14 votes

Bitcoin - If the government hates it, don't you think you should at least consider learning about it?

I just wanted to share this blog someone wrote about Bitcoin:

http://evoorhees.blogspot.com/2012/04/bitcoin-libertarian-in...

    Bitcoin - The Libertarian Introduction

What it is, how it's used, and why you should care.

Erik Voorhees - April 11, 2012

"When a state currency is challenged, the state itself is challenged,
and market forces move swiftly around sickly, depreciating inhibitors."

1 Introduction
2 What is Bitcoin?
3 How does it work?
4 Why is Bitcoin valuable?
5 No really, WHY is Bitcoin valuable?
6 How does one obtain it?
7 Being careful with money
8 What can one do with it?
9 Bitcoin vs. The State
10 Bitcoin and Disruption
11 Useful Resources

Introduction

There has been much talk about Bitcoin within libertarian and economic circles. It's becoming a buzzword, but like all new systems that break onto the public stage quickly, Bitcoin brings with it excitement, speculation, rumor, and downright confusion. To be sure, Bitcoin is complicated. After all, it's an entirely new global monetary system - both a currency and a payment network for that currency.

Like all powerful tools, it's important for those interested in using Bitcoin to spend some time engaging in the due diligence of education. Similar to a bicycle, once you know how to use Bitcoin, it will feel very easy and comfortable. But also like a bicycle, one could spend years learning the physics that enable it to operate. Such deep knowledge is not necessary to the actual rider, and in the same way one can enjoy the world of Bitcoin with little more than a healthy curiosity and a bit of practice.

This article is a primer on Bitcoin: an overview of the fascinating new phenomenon from the perspective of a humble libertarian who cares more about the ramifications for human liberty than about the technical protocol and brilliant science underlying the network.

The basics of Bitcoin are all covered here, ranging from a light technical overview to due diligence to monetary economics and theory. You'll also find an extensive list of resources to bring you up to speed on this most fascinating thing to happen in the realm of anarcho-capitalist technology since the internet itself.



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I agree.

In my comment below I made almost the same point. The critical issue for me is whether Labour has been applied to Land and something of value produced. This product is then taken to market and there it becomes money in the exchange process. The bitcoin meets these criteria.

The fact that the creators set out to mimic gold and silver to the point of using the gold market terminology and created not only the coin but also the payments system which is an integral part of the currency adds weight to this argument. They also built in a finite supply of the currency which will slowly be issued in decreasing quantities for the next thirty years I think.

Compare this with the present 'elastic" fiat system which also includes a payments system but has no limit to the amount of currency that can be created ex nihilo. This is a quite different concept from bitcoin and was clearly created to give the creators control and to enable them to buy up resources and enslave people through debt which is the foundation of the system. Bitcoin conversely is debt free, individually created, relatively indestructible, limited in issuance and very secure.

The major risk of course is that it depends upon an electronic teleconnection, not necessarily the Internet, in order to be useful.

"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

Interestingly

after reading the white paper on the technology of bitcoin it appears to me that the true commodity in which it represents is electricity. Without electricity, nothing can happen (in regards to the bitcoins) -and in our world now, electricity is hugely important. It utilizes CPU power in block chains to "mine" the bitcoins, but ultimately the commodity in which it relies comes down to the production of electricity (where by almost everything else is developed) unlike gold or silver.

This is an interesting point because although you can't see, hear or hold electricity (it can be felt though, lol!) we still need it in our daily lives. Almost ALL of our industries require some form of electricity to function. Without electricity, we'd have to go back to human and/or animal labor (with the exception of gas powered engines I suppose however interestingly enough we use that to develop electricity as well.)

Either way, cool stuff. Thanks for the post!

The link to the white paper is :
http://bitcoin.org/bitcoin.pdf

I'm not economist by any means...just an interested guy reading.

Seriously?

It doesn't represent electricity! Electricity might of been used to create it by doing useless work, but it doesn't contain or transfer electricity! No amount of electricity wasted to create it transfers ANY intrinsic value.

