Home > Markets > Cryptocurrencies > BitCoin - Intellectual Fraud or a Stunning Idea??

BitCoin - Intellectual Fraud or a Stunning Idea??

  1. If you have not heard about BitCoin, you are missing out. Take 15 minutes and read below 2 links.

    https://bitcointalk.org/index.php?topic=7269.0
    https://bitcointalk.org/index.php?topic=74609.0

    I want to do a quick poll on what ET community thinks of BitCoin?

    Disclaimer: I have become aware of BitCoin for last 1 hour. So, my knowledge and understanding is fairly limited. However, I already have strong opinions on this. I am curious to hear what community thinks of it.
     
  2. "It is perfectly alright to join a Ponzi and you can make good money by doing so, as long as you know it is a Ponzi, and you are aware of the risks." --- Abraham Lincoln
     
  3. Lol, Ponzi was born 20yrs after Lincoln died, wtfungus?
     
  4. Tell that to Lincoln, not me.... He was always before his time...
     
  5. My bad, just emailed him, thanks.
     
  6. well I was undeicded but after reading an analysis by karl denninger I am inclined to believe it is a tulip ponzi

    i think wow gold is more valuable than bitcoins in the end.
     
  7. Warning: conspiracy theory coming....

    Although Satoshi was using British spelling in his posts, his posting times (well, rather his non-posting=sleeping times) indicated that he was from the East Coast.

    So here is my very personal theory about the whole Bitcoin thing:

    The NSA or some other US government agency (Fed) decided to try a social experience if a virtual currency could get popular. There could have been several reasons for the experience:

    1. Can a virtual money get popular and if so, how fast?
    2. If it is a quasi-anonymus payment, can it still be used to locate criminals/terrorists?
    3. If it does work, could a government issue such a currency in the future?
    etc.etc.etc.

    So in my theory, the secrecy of the makers was necessary, because nobody really likes a government issued freedom money. Also, the anonymity is kind of BS, because if a high tech entity gets into it, they can follow the cointrail, the whole blockchain is nothing but a ledger.... Not to mention the earliest coins are still unused, and this could be explained if they were mined by a bunch of government employees, who were not allowed to rip the benefits.
    People knowing more about coding assume the code was done by a group, not just one person. If it was one person only, he had to work a lot on it and now when he could cash in, there they are the earliest coins sitting unused.

    I might be completely wrong, but that is a plausible scenario and explains a couple of things...
     
  8. Pekelo good theory! :)
     
  9. It's working. And will continue to work. Bitcoin, is a debt-free currency, which threatens the entire fractional-reserve, Central Banker system. They can't shut it down. It's not tulip bulbs. Saturation is miniscule at 125$ bucks per bitcoin, supply is CAPPED, and available at increasing difficulty. I'm going to buy the dips. Also get in with copy-cats during the early stage. Litecoin looks good.
     
  10. so it seems that after 8 votes, 75% of participants believes that bitcoin is a stunning idea.

    Let us see if more votes substantially change this stat.
     
  11. It is very fair from working. Mt. Gox was down for an hour today, and generally it is very hard to get approved for an account. bitcoin-central has been down since BTC reached 100$. For the average person it takes a great deal to try to find an exchange what one can use and trust.

    http://www.reddit.com/r/Bitcoin/comments/1bl32i/it_appears_that_mtgox_is_down_ive_got_nothing_on/

    Bottomline is, it is like the wild,wild West out there in the early days. The so many not very well established exchanges are not all trust worthy. Some can and will disappear overnight. The secrecy encourages fraud and the decentralization doesn't help charge backs...

    3 years from now we can get back to the topic of Bitcoin working or not...
     
  12. You're missing the point. The purpose of BTC isn't to be exchanged for USD or EUR. It's for buying and selling goods and services directly.

    Yes, it's not there yet. But as has been pointed out already, it's the wild west. A major financial crisis (bigger than the US bank bailout, bigger than the Cypriot haircut) may push things in that direction when so-called "real" currencies will become nearly worthless.
     
  13. I am not missing anything. And you are right, it should be a currency, instead of an investment vehicle.

    And that was my point in the other thread, as long as my coins appreciate 20% in a day,the hell for sure I am not spending them, but saving.... Once volatility dies down, we can start to talk about its currency status...
     
  14. Sierrachart announced integration of bitcoin as a trading service at some future date. I guess that means we would have a bitcoin account and we could trade about anything with it? I have an IB account and I can trade a zillion different things with it but it's limited to financial instruments...
     
  15. Supply limited to 21MM. This mkt is getting touted by legit media every day. There is no doubt that it will hit $1k within two years from the exposure.
     
  16. Someone should launch a CFD company that allows people trading anything under the sun using bitcoins. But it should all be underground and 100% tax free. Then many guys would be interested :)
     
  17. Are you long then ? Maybe ask UBS to sell you options to capture bitcoin's upmove then.
     
  18. Hey guys get this, you can have a negative commission with Bitcoin:

    "If you place limit orders, consider bitfloor. They have a "maker/taker" fee structure, and if you're a maker, that is if you place a limit order that is not immediately executed, your commission when the order is filled is -.1%. That's right, a negative commission. bitfloor is paying you to provide liquidity."
     
  19. This might possibly be what will happen if the FTT goes global. Interesting....
     
  20. I am, and it wasn't difficult at all to deal with Mt Gox. All they asked for was a scan of my DL and a utility bill. The concern is that it will spawn copycat bitcoins (like PayPal entering the biz).
     
  21. You are one of the guys I respect a lot as far as trading knowledge and experience is concerned. So, how did you structure this long exposure - just buying bitcoins directly or through some other means?

    May I ask how much you have risked on this trade - either in USD terms or in % of your net worth terms? If BitCoin does touch 1000$, what would be the pay-off for you?
     
  22. Dont know if this was previously posted but its an interesting read.....



    Bitcoin Bubble: How 'Geeks' Sent Prices Parabolic

    Published: Wednesday, 3 Apr 2013 | 12:29 PM ET
    By: Jeff Cox
    CNBC.com Senior Writer



    With the price surging more than 50 percent in just the past three days, even Bitcoin supporters acknowledge that the digital currency is unofficially in bubble territory.

    Widespread chatter about the alternative money has sent values parabolic, with one Bitcoin fetching $93.04 at daybreak Monday, then zooming to $141.32 nearing midday Wednesday, according to trading on Mt. Vox, the most popular Bitcoin exchange. (Click here for a Mt. Gox chart)

    "There is a little bit of a bubble. I'm not happy about prices going up as fast as they have," said Alan Safahi, CEO of Zip Zap, which bills itself as the largest cash payment processor of Bitcoins. "For any commodity it's normal to have price adjustment, to test new lows and new highs. It's not good to always go up."

    Yet that is exactly what Bitcoin has done, swelling from $34 on March 3 all the way up to an intraday high of $147 a month later.
    (Read More: Bitcoin Bonanza: Cyprus Crisis Boosts Digital Dollars)

    Bitcoin is an open-source digital, highly encrypted currency that is bought and sold online. Buyers give cash and receive a code that allows them to make purchases at a growing number of online retailers.


    What's a Bitcoin? And How Did It Break $1 Billion?
    Jeff Berwick, Bitcoin ATM co-founder, explains how his company uses digital currency that allows consumers to use peer-to-peer connections for monetary transactions, with CNBC's Rick Santelli.
    Lest anyone think they live strictly in the domain of underground computer geeks, no less a source than Art Cashin, the well-respected market veteran and director of trading floor services at UBS, addressed the craze in his morning note to clients.

    "It is rare that we get to see a bubble-like phenomenon trade tick for tick in real time. Usually it's kind of regional aggregate pricing like real estate reports," Cashin said. "But, all that may be changing—before our very eyes—quite literally. The bubble du jour may be something called a 'bitcoin.'"
    (Read More: Bitcoin Shows 'Aggressive Bubble' Behavior: SocGen)

    There are several events that could be tied to the recent surge in Bitcoin trading.

    Financial media outlets have glommed onto the trade; the price surged 13.5 percent a week ago, coinciding with a CNBC.com report on the phenomenon.

    At the same time, the trade got a huge boost when the Financial Crimes Enforcement Network on March 18, without mentioning Bitcoin specifically, said it will not prosecute those issuing what it deemed "virtual currencies."

    Also, Western Union recently said it will begin experimenting with digital currencies for customer convenience.

    Throw into the mix geopolitical turmoil, such as the tax imposed on private depositors in Cyprus to stave off the nation's banking crisis, and the stage has been set for a meteoric Bitcoin surge.

    "It got traction because it's decentralized, it's not subject to government meddling, it's considered safe and there's limited supply. So that drives value in kind of a commodity-type perception," Safahi said. "We now have a whole new generation of geeks who are willing to accept open-source as reliable."

    Whether the Bitcoin craze ever spreads beyond those "geeks" is dependent on several factors.

    One of the primary issues is security—critics worry that a clever hacker could plow into a Bitcoin system and pilfer accounts with aplomb. Some were concerned that volatile Wednesday trading, which saw a range from $147 at the high to $107.08 at the low, suggested the system is subject to a "Hack Crash" similar to the stock market's 2010 "Flash Crash" that sent major averages plummeting in a matter of minutes.



    "It's impossible to ignore, because everybody is tweeting me about it. It's on everybody's radar displays," said Boris Schlossberg, managing director at BK Asset Management. "As far as a viable currency, it's a fantasy in most people's eyes, but it's definitely emblematic that there's a huge amount of anxiety among the investment class."

    Schlossberg figured the enthusiasm w`ill last as long as it takes for the government to decide Bitcoin use has become too widespread not to be regulated.

    "At the end of the day if the government decides to regulate it one way or the other you may wind up with just a bunch of code in your hands and nothing else," he said. "It doesn't really have any value other than it's socially acceptable."
     
  23. From CNN.money:

    "And do not be like the Litecoin trader with seller's remorse. One guy wrote a sad tale about how in January he bought 80,000 litecoins at $0.068 and sold them at $0.20. Litecoins are selling for about $5 today. So he took a 194% return, or $10,560, but missed out on a 7,250% return, or $394,560. and is feeling seller's remorse."
     
  24. 1. Are you just investing and holding, or actively trading it (using the huge fluctuations)?
    2. Can you short it with a let's say 10K size? Or you can only sell what you have?

    Edit: This article says shorting is pretty complicated:

    http://www.businessinsider.com/how-to-short-bitcoins-if-you-really-must-2013-4
     
  25. I've logged in to respond responsibly to this thread. IF I get any $hit from cretins here I will NEVER post here again.

    Max Keiser has been the strongest supporter of Bitcoin on radio interviews and his RT show. The word on the street is he is behind Bitcoin and was directly accused of it on Alex Jones show which he carefully sidestepped and did NOT deny.

    I don't know if you are aware aware but before he retired and moved to London he created some software in CA (I believe) and holds many patents for trading of some sort which made him a lot of money in addition to his trading profits.

    For background, Max is a severe critic of J.P. Morgan and its CEO Jamie Dimon. He's a fervent bull for Gold and an even more aggressive bull for Bitcoin- claiming many will become Bitcoin millionaires.

    BTW, why is it necessary to get involved in this obvious bubble rather than merely trade for a living? Seems to me greed is the driver here and usually leads to disaster for most... I for one am happy to stay with what I know and can reliably depend on.

    I prefer to step in AFTER the bubble bursts and buy for a fraction like I did in Vegas 2 years ago in RE. Today Vegas RE up 25% total in one year. I bought a lot and I mean a lot of single family houses @ $45/sq ft now worth $100 sq ft. And now I am distributing them in a rising market to the "greater fools" before the inevitable dead cat bounce. Did the same in '83 in San Diego and also in Phoenix/Scottsdale 2000. Isn't that easier and safer place to put excess trading profits? In a sure thing?

    Woody
     
  26. Logging out again
     
  27. Ok I heard about bitcoins a few years ago, never looked into it.
    For me the big issue is : how do you buy stuff with it, sorry but I haven't seen a place like eBay or Amazon allow bitcoin .

    Secondly, in case the system collapses, maybe there won't be any internet in your area anymore, so your money is on the internet but what do you do if you have no internet, beside you don't buy groceries on the internet.
    what's more likely is the govt will try to stabilize the system and probably that will spell trouble for "alternative" currencies, they may be outlawed or rendered useless.

    Today I read about this FT article and then saw the CNBC one,
    if this thing went from 100 to $145 in one day, then there is no doubt in my mind it's a bubble. It boggles the mind that traders would get caught up in this craze. And I would see this as an indicator in my trading, confirming what I see elsewhere. The fact that the gold bug crowd is big on bitcoin is not a good sign either.
     
  28. Millions of dollars are globally transacting everyday, via bitcoin. That's a tonne of money swapping hands totally outside Government capital and regular banking controls. These transactions are near totally private - the only identifier to an "account" is an open pgp key. Users can destroy and create as many new pgp keys (read: accounts) as they wish. There is virtually no way of knowing who is identified to anyone particular key.

    Essientially, Bitcoin is open-source, debt-free banking. That is revolutionary. What underwrites it, are its relative disctinctions to fiat. In many ways, bitcoin is "the cleanest dirty shirt" (where have we heard that before?). Government issued fiat and precious metals are subject to all kinds of transfer controls, have zero anonymity, and, in todays world, aren't immune to confiscation, nationalization or bankruptcy.

    Bitcoin is transferable to the extreme, totally private, and immune from bank runs and other confiscatory efforts. And its designed to be scarce. That's what underwrites its value - superior intangible value relative to the competiton. Pretty amazing.
     
  29. You are just getting our hopes up, again.

    Max Keiser has been the strongest supporter of Bitcoin

    Interesting story, I will look into it.

    claiming many will become Bitcoin millionaires.

    Nobody has to claim it, we know that there are Bitcoin millionaires. They actually have a subreddit on Reddit. It is invitation only...

    BTW, why is it necessary to get involved in this obvious bubble rather than merely trade for a living?

    Well, for 2 reasons:

    1. You actually believe in the idea and want to support it. Not because of the bubble, but because you want Bitcoin to succeed.
    2. Because a trader/investor trades/invests in whatever moves. Bitcoin started to move really well this year, so it just makes sense that you use it as a trading vehicle.

    Did you miss the Lincoln quote in the 2nd post? As long as you know it is a bubble and you are aware of the risk and you don't bet the farm on it, it is OK to participate in a bubble.

    Seems to me greed is the driver here

    Hm, a trader complaining about greed. I thought greed was good since Mr. Gekko...

    and usually leads to disaster for most...

    I agree and you are right, lots of people are going to get hurt, but hey such is life. There is a Bitcoin, Ponzi,Pokemon in every 5-10 years and people never learn.

    I prefer to step in AFTER the bubble bursts

    Good thinking, although not all bubbles recover. Bitcoin probably will, unless some really big thing (government action, huge hacking scandal) happens.

    and buy for a fraction like I did in Vegas 2 years ago in RE.

    Thank you for the detailed tails of your adventures in RE, but we really don't give a shit.

    You must really be an older guy posting this log in and out info. Completely useless, since you can read ET when you are logged off.

