# Bitcoin - Peer to Peer currency



## Tim_54321

Seems like the idea has a lot of potential. Thoughts?

http://launch.is/blog/l019-bitcoin-p2p-currency-the-most-dangerous-project-weve-ev.html


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## disarray

*Re: Bitcoins - Peer to Peer currency*

yeah there's been a fair bit of chatter recently about the "deep web" and bitcoins are a common unit of currency there. drug dealers, hit men, pedos and all sorts of people are carving out their little niche among the seas of information available on the private web. it's pretty interesting but there's a lot of tinfoil hattery surrounding it.

basically you go to the tor project, get it setup in firefox then head on over to the hidden wiki and start from there. tinfoil hats aside, it is highly recommended you DO NOT start playing with this part of the internet with your personal banking / work computer, instead set up a virtual machine using VMWare player so if / when your pc gets hijacked you can just nuke it and start again.


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## Tyler Durden

*Re: Bitcoins - Peer to Peer currency*

Interesting. If one were interested in investing in something related to bitcoin, I wonder what opportunities there are out there? I mean, are there any companies on the ASX doing bitcoins?


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## So_Cynical

*Re: Bitcoins - Peer to Peer currency*

I've had a little Bitcoin logo in my avatar since joining the BC community back in January  back when 1 BC was only worth around $0.80 USD  after spending a couple of weeks getting all excited and doing due diligence i decided not to put any real money into this fledgling virtual currency because i really doubted the longevity of it...still do.

Anyway now the BC/USD exchange rate is 1 for 8.5  and the currency has been totally over run by speculators and USD haters....seriously have a look at the BC/USD 6 months chart.

Pretty amazing stuff.

http://bitcoincharts.com/markets/
~


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## moXJO

*Re: Bitcoins - Peer to Peer currency*

How do you exchange them for hard cash?


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## So_Cynical

*Re: Bitcoins - Peer to Peer currency*



moXJO said:


> How do you exchange them for hard cash?




Most trading is done Using MtGox, you have to trade via LR (Liberty Reserve) another type of virtual currency however well established and with some legitimacy...its a very round about way of trading and a bit of a pain in the ass.

To trade BC you would need an LR account to put USD into and take LR out of, you trade the LR for BC and vise versa on the MtGox exchange or one of the other new exchanges....that's how it worked back in Jan/Feb i must admit i haven't been keeping up with all the changes.

Its very much a open currency with no regulation or organisation so change can happen quickly.


http://www.libertyreserve.com/
https://mtgox.com/
https://en.bitcoin.it/wiki/Main_Page


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## Tyler Durden

*Re: Bitcoins - Peer to Peer currency*

What I still don't understand after reading that web page is why would anyone consider this to be worth anything?


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## moXJO

*Re: Bitcoins - Peer to Peer currency*



So_Cynical said:


> Most trading is done Using MtGox, you have to trade via LR (Liberty Reserve) another type of virtual currency however well established and with some legitimacy...its a very round about way of trading and a bit of a pain in the ass.
> 
> To trade BC you would need an LR account to put USD into and take LR out of, you trade the LR for BC and vise versa on the MtGox exchange or one of the other new exchanges....that's how it worked back in Jan/Feb i must admit i haven't been keeping up with all the changes.
> 
> Its very much a open currency with no regulation or organisation so change can happen quickly.
> 
> 
> http://www.libertyreserve.com/
> https://mtgox.com/
> https://en.bitcoin.it/wiki/Main_Page



 It's an interesting idea but I suppose at the end of the day if you convert it back to hard cash you still have to explain to the ATO where the stack of cash came from. Otherwise it's a bit like a form of bartering. Suppose it has potential for the online community though.
Jees you get around So_cyn you seem to have had a dabble in everything.


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## Tim_54321

*Re: Bitcoins - Peer to Peer currency*



Tyler Durden said:


> What I still don't understand after reading that web page is why would anyone consider this to be worth anything?




Why is fiat currency worth anything? All it is is a bit of paper? I'd rather have bitcoins than USD where politicians and bankers are destroying the currency. 

There will only ever be 21 Bitcoins. ATM there are around 6 million bitcoins in existence so the value of all bitcoins in existence is only around 50 million despite them trading at 8USD each, in the scheme of things they are very scarce. If everyone in Australia wanted a bitcoin  right now there would only be enough for ~.25 each.

If you think of how many countless billion there are floating around the world not much needs to go into bitcoin for the price to continue to rise.

I am in no way affiliated with them, but I have bought coins from https://bitpiggy.com/ and it went fine for those wondering how to buy them from Australia.


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## Tim_54321

*Re: Bitcoins - Peer to Peer currency*



Tyler Durden said:


> Interesting. If one were interested in investing in something related to bitcoin, I wonder what opportunities there are out there? I mean, are there any companies on the ASX doing bitcoins?




Why not just buy bitcoins? I think most things related to bitcoin at the moment are private enterprises.


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## tothemax6

*Re: Bitcoins - Peer to Peer currency*

Ive got some monopoly money if someone wants to take that as payment. There's only a fixed amount of my special monopoly money (about one board games worth + some gold ink to write 'special' on them), so they're rare you know.


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## skc

*Re: Bitcoins - Peer to Peer currency*



Tim_54321 said:


> Why is fiat currency worth anything? All it is is a bit of paper? I'd rather have bitcoins than USD where politicians and bankers are destroying the currency.
> 
> There will only ever be 21 Bitcoins. ATM there are around 6 million bitcoins in existence so the value of all bitcoins in existence is only around 50 million despite them trading at 8USD each, in the scheme of things they are very scarce. If everyone in Australia wanted a bitcoin  right now there would only be enough for ~.25 each.
> 
> If you think of how many countless billion there are floating around the world not much needs to go into bitcoin for the price to continue to rise.
> 
> I am in no way affiliated with them, but I have bought coins from https://bitpiggy.com/ and it went fine for those wondering how to buy them from Australia.




I think bitcoin will fail pretty quickly. 

Supporters of bitcoin say that it works just like fiat money, but its supply is limited by the 21m cap, whereas governments can print money that reduces the value of the fiat currency.

That is true but is missing the big picture. The supposed 21m bitcoin cap doesn't actually offer any real protection. Sure, bitcoin itself will not create any more dollars, but what is stopping any other imitators starting the same thing? 

Yes, government prints money that devalues the currency. But what is important to remember is that government is the _only _one who can print more money. With e-currency, anyone can print more money! And that's supposed to offer better protection than government fiat money? There are no regulations or authorities involved. I bet you there are hundreds of programmers out there testing beta of their own currencies already. 

Gold holds its value because it has a finite supply and cannot be 'printed'. If you and I can create gold out of thin air, what would be the value of gold be? 

The higher the value of bitcoin, the faster and better the competitors will be. The seed of Bitcoin's failure is planted at the very moment it becomes successful. 

Now if only I can short bitcoin - the chart is looking like a classic bubble.


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## Tim_54321

*Re: Bitcoins - Peer to Peer currency*



skc said:


> I think bitcoin will fail pretty quickly.
> 
> Supporters of bitcoin say that it works just like fiat money, but its supply is limited by the 21m cap, whereas governments can print money that reduces the value of the fiat currency.
> 
> That is true but is missing the big picture. The supposed 21m bitcoin cap doesn't actually offer any real protection. Sure, bitcoin itself will not create any more dollars, but what is stopping any other imitators starting the same thing?
> 
> Yes, government prints money that devalues the currency. But what is important to remember is that government is the _only _one who can print more money. With e-currency, anyone can print more money! And that's supposed to offer better protection than government fiat money? There are no regulations or authorities involved. I bet you there are hundreds of programmers out there testing beta of their own currencies already.
> 
> Gold holds its value because it has a finite supply and cannot be 'printed'. If you and I can create gold out of thin air, what would be the value of gold be?
> 
> The higher the value of bitcoin, the faster and better the competitors will be. The seed of Bitcoin's failure is planted at the very moment it becomes successful.
> 
> Now if only I can short bitcoin - the chart is looking like a classic bubble.




I can see where you are coming from, but I disagree. Your argument seems to consist of 2 points. More can be created out of thin air and a better alternative will come along. More can't be created as I explain below and your if you think a competitor may be better, which it may well be, then you must think the idea has merit?

There is nothing stopping someone starting a competing currency. In fact bitcoin is open source so you could start your own little seperate currency if you wanted. No one would use it unless it provided tangible benefits over the current bitcoin though. If bitcoin fails it may be because of a better alternative crypto currency, but I think it is inevitable that a currency of this type will succeed. Competing currencies of this type may not be a bad thing just like multiple currencies in the real world isn't a bad thing.

It's not the case that anyone can print an e-currency. It has to be an accepted form of exchange, which bitcoin is becoming, before anyone cares. Any currency to rival bitcoin would have to have real advantages over it to be adoapted. Bitcoins can be "mined" until the 21 million is reached, this is analagous to mining gold from the ground untill it has been exhausted and in the case of bitcoin, mining serves to distribute the currency in it's early stages.  You can't make more bitcoins after 21 million unless you make a new currency, however each coin has up to 8 decimal places so they can be practically used no matter what their value. 

There is the chance it is a bubble and I agree it looks that way from the chart. However, I think the fundamentals of bitcoin are sound and the price is largely a function of the extremely tight supply of bitcoins.

This is an interesting map of the nodes on the bitcoin network. As you can see it's quite widespread. http://maps.google.com/maps?q=https://smsz.net/btcStats/bitcoin.kml


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## So_Cynical

*Re: Bitcoins - Peer to Peer currency*



skc said:


> I think bitcoin will fail pretty quickly.
> 
> Supporters of bitcoin say that it works just like fiat money, but its supply is limited by the 21m cap, whereas governments can print money that reduces the value of the fiat currency.
> 
> That is true but is missing the big picture. The supposed 21m bitcoin cap doesn't actually offer any real protection. Sure, bitcoin itself will not create any more dollars, but what is stopping any other imitators starting the same thing?
> 
> Yes, government prints money that devalues the currency. But what is important to remember is that government is the _only _one who can print more money. With e-currency, anyone can print more money! And that's supposed to offer better protection than government fiat money? There are no regulations or authorities involved. I bet you there are hundreds of programmers out there testing beta of their own currencies already.
> 
> Gold holds its value because it has a finite supply and cannot be 'printed'. If you and I can create gold out of thin air, what would be the value of gold be?
> 
> The higher the value of bitcoin, the faster and better the competitors will be. The seed of Bitcoin's failure is planted at the very moment it becomes successful.
> 
> Now if only I can short bitcoin - the chart is looking like a classic bubble.




Sure nothing to stop a rival or 10 from starting up...many have preceded BC and many will follow im sure, what makes BC unique is that (i think) it was the first virtual currency to be encrypted with an unbreakable encryption key, just like a serial number on a note, and the very nature of the peer to peer program that creates and tracks BC movements make BC a real pioneer.

Like say IBM, Google, Cisco and Apple are/were pioneers...and that's where some of the allure with BC comes from, the fact that each BC has a unique encryption key and the fact that the software making, tracking and verifying transactions of BC actually lives on the PC's of the people using the currency.

BC has potential and is certainly unique....there's a real flavour of a social currency about it.


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## Tyler Durden

*Re: Bitcoins - Peer to Peer currency*



Tim_54321 said:


> Why is fiat currency worth anything? All it is is a bit of paper?




Well in theory, it had its origins tied to gold, hence there is a longstanding link with the value that fiat curreny represents (even though it may not be the case today).

But it seems like BC has just come along and said to everyone "we are of value". But why?


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## skc

*Re: Bitcoins - Peer to Peer currency*



Tim_54321 said:


> I can see where you are coming from, but I disagree. Your argument seems to consist of 2 points. More can be created out of thin air and a better alternative will come along. More can't be created as I explain below and your if you think a competitor may be better, which it may well be, then you must think the idea has merit?
> 
> There is nothing stopping someone starting a competing currency. In fact bitcoin is open source so you could start your own little seperate currency if you wanted. No one would use it unless it provided tangible benefits over the current bitcoin though. If bitcoin fails it may be because of a better alternative crypto currency, but I think it is inevitable that a currency of this type will succeed. Competing currencies of this type may not be a bad thing just like multiple currencies in the real world isn't a bad thing.
> 
> It's not the case that anyone can print an e-currency. It has to be an accepted form of exchange, which bitcoin is becoming, before anyone cares. Any currency to rival bitcoin would have to have real advantages over it to be adoapted. Bitcoins can be "mined" until the 21 million is reached, this is analagous to mining gold from the ground untill it has been exhausted and in the case of bitcoin, mining serves to distribute the currency in it's early stages.  You can't make more bitcoins after 21 million unless you make a new currency, however each coin has up to 8 decimal places so they can be practically used no matter what their value.




Forget about the technology smarts and other practical attributes of bitcoin - those are necessary but not sufficient for it to work - bitcoin can only have value because of 2 critical things. 1. Acceptable form of exchange and 2. Limited supply. Both are currently satisfied and hence bitcoin has value currently - that cannot be disputed.

1 is a bit of a mystery to me. Do you have any information on how bitcoin started as an acceptable form of exchange? At some point in time it made a quantum leap from having no value to having some value. How did that happen? Only then it can become an acceptable form of exchange. 

The technology can be replicated no doubt, but can 'acceptability' be imitated as well? If so, the problem isn't just that there is a competitor to bitcoin. The problem is that the second condition for value (i.e. limited supply) will be violated. The 21m cap is useless in this case. 

So the real question is...Why can't a different e-currency with the same characteristics become an acceptable form of exchange when bitcoin can? If there is a ironclad reason why not, then I am open to bitcoin having some long term value.

I must say this is very intriguing and is stretching my very limited knowledge in economics... but I am doubting it on the grounds of logic at the moment.


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## Tim_54321

*Re: Bitcoins - Peer to Peer currency*



skc said:


> 1 is a bit of a mystery to me. Do you have any information on how bitcoin started as an acceptable form of exchange? At some point in time it made a quantum leap from having no value to having some value. How did that happen? Only then it can become an acceptable form of exchange.




I'm relitively new to bitcoin and only heard about it 3 weeks ago but I guess initially it became an acceptable form of exchange between the community that formed around it's development and grew from there (see this as an example http://forum.bitcoin.org/?topic=137.0) As more people realised the merits of such a currency it spread to the point where it had received a fair bit of (non mainstream) media in the last few months.

I think bitcoin has got enough momentum now that any similar alternative currency would have to be significantly better to gain a foothold and challenge the same 'market' bitcoin has. The fact that it is the first of it's type might be enough to secure the market. Sites and services are springing up around bitcoin and these will serve as the infrastructure that make bitcoin a viable online currency. Once that is in place other competing currencies would have to replicate that to have a chance.

EDIT: also the mining of bitcoins serves to distribute the currency helping it gain a foothold.


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## Tim_54321

*Re: Bitcoins - Peer to Peer currency*

The price of bitcoins has doubled in a week for anyone interested.


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## So_Cynical

*Re: Bitcoins - Peer to Peer currency*



Tim_54321 said:


> The price of bitcoins has doubled in a week for anyone interested.




LOL its true...1 USD will get you 18.5 BC as im typing, up over 120% in a week  if we were in bubble territory last week at 8 BC for 1 USD/LR then this must be double bubble territory. 

i really thought that the lack of any genuine need for BC due to the BC economy being  almost non existent would stifle demand...the demand and thus exchange rate is being driven by pure speculation, i wish i had thrown 500 bucks at this back in the day.


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## disarray

*Re: Bitcoins - Peer to Peer currency*

informative article HERE from a systems admin who is using his schools pc's as a bitcoin mining farm. explains in simple terms the concepts and processes behind it.

the Mt. Gox Bitcoin Exchange has market rate at US$18.15


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## Tim_54321

*Re: Bitcoins - Peer to Peer currency*

This is one of the best articles I've read on bitcoin. http://www.businessinsider.com/an-emerging-free-market-currency-2011-6


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## Tim_54321

*Re: Bitcoins - Peer to Peer currency*



disarray said:


> informative article HERE from a systems admin who is using his schools pc's as a bitcoin mining farm. explains in simple terms the concepts and processes behind it.
> 
> the Mt. Gox Bitcoin Exchange has market rate at US$18.15




"Right now I’m making a Bitcoin about every five days."

He must just be CPU mining. Mining with your graphics card is the way to go these days. They can mine at a rate 30 times a cpu. I have a computer with a 5870 and that makes a bitcoin about every 2 days currently.


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## So_Cynical

*Re: Bitcoins - Peer to Peer currency*

I forgot to mention earlier that the GLBSE Global Bitcoin Stock Exchange is up and running  Fully self regulated and ungoverned, and operating without any licences or approvals etc etc.

Its the wild wild west over in BC world :cowboy: these guys are making it up as they go along, creating a virtual world to go along with their virtual currency....and yet somehow its working.

http://glbse.com/


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## DB008

*Re: Bitcoins - Peer to Peer currency*

There was a very good article in the WIRED last week on this.
I'll have a dig for it.

