Is mining the unfair part of bitcoin in the same way banks (or rather, fractionary reserve systems) are to current monetary system?

I’ve been reading a lot about bitcoin lately and I’m very interested.

Especially, when it comes to making a currency that is way more fair, because it avoids a centralized control of it.

However, in the same way today’s banks/centralbanks/FED/regulators benefit from how the current monetary system works, wouldn’t an economy solely based on bitcoin make the big IT corporations take advantage of everyone due to their computing (mining) power?

Cannot we build a currency that is decentralized like bitcoin, but that doesn’t have the “mining” part of it? (I know that mining concept is very tied to cryptography, but maybe a less cryptographic-centric system can be built, like one based on trust/untrust between nodes?)

Thanks very much, and sorry if this has already been asked, but it’s difficult to look for a question like this.

Are there studies about a Bitcoin-like economy with inflation?

Assume, we create an alternative cryptocurrency (“InflationCoin”) based on the bitcoin software with one change to the protocol:

  • The Block reward is constant, e.g. 50 InflationCoin

Technically this would work just like Bitcoin while avoiding one of Bitcoin’s most discussed characteristic, namely built-in deflation. The supply of InflationCoin would grow constantly, possibly leading to a controlled and predictable inflation if the InflationCoin economy does not grow as fast the supply of InflationCoins. Transactions are always cheap and therefore encouraged. Hoarding is dangerous due to the risk of inflation.

Since, both unsing Bitcoin and InflationCoin is voluntary, they could coexist and possibly attract different users or usage scenarios.

Is this an ok “poor man’s 2 out of 3” key solution?

In the situation that you want no individual to have the complete private key, but you do want to share the complete key between 3 individuals, of which any 2 can construct the complete key, what is the downside from doing something like this:

Orig key = 1 2 3 4 5 6 7 8 9 (abbreviated for demo)

key 1 = 1 2 _ 4 5 _ 7 8 _

key 2 = 1 _ 3 4 _ 6 7 _ 9

key 3 = _ 2 3 _ 5 6 _ 8 9

obviously any 2 keys would construct the entire key again.

Apart from the decrease of key strength to 1/3 of the original, are there any other potential issues ?

This would be used for “short term” escrow accounts where, in the case of a “winner takes all”, the escrow would just communicate their key to whichever counterpart won. If the escrow failed to send, then the counterparties could choose another (trusted) escrow and transfer the funds to them.

Cannot access my bitcoins because my wallet is still synchronising. What can I do to spend them immediately?

I have purchased bitcoins and have downloaded Bitcoin-QT, but my wallet is taking forever to synchronize to the network.

I can’t access my wallet because it is still in the sync process. I have the record of me paying for the Bitcoins, the confirmation email, etc., and the address it has been sent to. I desperately want to start spending them. What can I do to gain access immediately without waiting for the synchronization to run its course?

Help me understand Instawallet better to trust it more!

I have read the FAQ. I like the idea it’s only a link, I don’t need it to be more complicated than necessary. For me it doesn’t matter to store a generated difficult password for an account or only a link. But this way the login process is easier and the developer seems to be working on some pretty innovative features which is cool.

Basically it all boils down with all these online wallets is how much you trust the people behind them, right? Of course, you don’t store on them big money but it’s a convenient way to spend some BTC.

One good question is who is behind Instawallet? Financially. It forms a network with Bitcoin Central, Instawire, Paytunia and Paymium, though the terms and guarantees are different. Instawallet comes with to guarantee but Bitcoin Central is a registered payment processor in France.

Why is it good that Instawallet “launders,” or structures the money in various transaction sizes and through various Bitcoin addresses? Though, I can understand it’b beneficial for some (on the Silk Road market) but it takes up to 24 hours to receive funds which is a drawback. But hey it’s free! I mean I don’t really understand when the bitcoin network charges a transaction fee and when it isn’t. If you can tell me in a newbie friendly way.

Also, in what cases Instawallet’s green address is useful? For a simple product purchase in the Bitcoin marketplace you don’t need one, right? Your funds can go from various addresses, you just receive a confirmation number from the merchant (just like with an online or offline credit card purchase) and that’s what you need besides your funds being sent.

Why are hashes in the bitcoin protocol typically computed twice (double computed)?

According to the wiki specification of the bitcoin protocol, hashes are typically “computed twice”. For example:

2cf24dba5fb0a30e26e83b2ac5b9e29e1b161e5c1fa7425e73043362938b9824 (first round of sha-256)
9595c9df90075148eb06860365df33584b75bff782a510c6cd4883a419833d50 (second round of sha-256)

What is the reasoning for this? I imagine it somehow provides additional security, or protection against potential attack vectors, but I can’t reason what those attacks might be.