Bitcoin Forum

Please read the following:

http://article.gmane.org/gmane.comp.finance.gold-silver-crypto/22354
http://article.gmane.org/gmane.comp.finance.gold-silver-crypto/22355

Entire thread: http://news.gmane.org/gmane.comp.finance.gold-silver-crypto
Subject: "Watch out for changes at LR!"

My recommendation is to NOT use Liberty Reserve. If you have funds in it, dump them NOW.

I had posted warnings about LR on this forum around a year ago.

https://www.bitcoin.org/smf/index.php?topic=39.msg299#msg299

I also advised lots of people in PMs to not hold their money with LR. I hope people paid attention.

I am also starting to think that the recent demand for Bitcoin in the past few days have to do with the changes that are going on over at Liberty Reserve.

"Banking secrecy" is an oxymoron.

Thank you. I am glad I had withheld from buying Bitcoins with them a couple of days ago.

If Paypal and LibertyReserve sucks, where do we go?  :-\

We could start selling physical notes with scratch-and-reveal Bitcoin keys. Paypal won't mind that.

I see no links supporting his claims? Also at the end he finishes advertising his own service so that makes him lose credibility in my mind.

Why would there be links? Costa Rica's banking laws are published. Use Google.

The advertisement you are referring to is an email signature. Bitcoin is mentioned as an alternative too.

Have you logged into your LR account lately? See the beginnings of the AML/KYC stuff yet? ;)

On the bright side: this is good news for Bitcoin. As more and more of these centralized payment processors fail; people will turn to decentralized systems. :)

Great idea.

Buying/selling Bitcoins to private individuals in person would be good too.

Perhaps people should start using craigslist/kijiji and advertise that they do trades in person for cash.

It's true LR is turning into WMZ and will be seizing/holding accounts now for verification, already happened to numerous people I know. Costa Rica is not a viable place to run a currency anymore, they should move to the Seychelles or Azerbaijan.

HDmoney so far is biz as usual. Mt Gox should switch over to them or the other big exchangers

http://artmind-etcetera.blogspot.com/2009/05/how-to-make-scratch-off-lottery-tickets.html (http://artmind-etcetera.blogspot.com/2009/05/how-to-make-scratch-off-lottery-tickets.html)


 :D

There are blogs out there with piles of people complaining that their Liberty Reserve account was frozen. The outlook isn't good folks.

I've noticed that a lot of people are moving their operations to Belize now.


I'm not too familiar with HD Money. However, I have heard of it.

I hope that Jed doesn't end up with a pile of Liberty Reserve that he can't get back out as dollars. (I PM'd him about this thread already.) If a run happens (I suspect one started on the 1st), Liberty Reserve will collapse. It's unaudited and many suspect it is fractional reserve. The running joke is "NO Liberty NO Reserve" (CR's new bank laws / fractional reserve, unaudited).

A run will provoke them into freezing accounts faster and faster to try to stay afloat. That will only piss more and more people off. These pissed off people will spout out on blogs and forums. (Already starting to happen.) The panic will spread and accelerate the run.

The Liberty Reserve exchangers will start hiking the rates to exchange into fiat, because the risk of default will rise. Some exchangers will just quit immediately because they'll remember the e-gold panic.

... and that's the Madhatter forecast. :P This concludes our broadcast day. *click*

Bumped, because although I don't use LR this needs to be seen.

It seems important for us to know what the status of LR held with MtGox and bitcoin-central. I get the impression that $ held on MtGox can be cashed out via LR or wire or check, but will that hold if LR goes bad? And is it an option at bitcoin-central at all?

Obviously there is no easy solution for the exchange operators they either need to hold it in LR for easy withdraw and risk an LR run or keep it elsewhere and risk making people wait.

I doubt it. If MtGox can't convert Liberty Reserve into a bank wire to one of their bank accounts (assuming a run/or they go broke) MtGox won't be able to disperse dollars to their clients with other payment methods.

