Love the ring! I want one, for some nerd-bling.
My experience so far with Bitcoin has been really positive. It's a very clever, polished system. It doesn't really deserve its mild "difficult to use" reputation at all; people are already used to working with bank accounts, and this is no different.
Money comes in and out of the same "wallet", the only difference being that every transaction uses different apparent "numbered accounts".
Payments are genuinely quick, even without using the tiny, optional transaction fees.
The only problems with Bitcoin at present that really stand out for me are:
- No built-in encryption of the wallet file. I expect this to get fixed quickly enough, but it's a glaring omission in the early offering because it makes it too easy for a windows or mac user to lose their money due to the crappy security of both. I believe you can manually encrypt the files, and enterprise users probably do, but the regular client should support this by default.
- Single-click payments are not yet well handled; every transaction generally requires a new receiving address which is offered to the buyer, and the transaction is considered cleared when payment comes in via the receiving address. The most common means of performing a transaction is manual; you email the seller, who emails a bitcoin address. It would be pretty easy to automate this so you click "buy", receive an address, and just pay to the address right away. Better yet, a Chrome or Firefox plugin could automate the entire thing between your computer and the seller; hopefully this function will become a de-facto part of upcoming browser standards.
So, given that it's got a really clean and usable interface and its only problems are due to people using it on insecure systems or due to stuff that simply isn't-written-yet, it's doing fantastically.
I'll definitely be accepting bitcoin for my goods-and-services at indiebiotech.com, and I'm hoping to see a vibrant uptake from the Maker Community overall. You can already get golden-ratio callipers for bitcoin, buy the Citizen Science Quarterly, or pay for a variety of IT services and hosting. It's ripe for invasion into Maker culture, especially now that there's an Android client.
Given how awful Paypal is getting (cross-border fees? Seriously?), I'd love to see Shapeways allow sellers to receive payments in bitcoin.
I've looked into this and will likely adopt using Bitcoins, however I'm still unsure at just what all this "mining Bitcoins" is and how leaving your computer to do this "mining" in the background works... more research needed
@Cathal: I'm really glad you like the ring. It's actually one of 2 bitcoin rings in my shop. Very informative post!
@Glenn Slingsby: Mining bitcoins has become a rather specialised business, with most serious miners running multiple machines each with multiple GPUs (graphics cards) running 24/7. The difficulty of mining increases (or decreases) along with the amount of processing power available on the network - this is to ensure a steady and predictable amount of bitcoins entering the system. This difficulty has increased to the point where you have to have a dedicated setup for mining to be worth your while (ie. for the number of bitcoins generated to cover the cost of electricity consumed!)
It's worth knowing that "Mining" isn't how bitcoin "creates new bitcoins"; rather, the network creates new bitcoins to reward miners for their efforts.
What "mining" actually achieves is that it validates transactions and preserves the stability and security of the bitcoin network. Without mining, there wouldn't be any verification of transactions and bitcoin wouldn't work. About 50 bitcoins are allocated per week to whomever successfully validates blocks of the "block-chain", the running public log of bitcoin transactions, and so people set up complex and expensive mining rigs to earn bitcoins from the network, helping the network remain stable in the process.
I do wish it were a little more elegant in nature than this, because as things stand it's encouraging a tremendous waste in electricity; the size of the verification pool (total number of miners active) is waaay bigger than the network actually needs, and that's a lot of wasted processor cycles.
@Cathal: A few corrections are in order. First, 50 bitcoins are allocated to whichever miner successfully solves a block of bitcoin transactions. The network adjusts itself every 2,016 blocks solved toward a target of one 1 solved every ten minutes. A block is considered "solved" when the hash value (calculated by running the SHA 256 algorithm twice) of the record of all transactions in it plus the hash value of the previous block plus a nonce is evaluates to less than the network's target value. If the network is solving blocks too quickly, the target value gets lowered. If the network is solving blocks too slowly, the target value gets raised. The rules of the network are agreed upon beforehand by each of the clients in the network. If a client begins following different rules, they effectively isolate themselves from the network.
Secondly, yes, it would be nice if there were a more elegant solution. However, I think any technology of this sort will rely on some form of brute force protection, and thus waste.
@goebat and cathal - Thanks for the info. Very helpful. From the sounds of it it certainly isn't going to be worth my while doing the odd bit of mining a few hours a day using my CPU (I have no idea how to use the GPU for this task). In terms of wasting processor power I'd rather sign up for the SETI Project... except that has been cancelled because the aliens are on their way here already