Sinkhole Sucks Brains From Wasteful Bitcoin Mining Botnet 203
judgecorp writes "A sinkhole has taken a quarter of the bots out of the ZeroAcess botnet which was making money for its operators through click fraud and Bitcoin mining. This particular Bitcoin mining operation was only profitable through the use of stolen electricity — according to Symantec, which operated the sinkhole, ZeroAccess was using $561,000 of electricity a day on infected PCs, to generate about $2000 worth of Bitcoin."
Re:Figured it out yet? (Score:5, Informative)
What is it with Slashdot and people using the phrase "Ponzi scheme" to refer to anything they think is a scam?
Yes, Bitcoin mining becomes less profitable over time, because the goal of the system is not to make people money, but to create a sustainable currency. The "gold rush" was engineered in to build up the basic level of hardware needed to make the system useful, and now that there are a lot of bitcoin machines doing transactions we no longer need to hand out a reward for showing up.
Re:Kill the zombies (Score:4, Informative)
Comment removed (Score:5, Informative)
Re:RoI (Score:4, Informative)
The moron was the owner of the car.
Speaking as an old California boy, who has always had convertibles... anyone who locks the doors of a convertible deserves what they get.
Not necessarily in the UK, where leaving a car unlocked can be grounds for the insurance refusing to pay out if it gets stolen. -- ~~~~
Re:Figured it out yet? (Score:4, Informative)
Well, it doesn't have most of the characteristics that make a currency work, the main one being that it's inherently deflationary. This is a terrible thing for a currency, due to this psychological phenomenon called money illusion. This makes the monetary base shrink over time, instead of grow, turning said prospective currency into an investment vehicle. It's just natural behavior when something increases its value when you hold it. This makes most of the currency be there as a holder of value than as a method of exchange, increasing the demand of money over time.
Just pick any model of a currency that we have, and insert the parameters required to make it behave like bitcoin, and see what it does. It's not pretty.
Re:Figured it out yet? (Score:4, Informative)
The problem with Fractional Reserve Banking is that there is no real money. Fiat currency is by nature imaginary; but in this case fiat currency isn't printed and spent into the economy, but rather loaned into existence. That means every piece of currency in existence is basically owed to someone else, with the caveat that it's probably not in the hands of the debtor who owes it to said creditor.
On top of this, loans necessarily incur interest, meaning more money is required to pay off the loan than borrowed, meaning inflation, meaning that every piece of currency that comes into existence causes inflation and immediately creates a need for more currency to come into existence at a later date. It's not that predictably later we will need more currency because of another action, but that the event of currency becoming accessible creates the situation that more currency needs to be made accessible.
In essence, each unit of currency loaned into existence causes inflation by increasing the money supply ("printing money") and by increasing the amount of money owed (monetary demand to pay off the interest). We operate on a negative currency system, where the system becomes more and more poor as the amount of currency increases. Our entire economy is continuously indebted, and the growth of the money supply is accomplished by the growth of debt and the continuous loss of wealth.
Re:Figured it out yet? (Score:5, Informative)
This crap is so old it's actually mentioned in the bitcoin FAQ:
http://bitcoin.org/en/faq#wont-bitcoin-fall-in-a-deflationary-spiral [bitcoin.org]
There is lots of academic research that indicates the "deflationary spiral" doesn't happen like that.
Bitcoin having a fixed final size is just fine - it means when the economy grows, everyones money becomes worth a little bit more, i.e. prices fall a bit. Things get cheaper. That's sort of what you expect from progress, isn't it?