What's more important is that if you have any indication or suspicion that your private key might be compromised, you move all of your (remaining) bitcoins at that address to a new one after you secure your account so that the attacker cannot login again.

Nobody would want to hold the hyperinflating Zimbabwe dollars because they are dropping in value so fast. People who have no choice but to be paid in them will spend them as quickly as physically possible. But all that means is that hyperinflation is bad, not that all inflation is bad or all deflation is good.

My understanding has been that, in order to have a stable economy, you must have small but positive inflation at all times, no matter what the economy is doing. Because the economy is pretty much always growing, this means that you must increase the money supply at a controlled pace, meaning that some entity must be able to increase the money supply at a variable rate depending on what the economy is doing. In other words, Government-controlled fiat currency, which every nation in the world currently uses.

Small but positive inflation means that simply holding onto money long-term is not to your advantage. You have to either spend it, or invest it in something. Inflating faster than any business can profit or any real good can increase in value is bad, because nobody will want to invest when they can spend instead and get real goods that don't inflate. Deflating is bad because everybody will hold their currency instead of investing it unless they believe that the company they are investing in will profit enough to overwhelm the inflation.

Just purchasing daily necessities is not enough. How many people here work in a business that creates something that is strictly necessary? Probably almost nobody. You need investment at all levels for the economy to work. How much investment is there with Bitcoins? Would you invest a large sum in BTC in a company with a good business plan? Probably not, because they couldn't return more than you would earn by just holding the BTC.

This is what I believe will ultimately limit the growth of Bitcoin. It's useful and interesting, and all sorts of good products will probably be created using it, but I don't believe that it will ever take over the world, replace any national currencies, destroy governments, or otherwise become the primary currency for a large section of the economy. I do hold some bitcoin, and I would be interested in being proven wrong, but that's the way that I see it right now.

Yeah, it was used as the primary global currency for centuries... and the world moved off of it because of the relatively fixed money supply and the deflation problems that caused. Not just a few countries with greedy, authoritarian governments, the entire world.

The thing that makes me wonder about the usual advice about buying on a dip from temporary bad news is that it seems like an awful lot of people are planning to do that. If there is more money in people trying to buy on a dip then there is in speculators prone to panic-sell on bad news, then the dip never happens. Look at what happened on the blockchain split problem - it regained like 60% of the loss within a few hours, and all of it in 2 days. Just buying now might well be the thing to do. Or if you're going to try to buy on a dip, you probably ought to have your USD in an exchange now so you can react in minutes instead of days.

Consistency and predictability. On a pool, you know you'll make whatever amount a day, every day. Mining solo, the average for your hashrate at today's difficulty is supposedly like 9 years or so, but that's just an average. You could solve a block in 10 minutes, or not at all in 30 years. It's tough to justify any sort of investment in mining tech with such unpredictability.

I actually agree that the deflationary nature/fixed supply rate of Bitcoin and all similar currencies will limit their ultimate growth to well below the nation-state level. However, in places like Cyprus, Bitcoin seems to be better backed up and a safer investment than conventional bank accounts for the moment. You can put your money wherever you please, but would you rather put it in Cyprus savings accounts or Bitcoins right now?

They've been a legal gray area since they were created. We've always known that the Government would get into regulating them someday, but nobody knew what form that regulation would take. They could be all but ignored or they could do their level best to squash it like a bug. I believe this is a good sign in that it seems to be pretty light regulation and provides some security - the more official recognition Bitcoin gets, the less likely the Government is to try to crush it.

We're from big oil, and we'll be coming for you now... 

Not seeing it... their big issues along those lines are the copyright holders' restrictions on where media can be played. I don't see any real benefit for them in accepting them. Plus, with Bitcoin, they have no good way to auto-debit your monthly fee. Maybe if they moved much further in the direction of producing their own content...

On the other hand, Youtube has been rumored to be thinking of creating subscription channels. Accepting Bitcoin could be a significant help for them if they did, since it would allow them to charge subscribers and pay producers in any country with minimal hassle.

In my opinion, the price is pretty unstable mostly because there's much more traffic in speculation than in normal commerce. When the market is dominated by speculators hoping to make some money by buying and selling at the right time, then it'll tend to vary widely for any reason at all. Hopefully, the number of merchants accepting bitcoin will grow and the commercial traffic will grow with it, and that will tend to stabilize the price.

As for whether to hold or sell now, that's your call man. By asking the question, you are essentially speculating yourself, and whether you make or lose money depends on how your guesses line up with the guesses of all of the other speculators out there. This is essentially more of a financial market discussion than a bitcoin discussion.

If you want to help the situation, work to increase bitcoin commerce. Buy something you need with bitcoins, ask a merchant to support it, accept bitcoins yourself if you have any kind of store, whatever is practical for you.

There's a nice bit about that in the Wiki:

https://en.bitcoin.it/wiki/Myths#Point_of_sale_with_bitcoins_isn.27t_possible_because_of_the_10_minute_wait_for_confirmation.

Basically, for purchases of modest value, it is considered reasonably safe to go through with the physical transaction without any confirmations, just watching for the transaction and any double-spends. Getting away with a double-spend in those conditions is difficult enough that nobody would bother to do it just for something worth significantly less than, say, the current block reward.

Do watch out for unencrypted walled backups also. That's how they stole like 30k BTC from Bitfloor. If you're going to store any significant amount of BTC in your wallet, make sure that you encrypt it with a strong password, and if you didn't do this immediately when you created your wallet, make sure you find and destroy any backups of the wallet from before you encrypted it.

I'm pretty sure that you'd have to write a custom client to do anything like that. That's stuff that is technically possible to do in the protocol, but no mainstream client will let you do it - deliberately ignore the first spending transaction, and/or deliberately connect to two separate sets of nodes in the network. And if you're doing any messing around like that, it would probably be best to do it on the test network instead of the production one.

They're public, but also anonymous. It's designed to be difficult to tie a bitcoin address to a specific person or business. You can see all of the addresses that the stolen bitcoins went through, but proving that a specific person was behind the theft is hard. Especially if the thief takes a few precautions - sending through a few different anonymous wallet sites, etc.

I'm pretty sure that the fees are collected by miners when they solve a block with the transaction in it. So start mining... though the block reward seems to be much bigger than the fees anyways.

From what I understand, in solo mining, you don't make 1 BTC but rather the current reward of 50 BTC if you solve a block. The downside is that the difficulty is already high enough that even solo GPU mining with custom rigs stuffed with all of the high-end GPUs they can take could take years to solve one block. CPU mining was completely pointless long ago. You might be able to make a little BTC if you join a mining pool, where a bunch of miners agree to share the reward if any of them solve a block, but you probably still need some serious hardware to get anywhere.

Meanwhile, ASICs - custom-designed CPUs that do nothing but mine, are really expensive and also really fast - seem to be coming onto the market, and may make even pooled GPU mining pointless in the next few months.

Correct me if I'm wrong about anything, I'm still learning this stuff too...

Didn't know that... Guess if you want to buy outside of business hours, you'll need to find a local seller to take cash.

I just bought my first bitcoins yesterday with a marked deposit from Bitfloor/LocalTill, and I was quite impressed with how fast it was. I got an email that the deposit went through and was in my Bitfloor account on the way out the door of the bank. Then under 5 minutes to convert to BTC and do a transfer to my wallet.

Yep, that's going to go viral any day now...  Gotta get in on the ground floor of a silly 12-year old trolling campaign...