Bitcoin Forum

Investor Joe Lewis isn't investing in a bitcoin venture called Avalon and doesn't lead a Zurich-based private-equity fund called the Phoenix Fund. An article on the supposed investment was inaccurately published and has been removed.

Joe Lewis, a billionaire foreign-exchange trader who teamed up with hedge-fund manager George Soros in 1992 to bet against the Bank of England, is the latest high-profile financier to throw his weight behind the virtual currency called bitcoin.

Mr. Lewis leads the Phoenix Fund, a Zurich-based private-equity fund that on Tuesday plans to invest $200 million in Avalon, a company that makes computer servers aimed at creating bitcoins, according to people familiar with the situation.

Bitcoin is a virtual currency that exists online and isn't backed by any government or central bank. Bitcoins were invented in 2008 by a computer programmer who goes by the pseudonym Satoshi Nakamoto, who describes it as a peer-to-peer electronic cash system.

The Phoenix Fund's investment in Avalon reflects the growing popularity of virtual currencies, which are also coming under scrutiny from regulators. Other bitcoin enthusiasts include Cameron and Tyler Winklevoss, who are best known for their role in the creation of Facebook Inc. FB +1.50% They have proposed an exchange-traded fund that is tied to bitcoins.

Bitcoins are created through a process called mining, in which computers solve complex mathematical algorithms to earn the bitcoins. The total number of bitcoins that can be mined is limited to 21 million. There are now about 11.5 million bitcoins in circulation, according to Blockchain, a website that monitors bitcoin transactions.

The Phoenix deal will also involve Taiwanese microchip maker Taiwan Semiconductor Manufacturing Co., 2330.TW +0.50% which is set to supply the state-of-the-art microchips that will power the hardware.

The Phoenix Fund was set up this year to invest in bitcoin mining-hardware companies. It looked at several of Avalon's rivals in the sector, including Butterfly Labs and KnCMiner but decided against investing, according to a person familiar with the private-equity firm's strategy.

Investors in the Phoenix Fund, which includes a small number of individuals who made their fortunes in currency trading, believe that the currency will become more stable and popular if more parties are involved in the mining process, this person said.

Mr. Lewis moved into currency trading in the 1980s and 1990s. In September 1992, Mr. Lewis teamed up with Mr. Soros to bet on sterling crashing out of the European Exchange Rate Mechanism, an event that was later named "Black Wednesday." Mr. Lewis didn't respond to a request for comment.

Mr. Lewis had big losses investing in U.S. brokerage firm Bear Stearns Cos, in which he began amassing a stake during 2007, The Wall Street Journal reported at the time.

Mr. Lewis is the main investor in an unlisted company called Tavistock Group, which has investments in more than 200 companies across the globe.

Tavistock Group includes ENIC Group, which has a Bahamas-registered subsidiary called ENIC International Ltd., through which Mr. Lewis owns 85% of the shares in U.K. soccer club Tottenham Hotspur.

The Phoenix Fund is independent of Tavistock.

The bitcoin deal was put together by Andrew Laurus, a former government-bonds salesman at Lehman Brothers who is also an investor in the fund. Avalon was set up by Yifu Guo, a pioneer in the bitcoin-mining industry. He was part of the team that developed the first ASIC bitcoin mining hardware. ASIC stands for application-specific integrated circuit, a type of custom-designed microchip. Mr. Guo couldn't be reached for comment.

Separately, Coinflash, a company that planned to set up kiosks for bitcoin enthusiasts to buy the virtual currency, is shutting down before it even opened its doors. "Due to an unforeseen change in our personal circumstances, we've made the difficult decision to suspend Coinflash's services indefinitely," the San Diego-based company said in an email statement.

Coinflash was established earlier this year and had planned to open the bitcoin kiosks in California and New York this summer.

As part of the deal, Avalon will gain access to TSMC microchips based on 20-nanometer processes, which are much faster than other chips. TSMC recently won a contract to supply chips to Apple. The increased processing power should give Avalon an edge in solving the algorithms that control the supply of bitcoins.

—Robin Sidel contributed to this article.
Write to Harriet Agnew at Harriet.Agnew@dowjones.com

At $100/btc the entire mining industry only makes about $131 million a year.

In order to justify investing spending $200 million dollars in bitcoin mining these people must believe the price will go far higher then that.

Hopefully this will cause some more people to want to buy ;D

200M to secure a confirmed portion of what might be the new financial backbone of the world? surrrre why not, got billions more

Why would it cost anything like $200m to take the Avalon design to the latest, narrowest chip tech?
Surely a few million would be enough. Doesn't make sense.

200M to buy a whole generation's worth of mining (while leapfrogging a few others while they're at it), first mover advantage, why the hell not!!!
got a couple  more billions in his pocket...

vision: set it to "nothing's impossible"

Also.. if you were about to drop $200Million into a mining outfit... you'd probably have dropped a massive chunk straight into buying bitcoins just before publicizing the news.

I still smell a stinking ball of incestuous journalists feeding off the same rumour.  Would love to be wrong though!

Sure, and the total bitcoin market cap is around $1 billion.  This guy could personally bid it up to $200.  If he has a huge investment in chip capacity it would be in his interests to keep the price going up in order to sell chips.