Its not useless work. All

Its not useless work. All the computers are securing the network and verifying transactions that happen across the system.

This is what it takes to be decentralized. If it was a business.. they'd just have all these computers in one server room doing all the work. When it comes to something the government doesn't like this isn't the best route to take.

I'm not sure why you got

I'm not sure why you got voted down.

It is a FACT that the bitcoin network relies on the work of individual computers to check the blockchain for inconsistencies.

Bitcoins in some way do represent electricity, but more like a history of electricity rather than a storage device.

Demand, divisibility, distinctiveness

Bitcoins satisfy SOME of the definitions of money, and so have a utility in their particular realm. But beyond? That's arguable. As with gold or silver, if I lose a bitcoin at the beach, can someone else pick it up and use it? The value, the very existence, of bitcoins is contingent on a functioning internet. Gold and silver and wheat and alcohol will retain value WITHOUT artificial support, and have for generations.

I'll stick with metal, thanks. I'm too much the apocalyptic to trust in a cybernetic context to preserve my property.

dynamite anthrax supreme court white house tea party jihad
======================================
West of 89
a novel of another america
https://www.smashwords.com/books/view/161155#longdescr

Ahh the allure of easy money

meets baby bernanke meets the matrix

Patriot Cell #345,168
I don't respond to emails or pm's.
http://www.youtube.com/watch?NR=1&feature=endscreen&v=qo8CmO...
Those who make peaceful revolution impossible will make violent revolution, inevitable.

Why "bitcoin" may not be "money"

The thing used as money must have been produced by the application of Labour to Land (in the economic sense).

If this is not the case, if the thing is simply an accounting entry given legal tender status as at present or is accepted by a community as containing the value of the commodity, good or service for which it was given in exchange, then it is not money and will rapidly lose exchange value since it can be produced without the application of Labour to Land. The exception to this rule is if the thing given in exchange is redeemable for real money at some agreed point in time. This would apply to Real Bills which are usually traded at a discount and are redeemable in 91 days.

The only thing that can be money must have been the result of the application of Labour to Land and it must then be valued by the market through usage. Historically, the commodities that have come to be accepted everywhere in the world for this purpose are gold and silver with the base metals serving the purpose for low value exchanges.

Pablo Picasso was an artist. His work was the result of applying his Labour to his Land, his innate talent as an artist. When this product was put into the market it became money. This money has increased in value over the years because it is in great demand. It is not however in general use. There were occasions when he would draw a simple figure on a table napkin, sign it and use it to pay for a dinner for many guests at an expensive restaurant. This is an example of how money comes into being.

"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

one could argue that the

one could argue that the bitcoins are indeed derived from labor. people who "mine" them have to invest in thousands of dollars worth of equipment to generate their bitcoins, which does not even guarantee that they will get any in the end. so it is certainly not just an accounting entry. i think what sets back most people is that the product of this labor is not a physical asset.

Never forget:

To disagree, one doesn't have to be disagreeable.


- Barry Goldwater

Bitcoin is indeed money.

I wrote the above comment before I read the article and the bitcoin.org website. I did this deliberately since I wanted to lay down the foundation of how money comes into existence and what money is.

There is no question in my mind that the bitcoin is indeed money and harnesses all the features of gold and silver while wedding them to the Internet in a peer to peer payment system. The creators of bitcoin have used an analogy of gold and gold mining to create their system and this is justifiable I believe.

The Land in this case is the pool of talent within the bitcoin community and the Labour is the application of the efforts of the original source code creators and the "miners" who bring the blocks of bitcoins into existence. It is then easy to see that bitcoins are genuine money.

Now, there are other features that I find interesting and intriguing. There is another analogy that can be used to understand this phenomenon. This is the formation of a corporation with a block of "authorised share capital" and a block of "issued and outstanding share capital" . The authorised capital would be the c.21 million bitcoins that can be created over time. The issued and outstanding capital consists of the bitcoins that have been issued to date. The business of the corporation itself is the payment system that bitcoin facilitates and represents.

