That chart shows when each group adopted or will adopt. If you joined in mid-2010, you were right on schedule, and you are OK.   

Phew! For a moment I was afraid that there might now be someone on the board of the Bitcoin Foundation who might be a respectable fellow. But:
http://www.reddit.com/r/Buttcoin/comments/2xpz4r/newly_elected_member_of_the_bitcoin_foundation/

Also:
http://www.reddit.com/r/Bitcoin/comments/2xq83g/this_is_it_gentlemen_bitcoin_gone_mainstream/

I must admit that I was wrong:



I did not foresee the racists, neonazis, and white supremacists...

 

Well, I find that argument quite unconvincing.  As you pointed out in the case of day trading, one cannot assume that every player will just try to maximize the amount of coins that he gets from the next block.  Large corporate players may have more complex, longer-term goals, and motivations other than greedy coin-slurping.



It may differ from the main chain, e.g. in block frequency, block reward schedule, mandatory minimum fees, etc.

In another thread, I discussed a scenario where miners conspire to force a change in the reward schedule, postponing the next halving for 2 years (without changing the limit on total coins).  Some argued that long-term holders would vehemently oppose that change because it would mean higher inflation in those two years, and they would rather do a hard fork of their own.  But then, going back to that kid's fork: if he changed the schedule to bring the next halving forward a yar, then those holders would surely love his Series B coins, no?  Since those holders would automatically have as many Series B coins as they have in Series A, why not value and use them too?

To make the "time travel" advantage more plausible, suppose that a hacker manages to steal the 94'000 BTC from the USMS wallets.  Six hours later, after meeting in some undisclosed location at the invitation of some undisclosed entity, the CEOs of Coinbase, Kraken, SMBIT, COIN and a few more US bitcoin companies, as well as the president of the Bitcoin Foundation, issue a joint announcement: "for the future of Bitcoin", they are starting a hard fork that branches off just before the heist, and will henceforth work with that fork only; so all clients had better upgrade asap.  Moreover, with the help of that undisclosed entity, they are setting up a dedicated mining installation and temporarily reduce the difficulty so as to ensure an adequate block rate, but urge all miners to switch too.  They will try to re-issue any canceled transactions, or indemnify legitimate losses. Naturally many bitcoiners, exchanges, and miners all over the world will revolt and will keep mining and using only the old chain, while others will use both. 

Can you say that this scenario is impossible, and that one of the forks will immediately lose all its value?

I am not "disingenuous", I have a very negative view of these bitcoin funds -- more so than of bitcoin itself.  Why should I not ask important questions that no one seems willing to ask?

Are you thinking of same protocol but totally different chain? I.e. a "radical" hard fork that starts before the Genesis block? That is possible too.


But that is not "guaranteed by math".  Litecoin, Dogecoin, and several other altcoins still have value, 18 months(?) after theyr were supposed to be dead...

So, will shares be eventually redeemable from SMBIT at their nominal value (0.1 of current BTC market price)?  By brokers, if not by original investors?

The "series B" chain could fork from the main chain a block that was posted on Jan 2013, before (hopefully) the MtGOX heist.  Transacting on that chain would be like traveling back in time and doing whatever one wants with one's coins from that point on.  I am not saying that such an "advantage" would be enough to steal a significant portion of the "series A" market cap, but it is one thing that could attract users to the "series B" chain.

No, I am describing a hard fork.

It does not interfere with the original chain directly, simply creates another clone, premined and "pre-transacted" to hae the same addresses, private keys, UTXOS, and everything as the original chain.  All it can do is steal value from the original bitcoins, if for some reason people prefer to spend their dollars on "series B" bitcoins rather than original ones.

I believe is is proved (perhaps, I haven't checked) that the output values of SHA256 span all possible 256-bit strings or at least a very large subset of them (say, 2^200 strings).  On the other hand, it is obvious that, if the inputs are 1000-bit strings, no mater how SHA256 is used there will be 2^(1000-256) = 2^744 input strings that have exactly the same hash.