He only accepts Liberty Reserve to fund MtGox accounts, so he has to convert Liberty Reserve into a bank wire somewhere along the line. If his account were suddenly frozen by Liberty Reserve he'd go broke. Assuming he left a significant portion of customer's funds in Liberty Reserve, of course.


If MtGox accepted bank wires directly that would alleviate the risk of Liberty Reserve going broke. He should also let clients move dollars between accounts for free. He could run his own Liberty Reserve-like system inside of MtGox.

Here's an example: Say a bank wire costs $50 to transmit. You wouldn't wire $100 to MtGox. It's not cost effective. If I wired $10,000 (and paid the $50 fee.. it's peanuts on a $10K wire) to MtGox and then sold $100 GoxDollars to you for 0.5% it is a far better option.

Anyway, my point is that MtGox could change their system a bit and do away with Liberty Reserve completely.

It all boils down to MtGox printing the mtusd currency, and backing it with a basket of other currencies, one of them being LR.
That's one of the things I disliked in his way of doing things, not saying it's wrong in its essence, just that it has a little fractional reserve smell to me.

As far as bitcoin central is concerned, the sum of all LR balances is 100% covered and my balances are public, I've used my real name and address for the account, there's not much more I can do.

Thanks for the warning, I never dared to keep much money in liberty reserve due to the fact that it always seemed high risk to me. Especially considering how e-gold got totally destroyed by the US government. It's a shame all these great currencies ends up with the same sad destiny, but at the same time I guess that's great news for bitcoin :) It's almost like if Bitcoin was a huge company using government regulations to shut down competition :P

Maybe I misunderstood this, but I sent MtGox a bank wire a few days ago? And even though LR might be very risky now, even the bank account is at risk, who knows when it will be suspended? I assume mtgox doesn't possess any license to do this kind of business, so it's all a grey zone.

A solution to this could possible be that he create some kind of exchange market between LRUSD and the USD Finland Bank to allow investors to decide where they can take risk. Or even better, create bank accounts in different countries to hedge against the political climate in any given country. Well, the best thing would obviously be to find a country where you can actually run a legitimate exchange, if anyone know of such place please do let me know. And if you have to pay a million dollar license fee it's out of the question.

I'm actually starting to wonder :)

Sure. That's what I was getting at.


I haven't had a chance to try Bitcoin Central out. I'll take a look at it tonight. :)

Cheers!

As soon as mtgox is investigated he will probably be shut down, I am sure there are a lot of laws (stupid laws) that are being broken. There are probably some regulations for this as well. This kind of thing is just not allowed.

The only option is to have an anonymous exchange, anything else will be targeted and shut down by the government.

Inside the USA? Good luck with that.

http://pokerati.com/2010/04/17/rogue-payment-processor-arrested-in-las-vegas-accused-of-laundering-full-tilt-pokerstars-ub-money-first-criminal-indictment-for-uigea-violations/

http://www.wsopschedule.com/poker/florida-resident-arrested-for-serving-as-online-poker-payment-processor/

http://gamingzion.com/gamblingnews/legal-online-gambling-in-canada-wont-save-douglas-rennick-1375

http://www.gambling911.com/NETeller-Founders-Arrested-011507.html

http://www.wired.com/politics/law/news/2001/03/42745

http://www.moneymakergroup.com/gold-Owner-Arrested-t214753.html

http://www.dgcmagazine.com/blog/index.php/2008/07/29/pamela-fayed-of-e-bullion-murdered/

http://www.dgcmagazine.com/blog/index.php/2008/08/20/government-seized-24-million-from-e-bullion-and-incorrect-case-facts-saturate-the-internet/

http://www.crowne-gold.com/

http://www.1mdc.com/

http://www.thebullionexchange.com/

http://www.gitgold.com/

http://www.dailytalkforum.com/thread-goldage-partners-arrested-held-on-bond

http://www.icegold.com/

http://www.denvergoldexchange.com/

http://minhagallery.com/content/e-gold-money-seized

http://hyipblog.nobshyip.net/2007/07/19/60-e-gold-exchange-agents-whos-still-alive-you-might-be-surprised/

http://hyipblog.nobshyip.net/2007/04/29/e-gold-indictments-current-situation/

REMEMBER In the USA, online gambling is consider illegal and anyone who touches wagers or winnings is at risk of arrest and confiscation.