When one sees it in this way then it is obvious that by becoming an early adopter (shareholder) of bitcoin there is a very real possiblity that one couild profit as the payment system is used more widely and the value of the "corporation" and therefore the price of the "shares" increase. The fact that the number of "shares" that can be issued is finite leads to an even greater likelihood of appreciation in the price of bitcoins.

The same caveats as investing in a "venture" company apply but since the system is already up and running and there are more and more joining every day (61,500 bitcoins traded on just one exchange today) the risks are less than one might imagine. Of course one must be circumspect but it might be worth a flutter.

The other feature I liked was the potential link with gold and silver. I use a Goldmoney account and since last year they have stopped offering inter-account transfers under pressure from the government. Eric Voorhees advertises a website offering gold and silver coins for bitcoins and it may well be that Goldmoney will do the same at some point. Then one could use gold and silver as stores of value and "earn" bitcoins on various websites offering payment in bitcoins for filling out surveys, reading adverts etc. The bitcoins could be used to trade for goods and services and to purchase gold and silver to spread the risk and create a store of value.

All in all I agree that when Dr. Paul is President and the market is opened up to competing currencies, removing the threat of government interference, the bitcoin system will come into its own. There is no doubt it has been created for such a time as this. I am not too surprised that it is opposed by the von Mises Institute. They can be quite doctrinaire. They also oppose Professor Fekete's ideas on Adam Smith's Real Bills Doctrine. However they are free market advocates also so that will put everything to the test.

BTW Bitcoin also mentions fractional reserve banking being used to increase the money supply. This is not something I would agree with since I believe it to be fraudulent but it may not last long since in the first place a bitcoin/gold/silver system would tend to be deflationary and this makes all borrowing less attractive. Secondly the existence of fractional reserves would have to be declared and people would be unlikely to provide savings to such an enterprise since other safer options would be available. It would take only a couple of bank collapses to put an end to that way of doing business.

"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

Bitcoin is not money!

Bitcoin ISN'T money because it contains no intrinsic value! Gold isn't worthy of being money just because it's scarce. It is intrinsically valuable, because it has genuine uses. Intrinsic value is a part of the form of money. Bitcoin does not satisfy that requirement. It is NOT money.

What is intrinsic value?

Bitcoin is the result of the application of Labour to Land in the economic sense and it is, at one and the same time, a secure means of exchange without any intermediary anywhere in the world instantaneously, and a system of payments. It is, given its finite design, a store of value and a unit of account divisible to 21*10 to the 14th. power. This is equivalent to the existing store of gold on the planet expressed in tenths of a milligram each equivalent to 0.001543 grain.

It also cannot be counterfeited due to its mathematical properties within the network of which it is a part.

All of these features mean it has intrinsic value as money created for that purpose just as gold was at one time mined primarily for its monetary value. It is already freely traded, is accepted in payment by many merchants and presently has a value in the neighbourhood of $5.

Bitcoin will not replace gold and silver and its value can be expressed in terms of these precious metals, or vice versa, when the present fiat currency system has collapsed. It is in my view an excellent candidate as universal money in the world of the near future.

I can also see the day when someone invents a point of sale device to accept bitcoin at local shops just as there is a system for accepting debit or credit cards. In the case of bitcoin there will be no need for a teleconnection since the memory device containing the bitcoin (the wallet) will already be loaded with the purchaser's store of bitcoin.

"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

Intrinsic value is NOT a

Intrinsic value is NOT a requisite for money.

It is nice to have though.

Intrinsic value is a sine qua non for money.

If you read my other posts you will see what I mean by that.

"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

Bitcoin is an Elegant weapon for a more civilized age...

Yes I know that it is not based on anything with inherent value, but there are no other arguments whatsoever that hold up against the bitcoin if you have looked deeply into it. (And understand the code.)

I'll get to a solution at the end for the inherent value issue, but I couldn't let this thread die without letting my fellow libertarians know what an elegant, BEAUTIFUL, almost godlike piece of code the bitcoin system is!

