terrorism#United_States according to this, you need to do violent activities to be considered a terrorist for legal purposes. Recent off-the-cuff remarks by politicians have no basis in law or fact.<br />
<br />
Also, Bitcoin isn't domestic to the US or any other country. It's a worldwide community. See this map of Bitcoin nodes <br />
https://bitcointalk.org/?topic=2346.0<br />
<br />
== Bitcoin will only enable tax evaders which will lead to the eventual downfall of civilization ==<br />
<br />
Cash transactions hold the same level of anonymity but are still taxed successfully. It is up to you to follow the applicable state laws in your home country, or face the consequences.<br />
<br />
While it may be easy to transfer bitcoins anonymously, ''spending'' them anonymously on tangibles is just as hard as spending any other kind of money anonymously. Tax evaders are often caught because their lifestyle and assets are inconsistent with their reported income, and not necessarily because government is able to follow their money.<br />
<br />
== Bitcoins can be printed/minted by anyone and are therefore worthless ==<br />
<br />
Bitcoins are not printed/minted. Instead, [[Blocks]] are computed by miners and for their efforts they are awarded a specific amount of bitcoins and transaction fees paid by others. See [[Mining]] for more information on how this process works.<br />
<br />
== Bitcoins are worthless because they're based on unproven cryptography ==<br />
<br />
SHA256 and ECDSA which are used in Bitcoin are well-known industry standard algorithms. SHA256 is endorsed and used by the US Government and is standardized (FIPS180-3 Secure Hash Standard). If you believe that these algorithms are untrustworthy then you should not trust Bitcoin, credit card transactions or any type of electronic bank transfer. Bitcoin has a sound basis in well understood cryptography.<br />
<br />
== Early adopters are unfairly rewarded ==<br />
<br />
Early adopters are rewarded for taking the higher risk with their time and money. This argument is akin to saying that people who buy stock at a company IPO (Initial Public Offering) are unfairly rewarded. This argument also depends on bitcoin early adopters using bitcoins to store rather than transfer value. The daily trade on the exchanges (as of Jan 2012) indicates that smaller transactions are becoming the norm, indicating trade rather than investment. <br />
<br />
In more pragmatic terms, "fairness" is an arbitrary concept that is improbable to be agreed upon by a large population. Establishing "fairness" is no goal of Bitcoin, as this would be impossible.<br />
<br />
By starting to mine or acquire bitcoins today, you too can become an early adopter.<br />
<br />
== 21 million coins isn't enough; doesn't scale ==<br />
<br />
One Bitcoin is divisible down to eight decimal places. There are really 2,099,999,997,690,000 (just over 2 quadrillion) maximum possible atomic units in the bitcoin design.<br />
<br />
The value of "1 BTC" represents 100,000,000 of these. In other words, each is divisible by up to 10^8. <br />
<br />
As the value of the unit of 1 BTC grows too large to be useful for day to day transactions, people can start dealing in smaller [[Units|units]], such as milli-bitcoins (mBTC) or micro-bitcoins (μBTC).<br />
<br />
== Bitcoins are stored in wallet files, just copy the wallet file to get more coins! ==<br />
<br />
No, your wallet contains your secret keys, giving you the rights to spend your bitcoins. Think of it like having bank details stored in a file. If you give your bank details (or bitcoin wallet) to someone else, that doesn't double the amount of money in your account. You can spend your money or they can spend your money, but not both.<br />
<br />
== Lost coins can't be replaced and this is bad ==<br />
<br />
Bitcoins are divisible to 0.00000001, so there being fewer bitcoins remaining is not a problem for the currency itself. If you lose your coins, all other coins will go up in value a little. Consider it a donation to all other bitcoin users.<br />
<br />
A related question is: Why don't we have a mechanism to replace lost coins? The answer is that it is impossible to distinguish between a 'lost' coin and one that is simply sitting unused in someone's wallet.<br />
<br />
== It's a giant ponzi scheme ==<br />
In a Ponzi Scheme, the founders persuade investors that they’ll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy.<br />
<br />
A ponzi scheme is a zero sum game. In a ponzi scheme, early adopters can only profit at the expense of late adopters, and the late adopters always lose. Bitcoin has an expected win-win outcome. Early and present adopters profit from the rise in value as Bitcoins become better understood and in turn demanded by the public at large. All adopters benefit from the usefulness of a reliable and widely-accepted decentralized peer-to-peer currency.<br />
<br />
== Finite coins plus lost coins means deflationary spiral ==<br />
As deflationary forces may apply, economic factors such as hoarding are offset by human factors that may lessen the chances that a [[Deflationary spiral]] will occur.<br />
<br />
== Bitcoin can't work because there is no way to control inflation ==<br />
<br />
Inflation is simply a rise of prices over time, which is generally the result of the devaluing of a currency. This is a function of supply and demand. Given the fact that the supply of bitcoins is fixed at a certain amount, unlike fiat money, the only way for inflation to get out of control is for demand to disappear. Temporary inflation is possible with a rapid adoption of Fractional Reserve Banking but will stabilize once a substantial number of the 21 million "hard" bitcoins are stored as reserves by banks.<br />
<br />
Given the fact that Bitcoin is a distributed system of currency, if demand were to decrease to almost nothing, the currency would be doomed anyway.<br />
<br />
The key point here is that Bitcoin as a currency can't be inflated by any single person or entity, like a government, as there's no way to increase supply past a certain amount.<br />
<br />
Indeed, the most likely scenario, as Bitcoin becomes more popular and demand increases, is for the currency to increase in value, or deflate, until demand stabilizes.<br />
<br />
== The Bitcoin community consists of anarchist/conspiracy theorist/gold standard 'weenies' ==<br />
<br />
The members of the community vary in their ideological stances.<br />
<br />
== Anyone with enough computing power can take over the network ==<br />
<br />
CONFIRMED, see [[Weaknesses]].<br />
<br />
That said, as the network grows, it becomes harder and harder for a single entity to do so. Already the Bitcoin network's computing power is quite ahead of the world's fastest supercomputers, together.<br />
<br />
What an attacker can do once the network is taken over is quite limited. Under no circumstances could an attacker create counterfeit coins, fake transactions, or take anybody else's money. An attacker's capabilities are limited to taking back their own money that they very recently spent, and preventing other people's transactions from receiving confirmations. Such an attack would be very costly in resources, and for such meager benefits there is little rational economic incentive to do such a thing.<br />
<br />
Furthermore, this attack scenario would only be feasible for as long as it was actively underway. As soon as the attack stopped, the network would resume normal operation.<br />
<br />
== Bitcoin violates governmental regulations ==<br />
<br />
There is no known governmental regulation which disallows the use of Bitcoin.<br />
<br />
See also: the "[[#Bitcoins_are_illegal_because_they.27re_not_legal_tender|Bitcoins are illegal because they're not legal tender]]" myth.<br />
<br />
== Fractional reserve banking is not possible ==<br />
<br />
It is possible. See the main article, [[Fractional Reserve Banking and Bitcoin]]<br />
<br />
== Point of sale with bitcoins isn't possible because of the 10 minute wait for confirmation ==<br />
<br />
It is true that transactions [[FAQ#Why_do_I_have_to_wait_10_minutes_before_I_can_spend_money_I_received.3F|can]] sometimes take tens of minutes to become ''confirmed''. Despite this, retailers can accept unconfirmed transactions with very little risk by simply 'listening' on the network for a double-spend transaction, or partnering with a company that provides this service. After a head start of merely several seconds, the original transaction would reach so much of the Bitcoin network that a fraudulent double-spend transaction would almost certainly be fruitless. An attacker would have to commit easily-detectable fraud, in person, several hundred or several thousand times, before one of these low-value double-spend attempts would likely succeed.<br />
<br />
An attacker could work around the necessity of sending out a second fraudulent transaction to the Bitcoin network by attempting to [[Mining|solo-mine]] an attack block containing the attack transaction himself - temporarily withholding the block with the rest of the network - and then execute the fraudulent purchase within seconds, or minutes at most, of mining the attack block, before broadcasting the attack block. However, the cost of such an activity would dramatically outweigh the value of anything typically offered without a confirmation wait for several reasons.<br />
<br />
First, mining a block (attack or otherwise) entitles the miner to a valuable block reward, and because the attack involves temporarily withholding the block from the network, the attacker would put himself in the likely position of his block becoming [[Stale block|stale]], which would result in forfeiture of the entire reward. Most solo miners solve less than one block per month, so this would represent the loss of proceeds of potentially several weeks of mining.<br />
<br />
Second, it is not possible for a solo miner to know exactly when his mining activity will yield a block, and because the attack must be carried out within seconds or minutes of successfully mining a block, the attacker will not be able to know or plan in advance the brief window when the attack would be likely to succeed. While it may be easy for a determined attacker to get low-value items that are sold and delivered online instantly without waiting for confirmations (such as downloads), this unpredictability and the briefness of the opportunity would make it extremely difficult to commit any kind of fraud where real-life interaction is required, such as visiting a merchant or taking possession of goods. Petty shoplifting would be far simpler. Even if an attacker went forward with this attack, the retailer would be notified of the fraud the moment the attack block is released seconds later.<br />
<br />
In short, the 10-minute wait for confirmation is only practically necessary when delivering goods of value that significantly exceed the block reward an attacker would have to risk to perform an attack and where recourse after delivery is practically nonexistent, such as money transfers.<br />
<br />
== After 21 million coins are mined, no one will generate new blocks ==<br />
<br />
When operating costs can't be covered by the block creation bounty, which will happen some time before the total amount of BTC is reached, miners will earn some profit from [[transaction fees]]. However unlike the block reward, there is [http://bitcoin.stackexchange.com/questions/876/how-much-will-transaction-fees-eventually-be/895#895 no coupling between transaction fees and the need for security], so there is less of a guarantee that the amount of [[Mining|mining]] being performed will be sufficient to maintain the network's security.<br />
<br />
== Bitcoin has no built-in chargeback mechanism, and this isn't good ==<br />
<br />
'''Why some people think this is bad''': Chargebacks are useful for limiting fraud. The person handling your money has a responsibility to prevent fraud. If you buy something on eBay and the seller never ships it, PayPal takes funds from the seller's account and gives you back the money. This strengthens the eBay economy, because people recognize that their risk is limited and are more willing to purchase items from risky sellers.<br />
<br />
'''Why it's actually a good thing''': Bitcoin is designed such that your money is yours and yours alone. Allowing chargebacks implies that it is possible for another entity to take your money from you. You can have either total ownership rights of your money, or fraud protection, but not both. That said, nothing inherent in the dollar or euro or any other currency is necessary for chargebacks to be possible, and likewise, nothing prevents the creation of PayPal-like services denominated in Bitcoin that provide chargebacks or fraud protection.<br />
<br />
The statement "The person handling your money has a responsibility to prevent fraud" is still true; the power has been shifted into your own hands. Fraud will always exist. It's up to you to only send bitcoins to trusted entities. It is possible to trust an online identity without ever knowing their physical identity; see the [http://wiki.bitcoin-otc.com/wiki/OTC_Rating_System OTC Web of Trust].<br />
<br />
== Quantum computers would break Bitcoin's security ==<br />
<br />
Yes, but quantum computers don't yet exist and probably won't for a while. Bitcoin's security can be [http://en.wikipedia.org/wiki/Post-quantum_cryptography upgraded] if this were considered an imminent threat.<br />
<br />
See the implications of quantum computers on public key cryptography here http://en.wikipedia.org/wiki/Quantum_computer#Potential<br />
<br />
The ''risk'' of quantum computers is also there for financial institutions, like banks, because they heavily rely on cryptography when doing transactions.<br />
<br />
== [[Mining|Bitcoin mining]] is a waste of energy and harmful for ecology ==<br />
<br />
No more so than the wastefulness of mining gold out of the ground, melting it down and shaping it into bars, and then putting it back underground again. Not to mention the building of big fancy buildings, the waste of energy printing and minting all the various fiat currencies, the transportation thereof in armored cars by no less than two security guards for each who could probably be doing something more productive, etc. <br />
<br />
As far as mediums of exchange go, Bitcoin is actually quite economical of resources, compared to others.<br />
<br />
'''Economic Argument 1'''<br />
<br />
[[Mining|Bitcoin mining]] is a highly competitive, dynamic, almost [http://en.wikipedia.org/wiki/Perfect_market perfect], market. Mining rigs can be set up and dismantled almost anywhere in the world with relative ease. Thus, market forces are constantly pushing mining activity to ''places'' and ''times'' where the marginal price of electricity is low or zero. These electricity products are cheap for a reason. Often it’s because the electricity is difficult (and wasteful) to transport, difficult to store, or because there is low demand and high supply. Using electricity in this way is a lot less wasteful than simply plugging a mining rig into the mains indiscriminately. <br />
<br />
For example, Iceland produces an excess of cheap electricity from renewable sources, but it has no way of exporting electricity because of its remote location. It is conceivable that at some point in future Bitcoin mining will only be profitable in places like Iceland, and unprofitable in places like central Europe, where electricity comes mostly from nuclear and fossil sources. <br />
<br />
Market forces could even push mining into innovative solutions that have an effective electricity consumption of ''zero''. Mining always produces heat equivalent to the energy consumed - for example, 1000 watts of mining equipment produces the same amount of heat as a 1000 watt heating element used in an electric space heater, hot tub, water heater, or similar appliance. Someone already in a willing position to incur the cost of electricity for its heat value alone could run mining equipment specially designed to mine bitcoins while capturing and utilizing the heat produced, without incurring any energy costs beyond what they already intended to spend on heating.<br />
<br />
'''Economic Argument 2'''<br />
<br />
When the environmental costs of mining are considered, they need to be weighed up against the benefits. If you question Bitcoin on the grounds that it consumes electricity, then you should also ask questions like this: Will Bitcoin promote economic growth by freeing up trade? Will this speed up the rate of technological innovation? Will this lead to faster development of green technologies? Will Bitcoin enable new, border crossing [http://en.wikipedia.org/wiki/Smart_grid smart grid] technologies? …<br />
<br />
Dismissal of Bitcoin because of its costs, while ignoring its benefits, is a dishonest argument. In fact, any environmental argument of this type is dishonest, not just pertaining to Bitcoin. Along similar lines, it could be argued that wind turbines are bad for the environment because making the steel structure consumes energy.<br />
<br />
== Shopkeepers can't seriously set prices in bitcoins because of the volatile exchange rate ==<br />