==FOUND IT==

Underground Website Lets You Buy Any Drug Imaginable


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## sinner

*Re: Bitcoins - Peer to Peer currency*

So_Cynical, the reason bitcoins went from 1 to 8 has nothing to do with speculators or USD haters.

The revaluation occurred after this

http://www.bitcoinblogger.com/2011/04/bitcoin-technical-lead-to-present-at.html
http://forum.bitcoin.org/?topic=6652.0


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## cynic

*Re: Bitcoins - Peer to Peer currency*



So_Cynical said:


> I forgot to mention earlier that the GLBSE Global Bitcoin Stock Exchange is up and running  Fully self regulated and ungoverned, and operating without any licences or approvals etc etc.
> 
> Its the wild wild west over in BC world :cowboy: these guys are making it up as they go along, creating a virtual world to go along with their virtual currency....and yet somehow its working.
> 
> http://glbse.com/




Perhaps this virtual world has a virtual regulatory body with virtual watchdogs, marshals etc.


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## prawn_86

*Re: Bitcoins - Peer to Peer currency*

Now up to circa $26 per coin


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## disarray

*Re: Bitcoins - Peer to Peer currency*



cynic said:


> Perhaps this virtual world has a virtual regulatory body with virtual watchdogs, marshals etc.




yeah, it's all "peer" to "peer"


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## Tim_54321

*Re: Bitcoins - Peer to Peer currency*



prawn_86 said:


> Now up to circa $26 per coin




broke $20 and $30 in under 24 hours...


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## skc

*Re: Bitcoins - Peer to Peer currency*

Is it crashing now or just a blip in the road?

http://www.dailytech.com/Digital+Black+Friday+First+Bitcoin+Depression+Hits/article21877.htm


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## So_Cynical

*Re: Bitcoins - Peer to Peer currency*

Bitcoin has fallen from its 30 USD high last week to a more reasonable 15 USD...the recent 30 USD high attracted  alot of main stream media attention, resulting in half assed reporting and the usual main stream media beat up...like this write up at CNN money. 

The clock is ticking on Bitcoin http://tech.fortune.cnn.com/2011/06/17/the-clock-is-ticking-on-bitcoin/

This article is a little more realistic. 

Bitcoins: Currency of the Geeks http://www.businessweek.com/magazine/content/11_26/b4234041554873.htm

And the funny BC photo of the week come from this thread.
http://forum.bitcoin.org/index.php?topic=18397.0
~


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## skc

*Re: Bitcoins - Peer to Peer currency*



So_Cynical said:


> Bitcoin has fallen from its 30 USD high last week to a *more reasonable *15 USD...the recent 30 USD high attracted  alot of main stream media attention, resulting in half assed reporting and the usual main stream media beat up...like this write up at CNN money.




Personally I think a reasonable rate is $0...so I suppose $15 is _more reasonable _than $30.


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## Tim_54321

*Re: Bitcoins - Peer to Peer currency*



skc said:


> Personally I think a reasonable rate is $0...so I suppose $15 is _more reasonable _than $30.




It got pretty close to 0 yesterday! Some large account got hacked on the biggest bitcoin exchange MtGox and sold off all the coins down to 0.01.

"The bitcoin will be back to around 17.5$/BTC after we rollback all trades that have happened after the huge Bitcoin sale that happened on June 20th near 3:00am (JST).

One account with a lot of coins was compromised and whoever stole it (using a HK based IP to login) first sold all the coins in there, to buy those again just after, and then tried to withdraw the coins. The $1000/day withdraw limit was active for this account and the hacker could only get out with $1000 worth of coins.

Apart from this no account was compromised, and nothing was lost. Due to the large impact this had on the Bitcoin market, we will rollback every trade which happened since the big sale, and ensure this account is secure before opening access again."
https://support.mtgox.com/entries/2...-due-to-a-compromised-account-rollback?page=3

EDIT: BTW the hacking didn't comprimise the security of the bitcoin network, just the site where they are traded.


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## skc

*Re: Bitcoins - Peer to Peer currency*



Tim_54321 said:


> It got pretty close to 0 yesterday! Some large account got hacked on the biggest bitcoin exchange MtGox and sold off all the coins down to 0.01.
> 
> "The bitcoin will be back to around 17.5$/BTC after we rollback all trades that have happened after the huge Bitcoin sale that happened on June 20th near 3:00am (JST).
> 
> One account with a lot of coins was compromised and whoever stole it (using a HK based IP to login) first sold all the coins in there, to buy those again just after, and then tried to withdraw the coins. The $1000/day withdraw limit was active for this account and the hacker could only get out with $1000 worth of coins.
> 
> Apart from this no account was compromised, and nothing was lost. Due to the large impact this had on the Bitcoin market, we will rollback every trade which happened since the big sale, and ensure this account is secure before opening access again."
> https://support.mtgox.com/entries/2...-due-to-a-compromised-account-rollback?page=3
> 
> EDIT: BTW the hacking didn't comprimise the security of the bitcoin network, just the site where they are traded.




This is pretty bad for bitcoin. Current holders have to be pretty brave to not be shaken by this...

I thought Bitcoin might fail due to underlying economics (or there lack of) but it could just as well fail due to the enabling structure being not up to scratch...


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## white_goodman

*Re: Bitcoins - Peer to Peer currency*

ive written this somewhere else on the 'deep web' (lol) maby i havent read enough on it or fully dont grasp the picture but this was my initial thoughts..

lets just examine this...

-real money is endorsed/backed by govt, despite it being fiat it is still widely accepted
- money is exchanged for productive work, investing (cash returns - rent, dividend, royalties), or in some cases purely speculation
- in the case of speculation ie stocks it is still usually backed up by a physical item, net tangible assets of the company, business cash flows etc.
- this system was allegedly brought about by those upset with the US Fed (tin hat crews) and the large devaluation of the USD (actually private banks do more harm to money supply excesses but thats for another time), so in revolt against fiat money they create a form of money backed by nothing, created out of knowhere... strong logic..
- also if its such a rebellion against the USD, how come the the only thing that gives this value is that it is backed or valued in USD???


other points:
- people that have bought into this 'clever' marketing will violently reject any rational commentary to debate against there position.. Ask yourself how abusive property flippers, new home owners etc were around 2005 in the US if you mentioned that the property bubble would burst.. talk about emotions over reason.
- fools and there money are soon parted
- the originators or ones in the know will be well and truly out of this fraudulent system leaving its disciples with the 'cheque'.


what the fcuk are blocks or proof of work, what is running your computer all night actually acheiving?!?? People will always be suckered into the notion of getting something for nothing, a product of the welfare state (free lunch society) that the western world is slowly becoming.


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## So_Cynical

*Re: Bitcoins - Peer to Peer currency*

MtGox got hacked...not good, not good at all...talk of half a million BC gone. :dunno: and all account holders info posted online at hacking sites...good to see that Google was quick on the job with email password resets.

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

Edit:

Looking at the Stolen list of account details...amazing that my account was one of the first 2500 accounts made at Mtgox out of 60000...i was in on the ground floor, a first mover and yet made nothing.


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## sinner

*Re: Bitcoins - Peer to Peer currency*

Nothing to see here, move along.

Bitcoin founder takes bitcoins to show the CIA.

Bitcoins start ramping from 1-2USD to 8USD on Mt Gox shortly after that.

Stories start appearing in the news to get people interested in bitcoins:

* Bitcoin miner busted by cops who thought his power consumption was for growing weed
* SIlk Road buy drugs on bitcoin
* Hitmen, kiddie pr0n, prostitutes using bitcoin stories
* Bitcoin tech stories about how it is supposedly "anonymous", "secure" etc.

By now bitcoins gone from 8-12 to 20-30.

...

This was a pump and dump folks, someone with access to the press got all cartel on the bitcoin markets ****.

My speculation is that the CIA recognised they had access to a hard limit market (just like the good old days), where they could easily gain control over a large portion of the supply of bitcoins. The original developer alone holds 25% of all bitcoins ever mined, and combined with his 6 developer team, they hold over 50%!


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## sinner

*Re: Bitcoins - Peer to Peer currency*

This thread is very interesting on the bitcoin forum

http://forum.bitcoin.org/index.php?topic=20207.0

Someone managed to subpenny the 0.01 bids at 0.0101 and grabbed 250,000 bitcoins during the crash and posted their version of events.

The author of the that thread has made some interesting observations and accusations, worth a read for anyone interested in the story.

Sort of reminds me of May 6 flash crash dissection with nanex.


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## So_Cynical

*Re: Bitcoins - Peer to Peer currency*



sinner said:


> This thread is very interesting on the bitcoin forum
> 
> http://forum.bitcoin.org/index.php?topic=20207.0
> 
> Someone managed to subpenny the 0.01 bids at 0.0101 and grabbed 250,000 bitcoins during the crash and posted their version of events.
> 
> The author of the that thread has made some interesting observations and accusations, worth a read for anyone interested in the story.
> 
> Sort of reminds me of May 6 flash crash dissection with nanex.




That thread is 15 pages...in one day!!!!!!! phenomenal.

a quote



> The site stopped responding completely for a while, probably from so many people hitting refresh to see what was going on. When I got back in, I saw in my account:
> 
> 06/19/11 17:51  Bought BTC  259684.77 for 0.0101
> 
> I had just purchased over 250,000 bitcoins for $2613. At the trading price immediately before this large sell order happened, that number would have been worth nearly $5 million. After I regained my breath, I tried to figure out what to do. I wasn't sure what was really going on.




This is the sort of stuff ya just never see on ASF or other proper stock sites.


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## skc

*Re: Bitcoins - Peer to Peer currency*



skc said:


> I think bitcoin will fail pretty quickly.
> 
> Now if only I can short bitcoin - the chart is looking like a classic bubble.




Hey my theoretical short (30 May) is now in the money! After being down 3x initial capital that is.

The old saying "The market will stay irrational longer than you can stay solvent" rings true.


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## againsthegrain

*Re: Bitcoins - Peer to Peer currency*

Bitcoins have quadrippled in value over the last few months, not sure if its because of all the recent media reports on silk road which only operates on bitcoins as a payment medium or perhaps the russian hacker who unlocked iphone4 free applications and acception donations by bitcoins. But with a locked market cap of bitcoins out there this has caught my eye and becoming a very interesting gamble. 

Anybody else here been following bitcoins?


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## Joules MM1

*Re: Bitcoins - Peer to Peer currency*



againsthegrain said:


> Bitcoins have quadrippled in value over the last few months, not sure if its because of all the recent media reports on silk road which only operates on bitcoins as a payment medium or perhaps the russian hacker who unlocked iphone4 free applications and acception donations by bitcoins. But with a locked market cap of bitcoins out there this has caught my eye and becoming a very interesting gamble.
> 
> Anybody else here been following bitcoins?




liquidity that was in that alternative metal, yellow thingy, awash around bitcoin.......and it'll leave just as quickly if not quicker


----------



## prawn_86

*Re: Bitcoins - Peer to Peer currency*

I was looking for this thread a few eeks ago but couldn't find it 

I threw a few hundred dollars at bitcoins when they were about $4, wish i had put more in, but it was just for laughs more than anything to find out how it works. Turned out to be an OK investment


----------



## So_Cynical

*Re: Bitcoins - Peer to Peer currency*

I spent a few hours on the BC forum a few weeks ago after an absence of many months and was amazed to see the place is still going strong, bigger and bolder than before...the BC stock exchange has 100s of listings, mostly bonds to finance BC mining set-ups...the BC world is still very isolated and still full of opportunity with millions being made.

The BC in circulation had a USD value of over 200 million a couple of weeks ago...perhaps twice that now.

Its a brave new world that's now (i think) approaching its 2nd anniversary...or maybe its passed already.


----------



## disarray

*Re: Bitcoins - Peer to Peer currency*

bitcoins are a new paradigm. people will always need a medium of exchange, and here is one that is out of reach of government, banks, or "the system". as the world virtualizes, this is the first virtual currency. all the blathering about "the cloud" is just the beginning. this is snowcrash territory.



			
				Joules MM1 said:
			
		

> liquidity that was in that alternative metal, yellow thingy, awash around bitcoin.......and it'll leave just as quickly if not quicker




promiscuous money will come and go. it doesn't change the concept.


----------



## againsthegrain

*Re: Bitcoins - Peer to Peer currency*

Been playing the dips for a bit of fun and doing allright. Just struck me when doing my tax return that this is a bit of a grey area and no way really for the ato to enforce paying cgt on profits, since this is a annonymous currency.


----------



## DB008

*Re: Bitcoins - Peer to Peer currency*



againsthegrain said:


> not sure if its because of all the recent media reports on silk road which only operates on bitcoins as a payment medium




Yes, it seems that silk-road has been gaining in popularity and has hit the usual main media recently.


----------



## prawn_86

*Re: Bitcoins - Peer to Peer currency*



DB008 said:


> Yes, it seems that silk-road has been gaining in popularity and has hit the usual main media recently.




Vendors must be loving the free media promotion


----------



## againsthegrain

*Re: Bitcoins - Peer to Peer currency*

I saw a few adds on silkroad thanking current affair for the promotions and business is booming lol


----------



## prawn_86

*Re: Bitcoins - Peer to Peer currency*

Up to near $15, they have now gone up nearly 500% since i bought some 

As always looking in hindsight, should have bought more


----------



## Some Dude

*Re: Bitcoins - Peer to Peer currency*

Is anyone here still mining them?


----------



## So_Cynical

*Re: Bitcoins - Peer to Peer currency*



Some Dude said:


> Is anyone here still mining them?




I didn't think anyone here (ASF) was ever mining.

Mining requires a substantial set-up, in the time i have been following BC mining has moved from CPU to GPU to multiple GPU's to the current multiple GPU share farming set-up.


----------



## Some Dude

*Re: Bitcoins - Peer to Peer currency*



So_Cynical said:


> I didn't think anyone here (ASF) was ever mining.
> 
> Mining requires a substantial set-up, in the time i have been following BC mining has moved from CPU to GPU to multiple GPU's to the current multiple GPU share farming set-up.




I was pool mining utilising my home network before the price collapsed and made it marginal for profitability. I have been considering powering it back up.


----------



## againsthegrain

*Re: Bitcoins - Peer to Peer currency*

Suprised they are still going up strong, went up 100% since I took interest but curious does anybody know what is behind the sudden move?


----------



## prawn_86

*Re: Bitcoins - Peer to Peer currency*



againsthegrain said:


> Suprised they are still going up strong, went up 100% since I took interest but curious does anybody know what is behind the sudden move?




haha i just checked the price then because of your comment. I have no idea why the move, but it makes it a ten bagger for me


----------



## ROE

*Re: Bitcoins - Peer to Peer currency*

didnt know people in ASF into it ..I read this a while ago...interesting read

http://www.wired.com/magazine/2011/11/mf_bitcoin/all/


----------



## prawn_86

*Re: Bitcoins - Peer to Peer currency*

What is going on here?? Up to over $60


----------



## white_goodman

*Re: Bitcoins - Peer to Peer currency*

what a great store of value, the volatility of it is stupid, this will end badly

[insert gold bug illuminati NWO tin-hat argument]


----------



## againsthegrain

*Re: Bitcoins - Peer to Peer currency*

nearly 70, this has been going higher and higher on a stupid level. 

Prawn you must be doing really well! 

I note that a big jump has been taking place since the Cyprus tax has been announced, I wonder if Russian money is moving shifting. After all bitcoin fits the perfect model for the Russian organization.


----------



## prawn_86

*Re: Bitcoins - Peer to Peer currency*



againsthegrain said:


> nearly 70, this has been going higher and higher on a stupid level.
> 
> Prawn you must be doing really well!




haha shame i didnt buy more. Some nice beer money that's for sure


----------



## Some Dude

*Re: Bitcoins - Peer to Peer currency*

Just sold some that I had been holding since the 2011 crash. The levels are nutty, time to fire up the mining hardware.


----------



## prawn_86

*Re: Bitcoins - Peer to Peer currency*



Some Dude said:


> Just sold some that I had been holding since the 2011 crash. The levels are nutty, time to fire up the mining hardware.




Yeh i sold my last lot out at $90, too good and illiquid to pass up those gains.

Turned out to be one of my best investments on a % gain basis


----------



## clowboy

*Bitcoin*

So, I have just been looking at Bitcoin a bit since finding out about it from the Cyphrus thread and am somewhat confused.

I understand the concept that it cannot be shut down by any Govt etc and it's apeal in that sense.  I also follow there logic of low cost international transactions.  They liken themselves to Egold from years past but with the advantage of not being able to be shut down. Fair enuff.

The difference I see is that Egold had something of value behind the account, you where buying electronic gold.

I don't follow what Bitcoin is backed by, as far as I can tell it's just a promise of never having more than 21 million bitcoins, otherwise it is mostly just bitcoins manufactured in a similar way to Farmville?

Now I know many people are going to say the USD is fake and manipulated and can just be printed out of thin air and all that, but putting that aside at least the USD is printed out of thin air at a controlled rate.