    Anyway, good luck with the European bunny hunt!! :)
     
  30. This drives me crazy. People, stop saying Bitcoin is scarce. It is not. It is limited issue, but that doesn't mean scarce. You can not have a popular and usable currency that is scarce, that is an oxymoron. For a currency to be widely used it CAN NOT BE scarce!!!

    You know what is a scarce currency? Roman gold coins from Jesus' times. That is scarce.

    Bitcoin is 11 million times 10 million units, if that is scarce, you are a fucking moron. If BTC goes up much higher, people will have to start to use milicoins, because it has a 1/1000th value of the Bitcoin.

    Now I hope we put this scarce notion into the ground...

    P.S.: Oh yes, and its value is not coming from its rareness. It comes from its usability and acceptance and hype. That's it....

    3 years ago when you couldn't use it for anything, nobody wanted it and it didn't have a hype, it was worthless...
     
  31. So let me get this straight , hype is value for you ?
    You sound like a 21 year old addicted to his iPhone and social media.

    you'd be a fool buying this stuff , did you see the chart ?
    It's basically a (penny) internet stock.
     
  32. Get the facts of life son, hype creates value. Cabbage kids, Pokemon, Bitcoin, 90s stock market, whatever...

    It doesn't matter if you like it or not, let's repeat with me, hype creates value. Now you could argue that it is just temporary, but sometimes even a good idea needs a little hype first to get off of the ground....

    Just to clarify, by hype I also mean fads. Interestingly, Cabbage Patch kids is an excellent example:

    "The doll brand went on to become one of the most popular toy fads of the 1980s and one of the longest-running doll franchises in America."

    So first it was a huge fad/hype that gave it incredible value but nevertheless it actually had a lasting effect and became a very long running franchise...

    http://en.wikipedia.org/wiki/Cabbage_Patch_Kids

    "At the peak of their popularity the dolls were a must-have toy for Christmas.Parents across the United States flocked to stores to try to obtain one of the Cabbage Patch Kids for their children, with fights occasionally erupting between parents over the hard-to-find dolls."

    "1983 - Cabbage Patch Kids were introduced with great fanfare at the International Toy Fair in NYC. By October, riots were occurring in stores around the country. The dolls made the cover of Newsweek before Christmas and stories of their success were heralded around the world."

    It is/was a fucking ugly toy....People were paying extreme prices just to get them. Thus hype ADDED value....
     
  33. Yes, BTC are must have's for the holiday season. Grandma's are going out to purchase BTC for their grandchildren this Easter, throw a USB drive with 5 BTC on it in the basket for the kids.

    I am beginning to think you are mentally retarded Pekelo.
     
  34. ...that you are intellectually dishonest, we already established. Denial of parabolic rise and shit. Now your inability to understand a simple example/analogy about hype just confirms the rest, that you are an idiot. Welcome to my Ignore....

    And keep reading my posts, you might eventually learn something.... Like hype adds value. :)
     
  35. Really?

    Do I need to keep linking the logarithmic chart to shut you up?

    Not to be mean, but you sound like my dad. "This is all a ponzi-scheme, blah blah blah." It seems the older you get, the more you know about new technologies and future implications and the less you need to research. Btw, I say this in all fun, because BTC could drop to $50 at any time.

    But seriously, start thinking for yourself and research BTC.
     
  36. Lets keep the discussion respectful here.

    Pekelo - what was the Pokemon hype? Can you describe it a bit like you described the doll thing. thanks.
     
  37. If the US Treasury capped the total supply of dollars at 21 million (digital and fiat) at it's inception, would the US Dollar be more scarce, or less scarce, then it is today? Real easy, isn't it?

    Being divisible doesn't make something less scarce. Gold is divisible. Does that mean gold isn't scarce?? Palladium, silver, platinum and oil are nearly infinitely divisible. Does that not make them "scarce"? What is "scarcity"? Shall we have theoretical debate now about semantics?

    The whole point, in colloquial terms, all these distinctions are relative. Bitcoin versus fiat. Scarcity versus plenty etc. And it's unnecessary to go any further than that, imo.

    As for it's value, I think you drastically underestimate it's utility. There's alot more going on here, than people have grasped..
     
  38. Not to throw gas on the fire, but I've noticed ET is filled with old guys, set in their ways, that can't admit the politicians and system they supported their entire lives, is essentially, a corrupt piece of shit. They can't admit they're wrong.

    In fairness, there's a few older guys on here that are aware, and are patriots.
     
  39. Store of value is determined by more then just scarcity. The two key factors are utility (what can I do with it aside from storing it) an global perception (I.e. who else thinks that this is a store of value). Gold (or most other PMs) have industrial /consumer uses and millennia of history as a store of value. Bitcoin, despite scarcity, has no other use and its perception as a monetary unit is driven by a small group. How does one go from here to make it a proper currency? Well, you'd need to make it stable and liquid, but most of all, you'd need it to be fungible for everyday goods and services. Without those, bitcoin is nothing but a bearer promissory note of uncertain value. Just like pokemon dolls or "limited edition collectable thimbles".
     
  40. You can pay your property taxes now in BTC and can also buy anything you want on the internet with BTC virtual credit cards. More and more is in development everyday.

    This is just like the beginning of the internet. At first, there was nothing to do but look up .jpeg's of shitty resolution boobies..
     
  41. You don't get it. Bitcoin is backed by:

    1) superior transferability
    2) superior privacy
    3) superior safety
    4) scarcity.

    Those intangibles are what gives it it's value. Because those intangibles are VALUED by the marketplace. I'm sorry you can't understand that.

    In no way, is Bitcoin anything like cabbage patch dolls or pokemon toys. That's a complete joke and shows you have no grasp of the matter.

    As for Bitcoin having no other physical utility than a shared-psychological store of value. Yes, much like fiat. Who would have known.
     
  42. The problem is that unlike internet which had "parents" this has a few hackers behind it. The whole hoopla about it being "bankless" currency is going to be its demise to - something that's transacting also has to be borrowed and lent. Also, what's more important, what prevents me or you of building another, completing digital currency with similar features? Why bitcoin and not litecoin or something else?

    Ps. You obviously weren't there when internet started :)
     
  43. You can borrow BTC @ around 15% I think right now on Bitfinex, IIRC? Check around, but it's true.

    There is nothing stopping you from making another currency. Just like there is nothing stopping you from making another E-Bay. Good luck with that, though.

    Btw, I did diversify 3 of my BTC into Litecoin. I hear that Mt. Gox is going to start to let you trade LTC on their exchange. Whether this is BS or not, not a huge deal, but I rather get in before the bigger players can. The only place I know of that sells LTC now is btc-e.com


    EDIT:

    https://twitter.com/MtGox/status/319785584468062208
     
  44. So I can't borrow gold? Or silver? Or oil? However did empires function before 1600 AD? I guess the world never existed before fractional reserve banking came around? BTC are actively lent and borrowed.

    Crypto-currencies being debt-free is EXACTLY why Bitcoin (and others) will revolutionize and other-throw this pos fractional reserve monopoly we have now. Debt-based fiat means bankers suck a continual vig off every dollar in circulation. Debt-free currencies eliminate these parasites and greatly reduce the interest burden society is forced to carry, at any one time. That means more money circulates in the REAL economy, and everyone is alot better off. Bankers are essentially parasitical middle-men - they collect a vig for lending us our own money. It's a cancer. Perhaps you don't understand that either? Where's Randomcapital.
     
  45. All of those features are features of a precious metals or diamonds. Why am I not putting all of my net worth into uncut diamonds and bullion? Those intangibles so far are valued by the black market mainly. You do know that cigarettes are a currency in Russian prisons since they posses most of those properties. But at least cigarettes have consumption value.

    Bitcoin is akin with pokemon toys in the same way as any other limited supply assets where both parties view it as a store of value because of its perceived scarcity vs the demand. Once the demand is not there, the asset ceases to act as a store of value.

    I think bitcoin will have its niche, mainly in illegal trade. I doubt it will replace gold as the main safety asset or become a mainstream currency.
     
  46. I am out today at 135. There are sites that allow for shorting, OTC options, etc. (MPEx), but adding incrementally to counter-party risk.
     
  47. Where can you get gold that isn't "on the books"? Other than private sellers, I mean? If you go to a pawn shop to buy gold, do they copy your ID? I honestly have no idea as I have never made these transactions.

    Do you also think gold is easily transferable? How do you mean, exactly? I think BTC is a lot easier to transact in, personally. I honestly think you are seriously underestimating the future potential (and current).
     
  48. "Attackers wait until the price of bitcoins reaches a certain value, sell, destabilize the exchange, wait for everybody to panic-sell their bitcoins, wait for the price to drop to a certain amount, then stop the attack and start buying as much as they can. Repeat this two or three times like we saw over the past few days and they profit," Mt.Gox said.
     
  49. Sounds like regular equity markets.
     

  50. yup nothing new :cool:
     
  51. atticus i cant tell if you are being sarcastic or serious, did you really put some money into bitcoin? at what $ level if dont mind.
     
  52. There is no barrier to entry beyond name-recognition and the volatility in bitcoins will be a huge impediment going forward. Their anti-laundering efforts are IP-based (if you proxy you get flagged), so until that is addressed the entire mkt (beyond BTC specifically) is a novelty.

    You still have to xfer to buy the BTC at some level. Much in the same way as online gambling was hobbled by US regs.
     
  53. Again, you're totally wrong.

    All physical tangibles (like gold, pm's, diamonds etc) are subject to:

    1) Freight inspections/xrays/seizures
    2) Customs inspections/xrays/seizures
    3) Military inspections/seizures

    All digital fiat are subject to:

    1) Banker regulations and transfer controls
    2) Government capital/anti money laundering/anti-drug/anti-terrorism controls.

    Try smuggling a good delivery bar or 100,000 in cash through a fortified border and see how far you get. Diamonds? Maybe? Maybe you get caught. And you lose you're entire savings. And go to prison. Now think of the time it takes for you, to fly all the way around the world, with a diamond up your butt, to make payment to some guy, where your chances of getting caught are 50-50. Not exactly convenient, safe, or time-sensitive, is it?

    Anyway, horse to water. These are all relative distinctions. Try to grasp that. Relatively speaking, Bitcoin and other cryptocurrencies kick fiats ass, in many areas, valued by the marketplace. But you refuse to accept that. Fair enough.

    Were you aware that millions of dollars are being transacted, everyday, in real life (not theory), via Bitcoin? This is really working...
     
  54. I absolutely did. Have you seen the chart? I bot the moment the funds were received by Mt Gox. $8k, which even at that level was uncomfortable, which is also an impediment.

    [​IMG]
     
  55. Well, not entirely.

    But yes, most will go this route. I actually earned my first few coins from someone else for doing yard work, then slowly found out more about it.

    But you can buy as much BTC from private sellers as you want. You can buy and sell locally with other people. Just go meet up at a starbucks or something and do it there.

    Localbitcoins.com would be a good place to start.

    I also think, though, that this AML/KYC stuff is good for bitcoin. Makes it more legitimate for the bigger players. I don't have enough money to care one way or the other, but I do believe you CAN be much more anonymous with BTC than anything else. Whether you want to is up to you.

    I think the volatility will die down as the market cap continues to grow. Merchants can instantly buy/sell coins with Bitpay for example so they don't have to worry about instant volatility.
     
  56. There's some definite advantages to market cap = stability. Litecoin market cap is huge. Copy-cats will proliferate, but this is what "competing currencies" are all about. Maybe Bitcoin gets smashed into dust, by a far superior iteration of the same concept? Nobody knows. But much the same could be said of internet search engines and websites in the early days, that simply got popular first, then grew an empire.

    A cool thing about the nature of cryptocurrencies is the inherent cost in producing it - giving miners an incentive to hold, and restrict supply. It's minimum value being the cost to mine it etc.
     
  57. Look at BTC from the perspective of the size trader looking to move illicit goods. It simply doesn't work at it's capacity constrained and you must initiate with FX in some capacity. I mention the illicit trans. as there is no reason for legit business to deal with something so constrained. The mkt potential is limited until the thing trades a serious notional figure (like $1k per unit) and it attracts interest along the way. The barrier to entry is insignificant which puts a cap on price.

    Imagine the vcap interest in a new BTC-type startup if the notional hits a billion. Yeah, they'll be entrenched, but if a corporate name comes in the BTC will lose 60% overnight.

    So no reason to transact until it reaches some capacity and that would breed massive competition.
     
  58. Sorry guys, I was actually trading.

    Well, how much does a Pokemon card (or any baseball card) cost to make? let's say 10 cents and we are pushing it. How much does it cost in the store? How much does it cost on Ebay later on? What ads value to that 10 cents making value?

    A baseball or pokemon card has basicly no intrinsic value itself, well, I guess you can cut cocaine with it. The value comes from the hype. Some baseball players are famous (aka hyped) most are not. Some Pokemon characters are valued high (for whatever reasons) most of them are not.

    Can they make more Pokemon cards? Sure. Were there a bunch around when they were released? yes. So it wasn't scarcity what made them valuable.

    You know what is rare? My shit. My poo. I produce on average one so that makes fairly scarce. But rarity itself doesn't always add value. My shit has value for me, but not for anybody else. Now if some of you guys are interested, I can be selling.... :)
     
  59. So, buy and hoard until $1000 a coin? :)
     
  60. Ha, but it was my intent, but the upside vola was so great that once I was in with a double I had to look seriously at getting out. I am sure there are thousands of techies out there who received BTC as payment for programming jobs when it was in the single digits.

    There is no store of value here.... 21MM reflects a nearly $3B mkt gain based upon hobbyists. It's not sustainable.

    I will be kicking myself if it hits $1k, but I don't want to be w/o a chair when the music stops.
     
  61. lol never thought i would see the day atticus buys some bitcoins.

    Yeah i never leave anything in mtgox, always transfer out asap. That shop is(was?) just a bunch of kids in the basement, their site got killed/hacked so many times in the past, you have no recourse if they take or lose your money/btc.

    The biggest obstacle by far for bitcoin is the lack of a legit exchange/market maker, if a real player like ib or oanda gets into it the value of bitcoin will skyrocket even more. But it's still too small for them to bother.

    Not too concerned about copycats like paypal going in, there is an inherent distrust and "barrier" for any corporate funded copycats. For opensource, nothing can compete with bitcoin without adding new features while maintaing the advantages of btc, if this train keeps going, we may ended up with a few much like gold/silver etc. so far btc by far followed by litecoin is it.
     
  62. Good that you brought this up, because we can discuss the money supply. Had the US dollar have a limit from 1930, it could NOT have functioned during the last few decades as a useful currency. Why? Because there are way more products and services and there wouldn't have been enough dollars to act as value exchanger.

    Sometimes more money is needed for a country and sometimes the money supply needs to be curtailed. That's what the Feds do. Now politicans can get into the easy money printing business, but it doesn't need to be so the case all the time.

    So people crying about fiat money don't get that it isn't the fiat nature of the money what is the problem, but unlimited and unnecessary printing.

    Being divisible doesn't make something less scarce.

    No, but if you think about Bitcoins as only 21 million (well 11) available, you are incorrect. 21 million anything indivisible couldn't function as a currency. But if you add a multiplier of 10 million, now we are talking.