<br />
Your assumption is that bitcoins must be sold immediately to cover operating expenses. If the shopkeeper's back-end expenses were transacted in bitcoins as well, then the exchange rate would be irrelevant. Larger adoption of Bitcoin would make prices [http://en.wikipedia.org/wiki/Sticky_%28economics%29 sticky]. Future volatility is expected to decrease, as the size and depth of the market grows. <br />
<br />
In the meantime, many merchants simply regularly pull the latest market rates from the exchanges and automatically update the prices on their websites. Also you might be able to buy a put option in order to sell at a fixed rate for a given amount of time. This would protect you from drops in price and simplify your operations for that time period.<br />
<br />
== Like Flooz and e-gold, bitcoins serve as opportunities for criminals and will be shut down ==<br />
<br />
* Visa, MasterCard, PayPal, and cash all serve as opportunities for criminals as well, but society keeps them around due to their recognized net benefit.<br />
* Hopefully Bitcoin will grow to the point where no single organization can disrupt the network, or would be better served by helping it.<br />
* Terrorists fly aircraft into buildings, but the governments have not yet abolished consumer air travel. Obviously the public good outweighs the possible bad in their opinion.<br />
* Criminal law differs between jurisdictions.<br />
<br />
== Bitcoins will be shut down by the government just like Liberty Dollars were ==<br />
<br />
Liberty Dollars started as a commercial venture to establish an alternative US currency, including physical banknotes and coins, backed by precious metals. This, in and of itself, is not illegal. They were prosecuted under counterfeiting laws because the silver coins allegedly resembled US currency.<br />
<br />
Bitcoins do not resemble the currency of the US or of any other nation in any way, shape, or form. The word "dollar" is not attached to them in any way. The "$" symbol is not used in any way.<br />
<br />
Bitcoins have no representational similarity whatsoever to US dollars. <br />
<br />
Of course, actually 'shutting down' Liberty Dollars was as easy as arresting the head of the company and seizing the offices and the precious metals used as backing. The decentralized Bitcoin, with no leader, no servers, no office, and no tangible asset backing, does not have the same vulnerability.<br />
<br />
== Bitcoin is not decentralized because the developers can dictate the software's behavior ==<br />
<br />
The Bitcoin protocol was originally defined by Bitcoin's inventor, [[Satoshi Nakamoto]], and this protocol has now been widely accepted as the standard by the community of miners and users. <br />
<br />
Though the developers of the original Bitcoin client still exert influence over the Bitcoin community, their power to arbitrarily modify the protocol is very limited. Since the release of Bitcoin v0.3, changes to the protocol have been minor and always in agreement with community consensus.<br />
<br />
Protocol modifications, such as increasing the block award from 25 to 50 BTC, are not compatible with clients already running in the network. If the developers were to release a new client that the majority of miners perceives as corrupt, or in violation of the project’s aims, that client would simply not catch on, and the few users who do try to use it would find that their transactions get rejected by the network.<br />
<br />
There are also other [[:Category:Clients|Bitcoin clients made by other developers]] that adhere to the Bitcoin protocol. As more developers create alternative clients, less power will lie with the developers of the original Bitcoin client. <br />
<br />
== Bitcoin is a pyramid scheme ==<br />
<br />
Bitcoin is nearly opposite of a pyramid scheme in a mathematical sense. Because Bitcoins are algorithmically made scarce, no exponential benefit is derived from introducing new users to use of it. There is a quantitative benefit in having additional interest or demand, but this is in no way exponential.<br />
<br />
[[de:Mythen]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=How_bitcoin_works&diff=33520How bitcoin works2012-12-10T02:34:17Z<p>Dree12: 50 -> 25</p>
<hr />
<div>This page explains the basic framework of Bitcoin's functionality.<br />
<br />
==Cryptography==<br />
<br />
There are several cryptographic technologies that make up the essence of Bitcoin. <br />
<br />
First is [http://en.wikipedia.org/wiki/Public-key_cryptography public key cryptography]. Each coin is associated with its current owner's public [http://en.wikipedia.org/wiki/Elliptic_Curve_DSA ECDSA] key. When you send some bitcoins to someone, you create a message ([[transaction]]), attaching the new owner's public key to this amount of coins, and sign it with your private key. When this transaction is broadcast to the bitcoin network, this lets everyone know that the new owner of these coins is the owner of the new key. Your signature on the message verifies for everyone that the message is authentic. The complete history of transactions is kept by everyone, so anyone can verify who is the current owner of any particular group of coins.<br />
<br />
This complete record of transactions is kept in the [[block chain]], which is a sequence of records called [[block|blocks]]. All computers in the network have a copy of the block chain, which they keep updated by passing along new blocks to each other. Each block contains a group of transactions that have been sent since the previous block. In order to preserve the integrity of the block chain, each block in the chain confirms the integrity of the previous one, all the way back to the first one, the [[genesis block]]. Record insertion is costly because each block must meet certain requirements that make it [[difficulty|difficult]] to generate a valid block. This way, no party can overwrite previous records by just forking the chain.<br />
<br />
To make generating bitcoins difficult the [http://en.wikipedia.org/wiki/Hashcash Hashcash] cost-function is used. Hashcash is the first secure efficiently verifiable cost-function or proof-of-work function. The beauty of hashcash is that is is non-interactive and has no secret keys that have to be managed by a central server or relying party; hashcash is as a result fully distributed and infinitely scalable. (Hashcash uses symmetric key cryptogaphy, namely a one-way hashcash function - typically either SHA1 or SHA-256). <br />
<br />
In bitcoin, integrity, block-chaining, and the hashcash cost-function all use [http://en.wikipedia.org/wiki/SHA-2 SHA256] as the underlying [http://en.wikipedia.org/wiki/Cryptographic_hash_function cryptographic hash function]. <br />
<br />
A cryptographic hash function essentially takes input data which can be of practically any size, and transforms it, in an effectively-impossible to reverse or to predict way, into a relatively compact string (in the case of SHA-256 the hash is 32 bytes). Making the slightest change to the input data changes its hash unpredictably, so nobody can create a different block of data that gives exactly the same hash. Therefore, by being given a compact hash, you can confirm that it matches only a particular input datum, and in bitcoin the input data being a block-chain is significantly larger than the SHA-256 hash. This way, Bitcoin blocks don't have to contain serial numbers, as blocks can be identified by their hash, which serves the dual purpose of identification as well as integrity verification. An identification string that also provides its own integrity is called a self-certifying identifier.<br />
<br />
The hashcash [[difficulty]] factor is achieved by requiring that the hash output has a number of leading zeros. Technically, to allow more fine-grained control than Hashcash number of leading 0-bits method, Bitcoin extends the hashcash solution definition by treating the hash as a large big-endian integer, and checking that the integer is below a certain threshold. The hashcash cost-function iterates by perturbing data in the block by a [[nonce]] value, until the data in the block hashes to produce an integer below the threshold - which takes a lot of processing power. This low hash value for the block serves as an easily-verifiable [[proof of work]] - every node on the network can instantly verify that the block meets the required criteria.<br />
<br />
With this framework, we are able to achieve the essential functions of the Bitcoin system. We have verifiable ownership of bitcoins, and a distributed database of all transactions, which prevents [[#Double_spending|double spending]].<br />
<br />
==Bitcoin [[Mining]]==<br />
<br />
We have mentioned in the previous section that adding a block to the block chain is difficult, requiring time and processing power to accomplish. The incentive to put forth this time and electricity is that the person who manages to produce a block gets a reward. This reward is two-fold. First, the block producer gets a bounty of some number of bitcoins, which is agreed-upon by the network. (Currently this bounty is 25 bitcoins; this value will halve every 210,000 blocks.) Second, any [[transaction fees]] that may be present in the transactions included in the block, get claimed by the block producer. <br />
<br />
This gives rise to the activity known as "Bitcoin [[Mining|mining]]" - using processing power to try to produce a valid block, and as a result 'mine' some bitcoins. The network rules are such that the [[difficulty]] is adjusted to keep block production to approximately 1 block per 10 minutes. Thus, the more miners engage in the mining activity, the more difficult it becomes for each individual miner to produce a block. The higher the total difficulty, the harder it is for an attacker to overwrite the tip of the block chain with his own blocks (which enables him to double-spend his coins. See the [[weaknesses]] page for more details).<br />
<br />
Besides being important for maintaining the transaction database, mining is also the mechanism by which bitcoins get created and distributed among the people in the bitcoin economy. The network rules are such that over the next hundred years, give or take a few decades, a total of 21 million bitcoins will be created. See [[Controlled Currency Supply]]. Rather than dropping money out of a helicopter, the bitcoins are awarded to those who contribute to the network by creating [[block]]s in the [[block chain]].<br />
<br />
==Double spending==<br />
<br />
The [[block chain]] is a common ledger shared by all Bitcoin nodes which details the owner of each bitcoin, or fraction thereof. Unlike conventional banking systems, there is no central place where this ledger of transactions is stored. This is accomplished through the broadcasting of small pieces ("blocks"), each stating that it is a continuation of a previous block. It is possible for the block chain to split; that is, it is possible for two blocks to both point to the same parent block and contain some, but not all, of the same transactions. When this happens, each computer in the network must decide for itself which branch is the "correct" one that should be accepted and extended further.<br />
<br />
The rule in this case is to accept the "longest" valid branch. Choose from the branches of blocks that you have received, the path, the total "difficulty" of which is the highest. This is the sequence of blocks that is assumed to have required the most work (CPU time) to generate. For Bitcoin, this will be the "true" order of events, and this is what it will take into account when calculating the balance to show to the user. <br />
<br />
It is still possible that, as new blocks are constantly being generated, at some later time, some other branch will become the longest branch. However, it takes significant effort to extend a branch, and nodes work to extend the branch that they have received and accepted (which is normally the longest one). So, the longer this branch becomes compared to the second-longest branch, the more effort it will take for the second-longest branch to catch up and overcome the first in length. Also, the more nodes in the network hear about the longest branch, the more unlikely it becomes for other branches to be extended the next time a block is generated, since the nodes will accept the longest chain.<br />
<br />
Therefore, the more time a transaction has been part of the longest block chain, the more likely it is to remain part of the chain indefinitely. This is what makes transactions non-reversible and this is what prevents people from [[double-spending]] their coins. What the receiver of each transaction does, after money has been supposedly transferred to him/her is to check how long the block chain following the said transaction has become, because the more blocks are added to the longest branch after the transaction, the less likely is it that some other branch will overcome it.<br />
<br />
When the block chain after the transaction has become long enough, it becomes near-impossible for another branch to overcome it, and so people can start accepting the transaction as true. This is why 'blocks' also serve as 'confirmations' for a transaction. Even if another branch does overcome the one with the transaction, most of the blocks will have been generated by people who have no affiliation with the sender of the coins, as a large number of people are working to generate blocks. Since transactions are broadcasted to all nodes in the network, these blocks are just as likely to contain the transaction as the blocks in the previously-accepted branch.<br />
<br />
Bitcoin relies on the fact that no single entity can control most of the CPU power on the network for any significant length of time, since, if they could, they would be able to extend any branch of the tree they chose, and faster than any other branch can be extended, making it the longest branch, and then permanently controlling which transactions appear in it.<br />
<br />
==See also==<br />
<br />
* [[Introduction]]<br />
* [[Getting started]]<br />
* [[Using Bitcoin]]<br />
* Bitcoin [[FAQ]]<br />
* [[Double-spending]]<br />
<br />
==External Links==<br />
<br />
* http://bitcointalk.org/index.php?topic=2487.0 A forum thread with some good 'for-the-layperson' explanations of how bitcoin works.<br />
<br />
[[Category:Introduction]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Block_chain&diff=33519Block chain2012-12-10T02:33:12Z<p>Dree12: remove 50 BTC</p>
<hr />
<div>[[File:blockchain.png|thumb|Blocks in the main chain (black) are the longest series of blocks that go from the genesis block (green) to the current block. Orphan blocks (purple) are blocks that are not in the longest chain.]]<br />
<br />
A '''block chain''' is a transaction database shared by all [[Node|nodes]] participating in a system based on the Bitcoin protocol. A full copy of a currency's block chain contains every [[transaction]] ever executed in the currency. With this information, one can find out how much value belonged to each [[address]] at any point in history.<br />
<br />
Every [[block]] contains a [[hash]] of the previous block. This has the effect of creating a chain of blocks from the [[genesis block]] to the current block. Each block is guaranteed to come after the previous block chronologically because the previous block's hash would otherwise not be known. Each block is also computationally impractical to modify once it has been in the chain for a while because every block after it would also have to be regenerated. These properties are what make [[double-spending]] of bitcoins very difficult. The block chain is the main innovation of Bitcoin.<br />
<br />
Honest generators only build onto a block (by referencing it in blocks they create) if it is the latest block in the longest valid chain. "Length" is calculated as total combined difficulty of that chain, not number of blocks, though this distinction is only important in the context of a few potential attacks. A chain is valid if all of the blocks and transactions within it are valid, and only if it starts with the genesis block.<br />
<br />
For any block on the chain, there is only one path to the genesis block. Coming from the genesis block, however, there can be forks. One-block forks are created from time to time when two blocks are created just a few seconds apart. When that happens, generating nodes build onto whichever one of the blocks they received first. Whichever block ends up being included in the next block becomes part of the main chain because that chain is longer. More serious forks have occurred after fixing bugs that required backward-incompatible changes.<br />
<br />
Blocks in shorter chains (or invalid chains) are called "orphan blocks", and while they are stored, they are not used for anything. When a block becomes an orphan block, all of its valid transactions are re-added to the pool of queued transactions and will be included in another block. The reward for the orphan block will be lost, which is why a network-enforced 100-block maturation time for generations exists.<br />
<br />
Because a block can only reference one previous block, it is impossible for two forked chains to merge.<br />
<br />