Bit coins, basically get "printed" at a rate that the collective owners or whatever print (bid them up) them at.
In a month Bitcoins have gone from $45 to $ 90.
Thats the same as the US printing all the money in circulation again in one month.

am I confused or missing anything????

Input apreciated

thans


----------



## So_Cynical

*Re: Bitcoin*



clowboy said:


> So, I have just been looking at Bitcoin a bit since finding out about it from the Cyphrus thread and am somewhat confused.
> 
> I understand the concept that it cannot be shut down by any Govt etc and it's apeal in that sense.  I also follow there logic of low cost international transactions.  They liken themselves to Egold from years past but with the advantage of not being able to be shut down. Fair enuff.
> 
> The difference I see is that Egold had something of value behind the account, you where buying electronic gold.
> 
> I don't follow what Bitcoin is backed by, as far as I can tell it's just a promise of never having more than 21 million bitcoins, otherwise it is mostly just bitcoins manufactured in a similar way to Farmville?
> 
> Now I know many people are going to say the USD is fake and manipulated and can just be printed out of thin air and all that, but putting that aside at least the USD is printed out of thin air at a controlled rate.
> 
> Bit coins, basically get "printed" at a rate that the collective owners or whatever print (bid them up) them at.
> In a month Bitcoins have gone from $45 to $ 90.
> Thats the same as the US printing all the money in circulation again in one month.
> 
> am I confused or missing anything????
> 
> Input apreciated
> 
> thans




Bitcoin forum has all the answers 

https://bitcointalk.org/

spend a day or 2 over there and then tell us what you think.


----------



## Garpal Gumnut

*Re: Bitcoin*



clowboy said:


> So, I have just been looking at Bitcoin a bit since finding out about it from the Cyphrus thread and am somewhat confused.
> 
> I understand the concept that it cannot be shut down by any Govt etc and it's apeal in that sense.  I also follow there logic of low cost international transactions.  They liken themselves to Egold from years past but with the advantage of not being able to be shut down. Fair enuff.
> 
> The difference I see is that Egold had something of value behind the account, you where buying electronic gold.
> 
> I don't follow what Bitcoin is backed by, as far as I can tell it's just a promise of never having more than 21 million bitcoins, otherwise it is mostly just bitcoins manufactured in a similar way to Farmville?
> 
> Now I know many people are going to say the USD is fake and manipulated and can just be printed out of thin air and all that, but putting that aside at least the USD is printed out of thin air at a controlled rate.
> 
> Bit coins, basically get "printed" at a rate that the collective owners or whatever print (bid them up) them at.
> In a month Bitcoins have gone from $45 to $ 90.
> Thats the same as the US printing all the money in circulation again in one month.
> 
> am I confused or missing anything????
> 
> Input apreciated
> 
> thans




My gardener, a Mr.Ponzi has accumulated near half a million bitcoins.

He's a good gardener.

gg


----------



## Farang

*Re: Bitcoin*



clowboy said:


> So, I have just been looking at Bitcoin a bit since finding out about it from the Cyphrus thread and am somewhat confused.
> 
> I understand the concept that it cannot be shut down by any Govt etc and it's apeal in that sense.  I also follow there logic of low cost international transactions.  They liken themselves to Egold from years past but with the advantage of not being able to be shut down. Fair enuff.
> 
> The difference I see is that Egold had something of value behind the account, you where buying electronic gold.
> 
> I don't follow what Bitcoin is backed by, as far as I can tell it's just a promise of never having more than 21 million bitcoins, otherwise it is mostly just bitcoins manufactured in a similar way to Farmville?
> 
> Now I know many people are going to say the USD is fake and manipulated and can just be printed out of thin air and all that, but putting that aside at least the USD is printed out of thin air at a controlled rate.
> 
> Bit coins, basically get "printed" at a rate that the collective owners or whatever print (bid them up) them at.
> In a month Bitcoins have gone from $45 to $ 90.
> Thats the same as the US printing all the money in circulation again in one month.
> 
> am I confused or missing anything????
> 
> Input apreciated
> 
> thans




Bitcoins are "mined" not "printed", no one arbitrarily decides to print new BTC. The supply is limited to 21 million.

BTC going from 45 to 90 in a month is *NOT* the same as the US printing all the money in circulation again in one month.

It is the same in theory as the US *cutting* the money supply in half, or the demand for USD doubling.

Obviously the demand for BTC has increased dramatically over the past month.


----------



## Joules MM1

*Re: Bitcoin*

http://www.dailytech.com/Inside+the+MegaHack+of+Bitcoin+the+Full+Story/article21942.htm

oh ! :burn:


----------



## againsthegrain

*Re: Bitcoin*



Joules MM1 said:


> http://www.dailytech.com/Inside+the+MegaHack+of+Bitcoin+the+Full+Story/article21942.htm
> 
> oh ! :burn:




Article is nearly 2 years old


----------



## So_Cynical

*Re: Bitcoin*



againsthegrain said:


> Article is nearly 2 years old




BC Magazine has regular story's and updates on the happenings and issues in BC world. 

http://bitcoinmagazine.com/


----------



## db94

*Re: Bitcoins - Peer to Peer currency*

now 1 BTC = USD$141 just keeps soaring. gonna end badly eventually. its amazing how its value can change by %2 every few seconds 

heres a live chart data platform

http://bitcoin.clarkmoody.com/


----------



## Garpal Gumnut

*Re: Bitcoins - Peer to Peer currency*



db94 said:


> now 1 BTC = USD$141 just keeps soaring. gonna end badly eventually. its amazing how its value can change by %2 every few seconds
> 
> heres a live chart data platform
> 
> http://bitcoin.clarkmoody.com/




My Gardener Mr.Ponzi is now a bitcoin millionaire, and I now do his garden.

My grass grows.

He has promised to cut it if all goes to crap.

gg


----------



## againsthegrain

*Re: Bitcoins - Peer to Peer currency*

I sold out at a magic .99 predicting $1 to be a profit taking trigger guess didn't happen. Can't believe its on 1.50 already, nobody is even selling anything online on silk road anymore its too hard to keep up with the exchange. 

Once this pops it will float like a rock


----------



## notting

*Re: Bitcoin*

Got smashed last night lost half it's value!


----------



## prawn_86

*Re: Bitcoins - Peer to Peer currency*

I have merged the 2 bitcoin threads we had into one


----------



## Garpal Gumnut

*Re: Bitcoin*



notting said:


> Got smashed last night lost half it's value!




My gardener Mr.Ponzi sold out at $250.

He has agreed to hire me as his gardener.

gg


----------



## ASICK

*Re: Bitcoins - Peer to Peer currency*

http://www.infowars.com/bitcoin-cra...lic-prediction-by-mike-adams-of-natural-news/

up and down and up --- enjoy the ride folks.


----------



## prawn_86

*Re: Bitcoins - Peer to Peer currency*



ASICK said:


> http://www.infowars.com/bitcoin-cra...lic-prediction-by-mike-adams-of-natural-news/
> 
> up and down and up --- enjoy the ride folks.




What a terrible article. I have never seen any other author try and talk themselves up so much, sounds like one of those guys trying to sell their million dollar trading systems.

Anyone (myself included in this thread) who knows even the slightest about BTCs was predicting a crash due to the illiquidity, i dont see why the author needs to write a whole article to pat himself on the back.


----------



## againsthegrain

*Re: Bitcoins - Peer to Peer currency*



prawn_86 said:


> What a terrible article. I have never seen any other author try and talk themselves up so much, sounds like one of those guys trying to sell their million dollar trading systems.
> 
> Anyone (myself included in this thread) who knows even the slightest about BTCs was predicting a crash due to the illiquidity, i dont see why the author needs to write a whole article to pat himself on the back.





All these articles popped out around the time that BTC finally broke the $100 barrier, at which stage we all knew here it will end up very badly since it hit $50.

I saw a few on news.com.au as well, it was almost as if the authors got all their info from forums and quickly tried to claim some fame. 

I was very suprised to see it go past $200 mark, anybody that has been following btc and half a brain would see that as a very bad signal.


Don't think there will be any ride here, just down.


----------



## prawn_86

*Re: Bitcoins - Peer to Peer currency*



againsthegrain said:


> All these articles popped out around the time that BTC finally broke the $1 barrier, at which stage we all knew here it will end up very badly since it hit 50c.




I think you need to multiply your figures by 100, it hasnt been 50c for the 3 years i have known about it


----------



## Garpal Gumnut

*Re: Bitcoins - Peer to Peer currency*

If it looks like a ponzi, sounds like a ponzi and moves like a ponzi, it is a ponzi for gawd's sake.

gg


----------



## againsthegrain

*Re: Bitcoins - Peer to Peer currency*

err right $50 and $100 ... playing dirty cheap speccy stocks does that to me, i see everything in cents


----------



## Superb Parrot

*Re: Bitcoins - Peer to Peer currency*

Interesting recent analysis

https://docs.google.com/file/d/0B2tdZG8OsWtLU1BPbGNPNnc0Unc/view?sle=true


----------



## Aussiejeff

*Re: Bitcoins - Peer to Peer currency*

Oh dear. Looks like Bitcoin bit the dust. 

Will another digital currency ever float after this fiasco? Everyone should get their money back. Apparently.....



> *BITCOIN has halted trading indefinitely and is promising to return everyone's money.*
> The virtual currency whose price has been fluctuating wildly over the last few weeks announced on its website that it must "cease all trading operations indefinitely...due to circumstances beyond its control".
> The announcement comes after weeks of denial of service attacks and technical problems that led to severe price fluctuations.





Read more: http://www.news.com.au/technology/b...ly/story-fn5lic6c-1226623544108#ixzz2QmwjpiED

I'm curious how all those online businesses that had been utilising Bitcoins as their sole or prime trading currency will react now...??

Additional info from Wiki....


> 2013 values
> The USD value of a bitcoin increased ten-fold in early 2013 from $13/BTC on 1 January to $190/BTC on 9 April, three months later. Suggested reasons for the rise in price included the European sovereign-debt crisis – particularly the 2012–2013 Cypriot financial crisis – statements by FinCEN improving the currency's legal standing and rising media and Internet interest.[49][50][51][52]
> *As the market value of the total bitcoin supply approached $1 billion USD*, financial commentators described bitcoin prices as a bubble.[53][54][55] On 10 April 2013, Bitcoin dropped from a price of $266 to $105 before returning to a value of $160 within six hours.[39]


----------



## Aussiejeff

*Re: Bitcoins - Peer to Peer currency*



Garpal Gumnut said:


> If it looks like a ponzi, sounds like a ponzi and moves like a ponzi, it is a ponzi for gawd's sake.
> 
> gg




Metinks it stunk like a Ponzi too.....


----------



## moXJO

*Re: Bitcoins - Peer to Peer currency*

Didn't those Winklevoss twins of facebook fame just sink millions of $ in bitcoins?
They were talking it up like it was a sure thing, must have been a lot of people who invested off the back of their support.


----------



## Underpants Gnome

*Re: Bitcoins - Peer to Peer currency*



Aussiejeff said:


> Oh dear. Looks like Bitcoin bit the dust.
> 
> Will another digital currency ever float after this fiasco? Everyone should get their money back. Apparently.....
> 
> 
> 
> 
> Read more: http://www.news.com.au/technology/b...ly/story-fn5lic6c-1226623544108#ixzz2QmwjpiED
> 
> I'm curious how all those online businesses that had been utilising Bitcoins as their sole or prime trading currency will react now...??
> 
> Additional info from Wiki....




That article is about a single BitCoin exchange - BitFloor - shutting down, not BitCoin itself.  For perspective BitFloor apparently handles ~4% of the trading volume of Mt. Gox - http://www.theverge.com/2013/4/17/4236876/bitcoin-exchange-bitfloor-shuts-doors.

The headline you've quoted ("BITCOIN has halted trading indefinitely and is promising to return everyone's money.") does not match what's on news.com.au now ("BitCoin exchange BitFloor shuts down trading"), so they may have corrected it since you posted.


----------



## Aussiejeff

*Re: Bitcoins - Peer to Peer currency*



Underpants Gnome said:


> That article is about a single BitCoin exchange - BitFloor - shutting down, not BitCoin itself.  For perspective BitFloor apparently handles ~4% of the trading volume of Mt. Gox - http://www.theverge.com/2013/4/17/4236876/bitcoin-exchange-bitfloor-shuts-doors.
> 
> The headline you've quoted ("BITCOIN has halted trading indefinitely and is promising to return everyone's money.") does not match what's on news.com.au now ("BitCoin exchange BitFloor shuts down trading"), *so they may have corrected it since you posted*.




Why those dirty ra.... :frown:

Yup. Truth in journalism again.....  and they didn't even offer a stinking apology for the mis-information....

Note the info under their graph still stands atm.... 







> Bitcoin has ceased trading indefinitely following months of attacks. Picture: Clark Moody


----------



## moXJO

*Re: Bitcoins - Peer to Peer currency*



Aussiejeff said:


> Why those dirty ra.... :frown:
> 
> Yup. Truth in journalism again.....  and they didn't even offer a stinking apology for the mis-information....
> 
> Note the info under their graph still stands atm....




Yeah I just checked google and saw no other news about it. Friken dodge media


----------



## So_Cynical

*Re: Bitcoins - Peer to Peer currency*



Aussiejeff said:


> Oh dear. Looks like Bitcoin bit the dust.
> 
> Will another digital currency ever float after this fiasco? Everyone should get their money back. Apparently.....
> 
> 
> 
> 
> Read more: http://www.news.com.au/technology/b...ly/story-fn5lic6c-1226623544108#ixzz2QmwjpiED
> 
> I'm curious how all those online businesses that had been utilising Bitcoins as their sole or prime trading currency will react now...??
> 
> Additional info from Wiki....




Jeff please.

The main stream media hasn't got a clue as to what's happening in BC world, not a freaking clue.

The currency does not "have a web site" it lives on the computers of maybe a million people, there is no central server or servers, no one individual or group of individuals is running it....your link refers to a BC exchange called BitFloor which is a very minor player in BC world, of a size comparable to Sonray capital when they went under.

Except that BitFloor hasn't gone under just suspended trading and looks like rolling back trades...nothing unusual in BC world, we have seen it before.


----------



## Izabarack

*Re: Bitcoins - Peer to Peer currency*



Aussiejeff said:


> Everyone should get their money back. Apparently.....




Yes, apparently.

Iza


----------



## Some Dude

*Re: Bitcoins - Peer to Peer currency*



Aussiejeff said:


> Metinks it stunk like a Ponzi too.....




Why do you (or GG) think it is a ponzi scheme?


----------



## galumay

*Re: Bitcoins - Peer to Peer currency*



Some Dude said:


> Why do you (or GG) think it is a ponzi scheme?




Look up the definition of a ponzi scheme and its pretty obvious! 

The funny thing is that the doomsday preppers and conspiracy theorists who have so much faith in a non-existent currency call the real economic system a ponzi scheme.

At least with paper currency there is some relationship between the country of issue, its nominal worth and the currencies worth, bitcoins are no more than computer code that has no intrinsic value or asset backing at all. 

At least with gold bullion you can use it for a door stop, or to hit a burgler over the head with it.


----------



## Some Dude

*Re: Bitcoins - Peer to Peer currency*



galumay said:


> Look up the definition of a ponzi scheme and its pretty obvious!
> 
> The funny thing is that the doomsday preppers and conspiracy theorists who have so much faith in a non-existent currency call the real economic system a ponzi scheme.
> 
> At least with paper currency there is some relationship between the country of issue, its nominal worth and the currencies worth, bitcoins are no more than computer code that has no intrinsic value or asset backing at all.
> 
> At least with gold bullion you can use it for a door stop, or to hit a burgler over the head with it.




I have and it isn't obvious to me. I have looked the code and made sure I understood it. It's not the future, and I don't even think it is a virtual currency in the sense of how most proponents believe it is, but I do think it is a very interesting indicator for how a future virtual currency will work. Simply being virtual does not in and of itself correlate to having no value, intrinsic or otherwise. It simply means that you do not attribute the same value to it as someone else but that is not different to how the market operates with all things. The stream of ones and zeros in this mp3 file I am listening to now would have no intrinsic value in the sense you suggest but people treat it as if it has value from a monetary, intellectual property, and legal perspective.

Would you be able to elaborate for me why you believe it is like a ponzi scheme?



			
				Wikipedia said:
			
		

> A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation. The Ponzi scheme usually entices new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. Perpetuation of the high returns requires an ever-increasing flow of money from new investors to keep the scheme going.




I think there are several inherent flaws in Bitcoin, but a ponzi scheme does not appear to myself to be one of them.


----------



## prawn_86

*Re: Bitcoins - Peer to Peer currency*



Some Dude said:


> I think there are several inherent flaws in Bitcoin, but a ponzi scheme does not appear to myself to be one of them.