Also.. if you were about to drop $200Million into a mining outfit... you'd probably have dropped a massive chunk straight into buying bitcoins just before publicizing the news.

I still smell a stinking ball of incestuous journalists feeding off the same rumour.  Would love to be wrong though!

There isn't even close to $200M on the orderbooks combined.
I think he can get a little bit under 100K Bitcoin's for 200M, after slippage

No way the WSJ would publish a story like this without checking everything out.




When I said $200, I meant he could buy enough to drive the price to $200 dollars. Not that he could buy $200mil worth.

Keeping the price up would increase the value of his mining chip investment.

This guy is mainly a ForEx trader.

Not good that a big-time thief like this guy is getting involved with mining. Mining is the way to control Bitcoin. Once you control the mining operation, you can do anything with Bitcoin you want. It not longer is beholden to limited supply or anything. They know this. Once the masses jump into Bitcoin and these mega douches control everything Bitcoin is over, it will be just another exploited currency. The problem is that we are still in their system of monetary control - i.e., they can buy up anything they want and that includes Bitcoin. The only time to strike is is when their system has collapsed.

Please learn how bitcoin works first

Please learn how bitcoin works first

I know how it works. If you control the mining, you control the voting of the bitcoin network. Once, the masses jump in, all of us "decentralization whores" and libertarians aren't going to have a voice. The Big money will control the mining and the forking of the network and they will lead the masses, who don't understand the need for decentralization, along with them.

+1

I don't see why the merchants, users & other miners should care too much if some massive miner starts building a chain of blocks with some other ruleset.  

200M to secure a confirmed portion of what might be the new financial backbone of the world? surrrre why not, got billions more

Not good that a big-time thief like this guy is getting involved with mining. Mining is the way to control Bitcoin. Once you control the mining operation, you can do anything with Bitcoin you want. It not longer is beholden to limited supply or anything. They know this. Once the masses jump into Bitcoin and these mega douches control everything Bitcoin is over, it will be just another exploited currency. The problem is that we are still in their system of monetary control - i.e., they can buy up anything they want and that includes Bitcoin. The only time to strike is is when their system has collapsed.

I agree this looks fishy. Why would anybody put 200M into mining? Is that good or bad news? Do they want to destroy or support bitcoin? I mean maybe this is the amount it would really take to defend against attacks but it certainly is an amount that is enough to put all existing miners out of business and destroy the next 3 versions of a proof of work algo, too. I hope he is greedy and has not too much fiat to loose as then it would not make any sense to destroy Bitcoin.

Ok, so if he is greedy, why is the bitcoin price not sky high from him front-running his good news?

So if you want to invest 200M, why would you need Avalon? The only advantage I see is that even with 200M you wouldn't be able to ramp up production big scale 2 months from now. With Avalon, you can. Why hurry? Did somebody whisper in his ear that Flintheart Glomgold will go all in and he wants to be even faster?

You should look into why Yifu got into creating ASIC's in the first place.  His heart is in the right place, you don't have to worry about him exceeding 50%.

Perhaps the Paypal rumour for this month is true and this guy knows it. I feel like us little are guys are really not included in the real market happenings these days. It has moved up beyond us methinks.

you think bitcoin acquistions happen on the orderbooks? think again..

No way the WSJ would publish a story like this without checking everything out.

What is the rumor?

The media usually copies what is written somewhere else. I don't mean stealing news, but once it's out, it's out and spreads. I saw something like this many times.

Directly related to Bitcoin the WSJ did something similar even some days ago:

http://blogs.marketwatch.com/thetell/2013/07/29/bitcoin-now-illegal-in-thailand/?mod=MW_latest_news

MW is part of the WSJ Digital Network (http://wsjdigitalsolutions.com/about/). In case you didn't know: Bitcoin isn't illegal in Thailand. :)

The media usually copies what is written somewhere else. I don't mean stealing news, but once it's out, it's out and spreads. I saw something like this many times.

Directly related to Bitcoin the WSJ did something similar even some days ago:

http://blogs.marketwatch.com/thetell/2013/07/29/bitcoin-now-illegal-in-thailand/?mod=MW_latest_news

MW is part of the WSJ Digital Network (http://wsjdigitalsolutions.com/about/). In case you didn't know: Bitcoin isn't illegal in Thailand. :)

So what? This doesn't falsify my statement that media outlets do make errors not necessarily do proper fact checks.

No, but it is to be expected that a published(paywall) article is likely to go through much more rigorous fact checking.

THAT'S A BLOG, QUOTING ANOTHER BLOG

So what is your all s call? Real or BS?

It does not take that long to corrupt someone - especially when you are throwing $millions around - hundreds of $millions.

This is the WSJ writer Harriet Agnew's twitter page

https://twitter.com/HarrietAgnew

Lots of activity in financial reporting. Would be real egg-on-face to have the wrong Avalon completely.