It's possible to use the block chain algorithm for non-financial purposes: see [[Alternative chain]].<br />
<br />
The block chain is broadcasted to all nodes on the networking using a flood protocol: see [[Block chain download]].<br />
<br />
[[Category:Technical]]<br />
[[Category:Vocabulary]]<br />
<br />
==See Also==<br />
<br />
* [[BlockChain.info]] - Utility site and [[EWallet]] provider of similar name</div>Dree12https://tests.bitcoin.it/w/index.php?title=Talk:Litecoin&diff=33518Talk:Litecoin2012-12-10T02:32:36Z<p>Dree12: /* Edit request */ new section</p>
<hr />
<div>There is nothing on this discussion page about this article at the moment. Use it. Reasonable informed edits will be allowed through until a consensus is reached and the page unlocked. That is comments that are neither pro or anti litecoin, but are ''neutral'' and objective. [[User:Genjix|Genjix]] 10:01, 28 November 2011 (GMT)<br />
<br />
== Objectivity please, missing citation ==<br />
<br />
There are two criticisms in the article, that I believe are not objective:<br />
<br />
* Mining Monopoly - while I heard claims that Litecoin is volnurable to botnets, I never heard anything about a single monopoloy, or anyone possibly building a "single piece of specialized/custom hardware to overtake all the commodity mining systems combined". Can we have a citation for this, or remove it if no citation is found?<br />
* Pyramid Scheme - The article states, as if it is a fact, that "Litecoin effectively functions as a pyramid scheme". This is hardly objective. Litecoin could possibly become say 1% of the total Bitcoin market, and could indeed function as "silver". The same arguments in [[FAQ#Is Bitcoin a Ponzi_scheme]] apply here.<br />
<br />
Can we fix this?<br />
<br />
[[User:Ripper234|Ripper234]] 13:43, 13 January 2012 (GMT)<br />
<br />
* Mining Monopoly - This isn't Wikipedia. Independent research is acceptable. Litecoin's scrypt is not (and cannot be, by definition) resistant to custom mining hardware. It is, however, resistant to all commodity hardware. This leaves a huge gap in mining capabilities between commodity hardware and custom hardware, which enables even a single person designing custom hardware to easily gain a 51% attack over all other miners. Bitcoin's double-SHA256 performs well on commodity GPUs, which serve as a "tier" between CPUs and custom hardware.<br />
* Pyramid Scheme - If you can make this more objective without being wrong, feel free. However, the fact is that Litecoin functions as a pyramid scheme because it has no long-term viability like Bitcoin does. It cannot function as "silver" or any other kind of currency because it cannot survive. Therefore, late comers do NOT benefit from it. Bitcoin is only exempt from the 'pyramid scheme' claim because of its long-term function as a currency.<br />
<br />
[[User:Luke-jr|Luke-jr]] 17:12, 16 January 2012 (GMT)<br />
<br />
: I believe the way to make the "pyramid scheme" section more objective is to remove it altogether. Meaningful criticism does not begin by assuming as a premise that all obstacles are insurmountable and that the currency is an inevitable failure. (Also, for clarification: did you delete my previous comments on this page because they were considered to not be objective?)<br />
<br />
[[User:Angus|Angus]] 23:35, 17 January 2012 (GMT)<br />
<br />
* Redundancy - Simply stating personal axioms is not helpful. There are several assumptions that are neither explained, supported by an argument or citation. The phrase, "...and Bitcoins much greater size..." has no context. What is meant by Bitcoin's size? Does this refer to the its userbase?<br />
<br />
* Vulnerability to mining monopoly - "a malicious entity needs only produce a single piece of specialized/custom hardware to overtake all the commodity mining systems combined." There needs to be citation to back this up or a solid "homegrown" argument. What are the economics of this type of attack?<br />
<br />
* Pyramid scheme - Without further context, the choice of the words, "Pyramid scheme", is simply not applicable, as there are no promises being made, investments being soliciated, etc. Regardless of the the ultimate fate of Litecoin, the term "pyramid scheme" is simply not applicable. As for the fate of Litecoin, the case of its inevitable demise has simply not been made within the confines of the article.<br />
<br />
[[User:Dooley|Dooley]] 09:05, 9 February 2012 (GMT)<br />
<br />
The "Mining monopoly" section is actually totally and utterly false. scrypt is not in fact designed to be inefficient on commodity hardware; if you read the original scrypt paper it's actually designed from the ground up for efficient implement on standard CPUs. One of the main design goals of scrypt was actually to limit the benefits an attacker using custom hardware could gain over people using off-the-shelf hardware. The designers of scrypt did this by cleverly making its performance dependant on memory bandwidth rather than processing power. Since the high-speed cache RAM on modern processors already takes up most of the die space, you won't be able to get much of an improvement over them by creating custom chips. In theory the best attack would be to find off-the-shelf processors whose balance of computational resources and cache fit scrypt-as-used-in-Litecoin perfectly, but that probably still wouldn't gain you a huge amount, especially as Intel has a big process advantage over the competition. - [[User:Makomk|Makomk]] ([[User talk:Makomk|talk]]) 16:32, 4 July 2012 (GMT)<br />
<br />
== redundancy ==<br />
<br />
It would be useful if a counter-argument to this criticism were mentioned. It does add something bitcoin doesn't have - it uses CPUs rather than GPUs to mine. --[[User:Rebroad|Rebroad]] 17:59, 21 February 2012 (GMT)<br />
<br />
: Redundancy isn't a bad thing, imo. Cf: Nassim Taleb's comments about redundancy and fragility, or simply check the wiki page [http://en.wikipedia.org/wiki/Redundancy_(engineering) Redundancy_(engineering)]: "In engineering, redundancy is the duplication of critical components or functions of a system with the intention of increasing reliability of the system, usually in the case of a backup or fail-safe." I think that the complementary nature of Litecoin should be embraced and used exactly as a complementary currency. As it stands the current page on Litecoin is entirely subjective and missing all the key points, I realise a lot of it is on the talk forums but it would be worth having it here. --[[User:Esoteric|Esoteric]] ([[User talk:Esoteric|talk]]) 23:10, 15 October 2012 (GMT)<br />
<br />
== "Pyramid Scheme" ==<br />
I concur that the "3.3 Pyramid Scheme section is highly subjective and not worthy to be here. Also why is this page protected? [[User:Barbarousrelic|Barbarousrelic]] ([[User talk:Barbarousrelic|talk]]) 19:48, 26 July 2012 (GMT)<br />
<br />
== Litecoin has Android miner which Bitcoin doesn't ==<br />
<br />
Litecoin has Android miner which Bitcoin doesn't https://bitcointalk.org/index.php?topic=93276.0<br />
This should be good for people without a decent computer or GPUs but have android phone. If I use my old CPU to pool mine bitcoin I can get nothing as all my work stale share but for Litecoin I ill get a little. So I'd like an alternative arithmetic doesn't only consider GPUs or ASIC but also fit for the old hareware to have a litte share.<br />
Also I want to edit the page but I can't find the edit button. Is there permission requirements? How to edit that page? <br />
[[User:Merrykid|Merrykid]] ([[User talk:Merrykid|talk]]) 04:01, 3 December 2012 (GMT)<br />
<br />
== Edit request ==<br />
<br />
Bitcoin no longer offers 50 coins per block. [[User:Dree12|Dree12]] ([[User talk:Dree12|talk]]) 02:32, 10 December 2012 (GMT)</div>Dree12https://tests.bitcoin.it/w/index.php?title=Man_page&diff=33517Man page2012-12-10T02:30:53Z<p>Dree12: update 50 -> 25</p>
<hr />
<div>This page is for frequently asked questions that do not yet appear in the main [[FAQ]].<br />
<br />
It's also a place for questions in progress, so feel free to ask new questions, or answer and/or refine existing answers.<br />
<br />
== Ask your question here: ==<br />
How much electrical energy per transaction is projected?<br />
<br />
== Answered Questions ==<br />
<br />
=== How does it work (for non-geeks) ===<br />
<br />
====Why can't somebody just create a version of the software that gives you extra bitcoins?====<br />
<br />
When you spend some bitcoins, the software on your machine has to prove to the software running on everybody else's machine that those bitcoins are valid.<br />
<br />
How does it do that? Well, it is a little bit complicated; you've got to understand how bitcoins are created, and how they are traded.<br />
<br />
First, how they're created: 25 bitcoins are created approximately every 10 minutes. Everybody who is trying to create bitcoins is in a race to try to find those 25 bitcoins; they are really hard to find, but, once found, it is easy to verify that, yes, indeed, your bitcoin software found them, so you get to spend them.<br />
<br />
Second, how they're traded: Imagine you did find 25 bitcoins (well, your computer found them by running the bitcoin software for a few months or a year-- they are not easy to find, and are harder to find the more people who are looking for them). You trade them to me by sending them to my bitcoin address. Inside the software, a messages is created and then broadcast to everybody that says "These 25 bitcoins that we all agree are valid are hereby officially traded to somebody else (me-- well, one of my bitcoin receiving addresses, actually)."<br />
<br />
Now I've got them. If you try to trade those same 25 bitcoins to somebody else, it won't work-- everybody running Bitcoin sees all the trades, so if you try to spend the same coins a second time everybody else's software will reject your attempt to cheat.<br />
<br />
And that's it-- that's how it works. Bitcoins are scarce because only about 25 are created every ten minutes. And you can't claim to have more than you really have because everybody else can check to see if your coins really were created by the "race" process, or if they were from valid trades.<br />
<br />
=== Uncatagorized ===<br />
<br />
==== Why did this generation give me more bitcoins than normal (like 25.075)? ====<br />
<br />
You collected a [[transaction fee]].<br />
<br />
==== Why must users back up their wallets every 100 actions? ====<br />
<br />
Bitcoin transactions send bitcoins to a specific public key. A Bitcoin address is an encoded hash of a public key. In order to use received bitcoins, you need to have the private key matching the public key you received with. This is sort of like a super long password associated with an account (public key). Your Bitcoin wallet contains all of the private keys necessary for spending your received transactions. If you delete your wallet without a backup, then you no longer have the authorization information necessary to claim your coins, and the coins associated with those keys are lost forever.<br />
<br />
Creating a new address generates a new pair of public and private keys, which are added to your wallet. Each keypair is mostly random numbers, so they cannot be known prior to generation. If you backup your wallet and then create a new address, the keypair associated with the new address will not be in the old wallet because the new keypair is only know ''after'' creating it. Any coins received at this address will be lost if you restore from the backup.<br />
<br />
The situation is made somewhat more confusing because the receiving addresses shown in the UI are not the only keys in your wallet. Each Bitcoin generation is given a new public key, and, more importantly, each sent transaction also sends a random number of bitcoins back to yourself at a new key. When sending bitcoins to anyone, you generate a new keypair for yourself and simultaneously send bitcoins to your new public key and the actual recipient's public key. This is an anonymity feature -- it makes tracking Bitcoin transactions much more difficult.<br />
<br />
So if you create a backup, send some bitcoins, and then restore from the backup, some bitcoins will be lost. Bitcoin has not deleted any keys (keys are ''never'' deleted) -- it has created a new key that is not in your old backup and then sent bitcoins to it.<br />
<br />
To mitigate this problem, the wallet contains a pool of 100 queued keys. When you need an address for whatever reason (send, "new address", generation, etc.), the key is not actually generated freshly, but taken from this pool. A brand new address is generated to fill the pool back to 100. So when a backup is first created, it has all of your old keys plus 100 unused keys. After sending a transaction, it has 99 unused keys. After a total of 100 new-key actions, you will start using keys that are not in your backup. Since the backup does not have the private keys necessary for authorizing spends of these coins, restoring from the old backup will cause you to lose bitcoins.<br />
<br />
Linux users can setup cron by running 'crontab -e' and adding this line:<br />
01 */1 * * * /usr/local/bin/backupwallet.sh<br />
<br />
backupwallet.sh:<br />
<pre>#!/usr/bin/env bash<br />
<br />
GPGU="My GPG User"<br />
<br />
TS=$(date "+%Y%m%d-%H-%M")<br />
<br />
WALLET=/tmp/wallet${TS}<br />
WALLET_E=/tmp/wallet${TS}.crypt<br />
<br />
~/bin/bitcoind backupwallet $WALLET<br />
/usr/bin/gpg -r "$GPGU" --output $WALLET_E --encrypt $WALLET<br />
~/bin/s3cmd put $WALLET_E s3://NAME_OF_MY_S3_BUCKET<br />
rm $WALLET $WALLET_E</pre><br />
<br />
The shell script does:<br />
* Call bitcoind backupwallet to create a time/date-stamped wallet file.<br />
* GPG encrypt the wallet with my public key.<br />
* Copy the result to an off-machine backup location.<br />
<br />
It's using Amazon S3, which is itself redundantly backed up to multiple geographic locations automatically. Replace the s3cmd with an scp to copy somewhere if you're not an S3 user; you could even ftp somewhere, since the wallet is encrypted it doesn't matter if somebody is eavesdropping<br />
<br />
==== How many nodes are there? ====<br />
<br />
You can get a rough estimate by counting the number of users on the [irc://irc.lfnet.org/bitcoin #bitcoin] channel at irc.lfnet.org. Most Bitcoin nodes are constantly connected to this channel while running, though Bitcoin can be configured not to do so. A more accurate number can be gotten by running Bitcoin nonstop for a few days and then using [https://github.com/gavinandresen/bitcointools bitcointools] to analyze your addr.dat file. This shows the "last seen" times for ''all'' Bitcoin nodes.<br />
<br />
=== Economics ===<br />
<br />
==== I've lost my wallet, is there a way to recreate the lost coins in the system? ====<br />
No, coins that are lost are lost forever.<br />
The lost coins will not be recovered or regenerated at any time.<br />
<br />
==== Where does the value of Bitcoin stem from? What backs up Bitcoin? ====<br />
<br />
Bitcoin has value because it is accepted as payment by many. The initial market value was achieved when people speculated, that because of its properties, the currency would be accepted by others later on.<br />
<br />
When we say that a currency is backed up by gold, we mean that there's a promise in place that you can exchange the currency for gold. In a sense, you could say that Bitcoin is "backed up" by the price tags of merchants and currency exchangers - a price tag is a promise to exchange goods for a specified amount of currency. Of course, price tags may or may not be as long-term promises as those made by central banks or governments.<br />
<br />
It's a common misconception that Bitcoins gain their value from the cost of electricity required to generate them. Cost doesn't equal value - hiring 1,000 men to shovel a big hole in the ground may be costly, but not valuable. Also, even though scarcity is a critical requirement for a currency to be useful, it alone doesn't make anything valuable. Your fingerprints are scarce, but that doesn't mean they have any exchange value.<br />
<br />
At the time of this writing, Bitcoin's chain of proof is the result of over 6 quadrillion cryptographically secure, verified calculations carried out by many independent computers. This large and growing input of energy and technology is part of Bitcoin's value, and represents a substantial investment of resources by Bitcoin users in creating the benefits of a trustworthy medium of exchange.<br />
<br />
==== Isn't the minting process a waste of resources? ====<br />
<br />
All currencies need a method for regulating the money supply and creating circulation. To make Bitcoin secure, a large amount of computer work is required. The Bitcoin process for introducing new coins into circulation is designed to make the currency secure by encouraging users to perform the necessary computational work by awarding the role of introducing new coins into circulation in rough proportion the amount of computer power contributed to this goal.<br />
<br />
=== Technical ===<br />
<br />
==== Can generating nodes charge different transaction fees, or is this enforced by the network? ====<br />
<br />