Also, any dealings with nationals on the USA hate list, including Iran and Cuba is also considered reason to steal yer shit and jail yer ass.

http://ecommerce-journal.com/news/24457_e-gold-owners-fined-3-million-illegal-ecurrency-accounts-iran

http://www.iran-forex.com/index.asp

And if they can't claim you are gambling, they might dispute your use of words. Jail yer ass and steal yer cash;

http://libertydollararrest.blogspot.com/

http://www.scribd.com/doc/24195021/Liberty-Dollar-Kevin-Innes-Jail-Letter-2009-11-18

The owners of the USA also own the word coin?

http://gata.org/node/5742

Why is Mt. Gox and Bitcoinmarket the ONLY known digital currency exchangers in the whole of the USA?

Naivety?

Well, it wasn't e-gold that was under fire directly. It was actually Omni Pay that brought the hammer of the state down on them.


Haha! :P

One other thing to consider: when MtGox attracts the attention of Liberty Reserve's operators (and it will eventually, they might see it as money laundering or some other stupid thing), they may disclose MtGox's information to the Costa Rican government under the AML/KYC regulations.

Not only will MtGox's information be disclosed, but the information of every account that has ever spent or received money with MtGox. Think about that for a second. Did you think that you had privacy by using Liberty Reserve? You were obviously wrong.

Does Liberty Reserve have to tell you that your information was given to the Costa Rican government? NO!

Do they have to tell MtGox that his information and account history was given to the Costa Rican government? NO!

Will Costa Rica cooperate with any US Government (or other governments) inquiries? YES! Look at the MLAT treaty. Costa Rica's banking secrecy is on its last legs.

This whole Liberty Reserve thing just stinks. MtGox should drop it immediately and just accept bank wires. He can sell GoxUSD / GoxEUR or whatever. The exchangers can buy/sell the GoxUSD/GoxEUR directly from MtGox and resell it to the masses.

We don't need Liberty Reserve.

There are not a lot a "lot of stupid laws" being broken. There's one big fat law probably being broken, that's conducting the business of being a bank without the proper license.

That can't exist when one uses bank wires. Money has to get in, money has to get out, dead simple. You can't have something global and scalable using cash.

It will hit mtgox eventually, and it will hit hard. And it might probably hit me too eventually if I don't find creative solutions :)

The exchange problem appears to be intractable.

Actually, it's called money transmitting without a license. MtGox doesn't do any banking. They don't write loans or pay interest.


Yes, but you can insulate the customers from privacy breaches by using a network of global exchangers. If we had exchangers in every country in the world that traded GoxUSD/GoxEUR for cash/money orders/wires/etc it would be more robust.

Only the exchangers in each country would have to transmit a monthly wire to MtGox for more GoxUSD/GoxEUR markers. MtGox could limit his risk by having more than one bank account that accepts these wires. He could also cash the accounts out as soon as he receives the wires. He'd only be expected to hold enough day to day operating cash in his bank accounts.


It could be done with a network of brick and mortar stores around the world that did over the counter trades in cash for Bitcoin. I don't see the cash in the mail for Bitcoin being very scalable because it relies so heavily on trust.


I think exchangers should be laptop nomads. :P The "Ghost Walkers" described here: https://ffij33ewbnoeqnup.onion.meshmx.com/books/Toward_A_Private_Digital_Economy/index.html#Ghost%20Walker

It can be solved if we are creative.