Edit: two earlier crypto pieces:

Harriet Agnew ‏@HarrietAgnew 5 Jul
@annairrera @tylerwinklevoss @winklevoss The crypto community is pumping up the next new thing: Litecoins http://bit.ly/16beDAD

 Harriet Agnew ‏@HarrietAgnew 5 Jul
Q&A with #Bitcoin backer @tylerwinklevoss:  http://bit.ly/1bbQaAI  @winklevoss
Expand

Not good that a big-time thief like this guy is getting involved with mining. Mining is the way to control Bitcoin. Once you control the mining operation, you can do anything with Bitcoin you want. It not longer is beholden to limited supply or anything. They know this. Once the masses jump into Bitcoin and these mega douches control everything Bitcoin is over, it will be just another exploited currency. The problem is that we are still in their system of monetary control - i.e., they can buy up anything they want and that includes Bitcoin. The only time to strike is is when their system has collapsed.

Having 51% of the network doesn't mean you can just do whatever you want with BTC. any kind of outright manipulation would be obvious, crash the price, and destroy their investment.

You can use a 51% attack to destroy bitcoin, but you can't use a 51% attack to just steal people's money

It didn't start with the WSJ but the Finanical News.

http://www.efinancialnews.com/story/2013-08-05/bitcoin-gold-rush-heats-up-with-private-equity-deal

Edit: Same author.

Financial News is owned by Dow Jones & Company. The Dow Jones franchise also includes The Wall Street Journal, Barron's, Factiva and Marketwatch.

You should look into why Yifu got into creating ASIC's in the first place.  His heart is in the right place, you don't have to worry about him exceeding 50%.

Yup yup. If this is true, and it's a huge credibility risk for the WSJ to write all that with no solid sources, then this really is the start of the goldrush.

THAT'S A BLOG, QUOTING ANOTHER BLOG

His Zionist brotherhood is whispering into his ear. They have to control Bitcoin before it destroys their global banking scam. Yufu was discussing the problems with how the government can destroy/control bitcoin and then he makes a deal with the devil.

I am talking about manipulating the mindless masses into using a forked chain that they control once Bitcoin has taken off. They won't know any better, they won't understand the need for the current protocol. They will just understand the convenience and as long as the forked chain has that and they can spend it they won't care about whether the amount is fixed or any of that. 

I'm not talking about a 51% attack to steal coins - that wouldn't be worth their time.

Hello everyone...er... Hello every shareholder,

1  About that "big news" regards to Avalon:  

        1  From a thread at btcman.com that was posted by a ID called "gridchip" last month, we (incl. all btcman`s members) can sure that Avalon team do have a big discord inside. It was written in chinese and need to register&login to read ,so I d prefer not giving the link here (all chinese shareholders can find it at "比特币挖矿区" board) However, I hardly believe the rest of this news is real.

gridchip's thread is here: http://bbs.btcman.com/forum.php?mod=viewthread&tid=4621&extra=page%3D2&_dsign=2de4381b

Wow, you are a complete idiot.

I am talking about manipulating the mindless masses into using a forked chain that they control once Bitcoin has taken off. They won't know any better, they won't understand the need for the current protocol. They will just understand the convenience and as long as the forked chain has that and they can spend it they won't care about whether the amount is fixed or any of that.  

I'm not talking about a 51% attack to steal coins - that wouldn't be worth their time.

Anyone can start a forked chain whenever they want.  There are dozens out there, from litecoin to BBQCoin to Primecoin.

If a company wants to start it's own alt chain they can do so whenever they want.  They don't need $200 million in chips to do it.

You just aren't comprehending the scenario I am talking about.

Also.. if you were about to drop $200Million into a mining outfit... you'd probably have dropped a massive chunk straight into buying bitcoins just before publicizing the news.

I still smell a stinking ball of incestuous journalists feeding off the same rumour.  Would love to be wrong though!

No, you aren't comprehending what you're talking about because you're a complete idiot. I understand what you mean, and you are incorrect. Because you are stupid. And an anti-semite or something.

Somebody has been buying up all of Avalon's coins already. It fits. Yifu has come out and said that all of the Bitcoins that were recieved as payment for the most recent round of loose chip sales were sold. If you look at the blockchain none of those coins were moved - the ownership of the wallet was transferred.

http://blockchain.info/address/1FGAftzSTztFSB8LMwsrdCKTyqGY6zr3sU?offset=0&filter=0

Over 75,000 bitcoins were sold at once. That buyer could have been Joe Lewis.

Somebody has been buying up all of Avalon's coins already. It fits. Yifu has come out and said that all of the Bitcoins that were recieved as payment for the most recent round of loose chip sales were sold. If you look at the blockchain none of those coins were moved - the ownership of the wallet was transferred.

http://blockchain.info/address/1FGAftzSTztFSB8LMwsrdCKTyqGY6zr3sU?offset=0&filter=0

Over 75,000 bitcoins were sold at once. That buyer could have been Joe Lewis.

But surely the buyer HAS to move them. That is a zero-cost step to take. A wallet buyer can never be sure that the private key is unknown to the seller(s). The coins could disappear at any time. This is like leaving $8m in cash sitting in your car.

Trader Joe is an Ashkenazim, who are of Eurasian (khazarian) decent. They are not related to the Semitic people who inhabited Palestine (i.e., Hebrews) 2000 years ago. Go read a book, please.

I am talking about manipulating the mindless masses into using a forked chain that they control once Bitcoin has taken off. They won't know any better, they won't understand the need for the current protocol. They will just understand the convenience and as long as the forked chain has that and they can spend it they won't care about whether the amount is fixed or any of that.  

I'm not talking about a 51% attack to steal coins - that wouldn't be worth their time.