If your fear is that someone is going to be able to hack it, or that someone like the Fed is behind it all trying to trap us, then I assure you that I have seen with my own eyes proof in the code that these could not be the case.

The system is perpetually self-checking. Every last line of code, every last chance for someone to mess with it; the next 6 minutes will ALWAYS check over every move it's made and you can be assured no one has an unfair advantage in Bitcoin.

No Fed or spook could even THINK like this... They build systems AROUND a back door, meanwhile this thing is made the opposite way, and any doors are revolving doors that have security cameras facing it from 10,000 different directions!

Trust me guys & gals, you can drop ALL fears about the bitcoin. It's legit as legit can be.

If the Bitcoin were to catch on then the Fed and pretty much every country with the least bit of unfairness to their monetary system would CRASH 100% OVERNIGHT. Destroyed, forever, instantly.

It's the biggest threat that the USA has ever faced, by far... Excepting only that it isn't catching on that well.

Now; the reason why: In all of history, there have only been three kinds of money to hold popularity:

1. Money that actually is valuable because of inherent ability. (ex: Gold coins)

2. Money that Represents value stored by a large government, who can defend the valuable gold bars somewhere. (USD before 1971)

3. Fiat money, that doesn't represent either, but a THREAT OF FORCE temporarily holds it's perceived value in place... Despite that place slowly slipping away over a few years. (USD After 1971)

Bitcoin is neither of these kinds... So it is difficult to see how it can obtain critical mass.

The only argument I've heard that it could do so is based upon the worlds NEED for such a perfect form of money (especially the anonymity) to create the Value.

Do we need gold because it's worth $1800 an ounce? NO, we need gold because it is an excellent conductor and used in millions of applications. It is a precious commodity.

In a similar way, we don't need Bitcoin because it's worth $5.12 a BTC... We need it to be able to pay someone online without anyone knowing about it, including the government.

So... It's a waiting game. If you consider the ability to pay for something anonymously online and be assured that the currency won't inflate is WORTH something to you, then maybe there is hope for this beautiful, brilliant, and totally SAFE piece of code in your future afterall.

HONEST RON 2012!
LEGALIZE LIBERTY!

A Scam Pure and Simple

Secret Service is all over it like ShadowCrew. Believe it or Not. Besides, it's not really a free market system. What's it worth in the end? Nothing? A nickel on the dollar if your day goes right? I'd steer clear of this kind of thing because nothing but Anonymous and some hype back it.

Enjoy life and all wonders within. Wars on Drugs before declaration. Poor but freedom was near. Comedies of the man who used to toss joints to the crowd like it was legal. Let's play Paperball for Ron Paul: http://www.youtube.com/watch?v=ydp2qMyVkbo

Go to the Bank to send money to Bitcoin?

Hmmm...

Free includes debt-free!

Even more curious?

What is the exchange rate at your local bank for bitcoins I wonder?

If I disappear from a discussion please forgive me. My 24-7 business requires me to split mid-sentence to serve them. I am not ducking out, I will be back later to catch up.

bad to be left without a chair.

I missed the top of that pyramid scheme too. Now we gotta jump on the bottom. Thanks but I am already hedged against government collapse.

Check the charts.

This is not a pyramid scheme. The very first purchasers of bitcoins paid about $30 each. They now sell for about $5 and have been there for several months. You should read the material at bicoin.org and the links there to the charts etc. and you will see that it is anything but a pyramid scheme.

There is a finite number of bitcoins to be issued. In a pyramid scheme the idea is that the eventual number of participants required is infinite in order to support the pyramid. This is not the case with bitcoin. It bears no resemblance to a pyramid scheme at all. It is a completely flat system operating on a peer-to-peer model with no central bank of data. It is a perfect system for a free society. Of course it needs some electronic teleconnections to be viable and that may be its only real weakness as far as I can see.

Best to keep some physical gold and silver on hand in the event of a worldwide crash of all computer systems.

"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

Hm this isn't true really

You need to send your chart back further.

Bitcoins used to be traded for pennies or less.

Bitcoin had alot of media attention last summer and shot up to 33 dollars in a very short period of time.

