The bitcoin wiki explains what an attacker with 51% of the network can do: An attacker that controls more than 50% of the network’s computing power can, for the time that he is in control, exclude and modify the ordering of transactions. This allows him to: Reverse transactions that he sends while he’s in control. This has the potential to double-spend transactions that previously had already been seen in the block chain. Prevent some or all transactions from gaining any confirmations Prevent some or all other miners from mining any valid blocks The attacker can’t: Reverse other people’s transactions Prevent …continue reading

Yesterday the IRS decided on a tax treatment for bitcoin. This seems to have left a lot of people scratching their heads. There’s one decent synopsis here. Now, lets get to their ruling, and why I don’t think this can possibly stand. Bitcoin miners are just like many businesses the IRS has seen before. It’s a fairly simple value add model. Miners spend a fixed amount of money on a shiny metal box that helps them produce revenue while incuring other variable costs, most notably HVAC and power. Every major miner knows his or her cost per coin or at …continue reading

A recent document has surfaced suggesting that Mt. Gox is indeed insolvent and that they plan on reaching out to the bitcoin community to help rectify their recent problems. While this may seem like a genuine way to help bolster the already struggling price of bitcoin (At the time of writing the winkdex is at $512.95) it is a ploy that we must not follow through on. The volatility and risk associated with Mt. Gox has been built into their price for months. The only risk that Gox every truly posed to the bitcoin community was re-enabling bitcoin withdrawals, which …continue reading

Mt. Gox announced Friday that they were disabling BTC withdrawals. Markets reacted instantly, sinking approximately $200 USD/BTC. Combined with the June 20th

Image from http://bitcoin.sepa.be The graph says it all. Bitcoin network growth is finally slowing. With the introduction, and mass shipping, of 28nm chips from both KNC Miner and CoinTerra it appears that bitcoin growth has finally started to slow. This is where things get interesting. Now that rapid acceleration in growth has stopped this game of technical chicken is more about capital than anything else. There are a small number of individuals worldwide who will be able to amass enough hashing power and begin to corner the market. This isn’t a bad thing for bitcoin, per se, but rather a …continue reading

I’ve been mining crypto-currencies for about 6 months now; mostly Bitcoin, Litecoin and Namecoin in that order. We were [relatively] early in the asics market and the biggest thing stopping us from being wildly successful has been scams and late ship dates. This is based purely on my personal experiences and nothing more so take it with a grain of salt. The order is based on how long we have been running gear from this supplier: WTCR – Some of the first gear we purchased was Block Erupter Blades. WTCR was awesome to deal with (Thanks Sean!), they ship extremely …continue reading