See this is much better, you've started talking about perceived real issues instead of just emotional reactions, or less emotional anyway.

I do not think bicoin is perfect, and I was pretty explicit about that. I just don't think its the root of all evil that most on /. seem to think, and I'm not scared of learning more about it.

I agree that there are risks, as there are with any technology. I'm not aware of any botnet threat (will look into that further), apparently Satoshi dice is a pretty similar to a DOS attack but isn't bringing the network down. Forking is probably not one, there was a forking problem between the 0.7 and 0.8 mining clients because the 0.8 client could allow larger blocks then the 0.7 could, but that incident proved that such an event would not cause bitcoin to fail. Once one fork is selected over another all transaction on the rejected branch that are not already in the accepted branch go back into the pool to be accepted. The system works. The worst that could be said was that the hashing rate of bitcoin was reduced for a while.

I agree that it does not have perfect anonymity, and certainly not default anonymity if you are someone being investigated. This may reduce it's popularity with a certain group of people, but by no means is this an argument for its death either, and of course knowledge of this is baked into the current valuation so it's not going to lead to some surprise in the future that kills bitcoin.

Your arguments about blocking are a bit suspect since there has been a fantastic amount of money and research pored into that problem with torrent to no avail. Not saying a state actor couldn't put even more effort into it in a pinch, but it's by no means a trivial problem. I think the much more likely argument here is that various countries outlaw trade in their jurisdiction

Deflation is an open debate, but even expert economists seem to come down on both sides of the issue. My observations are that deflation does not keep one from being able to use bitcoin for online transactions. The fact that hoarding or as some might say saving is incentivized is as much in effect now as it will ever be (and so baked into the valuation) yet the bitcoin economy is functioning, nay growing, and trade does happen. Deflation is why national economies might stagnate, but it's yet to be seen if it's a problem with currency in the abstract. Gold is deflationary and it worked as the basis of almost all monitory systems until just a few decades ago.

Regarding your 'soft' issues, I think the biggest plausible danger is that bitcoin trading would be declared illegal in the US and or other countries. That is an example of a surprise that is not currently baked into the valuation. However, there is not a lot of precedence for this, and the more legitimate economy that exists prior to that the harder such legislation would be to pass.

I also agree that "unforeseen" things could happen. Absolutely! But thats not how people on /. are arguing, they are arguing as if they know and can see the obvious flaws, but they can not they are just not yet familiar with the technology. You could say unforeseen things could happen about anything on the plannet throughout history. That's already buit into everyone's understanding of the risk landscape. What is impressive about bitcoin is how many of the things that can be foreseen have been addressed.

The food for thought is an interesting observation, but as bitcoin is opensource and emergent it evolves instead of fails like companies that must profit from their work.

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100% agree with you up to this point, but none of this is an argument against bitcoin.

Here, however, is where you go off the rails and just get emotional.

This is not quite accurate, since many people (rationally or not) like bitcoin and keep it as bitcoin. Also it isn't a matter of number of places that accept it, the fact is that the number of places / people / services that you can use bitcoin with is increasing. Did facebook fail because it only had 1000 users at one point, or google or apple or any business ever. It's early and it's growing, that doesn't sound like failure to me. In fact I've personally used it to commission work done by someone I never meet in another country. Nobody in between just email, and bitcoin between us. That to me is unbelievably cool.

Well these are unsupported assertions, but I certainly agree that the valuation has been very volatile. But how does one distinguish between a new monetary system that is totally successful genius idea and a totally horrible idea? Wouldn't either one exhibit such volatility early on? In fact wouldn't the horrible one simply disappear quickly? Four years on and no one has been able to crack the confidence in bitcoin. Quite the opposite, it has a larger user base and valuation now then it ever has and the long term trend has been growth, not failure.

One of the things that drives the emerging economy of bitcoin is the value of the bitcoins (valid or not). People are finding ways to get them because they are valuable. Telling people that are irrationally afraid or angry with bitcoin does nothing to get them more bitcoins, and is of almost no value, but starting an online business that can accept bitcoins from customers anywhere in the world regardless of who you are and your access to bank accounts and CC clearing services can get you bitcoins. We are seeing exactly that, new bitcoin accepting businesses starting up all the time. Also existing companies such as wordpress and reddit start accepting them, or simply individuals offering services, because all the gatekeepers and costs are gone.