As all bubbles do, it popped I'm sure most of the "early adopters" got out. Since then its formed a solid base around 5 dollars, which is very surprising to me.

This december, the amount of bitcoins created per day will be cut in half. Will the price double? or is the price already factored in? who knows.

Good point. I missed that. Silly me.

I was really addressing the pyramid scheme question which the fundamental bitcoin certainly is not. As you said they started trading at pennies but ran up very quickly as all shares do when they get publicity. There must have been quite a volume of trading to take the price to $30+ so a lot of the early purchasers will still be sitting with expensive bitcoins. That was just a bubble as you observed so they were more like an early stage public penny stock. In time even those who bought at $30+ should be able to recover their investment I believe.

The system itself is still intact and the creators and early adopters have probably bought back in by now. The tendency over time I believe will be stable growth as the system becomes more established as a currency. This will lead to a moderately deflationary economy which I believe is a good thing for savers and less of a good thing for borrowers since the value of money will gradually increase as the economy improves and more transactions occur.

The decrease in rate of creation will simply decrease the additional bitcoins being created not the total amount outstanding. The price in FRNs will depend upon supply and demand. Since "mining" i.e. production is being slowed down it makes sense that the price should increase assuming that demand continues to increase.

This is why I think they will be a good hedge against fiat inflation all other things being equal. I will likely buy a few with that in mind. I am not interested in speculating in the other ventures growing up around them.

I live in Scotland and the government is holding a referendum in 2014 on the question of independence from the UK. The issue of the monetary system has not come in yet for any serious discussion and the assumption is we will continue to use the British pound. It would be a good thing I think to use the bitcoin and gold/silver and grow away from the fiat system entirely.

"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

One thing that may very well

One thing that may very well have an effect on the price is the new FPGA mining boards that have recently been coming out.

Basically the cost of mining in electricity has alot to do with the price.

At first you just needed your CPU to mine.. and you could get lots of bitcoins.. as the difficulty rose.. people had to move to graphics cards. These cards take a good bit of power... I used to do it.

But these new cards.. take only a fraction of the power that the graphics cards take. So miners can sell their bitcoins at a lower price and still make a profit. Yes they cost more and it will be a while before everyone is using them.

The most important aspect of bitcoin to me is that the price stays relatively stable (which is has been doing). Back in the day if you made a purchase or someone bought something from you, your bitcoins could be worth a dollar or 2 less (or more) within a few hours.. noone really wants to deal with that. hehe

EDIT to add. I think once the gambling and adult industries grab hold of this, bitcoin will be unstoppable. :)

I am not a techie

so am not interested in mining. However I do have a friend who is a political prisoner in Bolivia and who is something of a computer whiz. He used to work at an Israeli research institute and may be interested in being involved in creating bitcoins. Do you have any information I could send him?

"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

Even More interesting

Is the bitcoin stock exchanges that have popped up.

The GLBSE being one of them

http://glbse.com

Buying and selling stocks in bitcoin companies. There were alot of shady companies, but they have been cracking down on the verification process.

Usually the companies give out dividends weekly or monthly from their earnings. Gonna be big if its never shut down somehow.

I believe a bitcoin is itself a "share"

Of course this is an analogy and not a verity. Bitcoins will only be issued in a finite number so as the system is more widely used the bitcoins should rise in value based on supply and demand. So far as I can tell it is possible to use the same source code to create other bitcoin currencies but I would think they would have to use another name.

I would be loathe to invest in a bitcoin company since they can be easily manipulated by the promoters and shut down by the government securities regulators. The better course is simply to buy or earn bitcoins themselves and in time they should increase in value against the fiat currencies.

"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

I agree

That things can be manipulated. Thats why most people dont invest in companies that aren't transparent. Usually each one has a thread on bitcointalk.org. I've invested in many and have made a very good return on my money usually (If you get in early especially)and they have a decent business model. Just a hobby for me, for fun.

If you truly believe in free markets.. I guess this would be it. lol

Is Bitcoin a relevant topic to DP?