    Gold is divisible. Does that mean gold isn't scarce?? Palladium, silver,

    Alright, you just gave me another argument. Is Bitcoin scarce? So how about Litecoin? Now the virtual currency market just got bigger by 400%. How about the Pekicoins I am going to release soon?

    Against the scarcity argument there is the possibility of other virtual currencies, and your precious little Bitcoin isn't that important or valuable anymore...

    In plain English, it doesn't have a monopoly on the virtual currency market but it does have competition, and the cost of entering the market with a new currency is incredibly low....
     
  63. Yeah, the BTC is crypto but these sites are a joke. There is a cottage industry of players hyping there tech for deposits. I will definitely get back in if someone produces an OTC bitcoin derivatives exchange. Like MPEx but with a decent front-end.
     
  64. Outside the West, currency and capital controls are the norm. Venezuela to West Africa. Even China, the Renminbi isn't easily convertible. Businessmen and well-to-do types dealing in the third and second world need reliable, easy convertibility and transfer. This is legitimate, necessary and beneficial. Take countries like Cyprus or Greece, undergoing a banking crisis that need to get their money out quick? Maybe if Bitcoin enjoyed this level of popularity a year ago, many Cyproits and Greeks who had little to do with their countries disastrous fiscal policies could have got their money out?

    Sure, big Corporations have no problem moving money through traditional banking channels. But then there's the little guy. The personal saver. What if I don't want to keep my money in the US (or Canada), or in a US bank, subject to all the spying, controls, and risk of serious "haircuts"? I'd like to store it elsewhere, thanks. Many people feel the same way. We want OUT of the system. I dont trust the system. Many people don't. With the ECB talking like Cyprus is the new model, there's reason to be concerned. I'm not saying Bitcoin is the go-to alternative. Obviously pm's, real estate and cash are better. But they can't be easily transported outside a country when it's time to leave. etc.
     
  65. I think you are underestimating the true potential of BTC. Using the term "hobbyists" I believe is somewhat foolish. I have been in this for about 2+ years now. I made a lot of mistakes too, like you just did selling your coins. The price could go down $40 tomorrow, if it does, hopefully you get back in. Personally, I think there is a chance of $250 this year.
     

  66. how about


    https://icbit.se/
     
  67. Wouldn't be the first time, but I can't hold something as intangible (w/o an implicit guarantee, coupon, etc) into a double sit on my hands. I'd def be back in at $80-90 provided no adverse news. Obviously we're all holding some sovereign currency, and therein lies the interest in BTC.

    Also, a corporate entry into the space is unlikely as there would be an assumption of manipulation, unless you're at a fixed exchange rate. No corporate interest in a floating digital currency. I think BTC is a great idea if it's fixed to EURUSD, but don't have any interest in it beyond a trade.
     
  68. It's Bitcoin World :D
     
  69. Pretty much your whole point is, "can't really use it good till it costs more." So, I'll sell now. :)

    If you can get instant BTC/USD transactions, I don't see why the price of BTC matters at all (from the sellers perspective).

    But you are right. You probably should have sold, really. I am in it for the long haul, but I can't afford to buy more than 1 BTC at a time anymore. I am priced out of the game, totally.
     
  70. look what i just found :D


    http://www.bit4x.com/


    quote from the site:

    Current Bitcoin exchange rates won't affect your trading limits. With the minimum deposit for opening a Live account, 20 BTC (200 dBTC) and 1:10 leverage you can trade up to 0.5 lot. With the same deposit and 1:100 leverage you can trade up to 5 lot and so on. We offer leverage ranging from 1:1 to 1:1000, but we strongly recommend below 1:50 for novice traders. You can change the leverage of your account at any time or open several accounts, if you are in need of more than one leverage option. Please check the FAQ for details.

    end/quote


    does that mean i can nearly double the leverage ? when trading with bitcoins ???

    i mean 0.5 lot with 20 BTC =2800 usd (1 btc = 140 usd) on a 1:10 lev.???
     
  71. The advantages of BTC are the decentralized, "hands off, f*ckers" nature of the beast. The downside is the fact that it isn't fiat. When it becomes an investment vehicle it loses a lot of utility, IMO. Trade gold if you want that position.

    I am not stating that you're dumb for staying in as I wish I had the stones to hold it. I just can't reconcile it as it becomes real money.
     
  72. haha looks like it
     
  73. So, some stats for the new guys:

    BTC current value = USD 120-140 per BTC

    Total number of BTC in circulation today = 11 million.

    So, total notional of BTC in circulation today = 1.2-1.5 billion

    BTC can be mined using idle computing power. So, if I understand correctly, it is possible to use your home computer in the night and instead of participating in SETI project, participate in running some software - which will earn you some BTC.

    My question - if I run my computer for 12 hours everyday for 1 month, how many BTC would accrue to me? I hope this question makes sense - if not please correct me.
     
  74. https://en.bitcoin.it/wiki/Comparison_of_mining_pools

    https://products.butterflylabs.com/homepage/1500gh-bitcoin-miner.html
     
  75. I don't really understand this point: what's the benefit of BTC's decentralized nature that's not solved (better) than a suitcase full of cash?

    To wit: anytime BTC interacts with the real world, it ceases to be decentralized. Financial transactions in BTC is subject to the same reporting rules as normal currencies (as is gold, cars, etc). And, importantly (not sure if you are aware of this) - BTC is NOT by design anonymous. All BTC transactions can be traced and tracked.

    So, in the real world, if BTC were widely used it would lose all these 'benefits'.

    Why are we trading around prime numbers again?
     
  76. After I looked into it, the time for amateur miners has come and gone. The total pool hashrate for bitcoin is approaching a Petahash. That's 1,000,000 times the size of a gigahash (the average amateur rig). There's only two companies that sell ASIC miners (GPUs that can process at gigahash level). One is back-ordered for months (Avalon). The other - Butterfly - has taken millions in preorders (some say 100 million), but haven't delivered a single rig. Their website recently changed today, with the 50 gigahash machine retailing for twice the price it was listed yesterday. Much of the community thinks it's scam. Realistically, without access to key hardware suppliers and real tech savvy to put it all together, this ship has sailed. The hardware retailers have no real incentive to sell to the public anyway. The Avalons are making their money back within a few weeks (at ~1800 purchase price). Why sell the hardware when you can run it yourself at a huge profit? Check out ebay. The Avalons sell for 20 grand (retail price 1800$).

    All those mining pools have access to ASIC chips/supercomputers/big IT guys, and they're not sharing. I was about to buy a couple miners yesterday, but there's absolutely zero supply on the market. It seems like great fun though. Wish I got into it sooner. It's really a game for techies.
     

  77. well i gues u can still jump on the Litecoin Train ? then ..
     
  78. I'd like too, but not sure that's possible either. The problem is the mining hardware. Nobody sells it. Butterfly will take orders, but they haven't delivered. They're talking huge production numbers (1500 units a month), but again, not a single delivery. LiteCoin was supposed to be GPU-neutral, favoring CPU power. But the community figured out a way to run the algo on GPU's - thus favoring ASIC chips again. Problem goes back to supply - Avalon (sold out) or Butterfly (no product).

    I downloaded all the software yesterday to see what kind of hashrate I could get on my quad core 2.4 Mhz machine - 5.5 Megahash/s. At that rate, at this difficulty, I could mine 3 dollars worth of Litecoin, a month..... lol And the difficulty is only going up.

    All about the hardware now...

    Try ASICMINER. It's shares in a professional mining consortium that pays dividends in bitcoin. I gotta look into it further. But for the average guy who wants to go long bitcoin revenue, it could be decent.
     
  79. I thought the Avalon stuff was building upon receipt of payment? Yeah, Butterfly is an outright scam.
     
  80. Thanks.

    Wiki link didn't make sense to me. There is a link in the wiki link. Clicking on it took me here that shows some graphs. Again didn't make sense to me what those different lines on the graph represent.

    http://eligius.st/~luke-jr/samples/800MH-3/

    I wanted to know a simple number: On my 2.4 GHz, core 2 duo 4 GM RAM machine, if I run it non-stop for 30 days 12 hours a day, how much money can I make.
     
  81. Useful information. On your machine, how much can you mine BitCoin in a month?

    I wonder if with Bitcoin, if you can mine it enough in dollar terms to even pay the electricity cost of running your machine?
     
  82. It's still at a year to cover your investment.
     
  83. Avalon outlined three batches. All were preordered months in advance. Batch#1 customers (ordered last fall), have begun to receive machines (5-6 months later). Batch#2 is sold out. Still under production? Conflicting reports on Batch#3 (600 units). Heard reports it took place last week and sold out in 30 mins. But on the Avalon site, its says they're opening preorders, at an undetermined time?

    Batch#3 machines are now only priced in Bitcoin = ~80 BTC per rig = 10K a machine. Bit of a jump.

    This is all small-scale, cottage industry production. Avalon has a facility, but it's very low capacity. I think they preordered to fund development costs with board designer, then bought the actual equipment to make the boards. It's not like Foxconn. One or two dyes, that put out I dunno. Maybe 50 boards a day? Maybe less? So even if you get in on Batch#3 (if there is a Batch#3), don't expect delivery until the end of 2013. Maybe 2014?
    http://launch.avalon-asics.com/
     
  84. 80 BTC a rig is worth it. If my coins weren't locked up in Mt. Gox I would order that today.
     
  85. There are Butterfly pre-orders on Ebay, so the possible scam is switched to the average Ebay seller.

    Anyhow here is what the guy says:

    http://www.ebay.com/itm/Butterfly-L...039?pt=LH_DefaultDomain_0&hash=item3a7fccd34f

    "This device as of this time would generate $832.25 a month!
    Bitcoin is currently valued at $86 per BTC. "

    So this machine mines almost 10 BTC per month. (probably not true) Well, why would anyone sell it for 1400$ or less if it can earn its price just in 1 month? Maybe the Butterfly Lab guys realized this and that's why there is no delivery.

    They are running the machines themselves, assuming they actually exist...

    ---------------------------

    Here is a quote from Reddit, the guy seems to know what he is talking about:

    "Butterfly labs is rising prices in response to bitcoin price increase. There is a risk however, and that is that the machine you order will not arrive for a long time. That is a problem. Let's assume it takes 10 months for a BFL machine to arrive so roughly 2014.

    It is possible the network will have about 1ph/s of power by the end of the year. So your 25gh/s machine would be able to capture about 0.05btc/day when you get it(factoring in slippage, invalid blocks, pool outages, what have you). So you're looking at a 200-day recovery cost to get your 10btc back.

    Let's assume that in the next 12 months (to 2015) the hashrate of the network goes up to 10ph/s. Modelling your profit in those 12 months under these conditions you will only recover 5btc in that year. It will take you a total of 10 years to recover 10btc.

    So by halving the hashrate and doubling the price and having eternal delivery rates (if at all) BFL is putting you at considerable risk of never ever seeing the BTCs you paid ever again."
     
  86. Basically, nothing. My machine is very similar. Dell Precision T3400. It calculated ~3 dollars worth of LTC a month. BTC difficulty is much higher. Even low gigahash rates don't earn much anymore (0.5 BTC/month). A machine without GPU's (CPU's crunch the blocks much slower), we're talking low megahash rates. Pennies....
     
  87. With ASICMINER? That's exactly right. About a year. I haven't done the math, but the outstanding shares are fixed (no dilution). Average dividend payout is around .02 (on the high side) to 0.003 (on the low side) BTC a week, per share (every Wednesday, I believe). I could be wrong, tho. Not sure if I read the schedule right. Pass through shares are trading at 0.77 BTC.

    https://btct.co/security/ASICMINER-PT
     
  88. Ya, I'd think about it. Batch#3 sold out last week tho. We just missed it. Rumor is Avalon is gunna take a break from production to retool or something. Who knows.
     
  89. What is the best place to buy BTC? I guess looking for the most trusted exchange. Mt.gox?
     
  90. Depends who you ask, but they offer the most liquidity. If you want to use paypal/visa or something you can buy them slightly cheaper at btc-e.com. You can get them through the bitpay option*
     
  91. Yeah, I want to use paypal/visa instead of depositing money to an exchange. Somewhat safer it seems.
     
  92. Yeah, of course it's another story at $50/200.
     
  93. Portability for one, but I agree with your arguments. My only interest arises out of trading the volatility in some OTC optionality along the lines of MPEx. I bot it solely bc of the dot-shot chart.
     
  94. A great example of Bitcoins value


    <iframe width="560" height="315" src="http://www.youtube.com/embed/Ilh5iUQIb4s" frameborder="0" allowfullscreen></iframe>
     
  95. In short, you are saying that it's a great illicit monetary tool. I agree, if bitcoin was a fairly stable and liquid currency, it would be a perfect tool for buying drugs, money laundering etc. Except, there is one problem - at one point or another, you have to pay for bitcoin using regular US currency. So, it would take a very simple step for the Big Brother to follow your "private and safe" transaction - a reporting requirement for anyone who wants to purchase or sell bitcoin. It would make bitcoin at more disadvantage to even gold and precious stones - at least I can pay cash for a batch of uncut diamonds and stuff 'em up my ass before I am flying to Uruguay.
     

  96. Try localbitcoins.com

    Don't bother stuffing anything else in your pooper ;)
     
  97. Here is the paper version:

    [​IMG]
     
  98. Haha. Cash and carry
     
  99. Interesting Bitcoin/Napster parallel from Reddit, I have to agree with it:

    " My sense is that Bitcoin is the Napster of cryptocurrencies, the proof-of-concept that changes reality, but doesn't stay on top forever, because future iterations improve on its flaws.

    "Flaws like what?"

    Flaws like Bitcoin addresses being long strings of random characters that can't be spoken or easily remembered, or a blockchain that takes far too long to download, or confirmations that take far too long to be confirmed, or transaction limits that don't scale well, or huge amounts of mining CPU power wasted on what is essentially busywork, and so on.

    I know there are a lot people emotionally invested in Bitcoin who will defend it against any of these criticisms, but the fact is that someday, when a new cryptocurrency comes along that addresses some or all of them well, Bitcoin will begin to sunset. I would love to see more people talking about what this future cryptocurrency should look like, and working to organize it.

    I enjoy reading all the supportive posts here, and everyone involved in making Bitcoin a success has a lot to crow about, but Napster wasn't the be-all, end-all of P2P file distribution, and Bitcoin won't be the be-all, end-all cryptocurrency. A little more skepticism and a little more impatience with its flaws would suit the community better, IMO."

    Someone pointed out that another analogy would be better:

    "Napster was also centralized. e-Gold was Napster, bitcoin is bittorrent."

    But I guess the point of the first opinion is that not always the first famous invention survives for the long run. And if it is a quasi-legal invention (Napster,Megaupload) they are the first and biggest target for a government action...
     


  100. Who is this "we" shit?

    I read this today:

    "Blackstone, a leading investment firm, has spent $3.5 billion buying single-family homes in nine markets in the past year and is expected to buy another 15,000 units this year. Other investment firms active in buying up houses are Colony Capital LLC and Two Harbors Investment Corp. As soon as they conclude prices have moved enough, they’ll be gone as fast as they came,”


    I'm now letting them have it. My partner in Vegas said 2 houses sold last week (one in 7 days- another in less than 2 weeks). Now everyone knows Vegas is hot and I am not referring to the weather LOL.