The only reason I'm on here talking about it at all is becuase I'm trying to cut through some of the noise and provide accurate information. You don't have to like bitcoin. Fuck I don't like java. But it is clearly working, like it or not. Might as well get the facts about why. Don't you think?

Well as a world traveler I'd disagree with you a bit on your characterization of the ubiquity of the US dollar. Nevertheless, I agree the USD is an extremely convenient and well respected currency, with lots of lovely features pursuant to being issued from one of the most successful countries in the world. However that is not an argument against bitcoin.

You are correct that no large organizations accepts bitcoin for payment yet (whether they consider it a 'real currency' is rather harder to ascertain). It does make one wonder though if that was not so similar to what people said about cars before highways where built, or computers before the personal computer or the internet before the world wide web. Are bitcoins just pet rocks? Maybe, but it doesn't seem likely, there doesn't seem to be any evidence for that, just some people's emotionally negative reaction to it that is always very thin on facts.

That something is *only* successful now and growing in popularity and peer reviewed success constantly since it's inception couldn't possibly mean that it is an idea that could have some future success. It just must fail becuase it isn't the most successful thing in the world yet. /irony

Regardless of arguments it is a fact that bitcoin is successful now, and does store value now. It is theory that it will fail. Your assertion that bitcoins have no value or practical use is clearly and demonstrably not true, and that it is not legally enforceable does not seem to have any effect on it's adoption rate. You are arguing why it won't be accepted, but we have already passed that point, it is accepted, and just like any innovative new technology that acceptance is growing bit by bit.

This is almost exactly not true. One of the big advantages of bitcoin even now is that you can convert it to local currency almost anywhere. Which is also what you'd have to do with dollars (with hefty exchange fees). I'll grant you that there are fewer bitcoin currency converters at the moment, but since literally anyone could be a converter and bitcoin is on a growth cuve (in terms of proliferation, not value) this should improve quite a bit over time.

You donutholes have no value because no one would be wiling to trade with you for them. Bitcoin does have value, people do trade them.

Please if people are going to argue against bitcoin can we at least stick to things that bitcoin is actually bad at?

Well it's not a very effective strategy since most up-voted posts are against the technology.

I'm starting to find the sociology of bitcoin even more interesting then bitcoin. It's fascinating how people are so passionately against a piece of crypto technology. Many people seem to have such a visceral dislike for it long before really understanding the fundamental technology. It's as if people kept yelling about how /. should stop posting about some new programming language.

Oh wait I think I did do that about java back in the day. God I hate java.

What’s amazing to me is how passionately people are against a pice of technology.

I mean just look at the moderation of this thread! People are up voting repetitive posts about Enron, and tulips and generally uninformative fear while not upvoting objective explanations of the technology, or economics. It’s bizarre. People say things like /. is pushing bitcoins. Clearly it’s not. Every up voted comment is antagonistic towards the technology.

You act like I’m trying to pull a fast one. I am not. I’m trying to explain what bitcoin is and why/how it works in exactly the same way that I would try to explain public key cryptography, or java script programming. It's like I'm saying "You don’t think public key cryptography will work, ok well in your mind what’s the failure mode of public key cryptography?"

After one understands how bitcoins work then by all means argue the finer points of why it will stop working in the future.

Saying something like everyone might just suddenly stop wanting to use it is perhaps a valid failure, but it’s silly. It’s like saying Apple might fail because people might suddenly stop liking Apple products. It might be more compelling if there are some clever indicators as to why this would happen, but you didn’t provide any. The fact is right now bitcoin is popular. Maybe not to you, but that’s not an argument for why they will fail, some people don’t like Apple products. So what? As long as there is even a single bitcoin node on the internet then bitcoins will continue to exist.

As far as I can tell people are having a vicegeral reaction to it. Almost all arguments against it are emotional, not factual. It *feels* like a scam, or a pyramid scheme or a new religion or just something is wrong about it. Well I agree it does feel that way at first, but when you look into it and understand it better you realize it is not those things. It may have flaws, but those are not them.