These are already happening. Look at those scamcoins. Is bitcoin hurt? I don't think so

This is the WSJ writer Harriet Agnew's twitter page

https://twitter.com/HarrietAgnew

Lots of activity in financial reporting. Would be real egg-on-face to have the wrong Avalon completely.


Edit: two earlier crypto pieces:

Harriet Agnew ‏@HarrietAgnew 5 Jul
@annairrera @tylerwinklevoss @winklevoss The crypto community is pumping up the next new thing: Litecoins http://bit.ly/16beDAD

 Harriet Agnew ‏@HarrietAgnew 5 Jul
Q&A with #Bitcoin backer @tylerwinklevoss:  http://bit.ly/1bbQaAI  @winklevoss
Expand

It's hilarious that the first comment on the article is about tulips...

Never fails, no matter the news. Some people will have to be dragged kicking and screaming into the future.

and this is her linkedin:
http://www.linkedin.com/pub/harriet-agnew/1a/73/23a

University of Edinburgh..I highly doubt she would fuck up such a simpleton misunderstanding like Avalon Mining and Avalon Ventures

Also note the little "—Robin Sidel contributed to this article." at the bottom.

This article was not the effort of a single person. It's getting printed in the Monday edition of the WSJ. They do not fuck up - not like this.

Exactly. They wouldn't just read random shit on the internet and put in their story, they would have called people on the phone and verified with them what was going on.

Note that the story says they were unable to contact Yifu, but does not say they were unable to contact Joe Lewis himself, or some of the other players.

The only risk is if one of their sources claimed to know more then they really did, and the $200m figure got injected into the rumor mill from the old stories.

It still seems improbable. Maybe they're putting out fake news in order to drive the price of BTC up so they can sell for a profit.

I know how it works. If you control the mining, you control the voting of the bitcoin network. Once, the masses jump in, all of us "decentralization whores" and libertarians aren't going to have a voice. The Big money will control the mining and the forking of the network and they will lead the masses, who don't understand the need for decentralization, along with them.

Once again... LEARN HOW BITCOIN WORKS.

The only thing miners "vote" on is which tx is valid in a conflict and which txs are included in the next block.  That is it.  If a group of miners change the protocol it is a fork and existing users and continue to use the existing (original) Bitcoin.

Anyway, hoping this is BS so these stock prices will correct.

Once again... LEARN HOW BITCOIN WORKS.

The only thing miners "vote" on is which tx is valid in a conflict and which txs are included in the next block.  That is it.  If a group of miners change the protocol it is a fork and existing users and continue to use the existing (original) Bitcoin.

Once again... LEARN HOW BITCOIN WORKS.

The only thing miners "vote" on is which tx is valid in a conflict and which txs are included in the next block.  That is it.  If a group of miners change the protocol it is a fork and existing users and continue to use the existing (original) Bitcoin.

To be precise, a 51% attacker could implement any soft-fork to the system, i.e. making an originally valid transaction invalid. That's all he can do. So he could blacklist bitcoin addresses, decrease money supply, decrease block size, charge ridiculous tx fee, reverse confirmed transactions, etc.

A 51% attacker cannot pull a hard-fork (making an originally invalid transaction valid), e.g. inflating money supply, raising block size, printing money out of thin air, stealing money, etc.

fool, why not buy bitcoins directly?

Also note the little "—Robin Sidel contributed to this article." at the bottom.

This article was not the effort of a single person. It's getting printed in the Monday edition of the WSJ. They do not fuck up - not like this.

fool, why not buy bitcoins directly?

https://twitter.com/smirobi

Not if the "original" bitcoin is made illegal.

...

They could fork the masses right off to a new chain and leave the original hanging with computer nerds and the sound money crowd who were fine with running an illegal chain.

Could there be hyperinflation in Bitcoin?

Currently the creation of new coins is fixed at a certain rate which halves every few years and will at some point in the future drop to zero. As I understand it, this is by consensus, i.e. all the nodes in the network agree on this protocol.

Suppose at some point in the future the Bitcoin community were to decide that the currency's deflationary bias wasn't such a good thing for the economy and that it would be better to start expanding the monetary base at a higher rate. What would it take for such a policy to take effect? Specifically, what percentage of the nodes in the network would have to vote in favor of the new expansionary policy?

And if indeed the network could vote itself into an expansionary policy, is it then also conceivable that it might vote itself into a hyperinflation, where the rate of expansion gets out of hand?

In short, what does it take to change the rate of expansion of the Bitcoin monetary base, and how easy or difficult is it to achieve as compared with the stroke of a central banker's pen?

As per the current rules there will only ever be 21 million coins at most (explained in other answers here). However, I'd like to add that this is by general agreement, which means that it can be changed.

See this question: Could there be hyperinflation in Bitcoin?

Looking at the history of money, I am skeptical that there will only ever be 21 million coins. I don't know of too many instances in history when money could be created out of thin air and wasn't. It would be foolish to ignore history. Whether or not there will be more than 21 million coins depends on whether or not "the people" demand it, and once again history is our guide.

Not everybody needs to agree (that would probably never happen!) for there to be a change in the protocol (which would be needed to cause inflation), but it's not based on just a majority of hashpower either.