    Just trying to show another way to take advantage of a bubble with trading profits with low risk/high reward...for perhaps those that do give a shit and are looking for high returns next time.

    I've come here for more years than I care to admit but never had the urge to post until recently, (and you know what they say about no good deed goes unpunished)? So, if I log out I'm not tempted to respond- has nothing to do with being old. You are old when you can't get it up anymore.

    As far as Bitcoin- Drudge's headline yesterday may be sufficient...

    Woody
     
  101. Anybody who hates offtopic material.You keep bringing up RE as an alternative to trading or Bitcoin using. It is not. I can start trading with a 5K account, I can buy BTC with an account of few hundred bucks. Can I do that in RE?

    Of course not, so stop talking about it, it is irrelevant and offtopic. And being overly detailed is not helping either, who cares about the details??? You made money in RE, that is fully noted, we are glad about it, now let's get back to BTC.

    Also if you want to talk about your son's bond trading, that is more interesting, but still offtopic in this thread....
     
  102. I was reading up on e-gold (company was closed down for operation of an unlicensed money transmitting business) when it occured to me. You need to be licensed for being able to transfer money??? That's is not what all Bitcoin users are doing?

    http://www.law.cornell.edu/uscode/text/18/1960

    Prohibition of unlicensed money transmitting businesses

    "(a) Whoever knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money transmitting business, shall be fined in accordance with this title or imprisoned not more than 5 years, or both."

    "(C) otherwise involves the transportation or transmission of funds that are known to the defendant to have been derived from a criminal offense or are intended to be used to promote or support unlawful activity;
    (2) the term “money transmitting” includes transferring funds on behalf of the public by any and all means including but not limited to transfers within this country or to locations abroad by wire, check, draft, facsimile, or courier "

    Sounds like the DoJ could be knocking on the door in any minute...

    Somebody has to make this shit up:

    "In July 2008, the brother of footballer Joseph Yobo was kidnapped in Nigeria. The kidnappers demanded a ransom of $10,000 paid through e-gold."

    If you think about it, it is genius. No more drop off locations in the woods for the kidnapped, just send me Bitcoins, here is the address, it is secretive!!!

    Anyhow, other Bitcoin related parallels:

    "e-gold has been perceived by the United States government as the medium of choice for many online con-artists, with pyramid schemes and high-yield investment programs ("HYIPs") commonplace. This has been blamed on e-gold's policy of irreversible transactions. "

    "The essence of the allegations in the indictment is twofold: (1) e-gold is an unlicensed money transmitting entity as defined by United States Code;[16] and (2) e-gold was a de facto means of moving money from illegal activities to wit: high-yield investment programs which are Ponzi scams, credit card and identity fraud sites and retailers of child pornography."
     
  103. Is it even legal to create private currency in competition with the dollar? Someone please clarify. Many have tried to do this before and they are now living their lives on the run.

    United States Private Dollars
    Angel Cruz, founder of United States Private Dollars, "fugitive...to face a maximum possible sentence of up to 185 years in federal prison"
    http://en.wikipedia.org/wiki/Private_currency#United_States_Private_Dollars

    Liberty dollars
    Bernard von NotHaus, Liberty dollar creator, "awaits his fate behind bars"
    http://www.nytimes.com/2012/10/25/u...his-fate-behind-bars.html?pagewanted=all&_r=0

    Does anyone really think it is in the US Government's interest for BitCoin to be a success?

    At best the Feds will ignore BitCoin whilst it is small scale and possibly monitor transactions to get a handle on money laundering, terrorist activity etc. I like Pekelo's theory but that sounds far too clever and forward thinking for a government to pull off.

    Most likely when it suits the Feds they will shut BitCoin down overnight and BitCoins will lose all value overnight. They might even get a list of anyone who ever traded in BitCoins so they can investigate individual's personal situation and tax reporting. They'll go after the founders like they went after Julian Assange. Any kind of anti terrorist or money laundering law could be used to shut the operation down, for a period of time at least, most likely indefinitely.

    I must admit I did consider investing a tiny amount in BitCoin a couple of years ago to sell to some greater fool at a later stage, but then I came to my senses. Maybe I am the fool for missing out.
     
  104. This is like the blueprint what will happen to virtual currencies:

    http://en.wikipedia.org/wiki/Digital_gold_currency

    Read the whole thing, the parallels are astounding....

    Not to mention, the idea of gold backed digital currency is somehow sounds better than bitcoin mining, backed by hours and hours of computing power wasted... (although your room is nice warm and cozy)
     
  105. "The prosecutor overseeing his case accused him (Bernard von NotHaus, Liberty Dollar creator) of 'domestic terrorism' for using them (Liberty Dollars) to undermine the government."

    "Mr. von NotHaus claims he never meant the Liberty Dollar to be used as legal tender. He says he created it as 'a private voluntary currency' for those conducting business outside the government’s purview."

    "In his own defense, Mr. von NotHaus testified about a 'philanthropic mission' to combat devaluation with a currency based on precious metals and asserted that he was not involved in 'a radical armed offense against the government or their money.' "

    "...It was, of course, to no avail; and in 2011, a jury found him guilty after a 90-minute deliberation."
    ---

    The BitCoin geeks will soon be living in prison or in exile if this thing starts getting more coverage on Bloomberg TV.
     
  106. I am not necessary against virtual currencies, but I have 3 grievances with Bitcoin, what is usually not mentioned:

    1. The original very uneven distribution of the coins. So if it is a currency, why don't we spread it out evenly among people, or would give out as a reward for doing something good. (like blood donation) Instead we have a very few people in the beginning who gets the easy coins mined and they just wait for the rest of the people later to show up and making them rich.

    This is similar when a new company CEO keeps the majority of the stocks, and let the little guys later coming in making his stocks' value skyrocket. Now if it had been widely announced right from the beginning (and an obscure message board is not a world wide announcement) so people have the choice to decide and participate right from the start, then it would be different.

    2. The money supply as it is designed. Generally that is not how money supply works. Bitcoin is designed to be released with an ever slowing rate. But what if the needs of the users is different? Any currency's task is to be an exchange tool for products and services without much change over time. If the economy is growing, more money is needed, if it is contracting, the money supply needs to be curtailed. (in a perfect world)
    This function is not built into the Bitcoin whatsoever. They can't release the coins much faster than it is designed and there is no way of cutting back on the supply either....

    3. Every currency during its history suffers volume loss due to loss of the physical money/coins. Ship sunk with gold on it? Well, it was lost for a few hundred years at least. Your HD died? The bitcoins are gone. More users are there, the more natural loss will occur. This is not addressed in the design...
    (I think bitcoins can be lost by sending it to the wrong address)
     
  107. I could be mistaken, but I thought there was a video of one of the original designers of bitcoin saying he had already sold all of his bitcoins in the $2 range. I'm not sure you can say for a fact that the original miners ever thought the bitcoin value would be this high.
     
  108. It is not really the valuation, but the fact that the early birds get the easy worms. If it is a currency for the masses, why a small group of people get to hold a large chunk of the currency, based on being first, not necessary on merit or designed distribution?
    (unless you call being first a merit, but it is also valid for Ponzis)

    There is a program where you can check the usage (history of coins basicly), and a huge chunk of the early coins were never used or transfered. I would love to know the reason for that.
     
  109. I wholeheartedly agree. It's not "Bitcoin" or "Litecoin"...but the concept. A bankless currency. And this concept WORKS:

    55 million USD changed hands via Bitcoin yesterday (24 hour period).

    Rolling average over the past month is 20 Million USD, a day.
    http://blockchain.info/charts/estimated-transaction-volume-usd

    In some cases, counterparties are transacting millions of dollars, via Bitcoin, in a single transaction....
    http://blockchain.info/largest-recent-transactions

    This is revolutionary.
     
  110. This is kind of silly, isn't it? There was currency before there were banks. And they weren't all metal based either (sea shell money for example: http://en.wikipedia.org/wiki/Shell_money) - or, better yet, tuna cans and cigarettes in prison today .

    Bankless currency as an revolution is just ignorant of monetary history.

     
  111. Yea, just like 1776 wasn't a revolution because the Greeks and Romans practiced democracy ~2000 years earlier.....

    Are you that blind??
     
  112. Surprisingly there is a demand for the supply of mathematically generated units.
     
  113. The romans... practiced democracy? This speaks exactly to your ignorance of history in general (see http://en.wikipedia.org/wiki/Democratic_elements_of_Roman_Republic to see how limiting it was and far from democracy in the 1776 sense; And might I remind you that the romans then spent about a thousand years after the republican era in its imperial era?).

    In any case, you fail to address the fact that bankless currencies exist even TODAY - in prisons, in informal bartering, and all the other mundane corners of our economic lives.
     
  114. Split hairs much? Technically, America is a republic too. Get over yourself.

    Tuna cans and honey buns aren't swapping hands in prison at the tune of 55 Million USD a day :D :D
     
  115. You mean digital fiat? :D
     
  116. I'm just calling out the lack of intellectual content in your drivel.

    If volume is a measure of legitimacy, then tulips were a legit investment vehicle too, no?

    Finally, those 55MM transaction volume were mostly speculative trades. How much of it is economic transactions? A currency whose value is primarily a speculative vehicle is not a useful currency.

    Please, go read a book on monetary history.
     
  117. Please STFU already. You have no concept of whats going on here.

    Likening an episode of OZ to 55 million a day changing hands proves you were dropped on your head as a child.

    Go read a book on tulip bulbs and get back to us
     
  118. No, I'm likening it to the tulip bubble. The tuna can thing is to show you that 'bankless currency' is not in itself novel.

    How about you (1) address the fact that most of the volume is speculative trades rather than economic transactions, and (2) how this is not like the tulip bubble.

    I'm sorry - how old are you? You don't seem able focus very well.
     

  119. First I would like to acknowledge that you are one of the most intelligent individuals here and I suspect a successful person as well.

    Apparently I am off topic then. I was referring to bubbles which is what I believe Bit coin is/will become especially based on the rabid responses on the subject. No one knows better than me the desire to get something for nothing or without working for it.

    Btw I was told to keep the particulars of his bond trading to myself.

    Woody
     
  120. You don't understand the gravity of the situation.

    Keynesian monetary principles dominate the world, via Central Banking and fiat fractional reserve credit issuance. With this, comes an entire swath of political, industrial and financial corruption, and currency debasement (read: theft), all because it's easy for centralized cartels (private and Central banks) to print money and control the rate of interest.

    YOU may like this system and ignore the destructive role it's had on the world. But I (and many others), do not.

    This whole debate centers on the philosophical principles of individual liberty - who can issue the peoples money, who receives the chief benefit of issuing the peoples money, and who gets to tell the people who, what, where, why, when and how they can spend their own money. Financial liberty is one the bedrocks to the entire sphere of individual liberty, and with it, the economic health of the State and political freedom. Our situation today, is quickly approaching financial and political tyranny (they go hand in hand). If you can't understand, then I feel very sorry for you.
     
  121. Tulip bubble is not a bad analogy and for a while I felt the same way. After doing more research I changed my mind.

    I think bitcoin's appeal is that it is the first truly global currency with no particular owner or "backer". It can't be manipulated to fit someone's economic position and thus isn't subject to regional inflationary/deflationary pressures.

    It can be traded and it can certainly fluctuate (and do so drastically) because of that, but as the demand expands, the liquidity will increase (the bitcoin is infinitely fractional so even though there is a capped supply, you can own 0.0001 of a coin) and stabilize the price.

    Now, the coin is readily convertible into any common currency and as such it is believed to contain real value. It is not unlike gold, but is better as it is far more manageable and readily available for trading for real goods (either via conversion or outright payments)

    I have to say, maybe bitcoin, being one implementation of a global digital currency isn't here to stay, but the concept is truly groundbreaking and will have traction. I think the Fed should heed this new development.

    As far as trading vs transactional volume is concerned as far as being a defining characteristic of a currency, I'd argue that the USD is traded far more than actually used to buy goods. Think about all the money shoveled among the Fed and the banks on things like repos, etc. on a nightly basis.

    /Wulfrede
     
  122. Well said. After trade and capital flows are deducted, some 95%+ of FX volumes are speculative (and hedging). Boohoo. Maybe fiat currencies are the next bubble (relative to Bitcoin)?

    I'd like to see the next generation of crypto-currencies mimic our current elastic system of credit issuance, except with loan interest primarily accruing to holders of that currency (the people), instead of the lenders ("Banks"). There's no doubt the advent of fiat fueled incredible commercial growth during colonization and the industrial revolution. If that concept could somehow be transmitted over to a crypto currency where the people receive the primary benefit from the use of their own money via debasement (loans) instead of lenders, then I think we'd have something very special.

    As it stands now, it appears Bitcoin and Litecoin are designed to be the "precious metals" of digital currencies, because their supply is capped (sorry Pekeo). I think that was done on purpose, perhaps because Nakamoto envisioned future competition, and wanted the first generation to stand the test of time (digitally speaking). That said, the concept is wonderful and it's time to overthrow these shithead money masters that have ruled America for the past 100 years. Europe for way longer. People don't get our debt-based money system is like a gigantic albatross around the neck of the economy. Lugging it around sucks a tremendous amount of energy from the people that accrues to guess who. Time to throw these mofos out in the dark.

    The beauty about Bitcoin, is it sidesteps the political route to monetary revolution (the people are largely too dumb, ignorant and apathetic to learn about the evils of debt-based money), and instead, gives them an alternative currency to the US Dollar, which in many respects, is better. When the market uses that, as opposed to fiat, it kills the bankers. It's genius.
     
  123. Same for tulips right? No government 'owned' the tulips. You can grow it in your yard.

    It seems to me that the bitcoin is backed by emotions (and hatred for the current state of the world) - much like achilles' outburst there.

    I suspect people like achilles (and maybe you) do understand that there's little substance to bitcoin. But it offers them some feeling over control over what they see as a hopelessly world: sort of joining a cult. So they get very emotional invested in it. And when they can't defend the economics of it, they fall back to the political arguments, which are even more hollow.

    I mean, if the world's govt falls apart because of monetary policy lunacy, do you really really think bitcoins will have ANY value whatsoever? In that case, we are back to guns, ammos, and cans of tuna fish (now there's a great currency).
     
  124. You are a very stupid, short-sighted person. Well done.

    The value of cryptocurrency is all relative. Just like every other product on the face of the earth.
     
  125. Let me guess, you are one of the chosen few who sees the light?

    This is a meaningless statement that address exactly zero of what I said. It does not preclude the fact that bitcoin might be in a speculative bubble, or that bitcoin has none of the benefits you tout.

    You really really really really just want to believe that bitcoin allows you to protest the current state of the world, right?
     
  126. But that's the thing. You can't grow bitcoins in your back yward. Sure you can mine them, but the cost is prohibitive and there are only so many. You can grow tulips much easier.

    Tulips eventually shrivel and die. They are hard to transport. You can't own fractions of them. And again, anyone can grow one with a fairly trivial effort.