I would be interested to hear what flaws you think exist in the current BTC system


----------



## Some Dude

*Re: Bitcoins - Peer to Peer currency*



prawn_86 said:


> I would be interested to hear what flaws you think exist in the current BTC system




1. The system relies on a processing network i.e. miners, to prcoess transactions which I believe are the basic value of Bitcoin. While an incentive was built into the system to encourage processing, once that incentive is gone, I am not convinced that sufficient processing power will remain to facilitate the level of transactions required. Granted the difficulty will come down to compensate for the lower processing power, but the incentive will not remain and I suspect the network will collapse. This will provide a viable attack vector for the primary security weakness i.e. more than 50% of the processing network belonging to one entity.

2. Bitcoin is more a commodity than a virtual currency. I can't go down to my local super market and trade gold for my groceries. Bitcoin has the same problem in that it's value is in it's global interchangeability between localised currencies. If I want to send "value" to someone not in my local area, Bitcoin is a mechanism that enables me to do so in a manner that can't be directly restricted, but it is limited in that it ultimately has to be converted to the local "currency" for the value to be usable.

3. I think it was an error to restrict the maximum number of Bitcoins, or at least to the level it is restricted. I understand why it was perceived as a good thing but assuming I am wrong about points 1 and 2, and it takes hold as a virtual currency, then the limited number will inflate the "value" to unusable proportions i.e. the lowest bitcoin value will be worth more than is usable in a daily sense.

4. The crypto is good for the current computing landscape but if different computing mechanisms make current "hard" problems not so hard, then the security underpinning Bitcoin may collapse. An example is the hash processing in that devices are nearly available that make the exercise almost trivial. I suspect the same will eventuate for some crypto-algorithms over time.


----------



## white_goodman

*Re: Bitcoins - Peer to Peer currency*



Some Dude said:


> 3. I think it was an error to restrict the maximum number of Bitcoins, or at least to the level it is restricted. I understand why it was perceived as a good thing but assuming I am wrong about points 1 and 2, and it takes hold as a virtual currency, then the limited number will inflate the "value" to unusable proportions i.e. the lowest bitcoin value will be worth more than is usable in a daily sense..




i also see problems with market/pricing inefficiency as spreads/liquidity can dry up quite quickly relating to the bitcoin cap.. also a massively volatile/deflating currency aint great for transactions. 

You can also delve into theories of value if youre inclined..

‘‘A prince, who should enact that a certain proportion of his taxes be paid in a paper money of a certain kind, might thereby give a certain value to this paper money."


----------



## white_goodman

*Re: Bitcoins - Peer to Peer currency*

the other problem it currently has is there are no forward markets, which is problematic if u want to actually get bigger businesses involved instead of silk road enthusiasts and various other social outcasts


----------



## sinner

*Re: Bitcoins - Peer to Peer currency*

Mish interview with Bitcoin Jesus:

http://globaleconomicanalysis.blogspot.com.au/2013/04/mish-interview-with-bitcoin-jesus.html

Bitcoin Jesus Sez:


> Mish: Anything else you wish to add?
> BJ: Yes thanks. It is important to realize that Bitcoin has two independent functions:
> 
> 1. As a currency
> 2. As a payment system
> 
> To use Bitcoin as a payment system, it doesn't matter if they are worth $1 or $100,000 each. You simply buy the correct USD amount, and send it to the recipient who immediately exchanges them back into whatever other currency they want.
> 
> I don't think Bitcoin's usefulness as an unblockable, uncontrollable, potentially anonymous payment system can be disputed. Time will tell how useful the bitcoins within the Bitcoin payment system become as an actual currency.




I agree with this POV, although caveat around it's only useful as a payment system as long as a functioning, liquid market for BTC/USD exists.


----------



## So_Cynical

*Re: Bitcoins - Peer to Peer currency*



prawn_86 said:


> I would be interested to hear what flaws you think exist in the current BTC system




Can i?

Flaws in the actually system that creates BC? none that i can see, it is what it is.

Flaws in the currency sure..for starters its a currency that can actually buy you very little, you can exchange it for real money but over the last 3 years BC has traded more like a commodity than a currency, and no regulations mean no safeguards.

While the community in general are fair minded and often do the right thing simply because its right, some people can and do try and take advantage of the situation, just look at at April DOS attacks against Mt Gox...i love the virtual world of BC land but the currency just isn't behaving like a currency should.


----------



## aster

*Re: Bitcoins - Peer to Peer currency*

Is there an easy way to invest in Bitcoins in Australia? Any funds which invest in this directly? I wouldn't mind playing about with this but I'd rather keep the transactions local, via some sort of fund for instance which focuses on Bitcoins. I also don't want to "physically" hold them by having to keep some codes safe on a usb stick sitting in my safe for instance.

Any ideas?


----------



## aster

*Re: Bitcoins - Peer to Peer currency*

Any indirect way to speculate on Bitcoins, like through an ETF perhaps?


----------



## Tim_54321

*Re: Bitcoins - Peer to Peer currency*



aster said:


> Any indirect way to speculate on Bitcoins, like through an ETF perhaps?




Thought I'd see if ASF had a bitcoin thread, seems that I was the one that started it!

I don't know of an indirect way to speculate on it, why not just buy some?


----------



## aster

*Re: Bitcoins - Peer to Peer currency*



Tim_54321 said:


> Thought I'd see if ASF had a bitcoin thread, seems that I was the one that started it!
> 
> I don't know of an indirect way to speculate on it, why not just buy some?




Two reasons really. Firstly I don't want to keep them at some exchange as those tend to disappear or get hacked, and secondly I don't want to hold them "physically" either as that is also risky. Kind of like keeping cash under the pillow 

I have found some CFDs though which could be interesting. Seems like the only way to get into the game without having to deal with the technicalities of holding onto Bitcoins...


----------



## Tim_54321

*Re: Bitcoins - Peer to Peer currency*



aster said:


> Two reasons really. Firstly I don't want to keep them at some exchange as those tend to disappear or get hacked, and secondly I don't want to hold them "physically" either as that is also risky. Kind of like keeping cash under the pillow
> 
> I have found some CFDs though which could be interesting. Seems like the only way to get into the game without having to deal with the technicalities of holding onto Bitcoins...




There's a program called bitcoin armoury where you create 'paper' wallet offline. You print it out and put it in a safe place. You then send the bitcoins you bought to its address. It never needs to touch the internet but you can import the wallet back into armoury when you want to use them.


----------



## Garpal Gumnut

*Re: Bitcoins - Peer to Peer currency*

Is it possible to buy Tulips at Interflora with bitcoins?

gg


----------



## Joules MM1

*Re: Bitcoins - Peer to Peer currency*



Garpal Gumnut said:


> Is it possible to buy Tulips at Interflora with bitcoins?
> 
> gg




amen!

http://soberlook.com/2013/11/bitcoin-goes-vertical-in-speculative.html






			
				SoberLook said:
			
		

> .... utter nonsense. This is speculation - pure and simple....


----------



## So_Cynical

*Re: Bitcoins - Peer to Peer currency*



Joules MM1 said:


> amen!
> 
> http://soberlook.com/2013/11/bitcoin-goes-vertical-in-speculative.html
> 
> View attachment 55371




That's ridiculous...to think of the money i could of made.  a BC was worth about 7$ when i discovered them.


----------



## prawn_86

*Re: Bitcoins - Peer to Peer currency*



So_Cynical said:


> That's ridiculous...to think of the money i could of made.  a BC was worth about 7$ when i discovered them.




yeh i bought a tiny amount at $3, and sold at around $100


----------



## aster

*Re: Bitcoins - Peer to Peer currency*

Bitcoin jumping around today, as "low" as $530 and as high as $900.


----------



## Conza88

*Re: Bitcoins - Peer to Peer currency*

Bit of a side note; but for those interested in the issue of Bitcoins - _Jeffrey Tucker_, and _Konrad Graf_ will be in Brisbane for the *2013 Australian Mises Seminar* on 30th Nov ”” 1st December from 9-5pm at the Emporium Hotel.

Bitcoin will be discussed. _Bitcoin: Practical and business aspects_, and _Bitcoin: Technical and economic aspects._


----------



## doctorj

*Re: Bitcoins - Peer to Peer currency*



aster said:


> Bitcoin jumping around today, as "low" as $530 and as high as $900.




My personal view is that Bitcoin is binary – it’s either worth a lot and significantly more than it is today, or its worth nothing at all.   US money supply (M2) is around USD 10.5 trillion and therefore if all of that was converted into Bitcoin, assuming all 21 million bitcoins exist, the implied price would be around USD 0.5 million per bitcoin.  And there’s a lot of M2 out there that isn’t USD.  That’s if you buy the Bitcoin story.

For me, there are many reasons why you probably shouldn’t.  I think a currency that is finite is analogous to a deflationary economy and therefore their use is discouraged, there are an unlimited number of Bitcoin substitutes because there are no barriers to entry, there are significant barriers to any serious companies adopting Bitcoin in any meaningful way (even if you ignore regulation), trust is a huge issue and the whole system is reliant on encryption that to my understanding cannot easily be upgraded and may one day be defeated.

I’ve explored it in much greater detail on my blog.  In short, I think it’s nothing more than a means of settling illegal transactions, a vehicle for speculation or a protest against banks and the governments that support them.  I really hope I’m wrong, but I think it’s only a matter of time before the bubble busts.


----------



## db94

*Re: Bitcoins - Peer to Peer currency*



doctorj said:


> My personal view is that Bitcoin is binary – it’s either worth a lot and significantly more than it is today, or its worth nothing at all.   US money supply (M2) is around USD 10.5 trillion and therefore if all of that was converted into Bitcoin, assuming all 21 million bitcoins exist, the implied price would be around USD 0.5 million per bitcoin.  And there’s a lot of M2 out there that isn’t USD.  That’s if you buy the Bitcoin story.
> 
> For me, there are many reasons why you probably shouldn’t.  I think a currency that is finite is analogous to a deflationary economy and therefore their use is discouraged, there are an unlimited number of Bitcoin substitutes because there are no barriers to entry, there are significant barriers to any serious companies adopting Bitcoin in any meaningful way (even if you ignore regulation), trust is a huge issue and the whole system is reliant on encryption that to my understanding cannot easily be upgraded and may one day be defeated.
> 
> I’ve explored it in much greater detail on my blog.  In short, I think it’s nothing more than a means of settling illegal transactions, a vehicle for speculation or a protest against banks and the governments that support them.  I really hope I’m wrong, but I think it’s *only a matter of time before the bubble busts.*





IMO it has already burst. Check out this chart and how a bubble usually plays out. Currently at the bull trap


----------



## Tim_54321

*Re: Bitcoins - Peer to Peer currency*



db94 said:


> IMO it has already burst. Check out this chart and how a bubble usually plays out. Currently at the bull trap
> 
> View attachment 55419




That's all well and good but we are on the third bitcoin 'bubble' and each makes vastly higher highs than the last. The same diagram has been compared to all of them. True bubbles never go close to retaining their pre burst highs.


----------



## db94

*Re: Bitcoins - Peer to Peer currency*



Tim_54321 said:


> That's all well and good but we are on the third bitcoin 'bubble' and each makes vastly higher highs than the last. The same diagram has been compared to all of them. True bubbles never go close to retaining their pre burst highs.




didnnt play out as i predicted. I now feel that if internet currency catches on we have something similar to the dotcom bubble. The only threat I see to bitcoin is other coins. There are a few currencies that are MUCH cheaper and actually have faster transaction speeds (<30 seconds) than bitcoin (1 day), so if it does catch on perhaps they too will boom.


----------



## pacestick

*Bitcoin*

BITCOIN BACK ABOVE $1,000.00


http://www.afr.com/p/world/bitcoins_exceed_us_again_XvSfeJelNIT53jeDmJhRvO

Olga Kharif

The price of Bitcoins *surpassed $US1000 ($1110) again on the Mt.Gox exchange after Zynga said it would start accepting the virtual *currency for some online social games as the digital money becomes more widely used.

Bitcoins, which exist as software and aren’t controlled by any country or banking authority, surged on Monday to about $US1119 on the exchange, one of several markets where they are traded for US dollars, euros and other currencies.

Bitcoins first crossed the $US1000 threshold in late November and reached a record $US1238 on Mt.Gox on December 4, but then plummeted to as low as $US640 after China’s largest online market for the virtual currency stopped accepting deposits. The digital currency has rebounded as more merchants accept Bitcoins for everything from Gummi bears to smartphones on the internet. Zynga is the latest *merchant to accept Bitcoins, which can be used to buy virtual items in games.

“Bitcoin has been remarkably *resilient in the face of all the bad news out of China,” said Nicholas Colas, chief market strategist at ConvergEx Group.

“The strength shows a continued interest, which is a very positive sign.”

Bitcoins were trading for about $US13 a year ago before wider acceptance and speculators boosted prices.

The rally gained steam in October, after *regulators shut down the Silk Road hidden website, where people could obtain guns, drugs and other illicit goods using Bitcoins. That *generated optimism the digital money would become more widely used. In November, law enforcement and securities agencies said in *US Senate hearings that Bitcoins could be a *legitimate means of exchange. Dani Dudeck, a spokeswoman for San Francisco-based Zynga, confirmed a post introducing a plan to test Bitcoin payments by the company on the *reddit.com community website.

Consumers will be able to pay via the *BitPay payments service for players of FarmVille 2, CastleVille and other games, Zynga said.

“We look forward to hearing from our players about the Bitcoin test so we can continue in our efforts to provide the best possible gaming experience,” Zynga said.

Victoria’s Secret stores have signed up with gyft, an app that lets users buy gift cards with Bitcoins.

Overstock.com planned to start accepting Bitcoins in the northern *summer, chief executive Patrick Byrne said last month.

“We think there’s an underserved part of the market that wants to use Bitcoins and can’t,” Mr Byrne said.

The company needs time before it starts accepting bitcoins in order to figure out how to process bitcoin transactions and to hedge bitcoin sales, he said.

BloombergREAD ALSO: SmartTrans’s rocky road to success in China Spreading bitcoin use US web retailer Overstock.com plans to accept Bitcoin

The Australian Financial Review


----------



## pacestick

*Re: Bitcoin*

overstock.com a major us online retailer now waccepting bitcoin payments

 for an intersting history of bitcoin  see this link

http://historyofbitcoin.org/


----------



## ThingyMajiggy

*Re: Bitcoin*

Bitcoin is interesting, been following it a bit myself. 

For something that isn't actually anything physical, it baffles me how it can be of equal value almost to the likes of Gold...........then again, I guess the ideal currency that all drug lords and smugglers use as it can't be identified as to who and where it's going(not very easily anyway) is going to be fairly valuable.


----------



## pacestick

*Re: Bitcoin*



ThingyMajiggy said:


> Bitcoin is interesting, been following it a bit myself.
> 
> For something that isn't actually anything physical, it baffles me how it can be of equal value almost to the likes of Gold...........then again, I guess the ideal currency that all drug lords and smugglers use as it can't be identified as to who and where it's going(not very easily anyway) is going to be fairly valuable.




Its value is determined by pure demand and supply as per adam smiths economics .Therefore if there is a lack of demand it will fall and if there is an over supply it will fall . However because supply is limited by the equation  that is used to create it there is a known limited unltimate supply in contrast to precious metals where we do not know  if all gold has been discovered and  how much there is.

Tracing it can be achieved  despite what has been reported in the media . The difficulty is that  due to encryption levels on bit coin wallets  if  law enforcement catches the crooks  they cant access the money without the  password which the criminals  may or may not hand over The cases  that have occurred recently of unauthorised naccess have been because individuals used on line wallets  rather than off line  wallets

Unlike fiat currencies  bitcoin cannot be manipulated by governments  through printing more .

I am of the opinion that it will take out a big proportion of the business to businesss  international transaction market  where the banks charge enormous fees but bit coin is free Although you can pay a fee to speed up the trasaction

Users of bitcoin however do pay a fee to  turn cash into bitcoin and bitcoin back to cash. However the more the market develops the less often people will need to move back and forth.

Bitcoin exchanges in Australia include bit trade australia which I use can be found at bitcoin charts.com look under currencies  at the AUD


----------



## ThingyMajiggy

*Re: Bitcoin*



pacestick said:


> Its value is determined by pure demand and supply as per adam smiths economics .Therefore if there is a lack of demand it will fall and if there is an over supply it will fall . However because supply is limited by the equation  that is used to create it there is a known limited unltimate supply in contrast to precious metals where we do not know  if all gold has been discovered and  how much there is.
> 
> Tracing it can be achieved  despite what has been reported in the media . The difficulty is that  due to encryption levels on bit coin wallets  if  law enforcement catches the crooks  they cant access the money without the  password which the criminals  may or may not hand over The cases  that have occurred recently of unauthorised naccess have been because individuals used on line wallets  rather than off line  wallets
> 
> Unlike fiat currencies  bitcoin cannot be manipulated by governments  through printing more .
> 
> I am of the opinion that it will take out a big proportion of the business to businesss  international transaction market  where the banks charge enormous fees but bit coin is free Although you can pay a fee to speed up the trasaction
> 
> Users of bitcoin however do pay a fee to  turn cash into bitcoin and bitcoin back to cash. However the more the market develops the less often people will need to move back and forth.
> 
> Bitcoin exchanges in Australia include bit trade australia which I use can be found at bitcoin charts.com look under currencies  at the AUD




Yep, I know all that. Problem is also security, encryption isn't encryption for very long, will eventually be cracked, as has already happened numerous times with hackers stealing 10X million the other day. It's not exactly something to have a huge amount of confidence in considering its speculated price. 

