"new features are being added to the protocol to support alternative implementations– next major release of bitcoind/Bitcoin-Qt (version 0.8) should support for “bloom filters” to get just the transactions relevant to your wallet"
"...optimize transaction storage so validating transactions requires much less disk access and memory..."
Though, I see that this is a bit different. If I had 1000 bitcoins I wouldn't want to put it on any server but my own. But, then again, I'd be pretty rich and downloading a few gigs of data wouldn't be the end of the world. ;)
I will say that I recently wiped by HDD and re-installed everything incuding the bitcoin-qt client and it probably took me around 24 hours to download the entire blockchain, probably just shy of 210000 blocks. The first 50-70% of data took very little time at all, the last 50-30% took the lions share of the 24 hours.
If it's just the download time that's bothering you, try the electrum client: http://electrum.ecdsa.org/
It uses a remote blockchain so that you don't have to sync with the network. But you control the wallet (the private keys that let you spend the coins) so it doesn't suffer from the problems of the online hosted wallets where you are not in control of your coins.
If I were going to trust a third party to begin with, I'd just go with a hosted wallet like Coinbase. They seem more reputable to me than whoever's behind the Electrum project.
* Freedom and Privacy: The server does not store user accounts. You are not tied to a particular server, and the server does not need to know you.
* No scripts: Electrum does not download any script. A compromised server cannot send you arbitrary code and steal your bitcoins.
* No single point of failure: The server code is open source, anyone can run a server.
“All thin clients listed below currently connect to a single server, and are vulnerable to an attack similar to a double-spend. The attack can be run by that single server - the server can just lie to them that they received a Bitcoin transaction, and they, assuming the server does not lie, perform some service, transfer funds or send goods without actually receiving any Bitcoin in exchange.”
Scenario: Bob hacks the server (or colludes with the people operating it). He buys 100 BTC of goods from you, you see the funds in your Electrum client and ship the goods. Surprise! the transaction was fake. You're out 100 BTC.
I'd have more faith in this system if the Electrum website disclosed, very clearly, that this kind of attack is possible and also spelled out exactly who is running the server and why I should trust them. Instead, they appear to be trying to sweep the whole issue under the rug. I therefore see little reason to trust Electrum.
I think you are over-exaggerating the impact of this vulnerability given the safeguards available to mitigate the attack, such as running your own electrum server or cross checking transactions with a third party.
The project website doesn't advise taking these measures, nor disclose the possibility of this scenario. That's what bugs me the most here.
If their intended user is a knowledgeable Bitcoin hobbyist, who knows how the currency works inside and out, maybe it isn't a big deal, but just speaking personally as a Bitcoin newbie, the lack of disclosure/accountability suggested I stay away.
The project is still in its early stages of development, but is already very useful to bitcoin-tech savvy users. The ability to install it on my Android phone and other devices while running my own transaction server is a big plus for me currently.
There's a lot of compression possible that the client hasn't bothered with yet. The community expects this to eventually be a solved problem.
But generally, I imagine most people would go with the online wallet approach if they're not comfortable with the drive space requirements.
I also believe that it is possible (theoretically, at least) to essentially just start somewhere further in the chain, in a way. Having said that, that would probably remove you from the option to mine at the same time. Maybe?
What surprises me is that the original creators, who were obviously very intelligent, didn't anticipate this becoming a problem and create the system from the ground up to address it.
More to the point, however, is that this isn't really an issue of an authority, but rather an issue of trust. If I for whatever reason decided not to trust Bitcoin.org, someone else could take their place. For instance, I could get my recent state of the block-chain from a pal that I trust to do the actual task of verifying the full chain. I could even pay that person some fee periodically for providing that service. You could probably come up with a distributed, fraud resistant, method of providing recent block chain states where many sources would have to be simultaneously compromised for any attack.
2) You can always use one of a number of online wallets who will host the blockchain for you.
It's available on my website (shameless plug) at www.bltzrg-app.me
You are out of luck. Now if you'll excuse me I've got some Ruby on Rails code to write and a blog post hating on PHP and applauding Node.JS and NoSQL.
IIRC the entire Bitcoin community mines 6 blocks per hour, and it's the mining process that keeps Bitcoin going, because without miners there couldn't be any transactions.
 - https://en.bitcoin.it/wiki/Controlled_Currency_Supply#Projec...
It will continue to halve, exactly one more time to 12.5, and then the next time after that, it will stop. Once the 12.5 reward is gone, the network will be supported entirely by transaction fees, and no new bitcoins will be created.
So, yes, asymptote, but the rest of your comment seems misleading. It will halve once more, that's not exactly "continue to halve."
It's supposed to halve 33 times.