    Emotions certainly play a role in bitcoin. I think it is very exciting. But I doubt they are the main driving factor. Can bitcoin drop back to $10? Lower? Maybe. But the price doesn't take away from what bitcoin represents. It is a store of exchangeable value. It doesn't perish, it is easily transportable and no, you can't easily make more.

    Finally, I highly doubt bitcoin (or gold) is an intended hedge for the coming apocalypse. There is no actual hedge in place. If there was a real worry we'd be seeing tuna cans putting on a major rally.

    /Wulfrede
     
  127. No, no. Clearly, only you see the light....You've seen it all and done it all..... We get it... :D

    Lets assume everything you said was true, for a moment. One would think transactional volume in Bitcoin would be a few thousand a day, max? Not tens of millions a day (for almost a year)? Afterall, only delusional hippy pot smokers living in their moms basement would be trading it, right? So why are hundreds of thousands being cleared, a few times a minute? Is it mostly just speculation? Like FOREX?

    There's no real understanding in your posts. Only the baseless insistence it's a bubble with no value. Problem is, it does have value. You just don't understand it. Sorry.
     
  128. Thanks dude - this has been incredibly education in terms of the psychology of a bubble. I mean, people wonder all the time how the tulip bubble ever got to where it is: your posts (and emotions) sort of really hits home.

    Anyway, maybe I'll be prove wrong in my views. I'll be happy to eat dirt when that happens.

     
  129. Maybe it won't be Bitcoin. Rather, 'Bitcoin' X.0

    Either way, open-source, crypto banking has real traction. I suggest doing more research on the matter.

    Just watch the latest transactions for awhile. It's pretty amazing:

    http://blockchain.info/
     
  130. See, I like the concept as such. My only worry is and it is a very big worry - what if washington passes a legislation outlawing it. Then as has been said - true use of bitcoin would be left only in illegal activities. Mainstream (Talking about milllions of people) will not accept it for transaction purposes.

    You have made your point very well about the good things that the crypto currency can do and I agree. My main concern is above.
     
  131. a lot of money laundering in Bitcoins.
     
  132. A lot of money laundering in $20 and $100 greenbacks.
     
  133. I agree, to an extent. I'm learning more as we go. Specifically, regulatory and legal efforts afoot to squash crypto-currencies. From what I can tell, it's difficult, if not impossible, to outlaw any one particular digital currency, like Bitcoin or Litecoin. Reason being, at it's heart, every cryptocurrency has no official name or title afixed to each unit of account. In actuality, each currency unit is just a string of random numeric digits, stored on a computer, being sent between two people that agree on it's value. It's no more as if you and I agreed a rock we picked up off the ground is worth 50 dollars, and we respect that agreement. The agreement of something holding value - which is simply an idea (outlawing ideas....) - cannot be outlawed. Nor can the random string of digits that represents that value be outlawed....They are just numbers. How can we make numbers illegal?

    The second problem, is the distributed nature of the network. Each "node" represents one (or many) computers, who are parties to the transaction, or maintain the network. Like Napster, they can attempt to go after nodes, one-by-one, but there's literally millions on the network. As bitcoin grows, instead of millions on the network, there are tens of millions etc. Further, it's extremely difficult - if not impossible - to associate any IP address with a pgp key stored on the blockchain. It doesn't do that, from what I understand.

    The other angle, instead of direct prosecution, is vilification. You're right. I think that's the real worry. If the DOJ or whoever can lean on big name internet retailers/banks/money transfer houses to not accept bitcoin, and sort of spin it like the currency of choice for pedophiles and terrorists, then ya. There's a problem.

    But here's the rebuttal to all this. Napster back in the day, was one of the first of it's kind, commercially. The music industry leaned on the DOJ and got that shutdown. But then came Limewire, and Kaaza, which they tried to shut down with mixed success. Now Bittorrent is alive and well. Lesson is - with distributed networks, the Feds can't shut it down. The network is just so vast (hundreds of millions of users), they can't even go after a fraction of the people.... The Government simply doesn't have the resources (or capacity) to identify who is doing what, and fund all the lawsuits. So from the legal angle, theres not much of a deterrent.

    This is why Bitcoin (and others) are designed to be decentralized. Remember Von Not Hous (Liberty Dollar) and e-gold? They enjoyed wild popularity but they got shut down because they were centralized. The FEDs can pick off any organization that's centralized. But grass-roots, distributed networks, there's no way. Interesting, that the Federal Prosecutor made the argument that Von Not Hous was engaged in financial terrorism because he offered a product that undermine the value of the US Dollar. See, this is big, big shit we're talking about here, and the Government is like a hawk on this stuff.

    That said, the Central Banks and their Government lackeys of the world will go to war with Bitcoin if it continues to skyrocket. That's guaranteed. The ability to keep us all on the reservation, so to speak, using US dollars that they can easily print, and thus steal our savings, to fund their own nefarious wars and crap to keep them elected and money rolling in, is the basis of this entire oligarchical system. So it's gonna be a war. Very fascinating to watch.

    But the amazing part of all this, and Gip3 is right, this is an age old battle. The American colonies finally rebelled against the British largely because of gun control and King George insisted the colonies use debt-backed english notes.....a tax.... It's financial warfare. Anyway, fascinating. The age-old fight against the bankers has gone digital.
     
  134. Thanks for a well thought out post!
    This decentralized aspect is a very strong point of bitcoin or any crccy like that.

    Pekelo and others - To what extent do you think this decentralized nature of bitcoin/crccys will make it more/exponentially difficult for government to control bitcoins proliferation?

    One highly hypothetical scenario that might happen is if Russia or some other country starts supporting bitcoins. Well in that case, value will skyrocket in a day.
     
  135. LOL

    I love when people say BTC is only good for money laundering etc.

    Yeah, and no one launders money in US Dollars? Jesus Christ..
     
  136. It is pretty much impossible to stop BTC. You can try to call it "illegal" somehow, but it is pretty much impossible to contain now that the cat is out of the bag.
     

  137. US Dollars are used in legitimate businesses as well. No so if bitcoins become illegal to conduct business with.
     
  138. It's not illegal. So what's the point?
     
  139. When I tried to check the Bitcoin prices:

    [​IMG]
     
  140. In general the litany of standard criticisms of BTC fall under the the umbrella of FUD.
     
  141. Stop.

    That's your stupidity right there. Bitcoins is used for placement and layering. It is the mechanism which allows this. US dollars is the objective of money laundering.

    These are two different concepts.
    Dumbfuck.
     
  142. It's not illegal now because the market is too small yet. Eventually the government would want to take charge. If it can not be regulated then it might well be banned.
     
  143. As discussed, because of its decentralized nature, it is difficult to prosecute people and completely stop its use.

    However, if US govt outlaws bitcoins, no online website will accept it.

    The point where bitcoins differ from P2P sharing like bittorrent is that using bittorrent people transfer files from one computer to another and use it for personal use.

    In case of bitcoins, if it becomes outlawed, it will be extremely easy for police to prosecute websites which continue to accept bitcoins. Online websites are afterall real businesses with TAXID numbers, their addresses, their promoters etc. Which US based online business will take the risk to accept bitcoins if Washington outlaws it. This is a big risk. Don't you think so?

    Agreed, businesses outside US might continue to accept bitcoins but then it will shrink the user base of bitcoins dramatically. Unless and until some other sovereign like Russia comes in and says they are going to support trade in Bitcoins. But I would venture to say that instead of accepting bitcoins, chances are they will launch their own crccy.
     
  144. Good luck with all that. Everywhere is basically AML/KYC compliant unless you buy from local people. I would say 85% of the community transacts with AML/KYC regulations. There is nothing new here.
     
  145. There's a cyberpunk novel called "A Lodging of Wayfaring Men" that parallels what's going on with Bitcoin. It's not the best novel I've read but the author's plot involves the invention of a crypto currency that's gradually adopted by ordinary people. The gubment of course sees it as a danger and tries to stop it but it's too late by the time they start cracking heads.
     
  146. Achilles made a key point: BT is decentralized. Someone else followed up with: the cat is out of the bag.

    Yes.

    Just like with bittorrent, you can't shut it down. The concept of decentralization is ... well, if you really think about it, awesome.

    You can chase it, prosecute it, vilify it, call it the spawn of Satan, but in the end it will still exist. Somewhere. And actually, everywhere.

    This is why I think the Fed needs to pay attention. Not so as to kill it, but to have contingencies to deal with it once it becomes a viable contender. And that, my friends, I have no doubt about.

    /Wulfrede
     
  147. How does the Government ban Bitcoins, or any cryptocurrency, for that matter? How does the Government define a bitcoin, for legal purposes?
     
  148. You've seen the light :D

    I'm off to the gym for a bit, guys. Check out some of the largest transactions recorded over the past 10 hours.... really something.....

    http://blockchain.info/largest-recent-transactions
     
  149. All they can do to "ban" BTC is to shut down the exchanges and stores that accept them. That only stops the centralized businesses that they can lay their jack boots on.

    There's no way to stop individuals from exchanging BTC for USD or goods or services in face to face cash transactions.
     
  150. True, but aren't the advantages of bitcoin secrecy and anonymity? Not to mention easy transfer?

    I know, if I ever get into the kidnapping (or any blackmailing) business I will LOVE bitcoins. Just think about it, what is the biggest challenge in those criminal acts? The exchange of money. Bitcoin nicely solved that...

    By the way I love nobody addressed my 3 points earlier....
     
  151. Simple. Govt says its illegal to transact in any crccy. They define crccy in some way. So, any business or any bank or any website who does exchange bitcoins with you can be prosecuted and sent to jail for say 5 years.

    In this situation, yes you will be able to send me your bitcoins over the internet but i won't have much use for it and vice versa.

    Many emerging markets and other societies outside of Western Europe and US impose capital controls. It is illegal for most people in these countries to buy or sell their own currencies say against US dollar. Banks refuse to do business with you if you want to buy/sell currencies.
     
  152. Well, if they really want, they can start to use undercover cops. You know, just how they use them against prostitution or drug buying. If you get 6 months jailtime for using bitcoin, you might think twice...

    ----------------------------

    Litecoin will be traded on MT.Gox in 3 weeks....
     
  153. Well sure they'll be busting an individual every now and then. But they can't stop the whole thing, especially if it turns us into a nation of felons.

    Think of income taxes in Italy. Nobody pays income taxes and it's unenforceable beause nobody pays attention to the occasional high-profile bust.
     
  154. I'm looking into this, and FinCen admitted crccy is nearly impossible to outlaw because it's not easily definable. How would they define a crccy, exactly? I think once you think about it, from a legal standpoint, it's not so simple, at all.


    Which is exactly why crccy's are so wonderful - they liberate billions from currencies that are printed into the toilet.
     
  155. Oh, it is very simple. Whatever the US government says, it goes. If they tell to the New Zealand authorities to raid Kim Dotcom's house and shut down his business and bank accounts, the kiwis jump right away.

    The government's muscle is more important then their legal ability or moral standards. Have we found the Iraqi WMDs yet?
    Oh, about definitions. Once they throw in the magic word "terrorism" they can and will do whatever they want...

    Right now it is illegal to make a competing currency to the US dollar. It is also illegal to operate a money trafficking business without license. There you go, 2 existing laws that bitcoin users break.... they don't even need to rewrtite the legal code....

    Just imagine tomorrow there is terrorist cell discovered living in Kansas. They also discover that they have been funded using bitcoins sent from wherever. That would be the end of $140 BTC...
     
  156. [cough]marihuana[cough]

    I think you are a little late worrying about that. :)

    ------------------------------

    Legal question to ponder: If someone steals my bitcoins and I know who did it, will authorities care or do anything? What was exactly stolen??

    --------------------------------

    " And then 100 FBI agents get a few thousand Bitcoins each, buy something from US based Bitcoin merchants and parade them out on national TV for the entire nation to see why Bitcoin acceptance results in a $250,000 fine and 5 years in prison. In other words, Bitcoin could very well become a victim of its own success as the US government would never allow another form of money to detract from public purpose due to high levels of monetary competition. "

    http://www.businessinsider.com/is-bitcoin-money-2013-4
     
  157. You just answered your own question. That's why the Government can't outlaw it. It's not a physical currency. It's random digits stored on a computer, that mean something, to some people. It's fluff. Nothing. But something.

    At this point, I'll more research. We're entering the realm of conjecture now.
     
  158. What the guberment can do is threaten all parties/exchanges/companies that take bitcoin as a payment with fraud and jail time or else.
     
  159. I bet right away there are at least 5-10 Russian/Chinese code writer groups working on how to hack, modify, steal from the system. I bet in the next 6 weeks we are going to see a hacking scandal or a huge thefts of one of the exchanges. When BC was under $10, the incentive wasn't there. Now with the growing value....

    Then when you go to the police; Hey, they just stole my 10K Bitcoins, the government is just going to smile and say: see, I told you so....

    --------------------------

    What about natural loss I mentioned earlier? Let's say an early miner dies with 500K coins and nobody knows where he kept them. That is 5% of the current coinsupply lost forever...
     
  160. There is a thread somewhere detailing just this. I think it is estimated that around 250,000 coins are lost forever? I may be off by around 100k though, hard to remember exactly what the total was.

    GL "hacking" bitcoin, whatever that means. Exchanges, yes, that do not utilize cold storage.
     
  161. Depletion is not a problem. Digital currency is just a mathematical algorithm. So it should not be difficult to replace one digital currency with another I think.
     
  162. A currency fails to fulfill its role as a currency if its going to be replaced by another so easily.
     
  163. Sure it is.

    1. You don't even know it is missing. The only thing you see is that the coins are not trading, but that doesn't necessary mean they are lost, maybe they are just horded.
    2. Who has the authority to issue new coins for the lost ones (if can be proven)? It is decentralized!
    3. This could go on forever, depleting the whole supply....
     
  164. Bitcoin.

    One word.

    Intrade.
     
  165. You don't know it. The only thing you see that they get too expensive.
     
  166. Bitcoin

    One word.

    Decentralized.
     
  167. Time will tell. I am not jumping on this bandwagon yet, but I welcome this as a potentially useful idea.
     
  168. Weekend reader:

    Quantitative Analysis of the Full Bitcoin Transaction Graph

    http://eprint.iacr.org/2012/584.pdf

    Summary: This analysis was done using Bitcoin usage up to 2112 May. There were 9 million BTCs created up to that point, and about 3/4th of them were never been used

    In plain English, only 2 million BTCs were responsible for the price movements of the last 3 years, since creation. So saving/hording is/can be a serious problem.

    Here is what I don't get. Once BTC's value reached higher values (let's say above a dollar), and people saw that this can be used for longer term gains, that explains hording. But why would the early adopters hord and save instead of trying to circulate the coins like any good currency should do? So was their goal enriching themselves or were they trying to create a popular and widely used new currency? To me hording shows the "let's get rich by making this a Ponzi" idea.

    If I create a new system altruisticly (or as an experience) and want to get people to adopt it, I would throw the coins all around. Give 500 to this, 2000 to that. After all if I am (and/or a few friends of mine) the only owner, the coins are worthless. You have to hype them and introduce them to others and make them except it to gain value.