I also agree that bitcoin might be experiencing a valuation bubble right now but so what? We didn’t stop using houses because there was a housing bubble (or even tulips for that matter). So the value will correct in the future, no big surprise there, free markets always do that.

Even if you never hold bitcoin (and I generally don’t think people should speculate on bitcoin), it is a useful piece of technology.

And by the way I am not even remotely equivocating about the facts, previously I was just rhetorically asking the question: “Could bitcoin store value?” and the answer is a fact: yes they can because they currently are doing exactly that.

What is theatrical are all these emotional arguments that they will stop holding value in the future, and so far no one has put forward a lucid well informed argument for why that would happen. The non lucid or ill-informed arguments have all been addressed and disproven with proofs provided in the various FAQs.

Here are other useful facts:

Bitcoin uses the same cryptography as the banking industry and the secure web.
Transactions are instant, they only take 10+ minutes before you can start spending the money. They are much faster then credit card transactions that take 30 days before you can start spending the money.
They work around the world, and thereby enable business to easily have a world wide audience.
The costs of moving them around is very low.
No one can freeze, or take your money.
You can use these features without ‘holding’ bitcoin, simply convert to the currency of choice immediately upon receipt or before sending.

Never mind the current or future value of bitcoin on a purely technical level these are really interesting and useful features.

That has not happend even once in the 5000 year history of gold, and there is no evidence of it happening now with gold or bitcoin so um.. no.

It's the *why* would everyone stop using it that is the question to be answered.

Again, that bitcoin "could be useful" or "could have value" has already been proven and is now fact. The theory is that it will stop being useful or hold value in the future. Well why? Clearly none of the theories put forward so far have convenced the people using and investing in bitcoin now. Quite the oposite, as naysayers (as I was) really look into it and learn more about it they realize that most if not all of these theories of it's demise are baseless, or worse magical like 'people will just suddenly stop wanting to use it for no reason'.

Ok then you're saying the same thing as "Some people think the world is flat" and a company like Enron doesn't enter into it.

Well the glaring difference is that bitcoin does not have expenses or employees so theres no compelling reason to stop. Currencies fail because governments fail (or vice versa in a few cases), but bitcoin is not associated with any government so again no reason to stop. This is why it is better to compare bitcoin to gold since gold can't fail perse it's value can fluctuate for any number of reasons, and could even become very low, but there's no reason for it to go to zero value (even if it had no intrinsic value).

Iirc most economists agree that real world or "intrinsic" value is not a desirable property in currency. Currency like the dollar represent value, but aren't in and of themselves valuable (paper and ink).

Many people are concerned about bitcoin, and rightly so, but everyone starts by thinking it's ridiculous until they understand it better and realize that their concerns are addressed by the design or general economic theory. People are objecting to it because it's a new idea, not because it's a bad idea. Extremely knowledgeable people have evaluated it to the core and continue to do so, but have not yet been able to find a significant flaw (well there is actually one that happens way in the future and is expected to be fixed long before we get there).

Bitcoin's value is not theoretical, predictions of it's demise are.

No, that's not it.

A) The curent computing volume of the bitcoin mining network is over 640 PetaFLOPS. That is more then 6 times the computing capacity of the top 500 supercomputers in the world COMBINED. It is not likely that any one organization has 50% of that capacity. Nevertheless, any computation race only leads to double spend threats, so as long as you don't do business with someone form the NSA it would have no effect on you, they still can't create money or control other peoples wallets, only double spend the money they have.

B) First you'd have a much bigger economic problem them bitcoin if that happend, and also the bitcoin network continues to function on any scale. As long as there are any computers connected to the bitcoin network it continues to function.

Enron was a company. When companies run out of money they close because they can't pay their debts. What is the failure mode of bitcoin? What is the failure mode of gold for that matter?

I'm sorry I don't have specific details, but having worked in major studios for years I can say they have many strict rules outlined by the MPAA on how assets can be managed. For example final editorial boxes are not supped to be connected to the internet at all. VFX production is usually a little more lax, but the facilities do often have to sign lengthy agreements making them liable for the studio assets. If something where to make it into the wiled they have have huge liabilities to the studio. Smaller productions generally don't have these issues, but often still require massive computing requirements. Even independent films these days have hundreds of shots of fx.

Dreamworks, Disney(pixar), et. al. are all signatory to the MPAA rules.