Having a large output set is the very minimum requirement for a hash function.  However, even stupid functions like "take the first 256 bits of the input" will have that property.  If a function has that property, it will pass the simple collision test "generate N random input strings, compute their hashes, and look for duplicates".  That is because N must be MUCH smaller than 2^256, so the chance of catching a collision is small -- if N = 2^56 = 72 quadrillion, the chance of finding a collision (that certainly exists, if the input has more than 256 bits) is only 1 in 2^200.

SHA256 has passed much more interesting tests, like "take N random texts, make M slighlty modified copies of each, compute their hashes, and look for duplicates".  But, again, many simple functions pass this test too.  (These functions may still be good checksums, suitable to detect non-malicious changes in files; or in hash tables, where malicious inputs are not expected.)

The property that makes a function be a good cryptographic hash function is: "there is no algorithm that, given a text X, will find another text Y with the same hash as X in a viable amount of time". That property has not been proved, because there is no theory that would enable such proofs; and cannot be tested,  because it would require trying all possible algorithms, and then testing each one to see whether it works.  All that can be said is that many smart people have tried to find such an algorithm, and no one has succeeded (that we know of).

Well, yes and no.  An immaterial currency can be issued at will; it is the ultimate "fiat money".

(Before you scream "21 million": that bitcoin limit is "guaranteed" only by  fuzzy arguments about a complicated economic game, not "by math", and could be changed if the right players agreed to it.  Moreover, any kid can duplicate the amount of bitcoins in existence by creating a hard fork of the blockchain and starting to mine it on his laptotp.  Anyone who has bitcoins will gain an equal amount of those "series B" bitcoins, accessible through the same private keys, and could trade them independently of his old bitcoins by duplicating his wallet and downloading the kids's client software. Whether those "series B" bitcoins will get a significant market value is a market(ing) question, not a technical one.  And, of course, there are the altcoins.)


Yes, with current technology there is in theory a minimum amount of useful energy that needs to be disspated (turned into waste heat) in order to perorm any logical operation.  That energy can be expressed as mass by Einstein's equation m  = E/c^2.   For example, a 10 watt lamp in one second burns 10 joules, which is equivalent to (10 kg m^2/s^2)/(300'000'000 m/s)^2 = 0.00000000000000011 kg, or 0.1 picogram of matter, if I didn't miss some zeros.  (Quantum computing may get around this limit somehow, but it is not known whether it will ever be usable for problems like this.)

The theoretical minimum energy cost of computations is quite small, much less than the cost that can be achieved with current technology.  But even if we use the actual cost, the mass equivalent of the cost of creating 1 bitcoin will be fairly small. Anyone knows how many joules are tipically consumed today to create 1 valid block (25 BTC)?  

However, the cost of creating something in the first place is only an upper bound to its "intrinsic value".  There are examples of huge civil engineering works that cost billions to build, were never used, and cost millions to demolish -- that is, had negative value.  (The dams built by Saddam Hussein to drain the marshes in Southern Iraq may be one example.  The Iridium communications infrastructure may be another.)  The computing the nonces of orphaned blocks costs as much as computing  those of surviving blocks, but those nonces are worthless (except perhaps to cryptographers, who may have a use for them).

Another upper bound for the "intrinsic value" of something could be the cost of duplicating it.  The cost of duplicating a bar of gold is the same as creating the first one.  For a banknote, printing an extra copy is much cheaper than printing the first one because all the plates and equipment are reused.  For information, the cost of duplication (theoretical and in practice) is extremely small.  

It can be argued that duplicating information in the bitcoin system does not produce extra bitcoins.  But that is not a physical constraint, it is a property of the whole bitcoin system -- not just the protocols and the algorithms, but also of the internet, and, mainly, how people use and react to those things.  So, the allegedly valuable properties of the bitcoin system -- single spending, authentication, limited supply, irreversibility, global reach, etc. -- do not define the "intrinsic value" of a bitcoin; they contribute only to its market value.