Guaranteed it will take out a big proportion of international business transactions, it will be the king of dirty money, as has also already happened with the likes of Silk Road. 

I still don't understand how it can be worth as much as Gold, I get the whole only a limited amount of it and we don't know how much Gold there is, but still, Gold is real and pure and is actually worth something, always has, there isn't any actual THING with bitcoin, just some thought up electronic currency, computer/phone/tablet crashes and unless you have some serious back up solution you've lost the lot, and that seems like a fairly realistic scenario.


----------



## pacestick

*Re: Bitcoin*

I am afraid that is not correct despite news reports bitcoin itself has not been hacked . What has been hacked is peoples personal and online wallets held by companies . This has ocurred exactly the same way as if  they had  used weak  passwords on their bank accounts and made the account name  known another illustration is  that to have such a weak password  or to have a central server to hold your wallet  is like putting money on the front lawn and wondering why it isnt there the next day. AS far as the encryption level is concerned the encryption cannot be broken untill quantum computers  arrive due  about one decade on


----------



## ThingyMajiggy

*Re: Bitcoin*



pacestick said:


> I am afraid that is not correct despite news reports bitcoin itself has not been hacked . What has been hacked is peoples personal and online wallets held by companies . This has ocurred exactly the same way as if  they had  used weak  passwords on their bank accounts and made the account name  known another illustration is  that to have such a weak password  or to have a central server to hold your wallet  is like putting money on the front lawn and wondering why it isnt there the next day. AS far as the encryption level is concerned the encryption cannot be broken untill quantum computers  arrive due  about one decade on




Well obviously Bitcoin itself can't be hacked as there is no such thing. The important bit which is your wallet, CAN be hacked as has been before, so your point is invalid. It's not really like a weak password actually, as banks have more than one security measure, when I go onto online banking I have 4 sets of numbers to put in, AND it's all encrypted as well, also there's the fact that you would be hacking a bank and be in deep shizen, but because there's no governing body and no physical thing with Bitcoin, the person being hacked just gets screwed.......unless they improve things somehow.

As far as encryption goes, they've said in the past that a lot of encryption methods would NEVER be hacked, trust me, it won't be long.


----------



## TulipFX

*Re: Bitcoin*

BitCoin's biggest threat is from the US/EUR's central banks. They can't outright ban/destroy it. What they can do is manipulate the market so it becomes so unstable it loses its appeal. Will they succeed? Is it a bubble? Finally a liberal currency as currency was intended in its most basic sense? Time will tell and it'll be interesting to see how it pans out.


----------



## pacestick

*Re: Bitcoin*

Having purchased a small speculative holding just before the november increase and then sold bitcoins up to   my original holding I  intend to  sell down at regular periods  as the   value of my holdings increase . I am uncertain at this stage whether to sell at predetermined dates  i.e.end of each quarter sell half the previous quarters  gain  or predetermined  amounts  perhaps selling half of each gain everytime  it doubles I do this becuause I do realise that it is the most speculative  holding I have ever had . Others  who I know hold larger amounts  are prepared to hold for longer .


----------



## Sdajii

*Re: Bitcoin*



ThingyMajiggy said:


> I still don't understand how it can be worth as much as Gold, I get the whole only a limited amount of it and we don't know how much Gold there is, but still, Gold is real and pure and is actually worth something, always has, there isn't any actual THING with bitcoin, just some thought up electronic currency, computer/phone/tablet crashes and unless you have some serious back up solution you've lost the lot, and that seems like a fairly realistic scenario.




Gold only has arbitrary value. Its actual practical value is less than 10% of its commercial value. It's handy in electronics and corrosion resistant stuff, but we primarily store it in warehouses or wear it as trinkets, which shows that it doesn't have inherent value, just sentimental. There are plenty of rare physical elements other than gold which are not as valuable, we just didn't decide to put inflated value on most of them. Gold is pretty and is unusual in existing in a metalic state in nature. Even though that's not especially relevant today (and hasn't been for a long time) we like it for traditional reasons.

Sure, bitcoins don't have a physical existence, but would printing out a piece of paper with "1 Bitcoin" on it for every bitcoin make them more valuable?

It's very interesting. Most of the arguments used against bitcoins having value can be used equally for both gold and money. All of them can be used for either gold or money (or both).

I was sceptical about bitcoins at first, because it was just some random thing which someone made and anyone else could have recreated, but perhaps being the first to catch this much attention means it will become the big one which lasts. If Google hadn't come along someone else would have had that monopoly, they were just the best in the early days. If Facebook hadn't been there another mob would have gained the monopoly on online social media. Perhaps the evolution of a non nation-based non-physical currency was inevitable, and Bitcoin just got in there with a good enough product at the right time. Then again, maybe Bitcoin's flaws will become more obvious in time and Bitcoin will be to the next one as Myspace was to Facebook. Or perhaps the bitcoin fad will just end.


----------



## pacestick

*Re: Bitcoin*

http://dave88th.blogspot.com.au/p/an-annotated-response-to-francois-r_5327.html


a thorugh response to fed letter on bitcoin  you will need some time to work it through


----------



## pacestick

*Re: Bitcoin*

poised for breakout


http://finance.yahoo.com/blogs/talk...to-break-out-to-all-time-highs-141729681.html


----------



## pacestick

*Re: Bitcoin*

bitcoin verses tulips


 3 fundamentally different characteristics between Tulip Bulbs and Bitcoin:

    Tulips were certainly not highly divisible, not even divisible at all – One of the fundamental aspects of money is that it must be highly divisible (Like Bitcoin or the Australian Dollar). This characteristic allows the users of the money to trade as close as possible to the gravitational centre of a natural market price and is discussed by Adam Smith in The Wealth of Nations. If a type of money is not highly divisible it is very crude and insecure to conduct trade (Imagine trying to buy a hamburger from a takeaway shop and only being allowed to conduct the trade in $100 notes). When I refer to the natural market price I am referring to what the good, service or money would be worth on the market discounting limitations of divisibility characteristics when exchanged. This term is different to the ‘Real Price’ or the ‘Market Price’. If you divided a tulip during the Tulip Mania period its price would become zero.
    Majority of Tulips were traded on futures contracts – Futures contracts are instruments which specify a commodity or financial instrument will be bought or sold at a future date. During the height of the Tulip Mania period nearly all of the Tulips were traded on futures contracts. In contrast, the futures contract market for Bitcoin is essentially non-existent. It is possible for futures contracts to play a fundamental role in the instability of the commodity or financial instrument they reference through the enforcement of their trade (Usually by a government) and this is precisely what happened during the Tulip Mania. The futures contracts also catalyse a dissipation of divisibility when more than one commodity is referenced in the contract.
    Tulips were not fungible – All Tulips exert different characteristics and some were much rarer than others. This is different to a $100 Dollar bill which is exchangeable for another $100 Dollar bill.


----------



## CanOz

*Re: Bitcoin*

Characteristics of a bubble:

Participants believe this bubble is different and proceed to provide examples why this is so....


----------



## ThingyMajiggy

*Re: Bitcoin*



CanOz said:


> Characteristics of a bubble:
> 
> Participants believe this bubble is different and proceed to provide examples why this is so....




Spot on


----------



## TulipFX

*Re: Bitcoin*



CanOz said:


> Characteristics of a bubble:
> 
> Participants believe this bubble is different and proceed to provide examples why this is so....




Or uncles who are in the earth moving business suggest they are thinking about entering the market.

_"Joseph P. Kennedy, Sr later claimed he knew the rampant stock speculation of the late 1920s would lead to a market crash. It is said that he knew it was time to get out of the market when he received stock tips from a shoe-shine boy"_


----------



## pacestick

*Re: Bitcoin*

http://www.abc.net.au/news/2014-01-...-for-online-currency/5231178?section=business

ATMs being rolled in Australia for online currency Bitcoin

Updated Fri 31 Jan 2014, 3:52pm AEDT

A new company is planning to roll out 100 ATMs in Australia for the virtual currency Bitcoin. However, there are ongoing concerns about the lack of regulation and volatility of the online money.
Natalie Whiting

Source: The World Today | Duration: 3min 11sec

Topics: currency, internet-culture, internet-technology, australia

Transcript

PETER LLOYD: The virtual currency Bitcoin is about to come crashing into the real world, with plans to install 100 Bitcoin ATMs around the country.

The online form of money is currently estimated to be worth an astonishing $10 billion, but there are increasing concerns about the lack of regulation surrounding this new currency.

Natalie Whiting reports.

(Sound of ATM buttons being pressed)

NATALIE WHITING: You can find an ATM on most city streets. Now there's a plan to start installing Bitcoin ATMs. But some people are still hesitant about using the online currency.

ALEX: If there was more regulation I guess I'd feel a lot more comfortable using it.

JOEL: I just don't see too much trust from the big banks and corporations in the system just yet.

LUKE: Without a doubt, it is the future. I'm not quite sure whether society has actually caught up with that yet.

NATALIE WHITING: Bitcoin is traded computer to computer and has no central authority or government backing. It's primarily used to purchase goods on the internet, and has no transaction fees.

A new company, Australian Bitcoin ATMs, is now planning to roll out 100 machines to try to increase the use of the currency.

The company's CEO is Chris Guzowski.

CHRIS GUZOWSKI: You can type in how many Bitcoins you want to sell, then our ATM goes onto an overseas Bitcoin exchange and executes that transaction for you and will spit out the cash for which you sold the Bitcoin for. And the opposite also applies, so you can put cash in and purchase Bitcoin.

NATALIE WHITING: There have been issues in the past with computers being hacked and Bitcoins being stolen.

David Glance from the University of Western Australia says he thinks it will take more than ATMs to facilitate mass adoption.

DAVID GLANCE: I think that until you see the National Australia Bank or the Commonwealth or one of the major banks getting behind the currency, providing simplified access to it, I think it's always going to be a niche.

NATALIE WHITING: He says the lack of regulation in Australia is also a major issue.

DAVID GLANCE: In the US they're currently going through some discussions about the regulation of Bitcoin exchanges. We haven't really got there as such in Australia. This has been the problem with sites going out of business or people just shutting up shop - it quite often leads to people losing their investments.

NATALIE WHITING: But regulation isn't the only issue with Bitcoin. It's also very volatile, with values fluctuating by as much as 50 per cent in a day.

CHRIS GUZOWSKI: Well I think most Bitcoin adopters so far have been aware of the risk associated with purchasing the digital cryptocurrency.

NATALIE WHITING: Do you think it might hinder bringing new people on board; if the introduction of ATMs is about making it more accessible and more mainstream, do you think people won't be willing to take that risk?

CHRIS GUZOWSKI: Look it's possible. It's no secret, and everybody should be aware of the risk profile of Bitcoin.

NATALIE WHITING: The Bitcoin ATMs will begin to be rolled out next month, with the first to be installed in Sydney and Melbourne.

PETER LLOYD: Natalie Whiting reporting.


----------



## pacestick

*Re: Bitcoin*

http://www.theaustralian.com.au/bus...s-yuan-deposits/story-fnay3ubk-1226816164326#
Bitcoin exchange resumes yuan deposits

    Michael Casey
    The Wall Street Journal
    February 03, 2014 12:00AM





POPULAR Chinese bitcoin exchange BTC China has restored a facility allowing customers to buy bitcoin by depositing yuan into the exchange's corporate bank account.

The move reverses a decision in December to halt such deposits, which the exchange made in response to a December 5 memo from the People's Bank of China warning national financial institutions not to trade in bitcoin.

Those twin developments threatened to curtail volumes on BTC China, which had grown to become the biggest exchange in the world, and prompted a more than 50 per cent drop in bitcoin's international price over a two-week period in December.

At the time, some of bitcoin's harshest critics even described them as the death knell for the digital currency.

Reached by phone in Shanghai, BTC China chief executive Bobby Lee said the change, which was implemented last Thursday, was made after the company studied the PBOC memo and other rules that raised concerns about BTC's banking activities.

The exchange determined that it was legally permitted to accept deposits into its corporate bank account and to transfer those funds into customer accounts, even though banks themselves are barred from engaging in bitcoin businesses and speculation.

"We are definitely in compliance with the December 5 memo, but the government and the government agencies can change the rules anytime," Mr Lee said. "So we are going to take a wait-and-see approach."

Bitcoin, the most prominent of a host of new virtual currencies, is created by a global network of digital "miners", whose computers discover them via complex computations and then serve as protectors of the integrity of the virtual money supply. They can be transferred seamlessly and internationally between digital "wallets".

Regulators the world over are trying to figure out how to regulate commerce in the currency, with the uncertainty surrounding that process impeding its adoption and - as with the PBOC's move in December - sometimes weighing on its price.

The New York Department of Financial Services held two days of hearings last week to try to come up with a framework for regulating digital currencies. This followed news that New York US Attorney Preet Bharara had arrested two men, including prominent bitcoin entrepreneur Charlie Shrem, on charges of helping users of the illicit drug-trading website Silk Road launder money through bitcoin exchanges.


----------



## pacestick

*Re: Bitcoin*

Bitcoin prices have plunged  but not to other recent lows .
  The timeline went like this  
1. Russia band bitcoin
2. A flood of bitcoin is recieved at Mt Gox for changing into fiat currenccy
 3. Mt Gox  stops processing for technical reasons  as per  linked article
http://www.bloomberg.com/news/2014-02-07/bitcoin-price-falls-as-mt-gox-exchange-halts-activity.html
4. Bitcoin price begins recovery

Mt Gox have said they intend to be operating again by monday. I am left with the suspicion that their pool of fiat currency wasnt big enough to cope with the demand  rather than it being a computer problem but  we dont know


----------



## pacestick

*Re: Bitcoin*

Bitcoin exchange Mt. Gox’s withdrawal halt prompts SecondMarket action
February 7, 2014, 12:52 PM


A temporary halt on withdrawals from the bitcoin exchange Mt. Gox on Friday and subsequent price decline have prompted trading platform SecondMarket to start a pilot program to buy and sell bitcoin, a move it says highlights the need for a major U.S.-based bitcoin exchange.

SecondMarket, which made its name as a platform that allowed investors to trade shares of Facebook Inc. FB 0.06%  before the company went public, has established itself in the bitcoin space through its open-ended bitcoin trust.

“Given the MtGox issue, we decided to experiment with a two-way market,” Chief Executive Barry Silbert said in an email Friday about the company’s pilot program. “There is a clear need for a U.S.-based, regulated, compliant and trustworthy bitcoin exchange. This could be the first step in that direction,” he said.

There is no major bitcoin exchange based in the U.S., even as U.S. investors are pouring millions into domestic bitcoin start-ups and U.S. companies are beginning to adopt the virtual currency as payment.

    Saumya Vaishampayan/MarketWatch
    Informal trading at the Bitcoin Center NYC

The lack of a major bitcoin exchange in the world’s biggest economy has contributed to the volatility that has become a trademark of the virtual currency, Jeremy Allaire, chief executive of Circle Internet Financial, said in a January virtual-currency hearing held by the New York State Department of Financial Services. The total daily trading volume of bitcoin is similar to that of a small-cap stock on one exchange, he said.

That much was evident Friday in the wake of the Mt. Gox news, which sent prices lower across exchanges. “The increase in the flow of withdrawal requests has hindered our efforts on a technical level. To understand the issue thoroughly, the system needs to be in a static state,” the company said in a release Friday.

Mt. Gox, which is based in Japan, isn’t even the largest bitcoin exchange. The largest by 30-day volume is Bitstamp, which based in Slovenia, according to data from bitcoincharts.com. The second-biggest is  BTC-e, which appears to be based in Bulgaria. Mt. Gox is third.

“The single most important thing that we can do…is get some serious exchanges established here in New York,” Circle’s Allaire said at the hearing. Circle is a company that aims to make bitcoin payments easier for merchants.

There are companies working on establishing bitcoin exchanges in New York, but witnesses at the hearing pointed to the regulatory uncertainty and reluctance from banks to work with bitcoin companies as major hurdles.