It's really a vast majority of users that need to agree; if just 51% of users decided to change the protocol, it's entirely possible that it would cause a massive loss in confidence in both resulting chains. Retailers and every other service would need to choose which to accept (or accept both), and try to understand the difference, and communicate that on to users.

I think most of us know its a bad idea to go down that path with Bitcoin while it's not yet been fully accepted as mainstream. A smoother option would probably be to create an alternative cryptocurrency with a new name, rather than trying to split the Bitcoin user base into two parts.

The problem with idiots is that no matter how much time you spend trying to explain things to them, they will never understand  -- if they simply lack the intellectual capacity to comprehend the explanation. Makes it a huge waste of time to bother.

I actually like Joe Lewis, he's a force of good in this world.

Lewis was born to a Jewish[1][2] family above a public house in Roman Road, Bow, London,[3] Lewis left school at 15 to help run his father's West End of London catering business Tavistock Banqueting, starting out as a waiter. When he took the reins, he quickly expanded it by selling luxury goods to American tourists, and also owned West End club the Hanover Grand, where he gave Robert Earl his first job.[3] He later sold the business in 1979 to make his initial wealth.

You sir, are what I deem a racist. Makes sense, racists are very ignorant.

You sir, are what I deem a racist. Makes sense, racists are very ignorant.

Let me ask you this: If this is all insider trading, and not through realizing opportunities that others do not see as the entrepreneurial spirit entails, tell me, oh tell me, what is he doing in bitcoin? What is this insider information that he is about to "thieve" a fortune from?

All they have to do is secure the mining power, fork the chain while altering the protocol to allow more bitcoins, tell the masses that any other chain is illegal and disastrous to society and there you go - job complete.

trader joe nor any of his zionist banker buddies should be allowed within an astronomical unit of a bitcoin mining operation under any circumstance.

Robin thinks Bitcoin is a company. But did learn for the first something new (read red).

http://24allnews.com/virtual-currency-enthusiasts-to-launch-self-regulatory-group-2/

You do not know what racism is then. I didn't say it was insider trading, I said he got his fortune through insider trading and using his connections within the central banking cartels. What I said, with regards to this story, was that if this story is true then he is making one of the first moves to gain control of the mining power of the network.

___

For example, too dumb to see the obvious flaw with this theory.


And again, apparently too dumb to understand that the whole point of bitcoin is that no one has to "allow" you to use it. It's the kind of statement that only someone who isn't even capable of actually understanding bitcoin could make.

Sell all your bitcoins and buy BBQCoins or whatever if you don't like it.

Robin thinks Bitcoin is a company. But did learn for the first something new (read red).

http://24allnews.com/virtual-currency-enthusiasts-to-launch-self-regulatory-group-2/

What is the obvious flaw, genius? I mean, just go ahead and spit it out... don't tease us.

I don't even know what the hell you are trying to say in the last comment. That just simply has no connection with anything I said.

No point in telling you since you are too dumb to understand it.


Exactly, you didn't understand it because you are really stupid. 

This really does make me think about the Paypal rumour though...

I do think it's more likely true than not, and that was on day 0 of the rumor when I first heard about it.

It'd make so much sense. Old Paypal founders already invested $2m into Bitpay. The Paypal CEO (or president?) already said he was looking into Bitcoin. The reddit post was removed pretty quickly (possible company letter threat? I don't know why a troll would remove a troll post if they didn't work at Paypal). It'd be easy for them to do so—they have the infrastructure needed to bring bitcoin into the mainstream. Why the hell not? Makes perfectly good business sense! Especially if Bitcoin has the potential to ruin their business model if they didn't adopt it! 'Sides, they already work between dozens of currencies, what's bitcoin to 'em?

Yeah me too, plus trolls have a certain "feel" to them and TheInsiderMan just didn't have it.

Damn I don't even want to go to sleep right now, I want to watch New York wake up...

http://www.linkedin.com/pub/robin-sidel/6/ba1/ba

Do you seriously have a learning disability that prevents you from understanding written English?

The subject of the sentence is "A group of companies that are pushing virtual currencies such as bitcoin..."

That can be rephrased as a single sentence: "A group of companies are pushing virtual currencies such as Bitcoin."

In that case the subject would be "A group of companies"

The object would be "Virtual currencies, such as Bitcoin"

and the verb would be "pushing"

"such as bitcoin" clearly refers to the virtual currencies the companies are pushing, as opposed to the companies themselves.

The section highlighted in red is also totally irrelevant.

___

This is in addition to thinking that a twitter user who wrote that they were "not a WSJ reporter" was a WSJ reporter.

Let's just take it for gospel that Avalon is getting $200M in VC to compete with BFL which is at best a $30-$40M GROSS sale company.

Do you realize that sales would have to be in the billions for a VC to even see the return of their principal, let alone profit/interest?

The only thing that would make since is if there's one or two too many zeros in that $200M figure.

Therefore, I see only two possibilities: Somebody fucked up the research or Bitcoin's being played.

Not if the "original" bitcoin is made illegal. The users can decide which chain they are a part of through client updates and such. Don't sit there and try to tell me that can't work. It absolutely can work. When FTC was forked, we had to update our clients to make sure we weren't on the forked chain, and many were, and were mining and transacting on the forked chain. They could fork the masses right off to a new chain and leave the original hanging with computer nerds and the sound money crowd who were fine with running an illegal chain. It. Can. Happen. Especially if the big players want it to happen, easily once they get everyone on board and the infrastructure built. So shut your ass.  