CG production is all about burst computing. Even with multiple productions going you don't end up with even capacity utilization. You're constantly going from near zero need for the render farm, to wishing you had 20 times the capacity. Just look at an individual artists work flow:

1) Playing video games because the job hasn't started yet.
2) Designing and planning a shot.
3) Render testing (local machine).
4) Production of a version of the shot.
5) Render (artist back to the video games).
6) Review with supervision. If done move to next shot (goto step 2).
7) Else make changes. (goto step 4)
8) Once done with all shots go back to video games.

This mirrors the patter of the facility as a whole. Only one of those steps is rendering, and depending on what your render resources are it will either take up all the artists/facilities time, or almost none. You want a burst of high capacity, then you don't care about the farm at all.

Actually using the cloud is significantly different from using render farms. The overhead of using a render farm is very high. You have to package your data specifically for the farm, which includes methodically fixing all your resource paths, you have to setup an agreement with the provider, and the rates are typically exceptionally high in many cases more then 100x the price of equivalent EC2 instances.

Whereas on Amazon you control the boot image, have exactly the software you need installed and can create a structure that mirrors the facility. You have root level access, and now with VPC you can even have the servers show up as nodes on your local network increasing management ease and exposing the nodes to your own queue managers, license servers etc. It's a totally different game form a usability point of view. Plus the massive capacity of EC2 allows you to do breadth first rendering which is a huge plus on turn around time. Commercial render farms typically have the same capacity issues as any facility does.

I agree that once you have a million dollar cold room your issue is human resources, but we're talking about how the companies that don't have the cold room can now do the work of larger facilities. I don't think anyone is saying that just because you've got access to tens of thousands of render nodes means that you're now competing with Pixar. What's new is small facilities or even individuals can hire up for a project on day one without having to be a fortune 500 company with millions of dollars of infrastructure already invested.

We've been living with the numbers for the last three years. In other industries I'm sure the cost of cloud computing quickly eclipses the cost of owned computing capacity, but in visual effects and animation production you have to remember one important factor; your computers are idle most of the time.

Studio Pyxis (www.studiopyxis.com) is a Burbank based production company that is taking full advantage of cloud computing, both for our own productions and for sharing with clients. The company is a new model of production company leveraging years of development in real time technology such as the Virtual Production process used on Avatar which involve real time graphics and visualization so that directors can shoot visual effects interactively as if they are really happening in front of you, and cloud computing that can complete the photorealistic renders on the back end in record time.

One feature of cloud computing that is often over looked though in these production discussions is the breadth vs depth computing model. It's obvious that it's a value to have a massive cold room that you don't have to buy up front, but the real advantage comes when it costs exactly the same thing to run 1000 cpus for 1 hour as it does to run 10 cpus for 100 hours.

Visual effects and animation production is all about revisions. It's a huge win to have your full renders back sooner. Being able to run every frame of a shot at once regardless of how many frames you have means that you have the entire shot in the time it takes the longest frame to render. This has never been possible before. Production has always wanted a dynamically scalable solution but as always had to contend with some fixed capacity. Granted EC2 has a fixed capacity as well, but it is so much more massive then a typical production facility as to be a non issue.

As for what some commenters are saying about bandwidth issues it is true it's a factor, and this is why it's not a turn key solution for the average small company. We've spend a fair amount of time creating an infrastructure that mirrors assets in the cloud, renders and composite locally to the cloud, then generates compressed images and movie files for download at review. Only when we approach the completion of a shot do we download actual exr, or dpx data. But we do make our infrastructure available to other companies to help them be more turn key.

Another aspect that more then democratizing cg production actually gives an advantage to the smaller facility are the limitations that larger facilities working on mainstream studio pictures have such as MPAA rules about keeping film assets off the internet and/or on physically disconnected machines. Whereas small facilities like ours can be satisfied with a VPN connection to Amazon, larger facilities are often legally obliged not to.

The one area that still needs to be solved to truly make this work for everyone is for the software companies to start offering the same type of pay as you go licensing so that we can more easily use the professional tools. It would be relatively easy for a company like Pixar to offer a RenderMan license server that one could connect to over the internet or even EC2 based that would monitor your hourly usage. Are you listening Pixar?