Moreover, no one really knows how hard it is to compute a valid block.  The trial-and-error method used by miners is just the most efficient method that we know; but there is no proof or other evidence that there is no better way.  There may well exist an agorithm that finds the right nonce for a block header in a few microseconds.  Or, worse, finds a block that has the same hash of another block but a different contents, including a specific transaction that is not in the first block.  Or finds the private key for any given address.  So, the theoretical "mass cost" of computing a valid block may be orders of magnitude lower than the trial-and-error cost.

First you tell me the weight of a bitcoin. 

That is easy: bitcoin it is worth its weight in gold.

I would rather say "Nobody who has USD to invest is willing to pay $250 260$ for 1 BTC".  On a high enough level of analysis, the reason doesn't matter.  It may be that the guy has never heard of bitcoin.

I concede your point about strategic non-buying, on a more detailed scale of analysis. However (as you remarked) that does not contradict the rephrased statement above: the trader who waits for lower prices too thinks that 260$ is too much to pay.

Shares of the SM BIT fund will be traded through brokers, and their price will be listed on the OTCQX index site.

(I understand that such trading still has not been approved; they only got a temporary ticker symbol (BITV) at OTCQX, to be replaced by GBIT later. Just as the Winkles got their ticker symbol (COIN) but no SEC approval yet. Correct?)

Not quite, those bitcoins will be sold only if the owners of the corresponding shares are allowed to redeem them (sell them back to SMBIT).  If the owners sell the shares on the OTC market, SMBIT neither buys nor sells.

Redemptions have been suspended since last October.  It is not clear if and when they will be allowed again.  


They should buy more bitcoins only if more people buy shares directly from them. After the shares become tradeable, if the price of their shares on the OTC market is sufficiently high, SMBIT may want to buy bitcoins and sell more shares on that market. Conversely, if the share price on OTCQX drops enough, and redemptions are still disabled, it will be profitable for SMBIT to buy their own shares on the market and sell the corresponding bitcoins.

You mean that imposter?  Ha. Don't pay attention to him.  He is actually Satoshi Nakamoto, trying to save his experiment from us trolls -- the only attack vector that bitcoin was not designed to survive.

Indeed the price rise is probably due to this "news".  But note that it is still actually a rumor, because it is not clear what it means exactly.  So it fits the rule "buy the rumor, sell the news" 

First, "OTC" is short for "over the counter" which means private deals (directly or through brokers) rather than on public exchanges.  Confusingly, "OTC Markets" is the stupid name of a company that runs some exchange-like services for instruments that do not qualify for the major exchanges like NYSE and NASDAQ.  The SM BIT shares (not to be confused with shares of SM BIT) will be listed on OTCQX, one of those "exchanges".  Capisce?

I could not find exactly how the trading will work.  I have seen a quote from OTC Market page saying that they cater only to brokers, not directly to "retail" investors.  Also I don't know whether OTCQX will hold shares for trading, like the bitcoin exchanges, or whether the brokers will hold the shares and OTCQX will be just an index, like the WinkIndex.



I take that as being sarcasm...

What I would like to know is whether SMBIT will re-enable redemption, that is, whether the people with SMBIT shares can return them to SM and get the nominal value back (which is defined as the market's dollar price of 0.1 BTC).  Or whether the clients will have to look for Greater Fools, at OTCQX or through brokers, in order to get their money back.

I don't play poker, but it seems to be a good analogy.  Some players may fare consistently better than others on average, by their greater skills at psychological manipulation and play strategies; averaged over all players, however, it is obviously a zero-sum game.

However, in day trading there are thousands of players who do not know each other.  There there seems to be less room for successful psychological manipulation in that case. 

Does OTCQX trade 24/7, like bitcoin exchanges? Or only during business hours, like NYSE?

See my post above.  There may be "super-traders" that successfully play such complicated short-term trading strategies, and they may take money from less sophisticated traders; but, averaged over all traders, short-term trading will always be a losing game.