I am not just talking about a 51% attack. We are talking about using the majority of the mining base to fork the chain while altering the protocol on the fly to adopt to government regulations - they can change the max number of coins, just as they can alter the blocksize, etc. You need a mining base to maintain the particular network for each chain - that is why they would take over the mining infrastructure. But they also need to alter the protocol.

Taking over Bitcoin will be easy once the infrastructure is established AND the masses join... because the masses can be duped into anything. they will take it over, eventually, if allowed to. Whether or not we maintain the original in a black market is a different story.

It won't be one miner, its going to be most of the network. We are the minority, the mindless masses are the majority. They aren't going to care about your forked network, they just want the one that they are told they are allowed to use. "We" are going to be the "chain of block with some other ruleset" if you let these criminals into the mining operation.

Let's just take it for gospel that Avalon is getting $200M in VC to compete with BFL which is at best a $30-$40M GROSS sale company.

Do you realize that sales would have to be in the billions for a VC to even see the return of their principal, let alone profit/interest?

The only thing that would make since is if there's one or two too many zeros in that $200M figure.

Therefore, I see only two possibilities: Somebody fucked up the research or Bitcoin's being played.

No way the WSJ would publish a story like this without checking everything out.

OP has answered your question


I had lots of "chats" with monied folks from Switherland along the lines of "we have lots of dosh we want to buy 22 million bitcoins now". Eventually they realize that they will have to fight for the remaining 10 millions or force the price into 5 digit area prematurely.

Large scale investment into mining is a way to buy bitcoins without showing your hand and starting another "bubble". It was exactly like that in early 2011 and at any other time so far. There is nothing new, just all the numbers now have more zeroes. As time goes by, there will be even more zeroes added to those numbers.

... The Phoenix deal will also involve Taiwanese microchip maker Taiwan Semiconductor Manufacturing Co., 2330.TW 0.00% which is set to supply the state-of-the-art microchips that will power the hardware.

The Phoenix Fund was set up this year to invest in bitcoin mining-hardware companies. It looked at several of Avalon's rivals in the sector, including Butterfly Labs and KnCMiner but decided against investing, according to a person familiar with the private-equity firm's strategy.

Investors in the Phoenix Fund, which includes a small number of individuals who made their fortunes in currency trading, believe that the currency will become more stable and popular if more parties are involved in the mining process, this person said.
...

The bitcoin deal was put together by Andrew Laurus, a former government-bonds salesman at Lehman Brothers who is also an investor in the fund. Avalon was set up by Yifu Guo, a pioneer in the bitcoin-mining industry.... Mr. Guo couldn't be reached for comment.

fool, why not buy bitcoins directly?

https://twitter.com/ScottWapnerCNBC/status/364370798892421120

'Spoke to Joe Lewis this morning who says of reported Bitcoin investment: "Completely Untrue".  Tells me he's "Never heard of Phoenix Fund" '

For everyone that sold out last night...waaa waaa. :)

"Spoke to Joe Lewis this morning who says of reported Bitcoin investment: 'Completely Untrue'. Tells me he's 'Never heard of Phoenix Fund'"

Not sure if anybody has mentioned this bit from the bottom of the 'efinancialnews' article:

Visit the Phoenix Fund website here: http://www.phoenixasic.com/

It has the same site design as: http://www.joelewis-trading.com/index.php but different head office address... Strange?

Not sure if anybody has mentioned this bit from the bottom of the 'efinancialnews' article:

Visit the Phoenix Fund website here: http://www.phoenixasic.com/

It has the same site design as: http://www.joelewis-trading.com/index.php but different head office address... Strange?

Not sure if anybody has mentioned this bit from the bottom of the 'efinancialnews' article:

Visit the Phoenix Fund website here: http://www.phoenixasic.com/

Do you really trust journalists? Seriously? LOL
Yeah sure, and you expect me to believe you? Lol

not sure if this rumour is any truer than the other stuff but i'll leave this here.

https://twitter.com/ScottWapnerCNBC/statuses/364370798892421120

Twitter / ScottWapner, CNBC:
its a bit like watching goldfish swim round and round in a bowl.

Hate to say "I told you so" but...oh no wait...I don't hate it at all.  It's incredible the level of faith you people have in old media.  Even now, you people are posting here with notions like "Oh, but this is the media.  They would never just publish on rumour right?  There has to be something more to this!"  Unfortunately, when you want to be the first to press, you will publish on rumour and yes, journalists do this a lot more often than the public realizes.

People who posted that someone would lose their job over this and that the story must have been true because no one would risk their job like that...also getting it wrong.  There may be a meeting and someone may be scolded but this isn't like reporting the wrong sex of the royal baby; this is a story on bitcoin rumours.  A story with niche appeal.  In other words, no biggy.  Unfortunate, undesired and unprofessional sure but also unsubstantial in its effect on general credibility.

Seriously, why the hell do some of you think the mainstream media prints gospel? If it's "because they're the established media" then you should give your head a shake and think a little more critically.

People still think btc is illegal in thailand.