In recent trade, bitcoin traded at $741.30 on the bitcoin exchange Bitstamp and $763 on Mt. Gox. That’s a decline from trading around $900 earlier this week on Mt. Gox and in the early $800s in the same period on BitStamp. Here’s a two-month chart of prices on Bitstamp:

    Bitcoincharts.com



–Saumya Vaishampayan
wall street journal


----------



## Garpal Gumnut

*Re: Bitcoin*

Bitcoin

Pitcoin
Potcoin
Poncoin
Ponci

Ponzi.



gg


----------



## pacestick

*Re: Bitcoin*

What I find amazing is the amount of  people who wont look at bitcoin because  it has been used by criminal elements  yet they use cash which cannot be traced at all as opposed to bitcoin that can be traced to each and every previous owner by those with the computer knowledge to do so


----------



## Sdajii

*Re: Bitcoin*



pacestick said:


> What I find amazing is the amount of  people who wont look at bitcoin because  it has been used by criminal elements  yet they use cash which cannot be traced at all as opposed to bitcoin that can be traced to each and every previous owner by those with the computer knowledge to do so




Can it always be traced? Do I need to enter personal details to get a bitcoin wallet? Could someone, say, get a wallet without using any personal details, sell a lawnmower in exchange for some bitcoins, then use those bitcoins to buy pizza (or guns and bombs or whatever)?

I really don't fully understand the details of how bitcoin works. I understand you could check the block chain to see which account sent you the money, but what information can anyone gain from getting a wallet address/label/whatever it's called? I made a bitcoin wallet (unless it was just a scam site and I created nothing), it cost me nothing and I didn't enter any personal details. My understanding is that I could then give that 'wallet number' ( ? ) to anyone, and they could send bitcoins to it, though I'm not sure how I would send someone else bitcoins.

I had a look at a couple of bitcoin forums, and they were littered with obvious scams along the lines of "Donate here to xyz charity, we're going to save the whales/kittens/starving/send a space ship out to promote bitcoin". I found the space ship ones really bizarre! By donating to one 'bitcoin promotion by spaceship' charity you could get advertising space on it, the more you donated the more advertising space you got (put your slogan or logo on the hull so people will see it on TV? ???). I suppose if you donate 10c worth of bitcoin you get a microscopic banner, and for it to be readable you'd have to send a few million dollars worth, so the hull would basically look brown unless you viewed it with a microscope. Obviously entirely scam and fictional of course, but amazingly there were people claiming to have donated to them (unless that was the scammers claiming to be people donating and happy about it to encourage real people to do it). So, obviously that's an example of something completely and transparently illegal for multiple reasons. If I was stupid enough to donate to such a thing, then come to my senses, would I be able to get my money back? I assume these scammers are successfully remaining anonymous.


----------



## pacestick

*Re: Bitcoin*

http://fiatleak.com/

whose buying bitcoin this web site monitors transactions  by fiat currency and country of transaction note the strong chinese appearance


----------



## pacestick

*Re: Bitcoin*

http://www.isitdownrightnow.com/mtgox.com.html

http://bitcoincharts.com/markets/


despite reports in the australian to the contrary as the above site shows  mt gox is up and running again. 
Mt Gox have however admitted to discovering an error which allowed users to quickly duplicate a transaction and move it to their account . That was the reason they stopped transactions  over the weekend.


----------



## pacestick

*Re: Bitcoin*

*Can it always be traced?*

Yes

----

*Do I need to enter personal details to get a Bitcoin Wallet?*

No

----

*Could someone say, get a wallet without using any personal details, sell a lawnmower in exchange for some Bitcoins, then use those Bitcoin to buy pizza (or guns and bombs or whatever)?*

Yes, but only if they accept Bitcoin

----

*But what information can anyone gain from getting a wallet address/label/whatever its called?*

Any person can determine the history of all deposits and withdrawls from that address, no other information can be gained. The only way to discover your identity (Provided you don't expose the information willingly), the person looking say police, would need first of all to 1: discover the IP address by determining it from the Bitcoin ledger.  2. Get a court order to make your ISP release your personal details to them. 3. It is a matter of record that different ISP's purchase a band of ip addresses. 4. The ISP knows which of their customers has which IP address.

----

*My understanding is that I could then give that give that wallet number (Bitcoin Address) to anyone, and they could send Bitcoins to it*

Yes

----

*Though im not sure how I would send someone else bitcoins*

You would need their Bitcoin Address and then you could send them

----
Re the advertising on bitcoin chatrooms  like all scams  such as  the nigerian letter scam if youi send money to them dont expect it back


----------



## Sdajii

*Re: Bitcoin*

So if the only way to trace the owner is via IP, couldn't someone just do their dealings on a public computer or by using proxies or any of many other options of using IP addresses untraceable to an individual? You could, say, buy a second hand laptop and use the free Internet at a local McDonald's. Countless options. If you wanted to get money into your own bank account you could create a string of anonymous wallets which then sent bitcoins to your visible account and you could sell them for money and keep the cash, claiming people sent you bitcoins for whatever fictional reason you choose. It doesn't seem like a difficult system to use anonymously. If you never wanted to convert back to real currency it would be very easy to remain anonymous and carry out whatever business you wanted. 

Or am I missing something?


----------



## pacestick

*Re: Bitcoin*

*So if the only way to trace the owner is via IP, couldn't someone just do their dealings on a public computer or by using proxies or any of many other options of using IP addresses untraceable to an individual? You could, say, buy a second hand laptop and use the free Internet at a local McDonald's. Countless options.*

Yes, but public computers still have ip addresses and since the time and IP address are known in the blockchain law enforcement would just need to do some investigation to identify or narrow down the suspect. This is a lot more to go on compared to if law enforcement were tracing an illegal cash transaction.

*If you wanted to get money into your own bank account you could create a string of anonymous wallets which then sent bitcoins to your visible account and you could sell them for money and keep the cash, claiming people sent you bitcoins for whatever fictional reason you choose.*

If you conducted illegal transactions on the 'string of anonymous' wallets and then sent it to an address which hadn't initially dealt with illegal transactions, then that address would be visibly seen on the Block Chain (Public ledger) as transacting with the illegal addressess immediately. This makes 'money laundering' pointless on Bitcoin. This is in contrast to the traditional bank systems where law enforcement have strugled with 'money laundering' for decades.

*It doesn't seem like a difficult system to use anonymously.*

Bitcoin is almost the opposite of anonymous. It is probably the best investigative tool for law enforcement since DNA and fingerprints. Just because no company holds your 'name' per say does not mean it is anonymous.

*If you never wanted to convert back to real currency it would be very easy to remain anonymous and carry out whatever business you wanted. *

At the present time, If you were smart enough you could use an anonymous IP address through something like Tor, take extreme security precautions and never use an exchange to sell your Bitcoins, and then you could get away with conducting illegal transactions. Fortunately, this would require a high amount of IT knowledge that not many people have. In the future to discourage this, I think law enforcement will need to set up a live database which flags and tracks addresses that are associated with illegal transactions. By making this the norm (Possibly enforced by law) transactions that operate outside this database are more easily isolated. It should also be noted that this problem is actually very small for law enforcement as opposed to trying to track cash transactions.


----------



## Sdajii

*Re: Bitcoin*

It really does seem that you're exaggerating the difficulty of remaining anonymous with bitcoin. It seems pretty easy. There are plenty of ways to get online without anyone knowing who you are. Who can prove who is sending this message I'm typing now? If I walk away from this terminal, how can anyone know who typed it? Okay, at the moment I'm signed into my ASF account and it's a fair assumption that it's the account's regular user and I'm sure if the authorities wanted to they could track me down with reasonable certainty, but even with this IP address it would take a fair bit of work. If I signed on to a public computer and made a bitcoin wallet it would be extremely difficult to track me down and perhaps impossible. If I deliberately tried to hide or disguise myself it would be pretty easy to remain unfindable. Realistically, you wouldn't need to be too smart to remain anonymous. You would just need to make sure you didn't carry out transactions anywhere which pointed to you.


----------



## skc

*Re: Bitcoin*

Is the bubble finally popped?

Mt Gox goes offline

http://www.forbes.com/sites/cameron...rs-recovery-steps-and-taking-your-tax-losses/

Bitcoin now ~$100 vs over $1000 a little over 2 months ago.




Doesn't it resemble the Nasdaq chart in 2000?


----------



## trainspotter

*Re: Bitcoins - Peer to Peer currency*

Bye Bye Bitcoin ...



> *ONE of the world’s largest bitcoin exchanges has seemingly disappeared, delivering a severe blow to the virtual currency as it struggles to gain legitimacy.*
> A coalition of virtual currency companies said on Tuesday that Tokyo-based Mt. Gox went under after secretly racking up catastrophic losses.
> Mt. Gox’s website was returning a blank page on Tuesday. The disappearance of the site follows the resignation Sunday of Mt. Gox CEO Mark Karpeles from the board of the Bitcoin Foundation, a group seeking legitimacy for the exotic new form of money. The exchange had imposed a ban on withdrawals earlier this month.




http://www.news.com.au/finance/busi...r-massive-losses/story-fn5lic6c-1226837790823


----------



## CanOz

*Re: Bitcoins - Peer to Peer currency*



db94 said:


> IMO it has already burst. Check out this chart and how a bubble usually plays out. Currently at the bull trap
> 
> View attachment 55419





Good call!


----------



## skc

*Re: Bitcoins - Peer to Peer currency*



CanOz said:


> Good call!




Lol. Good call except that he changed his view later...



db94 said:


> didnnt play out as i predicted. I now feel that if internet currency catches on we have something similar to the dotcom bubble. The only threat I see to bitcoin is other coins. There are a few currencies that are MUCH cheaper and actually have faster transaction speeds (<30 seconds) than bitcoin (1 day), so if it does catch on perhaps they too will boom.




BTW there are 2 bitcoin threads... CanOz, can you pls move my last post there to here? Thanks


----------



## trainspotter

*Re: Bitcoins - Peer to Peer currency*

Doctorj got it right ....



> I’ve explored it in much greater detail on my blog. In short, I think it’s nothing more than a means of settling illegal transactions, a vehicle for speculation or a protest against banks and the governments that support them. I really hope I’m wrong, *but I think it’s only a matter of time before the bubble busts.*


----------



## So_Cynical

*Re: Bitcoin*



skc said:


> Is the bubble finally popped?
> 
> Mt Gox goes offline
> 
> http://www.forbes.com/sites/cameron...rs-recovery-steps-and-taking-your-tax-losses/
> 
> Bitcoin now ~$100 vs over $1000 a little over 2 months ago.




The Talk in some circles of BC world is that Mt Gox may be a goner and will never trade again.

https://www.mtgox.com/



			
				Mt Gox said:
			
		

> Dear MtGox Customers,
> 
> In light of recent news reports and the potential repercussions on MtGox's operations and the market, a decision was taken to close all transactions for the time being in order to protect the site and our users. We will be closely monitoring the situation and will react accordingly.
> 
> Best regards,
> MtGox Team




For those that don't keep up with the ins and outs of BC world, the closure of Mt Gox is the Australian equivalent of Maquarie Bank, Comsec, E-Trade and Westpac Broking all going belly up on the same day with accounts frozen.


----------



## CanOz

*Re: Bitcoins - Peer to Peer currency*



skc said:


> Lol. Good call except that he changed his view later...
> 
> 
> 
> BTW there are 2 bitcoin threads... CanOz, can you pls move my last post there to here? Thanks




ooops...

I'm sure a moderator can move it for you SKC.


----------



## doctorj

*Re: Bitcoins - Peer to Peer currency*



trainspotter said:


> Doctorj got it right ....




Thanks.  I had to be right on something sooner or later!

I don’t often disagree with Marc Andreesson, but he came out and said this:

_“Mtgox has been obviously broken and possibly outright crooked for months.  As seen in trading spreads.  This is like MF Global.  Not some huge breakdown of the underlying technology or other exchanges.  Bitcoin protocol is unchanged and other bitcoin exchanges and companies are doing fine”_

I don’t follow bitcoin all that closely, but I’m guessing that through a combination of fraud and taking open risk, they blew up.  None of that in itself means that there’s a problem with the underlying protocol, but I think that misses the point.  The point is that you can’t have a currency that has an incredibly uncertain value or can’t be trusted for other reasons.  I understand why bitcoin is popular and I understand VCs want to catch the ‘next big thing’ and to an extent Marc is talking his own book, but I really believe those that are pitching bitcoin as the next currency are missing the big picture.


----------



## So_Cynical

It looks official now...Mt Gox is gone.



> Troubled bitcoin exchange Mt. Gox files for court protection
> TOKYO, Feb. 28, Kyodo
> 
> Mt. Gox, a Tokyo-based major bitcoin exchange, filed for bankruptcy court protection on Friday, its chief Mark Karpeles said, after the exchange suddenly shut down all transactions of the virtual currency earlier this week.
> 
> Net current liabilities at Mt. Gox total around 6.5 billion yen, Karpeles said at a news conference in Tokyo, apologizing for the recent trouble that is believed to have impacted at least 1 million users of the exchange.
> 
> He said the exchange was illegally accessed in early February and bitcoins may have been withdrawn, adding the exchange has asked experts to carry forward procedures for filing a criminal complaint.




http://english.kyodonews.jp/news/2014/02/276605.html


----------



## pacestick

Mt Gox is not bitcoin .It is just one exchange . It used to be the largest exchange but during the last year was replaced first of all by a chinese exchange then a eastern european exchange 
The price of bitcoin has remained  remarkably stable  since the mt gox  news hit the   media . Posssibly Mt Gox was priced into it .

This article from coindesk   deals with some of the criticisms and problems  of bitcoin

http://www.coindesk.com/citigroups-three-risks-facing-bitcoin-misguided/

Coin Desk does  a  bitcoin price index  at this point here

http://www.coindesk.com/price/

As Mt Gox  unfolded it did pull down the price  but not to mt gox level .Therefore  the pull down in price  showed the strength of decentralisation through multiple exchanges .

The wniklevoss twins have created  their own index  to go  with their own bitcoin investment fund

http://winkdex.com/#/

It uses more inputs than the bitcoin fund but  comes up with remarkably similar prices 

However the twins may be a little late in getting their fund up and running as  Fortess  just got their amounts above 20 million dollars usd

http://www.coindesk.com/fortress-investment-group-reports-purchase-20m-bitcoin/


----------



## So_Cynical

pacestick said:


> Mt Gox is not bitcoin .It is just one exchange . It used to be the largest exchange



Mt Gox is where it all began and 500 million is 500 million, and its gone...and its a big deal and Mt Gox is not just one exchange.


----------



## pacestick

max kaiser on mt gox and bitcoin

https://www.youtube.com/watch?v=yP6p5iNgQaA


----------



## db94

*Re: Bitcoins - Peer to Peer currency*



CanOz said:


> Good call!




should have stuck to my original theory  Kept reading news headlines and forums and got stuck in the hype... the joys of being a rookie. lesson learnt. Keep emotions out and dont listen to others


----------



## pacestick

http://winkdex.com/#/

meantime in the real world  the price remains stable


----------



## trainspotter

But not for long ..........



> Just two weeks before her death, Radtke posted an essay entitled “The Psychological Price of Entrepreneurship” and in it she said that “everything has it’s price.”
> Her death is the latest in a spate of bad news for bitcoin, founded in 2009, and follows the collapse of the Japanese-based Mt Gox exchange last week after $400 million went missing and the closure of the Flexcoin bank yesterday in Canada after computer hackers robbed $600,000.




http://www.news.com.au/finance/mark...ide-in-singapore/story-e6frfm30-1226846560794


----------



## ROE

This stuff is like the wild west, exchange going belly up, coin get stolen, server got hacked, people commit suicide all this in random computer bit and bytes instead of bullets


----------



## pacestick

http://www.coindesk.com/australian-tax-office-explains-bitcoin-tax/


Australian Tax Office Explains Bitcoin, Intends to Tax it
Jon Southurst (@southtopia) | Published on March 14, 2014 at 11:36 GMT | Asia, News, Regulation
inShare7
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45
shutterstock_123187171

The Australian Tax Office (ATO) has provided businesses with some more guidelines on how it intends to deal with bitcoin, stating that income and profits derived from bitcoin transactions are taxable.

The letter, sent to an Australian bitcoin entrepreneur in response to a request made last June, was a private ruling to specific questions and noted its contents were valid only to that case. But it gives digital currency businesses in the country a better idea of how they should act to comply with tax regulations.

The first question asked if transferring bitcoins to a private company in return for shares would count as income, either ordinary or that from a for-profit undertaking. The answer was simply “Yes”.

As to whether transferring bitcoins to another party would be subject to Goods and Services Tax (GST), the answer was also a one-word “Yes”.

Bitcoin profits would also be subject to capital gains tax, though deductions depending on the individual case would apply.
Clear understanding

The letter also laid out a series of explanations showing the ATO has a very clear understanding of what bitcoin is, as well as the technology and processes behind it.

It acknowledges that bitcoin is “based on an open source cryptographic protocol, which is not under the control of a central authority”.

According to the ATO’s definition:

    “A Bitcoin is a numerical amount that is allocated to a ‘Bitcoin address’. A Bitcoin address is a long string of numbers and letters, each one unique. The process through which Bitcoins are created and enter into circulation is called Bitcoin mining.

    Mining involves using freely downloadable Bitcoin software to solve complex cryptographic equations that essentially verify and validate blocks of Bitcoin transactions. The first ‘miner’ to successfully solving an equation receives a specified number of newly created Bitcoins as a reward to their Bitcoin address.