    Now there could be another explanation, that a huge amount of coinage were lost, due to forgetfullness and uninterest. Somebody gave me 10K coins but I never thought of it anything and I forgot where they are or the password. That is a possibility too.

    But I tend to question the motivations of any very early adopter who is sitting on 50K+ coins never used. Did you create a useful new currency for everyone, or did you just enrich yourself?
     
  169. In the early days bitcoins were worthless as you can assume, so there was not much interest about them as an store of value. For instance there is the now infamous 10000 BTC pizza:

    https://bitcointalk.org/index.php?topic=137.0

    Also, in the early days, it was very simple to "mine" the bitcoins. You could get several thousand per week with the right equipment. The abundance made it look like a nice crypto toy so I guess many early adopters didn't take it seriously and most of those coins are lost in one way or another.

    Although I would agree that whoever Satoshi Nakamoto is (a single person, or a group) must be sitting in a nice pile of BTC probably numbered in the millions.
     
  170. For Atticus or any serious trader with the dough, here is a Romanian company where you can trade stocks, futures and options in BTC:

    http://mpex.co/

    The set up fee is steep (30 BTC and non-changing), but the owner says it keeps out the hobbyists and the company is doing fine right now. January report:

    http://polimedia.us/trilema/2013/mpoe-january-2013-statement/

    Discussion of the whole company:

    http://www.loper-os.org/

    The owner's response to it:

    http://polimedia.us/trilema/2013/in-which-we-discuss-datskovskiys-discussion-of-mpex/
     
  171. I've mentioned MPEx in the past. I don't know anything about the co but am interested in trading vola in BTC. I didn't know about the "loper-os" link.
     
  172. There is no fiscal back up, which means it is more dangerous than fiat.
     
  173. Thought about it this morning....

    Could the US Gov mandate all commercial transactions be settled *only* in USD? Thereby outlawing any alternatives?

    That's an elegant solution, for the evil-doers.
     
  174. Wouldn't that prohibit transactions in foreign currencies or am I misinterpreting your question? The US tax law already handles all types of foreign currency transactions, and bitcoins would full under that law. So all transactions, at the time of the transaction, are virtually converted to US dollars at the current spot rate for cost basis and gross sales calculations.
     
  175. I first thought MPex traded BTC futures, but no, it trades in BTC.

    The loper-os website is really interesting, he has 5 articles about Bitcoin. He also thinks the same as I do, that maybe Bitcoin is the creation of the NSA as a honey pot... He thinks that a huge dump of early bitcoins could kill the whole idea, I think it would be actually good in the long run, because the distribution would be more even, more new comers could enter at a lower price and more coins were in circulation, instead of being horded...
     
  176. I am aware of both facts. So why didn't they distribute BTC widely? It was worthless anyway, but to make it work, they needed more users. So they should have donated to pretty much anyone or at least people who did some good deed.

    I started to think of Bitcoin as a company. Think of Facebook. You start a website so a small group of your friends can communicate with each other and share pictures. What is the value? Not so much. Make it 200 million people communicating, and you are a billionaire.

    So the starters of Bitcoin could be the "venture capitalists" who put time, codewriting and maybe some money into the project, kept most of the coins, and now they are reaping the benefits...

    But the strange thing is that they are STILL not cashing out. They are either very patient investors or there is something else going on.

    Reasons for the early coins never been used:

    1. Early adopters are experts at investing and they know that the current price is still pocket change, more to come.
    2. Most of those coins have been lost.
    3. The creators were government employees and they are not allowed to use/benefit from basicly what is government property.
    4. All or some of the above....
     
  177. Sorry, I should have been more clear. Mandate all US domiciled business/internet business to accept payment *only* in USD?

    Edit - after reading your post again, you're right, it would. But perhaps there's an avenue here....exempt foreign currency transactions. Applies to all other goods and services sold within the US?

    Edit#2 - that would exempt US companies who traded foreign currency for USD :D How about requiring all foreign currencies to be transacted through authorized banks/exchanges. And then all brick and mortar shops only accept USD? I'm just thinking aloud here...
     
  178. I am surprised nobody has jumped on the arbitrage bandwagon. Apparently there is huge (up to 5%) difference between the exchange rates, namely between bitfloor and mt.gox:

    http://www.reddit.com/r/Bitcoin/comments/1bt2gx/why_is_bitfloor_trading_6_above_mtgox/

    "Bitfloor has usually always been +0-5% higher than mt. gox. I'm assuming it's due to easily being able to get your money in, smaller trade fees, and less available supply."
     
  179. There is tons of opportunity, but good luck transferring all the coins and converting currencies on the fly. I am assuming some do this, but the best opportunities are with CNY currency, last check was like $15 above Mt Gox price after converting.

    There are also opportunities with btc-e.com - which I believe are the most exploitable. Still have to add in fees etc..
     
  180. The problem with bitcoin is that it can be ruined by governments blocking the points where bitcoin is exchanged for traditional currency, or legitimate (IE not black market) points of sale and businesses. Kind of how they mostly killed online poker in the US by going after payment processors.
     

  181. Well, there was one guy who bought a pizza for 10.000 BTC, and he reordered. Lots of early coins are lost forever as people did not pay much attention to keeping proper backups when it was worthless.
     
  182. Bit coin is not a currency since the fluctuations are too large to have any place in the real financial system. Stability of price is a requirement for monetary usefulness.

    Read productivity credits. They will have more validity in the financial system since they will not fluctuate the way bit coins have.
     
  183. I meant to post on Friday that the hourly chart is showing an ascending triangle and a breakout is very likely to the upside. (Horizontal line was around $145.)
    It sure broke out, now at $155. Nice to know that TA also works on Bitcoin.

    A TA site for Bitcoin:

    http://btctrading.wordpress.com/

    "What is doing now bitcoin is a good example of a parabolic rise in an early stage, using last 10 weeks i derived the formula of the current parabolic that bitcoin is following:

    y = 1.81 * x2 – 11* x + 35 where x2 is x to the power of 2

    As i explained many times i think that normally a swing can last up to 25-30 bars, in this case weeks, extrapolating the above formula i can compute a target (you can do the same just substitute “x” with the number of weeks).

    With 25 weeks i’ve a target of 890$, using 20 weeks i’ve a reasonable 540$ target; i think that a long term top beetween 500$ and 1000$ is likely to happen, all depends if bitcoin will reach the wall street crooks or not:)"
     
  184. Pekelo, there isn't enough data to support what you're saying.


    Also, quadratic equations of securities shouldn't ever be used as a predictor.
     
  185. Warning: little trading conspiracy stuff regarding the future

    I was toying with the "big pocket guy playing the BTC market" idea. Let's run 2 scenarios.

    1. What if the GOVERNMENT decides to discredit/devalue BTC using completely legal means? What if they start to play the BTC market with their huge (pretty much unlimited) pocket and make the market so volatile, that users abandon it?
    They could even do it in a way that could eventually cost them nothing.
    Let's say they put 10 agents/traders with 10 million bucks each on the case and they start to buy BTC, trying to do it slowly so not to push the price up to much.(actually, if they want they could just go for it buying it quickly, since the point of the action is to cause a crash later on, so higher the price, bigger the crash, more the loss to people)
    So let's say they started at 100$, they spent all their money by $200 BTC with an average price of $150. In their strategy the starting of the crash should occur 20-30% of their average price. Why? Well, because if their action doesn't work, if nothing else, they made a little money. So positions established, time to move the market, they have 100mill/150$=666666 coins. I know, evil.

    As I showed earlier, there are only 3 or so million coins in active circulation, so if you start to dump 0.666 million coins in that market, price will drop. (in case the price wouldn't, then they just made a nice return) So they dump and price falls. Now if I am in control of the operation, I don't dump everything at once, I just make the market move. It is possible that once the initial dump scares people the panic selling continues on its own. But let's say after every 20-30 bucks drop, newcomers jump in and start to buy. Then the agents dump again. They should stop dumping at $150, the goal is to make BTC volatile, not to lose a lot.
    Let's say BTC recover at 130$ (mind you, a 35% loss from peak) and reaches again $150. Then the agents dump again. Rinse and repeat. If the BTC market is real strong and lots of newcomers are still buying, if nothing else the agents could establish a price ceiling and make money while doing so. In best case scenario the BTC market plunges (big horders finally get scared out of their holding position) and maybe takes years if ever to recover.
    And it was done completely legally.

    2. In this scenario, the same thing happens, but instead of the government, a HEDGEFUND plays the BTC market for the simple goal of making profits.
    The scenario pretty much the same. HF boss decides that instead of buying a new Picasso, he is going to play with bitcoins. He follows the strategy described above, except buy more agressively (price should go up) and sell less obviously. In case the market does panic, and falls a lot, they can switch sides and start buying again.
    The point here is that the BTC market is so illiquid and rather small right now (3 million floating coins) that a player with signifficant pockets can easily move it in both directions, doesn't matter if their goal is profit making or crashing BTC.

    The only real question is, just how big an account is needed to make the big play in bitcoins???
     
  186. This usually never happens on the weekend. Should be an interesting Monday.
     
  187. How do you figure there are only 3 million coins in circulation? Besides the lost coins, all 11 million are in circulation.

    Yes, someone could slam the price with 200,000 coins. Yeah, real smart, just a little bit of slippage there. These thoughts have been gone over ad infinitum, while someone could make that choice, it would be a very dumb decision. Then the coins just get distributed to more wallets. Because, I can promise, I will be buying a boatload more.

    Why are you going on about this government secretly being in bitcoins? They aren't.
     
  188. Here is another scenario from Reddit (I love this guy, must be a trader) where the Fed kills Bitcoin by removing liquidity:

    "So this is just something I drew up while watching screens

    Recall that the Fed's current policy of "printing money" doesn't involve directly adjusting the value of every dollar on the book; they monetize debt. They create more money supply to buy UST and effectively lower rates. The key word here is "buy": the "OMO" in "POMO" stands for Open Market Operations. They're not doing anything you or I couldn't theoretically do (anybody can buy UST) but they have as much money as they want to create to buy with.

    In the same way they monetize debt, they can demonetize any commodity, including BTC. The fundamental rule of market manipulation is that if you don't care about how much you spend, you can do anything to any price.

    In my scenario: JPMorgan accumulates a large BTC position. This can be done using minimal impact algos (VWAP is the one I picked) without too much notice. Goldman does the same.

    JPM gets free insurance on that in the form of a swap with the Fed. This means that any future increase in the exchange rate will be paid in dollars by the Fed to JPM.

    Why?

    The Fed enters into a repo deal with JPM, lending USD in exchange for JPM's BTC as collateral. This means that JPM will buy the BTC back at market rate tomorrow.

    The Fed writes a free At the Money put to Goldman, giving GS insurance on their position.

    Fed takes JPM's BTC and hits every fucking bid it can get to -- massive vol, prices shatter, panic selling etc. Depending on the size of the position, it could be an absolutely deadly blow, especially if they hit it in waves.

    Goldman sees prices fall, exercises its put and sells BTC at the strike price.

    Fed pays a lot of money for the now mortally wounded BTC; they don't care, they have a printing press.

    Fed takes those BTC and sells them back to JPM tomorrow to settle the repo deal. Depending on mark-to-market procedures (lots of fuckery about this on repo desks...), they might be overpaying drastically, and that's why the Fed does them the free swap - this puts loss limits on JPM and Goldman makes a profit, ensuring participation (most important part).

    Realistically, JPM and Goldman (or whatever two firms) will want a more even handed split on their short BTC deltas"

    http://www.reddit.com/r/Bitcoin/comments/1bv8tl/hypothetical_fed_action/
     
  189. Pekelo - Great commentary all around. I am enjoying it. Lots of good points you are putting forward. Keep it coming.
     
  190. I predict there will be a revolt of the Beanie Babies and they will all fall down.
     
  191. HOW CAN ANYONE "INVEST" IN SOMETHING THEY DON'T FULLY UNDERSTAND (COMPLICATED MATH ALGO...)??

    AND WHAT WILL HAPPEN THE DAY THE THING STARTS GOING SOUTH, WHEN NOBODY UNDERSTANDS WHY??.. =>>> BIG KRACH, THAT WILL BE....
     
  192. all fall down, 1 day later.

    ownage.
     
  193. hits $250+ then hits ~$100...in 1 day. :eek:

    total volume dollar wise is still minuscule at ~$20m, wonder if mtgox itself is manipulating their own exchange.

    wild west x 100
     
  194. Oh, right there, Pekelo?

    Why don't we see that equation go for -x2 +x-40?

    I don't know what the obsession with arcs in financial data is. The presence of change over time is no more a predictor than the underlying capitalization of the capital stock in this currency.

    By the way, is there any?
     
  195. WOW $265 down to 115... How do you like them apples Pek?

    Doesn't help every time it drops Drudge posts it!
     
  196. The saddest part is that the exchanges can't handle the volume. This is a trader's wet dream, look at the volatility. I think there is enough interest that any super big dip will be bought for a few weeks at least.

    But the fluctuations! They are incredible, but untradable, unless you put out blind orders and hope they get hit...

    I have just read, the guy put out a buy order at 140 because he thought he would be statisfied with that price. An hour later once it was filled it is up at 190...
     
  197. Pekelo, your equations lost over 60%, and were applied inappropriately to non-linear data, which is a requirement to use quadratic equations so it isn't a surprise that when a binary choice between +\-x^2 means the difference between making and losing 50%, obviously that isn't appropriately represented in the data and you should never ever ever ever use those equations to fit a non-linear curve which is to say nothing really about the value of the underlying you were analyzing.
     
  198. lol lost money?

    i think we hit the 2 or 3 week low or something? big deal. yeah, i was worth a shitload more when btc was at $265 each, but with dollar cost averaging, totally not sweating this. i hope it does drop more.
     
  199. The ops are not a fan of great beauty.
     
  200. no , the saddest part is that anyone is trading this garbage at all

    really, thats the problem in modern society.

    the folks trading this used to be cleaning toilets, working the fields, washing other peoples laundry.

    now they have time for silliness like bitcoins.

    Bitiots.
     
  201. are those winklevosses a little, you know.
     
  202. I agree it needs a peg. Like a sham ETF that holds no appreciable assets and is simply marked to the underlying. They exist due to the explicit peg.
     
  203. My comment was general in nature, not trying to deride anyone here.

    However if you did not at least partially sell your holdings above 200, then you missed a wonderful opportunity to make a shitload of money. Btw, someone wrote that you put an order at 190 and get filled at 160 or something like that. Why would such a delay happen - I understand they are trading BTC on exchange and bid-ask book is displayed right? So, people should be able to hit bid or lift ask and be done with the trade in a second. Why will it take half and hour to get a fill?

    Looking at volume here, seems like the bottom is in. So, consider buying more.
     
  204. maybe because its just a pink sheet scam in disguise. Not even a good one.

    really, the # of people thinking this is a legit form of money is absolute proof that the public am sheep.
     
  205. Anybody who is a trader AND a Bitcoin fan should have sold above 200 and buy it back under 100. Now suddenly you have twice as many coins, congrats!
     
  206. U r such a piker...

    In hindsight, only your trades lost over 70% so now that you know what to do the next time...