Hence why a press release stating, "BITCOIN TO RISE TO $1,000,000" needs to be published.  ;D

I guess that does not sound believable enough though.

I just had some faith in journalistic integrity, especially for someone that graduated from the University of Edinburgh in journalism. It's okay though, my heuristics have adjusted accordingly.

I think if people spent some time in a news room they would be pretty taken aback.  It's not like people are routinely unprofessional or lack skills but a lot of assumptions about the ability of journalists and the resources they must have at their disposal are absolutely unrealistic.

Not if the "original" bitcoin is made illegal. The users can decide which chain they are a part of through client updates and such. Don't sit there and try to tell me that can't work. It absolutely can work. When FTC was forked, we had to update our clients to make sure we weren't on the forked chain, and many were, and were mining and transacting on the forked chain. They could fork the masses right off to a new chain and leave the original hanging with computer nerds and the sound money crowd who were fine with running an illegal chain. It. Can. Happen. Especially if the big players want it to happen, easily once they get everyone on board and the infrastructure built. So shut your ass. 

Which has ABSOLUTELY NOTHING TO DO WITH MINING. You could make Bitcoin illegal (in one county) with 0.0 khps and can't make it iillegal with 3490278429178412940274219847 PH/s.  So the idea that one would need to invest $200M in mining  to fork Bitcoin and make the original illegal is just stupid as was your original claim.  Of course Bitcoin being illegal in one country doesn't make Bitcoin illegal in the other 239ish countries. 

I guess that does not sound believable enough though.

Well someone investing $200M into an industry which at most has $130M in global revenue is equally unbelievable.  Remember the $130M doesn't mean the market supports $130M in mining hardware profit or even $130M in mining hardware that is just the GROSS revenue for all miners globally.  Miners themselves expect to make a profit and they have to electricity as a cost, and mining equipment is a capital good it doesn't get "used up".

A final possibility is that there is a deal and Joe Lewis just didn't want to publicly acknowledge it to the reporter on twitter. I do find the $200 million price to be ridiculously over the top, though. Bitcoin would have to be worth at least $2k, IMO, for that to even begin to make any kind of rational sense.

what a big fail on his (Laurus's) part if so. so much work for no gain

Yeah, unless the story ends up being true and we all look ridiculous.

My feeling is that there are a lot of really rich people interested in investing in bitcoin, but can't just buy coins because there aren't enough. On the other hand, for them buying a $500k hosting plan from "Gridfinity" wouldn't even be a lot of money.

Many people have been asking for a lot of coin. Not all offered to pay over gox rate but one guy did at 3000 coins.

I did not ask why but there is demand otc.

Also not one person tried to sell to me.

[...]

I had lots of "chats" with monied folks from Switherland along the lines of "we have lots of dosh we want to buy 22 million bitcoins now". Eventually they realize that they will have to fight for the remaining 10 millions or force the price into 5 digit area prematurely.

Large scale investment into mining is a way to buy bitcoins without showing your hand and starting another "bubble". It was exactly like that in early 2011 and at any other time so far. There is nothing new, just all the numbers now have more zeroes. As time goes by, there will be even more zeroes added to those numbers.

WSJ Redacted the article, saying there was inaccurate publishing:
http://online.wsj.com/article/SB10001424127887323997004578644491403250124.html#articleTabs%3Darticle

Here's a (paywall free) article about this isn't true: http://www.marketwatch.com/story/private-investor-and-trader-joe-lewis-not-backing-bitcoin-ventures-2013-08-05

"I have no investments whatsoever in any Bitcoin ventures," said Lewis.

Hate to say "I told you so" but...oh no wait...I don't hate it at all.  It's incredible the level of faith you people have in old media.  Even now, you people are posting here with notions like "Oh, but this is the media.  They would never just publish on rumour right?  There has to be something more to this!"  Unfortunately, when you want to be the first to press, you will publish on rumour and yes, journalists do this a lot more often than the public realizes.

People who posted that someone would lose their job over this and that the story must have been true because no one would risk their job like that...also getting it wrong.  There may be a meeting and someone may be scolded but this isn't like reporting the wrong sex of the royal baby; this is a story on bitcoin rumours.  A story with niche appeal.  In other words, no biggy.  Unfortunate, undesired and unprofessional sure but also unsubstantial in its effect on general credibility.

Seriously, why the hell do some of you think the mainstream media prints gospel? If it's "because they're the established media" then you should give your head a shake and think a little more critically.

+1

And not the WSJ fucked up, but Bitcoin Examiner. But what is very more interesting: Bitcoin Examiner gained such a high level of credibility till know, that this happened. ;)

WSJ fucked up by not fact checking from a primary source the stuff their hires wrote.

I am definitely surprised that the WSJ would run a story like this without a thorough fact-checking, but it sounds like that's what happened. I would have expected the reporter to at least check with multiple sources.

This is Google's cache of http://twittercounter.com/frankieterrier. It is a snapshot of the page as it appeared on Jun 16, 2013 20:44:38 GMT. The current page could have changed in the meantime. Learn more
Tip: To quickly find your search term on this page, press Ctrl+F or ⌘-F (Mac) and use the find bar.

So you're saying this is pro marketing at work? interesting.