Currently a generating node can charge whatever [[transaction fee]] they want. A transaction that doesn't pay the fee won't be included in any blocks produced by that node, but it will appear in later blocks by cheaper generators.<br />
<br />
It is [http://www.bitcoin.org/smf/index.php?topic=165.msg1595#msg1595 possible] for the network to enforce a fee rate, but this is not currently implemented. If [[Satoshi]] tried to implement this, only ''generating'' nodes would have a vote in whether the change would be accepted, so the change would have to be beneficial in some way to generators (ie, not too low).<br />
<br />
==== Does including more transactions in your block slow down your hashing rate? ====<br />
<br />
Not at all. You're hashing the block header, which contains only a fixed-size hash of all the transactions.<br />
<br />
==== Why is it using so much CPU? ====<br />
<br />
If you have "Generate coins" turned on, Bitcoin will calculate millions of [[hash|hashes]] per second in an attempt to solve the current [[block]]. This will use all of your idle CPU time, but Bitcoin runs at a low priority, so none of your other programs should be slowed down. Turning off coin generation should eliminate most CPU usage.<br />
<br />
==== Why can't it be doing something useful for humanity instead? ====<br />
<br />
[[hash|SHA-256 hashing]] has very specific properties that we need. In particular, it generates (with predictable CPU required) numbers that are for all practical purposes purely random, but in a way that is easily verifiable. There are no known "beneficial" calculations that could replace this.<br />
<br />
This CPU time and electricity is not entirely wasted, though: it helps protect the network from attack.<br />
<br />
==== How much network traffic does the bitcoin client generate? ====<br />
<br />
Almost none. These statistics were recorded before the outgoing connection limit was reduced from 15 to 8, so the current usage is probably even lower:<br />
<br />
* Bytes sent without Bitcoin: 2475590 (2.4MiB) per day<br />
* Bytes received without Bitcoin: 2798454 (2.7MiB) per day<br />
* Bytes sent with Bitcoin (not port forwarded): 2210854 (2.1MiB) per day<br />
* Bytes received with Bitcoin (not port forwarded): 4699445 (4.5MiB) per day<br />
* Bytes sent with Bitcoin (port forwarded): 20879040 (19.9MiB) per day<br />
* Bytes received with Bitcoin (port forwarded): 10954438 (10.4MiB) per day<br />
<br />
==== Can we expand the transaction protocol so it includes a message as well as an amount? ====<br />
<br />
The current implementation already supports processing arbitrary data in transactions through the complex transaction scripting mechanism. However:<br />
* You will be charged 0.01 BTC per kilobyte, just like all other transactions.<br />
* ECDSA (the public-key algorithm used by Bitcoin) doesn't support encryption, so you'll have to use something else if you want encryption.<br />
* The ability to actually use this feature to send messages will probably never be implemented in Bitcoin. It's not what the block chain was designed for.<br />
<br />
==== What happens when two nodes generate a block at the same time? ====<br />
<br />
This is very unlikely to happen but if it does: The tiebreak is which block the NEXT block builds on.<br />
<br />
Each node sends out it's 'winning' block. Some nodes on the network will hear about 'block A' first and assume it is the winning block, and some will hear about 'block B' first and assume it is the winning block. Then each 'half' will proceed hashing from there trying to generate the next block as normal.<br />
If a machine with 'block B' as its predecessor wins the next race by generating 'block C', it becomes the official winner, and the nodes who were working on A give up and start on C. (In this case the generator of 'block A' might be disappointed, because he thought he generated some coins, but he didn't because the network decided his block was no longer valid.)<br />
<br />
Note: block A and block B will usually contain the same list of transactions. Transactions not included will be made available to other future blocks for inclusion into the chain.<br />
<br />
==== What happens if someone sends me some coins but I am not connected? ====<br />
<br />
Any transfer to a 'valid' address should be successful. <br />
You don't need to have a client running to receive bitcoins.<br />
Once you create an address, any coins sent to it will just sit there waiting for you to spend them.<br />
<br />
==== Can I start bitcoind without it becoming a daemon process? ====<br />
<br />
No. That is expected to be added to the client at some point.<br />
<br />
=== Technical (Windows) ===<br />
<br />
==== Why am I not downloading any blocks? ====<br />
<br />
Add bitcoin.exe to the "Excluded processes" list of Microsoft Security Essentials.<br />
<br />
=== Developing ===<br />
<br />
==== Is there a mailing list? ====<br />
Yes. http://sourceforge.net/mailarchive/forum.php?forum_name=bitcoin-list<br />
<br />
==== Is there a test network? ====<br />
Yes, run Bitcoin or bitcoind with the -testnet switch (beginning with version 0.3.14).<br />
<br />
There is a -testnet version of the Bitcoin Faucet at https://freebitcoins.appspot.com/TEST/.<br />
<br />
==== How do I build bitcoin? ====<br />
Forum thread on building v0.3: http://www.bitcoin.org/smf/index.php?topic=298.msg2366#msg2366<br />
There are some [http://heliacal.net/~solar/bitcoin/bitcoin-linuxbuild.pdf Build notes for linux type systems (pdf)]<br />
<br />
== See Also ==<br />
<br />
* [[FAQ]]<br />
<br />
[[Category:Technical]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Template:Old&diff=33515Template:Old2012-12-10T02:24:23Z<p>Dree12: centre div</p>
<hr />
<div><div style="width:80%; margin-left:10%; margin-right: 10%; background-color:#B09898; text-align:center; border: 1px black solid;"><br />
This article or section contains information that is no longer up-to-date. Please either update the outdated information or remove the outdated information.<br />
</div><br />
<includeonly>[[Category:Outdated]]</includeonly><noinclude><br />
This template should be applied to articles or sections with outdated information.<br />
</noinclude></div>Dree12https://tests.bitcoin.it/w/index.php?title=Template:Old&diff=33514Template:Old2012-12-10T02:22:45Z<p>Dree12: New template</p>
<hr />
<div><div style="width:75%; background-color:#B09898; text-align:center; border: 1px black solid;"><br />
This article or section contains information that is no longer up-to-date. Please either update the outdated information or remove the outdated information.<br />
</div><br />
<includeonly>[[Category:Outdated]]</includeonly><noinclude><br />
This template should be applied to articles or sections with outdated information.<br />
</noinclude></div>Dree12https://tests.bitcoin.it/w/index.php?title=Controlled_supply&diff=33513Controlled supply2012-12-10T02:16:11Z<p>Dree12: suppress leading TOS (looks bad)</p>
<hr />
<div>In a centralized economy, currency is issued by a central bank at a rate that is supposed to match the growth of the amount of goods that are exchanged so that these goods can be traded with stable prices. The <br />
<span class="plainlinks">[http://en.wikipedia.org/wiki/Monetary_base monetary base]</span> is controlled by a central bank. In the United States, the <span class="plainlinks">[http://en.wikipedia.org/wiki/Federal_Reserve_System Fed]</span> increases the monetary base by issuing currency, increasing the amount banks have on reserve, and more recently, printing money electronically in a process called <span class="plainlinks">[http://en.wikipedia.org/wiki/Quantitative_easing Quantitative Easing]</span>.<br />
<br />
In a fully decentralized monetary system, there is no central authority that regulates the monetary base. Instead, currency is created by the nodes of a peer-to-peer network. The Bitcoin generation algorithm defines, in advance, how currency will be created and at what rate. Any currency that is generated by a malicious user that does not follow the rules will be rejected by the network and thus is worthless.<br />
<br />
==Currency with Finite Supply==<br />
<br />
[[File:total_bitcoins_over_time_graph.png|thumb|Number of bitcoins over time]]<br />
<br />
Bitcoins are created each time a user discovers a new [[block]]. <br />
The rate of block creation is approximately constant over time: 6 per hour. The <br />
number of Bitcoins generated per block is set to decrease geometrically, with a 50% reduction every 4 years. The result is that the number of Bitcoins in existence will <br />
never exceed 21 million<ref>[http://www.bitcointalk.org/index.php?topic=3366.msg47522#msg47522 21 million cap]</ref>. This algorithm was chosen because it approximates the rate at which commodities like gold are mined. Users who use their computers to perform calculations to try and discover a block are thus called [[Mining|''Miners'']].<br />
<br />
==Projected Bitcoins Short Term ==<br />
This chart shows the number of bitcoins that will exist in the near future. The ''Year'' is a forecast and may be slightly off.<br />
{| class="wikitable"<br />
|-<br />
! Block!!Reward Era!! BTC/block!! Year!! Start BTC!! BTC Added!! End BTC!! BTC Increase|| End BTC % of Limit<br />
|-<br />
|0||1||50.00||2009||0||2625000||2625000||infinite||12.500%<br />
|-<br />
|52500||1||50.00||2010||2625000||2625000||5250000||100.00%||25.000%<br />
|-<br />
|105000||1||50.00||2011||5250000||2625000||7875000||50.00%||37.500%<br />
|-<br />
|157500||1||50.00||2012||7875000||2625000||10500000||33.33%||50.000%<br />
|-<br />
|210000||2||25.00||2013||10500000||1312500||11812500||12.50%||56.250%<br />
|-<br />
|262500||2||25.00||2014||11812500||1312500||13125000||11.11%||62.500%<br />
|-<br />
|315000||2||25.00||2015||13125000||1312500||14437500||10.00%||68.750%<br />
|-<br />
|367500||2||25.00||2016||14437500||1312500||15750000||9.09%||75.000%<br />
|-<br />
|420000||3||12.50||2017||15750000||656250||16406250||4.17%||78.125%<br />
|-<br />
|472500||3||12.50||2018||16406250||656250||17062500||4.00%||81.250%<br />
|-<br />
|525000||3||12.50||2019||17062500||656250||17718750||3.85%||84.375%<br />
|-<br />
|577500||3||12.50||2020||17718750||656250||18375000||3.70%||87.500%<br />
|-<br />
|630000||4||6.25||2021||18375000||328125||18703125||1.79%||89.063%<br />
|-<br />
|682500||4||6.25||2022||18703125||328125||19031250||1.75%||90.625%<br />
|-<br />
|735000||4||6.25||2023||19031250||328125||19359375||1.72%||92.188%<br />
|-<br />
|787500||4||6.25||2024||19359375||328125||19687500||1.69%||93.750%<br />
|}<br />
<br />
<br />
==Projected Bitcoins Long Term ==<br />
<br />
{| class="wikitable"<br />
|-<br />
! Block!!Reward Era!! BTC/block!! Year!! Start BTC!! BTC Added!! End BTC!! BTC Increase|| End BTC % of Limit<br />
|-<br />
| 0|| 1|| 50.00000000||2009.007|| 0.00000000|| 10500000.00000000|| 10500000.00000000|| infinite|| 50.00000006%<br />
|-<br />
| 210000|| 2|| 25.00000000||2013.000|| 10500000.00000000|| 5250000.00000000|| 15750000.00000000|| 50.00000000%|| 75.00000008%<br />
|-<br />
| 420000|| 3|| 12.50000000||2016.993|| 15750000.00000000|| 2625000.00000000|| 18375000.00000000|| 16.66666667%|| 87.50000010%<br />
|-<br />
| 630000|| 4|| 6.25000000||2020.986|| 18375000.00000000|| 1312500.00000000|| 19687500.00000000|| 7.14285714%|| 93.75000010%<br />
|-<br />
| 840000|| 5|| 3.12500000||2024.978|| 19687500.00000000|| 656250.00000000|| 20343750.00000000|| 3.33333333%|| 96.87500011%<br />
|-<br />
| 1050000|| 6|| 1.56250000||2028.971|| 20343750.00000000|| 328125.00000000|| 20671875.00000000|| 1.61290323%|| 98.43750011%<br />
|-<br />
| 1260000|| 7|| 0.78125000||2032.964|| 20671875.00000000|| 164062.50000000|| 20835937.50000000|| 0.79365079%|| 99.21875011%<br />
|-<br />
| 1470000|| 8|| 0.39062500||2036.956|| 20835937.50000000|| 82031.25000000|| 20917968.75000000|| 0.39370079%|| 99.60937511%<br />
|-<br />
| 1680000|| 9|| 0.19531250||2040.949|| 20917968.75000000|| 41015.62500000|| 20958984.37500000|| 0.19607843%|| 99.80468761%<br />
|-<br />
| 1890000|| 10|| 0.09765625||2044.942|| 20958984.37500000|| 20507.81250000|| 20979492.18750000|| 0.09784736%|| 99.90234386%<br />
|-<br />
| 2100000|| 11|| 0.04882812||2048.934|| 20979492.18750000|| 10253.90520000|| 20989746.09270000|| 0.04887585%|| 99.95117198%<br />
|-<br />
| 2310000|| 12|| 0.02441406||2052.927|| 20989746.09270000|| 5126.95260000|| 20994873.04530000|| 0.02442599%|| 99.97558604%<br />
|-<br />
| 2520000|| 13|| 0.01220703||2056.920|| 20994873.04530000|| 2563.47630000|| 20997436.52160000|| 0.01221001%|| 99.98779307%<br />
|-<br />
| 2730000|| 14|| 0.00610351||2060.913|| 20997436.52160000|| 1281.73710000|| 20998718.25870000|| 0.00610426%|| 99.99389658%<br />
|-<br />
| 2940000|| 15|| 0.00305175||2064.905|| 20998718.25870000|| 640.86750000|| 20999359.12620000|| 0.00305194%|| 99.99694833%<br />
|-<br />
| 3150000|| 16|| 0.00152587||2068.898|| 20999359.12620000|| 320.43270000|| 20999679.55890000|| 0.00152592%|| 99.99847420%<br />
|-<br />
| 3360000|| 17|| 0.00076293||2072.891|| 20999679.55890000|| 160.21530000|| 20999839.77420000|| 0.00076294%|| 99.99923713%<br />
|-<br />
| 3570000|| 18|| 0.00038146||2076.883|| 20999839.77420000|| 80.10660000|| 20999919.88080001|| 0.00038146%|| 99.99961859%<br />
|-<br />
| 3780000|| 19|| 0.00019073||2080.876|| 20999919.88080001|| 40.05330000|| 20999959.93410001|| 0.00019073%|| 99.99980932%<br />
|-<br />
| 3990000|| 20|| 0.00009536||2084.869|| 20999959.93410001|| 20.02560000|| 20999979.95970001|| 0.00009536%|| 99.99990468%<br />
|-<br />
| 4200000|| 21|| 0.00004768||2088.861|| 20999979.95970001|| 10.01280000|| 20999989.97250001|| 0.00004768%|| 99.99995236%<br />
|-<br />
| 4410000|| 22|| 0.00002384||2092.854|| 20999989.97250001|| 5.00640000|| 20999994.97890001|| 0.00002384%|| 99.99997620%<br />
|-<br />
| 4620000|| 23|| 0.00001192||2096.847|| 20999994.97890001|| 2.50320000|| 20999997.48210001|| 0.00001192%|| 99.99998812%<br />
|-<br />
| 4830000|| 24|| 0.00000596||2100.840|| 20999997.48210001|| 1.25160000|| 20999998.73370001|| 0.00000596%|| 99.99999408%<br />
|-<br />
| 5040000|| 25|| 0.00000298||2104.832|| 20999998.73370001|| 0.62580000|| 20999999.35950001|| 0.00000298%|| 99.99999706%<br />
|-<br />
| 5250000|| 26|| 0.00000149||2108.825|| 20999999.35950001|| 0.31290000|| 20999999.67240001|| 0.00000149%|| 99.99999855%<br />
|-<br />
| 5460000|| 27|| 0.00000074||2112.818|| 20999999.67240001|| 0.15540000|| 20999999.82780001|| 0.00000074%|| 99.99999929%<br />
|-<br />
| 5670000|| 28|| 0.00000037||2116.810|| 20999999.82780001|| 0.07770000|| 20999999.90550001|| 0.00000037%|| 99.99999966%<br />
|-<br />
| 5880000|| 29|| 0.00000018||2120.803|| 20999999.90550001|| 0.03780000|| 20999999.94330001|| 0.00000018%|| 99.99999984%<br />
|-<br />
| 6090000|| 30|| 0.00000009||2124.796|| 20999999.94330001|| 0.01890000|| 20999999.96220000|| 0.00000009%|| 99.99999993%<br />
|-<br />
| 6300000|| 31|| 0.00000004||2128.788|| 20999999.96220000|| 0.00840000|| 20999999.97060001|| 0.00000004%|| 99.99999997%<br />
|-<br />
| 6510000|| 32|| 0.00000002||2132.781|| 20999999.97060001|| 0.00420000|| 20999999.97480001|| 0.00000002%|| 99.99999999%<br />
|-<br />
| 6720000|| 33|| 0.00000001||2136.774|| 20999999.97480001|| 0.00210000|| 20999999.97690000|| 0.00000001%|| 100.00000000%<br />
|-<br />
| 6930000|| 34|| 0.00000000||2140.767|| 20999999.97690000|| 0.00000000|| 20999999.97690000|| 0.00000000%|| 100.00000000%<br />
|}<br />
==Money Supply==<br />
<br />
While the number of bitcoins in existence will never exceed 21 million, the <span class="plainlinks">[http://en.wikipedia.org/wiki/Money_supply money supply]</span> of bitcoins can exceed 21 million due to <span class="plainlinks">[http://en.wikipedia.org/wiki/Fractional-reserve_banking Fractional-reserve Banking]. </span><br />
<br />
==Deflation==<br />
<br />
Because the monetary base of bitcoins cannot be expanded, the currency would be subject to severe deflation if it becomes widely used. <br />
Keynesian economists argue that [[Deflationary spiral|deflation]] is bad for an economy because it incentivises individuals and businesses to save money rather than invest in businesses and create jobs. The <span class="plainlinks">[http://en.wikipedia.org/wiki/Austrian_School Austrian school]</span> of thought counters this criticism, claiming that as deflation occurs in all stages of production, entrepreneurs who invest benefit from it. As a result, profit ratios tend to stay the same and only their magnitudes change. In other words, in a deflationary environment, goods and services decrease in price, but at the same time the cost for the production of these goods and services tend to decrease proportionally, effectively not affecting profits. Price deflation encourages an increase in hoarding &mdash; hence savings &mdash; which in turn tends to lower interest rates and increase the incentive for entrepreneurs to invest in projects of longer term.<br />
<br />
==See also==<br />
<br />
* [http://www.econlib.org/library/Columns/y2006/Friedmantranscript.html Milton Friedman interview], where he proposed to replace the central bank with a computer, and to fix the money supply growth at 4% annually<br />
* [[Deflationary spiral]]<br />
* [http://blockchain.info/charts/total-bitcoins Chart of total bitcoins in circulation]<br />