I was also wondering how to reconcile this (seemingly very) early first halving with my concept of a 21 year bitcoin generation span. Thanks for clearing that up!
*edit: Turns out I was misinformed about the 21 year thing too. These projections have the halving terminating estimated at 2140. Don't suppose either of us will be around to see it.
By the end of the century, there will be one Bitcoin left to mine.
Here is someone who claims to have missed out: https://bitcointalk.org/index.php?topic=128200.msg1363948#ms...
But if you see a deal, by all means grab it.
* Disclosure, I am the community manager for a GPU-centric Bitcoin mining pool
I wonder what will happen to the difficulty over the next couple days:
Considering the exchange rate remained stable, I expect the difficulty to halve.
Why would it? Those who have invested in dedicated mining hardware aren't going to switch it off just because the reward has halved. At least not until mining fails to pay for the electricity that goes into it (but I don't expect that will ever happen.)
But is this the price of electricity in the USA? What about hiring people to do mining in countries with cheaper electricity?
What about if some miners had a solar panel on the roof? Although, as I write this, it occurs to me that at some point, it would be more economical to sell the solar generated electricity back to the grid, rather than use it for mining hardware...
You mean happen again? Like it did last summer?
... GPU mining is still fairly profitable with the half reward for ~most people (those who don't have electricity over $.15/kwh or so). My expectation is that the difficulty is currently lower than its proper equilibrium because people have opted to not purchase more GPUs while anticipating the introduction of ASIC devices.
Profitability decline = 1,
Hardware Cost = 0,
Time Frame (months) = .033333 (1 day),
Electricity Cost = $0.15
Profit: -0.56 USD/day
For this example (1200MH @ 750W) you need electricity to be <$0.12 to be profitable.
My rig (2x7970) does about (1400MH @ 650W) and electricity @ $0.16 is my break even point (Profit: 0.01 USD/day)
So, if you want to amortize the loss of hardware value over 24 hours be my guest. If you want to purchase hardware to (profitably) bitcoin mine, then (as you clearly recognize) you need to get the new specialty hardware not an off the shelf video card.
But the decision "with my current fixed plant, do I mine this hour, or not?" is unaffected by anticipation. Either the expected-reward is enough to pay incremental costs, or not.
The expected reward for the same hashing power is now half what it was. Surely, some marginal miners who were only slightly profitable before are now non-profitable. It may take them a while to notice, but when they do, they're likely to drop out. But this is far from half of the mining capacity, and other rigs that are still profitable at the new reward rate are still coming online.
I expect difficulty to trend down a bit in the very short term... but not by half, and not for long as lower-power rigs continue to come online.
Some people use mining as a way to privately purchase Bitcoins, and/or are speculating that the value will rise long term. Some would rather pay $105 of power and not have a banking paper trail connecting them to their coin purchases (usually because they are kind of paranoid or doing something legally questionable) than pay $100 to purchase the coins on an exchange.
Also, if you've never mined, there is something kind of geek-magical about creating money with your computer.
But it's farfetched to predict that everyone who was willing to do something when the bitcoin reward was X will still be willing to do it, in the exact same amount, when the reward is reduced to X/2. (Even if the goal is 'anonymous bitcoins' at above-market rates, they've still become twice as costly.) Demand curves slope down, supply curves slope up, exceptions are rare and not in evidence here.
Three dollars, now I regret it.
What kind of money do you make on transaction fees?
However I don't recommend anyone to buy FPGAs right now, as ASICs are coming in December/January, and they will change the game.
Transactions fees only increase my revenues by ~1%.
Want a new top-of-the-line graphics card? Until it pays for itself, you don't owe any taxes. (In the us, from my understanding. IANAL, IANACPA)
11 boards... do you have $6500 laying around? And you'll invest it to make a (possible, read: Your Milage WILL Vary) return of ~$450/mo? Shoot for the moon, I guess...
But also, miners who can't be profitable anymore will drop out. As they do, the mining difficulty will decrease until mining becomes viable again. On the other hand, the first special purpose mining ASICs are starting to be offered, and people with those will be able to mine more efficiently.
I'm not expecting the bitcoin price to change significantly, since I figure it's determined more by the demand for bitcoins than by production costs. Looking forward to seeing whether that's correct.
2) FPGA mining is still plenty profitable (I'm making, eh, 20BTC a day or so? And already paid for my hardware)
3) ASIC, coming soon, will change everything again, but keep it profitable
TL;DR: What's the wait like if you're stingy?
See this Stack Exchange answer for some more details:
Sorry, I never really paid attention to bitcoin. I was sure the government would have killed it by now, labeling you all criminals.
Every community has its own quirks. You just encountered one of the more important ones for HN.