    Accordingly, Bitcoins rely on a network of Bitcoin miners using the system to validate transactions and collectively implement a replicated ledger of Bitcoin transactions. The security of this ledger is protected by this mining process.

    Bitcoins are circulated using a peer-to-peer computer network. Bitcoin users store their Bitcoins in a software program called a ‘Bitcoin wallet’.

    A transaction involving Bitcoins requires an account, which is in essence a ‘public-/private-keypair’. A Bitcoin address derived from the public key is used to identify the account. To transfer Bitcoins to an account a transaction is created with the address of the account as the destination. To send Bitcoins from an account, the transaction has to be signed with the private key associated with the sending account.”

It also identified that participants in the bitcoin economy did so with the intention of making money, particularly those who mined:

    “You invested a substantial amount of money in computer hardware and advanced scientific computing systems with the purpose of making substantial profit from mining and selling Bitcoins.”

An ATO representative had said in early February that the department would publish guidelines on bitcoin for the current tax year, which ends in June. Transactions would be taxed according to their value in Australian dollars.
Permissive atmosphere

Australia has provided some of the more level-headed responses to bitcoin and bitcoin business so far. Compared to other nations, warnings from Australia’s regulators have been comparatively mild and so far unofficial.

While the country’s corporate banks have reacted in different ways, there have been no central bank moves to block those banks or other financial institutions from working with digital currency. There are no longer any government-owned banks in Australia.

So far the response has been similar to that of Singapore, which has also provided some guidelines on how bitcoin businesses should approach tax time.

Melbourne image via Shutterstock


----------



## pacestick

http://au.news.yahoo.com/thewest/a/21956040/tsvetnenko-launches-bitcoin-company/


Tsvetnenko launches bitcoin company
The West Australian

The West Australian March 13, 2014, 8:55 am
Share





Perth-based, Russian-born tech multi-millionaire Zhenya Tsvetnenko will make his ASX debut through a backdoor listing of his new bitcoin mining and digital currency trading company, digitalBTC.

Mr Tsvetnenko, who made his fortune through mobile premium messaging services, will take over as executive chairman of the new entity.

ASX-listed shell company Macro Energy says it has already received firm commitments for a $9.1 million capital raising to effect the transaction and expand digitalBTC's bitcoin trading and digital currency mobile applications.

Mr Tsvetnenko, who made his debut on the BRW Young Rich List in 2009 with an estimated net worth of $107 million, said bitcoin was an exciting and fast emerging currency system which he believed would dramatically change the way in which many people would make payments or financial transfers.

"As the Bitcoin system matures beyond its initial niche and begins to realise its true disruptive potential, sophisticated service firms will be increasingly required to facilitate the system," he said.

"We believe that sophisticated intermediaries such as digitalBTC can derive significant profit in supporting this emerging growth phase of Bitcoin, as it takes its place as a true worldwide currency.

"We are pleased to have reached the acquisition deal with Macro, which will give us the platform and capital to take our support of and growth with the Bitcoin system to the next level, as well as offering public market investors one of the first opportunities to participate in the potential upside inherent in Bitcoin."

Mr Tsvetnenko said the company would also be involved in other emerging digital currencies.

The new entity is being touted as the first ASX-listed company offering exposure to the Bitcoin system.

Bitcoin is a peer-to-peer payment system and digital currency, with a total market capitalisation of more than $US8 billion and about 66,000 transactions occurring daily at a total trade value of $US55 million.

Across the major US Bitcoin exchanges, in excess of $US20 million is regularly traded every 24 hours with more than 44,000 merchants accepting Bitcoin around the world.

However the online currency is considered a shadowy development in the online world by critics for its regular use in the trade of illegal goods such as drugs and weapons.

Governments are yet to fully grapple with how bitcoin trades can be controlled and monitored and regulations surrounding its use are still a long way off.

Last month, Japan-based bitcoin trading company Mt Gox collapsed, announcing about 850,000 bitcoins (worth about $450 million) belonging to customers and the company were missing and likely stolen.

However Macro Energy managing director Brett Lawrence said digitalBTC offered existing Macro shareholders significant potential upside in a fast growing and revolutionary sector.

Macro will change its name to DigitalCC Limited and conduct a share consolidation as part of the deal, subject to shareholder approval.

Following completion of the transaction, the new entity will have an implied pro-forma market capitalisation of $33.2 million, with approximately $12.4 million in cash on-hand and an enterprise value of $20.8 million.

Macro Energy shares were up 1.4 cents, or 54 per cent, to four cents at 8.50am.
Share


----------



## matty77

Im looking at purchasing some bit coins for a bit of fun..

Anyone know where I can buy some from that I wont get ripped off from?


----------



## pacestick

matty77 said:


> Im looking at purchasing some bit coins for a bit of fun..
> 
> Anyone know where I can buy some from that I wont get ripped off from?





I use this lot

https://www.btradeaustralia.com/


Professor Susan Athey: ‘If People Use It, Bitcoin Has Intrinsic Value’
Carrie Kirby (@carriekirby) | Published on April 1, 2014 at 18:29 BST | Analysis, Bitcoin protocol, Blockchain, Exchanges, Investors, Merchants, News, Regulation, Startups, Wallets
inShare8
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23
Susan Athey

Susan Athey is a senior fellow at the Stanford Institute for Economics Policy Research, specializing in auction-based marketplaces and the economics of the Internet. She is also an advisor at Ripple Labs and serves as Microsoft’s Chief Economist. 

Athey brought an independent academic perspective to discussions at CoinSummit San Francisco last week, using her expertise and research to assess the technology’s potential on many fronts.

CoinDesk spoke to Athey about what gives bitcoin intrinsic value, the novelty of the Bitcoin protocol, possible scenarios for bitcoin’s future, and the currency’s value as an investment.

______________________________________________________________________

CoinDesk: When we saw your name and credentials listed on the agenda, we thought maybe this is the responsible grownup who is going to tell us how crazy bitcoin is and how it won’t work. But it seems like after examining bitcoin with a skeptical academic eye, you are not dismissing it. When you first looked into bitcoin were you sceptical?

Susan Athey: I was introduced to bitcoin by some early aficionados. The first things I read when I got home were about bubbles. I pulled out my books about asset bubbles and tulips, and I worried that it was a Ponzi scheme in the sense that a lot of rich people were investing in it and telling their rich friends to invest in it, and so the price was going up as rich people were putting their money into it.

Also, the arguments in favour of it by some of the early adopters didn’t resonate with me: the idea that we needed it because something terrible was going to happen to the US dollar. In steady state as a store of value there may be better financial instruments.

Right now the price is growing, so it’s a good investment because the upside offsets the risk. But if it were in steady state and no longer growing, there may be better ways to protect your money than bitcoin in the United States.

What fascinated me and captured my imagination was the technology itself, understanding what the ledger meant, what it accomplished, and why a native currency was essential to the overall technology.

Let me unpack that a little bit. When we start thinking about the actual technology, the block chain, the ledger and the security around the ledger, that’s clearly a powerful thing. We have lots of other expensive and cumbersome institutions to establish that things of value have moved in ownership from one person to another. The block chain doing that in a decentralized, frictionless way – a pure way – is a powerful innovation.

But then the first question you ask is, ‘Why did you need to invent a new currency? Was that a gimmick? Something that you added on, a marketing tool to sell this thing that was really just a ledger?’ Then I realized that bitcoin itself is sort of fundamental to the ledger.

Let me explain that. I could have entries in a ledger that describe ownership of dollar bills. I could, in principal, use a security protocol: If I owned a ledger entry I could send a message to move a dollar to someone else. But that would just be a message. It would be a promise. We haven’t invented the technology to beam dollar bills and have them appear on your keyboard.

The SWIFT (Society for Worldwide Interbank Financial Telecommunication) international system is a system of messages that tells people where money has moved, and then underneath it, the money actually moves through clearinghouse systems. Being able to send messages is very powerful, but it’s not as powerful as actually being able to send value.

The bitcoin is the only thing where the complete definition of ownership is the entry on the ledger. It has to be a native and new currency because the definition of the object is the ledger entry. That doesn’t correspond to a dollar or a piece of gold or something else. It is what it is. The entry on a ledger of a bitcoin is a fundamental unit whose value can be moved electronically through the security protocol.

Does the value of the technology mean that it’s not a bubble or a Ponzi scheme?

It’s a technology that can be used in a variety of ways. We’re perfectly capable of coming up with Ponzi schemes in the old economy. I couldn’t say that you couldn’t put a Ponzi scheme on top of bitcoin. But the technology has use and so, to me, the thing that gives bitcoin its fundamental value is its use.

The ability to move value electronically without counter parties and without IOUs and promises is very useful. If people use it, it will have value. That’s what makes me think that it does have intrinsic value.

One way to think about the transaction volume and the intrinsic value is that, at any moment in time, there’s a fixed number of bitcoins, and suppose you want to run half a billion dollars-worth of transactions through the system in a day.

There’s a fixed number of bitcoins, and a dollar value of transactions that needs to be supported on them, and each bitcoin can only be used once in a day, then the market cap of the bitcoins would have to rise to support the dollar value of transactions. There’s a market price for access to the bitcoins.

You have examined the relationship between transaction volume and price. So are you saying that the volume that you saw justifies the price?

Yes. That’s not a complete theory of price, because if the volume is driven by speculation, it’s possible that the volume could support the price, but it’s still possible that the price could fall, and the volume could fall.

I’m just saying that ‘the volume justifies the price’ isn’t a complete theory of what the future price should be. It’s more of a high level impressionistic view of the market that the prices and the transaction volume have moved together in a way that makes sense.

In steady state, when speculation is no longer the primary driver of volume, then it would be possible to relate the transaction volume to the price in a more defensible way.

A lot of the volume is related to speculation. What you might like to do is look at the parts of the ecosystem that are really being used for commerce. That transaction volume is the thing that will matter if you’re at a steady state. If it gets to a steady state size, then people are no longer coming into it because they think it’s going to grow. And then the value is determined more by the transactions on the system.

I have a very simple theory of what the price should look like in steady state. That theory, when applied to what happens today, doesn’t do badly in matching up with the data, but we’re not in steady state right now, so the theory is incomplete.

I have heard people warn that, one day, this value is going to evaporate and nobody is going to want bitcoins anymore.

It could happen. Let me give some of the scenarios where it would happen. One might be that there’s a security flaw found, or some sort of attack occurs that undermines the trust in bitcoin.

Given where we are today, I would imagine that in that scenario we would migrate onto an alternative coin. This is one reason why I think it’s good for the bitcoin ecosystem to have a number of other coins out there, because if something catastrophic happened to bitcoin, I think we could move in a pretty orderly fashion to another alt-currency, and while certainly there would be some redistribution of wealth in that transition process, the overall investments in the ecosystem would be maintained.

The venture capitalists are backing a number of firms in the virtual currency space. Most of them could pivot to another virtual currency with relatively little effort. In terms in the application layer, yes, it’s specific to bitcoin, but if it needed to, it could pivot.

Now, we understand the security properties of bitcoin very well. There would be a period of uncertainty with that new protocol and that testing process could lead to migration to a third alt-currency.

So if something catastrophic happened to the Bitcoin protocol, there would be disruption and there might be a period of uncertainty as we figured out what would be the best alternative, and maybe a rebirth of bitcoin once they had fixed whatever the problem was.

So, if people think everybody else is leaving bitcoin, everybody will get out of bitcoin, and the price will fall. There are many other types of businesses and investments that have that property.

For example, a marketplace that needs buyers and sellers. If the buyers and sellers all started migrating to another platform, you could see that. Think about a social network. We saw people using MySpace, and then they migrated to Facebook. We see many types of platforms and institutions and firms where the utility of the platform is based on other users using it.

That doesn’t mean you can’t value a Facebook, just because things are only useful when other people are using them. The risk profile of a bitcoin investment is less like a really safe store of value.

I actually look at it more like the risk profile of, say, a marketplace startup that has an initial user base. If the users stay and they interact with each other and it grows, it will have a lot of value. If the users pick another platform for whatever reason, then you won’t have any value. If you were buying stock or taking a venture position in this kind of a startup, you would realize there’s some probability of it going to zero and there’s some probability it’s going to grow big.

That’s the way that I look at bitcoin: there’s some probability that people shift to another platform for whatever reason; if they don’t, it grows and it has intrinsic value based on the transaction volume.

You consult with world governments on economic issues. Have you discussed bitcoin with national or international economic authorities? Are there widely divergent views around the world in regard to whether bitcoin is going to be important, whether they fear it, are ignoring it, and so on? What is the vibe you are getting?

One thing that’s kind of interesting is that the individual people from the various branches of government who have gotten interested in it, like almost everyone who takes a look at this, become fascinated by it.

This is just really interesting and challenging and intellectually fun. It’s fun because it’s hard. To think through all the implications of this new technology and to think through all the ways that various regulations could have good and bad consequences is a challenging problem. So one vibe that I get is that they, like the rest of the community, find it really intellectually engaging and challenging.

A message that I have found to be resonating is that it is very important that the environment in the US is friendly enough that the ecosystem stays here, because there are a lot of resources in the US to support that, and a lot of those resources will also encourage that development to favour more legitimate uses and safe uses. If it becomes illegal then it develops more in [unwanted] directions. It is in the US national interest to have this ecosystem develop here.

And you think that people in authority in the US understand that?

I think they do. Now, understanding that and being able to act on it in a timely and clear way are different things. No individual regulator can solve the whole problem, and banking regulation is an extremely challenging and complex area. But as it sinks in that this protocol and technology is here to stay, and that it needs to be dealt with, then the attention turns to dealing with it right.

At a fundamental level, you can certainly throw tacks in the road. You can make it difficult to buy things. Like the latest tax ruling makes it challenging for people to comply with tax law; they need to do a lot more accounting if they’re using bitcoin for small transactions.

For bitcoin investors, the tax ruling is actually helpful, because it provided clarity. If you’re just buying and selling, the tax ruling was quite simple. For someone who had a stash and was spending them on small purchases, you will probably need accounting software to file your taxes properly.

Those kinds of things can certainly be tacks in the road. Lack of clarity in banking relationships is a huge hurdle in the road. But at a fundamental level, you can’t really outlaw a ledger. This is a piece of computer software that has lots of different uses. You can regulate how fiat currency goes in and out of it, but you can’t really stop it from being used.

Some of its uses don’t relate directly to currency at all, some of the multi-signature applications where you have multiple people signing a transaction, keeping things in escrow, title, applications where you’re using this as a way to send a public message that has a timestamp that verifies it. Companies could build their own internal ledger. They could just fork the Bitcoin protocol, they don’t need to move any money in and out of banks, they just use this ledger to manage their internal books, if they move money across divisions within the firm.

There are lots of these applications out there, and many of them don’t really require the approval of regulators. Once you recognize that the technology’s out of the bag, it can’t be stopped, it has lots of interesting applications, it only makes sense to put a framework around it that makes it possible for it to work.

Are you working on research papers or projects related to bitcoin?

I’ve been working on analyzing the block chain and trying to describe the evolution of the block chain over time, what kinds of transactions are occurring, trying to document the flows of funds …

It’s a pretty challenging exercise to do well because of the idiosyncrasies of the way the block chain records information: the fact that there’s not one wallet number to one individual or entity on the block chain, and they don’t have any identifying information.

At an individual level you have a fair bit of noise in understanding what’s going on, on the level of a single block chain transaction. But you can still look at aggregate patterns. I’m doing research in this area.

It’s a bit time-consuming to get it right, but interesting patterns emerge from understanding the block chain. It’s only going to become more interesting as companies like BitPay expand their reach and allow more and more people to do transactions.

If actual people buying and selling things is only a few per cent of what’s going on, it’s a little bit less interesting to analyze, but that’s changing. I think that real commerce is in the double digits on the block chain, and it’s growing. People finding utility from the block chain, from an economic perspective, is much more interesting to study. I’m doing research and also in parallel waiting for the community to evolve to the point that it’s more interesting economically.

Is this a popular topic that graduate students want to sign on to research?

There’s a lot of interest. [However] there are not very many people yet who have mastered the technology required to study it well. My guess would be that within a year you’ll see an explosion of analyses.

Based on my own experience, there’s a pretty big startup cost to sort through all the institutional details, to really convince yourself that you’ve understood the informational content of the block chain. Think about some of the things that change over time.

People use anonymization techniques in order to disguise themselves. Use of that and the way that works changes over time. The identities of the exchanges and the way they interact with the block chain change over time. Some services do a lot of stuff off the block chain, while other services do a lot of things on the block chain.

It’s a moving target and a complex target to understand what’s on the block chain, what’s off the block chain. There’s a barrier to entry with this research, but I think people will surmount that barrier.

Have you purchased any bitcoins yourself?

To study any market you need to be a participant in the market, to understand the user experience and wrap your head around it. So I’ve been in and out of bitcoin, but at a low level. I’ve tried to try out different exchanges, and as new firms come on I’ve tried to experiment with them and see how they work.

If I was in the position of doing a lot of more risky investments, I think it totally makes sense that a lot of the wealthier investors have taken a position here. It’s got a very interesting growth profile.