==References==<br />
<references /><br />
<br />
[[Category:Economics]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Controlled_supply&diff=33509Controlled supply2012-12-10T02:15:15Z<p>Dree12: Dree12 moved page Controlled Currency Supply to Controlled supply: Capitalization</p>
<hr />
<div>__TOC__<br />
<br />
In a centralized economy, currency is issued by a central bank at a rate <br />
that is supposed to match the growth of the amount of goods that <br />
are exchanged so that these goods can be traded with stable prices. The <br />
<span class="plainlinks">[http://en.wikipedia.org/wiki/Monetary_base monetary base]</span> is controlled by a central bank. In the United States, the <span class="plainlinks">[http://en.wikipedia.org/wiki/Federal_Reserve_System Fed]</span> increases the monetary base by issuing currency, increasing the amount banks have on reserve, and more recently, printing money electronically in a process called <span class="plainlinks">[http://en.wikipedia.org/wiki/Quantitative_easing Quantitative Easing]</span>.<br />
<br />
In a fully decentralized monetary system, there is no central authority that regulates the monetary base. Instead, currency is created by the nodes of a peer-to-peer network. The Bitcoin generation algorithm defines, in advance, how currency will be created and at what rate. Any currency that is generated by a malicious user that does not follow the rules will be rejected by the network and thus is worthless.<br />
<br />
==Currency with Finite Supply==<br />
<br />
[[File:total_bitcoins_over_time_graph.png|thumb|Number of bitcoins over time]]<br />
<br />
Bitcoins are created each time a user discovers a new [[block]]. <br />
The rate of block creation is approximately constant over time: 6 per hour. The <br />
number of Bitcoins generated per block is set to decrease geometrically, with a 50% reduction every 4 years. The result is that the number of Bitcoins in existence will <br />
never exceed 21 million<ref>[http://www.bitcointalk.org/index.php?topic=3366.msg47522#msg47522 21 million cap]</ref>. This algorithm was chosen because it approximates the rate at which commodities like gold are mined. Users who use their computers to perform calculations to try and discover a block are thus called [[Mining|''Miners'']].<br />
<br />
<br />
<br />
==Projected Bitcoins Short Term ==<br />
This chart shows the number of bitcoins that will exist in the near future. The ''Year'' is a forecast and may be slightly off.<br />
{| class="wikitable"<br />
|-<br />
! Block!!Reward Era!! BTC/block!! Year!! Start BTC!! BTC Added!! End BTC!! BTC Increase|| End BTC % of Limit<br />
|-<br />
|0||1||50.00||2009||0||2625000||2625000||infinite||12.500%<br />
|-<br />
|52500||1||50.00||2010||2625000||2625000||5250000||100.00%||25.000%<br />
|-<br />
|105000||1||50.00||2011||5250000||2625000||7875000||50.00%||37.500%<br />
|-<br />
|157500||1||50.00||2012||7875000||2625000||10500000||33.33%||50.000%<br />
|-<br />
|210000||2||25.00||2013||10500000||1312500||11812500||12.50%||56.250%<br />
|-<br />
|262500||2||25.00||2014||11812500||1312500||13125000||11.11%||62.500%<br />
|-<br />
|315000||2||25.00||2015||13125000||1312500||14437500||10.00%||68.750%<br />
|-<br />
|367500||2||25.00||2016||14437500||1312500||15750000||9.09%||75.000%<br />
|-<br />
|420000||3||12.50||2017||15750000||656250||16406250||4.17%||78.125%<br />
|-<br />
|472500||3||12.50||2018||16406250||656250||17062500||4.00%||81.250%<br />
|-<br />
|525000||3||12.50||2019||17062500||656250||17718750||3.85%||84.375%<br />
|-<br />
|577500||3||12.50||2020||17718750||656250||18375000||3.70%||87.500%<br />
|-<br />
|630000||4||6.25||2021||18375000||328125||18703125||1.79%||89.063%<br />
|-<br />
|682500||4||6.25||2022||18703125||328125||19031250||1.75%||90.625%<br />
|-<br />
|735000||4||6.25||2023||19031250||328125||19359375||1.72%||92.188%<br />
|-<br />
|787500||4||6.25||2024||19359375||328125||19687500||1.69%||93.750%<br />
|}<br />
<br />
<br />
==Projected Bitcoins Long Term ==<br />
<br />
{| class="wikitable"<br />
|-<br />
! Block!!Reward Era!! BTC/block!! Year!! Start BTC!! BTC Added!! End BTC!! BTC Increase|| End BTC % of Limit<br />
|-<br />
| 0|| 1|| 50.00000000||2009.007|| 0.00000000|| 10500000.00000000|| 10500000.00000000|| infinite|| 50.00000006%<br />
|-<br />
| 210000|| 2|| 25.00000000||2013.000|| 10500000.00000000|| 5250000.00000000|| 15750000.00000000|| 50.00000000%|| 75.00000008%<br />
|-<br />
| 420000|| 3|| 12.50000000||2016.993|| 15750000.00000000|| 2625000.00000000|| 18375000.00000000|| 16.66666667%|| 87.50000010%<br />
|-<br />
| 630000|| 4|| 6.25000000||2020.986|| 18375000.00000000|| 1312500.00000000|| 19687500.00000000|| 7.14285714%|| 93.75000010%<br />
|-<br />
| 840000|| 5|| 3.12500000||2024.978|| 19687500.00000000|| 656250.00000000|| 20343750.00000000|| 3.33333333%|| 96.87500011%<br />
|-<br />
| 1050000|| 6|| 1.56250000||2028.971|| 20343750.00000000|| 328125.00000000|| 20671875.00000000|| 1.61290323%|| 98.43750011%<br />
|-<br />
| 1260000|| 7|| 0.78125000||2032.964|| 20671875.00000000|| 164062.50000000|| 20835937.50000000|| 0.79365079%|| 99.21875011%<br />
|-<br />
| 1470000|| 8|| 0.39062500||2036.956|| 20835937.50000000|| 82031.25000000|| 20917968.75000000|| 0.39370079%|| 99.60937511%<br />
|-<br />
| 1680000|| 9|| 0.19531250||2040.949|| 20917968.75000000|| 41015.62500000|| 20958984.37500000|| 0.19607843%|| 99.80468761%<br />
|-<br />
| 1890000|| 10|| 0.09765625||2044.942|| 20958984.37500000|| 20507.81250000|| 20979492.18750000|| 0.09784736%|| 99.90234386%<br />
|-<br />
| 2100000|| 11|| 0.04882812||2048.934|| 20979492.18750000|| 10253.90520000|| 20989746.09270000|| 0.04887585%|| 99.95117198%<br />
|-<br />
| 2310000|| 12|| 0.02441406||2052.927|| 20989746.09270000|| 5126.95260000|| 20994873.04530000|| 0.02442599%|| 99.97558604%<br />
|-<br />
| 2520000|| 13|| 0.01220703||2056.920|| 20994873.04530000|| 2563.47630000|| 20997436.52160000|| 0.01221001%|| 99.98779307%<br />
|-<br />
| 2730000|| 14|| 0.00610351||2060.913|| 20997436.52160000|| 1281.73710000|| 20998718.25870000|| 0.00610426%|| 99.99389658%<br />
|-<br />
| 2940000|| 15|| 0.00305175||2064.905|| 20998718.25870000|| 640.86750000|| 20999359.12620000|| 0.00305194%|| 99.99694833%<br />
|-<br />
| 3150000|| 16|| 0.00152587||2068.898|| 20999359.12620000|| 320.43270000|| 20999679.55890000|| 0.00152592%|| 99.99847420%<br />
|-<br />
| 3360000|| 17|| 0.00076293||2072.891|| 20999679.55890000|| 160.21530000|| 20999839.77420000|| 0.00076294%|| 99.99923713%<br />
|-<br />
| 3570000|| 18|| 0.00038146||2076.883|| 20999839.77420000|| 80.10660000|| 20999919.88080001|| 0.00038146%|| 99.99961859%<br />
|-<br />
| 3780000|| 19|| 0.00019073||2080.876|| 20999919.88080001|| 40.05330000|| 20999959.93410001|| 0.00019073%|| 99.99980932%<br />
|-<br />
| 3990000|| 20|| 0.00009536||2084.869|| 20999959.93410001|| 20.02560000|| 20999979.95970001|| 0.00009536%|| 99.99990468%<br />
|-<br />
| 4200000|| 21|| 0.00004768||2088.861|| 20999979.95970001|| 10.01280000|| 20999989.97250001|| 0.00004768%|| 99.99995236%<br />
|-<br />
| 4410000|| 22|| 0.00002384||2092.854|| 20999989.97250001|| 5.00640000|| 20999994.97890001|| 0.00002384%|| 99.99997620%<br />
|-<br />
| 4620000|| 23|| 0.00001192||2096.847|| 20999994.97890001|| 2.50320000|| 20999997.48210001|| 0.00001192%|| 99.99998812%<br />
|-<br />
| 4830000|| 24|| 0.00000596||2100.840|| 20999997.48210001|| 1.25160000|| 20999998.73370001|| 0.00000596%|| 99.99999408%<br />
|-<br />
| 5040000|| 25|| 0.00000298||2104.832|| 20999998.73370001|| 0.62580000|| 20999999.35950001|| 0.00000298%|| 99.99999706%<br />
|-<br />
| 5250000|| 26|| 0.00000149||2108.825|| 20999999.35950001|| 0.31290000|| 20999999.67240001|| 0.00000149%|| 99.99999855%<br />
|-<br />
| 5460000|| 27|| 0.00000074||2112.818|| 20999999.67240001|| 0.15540000|| 20999999.82780001|| 0.00000074%|| 99.99999929%<br />
|-<br />
| 5670000|| 28|| 0.00000037||2116.810|| 20999999.82780001|| 0.07770000|| 20999999.90550001|| 0.00000037%|| 99.99999966%<br />
|-<br />
| 5880000|| 29|| 0.00000018||2120.803|| 20999999.90550001|| 0.03780000|| 20999999.94330001|| 0.00000018%|| 99.99999984%<br />
|-<br />
| 6090000|| 30|| 0.00000009||2124.796|| 20999999.94330001|| 0.01890000|| 20999999.96220000|| 0.00000009%|| 99.99999993%<br />
|-<br />
| 6300000|| 31|| 0.00000004||2128.788|| 20999999.96220000|| 0.00840000|| 20999999.97060001|| 0.00000004%|| 99.99999997%<br />
|-<br />
| 6510000|| 32|| 0.00000002||2132.781|| 20999999.97060001|| 0.00420000|| 20999999.97480001|| 0.00000002%|| 99.99999999%<br />
|-<br />
| 6720000|| 33|| 0.00000001||2136.774|| 20999999.97480001|| 0.00210000|| 20999999.97690000|| 0.00000001%|| 100.00000000%<br />
|-<br />
| 6930000|| 34|| 0.00000000||2140.767|| 20999999.97690000|| 0.00000000|| 20999999.97690000|| 0.00000000%|| 100.00000000%<br />
|}<br />
==Money Supply==<br />
<br />
While the number of bitcoins in existence will never exceed 21 million, the <span class="plainlinks">[http://en.wikipedia.org/wiki/Money_supply money supply]</span> of bitcoins can exceed 21 million due to <span class="plainlinks">[http://en.wikipedia.org/wiki/Fractional-reserve_banking Fractional-reserve Banking]. </span><br />
<br />
==Deflation==<br />
<br />
Because the monetary base of bitcoins cannot be expanded, the currency would be subject to severe deflation if it becomes widely used. <br />
Keynesian economists argue that [[Deflationary spiral|deflation]] is bad for an economy because it incentivises individuals and businesses to save money rather than invest in businesses and create jobs. The <span class="plainlinks">[http://en.wikipedia.org/wiki/Austrian_School Austrian school]</span> of thought counters this criticism, claiming that as deflation occurs in all stages of production, entrepreneurs who invest benefit from it. As a result, profit ratios tend to stay the same and only their magnitudes change. In other words, in a deflationary environment, goods and services decrease in price, but at the same time the cost for the production of these goods and services tend to decrease proportionally, effectively not affecting profits. Price deflation encourages an increase in hoarding - hence savings - which in turn tends to lower interest rates and increase the incentive for entrepreneurs to invest in projects of longer term.<br />
<br />
==See also==<br />
<br />
* [http://www.econlib.org/library/Columns/y2006/Friedmantranscript.html Milton Friedman interview], where he proposed to replace the central bank with a computer, and to fix the money supply growth at 4% annually<br />
* [[Deflationary spiral]]<br />
* [http://blockchain.info/charts/total-bitcoins Chart of total bitcoins in circulation]<br />
==References==<br />
<references /><br />
<br />
[[Category:Economics]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Controlled_Currency_Supply&diff=33510Controlled Currency Supply2012-12-10T02:15:15Z<p>Dree12: Dree12 moved page Controlled Currency Supply to Controlled supply: Capitalization</p>
<hr />
<div>#REDIRECT [[Controlled supply]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Talk:Controlled_supply&diff=33511Talk:Controlled supply2012-12-10T02:15:15Z<p>Dree12: Dree12 moved page Talk:Controlled Currency Supply to Talk:Controlled supply: Capitalization</p>
<hr />
<div></div>Dree12https://tests.bitcoin.it/w/index.php?title=Talk:Controlled_Currency_Supply&diff=33512Talk:Controlled Currency Supply2012-12-10T02:15:15Z<p>Dree12: Dree12 moved page Talk:Controlled Currency Supply to Talk:Controlled supply: Capitalization</p>
<hr />
<div>#REDIRECT [[Talk:Controlled supply]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=BTCSERV.net&diff=33508BTCSERV.net2012-12-10T02:09:50Z<p>Dree12: fix spelling</p>
<hr />
<div>BTCSERV.net was a free for all [[Pooled Mining|Mining Pool]] with proportional [[Bitcoin]] payouts located in Germany. The pool was launched on July 9th, 2011 and its features were [[Long Polling]], SSL encrypted user interface and fast payouts. Only the [[transaction fees|transaction fees]] were kept by the pool operator.<br />
<br />
== Related Links ==<br />
[http://btcserv.net/ BTCSERV.net Website (offline)]<br />
<br />
[[Category:Offline]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=BTCSERV.net&diff=33507BTCSERV.net2012-12-10T02:09:28Z<p>Dree12: restore page into past tense</p>
<hr />
<div>BTCSERV.net was a free for all [[Pooled Mining|Mining Pool]] with proportional [[Bitcoin]] payouts located in Germany. The pool was launched on July 9th, 2011 and its features were [[Long Polling]], SSL encrypted user interface and fast payouts. Only the [[transaction fees|transaction fee]] were kept by the pool operator.<br />
<br />
== Related Links ==<br />
[http://btcserv.net/ BTCSERV.net Website (offline)]<br />
<br />
[[Category:Offline]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Bitcoin_Savings_%26_Trust&diff=33501Bitcoin Savings & Trust2012-12-10T02:01:29Z<p>Dree12: redirect</p>
<hr />
<div>#REDIRECT [[Pirateat40]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=User:Dree12/Sandbox&diff=33499User:Dree12/Sandbox2012-12-10T01:01:55Z<p>Dree12: finish Purpose</p>
<hr />
<div>'''Bitcoin''' is quite possibly the most misunderstood technology of the twenty-first century. Why? Although much of Bitcoin's documentation is aimed at people new to the concept, it can hardly be understood by the very people who wrote it. Through this inaccessibility, confusion results; through confusion, more inaccessibility follows. If, like many others, you are new to Bitcoin, perhaps a fresh look from the ground up would help matters. One doesn't need to know how something works to know how to use it. This introduction introduces the latter, not the former.<br />
<br />
== What is Bitcoin? ==<br />
Before one can understand anything, one has to know what they are trying to understand. This is the first major obstacle for those new to Bitcoin: just what is, and what is not, Bitcoin?<br />
<br />
Bitcoin can be confusing because the term has been overused so much. If I asked you what a date was, you might answer, "A date is a fruit." You could also answer, "A date is a palm", "A date is an appointment", or another of the many meanings of date. Bitcoin is similar in a way. It can refer to:<br />
<br />
* A ''technology''. Technologies facilitate the use of tools to solve problems. The automobile uses engines and fuel to increase transport speed. Similarly, Bitcoin uses certain tools to solve certain problems; these will be covered later.<br />
* A ''protocol''. "Protocol" is a fancy term for method of communication. Although people may talk about the "Bitcoin protocol", you probably don't need to worry about it.<br />
* A ''base unit of currency''. People use currency all the time. You might be accustomed to the "dollar", "euro", "pound", "peso", "yuan" or something else of that sort. The "bitcoin" (spelt with a lowercase 'b') is similar; it can be used to make purchases because it has a value.<br />
<br />
As if three distinct meanings weren't enough, many people mistakenly use "Bitcoin" to refer to something that is neither a technology nor a protocol nor a unit of currency. These usages are not correct, but commonplace anyways, so you better get used to them.<br />
<br />
* As a substitute for ''Bitcoin-QT'', a popular Bitcoin client. We will cover clients at a later time.<br />
* As a substitute for ''Bitcoin Foundation'', a non-profit organization that promotes the technology.<br />
* As a substitute for various organizations and businesses prefixed with ''Bitcoin''. For example, ''Bitcoin faucet'', ''Bitcoin central'', ''BitcoinTalk.org'', etc. are distinct from ''Bitcoin'', though they share its name.<br />
<br />
So, how can you tell the difference? The easiest way is simply to look at the capitalization. If the word is capitalized (i.e., "Bitcoin"), it probably refers to the technology, while if it is in lowercase (i.e., "bitcoin"), it is probably a unit of currency. If the word is pluralized (i.e., "bitcoins"), it is almost definitely referring to the unit of currency (akin to, for example, "dollars" or "pesos").<br />
<br />
== Purpose ==<br />
Any good technology must have a purpose. The automobile shortens transport times. The stove aids cooking. Bitcoin's purpose is unfortunately too often overlooked, and too often the media mistakes something else entirely for the purpose. A technology's purpose is the main problem it aims to solve, and Bitcoin solves more than one problem. But all the problems solved are derivatives of one unified purpose, which is unfortunately often overlooked.<br />
<br />
<blockquote>Bitcoin enables fast, low-fee, and global monetary transfer.</blockquote><br />
<br />
That wasn't too hard, was it? Bitcoin's role is similar to that of PayPal or Visa: moving money from one person to another. What makes Bitcoin innovative is how it does that without a central business running it. Rather than a big business doing the work moving money from one place to another, every user works together to do that. This allows Bitcoin transactions to have a reduced fee, one of Bitcoin's greatest merits.<br />
<br />
== The client ==<br />
TODO<br />
<br />
== Transactions ==<br />
TODO<br />
<br />
=== Confirmations ===<br />