The solution would be to either register of buy a shelf company in the Seychelles.
Use that to open up any corporate bank account around the world, preferably bank in Azerbaijan (pretty much no rules) and they can accept indirect IBAN xfers through Austrian banks.

Or you could open a Perfect Money account and accept 3rd party wires. Use Superchange.ru or your exchanger of choice to convert it into Hdmoney or something else for customers to cash out with. I've never used it tho the large ponzi schemes have no problem dumping huge money into it. There must be some major exchanger in Russia/Canada/China you can partner with to accept money to fund into Mt Gox or withdraw.

The last thing you want to be doing is running an unlicenced brokerage/exchange house or market in the USA. Expect domains to be seized, and a visit from the Secret Service and IRS. At least a Seychelles IBC doesn't have to report anything according to Seychelles law (for now.. this will probably change just like Costa Rica, Switzerland and Jersey had to change)

Should definitely look into making it a Tor hidden service as well to prevent hordes of investigators seizing records, or ddos attacks. Leaseweb and some other fast ISPs have no problem with VPS subscribers running Tor. If not possible then grandhost.cc offers bulletproof 'immunity' hosting in Moldova, Ukraine and Russia with domains that can never be seized but it's pricey, $100/mth typically. A Tor hidden service would be only $50/mth on a major provider in EU

Sorry, shell companies are of no use, that is playing by their rules, we will not be allowed to operate in their game.

A method to operate an anonymous exchange, the exchange must remain anonymous, customers can become known to the exchange( but the exchange is not known,by more than reputation to the customer)

A customer creates a regular bank account and gets two atm cards. One card is sent to the exchange(how the exchange can get it and remain anonymous I don't know, small detail).

When the customer wants to transfer money to the exchange they deposit cash into the account and inform the exchange. the exchange then needs to use the atm card to withdraw the cash.

When the exchange wants to return money to the customer they deposit cash to the account using an automated deposit machine, and the atm card they were given. The exchange then informs the customer that their funds are availablefor withdrawal.

The account then become a kind of drop box with multiple gateways to drop off and pick up from, forming a cutout between the exchange and the customer.

As was said before the exchanges can then become known to each other and do international transferes etc. directly to each others accounts.

I can't say much more in public, but this I can;

Bank wires are not the solution. Those online poker cashiers were busted through bank wires of USD.

Being outside the US does not solve the problem because for the past 4 years or so, all wires in US funds are diverted through a US (NYC) "corespondent bank" who spies out your deals and charges the victim $15. Panama is the worst. They actually use USD as national currency and are therefore totally under the thumb of the "owners", the Federal Reserve.

Not only would you have to be outside the US, none of your wires could carry USD.

Perfect Money is not perfect. They are currently melting down and selectively scamming their stakeholders.

HD-Money has taken the only logical approach and is unregistered, and unattached to any legal fiction or person - a pirate corp. If the privateers board her, the killing will be swift and the booty will be carted off to feed the beast but the jackboots are stymied as to where the treasure is buried and they can't finger anyone for the rubber hose treatment. Guess all you like. Nobody is going to admit he is pushing the buttons and hiding the booty. It might work.

As for LR, the founders decided to not admit ownership after being jailed in NYC. Since then it's been a mystery. There is some sort of corp reggy to enable the banking, but that's surely a trustee.

And no davout, for the nth time, Mt Gox is not a bank. Check a dictionary. If Jed had a charter to create money, especially in this bailout climate, he wouldn't bother with petty little bitcoin. (Let me know Jed because I'd like a bailout loan too).

And that is the rumour about LR, that they contracted a charter under under the Costa Rican gov.

BTW, most CR corps bank in Panama. You know, the country that got INVADED by the US over bank deposits.

some more jargon for googlers; financial services business (FSB) financial action task force (FATF) Financial Intel Center (FINCEN) financial tracking agency (FINTRAC) mutual legal assistance treaty (MLAT)

Specialisation of labor, this is one of the results of a market(even one thtat is not free) and especially for one that is completely free. It is a goodthing and will benefit everyone in both the short term and long term. It is a sign that the free market is working that gpu farms have grown, and quickly too.

