They may have sold 100M licenses to manufacturers, but adoption is still under 4%: http://www.netmarketshare.com/operating-system-market-share.aspx?qprid=10&qpcustomd=0
And with Electronic Arts, I guess they found one.
The only legitimate appeal of, or need for, an alternative currency is that it's more stable than government currencies
This is incorrect. If you are a merchant, avoiding 5% of your total cost on a transaction by using an alternate currency is plenty of reason. That savings comes from reduced fraud and chargebacks, and lower fees relative to bank cards and PayPal. If you are an individual trying to send money long distance, the lower fees relative to Western Union, PayPal, or bank wires is very attractive. The ability to shop online if you don't have a credit card is also attractive.
To be sure, fluctuating value relative to other currencies is a detriment, but payment processors like Bitpay take out the risk for merchants, and websites can and do price in bitcoins in real time against the exchange rate. The need for those sorts of work-arounds will go down as bitcoin gets wider use. The more people that use it, the lower the price fluctuations, becase any given person buying or selling will have less effect on the market.
Why would they want to take it over if they created it in the first place?
Think about it. The creator of bitcoin had a deep understanding of networks and cryptography. The block chain is a *public* history of every bitcoin transaction worldwide. Perfect transparency for whoever wants to monitor it. A team at the NSA is as good an explanation for who "Satoshi Nakamoto" was as anything else.
And in a wonderful example of self-reference, this Slashdot article is referenced in the Wikipedia article.
Miners are looking for the lottery number (nonce) such that it plus a set of new bitcoin transactions and the hash of the previous block generates a new hash with a lot of leading zeros. The exact number the new hash has to be below is set by the total hashing power of the network. Thus the difficulty of the lottery is adjusted so that a new block is found every 10 minutes. If you win the lottery, you get to include 25 newly created bitcoins addressed to your own account, plus any transaction fees. At the moment this is worth $3500 or so per block.
Any hash calculation which does not result in a new block gets nothing. It is a losing lottery ticket, and the unwilling botnet victim just wasted electricity. The botnet operator only makes anything if they discover a winning number and publishes the new block. The combined hashing power of the network is 5 times the 120 Petaflops of the Top500 list of supercomputers *combined*. So unless the botnet operator has an asounding number of bots, odds are he hasn't earned anything.
The nature of the bitcoin network is there is no way to tell a botnet from a fast but legitimate mining rig *within the network*. If you submit a correctly formed block, it gets accepted by the other nodes in the network and added to the permanent transaction history (block chain). You might be able to match IP address of the botnet controller to the bitcoin node address, but I assume anyone smart enough to run a botnet knows how to use proxies to mask their location.
By design, transactions are irreversible, and accounts cannot be impounded by anyone, because accounts exist in a distributed form on multiple copies of the block chain (every node has a full copy). As a user, you have a private key to sign new transactions, which proves you own the account. The most you could do is seize the private key if you can find the perpetrator, and then take their balance from them. If they had already spent their balance on sex, drugs, and rock-n-roll, though, the money is gone, because *transactions are irreversible*.
Although this allows evil botnet operators to function, the tamper-resistance of bitcoin also prevents governments from seizing accounts or taxing them without first finding the owners. This is not easy, because although the transaction history is public, owner names are not part of the history, just account numbers and how many bitcoins to transfer.
Make an encrypted archive with strong encryption that contains you wallet.dat file (private keys). Store that archive in several places, like email it to yourself, dropbox, skydrive, bank safety deposit box
Note: your account balance is still on the block chain record of transactions. So the bitcoins are still there, you just don't have authorization to spend them if you lose your keys.
They don't need to brute force your encryption. First they gather lots and lots of databases (credit cards, google searches, facebook, etc.) Then they trawl the data for interesting correlations: Ah, so person X uses TOR visits Mexico regularly spends a lot more on their credit cards than their job can support. How interesting! They can then single out these people for more attention. Use of encryption is just one of the factors that goes into sifting out the interesting people to watch.
Another example: buys fertilizer and has a farm that is in the family for decades ---> not interesting. Buys fertilizer and lives in an apartment --> very interesting.
You can set up hundreds of factors like that, and none of them involve breaking codes.
> Seriously, wouldn't sending a handful of robotic spacecraft to characterize larger asteroids be much more worthwhile?
If you design the asteroid tug right, after it returns with the first one, you can refuel it and sent it out to get another. If you use plasma (VASIMR) type thrusters, you can use oxygen as propellant. You need 2-3% of the asteroid mass as fuel, and asteroids are typically 40% Oxygen. Therefore once you get an extraction plant working, the mining is self-sustaining on fuel. You just need to replace solar arrays and thrusters when they wear out.
At 500 tons every couple of years round trip, a self-fueling tug can jumpstart serious space construction.
> L1 is great as a pass-through point for a lunar elevator,
Rotovator/Skyhook type rotating elevators are demonstrably better in mass ratio, transit time, and meteor exposure than a stationary elevator.
Assume you want to take off and land from the Moon, and your rotating elevator is designed for a comfortable 1 gravity at the tips. Lunar orbit velocity @ 280 km altitude is 1560 m/s. To have an equal rotation tip velocity @ 1 g you need a 248 km radius. Thus the tip becomes motionless over the Lunar surface at about 30 km altitude (we want some clearance to avoid mountains and for orbit shifts). The rotation period is 1000 seconds. If you wait half a rotation and let go, you are moving at twice orbit velocity, because the velocity of tip + orbit motion of the center of the structure now add instead of cancel. This is more than enough to escape the Moon. By climbing some part of the 248 km radius and timing when you let go, you can inject to a wide range of orbits. Compare this to climbing a 60,000 km stationary elevator to Earth-Moon L1. It takes longer, and is more limited in destinations. Not to mention 120 times less exposure to damage from meteoroids.
