Bitcoin

[astcell]

Re: Bitcoin

I agree. Bitcoin is as valuable as the community wishes it to be. In reality there is no backing with anything of hard value, or even the good faith and word of the issuer, as in many currencies today.

I think Bitcoin will one day go the way of Humphrey the $5,000 beanie baby camel and the One Hundred Trillion Dollar banknote of Zimbabwe. Then again I may be missing out on the equivalent of the first issued share of IBM.

[theprez98]

Re: Bitcoin

IMO Bitcoin will inevitably die a painful death, and a lot of people are going to lose (more) real money.

[Deviant Ollam]

Re: Bitcoin

it's very turbulent, and like any new system it will go through a lot of ups and downs (and possibly will fail, even while paving new ground that a different and alternative system will use after them)... but i'm very interested in the idea of strong-crypto-based, decentralized currency.

i think that if it could be made to work reliably and if people could one day put genuine faith and trust in it, it would be a wonderful tool of change and empowerment. anything that allows parties to engage in commerce free from oversight and restriction is a terrific resource that i'd love to see explored more. the fact that it's crypto-based and that said encryption was constructed by an author who really knows his shit is pretty kickin'

[arahel_jazz]

Re: Bitcoin

EFF bails on bitcoin... https://www.eff.org/deeplinks/2011/06/eff-and-bitcoin

[theprez98]

Re: Bitcoin

Glad I'm not wasting my money: http://forum.bitcoin.org/index.php?topic=20207.0

[arahel_jazz]

Re: Bitcoin

http://www.pcworld.com/article/23037...es_500000.html

And the first urban legend arises...

$500K worth? Doubtful.

[AlxRogan]

Re: Bitcoin

http://arstechnica.com/security/news...ur-bitcoin.ars

Looks like it's getting more mainstream every day

[TheCotMan]

Re: Bitcoin

Another problem with anonymity and loss of visibility to audit traiils:

Claims a BitCoin wallet was stolen (possibly with malware) and value transferred to another account.

Like cash dollars as currency, theft of a physical world wallet also is difficult to trace, but at least with the physical world, physical access to cash dollars as currency is required to steal cash dollars as physical currency. Certainly, an analogy with "pick pockets" could be made, but malware can be distributed across many victims, attack several targets very quickly, and after passing a balance through intermediates with unique ID for each, hard to track. It would also be possible to use infected hosts as intermediates to aggregating found coins until the final few hops, causing different bitcoin holders to blame each other and cause dissension and distrust among people in the group of users of bitcoins, giving the criminal time to push the money through more transactions to hide its final destination.

If the claim on theft of wallet through malware is true, then it is likely that either organized crime or so-called, "back hat," hackers have entered the game. Though, "Government Spies," might be responsible, it seems unlikely. There may be some advantage to sewing distrust into the bitcoin market, I would expect successful attacks would be kept private and used when the result was worth the risk of exposing the method used. This does not seem like something that would be worth the risk of exposure that there is an active exploit against bitcoin wallets in the wild. All of this decreases the probability for government spies to be behind something so trivial.

[astcell]

Re: Bitcoin

And in the news...

http://www.chicagotribune.com/news/p...,6328122.story

[astcell]

Re: Bitcoin

They said that about houses too.

[bascule]

Re: Bitcoin

When bitcoins were $7 I was going to buy a few, but the purchase trail defeats the entire purpose. I can easily buy silver at the coin store for cash and never show ID, use a bank card, or create an account to do so.

The reason to buy (or mine) Bitcoins right now is their skyrocketing value. If you can take advantage of the rising hype and get out before the market collapses, you stand to make a lot of money.

I've discovered in trying to buy some myself that the time it takes to do the wire transfers is pretty excessive and if you're buying some commonly purchased amount it would probably be difficult to correlate the wire transfer to a particular purchase from an exchange.

[astcell]

Re: Bitcoin

When bitcoins were $7 I was going to buy a few, but the purchase trail defeats the entire purpose. I can easily buy silver at the coin store for cash and never show ID, use a bank card, or create an account to do so.