Take a look at this and compare to current account while I take and crop screenshots: http://webcache.googleusercontent.com/search?q=cache:eopV5NmMVGkJ:twitbridge.com/frankieterrier+&cd=1&hl=en&ct=clnk&gl=us

Note the tweets that are no longer available.

business is business i suppose. interesting indeed in how far someone will go to get their company in the spotlight

Screenshots and links and quotes and stuff …

@MoAzeel
Business Development Consultant for http://www.GrowthAccelerator.com
London · growthaccelerator.com

Mind writing a TLDR. It's late and my brain doesn't parse what's your point.

Here are the screenshots before he deleted posts on his current account: https://twitter.com/frankieterrier

Very good detective work!

Though this only shows that he talked about mining, but it's not really a clue that he was directly involved in creating false news. ;)

I think he knows that I know what he was hoping no one else would ever know, you know?

https://twitter.com/frankieterrier

I am definitely surprised that the WSJ would run a story like this without a thorough fact-checking, but it sounds like that's what happened. I would have expected the reporter to at least check with multiple sources.

Famed Trader Joe Lewis Backs Bitcoin
online.wsj.com
Joe Lewis, a billionaire foreign-exchange trader who teamed up with hedge-fund manager George Soros in 1992 to bet against the Bank of England, is the latest high-profile financier to throw his weight behind the virtual currency called bitcoin.
Like ·  · Share · Promote · 21 minutes ago ·

Great! The WSJ correction still is behind a $1 pay wall? So I have to pay $1 to read that Joe Lewis will not and never planned to invest in Bitcoin? Copying the url to Facebook still gives me a great insight:

I'm getting warmer! http://www.leverageacademy.com/aboutus_testimonials.php

No you're not, you just proved in your last post that that was a stock photo. Think about it.

Bottom line, this was contrived.

Now, I ask you this: How much influence can I bestow upon a person who has never heard of Bitcoin before if I show them a physical copy of the WSJ depicting a whale investing $200M in some Bitcoin venture?

Think about that!

So, in the grand scheme of things, this scheme was to drum up support for this mining outfit...or something bigger?

first link reads the same as all those news reporting Thailand banning bitcoin drama.  if you read carefully forbe's artile, you will see that court decided against Shaver's claims that BTCST did not operate in investment securities and did not fall under SEC jurisdiction, which court decided against. The Judge simply recognized Bitcoin being as a form of money which can be used in investment securities, exchanged for traditional currencies and to buy goods and services with it.  There were no official ruling on whether Bitcoin is legally defined as a currency or not.

in other thread you mentioned Liberty Dollars and that there is a bunch of laws designed specifically for currencies inclining that bitcoiners may be in trouble with this 'precedent' for making their own money. Firstly you dismiss the fact that US does not prohibit private currencies, there are few that exists and function today in the US. Secondly bitcoin does not try to compete with and look closely resembling with legal tender for which LD got in trouble; there are no single entity issuing Bitcoins and no single miner has control over bitcoin's production mechanism and clearly do not fall under any currency counterfeiting laws that protect USD.

https://twitter.com/frankieterrier


Quick! Somebody pass me a towel. I'm about to cum.

how can you sue someone...who doesn't even really exist  ???

Phinn, do you peruse these guys manually or do you have some neat detective tool? because I truly admire your perseverance!

I paid closed to $20K for the program I use.

Our very own resident private eye! Let's see you scammers mess with us with this sort of power on our side! :D

Our very own resident private eye! Let's see you scammers mess with us with this sort of power on our side! :D

"Andrew Laurus ‏@frankieterrier 11h

received today communication from #joelewis lawyers Alston & Bird LLP Atlanta / re:Phoenix fund will postpone comment until matter settled."

I guess that swiss based phoenix fund is true, so some kind of project is on going anyway

I guess "Andrew Laurus" is a bullshit artist who was trying to scam people.

Is this what the fuss was about?  "Phoenix Technologies Announces Production of Bitcoin Mining Hardware
http://www.sbwire.com/press-releases/phoenix-technologies-announces-production-of-bitcoin-mining-hardware-302555.htm

Hi Sockpuppet,

no, this link is new. If you want to get our attention, get at least any of those thousands of "Phoenix Technologies" to post it on their site and not some sbwire …
I tried to find the logo and found out that tineye.com is particularly bad at finding text-logos (http://tineye.com/search/b83638c193dc7f237f25ced4e6aa1379067b9373/).

Hi Sockpuppet,

no, this link is new. If you want to get our attention, get at least any of those thousands of "Phoenix Technologies" to post it on their site and not some sbwire …
I tried to find the logo and found out that tineye.com is particularly bad at finding text-logos (http://tineye.com/search/b83638c193dc7f237f25ced4e6aa1379067b9373/).

Hi Reactionary.

I'm acutely aware that the "press release" from Phoenix Technologies is new. Perhaps I should have been more clear in my question.

How about this: Given the line of reasoning that there was an effort to plant the WSJ article by some sort of firm potentially involving "Andrew Laurus," could the objective have been to create an atmosphere where there's news hype for businesses with the key words of "mining" and "Phoenix?"

Or given that it was directed at the post immediately preceding mine(yes, I've read all ten pages several times), maybe I should have gone with "Yo, Phinneaus, where does this goofy company fit into your findings?"

Or if you prefer, "Sockpuppet." At least I have a title now.