    Your original projection put bit coin over 400, so there is no reason than for the entertainment of it for me to say:

    Dam, right! That's what I did. You get over 200 on your bc and arb back into it below 100 like I did, didn't you?

    No, so the thought of another pekelo thread that you show up to be a master if the obvious is even more hilarious than the lack of any directions than to buy and lose over 200 bit coin in reality!
     
  207. as dumb as they are, we are dumber for even bothering with them

    beginning to realize the internet is a place where we dialog with people who in life, we'd cross the street to avoid
     
  208. Yeah, I did miss out, for sure. But, I mean, it could have gone to $350-450-500 just as easy. Who the hell knows? I got what you meant though, most likely, anyone that bought in over 150 is probably out of their position. My opinion is just to keep buying no matter what.
     
  209. Whew, long thread but best discussion I've read on btc anywhere.

    The main thing I'm trying to guess at is: How long until multiple copycats of btc, such as litecoin, are created and to what degree will that erode the value of btc? I'm not even talking about a moderate improvement, which there is room for.

    In the absence of all other factors, I'm not sure how that would play out. It's doubtful that replica cryptocurrencies would be adopted to the point where they were all driven to zero value. However at the same time, litecoin now proves that there will be a bleed off of value to replicas.

    The interesting thing about this scenario is that it is so unusual I don't see any good historical models.
     
  210. They are already here. The 3rd most popular with the highest market cap is:

    http://en.wikipedia.org/wiki/PPCoin

    It uses a proof of stake instead of proof of work. I think venture capital money is already working on making even newer virtual money. So the cat is out of the bag...

    LTC will be traded on Mt.Gox from next week. You can still mine it with CPU power, so once ASIC mining will be all the rage for BTC, lots of fan might switch to LTC.

    The effect on BTC? Nobody knows for sure, but the first mover's advantage is going to erode a lot. I think the field will even out after a few months/years....I would be surprised if ANY of the virtual money is worth more than single digits 2-3 years from now...
     
  211. Once of the main purposes of money is as a store of value. Anything that fluctuates >50% in a few days clearly fails at this. Ergo, bitcoin and other virtual currencies are DOA. Even gold is too volatile for this purpose in most periods (the exception being high inflation or default scenarios when fiat currency and government bills become an even more volatile and worse store of value than gold).

    Bitcoin is a speculative mania just like dotcoms, housing, and tulips. Today's Isaac Newtons are no more immune to being rank noobs in markets as he was in the South Sea Bubble.
     
  212. Trading strategy from Reddit:

    "Hello guys, for the past few weeks I have been a bitcoin day trader. I work behind a computer at home, so staring at the charts all day has proven a fast way to pass time. I keep it on the micro-scale only selling off and buying small amounts (.5btc>) at a time, however I do it daily.

    Here is my strategy. I use the trading site CampBX (roughly 0.5% of the market in volume). I keep two real-time charts of mt gox (79% voulume), and CampBx(0.5% V). I wait until mtgox gets moderately lower than campBX, then sell. CamBX adjusts to mt gox, and when the two prices get relatively close to each other, I buy.

    The idea is to use mtgox as a predictor to the CampBX market."
     
  213. It is clear to me that Bitcoins are living on borrowed time, in part because of their role in the Silk Road online black market.

    Check out this story:-
    http://www.theverge.com/2012/11/21/...ys-fail-whale-not-feds-brought-down-notorious

    "Users of (Silk Road) rely on Bitcoins, the semi-anonymous ecurrency, in order to buy and sell the thousands of items on offer; it’s been estimated that the marketplace accounts for a majority of all commercial transactions done in Bitcoin."

    If the DEA is investigating Silk Road you can sure that they are investigating Bitcoins too...

    What will be amusing is how all these nerds who have mined bitcoins for the past couple of years throw their toys out of the pram when it does get shut down.
     
  214. This is where you miss the point.

    BTC is not being built by "hobbyists"...
    It's being built by an obsessive, highly educated Cult of 50,000 to 100,000 people...
    Go back to the 20th century and study the power of Mass Cults.

    This Cult has driven BTC from $50 million to $1 billion in 2 years...
    The idea that these people are just gonna quit...
    Because some Govt passes some regulations....
    Is to completely misunderstand the Bitcoin phenomenon.

    All the tech glitches are entirely normal...
    It's the equivalent of a stagecoach robbery...
    I'll bet more gold gets stolen every month than BTC.

    Bitcoin easily goes another 100 times to $100 billion...
    Even that is a drop in the bucket, just one month of Fed printing.
     
  215. What do you call when Gox DDOS’d, Bitcoin-24 Halted, BitFloor Shuts Down Permanently?

    Thursday...

    I have just used the cult analogy today, when talking to someone. Where you are wrong is that people will stick with it forever. When newer and better competitors take over and BTC goes to the 2-5 cent pricerange for years, the cultists are going to abandon it eventually. Sure they are going to own 10K-100K, but it will still be worthless because you can't spend it on anything...
     
  216. Using $50 BTC and a 1.5% fee...
    Gox made about $50,000,000 last year...
    So they are just raking it in and here to stay.

    BitFloor was making about $2,000,000/year...
    But had their US bank account closed by Capital One...
    They will re-open in weeks in a friendly jurisdiction.

    Bitcoin-24 may be a robbery... so what...
    It's like saying in 1850 that USD is worthless...
    Because outlaws rob banks and trains.

    Professional grade BTC exchanges are popping up like mushrooms...
    Like those archaic stock ECNs were popping up 10 years ago.

    There are now BTC Stock Exchanges and successful BTC IPOs.

    Bitcoin is not even centered in the US...
    It's extremely global in nature...
    Actually very popular in less developed countries...
    When China seriously gets on board...
    This will take off like a fucking rocket.
     
  217. It already did, and crash landed. 2-3 times so far. I highly doubt your numbers about Mt.Gox is correct. If they had that much money, they would have bought servers long time ago...

    On the day of the crash, Gox cound't handle more than 37 transaction per second. Now that's what I call a classy operation!

    There are only 250K users or so worldwide.... Wake me up when it hits a million....

    P.S.: I am long Bitcoin from 95 in my virtual account. Up 8% right now.... :)

    --------------------------------

    50 million my ass. Sierra Chart isn't impressed with MtGox datafeed:

    https://www.sierrachart.com/SupportBoard.php?PostID=2092#P2092
     
  218. OK, I'm trading at a smaller exchange in CAD with higher fees...
    Here are GOX fees = average about 0.5%.

    https://mtgox.com/fee-schedule

    Look at the volumes...

    http://bitcoincharts.com/markets/mtgoxUSD.html

    So GOX made about $2,000,000 last 30 days...
    Probably make $10,000,000/year...
    The smaller exchanges charge about 1% and make more/trade...
    Plus there are other fees that add up.

    GOX problem is really legacy software...
    The newer exchanges are building from scratch...
    GOX is a sitting duck to have their market share taken away.

    Here are all the exchanges:

    http://bitcoinwatch.com/

    This is not rocket science...
    You are market making ONE THING at multi-second latency...
    If you can take an exchange to volume 1,000/day...
    You have yourself a great, unregulated business.
     
  219. OK, so we are already down to 10 mill from 50 mill, that is a progress. Mind you, you used their very busiest month EVER, to guess their annual revenue.

    Of course 12 months ago the volume was easily 10% or less than last month's.
    Throw in that they have like 40 employees now (22 only for account verification) and they had to buy servers instead of those 5 years old desktops they were using in their moms' basement...
    Anyhow, bottom line is, although it could be a decent business once they actually run it like that, in the past, they haven't been a huge moneymaker....

    https://bitcointalk.org/index.php?topic=117478.0

    2012 Oct:
    "basically gox makes 1% of the monthly volume, the volume is usually at least 1M BTC per month, some times more than that,
    I've seen several 2M months. so gox makes at least 10k BTC per month"

    This in a year when the average BTC price was below $10... That would be way less than 3 million in revenue, minus salaries and paying mom for room and board.... their legal cost was huge...

    -------------------------------------------------

    I am up 25%, to Infinity and Beyond!!!!!!
     
  220. Damn, did we just rally overnight up to $135? I thought it was a screaming buy under 70 a few days ago...

    Atticus, are you done with this thing or still playing around with it? You can pretty much fade any 30$ move, either way...

    Here is my prediction, because I like to throw them around:

    At least one more bubble is still left in this thing. Not enough people got hurt yet, and they are still stupid. I don't know if the next peak will be below 266 or way above it, but one more decent runup and burn is in the cards.

    Short term (next 2 weeks) it should reach 140-180 where it might peaks. Where is that average chart of a bubble when I need it? I think that shows a second peak 30% or so below the big one... We shall see....

    Currently: just below $115
     
  221. I'm not really interested in what GOX is making...
    Or what their issues are in the Japanese business culture.

    I've been looking at the small exchanges and their Business Models...
    (Look up the Virtex IPO Prospectus to get an inside look)...
    And what it takes to clone one in a few months...
    What useful open source software is out there, etc...
    Since my current trading business is more complex than a BTC exchange.

    Cryptocurrencies are the sort of universe where a good idea will make you rich...
    Where a software engineer can really get creative...
    You can brainstorm endlessly, kinda like the internet in 1997...
    (As opposed to grinding money off $0.03 stock spreads...
    And waiting for a periods of volatility to make real money...
    In a stock market that is more rigged than not).
     
  222. $50MM to $10MM and now you don't care what they're making? Wow.

    Pekelo: no, I had no funding at Gox and was going to go with bitfloor until they hit the skids. I got another account funded but I won't pay more than $80.
     
  223. The point was that you can't even objectively evaluate a normal business, so why would we take your opinion on such a complex matter as bitcoin?
     
  224. In what remote sense is GOX a "normal business"?

    I run and evaluate a 7 figure business on a daily basis...
    As opposed to you jacking off online about a 25% bump in BTC.
     
  225. All I'll add is that the guys behind mtgox are the dumbest mofos alive if they're in mid seven-figs on revs and can't do a better job on their front-end. They need to triple their servers, for starters.
     
  226. Sure you do... :)

    That's why you evaluated Mt. Gox at 50 mill, when they probably didn't break 2-3 mill last year. But you know what, I will put you on Ignore, and you can evaluate whatever you want. And yes, MtGox is a normal business, having revenues, customers, salaried employees. You should know, because you do this on a daily base, right?

    See you at $180....
     
  227. Actually, that may well be the difference between trailing and future revenues.

    If it's not... there is not much point getting involved in these exchanges.

    I specifically pointed to a detailed, realistic 11 page model...
    Which only a few smart lurkers noticed...
    And why I have a policy = people with 5,000 or 10,000 poasts go staight to ignore.
     
  228. They did an AMA a week ago on reddit, it was amazing to see how they couldn't handle the situation both technology and PR-wise.

    The dumbasses closed down the site mid-week for 12 hours, but instead of correctly saying that it is a server update, they said they want the market to cool off. That sent the price even lower. In those days they were getting 20K applications per DAY.

    Not to mention that they let 0.01 silly orders to clog up their trading engine. But at least now they can handle more than 37 transaction per second, their previous highest....
     
  229. yes they are, those guys are out of their depth and dont have the intellect to hire a real team to build the platform. When mtgox first started it was using mostly javascripts and form submits as a trading system, absolute joke.

    Said this many times, if we have a stable well executed exchange, bitcoin will gain legitimacy. Those idiots have a golden egg on their hand, and not only are they turning it into rust, they are bringing down bitcoin with it.

    When the cnbc/media stories broke, if mtgox was stable and well run, bitcoin will be in a much better place. Both times bitcoin gained popularity, mtgox played a major part crashing it due to technical problems and hacking.
     
  230. Didn't the stock exchanges operate on a chalk board at one time? Why is it so surprising such a new, novel idea would run on a sub-par exchange? If Bitcoin is to survive, it will be on its own merits not an exchanges.

     
  231. Yeah, but it's not 1817 it's 2013.
     
  232. The idea might be new, but running an exchange is not. Hell, they have been trading magic cards, they should be expert about it. :)
     
  233. Yeah, learned my lesson with those dilettantes. I'll check out CampBX, thanks. Bitfloor (IIRC) was nice bc they had P2P through CapOne, but then they shut their account. More than a little disconcerting f your "broker" is shut down because they don't have a biz checking account. -D
     
  234. One user says that you can short via dark pools in CampBX. I wonder if there are plenty of coins to borrow...

    Impressive:

    https://en.bitcoin.it/wiki/Camp_BX#Major_Features

    Reading the features, this is the closest to a real trading platform. Not clear if shorting is currently available or not...
     
  235. The strange economy of selling mining machines, or a goldpick is worth more if you pick gold with it instead of selling it:

    "With no other manufactures shipping an ASIC unit you have no incentive to actually sell them to customers. BFLs 4.5GH machine was supposed to cost $150. At current price and difficulty it will get you about $30/day in BTC.

    Now further consider that on a $150 unit their profit margin may be half of that. So in 2.5 days of running the machine themselves they can make as much as they could selling it to you. They are better off running the machines themselves and not actually shipping units until other manufactures do. Avalon can ship a few dozen units to show they are doing something but they have no reason do ship more. They can just manufacture them and let them run to make money. Once difficulty rises a great deal they might start shipping units."

    Someone has paid 50K on Ebay for a high hashrate miner, and people called the deal stupid, but once the numbers were looked at, the machine pays for itself in 120 days... (assuming BFL hasn't shipped yet and BTC's price stays up)

    Now that is some good investment with a breakeven in 4 month....
     
  236. Your grammar is compelling.... as compelling as your math.
     
  237. Alright, let's move this market. From now on I will be always in either long or short with my position. I bought in at $95, I am selling it right now at $128 and shorting it too. (on MtGox)

    I put in a limit buy to cover and also to buy at $115, so if it reaches 115 I will be long again....

    Virtual playing a virtual money. Who said life wasn't wonderful????
     
  238. I think if we break this $130 mark we are again off to the races.
     
  239. Pekelo, when will you relinquish your virtual short position? We going to $150 by morning hopefully! :)
     
  240. Sure enough, once I went short, the price started to climb higher faster. :)

    The supposed reason for that was Paypal saying that they might accept bitcoins for account funding. Anyhow, we reached the price range that I expected (140-180) although I thought we would have one more dip before it does...

    Now the old (before the crash) strategy seems to be working, buy any 20-30 bucks pullback....
     
  241. Do you have a link for the paypal thing? It is a rumor or is it confirmed?
     
  242. Note this isn't a market call even if you are right the point is those levels don't have specific fluctuations to mention.

    Paypal's <u>a good thing</u> if it happens.
     
  243. He didn't say it for sure, but "they were thinking about it". Just google "paypal bitcoin":

    http://thenextweb.com/insider/2013/...hinking-about-including-the-virtual-currency/

    "So I’ve been spending a lot of time looking at it, and it’s truly fascinating actually: the way that the currency’s been designed, and the way that inflation is built in to pay for miners, and all that is truly fascinating. I think that for us at PayPal, it’s just a question whether Bitcoin will make its way to PayPal’s funding instrument or not. We’re kinda thinking about it."
     
