Bitcoin - Peer to Peer currency

[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

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

Good call!

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

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

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/

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

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

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]

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

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
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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