TODO</div>Dree12https://tests.bitcoin.it/w/index.php?title=User:Dree12/Sandbox&diff=33496User:Dree12/Sandbox2012-12-10T00:26:00Z<p>Dree12: initial draft of a Basic Introduction article</p>
<hr />
<div>'''Bitcoin''' is quite possibly the most misunderstood technology of the twenty-first century. Why? Although much of Bitcoin's documentation is aimed at people new to the concept, it can hardly be understood by the very people who wrote it. Through this inaccessibility, confusion results; through confusion, more inaccessibility follows. If, like many others, you are new to Bitcoin, perhaps a fresh look from the grounds up would help matters.<br />
<br />
== What is Bitcoin? ==<br />
Before one can understand anything, one has to know what they are trying to understand. This is the first major obstacle for those new to Bitcoin: just what is, and what is not, Bitcoin?<br />
<br />
Bitcoin can be confusing because the term has been overused so much. If I asked you what a date was, you might answer, "A date is a fruit." You could also answer, "A date is a palm", "A date is an appointment", or another of the many meanings of date. Bitcoin is similar in a way. It can refer to:<br />
<br />
* A ''technology''. Technologies facilitate the use of tools to solve problems. The automobile uses engines and fuel to increase transport speed. Similarly, Bitcoin uses certain tools to solve certain problems; these will be covered later.<br />
* A ''protocol''. "Protocol" is a fancy term for method of communication. Although people may talk about the "Bitcoin protocol", you probably don't need to worry about it.<br />
* A ''base unit of currency''. People use currency all the time. You might be accustomed to the "dollar", "euro", "pound", "peso", "yuan" or something else of that sort. The "bitcoin" (spelt with a lowercase 'b') is similar; it can be used to make purchases because it has a value.<br />
<br />
As if three distinct meanings weren't enough, many people mistakenly use "Bitcoin" to refer to something that is neither a technology nor a protocol nor a unit of currency. These usages are not correct, but commonplace anyways, so you better get used to them.<br />
<br />
* As a substitute for ''Bitcoin-QT'', a popular Bitcoin client. We will cover clients at a later time.<br />
* As a substitute for ''Bitcoin Foundation'', a non-profit organization that promotes the technology.<br />
* As a substitute for various organizations and businesses prefixed with ''Bitcoin''. For example, ''Bitcoin faucet'', ''Bitcoin central'', ''BitcoinTalk.org'', etc. are distinct from ''Bitcoin'', though they share its name.<br />
<br />
So, how can you tell the difference? The easiest way is simply to look at the capitalization. If the word is capitalized (i.e., "Bitcoin"), it probably refers to the technology, while if it is in lowercase (i.e., "bitcoin"), it is probably a unit of currency. If the word is pluralized (i.e., "bitcoins"), it is almost definitely referring to the unit of currency (akin to, for example, "dollars" or "pesos").<br />
<br />
== Purpose ==<br />
TODO<br />
<br />
== The client ==<br />
TODO<br />
<br />
== Transactions ==<br />
TODO<br />
<br />
=== Confirmation ==<br />
TODO</div>Dree12https://tests.bitcoin.it/w/index.php?title=Comparison_of_mining_pools&diff=30325Comparison of mining pools2012-08-31T12:45:18Z<p>Dree12: +difficulty, +HHTT</p>
<hr />
<div>Reward types & explanation:<br />
* '''DGM''' - Double Geometric Method. A hybrid between PPLNS and Geometric reward types that enables to operator to absorb some of the variance risk. Operator receives portion of payout on short rounds and returns it on longer rounds to normalize payments. [https://bitcointalk.org/index.php?topic=39497.0]<br />
* '''Prop.''' - Proportional. When block is found, the reward is distributed among all workers proportionally to how much shares each of them has found.<br />
* '''PPLNS''' - Pay Per Last N Shares. Similar to proportional, but instead of looking at the number of shares in the round, instead looks at the last N shares, regardless of round boundaries.<br />
* '''PPS''' - Pay Per Share. Each submitted share is worth certain amount of BC. Since finding a block requires <current difficulty> shares ''on average'', a PPS method with 0% fee would be 50 BTC divided by <current difficulty>. It is risky for pool operators, hence the fee is highest.<br />
* '''SMPPS''' - Shared Maximum Pay Per Share. Like Pay Per Share, but never pays more than the pool earns. [http://eligius.st/wiki/index.php/Shared_Maximum_PPS]<br />
* '''ESMPPS''' - Equalized Shared Maximum Pay Per Share. Like SMPPS, but equalizes payments fairly among all those who are owed. [http://forum.bitcoin.org/index.php?topic=12181.msg378851#msg378851]<br />
* '''RSMPPS''' - Recent Shared Maximum Pay Per Share. Like SMPPS, but system aims to prioritize the most recent miners first. [http://eligius.st/wiki/index.php/Shared_Maximum_PPS]<br />
* '''CPPSRB''' - Capped Pay Per Share with Recent Backpay.<br />
* '''Score''' - Score based system: a proportional reward, but weighed by time submitted. Each submitted share is worth more in the function of time ''t'' since start of current round. For each share score is updated by: score += exp(t/C). This makes later shares worth much more than earlier shares, thus the miner's score quickly diminishes when they stop mining on the pool. Rewards are calculated proportionally to scores (and not to shares). (at slush's pool C=300 seconds, and every hour scores are normalized)<br />
[http://eligius.st/~luke-jr/samples/800MH-3/ Visual examples of the various payout methods]<br />
<br />
{| class="wikitable sortable"<br />
|-<br />
! Name !! Location !! GH/s<ref name="hashrate2">Note that pool hashrate is largely irrelevant but can be seen as a popularity measurement. Note however that it is a theoretical security issue if one pool gains above 50% of the total computational power of the network, thus consider joining a pool based on other metrics.</ref> !! Merged Mining<ref name="merged">Merged mining allows miners to mine on multiple [[block chains]] at the same time with the same hashing.</ref> !! Reward Type !! Transaction fees !! Fee PPS !! Fee Prop / Score !! Protocol !! Launched !! Difficulty !! Forum !! Website<br />
|-<br />
| [[50BTC]] || Germany || 2500 || ? || PPS<ref name="stales">Pool also rewards stale shares</ref> || kept by pool ||3% || || getwork || 2011-11-11 || 1 || [http://bitcointalk.org/index.php?topic=54673.0 Link] || [http://50btc.com/ Link]<br />
|-<br />
| [[Bitcash.cz|Bitcash.cz]] || Czech Republic || 6 || ? || Prop. || kept by pool || || 0% || getwork || 2011-07-21 || 1 || [http://bitcash.cz/forum/ Link] || <br />
[http://bitcash.cz/pool/ Link]<br />
|-<br />
| [[Bitclockers|BitClockers]] || USA, EU || 235 || [[NMC]] || PPS || kept by pool || 8% || || getwork || 2011-05-27 || 1 || [http://forum.bitcoin.org/index.php?topic=10127.0 Link] || [http://bitclockers.com/ Link]<br />
|-<br />
| [[Bitcoin_Pool|Bitcoin Mining Pool]] || USA || 58 || ? || Prop. || kept by pool || || 0%<ref name="donations">Donations are possible</ref> || getwork || Unknown || 1 || [http://bitcoinpool.com/forum/ Link] || [http://www.bitcoinpool.com/ Link]<br />
|-<br />
| [[Bitcoin_Pooled_Mining|Bitcoin Pooled Mining (Slush)]] || EU/London || 1430 || [[NMC]] || Score || kept by pool || || 2% || getwork || 2010-11-27 || 1 || [http://forum.bitcoin.org/index.php?topic=1976.0 Link] || [http://mining.bitcoin.cz/ Link]<br />
|- <br />
| [[Bitcoins.lc]] || EU || 70 || ? || Prop. || kept by pool || || 0% || getwork || 2011-05-27 || 1 || [http://forum.bitcoin.org/index.php?topic=10121.0 Link] || [http://www.bitcoins.lc/ Link]<br />
|-<br />
| [[Bitparking]] || San Diego || 170 || [[NMC]], I0C, IXC, [[Devcoin]] || PPS || kept by pool || 2.5% || || getwork || 2012-01-08 || 1 || [https://bitcointalk.org/index.php?topic=57148.0 Link] || [http://mmpool.bitparking.com/pool Link]<br />
|-<br />
| [[BitMinter]] || Germany || 700 || [[NMC]] || PPLNS || shared || || 0% || getwork || 2011-06-26 || 1 || [https://bitcointalk.org/index.php?topic=27062.0 Link] || [https://bitminter.com Link]<br />
|-<br />
| [[BitPenny]] || USA || 3 || No || CPPSRB || 97% shared || 3% || || BlkPrep<ref name="local">Miner-local getwork proxy available.</ref> || 2011-02-08 || 8 || [https://bitcointalk.org/index.php?topic=36371.0 Link] || [http://bitpenny.com/ Link]<br />
|-<br />
| [[BTC Canada]] || Canada || 110 || ? || PPLNS || kept by pool || 1.5% || 1.5% || getwork || 2012-08-08 || 1 || [https://bitcointalk.org/index.php?topic=99741.0/ Link] || [https://btccan.com/ Link]<br />
|-<br />
| [[BTC Guild]] || USA, EU || 2000 || [[NMC]] || PPS || kept by pool || 5% || || getwork || 2011-05-09 || 1 || [http://forum.bitcoin.org/index.php?topic=7760.0 Link] || [http://www.btcguild.com/ Link]<br />
|-<br />
| [[BTCMine]] || UK || 50 || ? || Score || kept by pool || || 2% || getwork || 2011-03-11 || 1 || [http://forum.bitcoin.org/index.php?topic=4251.0 Link] || [http://www.btcmine.com/ Link]<br />
|-<br />
| [[btcmp.com]] || Germany || 160 || ? || PPS || kept by pool || 4% || 0% || getwork || 2011-06-28 || 1 || || [http://www.btcmp.com/ Link]<br />
|-<br />
| [[Coinotron|Coinotron]] || Poland || 7 || ? || DGM || kept by pool || || 0% || getwork || 2011-07-06 || 1 || [http://forum.bitcoin.org/index.php?topic=26727.0 Link] || [http://www.coinotron.com Link]<br />
|-<br />
| [[DeepBit]] || Germany || 3350 || No || PPS / Prop. || kept by pool || 10% || 3% || getwork || 2011-02-26 ||1 || [http://forum.bitcoin.org/index.php?topic=3889.0 Link] || [http://deepbit.net/ Link]<br />
|-<br />
| [[Eclipse Mining Consortium]] || USA / Europe / AU / Asia || 1400 || [[NMC]] || DGM / PPS || kept by pool || 5% || 0% || getwork || 2011-06-14 || 1 || [http://forum.bitcoin.org/index.php?topic=16385.0 Link] || [https://eclipsemc.com Link]<br />
|-<br />
| [[Eligius]] || Germany || 400 <!-- don't update this just because you catch us at a low instance; pools have variance just like any other miner --> || [[NMC]] || SMPPS || kept by pool || 0%<ref name="donations">Donations are possible</ref> || || getwork, getmemorypool<ref name="local"/> || 2011-04-27 || 1 || [https://bitcointalk.org/index.php?topic=23768.msg298069#msg298069 Link] || [http://eligius.st Link]<br />
|-<br />
| [[Horrible Horrendous Terrible Tremendous]] || ? || 6 || No || PPS || kept by pool || || 2% || getwork || 2012-08-29 || Miner-controlled || [https://bitcointalk.org/index.php?topic=95378.0 Link]] || [http://hhtt.1209k.com/ Link]<br />
|-<br />
| [[Mining Team Reddit (MtRed)]] || USA, EU || 629 || [[NMC]] || PPS || shared || 0% || || getwork || 2011-05-25 || 1 || [http://forum.bitcoin.org/index.php?topic=15929.0 1] [http://reddit.com/r/mtred/ 2] || [http://www.mtred.com/ Link]<br />
|-<br />
| [[Ozco.in]] || USA/EU/AUS || 800 || [[NMC]] on DGM || DGM / PPS || shared on DGM || 5% || 3%DGM || getwork || 2011-06-07 || 1 || [https://bitcointalk.org/index.php?topic=14085.0 Link] || [https://www.ozcoin.net Link]<br />
|-<br />
| [[P2Pool]] || Earth (P2P) || 500 || Yes/Solo<ref>P2Pool supports merged mining but payouts in the merged chain are not pooled.</ref> || PPLNS || shared || || 0%<ref>People are donating ''to'' P2Pool miners to encourage people to use it. The P2Pool author also accepts optional donations.</ref> || Proprietary<ref name="local"/> || 2011-06-17 || 1 || [http://forum.bitcoin.org/index.php?topic=18313.0 Link] || [https://en.bitcoin.it/wiki/P2Pool Link]<br />
|-<br />
| [[pool.itzod.ru]] || Russia || 200 || Converted to BC || RSMPPS || shared || 0% || || getwork || 2011-08-01 || 1 || [https://bitcointalk.org/index.php?topic=25127.0 Link] [https://bitcointalk.org/index.php?topic=44024.0 Link] || [https://pool.itzod.ru/ Link]<br />
|- <br />
| [[PolMine]] || Poland || 110 || No || SMPPS || shared || 1% || || getwork || 2011-06-13 || 1 || [http://forum.polmine.pl/ Link] || [https://polmine.pl/?setlang=en Link]<br />
|-<br />
| [[Triplemining]] || Europe || 90 || On hold || PPLNS || kept by pool || || 0% <ref name="jackpot">Triplemining keeps 1% to redistribute using a weekly jackpot and affiliations</ref> || getwork, getmemorypool<ref name="local"/> || 2011-06-28 || 1 || [http://forum.bitcoin.org/index.php?topic=23664.0 Link] || [http://tinyurl.com/triplemining Link]<br />
|-<br />
| [[pool.mkalinin.ru]] || Russia || 40 || No || PPLNS || kept by pool || || 0% || getwork || 2011-07-20 || 1 || [https://bitcointalk.org/index.php?topic=30703.0 Link] || [http://pool.mkalinin.ru/ Link]<br />
|-<br />
| [[alvarez.sfek.kz]] || Kazakhstan || 3 || No || PPLNS || kept by pool || || 0% || getwork || 2012-04-19 || 1 || [https://bitcointalk.org/index.php?topic=80135.0 Link] || [http://alvarez.sfek.kz/ Link]<br />
|}<br />
<references/><br />
<br />
== See also ==<br />
*[[Pooled mining]]<br />
*[http://bcx.me/ Bitcoin Mining Pool Tracker]<br />
*[http://blockorigin.pfoe.be/chart.php Hashrate distribution pie chart]<br />
<br />
[[Category:Mining]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Satoshi_Dice&diff=30309Satoshi Dice2012-08-31T02:53:13Z<p>Dree12: Dree12 moved page SatoshiDICE to SatoshiDice: Use official name, SatoshiDice. ("SatoshiDice is the world's most popular Bitcoin betting game." -- homepage)</p>
<hr />
<div>A blockchain-based betting game.<br />
<br />
Blockchain betting games are those which use information from the wager transaction in the blockchain in determining whether the player wins or loses.<br />
<br />
Unlike traditional online gaming software, wagers with SatoshiDice can be sent without access to the website nor running any client software. To play, a Bitcoin transaction is made to one of the static addresses operated by the service, each having differing payouts. The service determines if the wager wins or loses and sends a transaction in response with the payout to a winning bet or it returns a tiny fraction of the house's gain to a losing bet. As a result, the player receives a win/lose response relatively instantaneously. SatoshiDICE pays a transaction fee on for each payout so the transactions will be relayed and included in the blockchain without significant delay.<br />
<br />
With SatoshiDICE, there is no need for bitcoin transactions to first confirm as the method the service creates the payout transaction includes a dependency on the original wager transaction. This gives the service the ability to accept a 0/unconfirmed transaction for each wager.<br />
<br />
Multiple bets may be in a single transaction (e.g., a bet can be made for Under 48,000 and include a second bet Under 32 in the same payment transaction). The service will respond with multiple payout transactions, one for each bet, in response.<br />
<br />
There has been the suggestion that the service might be seeing use as a [[mixing service]], as the composition of a wallet can be materially changed after running wagers through SatoshiDICE<ref>[http://bitcointalk.org/index.php?topic=79079.0 Blockchain-based betting services function as mixing services?]</ref>. Though this approach could change the makeup of the wallet, it does not sufficiently serve the mixing purpose as the coins returned in winning bets are tied to the coins from the wager transaction.<br />
<br />
There is no reason to believe that [[Satoshi Nakamoto]] has anything to do with this service, other than the service choosing to include the noun Satoshi in the brand.<br />
<br />
==Random Number Generation==<br />
<br />
To determine if a wager is a winner or loser, the site uses a method to produce a number between 0 and 65,535, similar to how a random number generator (RNG) would be used. The service uses a combination of the transaction hash from the wager transaction from the blockchain and performs a sha2 (sha-512) hash for that transaction hash using a secret unknown to the player. The first four bytes of that sha-512 hash become the lucky number in determining winner or loser.<br />
<br />
==Odds==<br />
<br />
Each wager address has different odds, and each gives the house an edge of 1.50% (i.e., payouts are 98.5% when including the payout to the losing bets)<ref>[http://bitcointalk.org/index.php?topic=77870.msg906438#msg906438 Some changes to the site]</ref>. The website shows the full list of wager addresses and odds.<br />
<br />
==Automated Betting==<br />
<br />
Bitcoin's community of developers wasted no time building automated betting bot scripts employing the Martingale betting system and variants thereof<ref>[http://bitcointalk.org/index.php?topic=80245.0 PHP martingale bot for satoshiDICE]</ref>.<br />
<br />
==History==<br />
<br />
SatoshiDICE was the brand given the service initially created by [[BitcoinTalk]] forum user FireDuck before selling the system to another operator<ref>[http://www.reddit.com/r/Bitcoin/comments/segz0/anyone_want_to_run_my_bitcoin_casino Anyone want to run my bitcoin casino]</ref>. The service was announced on April 24, 2012<ref>[http://bitcointalk.org/index.php?topic=77870.0 SatoshiDICE.com - Verified rolls, up to 65,000x winning]</ref>]. Withing weeks, the site became responsible for more Bitcoin transactions than all other uses of Bitcoin -- combined<ref>[http://bitcointalk.org/index.php?topic=79285.0 All-time transaction record was just hit]</ref>.<br />
<br />
==See Also==<br />
<br />
* [[Mixing service]]<br />
<br />
==External Links==<br />
<br />
