You could make the same argument about US currency since it is no longer backed by anything valuable. I believe your early adopter theory is most likely correct though. I believe there are a lot of miners holding back coins. Not just to reduce supply and thus increase value, but to use that value to attract legitimate businesses to use the currency. These big player miners will be the real winners. If they succeed they will have created a new market in which they have nearly complete control. Just like the big bank situation in the US.
A few years ago there was a site handing out 0.05 BTC to every visitor. My 0.05 is now worth US$60! I kick myself all the time for not investing after every burst, and being too lazy to mine in the beginning. All the attention right now means it will probably never dip to a point where I'm comfortable buying One can hope it crashes back down to <$10 but as time goes on it becomes less and less likely. Litecoin is probably the next best thing, but it's not likely to match BTC, ever.
I suspect bitcoin may hang around as a trendy fad or niche market, but it won't get any bigger than that. The reason being, unlike other currencies, early adopters have an unfair advantage over other users. They never had to trade any real goods or services for their coins. They essentially got their money for free, just because they were lucky and the network was young enough to afford them coins easily. Now that they have what appears to be 'value' in other peoples eyes, they don't want to give up that unfair advantage, and so, continue to promote the coins as being a viable medium of exchange.
They'll figure out a way to keep it going though since it's currently the only way you can buy illegal drugs or hire a hitman online.
Since the abolition of the gold standard that is basically what modern currency is anyway - worthless toilet paper. "The bearer promises to pay" but doesn't actually pay anything because there is no tangible commodity backing up the currency any more other than what people "feel". The thread never answered the OP's question of how to actually mine bitcoins BTW. I had a similar problem in that I installed an app, seemed to be a wallet but claimed to be a miner which did fuck all, uninstalled it and never tried it since.
How much detail do you want? In short, there's basically two ways: 1) Run the BTC app (P2P client); this hooks you into the network, and starts a server on your PC that you point a separate mining software, e.g. cgminer, at. Once your miner sovles a block, your result gets uploaded to the 'net and you get all the coins for that block. But you don't get anything until you actually solve a block. 2) Register at one of the "mining pools" and point your miner towards that. Here, you'll get paid tiny amounts for the work you do, independent of the fact if your work is the solution to a block. Occasionally, one of the pool's miners will generate a block; then the pool gets the coins. That's where the tiny amounts that are being paid out come from. Usually people go with the second option. Regarding the miner: Details depend on which one you use, but usually it's simply inputting an URL (local server, or pool), username/password and maybe a few parameters you can tweak for your specific hardware (the defaults should usually work, just possibly a bit slower), then pressing 'Go'.
I'm making a start on Feathercoin, just on the off chance it rises as well. It moved up 36% in value against the dollar pricing it at 57cents a coin. Although there's a chance both LiteCoin and Feathercoin might fail as imitators, I though of Bitcoin as nothing but a fad at the time and now I'm kicking myself.
Mining used to be a lot easier. My brother made 0.1Bitcoin in a week on his PC last year or so. He just recently got back into it, and is making nothing like before, even with a better rig. Don't get into it, that's the best option.
Spot on accept you should definitely mention the difficulty. The most likely reason legit wasn't able to mine coins is because he probably tried mining solo with the client (remember when the client had the "mining" button?) It probably maxed out his cpu but was a really small drop in the bucket compared to people mining with GPUs and FPGAs. I did this with Peercoins. Kept 200 of them aside and now they are worth about $5 each.Feathers and Litecoins seem like they may actually be useful in a Point of sale system. Where as bitcoins take too long to order a cup of coffee with (at least if you are waiting for all confirmations.) Digitalcoins are good right now too (at least from a mining standpoint) You can check out dustcoin.com to see which coins are most profitable.
God dammit, there's really way too many crypto currencies kicking around now. And most (all?) based on the same code, save for the hashing algo. Just imagine if someone discovered a conceptual weakness, then all of those would come crashing down at once. Or rather, vanish in an instant - giving noone even a chance to react.
That is definitely a possibility for all Crypto coins. Many have started coins that haven't contributed anything new to the market. I think Peer Coins and Litecoins are the ones that bring the most significant things to the table. My strategy so far is that this has been a great oppurtunity to buy new PC hardware. I would also love to have a payment system where I don't actually have to go through a bank or something like paypal.
Is it even posible to buy BTC/LTC with paypal except on everpriced ebay auctions? All I found are wire transfers and I don't like that. I wouldn't mind buying 50$ of litecoin just in case it explodes in the future (as someone said, more practical than btc as an everyday curency). It it fails, 50$ wouldn't be a big deal!
I suggest NovaCoin for mining because the proce is quite stable and always high 15-25 USD. With my single GFX card PC i mine 1 coin in a bit less then two days.
Unfortunately I don't know many options for using paypal for crypto currencies. The problem is for the seller once the coins are sent they are gone. Where as on the buyer side the buyer can dispute the transaction in various ways up to 6 months. So the battle for sellers is either to find a payment method that is irreversable or that they can verify/confirm the buyers identity.
I feel that all these new currencies are just a cash in. I mean, what stops someone from making a new currency, giving yourself a head start in mining, and once you get a load of coins, trying to hype it up to get people on board to get you rich? The fact that anyone can make and release a new bitcoin alternative just shows how worthless it really is. In my humble opinion of course.
This is actually very much frowned upon in the community. It's called a "premine" and usually coins that do it get a bad name. In fact Novacoin still has a bad name because of this. (even though the premined coins were destroyed.) As for people getting in early. When you believe something is going to work then you invest in it. When/if it does take off then you are sitting nicely. I have almost always believed in litecoins so I keep them on hand and only spend on certain occasions.
The point is because the OP asked for how to do it, they can make up their own mind if it was worth their time later.
The other fun part about this is had any one continued to mine at this point paying for the electricity themselves they would have been sitting on a good stash of money right now.
