You gotta distinguish Bitcoin as a system, and users of Bitcoin. As a technological system Bitcoin has done an exceptional job of fending off attacks; the only major threat was back in 2010 when someone found a integer overflow error in the transaction verification code that allowed anyone to make money out of thin air. The protocol was designed knowing that there probably would be mistakes like that, so the developers released a patched version of the software that everyone agreed to use and got everything sorted out within a few hours. Not a major problem, given Bitcoin was nearly worthless in 2010.

As for the scams surrounding Bitcoin... It's sufficiently anonymous and free from government control that people think they can get away with major scams, not to mention illegal activity like Silk Road. Some might call that a feature. Those are probably the same people that don't complain about how terrible tor is when hackers use it.

No, that Butterfly labs platform will currently mine about 0.37BTC/day, or 11.17BTC/month. Currently the exchange rate is $12/BTC, with fluctuations of about +-$1/BTC in the past few weeks. GPU's use up way more power, although they hardware cost is less. Either way, it's easy to turn a profit after power costs, albeit with the risk that your capital investment and coins generated will be useless if bitcoin busts. Obviously lots of miners immediately sell every coin they generate to recoup that capital investment.

It's irrelevant what Bitcoins are, only how scarce they are, what's the inflation rate, and what people are willing to pay for them. The latter driven because the scarcity and inflation rate is fixed, and you can transfer them from one person to the other easily.

They also are *not* a series of 1s or 0s in the correct pattern; you're confusing Bitcoins with hash cash. Rather it's an accounting system where the number of Bitcoins you have is based on a transaction trail back to the original creation of a Bitcoin. That creation happens out of thin air, but in a manner where the network only allows a (on average) fixed amount every 10minutes, automatically adjusted both to slowly decline that amount over time, and to ensure that as more people compete for that amount, it gets harder to get coins. All this stuff about "mining" is just proving how much computer power you control, so that the users of the system can vote on what is the authentic and true ordering of transactions. If the system didn't vote on transaction ordering, people could spend money twice, by signing statements to the affect of "I, Alice, transfer x coins to Bob" followed by "I, Alice, transfer x coins to Charlie".

It's just a form of fiat with a fixed, and declining, inflation rate that happens to be transferably digitally and can't be counterfeited, where all those properties are controlled by a distributed group of computers with many different owners. It's really not that complex or magical.

Modern banking is actually really similar, except that transactions guaranteed by accountants, and we say the government decides how many coins to create.

Go ahead and store your value in gold if you want. But there still is a need to transfer value digitally, and Bitcoin provides a way to do that without getting trusted third parties involved, and with having some hope of anonymity if you are careful. Yeah, you still have to put some trust in the person you just handed some dollars, or grams of gold too, in exchange for Bitcoins, but that person can be different on either end, and can be a different person each time.

Is Bitcoin a good way to *store* value for the long term? Probably not. But in some situations it has features, like irrevocability, pseudo-anonymity, and lack of dependence on government, that no other digital currency can currently provide.

Just don't hold more Bitcoins than you need in the immediate future and you can take advantage of it's features when you do need to transfer value digitally.

I think you're really missing the point of Bitcoin mining. It's like gold mining, in an economy using Gold as a currency; you'd never expect the majority of economic effort being involved in digging the stuff out of the ground. Rather a small segment of society does that, and the rest of society does whatever they do in the economy, buying gold from other people as needed.

Bitcoin mining was *never* meant to be the way that the majority of people would get their Bitcoins. Rather it's a way of securing the network, namely in that Bitcoin essentially consists of an accounting system, where value is exchanged by writing public key crypto signed messages saying things like "Alice gives 10 bitcoins to Bob". Mining is required because there needs to be some canonical way of ordering those transactions in time. That's done by saying that whatever at least 51% of the computing power in the network thinks is true, is. So long as no one party ever controls that 51%, you can determine if coins have been spent to another party before you decide to accept them.