[bascule]

Re: Bitcoin

If popular enough for mainstream use, governments will make new laws to demand visibility or make their use illegal. One of these will defeat a big reason to use bitcoins, and the other will push them to be used in realms of organized crime.

Making US dollar exchanges illegal within the US alone is enough to give law enforcement access to wire transfer information from foreign exchanges, as I understand it. I believe all international electronic funds transfers are monitored by the government.

A funds transfer to a foreign exchange, combined with the Bitcoin block chain, is probably enough information to deduce the history of a funds exchange made over Bitcoin. At that point you've lost anonymity, especially if you're buying Bitcoins just to make an exchange with a known drug dealer.

In that regard, Bitcoin is a lot more like a highly traceable form of cash. There's also worries they'll need to introduce transaction fees once all of the Bitcoins have been mined.

Ed:

Bitcoin lets you defend against this by creating a new address for you for each transaction. By using your new address with every transaction you improve anonymity.

[TheCotMan]

Re: Bitcoin

If we assume supply is guaranteed, it is only a question of demand, which I'll define here as people being willing and able to provide a compensation desired by those that have mined or posses bitcoins.

The claims to security or anonymity will be tested, however.

There are two great concerns in the realm of BitCoin over the next 2 years, if they remain in demand:

* Audit trails for law enforcement: who bought what from whom, and when: criminal cases, law enforcement, showing incentive, punishing people that contribute to those that governments don't want people to contribute resources.
* Audit trails for taxes: if governments are like pimps, then tax-payers are like whores, and the government has, "gots tah be paid!" (must be paid!) Without an audit trail, especially for large transactions, the government may "smack their bitch up." (penalize taxpayers.)

Over the next two years, if BitCoins become popular and go mainstream, I expect both of these areas of interest to governments around the world will lead governments to threaten the fabrication of new laws unless the government gets visibility to these private transactions through changes in the protocol, or backdoors. (Think BlackBerry and the US, or India, or China, or nearly any government that wants to be able to snoop on communications between different parties.)

An element of security (audit) is often desired by governments that wish to follow money trails. If a law exists to penalize people that donate money to those that governments claim as criminals/terrorists, or as payment for people that governments claim commit crimes, governments want visibility to who exactly is involved in these transactions, or at the very least, a method to get access to information with search warrant, on who was sending money to whom. If BitCoin is effective at denying governments from observing these transactions, governments will not be happy.

It is difficult to build cases and show motive, when no method exists to show financial incentive. Governments (federal, state and local) want their "cut" of transactions, too. VAT/Sales-Taxes, gasoline tax, tobacco tax, alcohol taxes and more apply to goods based on the sales price and/or quantity. When the "price" is ambiguous when a product is not sold in, "US dollars," can percentage-based taxes not based on quantity be eliminated from transactions, and if so, what if the government finds out it did not get its piece of the transaction? Governments make laws to address this with cash-money as currency by limiting how much you may carry on you as a person when entering or leaving the country without declaring it, documenting a potential transaction. The same is true on deposits to banks of cash money as currency, and extra forms are required when you exceed this threshold, so governments can audit transactions.

BitCoins will be attacked by all 5 major players, and it will be interesting to see how this unfolds:
1) Organized crime: if they find a way to exploit it, their information will almost certainly be kept private.
2) Government Spies: if they find a way to exploit it, their information will almost certainly be kept private.
3) Law Enforcement: as a matter of court record to establish how evidence was acquired, once found, would be published.
4) Law Makers: threaten to make, or make use, possession, transmission, reception, conversion, etc. of them illegal, or impose requirements for backdoors (which would be public as a matter of it being OpenSource.)
5) Hackers (all types): with some publishing their findings and others selling or abusing their findings.

Prediction over 2 years?

If popular enough for mainstream use, governments will make new laws to demand visibility or make their use illegal. One of these will defeat a big reason to use bitcoins, and the other will push them to be used in realms of organized crime.

[Club81]

Re: Bitcoin

Honestly, I wasn't too familiar with them until LulzSec brought them to my attention. Interesting concept. I have no idea if it'll make any headway into anything more than a way to "keep score".