It's not like the GPU farms are cornered markets.

Mining isn't even the point of Bitcoin, you guys. It doesn't matter if the mining market is cornered for now, in 2013 there will be less profit gained from the same work.

Yes exchanges are points of weakness, no international banks or any kind of legitimate bank will not corner the bitcoin market, they won't even recognise bitcoin until it's stealing all their business, and then they willside with governments trying to destroy it.

Imagine hoards of nomadic exchangers with cellphones/pdas/laptops that roam the world doing face-to-face cash exchanges for Bitcoin.

Hey.. a man can dream... :P

Wouldn't that make them even more vulnerable to US government stupid laws?
While they keep with LR they are vulnerable "only" to Costa Rica government and whichever government controls the data center where they are hosted.

I mean, if LR is doing chargebacks just like paypal, then I get the point. I haven't read everything you just posted, but it's not quite that yet, right? They are "just" locking accounts under investigation by US authorities, right?

Summarizing, why would bank wires be any safer than LR?

Of course it's not, he still does things that require a banking license where I live, safeguarding people's money, allowing people to send money to each other etc.

I have no idea about the best possible solution, I think the network of exchangers is a good first step, nefarios idea with the credit cards is really creative but I don't really see it scale well.

IMHO, it's actually beneficial for Bitcoin that fiat exchange mechanism problems continue. It gives a strong incentive for "the average citizen" to enter the B economy via trading good and services, AND stay in it to avoid the exchange hassles...

It will delay widespread adoption, but seems a much more elegant and clean solution, which is more consistent with the p2p design and intent of the project...

I've closed my LR account, and plan to use exchangers only when it's unavoidable. Thank you, Madhatter! You are a very valuable member of the Bitcoin community! :)

A bank solicits deposits and makes loans at interest. Mt Gox is a financial services business (FSB).  Since these definitions come from France, I will assume they are also used there. FATF is Groupe d'action financière (GAFI)

Generally, this "authority" claims that FSBs who transmit money must be licensed. I can argue that exchangers don't transmit money, and be correct, but the opposition has proven themselves to be motivated to something other than justice.

In the US, this is called a Money Services Business (MSB).  Mt Gox is probably an MSB, but there is FinCEN administrative ruling that states "our regulations define a money services business to include a seller or redeemer of stored value who sells or redeems stored value in an amount greater than $1,000 per person per day in one or more transactions."

So it can be argued that limiting daily withdrawals to $1000, exchanging for stored value (==bitcoins), fits this definition.  At least for the US jurisdiction.

Nevertheless, I would certainly recommend to Mt Gox and others in the US to register as an MSB.  It's not as complicated or expensive as it sounds, and it basically involves the following:

• AML: requires at least two people.  One is an auditor/reviewer of anti-money-laundering (AML) practices, who should not be involved in implementing AML.  For small websites, this means the website owner (mtgox) must find another person willing to review his code for security/privacy/KYC/AML.
• AML: You must file electronic reports on all transactions leaving the country, or are over $10,000
• AML: You are expected to notice transactions smaller than $10,000, that appear to attempt to evade the $10,000 reporting limit
• KYC: You are expected know to details on your website's users, primarily name, address and tax ID, in case law enforcement comes calling.

There are more details, but these were the big details that stick out in my mind, from my own research.

I don't get the concern... when you do a bank wire, doesn't that pretty much already make your identity available to the US government, in addition to putting the transaction right under their nose?  The owner of MtGox doesn't appear outrageously concerned about being anonymous, as he seems willing to readily identify himself to his own prospective customers.

I wonder what would happen if the value of Bitcoins rises so quickly that someone's MtGox balance increases in value by more than $1000 per day. They will never be able to get the value out!