Look at the pool hashrate diagram. Each of those pie slices is a group of dozens to hundreds of users, each with at least a few hundred dollars worth of mining hardware, securing the network. Do I care if they are making more in Bitcoins than their rigs are costing them? Heck no. I just want a secure network so when I receive some Bitcoins I can know that they haven't been spent before. FPGAs and the upcoming ASICs are good for that, because they perform so much faster than off-the-shelf CPU's that any attacker would have a hard time getting enough computing power to attack the network.

Besides, if I did want to become a miner, all I'd have to do is spend about $600 on a Butterfly Labs fpga platform and I'd gradually have Bitcoins trickle in. But it's a lot faster to just buy them from someone else, just like it's a lot faster to buy gold from someone than mine it.

Great advice. Also use the Google Authentication feature of blockchain.info, that way even if someone manages to steal the passphrase they still need to hack into your phone to get the Google Auth code. For that matter, use Google Authentication for everything... I do.

Regarding backups, if you did use a secure passphrase, you can also have blockchain.info automatically send copies of your encrypted wallet to an email address every time a new address, IE, a private key, is added to your wallet. If you ever need your coins back and blockchain.info is down you can get them directly out of that backup as long as you still know your passphrase.

Transferability is the very point of Bitcoin. Sure it'd be nice to have a stack of gold, but good luck sending that over the internet without involving any trusted third parties. Look what happened to e-Gold services, all shutdown by the Feds. Possibly the only alternative will be trusted devices such as the in-development MintChip, although the final version is likely to be restricted to very small amounts and not as anonymous as claimed.

Of course, hilariously on the MintChip Challenge website, the most commented upon idea for what you could do with MintChip is buy Bitcoins...

I posted this link elsewhere in the thread. Myself, I'm pretty convinced it was the guy who made the site. After all, it was a 17 year old immature kid.

Also, many in the community think that Zhou Tong, the buy behind the site, was the one who stole the money in the first place. For instance, after the initial hack and after Bitcoinica shut down, a bunch of money was stored with a legit exchange, Mt Gox. Well those funds got conveniently hacked, and another exchange noticed Zhou Tong trying to transfer the same amount of cash, as well as the fact that an email address associated with the hack was in control of Zhou Tong himself. Source

Ever heard of the term "bucket shop"? That's exactly how Bitconica functioned. Sure you could sell, or sell on margin, your Bitcoins for imaginary US dollars, but you couldn't never withdraw or deposit anything but Bitcoins. What went on was people would use the margin given to them by Bitconica to speculate on the price of Bitcoin, then they'd conveniently lose their whole positions whenever the market went against them, which is quite easy to do if you happen to have everyones Bitcoins to manipulate the market with. This happened so often that a new term was invented for it: zhou tonged, named in honor of the 17 year old kid running the site. (seriously, 17!) Hell, even in the Bitcoin community lots of people were calling them out on this right from the start, for instance here is a post by one of the main devs, obviously concerned about all the other scams that of course have cropped up using bitcoin. Speaking of, wait'll you see the press when the pyramid scheme known as "Bitcoin Savings and Trust" fails, as it of course will given it pays out %3400 a year.

Personally I'd suggest you use your Bitcoins for something reputable, like buying pot, getting cash out of Argentina or donating to wikileaks. All this investment non-sense, as opposed to just using the currency for moving value around digitally, is getting out of hand.

Doing out the math... CF lightbulbs have no more than 6mg of mercury per bulb. (voluntary industry standards, 5mg is typical) (wikipedia)

Most "low-mercury" fish has up to 0.1ppm of mercury, with canned tuna at the top. (http://www.obfocus.com/nutrition/Seafood.htm) So, 1kg of fish will contain, will have 0.1mg of mercury. As pointed out by other posters, the mercury in CF bulbs is metallic, and not particularly well absorbed by the body. In fish it's presumably organic mercury, and much more dangerous.