* [http://www.SatoshiDICE.com SatoshiDICE.com] website<br />
<br />
==References==<br />
<references /><br />
<br />
[[Category:Gambling]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=SatoshiDICE&diff=30310SatoshiDICE2012-08-31T02:53:13Z<p>Dree12: Dree12 moved page SatoshiDICE to SatoshiDice: Use official name, SatoshiDice. ("SatoshiDice is the world's most popular Bitcoin betting game." -- homepage)</p>
<hr />
<div>#REDIRECT [[SatoshiDice]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Pay_to_script_hash&diff=30306Pay to script hash2012-08-31T02:19:43Z<p>Dree12: test address</p>
<hr />
<div>'''342ftSRCvFHfCeFFBuz4xwbeqnDw6BGUey''', [[firstbits]] [http://blockchain.info/fb/3 3], is a version-5 Bitcoin [[address]]. It is notable for being the first [[P2SH]]-compatible address, as well as the first address using a non-1 prefix, with a prefix of 3. As the address has held a maximum of 0.004 BTC, and currently holds no bitcoins, the address is evidently a test address.<br />
<br />
== Analysis ==<br />
The address has only received funds from a newly-generated mining address (1GLPEswBeEs31aCn6n5y5rDv1ckFp7L83U), which received coins in [[block]] 160720. As the generated [[transaction]] was distributed, a feature only seen on [[P2Pool]] and [[Eligius]], an operator of Eligius likely operated the address.<br />
<br />
[[Category:Notable addresses]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Pay_to_script_hash&diff=30305Pay to script hash2012-08-31T02:13:20Z<p>Dree12: First P2SH address page create</p>
<hr />
<div>'''342ftSRCvFHfCeFFBuz4xwbeqnDw6BGUey''', [[firstbits]] [http://blockchain.info/fb/3 3], is a version-5 Bitcoin [[address]]. It is notable for being the first [[P2SH]]-compatible address, as well as the first address using a non-1 prefix, with a prefix of 3.<br />
<br />
[[Category:Notable addresses]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Higher_difficulty_pooled_mining&diff=30304Higher difficulty pooled mining2012-08-31T02:04:50Z<p>Dree12: cat: +mining</p>
<hr />
<div>'''Higher difficulty pooled mining''' is an attempt to allow powerful miners with high hash-rates to mine efficiently while reducing network chatter, therefore saving usage limits and bandwidth for both the miner and the pool operator. In development at this time, this concept is expected to overtake classical 1-difficulty [[pooled mining]] in the near future, coinciding with the introduction of [[ASIC]] mining. The basic concept is to only accept shares that meet a certain [[difficulty]], so less shares are sent to the pool.<br />
<br />
== Concept ==<br />
With rapidly-increasing hashing speeds, miners are rather wasteful in terms of bandwidth. Each share requires submission to the server, which must handle shares from all miners. This can be overloading, and is suboptimal.<br />
<br />
Higher difficulty pooled mining saves bandwidth and does not affect the expected return; however, volatility is increased. For powerful miners, volatility should be low even with a higher difficulty, and the bandwidth savings can pay off.<br />
<br />
Hypothetically, pools can allow miners to set their own difficulty level. No pool demonstrates this ability yet; however, Eligius may offer this functionality in the future.<br />
<br />
== Technical details ==<br />
Communication is done, as with classical pools, with the [[getwork]] protocol. However, some mining software does not yet fully support the protocol.<br />
<br />
== History ==<br />
Higher difficulty pooled mining originally originated in a [[SolidCoin]] pool, but after SolidCoin's closure was forgotten. The concept had previously been discussed, but weak mining hardware made original 1-difficulty mining pools sufficient. After [[Litecoin]]'s introduction, many Litecoin pools also adopted the concept. The first Bitcoin pool to propose higher difficulty pooled mining was [[Eligius]]; however, at the time, this has not yet been implemented. The first pool known to use higher difficulty pooled mining is HHTT, which uses a difficulty of 32.<br />
<br />
== Support ==<br />
=== Pools ===<br />
Only one pool is known to use higher difficulty pooled mining.<br />
<br />
<table class="wikitable sortable"><br />
<tr><th>Pool</th><th>Difficulty</th><th>Power (GhHz)</th><th>Type</th></tr><br />
<tr><td>[http://hhtt.1209k.com/ Horrible Horrendous Terrible Tremendous Mining Pool (HHTT)]</td><td>32</td><td>6</td><td>PPS</td></tr><br />
</table><br />
<br />
=== Software ===<br />
:''Main article: [[Getwork support]]''<br />
Mining software that fully conforms with the [[getwork]] protocol are compatible with higher difficulty pooled mining.<br />
<br />
[[Category:Mining]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Higher_difficulty_pooled_mining&diff=30302Higher difficulty pooled mining2012-08-31T01:45:45Z<p>Dree12: New page detailing future mining protocol</p>
<hr />
<div>'''Higher difficulty pooled mining''' is an attempt to allow powerful miners with high hash-rates to mine efficiently while reducing network chatter, therefore saving usage limits and bandwidth for both the miner and the pool operator. In development at this time, this concept is expected to overtake classical 1-difficulty [[pooled mining]] in the near future, coinciding with the introduction of [[ASIC]] mining. The basic concept is to only accept shares that meet a certain [[difficulty]], so less shares are sent to the pool.<br />
<br />
== Concept ==<br />
With rapidly-increasing hashing speeds, miners are rather wasteful in terms of bandwidth. Each share requires submission to the server, which must handle shares from all miners. This can be overloading, and is suboptimal.<br />
<br />
Higher difficulty pooled mining saves bandwidth and does not affect the expected return; however, volatility is increased. For powerful miners, volatility should be low even with a higher difficulty, and the bandwidth savings can pay off.<br />
<br />
Hypothetically, pools can allow miners to set their own difficulty level. No pool demonstrates this ability yet; however, Eligius may offer this functionality in the future.<br />
<br />
== Technical details ==<br />
Communication is done, as with classical pools, with the [[getwork]] protocol. However, some mining software does not yet fully support the protocol.<br />
<br />
== History ==<br />
Higher difficulty pooled mining originally originated in a [[SolidCoin]] pool, but after SolidCoin's closure was forgotten. The concept had previously been discussed, but weak mining hardware made original 1-difficulty mining pools sufficient. After [[Litecoin]]'s introduction, many Litecoin pools also adopted the concept. The first Bitcoin pool to propose higher difficulty pooled mining was [[Eligius]]; however, at the time, this has not yet been implemented. The first pool known to use higher difficulty pooled mining is HHTT, which uses a difficulty of 32.<br />
<br />
== Support ==<br />
=== Pools ===<br />
Only one pool is known to use higher difficulty pooled mining.<br />
<br />
<table class="wikitable sortable"><br />
<tr><th>Pool</th><th>Difficulty</th><th>Power (GhHz)</th><th>Type</th></tr><br />
<tr><td>[http://hhtt.1209k.com/ Horrible Horrendous Terrible Tremendous Mining Pool (HHTT)]</td><td>32</td><td>6</td><td>PPS</td></tr><br />
</table><br />
<br />
=== Software ===<br />
:''Main article: [[Getwork support]]''<br />
Mining software that fully conforms with the [[getwork]] protocol are compatible with higher difficulty pooled mining.</div>Dree12https://tests.bitcoin.it/w/index.php?title=BitcoinTalk&diff=29173BitcoinTalk2012-07-28T17:21:06Z<p>Dree12: Dree12 moved page Bitcoin Forum to Bitcoin Talk: distance Bitcoin Talk from officialness</p>
<hr />
<div>'''Bitcoin Talk''', originally called the Bitcoin Forum, is a message board where people interested in the technical details and the development of Bitcoin software can talk to each other. The forum also has places for people who are interested in bitcoin [[:Category:Mining|mining]], in trading with bitcoin, and in the economics of Bitcoin.<br />
<br />
The forum is owned by [[Sirius]]. It is administrated by [[:User:Theymos|theymos]], Sirius, and [[:User:Gavinandresen|Gavin]]. Currently, the forum is hosted by [[Mt. Gox]].<br />
<br />
==History==<br />
<br />
Before the creation of the current Bitcoin Forum, Satoshi used a SourceForge forum. When Sirius provided hosting, the forum was moved to bitcoin.org/smf. Satoshi made several custom modifications to the forum software and theme.<br />
<br />
Satoshi's first non-test post on the forum was:<br />
<br />
<blockquote><p>I left the admin account set to the original SMF theme so if I somehow completely wedge the custom theme I can still get in to fix it.</p><br />
<br />
<p>I've got a neat little 12x12 coin image to replace those pip stars with. Should look nice. Also some nice button images to try.</p><br />
<br />
<p>The registration page has "hide your e-mail address" unchecked by default. I must fix that in php before we can open up.</p><br />
<br />
<p>The Announcements forum is currently moderator access only.</p></blockquote><br />
<br />
The forum was at some point moved to forum.bitcoin.org. The bitcoin.org domain name was also transferred from Satoshi to Sirius.<br />
<br />
In July, 2011 the forum was moved to bitcointalk.org in order to make it explicitly unofficial. The "forum" link on the bitcoin.org homepage was made to simply return the Google search results for the search terms "bitcoin forums". This was followed by Bitcoin Community members, very much in bitcoin's spirit of decentralisation, creating a number of alternative forums offering different moderatorial policies and using different software platforms. None of these alternative forums have yet reached the size of Bitcoin Talk.<br />
<br />
Later, the "forum" link was simply removed, further distancing Bitcoin Talk from the official bitcoin.org. As of April 21, 2012, Bitcoin Talk remains the first search result on Google thanks to its high page rank.<br />
<br />
On July 22, 2012, Bitcoin Talk reached its one millionth post.<br />
<br />
==See Also==<br />
<br />
* [[Community portal]]<br />
<br />
==External links==<br />
<br />
* [http://bitcointalk.org/ Bitcoin Talk]<br />
<br />
[[Category:Forums]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=BitcoinTalk&diff=29172BitcoinTalk2012-07-28T17:20:40Z<p>Dree12: expand</p>
<hr />
<div>'''Bitcoin Talk''', originally called the Bitcoin Forum, is a message board where people interested in the technical details and the development of Bitcoin software can talk to each other. The forum also has places for people who are interested in bitcoin [[:Category:Mining|mining]], in trading with bitcoin, and in the economics of Bitcoin.<br />
<br />
The forum is owned by [[Sirius]]. It is administrated by [[:User:Theymos|theymos]], Sirius, and [[:User:Gavinandresen|Gavin]]. Currently, the forum is hosted by [[Mt. Gox]].<br />
<br />
==History==<br />
<br />
Before the creation of the current Bitcoin Forum, Satoshi used a SourceForge forum. When Sirius provided hosting, the forum was moved to bitcoin.org/smf. Satoshi made several custom modifications to the forum software and theme.<br />
<br />
Satoshi's first non-test post on the forum was:<br />
<br />
<blockquote><p>I left the admin account set to the original SMF theme so if I somehow completely wedge the custom theme I can still get in to fix it.</p><br />
<br />
<p>I've got a neat little 12x12 coin image to replace those pip stars with. Should look nice. Also some nice button images to try.</p><br />
<br />
<p>The registration page has "hide your e-mail address" unchecked by default. I must fix that in php before we can open up.</p><br />
<br />
<p>The Announcements forum is currently moderator access only.</p></blockquote><br />
<br />
The forum was at some point moved to forum.bitcoin.org. The bitcoin.org domain name was also transferred from Satoshi to Sirius.<br />
<br />
In July, 2011 the forum was moved to bitcointalk.org in order to make it explicitly unofficial. The "forum" link on the bitcoin.org homepage was made to simply return the Google search results for the search terms "bitcoin forums". This was followed by Bitcoin Community members, very much in bitcoin's spirit of decentralisation, creating a number of alternative forums offering different moderatorial policies and using different software platforms. None of these alternative forums have yet reached the size of Bitcoin Talk.<br />
<br />
Later, the "forum" link was simply removed, further distancing Bitcoin Talk from the official bitcoin.org. As of April 21, 2012, Bitcoin Talk remains the first search result on Google thanks to its high page rank.<br />
<br />
On July 22, 2012, Bitcoin Talk reached its one millionth post.<br />
<br />
==See Also==<br />
<br />
* [[Community portal]]<br />
<br />
==External links==<br />
<br />
* [http://bitcointalk.org/ Bitcoin Talk]<br />
<br />
[[Category:Forums]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=AurumXChange_Company&diff=29167AurumXChange Company2012-07-28T16:39:49Z<p>Dree12: </p>
<hr />
<div>Buys, sells, and exchanges [[MtGox]] [[redeemable code|redeemable codes]], [[Crypto X Change]] redeemable codes, [[Liberty Reserve]], PerfectMoney, [[Pecunix]], HD-Money, CosmicPay, SolidTrustPay, C-Gold, VouchX, EURO SEPA transfers, USD wire transfers, and GBP transfers.<br />
<br />
Provides account funding for MtGox and CryptoXchange when making cash deposits at more than 10,000 locations across the USA (currently at the lowest fees in the industry). It is also possible to fund an account using SEPA Euro transfers, USD Wire Transfers, GBP Transfers and any of e-currencies supported by the company. Cash deposits are processed within one hour, while most e-currency funding is processed instantly, and funding involving bank transfers is completed within one to two business days.<br />
<br />
It is also possible to exchange between e-currencies in real time (when allowed by the e-currency).<br />
<br />
In addition to funding, you can withdraw funds by converting [[MtGox]] or CryptoXchange codes to any of the supported e-currencies, or by requesting a wire or bank transfer.<br />
<br />
The company also offers the AurumXchange MasterCard to its premium members. This card can be loaded instantly and in real time using any of the funding methods described above. Once loaded, the funds are available to be withdrawn instantly at more than one million ATMs all over the world, and to make purchases at any retail or online store where MasterCard is accepted.<br />
<br />
Aurum Capital Holdings, Incorporated in 2007 owns and operates the website that operates under the name The AurumXchange Company<ref>[https://www.aurumxchange.com/content/privacy The AurumXchange Company - Terms and Conditions]</ref><br />
<br />
The company has been in business exchanging privately since 2007, and publicly since 2009. The company is an official funding partner for MtGox and CryptoXchange. The company is also an official certified exchanger for SolidTrustPay, HD-Money, C-Gold, and VouchX. The company is also certified as the official wholesaler for CosmicPay.<br />
<br />
The AurumXchange company is a featured exchanger and member of the VFS Network, and has been certified by the Global Digital Currency Association since 2009.<br />
<br />
==Affiliate Program==<br />
<br />
An affiliate program is offered to all with no registration requirement. Ccommissions are paid out to the Liberty Reserve account number used for the affiliate link<ref>[http://www.aurumxchange.com/content/affiliate ]</ref><br />
<br />
==Criticism==<br />
<br />
AurumXChange has been accused of attacking competitors without much basis. This occured when they attempted to persuade Tradehill to cease acceptance of Paxum, a large competitor. Many members of [[BitcoinTalk]] responded negatively to this.<br />
<br />
==External Links==<br />
<br />
* [https://www.aurumxchange.com AurumXChange Company] web site<br />
<br />
==References==<br />
<br />
<references /><br />
<br />
[[Category:Exchanges]]<br />
[[Category:Money transmitters]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Fractional_Reserve_Banking_and_Bitcoin&diff=19820Fractional Reserve Banking and Bitcoin2011-11-23T05:16:18Z<p>Dree12: edit link</p>
<hr />
<div>While Fractional Reserve Banking with Bitcoin is possible, there is [https://bitcointalk.org/index.php?topic=51899.0 disagreement] over what it would entail. Much discussion occurred on the [[Talk:Myths#Fractional_reserve_banking_with_Bitcoin_is_fundamentally_different|Myths Talk Page]].<br />
<br />
==Keynesian Viewpoint==<br />
Fractional Reserve Banking with Bitcoin is possible and practical. There is no fundamental difference between classical currencies and Bitcoin as it applies to banking. Banks will still be free to take in bitcoins and present them to customers as "available for withdrawal" while still lending most of those bitcoins to a different customer for a profit. Some of those bitcoins will be held in reserves in case of a bank run. It will be up to the bank to hold a sufficient supply of reserves in order to prevent insolvency in the event of a bank run. Central banks were established to enforce reserve requirements and so, with Bitcoin lacking a central bank, some banks will almost surely collapse, taking their customers' deposits with them.<br />