I do have to wonder where the lines are drawn (legally speaking) for these activities. If I overpay my cell phone bill, then my verizon account ends up with a negative balance (is it a negative balance in a credit account? I can never keep those accounting terms straight). Does that make verizon a bank? Technically, I can leave the money there to spend on future service automatically, or call them up and demand that they refund me (cash out).

When we first got together, my wife had double paid a cell phone bill, but it was a late already, so it was a bill for 2 months, and a second notice came in the mail, which she also paid, after the first one went out.... so she paid for about 4 months of service up front. Did that make them a bank? (are they already?)

At what point does allowing people to hold a credit with you, for use at your site, make you a bank? Clearly there are many situations where a non-bank would end up holding your money for a short time (or intending to be a short time, that for various reasons, can turn into a long time).

Of course... I know this is a slippery one, since, each government makes its own laws. Here in the US, often at multiple levels of city, country, state, and federal.... so likely the answer is different in many different places but... it seems like even a store that sells gift certificates is, in some way, acting as a bank, depending on your definition.

When I loan a friend $10 because he left his wallet at home, am I a bank?

We could all be points of entrance and exit in the Bitcoin network. The read on ghost walker is fascinating.

I offer you Internet Cash Cards and Travel Cards with no name on them in a choice of 3 currencies: EUR CHF USD
Limit of 10K in all currencies. Refillable not more than 100K in a 365 day period. I need to do refills in cash.
Not sure how many cards I can get though but at least a few.

Characteristics:
Internet Cash: Only on the Internet where Mastercard displayed. No physical card needed. 3USD for each transaction.
16digit, expiration date (2015), 3digit code will be provided.
Internet-Code as well to view balance and transactions.

Travel Card: Not for Internet. Used where Maestro accepted. Physical card required. 3USD for each withdrawal, 1USD for each transaction.

For me, it seems the Travel Card is more attractive but I got the Internet Cash one to start....
I can get bitcoins from you and credit your account in the same day, provided I have enough cash ;)

Started an auction on http://bitcoinmarket.ch/item.php?id=2 for a 200USD Cash Card.
PM if interested in any particular card and amount. Ideally, someone willing to reuse/refill in the future.

If there is demand for high amounts like 100KUSD :), I thought others could contribute a wire transfer, or cash and get some BTC too, hopefully at a good rate.

That would totally kill it for me.  I refuse to do business with anyone who asks for government-issued numbers or identification.  This defeats the whole purpose of bitcoin, imho.  It is then no longer the people's free currency.  I'm afraid we will have to solve the exchange problem in another manner.

Oh, well I was under the assumption that Jed had a bank account outside of the US. His corporation isn't a US one.

Yes, a US bank account will just get you fisted without lube.


This is no longer the case.

+1

This would be ideal, but it wouldn't always work out. :/


I'm glad I could be of service. :)

That depends on where you are wiring to/from. It also depends on the system that is being used to conduct the wire. The entire world doesn't revolve around the US. Just conduct your business outside of it.


Sure. He's running a company in plain sight. Why would he hide?

I was talking about insulating MtGox and his customers from a potential Liberty Reserve collapse more than anything else. Replacing Liberty Reserve with direct bank wire (I was under the initial assumption that MtGox's corporation was outside of the US) would be the fastest way to avoid any potential problem. A better/more private solution could be put into place later on, of course.

*sigh* This again? A bank writes loans and pays interest to depositors.

If you buy a bank charter what privileges are you granted? Those privileges are what makes a bank "a bank".

I agree. I wouldn't even touch MtGox if they required those things, or any other business for that matter.

You are correct. A bank account in Finland.

This thread is really interesting...

That illustrates the difference between mainstream and non-mainstream users.

In the US, your real name, address, and tax ID # are all associated with your bank accounts and brokerage accounts.  This obviously does not alarm the populace at large, who continue to bank or buy stocks.

If Mt Gox started requiring KYC for accounts > $100 or > $500, I think that would be a fantastic signal of mainstream bitcoin acceptance, and a sign that Mt Gox will remain viable long term.