One thing I would say about investing in it: most Americans should be holding US dollars and index funds. That’s the tried and true way to hold money. But for people who are looking for the kind of risk profile that’s associated with new ventures, which is some probability of zero and some probability of growth, an interesting thing about investing in bitcoin is that it democratizes access to an investment of that profile.

You as an individual are not offered a share of a venture capital fund. You can’t buy that. You have to be a large investor, and even if you’re a large investor, you still have to be invited to participate. So it’s interesting that not only has bitcoin democratized access to moving money, but also, at the moment, buying bitcoin is like taking a stake in a startup. That’s a risky bet, but it’s got high growth potential.

Instead of investing in five bitcoin startups, you can buy just bitcoin, and that’s probably going to go with the bitcoin startups. The one caveat to that is that many of the bitcoin startups could pivot if the Bitcoin protocol blew up. The bitcoin itself could go down.

One of the things about investing in bitcoin is that you wouldn’t want to be caught unawares if something started shifting, if another protocol started gaining traction.

So there are some issues with holding bitcoin, but it’s an opportunity if you wanted to take a very risky position in your portfolio, high risk/high return. It’s a much more liquid way to get that investment profile than many other investments that have the same risk/return profile.

This interview has been edited for length and clarity.

bitcoin investmentcoinsummitinterviewpricesSusan Athey
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Will Bitcoin Venture Capital Investment Reach $300m in 2014?

Just a month ago, the 2014 run rate for venture capital invested in bitcoin startups stood at $100m.
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PBOC Officials Discuss Bitcoin as China’s


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## matty77

Im curious if people could give me advise on how to store your bitcoins?

is there a non electronic way to store it? Or can I store on say multiple USB with back up, and put the USB in a safe or something? Really I dont know too much about it but want to make sure i store the key properly..


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## springhill

matty77 said:


> Im curious if people could give me advise on how to store your bitcoins?
> 
> is there a non electronic way to store it? Or can I store on say multiple USB with back up, and put the USB in a safe or something? Really I dont know too much about it but want to make sure i store the key properly..




If you google 'safe bitcoin wallet' or 'safe bitcoin storage' there is loads of information and numerous options.


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## matty77

Hmm im going to go 50/50 with 2 different sites.

Will buy 1 bit coin for each to start off with then go from there.

Coinbase and blockchain seem to be the biggest and most well known so thats a good starting point I guess.

talk about diversification on investment strategies haha


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## pacestick

Bitcoin Price Drops 10% as Chinese Exchanges Stop Bank Deposits
Jon Southurst (@southtopia) | Published on April 10, 2014 at 09:26 BST | Asia, News, Prices, Regulation
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Bitcoin prices crashed today as Chinese businesses began receiving official deposit shutdown notices from banks, confirming recent suspicions of an impending crackdown. Exchanges will stop account recharging via bank accounts between now and 15th April.

Even though the news has been anticipated for over a week now, bitcoin prices sank under $403 from a high of $450.74 on the CoinDesk Bitcoin Price Index after companies began making public announcements on their sites.

coindesk-bpi-chart

Exchange BTCTrade.com made an announcement just before lunchtime in China, followed shortly after by BTC100.org and Huobi. Interestingly, it appears Chinese banks started with smaller exchanges before working up to those with larger trading volumes.

The announcements have all come via the banks themselves, as the PBOC has still not provided exchanges with any official announcement ‘on paper’.

BTCTrade’s statement read:

    “With a heavy heart we make this announcement, that BTCTrade just received a telephone call from our bank the Kejicheng (Tech City) branch of China Agricultural Bank Hangzhou, that if we do not stop using our bank account to conduct bitcoin related businesses by 4/15 our account will be frozen. Therefore, we are forced to stop all RMB deposits by 4/15 midnight, although withdrawals will not be affected at [present].”

BTC China CEO Bobby Lee said his company would not be changing any of its banking arrangements until it receives some form of official notice, which hasn’t arrived yet.

    “So far, we still have NOT received any official notices from Banks or the PBOC,” he said.

    “I have indeed heard that some other exchanges apparently have received notice, but we have not.”

BTC38.com, which specializes in altcoin trading, suspended account funding via bank deposits on 4th April.

At that time, prices of digital currencies other than bitcoin dropped by 20% or more. Hardest hit were megacoin (MEC) and TAGcoin (TAG), which each lost around 50% of their value, while quark fell by 40% and dogecoin around 25%.

Even litecoin, which is traded on most major platforms and is not considered an altcoin per se in China, fell by over 20% in value last week. It is currently trading on BTC-e for just $10.22.
Focus elsewhere

OKCoin and FXBTC also stopped some account funding options after receiving notices from their banks and payment processor partners, but promised to continue trading otherwise after April 15th.

OKCoin CEO Star Xu said, however, that the company was focused more on future expansion plans, and would maintain regular daily operations otherwise.

Said Xu:

    “OKCoin’s margin management, risk management, and cash withdraw and coin withdraw functions are working properly at this moment, OKCoin’s English version site will be up quickly, OKCoin will establish overseas offices and move servers there if needed.”

Community unperturbed

In fact, much of China’s bitcoin community shares that spirit and does not seem perturbed by regulatory moves.

“OK is always here, rumor-spreaders can leave now, we already have plans for April 15th,” said OKCoin’s Vice President He Yi.

The industry so far has shown nonchalance in the face of previous government bans, whether implied or actual, since last December, and have developed new ways for customers to move money in and out of exchanges without direct access to bank accounts. These have included a variety of third-party payment processors, pre-paid cards, and a voucher system.

Even BTCTrade’s announcement today ended on a positive note, informing of the company’s intentions to expand overseas in the near future.

    “BTCTrade has always set our sites on the global market since coming online, and we have already registered companies in mainland China, Hong Kong, Japan and the US. We are planning to commence USD services soon, and the Japanese version of our website is already online and operational, and a new version will be online before 4/15.”

“Very soon we will publicly reveal our cold wallet address, and utilize 100% proof of reserves, in order to ascertain that the platform does not engage in any transactions, and that user assets are safe, open to public scrutiny.”

CoinDesk will continue to monitor and update this developing story.

ChinaHuobiPBOC


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## pacestick

China’s Central Bank Governor: PBOC Won’t Ban Bitcoin
Pete Rizzo (@pete_rizzo_) | Published on April 11, 2014 at 14:02 BST | Asia, News, Regulation
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The price of bitcoin recovered from a low of roughly $380 and rose past $420 at press time on 11th April, on the news that Zhou Xiaochuan, the governor of the People’s Bank of China (PBOC), had issued new statements potentially clarifying the central bank’s position on bitcoin.

According to reports, during Boao Forum, Xiaochuan offered his opinion on the nascent technology, saying that China would not seek to ban bitcoin and other digital currencies entirely.

Said Xiaochuan:

    “It is out of the question of banning bitcoin as it is not started by central bank.”

Xiaochuan continued his statements, offering a potential new potential classification for bitcoin, and suggesting that the PBOC may be actively considering how to treat bitcoin.

Xiaochuan said:

    “Bitcoin is more a kind of tradable and collectible asset, such as stamps rather than a payment currency.”

Boao Forum is a regional economic conference that seeks to address economic problems in Asia, and to promote collaboration on solutions.
Price rises

At press time, the price of bitcoin on the CoinDesk USD Bitcoin Price Index (BPI) rose sharply on the news, climbing more than 18% to pass $420.

china, pboc, ban

Likewise, the price of bitcoin on the CoinDesk CNY BPI was up 12.9% at press time to reach  ¥2630.70, up from the day’s open of  ¥2,329.99.

Screen Shot 2014-04-11 at 9.07.14 AM
Uncertainty lifts

News of the statement first surfaced at roughly 7:00 GMT, with the publication of a report by China Securities Network, a news outlet that provides real-time financial reporting, and later resurfaced on a number of similar news channels.

Though the remark may simply amount to an informal statement, it seemingly dispels fears percolating since March that China would potentially seek to ban bitcoin altogether.

Though, the PBOC is still likely looking to step up enforcement of past rules aimed at separating domestic banks from the alleged risk posed by the nascent digital currency industry.

In recent weeks, the price of bitcoin has dropped rapidly, from above $500 to below $400, on the news that China would seek to freeze the ability of major exchanges to conduct yuan deposits. Major exchanges have begun receiving notifications of account closures, and at present, Xiaochuan’s statements do not suggest a change in this policy.

CoinDesk is continuing to monitor this developing story.


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## DB008

Bit of a crash in bitcoin the other day as China moved to ban it (from use in their country).

Meanwhile...

*New Colorado Marijuana Vending Machines Will Accept Bitcoin*



> Marijuana vending machines have long been rumored to debut en masse in certain US states, but on 12th April the first machine that can be accessed directly by consumers was finally unveiled at an invite-only event in Colorado.
> 
> Billed as the first marijuana vending machine in America, ZaZZZ units are perhaps more accurately the first ones that will not be placed behind sales counters. The machines offer a number of novel compliance features, including a driver’s license reader and a camera that captures video of users.
> 
> ZaZZZ machines also have another notable feature: They accept only a limited number of payment options including the ZaZZZ Card, cash, and perhaps most notably, bitcoin.




http://www.coindesk.com/new-colorado-marijuana-vending-machines-accept-bitcoin/


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## daniellindsay

Tim_54321 said:


> Seems like the idea has a lot of potential. Thoughts?
> 
> http://launch.is/blog/l019-bitcoin-p2p-currency-the-most-dangerous-project-weve-ev.html




Very interesting. Although I'm pretty sure this bitcoin thing is just a bubble waiting to burst.


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## skc

Interesting article about the Blockchain technology behind Bitcoin.

http://www.brw.com.au/p/tech-gadgets/behind_the_most_valuable_thing_about_rl1rStxztA6fmbZoXP8tRM


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## sinner

skc said:


> Interesting article about the Blockchain technology behind Bitcoin.
> 
> http://www.brw.com.au/p/tech-gadgets/behind_the_most_valuable_thing_about_rl1rStxztA6fmbZoXP8tRM




I get what they are trying to do but it seems weird to me.

For every single use case mentioned in the article, by not using bitcoin and just adopting the blockchain technology (read: shared, zero trust database), all the participants would have to promise to not accumulate computing power greater than 51% of the total pool and yet have huge profit incentives to do so.

Also all the transactions will be shared across all nodes in the network, gonna be hard to do anything without every node owner knowing (or being able to know) what is going on.

I know the creator of mpex.co which is a serious exchange, basically like the CME or maybe NYSE for bitcoin stuff and to me that model seems much more in tune with reality.

My  on the article is that these banks are just scared of being behind the curve like they were for the internet. But they don't really know what they're doing, some capital will be misallocated to the mentioned startups and not much else of significance will happen. I'll be quite surprised if any permanent changes to how the banks operate come from research into blockchain technologies that doesn't leverage the existing massive decentralised pool of miners i.e. bitcoin itself.


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## DB008

Anyone trade this?

Huge rise, up over $1000 for 1 bitcoin atm.


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## ThingyMajiggy

DB008 said:


> Anyone trade this?
> 
> Huge rise, up over $1000 for 1 bitcoin atm.




Wow hadn't noticed that one, was around $300-400 last time I checked, wonder why it's gone so crazy again?


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## matty77

matty77 said:


> Hmm im going to go 50/50 with 2 different sites.
> 
> Will buy 1 bit coin for each to start off with then go from there.
> 
> Coinbase and blockchain seem to be the biggest and most well known so thats a good starting point I guess.
> 
> talk about diversification on investment strategies haha




So i ended up moving house and literally ran out of time to buy the bitcoin, if i had bought the bitcoin price was around$450 per coin, so that would have been a $900 investment with a return of $20k at todays low prices! haha lol

should of could of..


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## greggles

Does anyone know if it is possible to dispute Bitcoin transactions? One of the safety nets of fiat currencies is that everything is traceable and you can easily obtain refunds if there is a dispute. 

It occurred to me that because of the anonymity of Bitcoin and other cryptocurrencies that this is probably not an option with crypto transactions. You don't even know where your funds are going.

Anyone know more about this?


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## Indoril

I'm no expert but I'm sure there is no way to dispute transactions as per it's nature/design. All transactions are final, there is no authority other than the blockchain itself. That's why stolen coins is a thing. Once they are transferred to another wallet, there's no reversing it and no way of knowing who owns that wallet.
Also consider a lot of malware these days demands ransom in the form of bitcoin. No traceability, no disputes, no reversals.

It's the wild west.


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## greggles

Indoril said:


> I'm no expert but I'm sure there is no way to dispute transactions as per it's nature/design. All transactions are final, there is no authority other than the blockchain itself. That's why stolen coins is a thing. Once they are transferred to another wallet, there's no reversing it and no way of knowing who owns that wallet.
> Also consider a lot of malware these days demands ransom in the form of bitcoin. No traceability, no disputes, no reversals.
> 
> It's the wild west.



I think this aspect of cryptocurrencies is what will probably lead to its undoing in the long term. There are so many scams and ripoffs around and no protection for the average person. No checks and balances. No recourse to a higher authority. I imagine that cryptocurrency scams will only proliferate given that people are powerless once the funds have been transferred. The perfect theft is one where the victim cannot do anything about it.

There is a real downside to anonymity. The wild west it most certainly is.


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## greggles

Bitcoin Boy says if you're not a millionaire in 10 years, it's your own fault: http://www.news.com.au/technology/i...t/news-story/dc085f4551c54c5e7a6ea199acfab11d


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## moXJO

greggles said:


> Bitcoin Boy says if you're not a millionaire in 10 years, it's your own fault: http://www.news.com.au/technology/i...t/news-story/dc085f4551c54c5e7a6ea199acfab11d



There has never been a better time to make a million. We are seeing a massive shift in thinking,  technology, economy,  recreation,  etc.


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## matty77

greggles said:


> I think this aspect of cryptocurrencies is what will probably lead to its undoing in the long term. There are so many scams and ripoffs around and no protection for the average person. No checks and balances. No recourse to a higher authority. I imagine that cryptocurrency scams will only proliferate given that people are powerless once the funds have been transferred. The perfect theft is one where the victim cannot do anything about it.
> 
> There is a real downside to anonymity. The wild west it most certainly is.



This is why bitcoin and the blockchain are so good, its because you cannot change what has happened in the past - its impossible. The amount of computer power required to even make one change would make it impossible. My whole point is this - if you have sent bitcoin to an unknown address etc then too bad too sad - its gone. If somehow you can work out WHO owns that address which is highly unlikely then you may be able to get your bitcoin back - which is highly unlikely anyway. The whole point of the blockchain is that it is checking itself constantly so it pretty much is unhackable. I think that makes sense. What you are seeing as a weakness is in fact one of its biggest strengths.


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## greggles

Bizarre news in recent days about child abuse images being found in Bitcoin's blockchain: http://www.abc.net.au/news/2018-03-...-has-been-linked-to-child-pornography/9571384


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## jjbinks

News about btc is often exaggerated


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## Tim_54321

Tim_54321 said:


> Why is fiat currency worth anything? All it is is a bit of paper? I'd rather have bitcoins than USD where politicians and bankers are destroying the currency.
> 
> There will only ever be 21 Bitcoins. ATM there are around 6 million bitcoins in existence so the value of all bitcoins in existence is only around 50 million despite them trading at 8USD each, in the scheme of things they are very scarce. If everyone in Australia wanted a bitcoin right now there would only be enough for ~.25 each.
> 
> If you think of how many countless billion there are floating around the world not much needs to go into bitcoin for the price to continue to rise.



Just thought I'd bump this thread for posterity. Hope someone got in back when I originally posted and Bitcoin were $8.


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## moXJO

Tim_54321 said:


> Just thought I'd bump this thread for posterity. Hope someone got in back when I originally posted and Bitcoin were $8.



You end up being a billionaire Tim?


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## Tim_54321

moXJO said:


> You end up being a billionaire Tim?



It bought me a house and investment property but sold most too early like everyone. I always thought the government cracking down on it was the biggest risk especially in the early days which would have just wiped it out as an investment. Sold a lot when the scaling issues appeared too and the block size debate happened, never thought the pivot to digital gold would work, still skeptical about it long term. I think ETH will surpass it eventually with ETH2 and the digital gold narrative will gradually fade, but I've been wrong about that so far so probably will be again (I thought ETH was going to surpass Bitcoin in 2017, it got very close then Bitcoin had a massive rally and hasn't looked back).


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## noirua

Survey shows that 62% of Canadians want to get paid in crypto by 2027
					

The survey results also showed that crypto use is more prevalent in younger demographics.




					cointelegraph.com


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## noirua

Belgian MP becomes first European politician to accept salary in Bitcoin
					

Not just politicians, some of the biggest names in the sports have also come forward to accept Bitcoin salaries




					cointelegraph.com
				



Bitcoin (BTC) craze among lawmakers has reached the Belgian parliament now, as Brussels member of parliament Christophe De Beukelaer became the first European politician to convert his salary to Bitcoin.


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## noirua




----------