<br />
See [http://en.wikipedia.org/wiki/Fractional-reserve_banking Fractional reserve banking].<br />
<br />
The Monetary Base of Bitcoin is limited to 21 million. But because Fractional Reserve Banking is possible, the money supply of bitcoins (which includes demand deposits) can greatly exceed 21 million.<br />
<br />
==Austrian Viewpoint==<br />
<br />
According to the [http://wiki.mises.org/wiki/Fractional_reserve_banking Austrian viewpoint]:<br />
<blockquote>Fractional-reserve banking (or FRB) is the widespread banking practice in which only a fraction of a bank's demand deposits are kept in reserve and available for immediate withdrawal (as cash and other highly liquid assets), whilst the remaining cash is lent out to borrowers (and so is never actually available for immediate withdrawal to legitimate deposit-holders).</blockquote><br />
<br />
In order for fractional reserve banking to affect the money supply, the debt instruments issued by the bank (for example, bank notes or demand deposits) must be accepted as if they were money proper, in other words, they must be money-substitutes. This is explained for example by [http://mises.org/rothbard/austrianmoneysupply.pdf Rothbard in Austrian Definitions of the Supply of Money]:<br />
<br />
<blockquote>And so long as demand deposits are accepted as equivalent to standard money, they will function as part of the money supply.<br />
<br />
It is important to recognize that demand deposits are not automatically part of the money supply by virtue of their very existence; they continue as equivalent to money only so long as the subjective estimates of the sellers of goods on the market think that they are so equivalent and accept them as such in exchange.</blockquote><br />
<br />
In the historical cases of money based on gold or government issued fiat, the reason why money-substitutes are accepted as if they were money proper is that the money proper has in some circumstances high transaction costs (for example, gold might be too heavy to carry around, or the buyer and seller are not at the same location and want to perform the exchange electronically), or are not legally permitted (normal people are not allowed to obtain central bank reserves). This creates a demand for forms of money which have lower transaction costs. With gold/fiat, this requires the creation of debt instruments, which then, after being generally accepted in exchange, become money substitutes and a part of the money supply.<br />
<br />
The situation with Bitcoin is different, because other forms can be created without debt instruments, for example [[Casascius physical bitcoins]] or [[BitBills]]. Bitcoin in its "classical" form is similar in function of a bank account (allowing electronic transfers of balances) even though there is no debt instrument. Issuers of Bitcoin-based debt instruments, if they expect these instruments to be accepted in exchange, need to create demand for them as a method of payment outside of the Bitcoin network. This is difficult, because a transaction that occurs outside of the Bitcoin network is incompatible with it, so people equipped with software for handling only pure Bitcoin transactions cannot accept it. Furthermore, they also would need to compete against not only Bitcoin, but against other currencies, payment methods and services.<br />
<br />
Currently, Bitcoin based debt instruments are restricted to a narrow field of uses. Exchanges allow these instruments to be traded against other currencies. E-wallets allow inter-wallet transfers. GLBSE allows the floating of shares or other contractual arrangements. However, these debt instruments are, in general, outside of these narrow fields, not accepted for exchange as if they were native Bitcoins. They rarely even circulate outside of the internal transactions of the providers of these services. There are very few exceptions, such as the redeemable Mt. Gox code. If the service provider attempted to conduct FRB by overissuing these instruments, they would be exposed at risk of having them redeemed too quickly. One possible way of mitigating this risk is to institute a suspension of specie payments (for example, Mt. Gox. having a default withdrawal limit).<br />
<br />
If in the future, P2P exchanges and distributed wallets are available (both have been suggested already at bitcointalk.org forums), this would decrease the demand for Bitcoin-based debt instruments even further.<br />
<br />
Historically, in all known situations where an overissue of Bitcoin-based debt instruments was produced, this resulted either in a voluntary elimination of the excess instruments (Mt. Gox hack from June 2011), bankruptcy (the demise of mybitcoin) or a new investor bailout (the demise of bitomat.pl and subsequent takeover by Mt. Gox). Here we have empirical evidence that FRB with Bitcoin is possible.<br />
<br />
Putting all this together, there are several steps that need to be addressed regarding Bitcoin-FRB and money supply:<br />
<br />
# overissue of debt instruments (this would cause FRB)<br />
# general acceptance of these instruments as a method of payment (this would mean the instruments need to be included in the money supply)<br />
# market price of these instruments at a different rate than the reserve ratio of the issuer (this would cause inflation or deflation)<br />
<br />
Even if we assume that an overissue is possible in long term, there are significant obstacles in phase 2 and 3, as elaborated above. It is therefore unlikely that even if Bitcoin-FRB became widespread, this would significantly affect the money supply of Bitcoins or inflation/deflation.</div>Dree12https://tests.bitcoin.it/w/index.php?title=Crypto_X_Change&diff=19457Crypto X Change2011-11-15T20:42:46Z<p>Dree12: expand communication</p>
<hr />
<div>'''[http://www.cryptoxchange.com Crypto X Change]''' is a global Bitcoin [[currency exchange]] based in Australia. Opening on November 10, 2011, it is among the newest exchanges. It is owned and operated by Austrailian company Crypto X Change. Users of Crypto X Change can trade money between Bitcoin, United States dollars, Austrailian dollars, Namecoin, and Litecoin. With the exception of United States dollars to Austrailian dollars, all possible combinations are supported.<br />
<br />
== Features ==<br />
Crypto X Change allows customer deposits in over 25 national currencies, and withdraws in over 100. Additionally, the usage of [[MtGox]] voucher codes is supported. Customers usually have deposits arrive in less than 24 hours.<br />
<br />
A fully-transparent order book is provided with no dark pools and market manipulation. Crypto X Change also includes an API to make automated trading easier. They also provide customers with live chat support 24/7, and have phone numbers for most countries. A forum is also provided for users to discuss topics that are important to them. <br />
<br />
== Communication ==<br />
{{Communication|org=Crypto X Change|email=contact@cryptoxchange.com|website=[http://www.cryptoxchange.com/]|livesupport=[https://help.cryptoxchange.com/chat.php]|phone=+61280050602}}</div>Dree12https://tests.bitcoin.it/w/index.php?title=Crypto_X_Change&diff=19435Crypto X Change2011-11-15T13:10:12Z<p>Dree12: moved CryptoXchange to Crypto X Change: Proper names should be all capitalized, original spelling had spaces</p>
<hr />
<div>'''[http://www.cryptoxchange.com Crypto X Change]''' is a global Bitcoin [[currency exchange]] based in Australia. Opening on November 10, 2011, it is among the newest exchanges. It is owned and operated by Austrailian company Crypto X Change. Users of Crypto X Change can trade money between Bitcoin, United States dollars, Austrailian dollars, Namecoin, and Litecoin. With the exception of United States dollars to Austrailian dollars, all possible combinations are supported.<br />
<br />
== Features ==<br />
Crypto X Change allows customer deposits in over 25 national currencies, and withdraws in over 100. Additionally, the usage of [[MtGox]] voucher codes is supported. Customers usually have deposits arrive in less than 24 hours.<br />
<br />
A fully-transparent order book is provided with no dark pools and market manipulation. Crypto X Change also includes an API to make automated trading easier. They also provide customers with live chat support 24/7, and have phone numbers for most countries. A forum is also provided for users to discuss topics that are important to them. <br />
<br />
== Communication ==<br />
{{Communication|org=Crypto X Change|email=contact@cryptoxchange.com|phone=+61280050602}}</div>Dree12https://tests.bitcoin.it/w/index.php?title=CryptoXchange&diff=19436CryptoXchange2011-11-15T13:10:12Z<p>Dree12: moved CryptoXchange to Crypto X Change: Proper names should be all capitalized, original spelling had spaces</p>
<hr />
<div>#REDIRECT [[Crypto X Change]]</div>Dree12https://tests.bitcoin.it/w/index.php?title=Crypto_X_Change&diff=19434Crypto X Change2011-11-15T13:09:38Z<p>Dree12: use new communication template</p>
<hr />
<div>'''[http://www.cryptoxchange.com Crypto X Change]''' is a global Bitcoin [[currency exchange]] based in Australia. Opening on November 10, 2011, it is among the newest exchanges. It is owned and operated by Austrailian company Crypto X Change. Users of Crypto X Change can trade money between Bitcoin, United States dollars, Austrailian dollars, Namecoin, and Litecoin. With the exception of United States dollars to Austrailian dollars, all possible combinations are supported.<br />
<br />
== Features ==<br />
Crypto X Change allows customer deposits in over 25 national currencies, and withdraws in over 100. Additionally, the usage of [[MtGox]] voucher codes is supported. Customers usually have deposits arrive in less than 24 hours.<br />
<br />
A fully-transparent order book is provided with no dark pools and market manipulation. Crypto X Change also includes an API to make automated trading easier. They also provide customers with live chat support 24/7, and have phone numbers for most countries. A forum is also provided for users to discuss topics that are important to them. <br />
<br />
== Communication ==<br />
{{Communication|org=Crypto X Change|email=contact@cryptoxchange.com|phone=+61280050602}}</div>Dree12https://tests.bitcoin.it/w/index.php?title=Template:Communication&diff=19401Template:Communication2011-11-14T23:39:35Z<p>Dree12: modifications</p>
<hr />
<div><includeonly><br />
{{Infobox<br />
|title = {{{org}}} {{{desc|Support and Communication}}}<br />
|label1 = Email<br />
|data1 = {{{email|}}}<br />
|label2 = Alternate Email<br />
|data2 = {{{email2|}}}<br />
|label3 = Website<br />
|data3 = {{{website|}}}<br />
|label4 = Helpdesk<br />
|data4 = {{{helpdesk|}}}<br />
|label5 = Live Support<br />
|data5 = {{{livesupport|}}}<br />
|label10 = Global phone number<br />
|data10 = {{{phone|}}}<br />
|label11 = {{{lphonecity|Local}}} phone number<br />
|data11 = {{{lphone|}}}<br />
|label20 = Mailing Address<br />
|data20 = {{{address|}}}<br />
}}<br />
</includeonly><br />
<noinclude><br />
This is a template for use by organizations and companies to outline support methods.<br />
== Usage ==<br />
<pre><br />
{{Communication|org=organization or company|email=foo@bar|email2=...}}<br />
</pre><br />
Most parameters are optional. Listed in order of display:<br />
<pre><br />
org: Required. Organization or company the communications deal with.<br />
desc: Default "Support and Communication". Used in title.<br />
email: Provide a primary contact email address.<br />
email2: Provide a secondary contact email address.<br />
website: Main website with links to communication resources. Should be linked when provided: website=[http://foo.bar/]<br />
helpdesk: Webpage where help and problem tickets can be submitted. Should be linked when provided: helpdesk=[http://foo.bar/helpdesk/]<br />
livesupport: Webpage where customer support is instantly contacted. Should be linked when provided: livesupport=[http://foo.bar/livesupport/]<br />
phone: Global phone number for global companies. Should only be used if the company is global.<br />
lphone: Local phone number for local companies. Should only be used if the company is not global.<br />
lphonecity: City that the local phone number is based in. Provide this if and only if lphone is used.<br />
address: Mailing address (physical). Can be in whatever format is appropriate.<br />
</pre><br />
<br />
== Example ==<br />
<pre><br />
{{Communication|org=MtGox|email=support@mtgox.zendesk.com|website=[http://mtgox.com/]}}<br />
</pre><br />
{{Communication|org=MtGox|email=support@mtgox.zendesk.com|website=[http://mtgox.com/]}}<br />
</noinclude></div>Dree12https://tests.bitcoin.it/w/index.php?title=Template:Communication&diff=19400Template:Communication2011-11-14T23:38:06Z<p>Dree12: </p>
<hr />
<div>{{Infobox<br />
|title = {{{org}}} {{{desc|Support and Communication}}}<br />
|label1 = Email<br />
|data1 = {{{email|}}}<br />
|label2 = Alternate Email<br />
|data2 = {{{email2|}}}<br />
|label3 = Website<br />
|data3 = {{{website|}}}<br />
|label4 = Helpdesk<br />
|data4 = {{{helpdesk|}}}<br />
|label5 = Live Support<br />
|data5 = {{{livesupport|}}}<br />
|label10 = Global phone number<br />
|data10 = {{{phone|}}}<br />
|label11 = {{{lphonecity|Local}}} phone number<br />
|data11 = {{{lphone|}}}<br />
|label20 = Mailing Address<br />
|data20 = {{{address|}}}<br />
}}<br />
<noinclude><br />
== Usage ==<br />
<pre><br />
{{Communication|org=organization or company|email=foo@bar|email2=...}}<br />
</pre><br />
Most parameters are optional. Listed in order of display:<br />
<pre><br />
org: Required. Organization or company the communications deal with.<br />
desc: Default "Support and Communication". Used in title.<br />
email: Provide a primary contact email address.<br />
email2: Provide a secondary contact email address.<br />
website: Main website with links to communication resources. Should be linked when provided: website=[http://foo.bar/]<br />
helpdesk: Webpage where help and problem tickets can be submitted. Should be linked when provided: helpdesk=[http://foo.bar/helpdesk/]<br />
livesupport: Webpage where customer support is instantly contacted. Should be linked when provided: livesupport=[http://foo.bar/livesupport/]<br />
phone: Global phone number for global companies. Should only be used if the company is global.<br />
lphone: Local phone number for local companies. Should only be used if the company is not global.<br />
lphonecity: City that the local phone number is based in. Provide this if and only if lphone is used.<br />
address: Mailing address (physical). Can be in whatever format is appropriate.<br />
</pre><br />
<br />
== Example ==<br />
<pre><br />
{{Communication|org=MtGox|email=support@mtgox.zendesk.com|website=[http://mtgox.com/]}}<br />
</pre><br />
{{Communication|org=MtGox|email=support@mtgox.zendesk.com|website=[http://mtgox.com/]}}<br />
</noinclude></div>Dree12https://tests.bitcoin.it/w/index.php?title=Template:Communication&diff=19399Template:Communication2011-11-14T23:35:15Z<p>Dree12: fix unadded parameter issue</p>
<hr />
<div>{{Infobox<br />
|title = {{{org}}} {{{desc|Support and Communication}}}<br />
|label1 = Email<br />
|data1 = {{{email|}}}<br />
|label2 = Alternate Email<br />
|data2 = {{{email2|}}}<br />
|label3 = Website<br />
|data3 = {{{website|}}}<br />
|label4 = Helpdesk<br />
|data4 = {{{helpdesk|}}}<br />
|label5 = Live Support<br />
|data5 = {{{livesupport|}}}<br />
|label10 = Global phone number<br />
|data10 = {{{phone|}}}<br />
|label11 = {{{lphonecity|Local}}} phone number<br />
|data11 = {{{lphone|}}}<br />
|label20 = Mailing Address<br />
|data20 = {{{address|}}}<br />
}}<br />
<noinclude><br />
== Usage ==<br />
<pre><br />
{{Communication|org=organization or company|email=foo@bar|email2=...}}<br />
</pre><br />
Most parameters are optional. Listed in order of display:<br />
<pre><br />
org: Required. Organization or company the communications deal with.<br />
desc: Default "Support and Communication". Used in title.<br />
email: Provide a primary contact email address.<br />
email2: Provide a secondary contact email address.<br />
website: Main website with links to communication resources. Should be linked when provided: website=[http://foo.bar/]<br />
helpdesk: Webpage where help and problem tickets can be submitted. Should be linked when provided: helpdesk=[http://foo.bar/helpdesk/]<br />
livesupport: Webpage where customer support is instantly contacted. Should be linked when provided: livesupport=[http://foo.bar/livesupport/]<br />
phone: Global phone number for global companies. Should only be used if the company is global.<br />
lphone: Local phone number for local companies. Should only be used if the company is not global.<br />
lphonecity: City that the local phone number is based in. Provide this if and only if lphone is used.<br />
address: Mailing address (physical). Can be in whatever format is appropriate.<br />
</pre><br />
<br />
== Example ==<br />
<pre><br />
{{Communication|org=MtGox|email=mtgox@mtgox.com|website=[http://mtgox.com/]}}<br />
</pre><br />
{{Communication|org=MtGox|email=mtgox@mtgox.com|website=[http://mtgox.com/]}}<br />
</noinclude></div>Dree12