  244. I think Western Union is possible the bigger news of the two, but from what I have been reading, the WU deal with BTC might seem a bit more likely (if at all).
     
  245. Did I say 115? Damn, it came down to 120, before shooting back to 150 in less then 2 hours... (144 in 3-4 minutes)

    How well, next time....
     
  246. On a rainy Sunday afternoon, if somebody wants to decide just which virtual currency to prefer:

    http://coinchoose.com/

    https://en.bitcoin.it/wiki/List_of_alternative_cryptocurrencies

    In other news, this week brought us another exchanges to be closed down.

    Relevant article:

    http://arstechnica.com/business/2013/04/study-45-percent-of-bitcoin-exchanges-end-up-closing/


    "A study of the Bitcoin exchange industry has found that 45 percent of exchanges fail, taking their users' money with them. Those that survive are the ones that handle the most traffic—but they are also the exchanges that suffer the greatest number of cyber attacks.

    Computer scientists Tyler Moore (from the Southern Methodist University, Dallas) and Nicolas Christin (of Carnegie Mellon University) found 40 exchanges on the Web that offered a service changing bitcoins into other fiat currencies or back again. Of those 40, 18 have gone out of business—13 closing without warning, and five closing after suffering security breaches that forced them to close. Four other exchanges have suffered serious attacks but remain open."

    ---------------------------------------


    Bitcoin-24 was closed down last week. The guy running the exchange looks to be a complete amateur, but he still managed to collect 7+ million euros before the bank closed him down for suspicious activity.
     
  247. Fun times...

    "UPDATE FROM SIMON: Little Update! As some of you know, I had some problems with the German bank accounts in the past. I have solved the problem with moving to Poland and we had also never problems with them. Why does this all happen? The "Deutsche Bank" in Germany had some phishing attacks / hacker and some funds where send to my bank account. This attacks does not stop on the "Deutsche Bank", because it seems, that it is a very stupid bank! So they closed my bank accounts in Germany and I got an invite from the German police, to tell them, what I am doing. After that I had no problems but my Bank accounts where closed. (this all happen in the start time of bitcoin-24) In my opinion the problems where fixed. I moved to poland and make all business on the BZWBK. The Germans are now fighting against me and the "Deutsche Bank" has still the same problems, that people are sending me money from stolen bank accounts! THATS NOT MY PROBLEM! The only thing I can do now is to not accept payments from the "Deutsche Bank". The Germans think now, that I am trying to get money with this methode. So they look now, where I have money and try to close all bank accounts. Why in Poland? The Germans think, I am a criminal guy and they will stop the crime. They asked the poland for help and they closed my bank account in poland. I have 7 days to make something against this, otherwise my bank account will be closed for the next 3 month! I am very sure, that we can get back the bank account in the next time. I will not give you a promise, but it is possible, that I will get back the bank account in the next week."

    http://www.reddit.com/r/Bitcoin/comments/1cbrjt/for_everyone_worrying_about_bitcoin24_please_read/

    Best part:

    " The exchange is run by 2 German citizens as Ltd in the UK with a liability of 1 EUR. "

    You can be the best coder, but you still need to know the law:

    " you need to be licensed to hold EUR funds for your customers. That's why bitcoin.de holds only Bitcoins (but no funds in EUR) and bitcoin-central.net is cooperating with a licensed company."

    Also, you could be completely clean, bit if your customers are dirty:

    " It's just the account was having defrauded funds sent to it. Automatic alarms go off in the banking system: result, bank account closed."
     
  248. I am switching to long at 130.50 after a slight loss with the short.... Of course this move is going to take the price down....

    Let's put a switch order at 145...
     
  249. I sure suck at timing this, but anytime I switch position, the price sure moves...Supposedly there was big volume selling what caused the selloff....

    Here one can see the order book and it is pretty bearish:

    http://bitcoin.clarkmoody.com/
     
  250. Who knows where this shit is going, seriously.
     
  251. i said it before the first crash, this turd trades just like a penny fraud.
     
  252. I can't believe that this insanity tempts me but it seems that it does. I guess when I look at a 4 hour chart and see any instrument move from 146.50 down to 91.20 in fewer than 20 bars it gets my attention.

    I assume I can simply throw up a few hundred and trade the damn thing to get a feel? Does anyone have an opinion on what is the shortest practicle time frame? I'll have to check on comissions, spread, ability to post in between the spread etc. but if anyone has any comments I would appreciate them.
     
  253. last i looked i think it coats 1% to trade + spread. not cheap at all.
     
  254. search around bitcointalk.org

    times vary and so does reputation of all these firms. the most reliable firm, mt gox, if you can call it "reliable," has about a 10,000 person line waiting to get verified. you may be able to quickly transfer money in (low amnts), but it may take a while for you to get verified to transfer money and/or coins out. gl
     
  255. It's a fortune.


     
  256. I think it's more like .3% at mt gox. you should do your own checking, though.
     
  257. Thanks, Kid. Just wanted to use it to provoke some comments. Of course I'll check specifics.

     
  258. After 15 years of trading on the NYSE...
    I've been trading BTC as a sideline for about 3 weeks... and it's a BLAST.

    Things like overlays depend on the currency...
    But I've seen many overlays in the $5-10 range in CAD...
    So if you have accounts on several exchanges...
    You will be arbing a very inefficient market...
    With the cost for moving BTC around = zero.

    This would be free money...
    If it was not for the considerable counter-party risk.

    When I see people on Bitcointalk bragging of making $50K/month...
    Just by trading and arbing BTC... I almost believe them.

    But you can make a lot more money setting up an exchange...
    It's a LOT simpler than an Algo Trading operation...
    It would be nice to be on the other side collecting fees for once.

    In the end as a business decision...
    You have to decide if BTC will keep growing for the next 2-3 years...
    Because that's enough time to make a killing.
     
  259. Every 20-30 bucks drop is a huge buying opportunity, but one needs to have funds for multiple entries.

    Anyhow, the sound of money changing hands:

    http://www.listentobitcoin.com/

    Oh yeah, looks like the Chinese is finally discovering bitcoin, here is the client download stats from yesterday:

    1. China 14,970
    2. U.S. 2,891

    Here is a quick translation of a video shown in China (CCTV, the China Central Television) about BTC:

    "First, they are talking about professionals play with Bitcoins in China. They bought bitcoin servers from US and mining as much as they can. There are companies that invest on machines may mine 200 Bitcoins per day.

    Then they interview some investors to talk about the risk in Bitcoin. The professional bitcoin investor play with Bitcoins as shares, and indicate that there were undersell during bitcoin's massive growing in April. People are concerned about the bitcoin "bubbles".

    Last, they interview specialist in Finance and banking. They seem agree on that the bitcoin is the economic bubble. They infer the "Tulip Mania" happened in the Dutch Golden Age, and imply that bitcoin is high in risk, specially because it's very likely going to be another type of artificial currency.

    Anyways, I see there are many ppl in China are using Bitcoin, some even started to use bitcoin to buy coffee in Beijing. They mentioned several forums in China about bitcoins: www.btcman.com , www.btcchina.com .

    I guess it is definitely going to get more Chinese ppl involved in bitcoins. The government don't have any regulation on it yet. Certainly it's a good way to get money out of the country. It worth to keep an eye it for sure."
     
  260. mtgox is down.
     
  261. I don't think so, or at least not now....

    You can use for checking: http://www.downforeveryoneorjustme.com/

    Also, if you think it is down, check it here, somebody is going to post it in less than 10 minutes:

    http://www.reddit.com/r/Bitcoin/new/

    --------------------------------------------

    Forex Meets Bitcoin: https://www.kraken.com/

    "Kraken is a new US based Bitcoin exchange that announced their beta after the Coinlab vs Mt.Gox suit. They are promising to offer 1:10 margins and shorting,"

    They have a playmoney feature, so I am going to try that one out. Virtual playing a virtual money, hmmmm, delicious.....

    ------------------------------------------

    The daytrader's wet dream continues, in less than 2 days from $120 down to $80 and back again...

    -----------------------------------------

    For constant Bitcoin news: http://wtbtc.com/"
     
  262. I'm telling you, this is the same crowd that makes the pink sheets run.
     
  263. Stock, I think few would disagree that bitcoins are insanity. But I think for those that can deal with the counterparty risk the propensity for it to move and the arb potential make it tempting.

    I'm probably not even going to experiment with it because it seems like it will be so damn much fun that it will turn out to be a huge distraction. And to put enough capital into an account to make it worthwhile exposes me to counterparty risk that is simply sky high!

     
  264. The kraken.com website has been finally hooked up to MtGox's data feed, so the prices are pretty much up to date. You get 5K cash and 100 BTC to play with. personally, I think they are a bucketshop, it will be interesting to see how they handle quick movements when they are fully functional...

    I placed a bunch of orders, selling above 120 buying under 95, we shall see how they work...
     
  265. Ive put some change in some alt currencies mostly LTC over the past 2 months

    Im gonna forget about it and come back in a year or so
     
  266. huh, how the f&ck did it make 50% roi on 6 trades?
     
  267. I've never gotten where this equates to 50%... if this were true, I'd be quoting my ROI's in thousands so I should probably say you're wrong.
     
  268. you seem to be 1000% percent wrong here. I'll help you out.

    total capital 5 and change? his risk even less than that, much less. I understate the profit , you seem to think I overstate it. bad math on your part.

    if you buy an option for 500 and sell it for 750, what is your gain?


    makes 200 overnight? just like that?

    we're in the wrong business dude.

    is there anything about bitcon that doesn't reek of bullshit?
     
  269. Here's some grammar school math for you.

    (big number - small number)/small number

    <38%

    tool.
     

  270. 739
    -536
    --------
    203
    /536=

    0.378731343 or 37%.

    I was just rounding it for ease of discussion. Thats not the objection bwolinsky was making Im sure. For you to hammer at that, proves your twatness.

    Asswipe.
     
  271. Ur brilliant, dude. Clearly.
     
  272. Atticus
    From Wikipedia, the free encyclopedia
    Jump to: navigation, search

    Atticus, a Latin name meaning "Man of Attica", may refer to any of:

    People

    Titus Pomponius Atticus (112/109 BC – 35/32 BC), ancient Roman littérateur / philosopher


    Pomponius , where we get the term, pompous ass. You are well named, moron.
     
  273.  
  274. So it's the instrument for you.

    Please calculate the hypothetical profit of 10 NQ options on futures netting 200 points starting ATM . Yes way into the thousands of percent in a few weeks.
     
  275. Well, in the last 24 hours there weren't enough moves, but the previous 1-2 days Bitcoin was rollercoasting from 80 to 120 back to 95, so him trading 5 coins at a time, it is not impossible to make 200+ with 6 trades.... He didn't mention the cost of the program... Also, it is possible it won't work that well in the future....
     
  276. why would you want to compare a large spread/zero leverage trade with an option?

    is this trading 101?

    someone claims to have bought some 'bot' that traded a lunatic market near perfectly by some strange coincidence.

    i guess your bs meter is on a different scale than mine
     
  277. The end might have started:

    "As of 12:13 PM on 5/14/2013, the U.S. District Court for the District of Maryland issued a "Seizure Warrant" for the funds associated with Mutum Sigillum's Dwolla account (a.k.a. Mt. Gox). In light of the court order, procured by the Department of Homeland Security, Dwolla has seized account activities with Dwolla services for Mutum Sigillum."


    http://www.reddit.com/r/Bitcoin/com...ed_to_do_business_with_mtgox/?sort=confidence

    BTC is down $10 after going quite steady for a few days....

    As a result:

    "Camp BX can't handle the added stress... their site is not responding now."

    --------------------------

    Funniest comment:

    "Since when did DHS give a damn what any other agency says or does OR what the Constitution and Bill of Rights says?

    Edit: Just had a knock on my door. I have been informed that the DHS does care what other agencies and the Constitution says.

    OK I said it can I have my pc back? please don't unplu"
     
  278. Gold weak again - seem to recall it got trashed last time Bitcoin sold off hard. Maybe just a coincidence?

    Bitcoins are about to...bitcoin the dust!
     
  279. No power on earth will be able to silence the bitcoin movement!
    Fact is fact! :)

    Virtual currencies are legal, look who else has other virtual currencies...
     
  280. Please stop the overenthusiastic teenager bullshit and pull your head out of your ass. I, the government decide what is legal, not you....


    "Thou shall not make a competing currency to the dollar." --- Fed's Handbook paragraph 18th

    "Thou shall not operate a money transferring business without permission." --- Ben's little black book


    P.S.: Those are actual US laws....
     
  281. wow just hit cnbc, mtgox and dwolla(money transfer service for mtgox) raided by the feds, account seized by dhs. Hope noone left anything in mtgox, think i have a few cents in there :p
     
  282. After reading this article http://www.foxnews.com/tech/2013/05/30/how-bitcoin-could-go-legal/?intcmp=features

    I am starting to think that Bitcoin has been a "plant." An experiment by a sovereign to experiment with a new, digital, potential one world electronic currency.

    This was an experiment to see how the public would accept it, and to work out some bugs.

    I might be a contrarian on this... but watch to see this reintroduced, refined, taxed and controlled by a sovereign or a group of sovereigns. This software didn't just hatch itself.
     
  283. BTC holding stable at ~120 USD despite Gov crackdown on Mt Gox and price crash. Looks good...
     
  284. I think the price is stale, not representative of the actual price. Akin to Corn futures on a limit down move.
     
  285. Your post is at least a week late. The price hasn't been around 120 for days, and the Gov action was 10 days ago. Currently price is above 128$.

    http://bitcoinity.org/markets

    You can always check for quick news : http://wtbtc.com/

    Lately Bitcoin became a boring stock. Volatility has died and price stays in a narrow range. It is good for the currency function but not so exciting for traders...
     
  286. After doing much research, I can now say I will never buy bitcoins unless the anonymity goes away. Right now, if you get a malware program on your computer, some guy can just swipe your bitcoins and that its. Nothing you can do to get them back or catch the guy that did it. Its literally the perfect crime. You cant fight him for your money. You cant threaten him. You cant even sent him a message begging for your money back telling him its your kids college fund.

    Google "bitcoins stolen" and read the thousands of pages that it turns up. One guy lost 25k bitcoins to a hacker. At todays prices thats 3.2 million dollars.
     
  287. Finally some action. On Saturday night it dipped down to $90 for whatever reasons, since then it has been recovering to $98. But that is still sub-100 price...
     
  288. It's going down because all alternative currencies like gold are going down.
     
  289. Kraken.com the new exchange finally is almost ready to go live, heating up the PR with a 2 weeks trading championship.

    http://www.reddit.com/r/Bitcoin/comments/1gbxze/contest_krakencom_1_week_trial_mode_top_trader/

    Free Entry Trial Mode Tournament

    Register at: https://beta.kraken.com

    Begin: Monday, June 17th 12:00am Pacific (-7:00 GMT)

    End: Sunday, June 23rd 11:59pm Pacific

    On the night of Sunday, June 17th we'll:
    -wipe the beta ledger, order book, balances
    -credit all accounts with identical balances
    -disable the trade API

    Prizes:
    1st Place - 5 BTC
    2nd Place - 3 BTC
    3rd Place - 2 BTC