I think what we really need are at least two major Bitcoin exchanges, one in a welfare/warfare/police state like the U.S., where customers agree to give up their privacy in exchange for being "protected," and another in a peaceful, privacy-respecting jurisdiction that's not likely to give in to OECD arm twisting anytime soon. 

Right. I don't think it's reasonable to say the "point" of BitCoin is anonymity. That's just a quick way to get the whole endevour classified as a complicated and unusual money laundering operation. And not all of us care about anonymity, or we might care but only for an alternative persona and the bulk of trades are still done under our real identity.

BitCoin has many advantages over traditional electronic payments. It's not even especially great for anonymity today, somebody would have to run a trustworthy mixer service for that.

Whilst I'm not a fan of the USG, having a licensed exchange that accepts bank wires would be a good thing. You don't have to use it, but a legally approved way to get state currencies into and out of BitCoins would reassure many who are attracted by BitCoins other benefits.

People get around the KYC rules in other currencies easily. If the limit is $1k then you use 10 different exchangers to fund $10k with no ID
Exchangers in Russia/Latvia/Vietnam don't care at all about KYC you could fund 100k through them no questions asked right now if you wanted.

MtGox could take ID but eventually somebody is just going to give them fake scans. During an raid/audit (which will eventually happen.. especially if Wikileaks suddenly advertises they accept bitcoin for donations) every ID that ends up being phony could cause problems for the admin, as they will be looking for any excuse to shut it down. Even if the charges are all false, authorities play what is known as the 'holding game' meaning they have all the time in world to throw baseless charges at you and tie you up in court for infinity. Because you are a person who needs food/shelter you can't afford to have everything on hold for months/years at a time while trying to clear your name.

I recommend instantly moving to a Tor hidden service, hosted offshore and whoever runs it should be anonymous. Tell people to check safeorscam.com if they want reviews, no need to put your name or any identifying characteristics on the site. US is too dangerous to do anything that isn't sanctioned by a thousand corporations. The entire financial system is deeply entrenched in corporatism they will do whatever they can to destroy competition to their 2 billion a second in transactions MC/Visa and Paypal systems.

http://www.techdirt.com/articles/20110202/03320812922.shtml (http://www.techdirt.com/articles/20110202/03320812922.shtml)

I'll just leave this here.

That have nothing to do what we're talking here, except maybe only tangentially.

And if we are going to stand for that, we might as well just stick to using credit cards.

Which brings us back to the worry that LR is becoming a bank.

What we need is a separate exchange in each country matchmaking people who want to sell/buy bitcoin and not charging commission (or at most charging commission n Bitcoin only which will be hard to trace or tax, at least right now). Correct me if I am wrong - how could such a service be classified as illegal? It's like running an auction portal.

I read someone said bitcoinmarket was in danger? How are they in danger if they only matchmake buyers and sellers (unless there is something I don't know). It is a different story if you accept bank transfers onto your own bank account and then "top-up" people's accounts with this money (like bitcoin-central does) - then it looks like you actually make a profit.

EDIT: OK, such a scenario doesn't keep buyer and seller anonymous, but what difference does this make? Who cares whom they sell BTC to or buy from? I certainly do not and I don't care whether they know what paypal or bank account the money came from. All they know is that I bought or sold bitcoins, they don't know where they came from or where they're going to.

Also, the buyer and the seller can arrange an anonymous cash transaction (since they're in the same country), and with the reputation system, trust shouldn't be a problem.

Argh.

If you use monies, you are under contract with the issuer.

Paypal is not a digital currency, it is a payment processor, a carrier of fiat money.

Any trades of bitcoin for fiat money puts the parties subject to that contract.

The SS will kick in the door and arrest anyone that their owners tell them to arrest. Private currencies undermine their owner's carefully crafted illusion of monopoly in money creation.

Money problems and control issues are not a new thing. Digital currencies are not a new thing. Persecutions and prosecutions of facilitators of private money is not a new thing.