Is Bitcoin a relevant topic to DP? Maybe.
Competing currencies is Ron Paul's Bread and Butter a long with economics; so, yeah, it may just be a worthy discussion whether you meat the topic with curiosity, animosity, or whatever.
When Ron talks about the gold standard, I think many miss the underlying foundation to his idea of money which is liberty. Ron Paul is not promoting the gold standard as much as he is promoting the idea that the market place should have the freedom to use the currency of their choice.

So, like it, hate it, or just plain don't now what to think, Bitcoin is a currency operating world wide without boundaries or support of government or any institution. It is working now and the people that are involved are there free of choice. Being mocked because we used our "liberty" to support bitcoin from a website about freedom is interesting.

I've learned that money is not just an economic issue, but it's a social one as well. Every time we use money to make an exchange for goods and services there is usually some type of social interaction. For some to decide to support and use another currency is a kin to leaving the social group. I think that is where a lot of emotions stir. I support the gold standard. I have a lot of PMs and I'm also a bitcoin enthusiast and supporter.

Is Bitcoin Fiat currency? Give me a very precise definition of Fiat and then we can discuss.

“I’m fully diversified. I’ve got some under the mattress, some under the floor boards, some in the backyard.”

Nope, Bitcoin is not fiat.

Nobody will threaten to put you in jail for refusing payment in bitcoins.

Fiat currencies derive their "value" from the government's demand that the stuff be accepted as payment for all debts, public and private -- and from the threat of legal sanctions for refusing payment in fiat. Why else would anyone accept a currency that loses purchasing power, year after year? Fiat is simply not a good store of value.

Bitcoin does not have the intrinsic value of a commodity money like precious metals, but it does fulfill all the other functions of money (even better than precious metals, in many respects). Its value derives from its utility as money, and from its limited supply. It's sort of like trading in rare postage stamps. Supposedly there will never be more than 21 million bitcoins in existence. That's the one thing that makes me kinda doubtful: what's to stop the folks who issue the bitcoins from issuing the new bitcoins to themselves? Or issuing more bitcoins than the advertised limit? I've got to do some more reading to discover the answers to these questions, but on the whole, this is a VERY interesting idea.

Just exploring some of the links, I've discovered that one can buy or sell precious metals using bitcoins. One can buy all manner of illegal drugs -- I'm not into that, myself, but WOW, amazing. And one can buy credit to be used on Amazon and other major retailers. It's already looking better than credit cards and Paypal. And much, much better than the FRN/traditional bank monetary system with their fraudulent fractional reserves and potential for unlimited inflation. And best of all: government can't print it, and thereby use it to enslave us, as they DO with fiat money.

Recommended reading: The Most Dangerous Superstition, http://www.amazon.com/Most-Dangerous-Superstition-Larken-Ros...

No central entity issues new bitcoins

"Supposedly there will never be more than 21 million bitcoins in existence. That's the one thing that makes me kinda doubtful: what's to stop the folks who issue the bitcoins from issuing the new bitcoins to themselves? Or issuing more bitcoins than the advertised limit?" - dabooda

New bitcoins are issued by miners, with the consent of network participants. No central entity has the power to create new bitcoins or change the formulas at will.

When a miner finds a solution to the mathematical problem*, he submits proof of that to the network along with a transaction that gives himself new bitcoins (currently 50 BTC). Network participants verify that the solution is valid and from then on recognize the newly issued bitcoins as valid. If an invalid solution is submitted by a miner, the rest of the network ignores it and the miner's issuance transaction is as worthless as "50 BTC" written on a napkin.

That's one of the key advantages of bitcoin over most (all?) national currencies. We don't have to trust in a central bank or other single entity to not create new money at will and diminish its value.

* At the current difficulty factor (which adjusts based on total processing power being contributed to the bitcoin network), a miner calculates roughly 6800 trillion SHA256 hashes for each solution found. Solutions can be verified by other network participants relatively trivially. For perspective, a Radeon 5970 graphics card (most popular mining card) can calculate ~2.4 trillion hashes per hour, more if overclocked.