[mmichaels1970]

I read that in order to start using bitcoin you have to download and ‘initialize’ your setup which includes data on every transaction that ever occurrred

This occurs when you create a wallet to locally store your bitcoin. However, you can technically "use" bitcoin without a wallet.

For example, you can purchase it on an exchange (or upload from a mining rig to the exchange) and then transfer it directly from the exchange to a merchant that accepts it (or sell it for cash).

The implosion of Mt. Gox is definitely going to cause a credibility hit to the other exchanges. I've been following it closely and feel I've learned a lot. It's like an accelerated lesson in the collapse of a business. At some point I'm going to need to jot down some notes about what occurred. You could probably model an entire college course around the rise and fall of Gox.

[Mr. K]

Thanks for your reply- I really do not understand it very well

I do think it is an odd software design that you need to store info on every transaction that ever occured (do you rally want everyone’s transactions sent all over the world?)

At this point I am wary that someone figured out how to make this into a giant scam, using software some inexperienced designer made.

[djf]

The idea of having work nodes that have the whole blockchain is basically security.

If you are running the bitcoin software and somebody else does a transaction somewhere, part of the plan is that it uses your computer and your copy of the blockchain to verify whether the transaction is real.

Right now I am re-synching Bitcoin. I tried it the first time back last April. It took over ten days to download the initial data, and I am on DSL. As part of running bitcoin, it automatically connects you to other bitcoin nodes - I am currently connected to 8 other nodes.

Theoretically, it’s a good design and would work. But the developers need to find a way where not all nodes have all the data - it gets somehow “chunked up” and distributed.