I wish you kids would take some time to study the history. What you think is fair or equitable has no parallel in reality. This is a power struggle and the enemy owns your government and directs it's police. They own the drug trade, arms trade, public relations, gambling and other vice. They are not elected. If they catch you in their house using your own home-made poker chips, they will jail or kill your ass. By it's nature, exchange in or out of fiat money puts the exchanger clearly in the house.

Back to the subject at hand; What is up with LR?

I am in contact with the founders of LR, whom I have known and done business with since before the creation of LR in '02, and have a relationship with someone on the inside who just came back to Canada from Costa Rica. I am assured that there is no bank charter contract pending and that the increased KYC is only for the protection of customers against crackers and lost passwords. Do I believe this? No, I do not.

The owners of the governments have a long history of slow incrementalism toward collectivist totality. Today LR want you to verify that you have used your registered (slave) name. Who knows when, but sometime soon I predict that they will want to verify addresses. Then they will attempt to bring users under statutes that will turn LR into another payment processor. The gun held to the head of the trustee will remain unseen, but you can be sure it exists. For every stick there is a corresponding carrot. In this case the promise of charter.

On the other hand, there is no reason to panic. LR is not going to become a carrier of fiat anytime soon. After watching a half dozen previous systems fall to the tyranny, I have developed a good sense of timing my exit. Until LR starts freezing accounts pending presentation of gov issued (slave) ID, I'm not going to worry.

LR's primary exchanger just came to me with the offer of zero cost in. I predict that we will see out exchanges get more expensive and in exchanges might pay a premium, but I don't see the jackboots grabbing the loot quite yet.

Use it as it was intended - a communication vector, not a savings account.

This kind of crap makes landlubber / snailbuck currency ridiculously useless for netizens.

If we stick to bitcoin we can hopefully keep transaction costs nice and low, it seems the costs come in whenever one tries to actually make use of stupid previous-millennia earthling currencies. It seems the only reason that stuff seemed at all useful in previous millennia was because people were lugging it around in ships and wagons and carts and sacks and chests and bags and pockets plus maybe happened to have enough weaponry handy to keep those containers from being ransacked en-route...

-MarkM-

Now we just have to keep our hard drives and USB sticks from being ransacked.

To make that more survivable it might be handy to have a way of generating a keypair from a memorable password or phrase. So you could have at least one and maybe a few private keys in your head easily, needing only access to the app that can turn that into a private key fmatching one of your addresses you keep a stash in. I am not familiar enough with how much latitude one has in inventing keys to know if that is at all feasible though.

If not I guess one could come up with schemes for inventing mnemonics for private keys then generate lots of keys with corresponding mnemonics until you find one you find memorable.
 
-MarkM-

If the client supported generating a keypair using a strong password as a deterministic random number seed (such as by hashing it and generating the keypair from the hash, instead of from random numbers), then you could always generate that same keypair from scratch as long as you knew the password.

This could also help websites systematically generate addresses without needing constant access to a wallet or a bitcoind instance...e.g. sha256("i-am-generating-an-address-for-invoice-number-65432-salt-salt-salt-salt")

I tried creating an account on liberty reserve and it didn't work.  I kept getting an "invalid turing number" error.  Are they no longer accepting new accounts?

It sounds like you didn't provide the correct response to their captcha.  That's probably what "turing" refers to.

It is, but I tried about 20 times, and I have no trouble with captchas.  Someone else should try and see what happens.

austin's right. I just tried to make an account and got the same error. They're really, really easy captchas too.

LR is working fine,
every year someone comes out of the woodwork with some fear mongering claims that LR
are going to close, or they are shutting down, and it never happens.

Looks like Madhatter was right though.

Clap, clap.

That would actually be an excellent opportunity for Bitcoin if LR was dying.

Everybody would quickly dump LR, and with nowhere to go - a lot of them could go Bitcoin.