As far as materials required, the acceleration varies linearly from center to tip, so it is equivalent to 124 km stress at 1 gravity. Carbon fiber has a scale length of 360 km ( http://upload.wikimedia.org/wikipedia/commons/d/d4/Materials_Scale_Height_and_Tip_Velocity.PNG ). Allowing a 2.8 reduction of the breaking strength for factor of safety and structural overhead, we get 128 km design scale. Rotating structures need to taper by a factor of e per design scale, so this Rotovator would taper by a factor of 2.8 from center to tip. This is quite reasonable as a design.
You appear to have missed "hydrates" - minerals with chemically bound water. See table 5 (p44) at http://www.higp.hawaii.edu/~escott/Scott%20Krot%20TOG2007.pdf Many of the minerals listed contain bound water, or OH components which can be driven off by heating.
Since I am mining right now with my graphics card in the background, I will try to explain.
The bitcoin system has at it's core a database that records transactions between accounts. Transactions are grouped into sets called blocks, and they are chained together by using the hash of the previous block as part of generating the next block. We want the history of transactions to be hard to tamper with, including adding new, possibly spurious, transactions. Therefore to record a new block and have it be accepted by the network, a difficult condition needs to be met. Specifically, a set of new transactions, the hash of the previous block, and an unknown number (nonce) must result in a hash value below a value set by the software
Here's a recent block: http://blockexplorer.com/b/228196 You can see the hash value has a bunch of leading zeroes, and the Nonce (834654508) is a fairly high number. The only known way to generate a suitably low hash is to try different nonces till you find one that works. Anyone wanting to include a spurious transaction would have to find the right number faster than the whole rest of the network. This is extremely difficult. You will notice the first transaction listed says "Generation: 25 + 0.37485 total fees". Whoever found the right nonce for this block gets to send 25 newly created bitcoins to themselves, plus whatever transaction fees the other transactions in the block included. This is payment for the work done in maintaining a collectively hard to forge account history for everyone.
The Top500 supercomputer list (http://www.top500.org/statistics/perfdevel/) has a combined power of 162 Petaflops. The bitcoin network hash rate (http://bitcoinwatch.com/) is 630 Petaflops, about 4 times more. It's that massive level of computing power that makes the transaction history tamper-proof. The security of the accounts history, in turn, gives people confidence to use the bitcoin network to buy and sell stuff.
So to answer your questions directly,
1) They are not "pulled from the air", they are a reward for the difficult task of securing the database, which collectively other people are willing to grant to get the security. The validity of a hash is that it meets a difficult mathematical test, but is easy for anyone to check once found, by simply doing a hash of the raw block data and seeing it matches the announced value. If a block fails that check, it gets rejected by everyone and not added to the copies of the block chain.
2) It's not cheating, it's payment for useful and necessary work.
It's not only still around, but has record adoption and price.
* By your argument, dollars are insecure because pickpockets and bank robberies.
* The global distributed account book (the block chain) traces balances moved between account numbers. It does not list who owns the account. That has to be found by other means, like if you buy a physical product which is shipped to you. Also, new account numbers can be created at will (the official client starts out with 100 of them, and can make more), so tying accounts to people is hard by default.
* Bitcoin is a distributed account book, network, and software. It's a glorified accounting service for people trading with each other. As long as the database which tracks account balances is secure, which it is, people will be willing to trade with each other against their balances in the database. "Bitcoins" have no physical existence. They are merely numbers indicating a balance in the database. And no, they are not "fiat" in the sense of a decree by a government that something shall be used as money. It is a voluntary agreement to use a shared record keeping system.
* It's not controlled by anyone, it is open-source software. Users who run the client software create the network, and people running other software update the accounts database with new transactions (a process called "mining"). I am mining right now in the background using my graphics card.
> Can anyone tell me what advantage bitcoin has that is so massive that it outweighs all these risks/downsides?
If you are a merchant, credit card fraud averages 3% of all transactions, on top of which legitimate transactions have another 2-3% in fees. Bitcoin has the potential to eliminate most of those losses. Since the history of all transactions is public, anyone can audit the current balance of any bitcoin account (and this is done automatically by the software). Therefore someone cannot spend a balance they don't have. Transactions also have to be signed by the private key that goes with an account. Unlike credit card numbers, as long as you keep your private key secure, other people can't spend just by knowing your public account number. Transaction fees for bitcoin run an average of 7 cents at the moment, much lower than PayPal or Credit/Debit cards.
If you are an individual, you can send funds around the world, or shop anywhere in the world, with low overhead. You don't expose your personal information to identity theft (something which has happened to me before). It doesn't take days for a deposit to clear. You can't have a situation like Cyprus, where the government arbitrarily decides to take some of your savings, or the insidious theft by expansion of the money supply.
Because it's yet another fiat currency not based on or backed by anything of actual, tangible value
Its value is set by the real goods and services that people want to trade with each other. The accounts database (block chain) is just how we keep track of the trades people make. If people are confident they are able to use an account balance they have accumulated for a later trade, they are more willing to use those balances as temporary stores. The database has very strong features to prevent tampering, so people are, in fact, willing to use it. Think of bitcoin as a global distributed accounting service rather than a currency, and maybe it makes more sense.