Thank you. I believe I have addressed these points in my development which should post in the next day or so. I wish to use US currency ($1 bills specifically) because I want to lean on the counterfeiting security and laws. I wouldn't know how to verify paper rubles, pesos or rupees, or how unique each bill is. It would take huge balls for someone to knowingly counterfeit a FRN and send it through the US mail system. I have stickers that one can "paperclip" to a bill, to set it apart from one another (I don't suggest defacing US currency  ).

Looks like my fears are a bit overblown, I would technically have custody of other's BTC and promise to redeem upon demand. This doesn't have much legal risk, at least on a small scale?

Yes, I purchased what will probably be some very expensive silver! Looking forward to the coins, thank you.

So the logic is that people are pouring USD into bitstamp and Yuan into chinese exchanges because MtGox isn't paying?

Taking the fees out of the tx itself would also allow for pool subscriptions. I pay 0.01 to "BTC Miner" and get a set amount of transactions. It would allow for economies of scale, i.e. bit-pay could get a better rate per tx than the guy that processes 1 per month. Dust transaction sites would have a different agreement.

edit: sites like btc guild could also "guarantee" transaction times (say 60 minutes or your tx fee back) based on their hashing power relative to the network.

I asked a question in the legal forum:https://bitcointalk.org/index.php?topic=327073.0 about it.

I'm making a mockup of exactly how it will work. Will get something going in the next few days.

In the thread How to use fiat currencies for Bitcoin offline transactions? I proposed an idea, which is to send coins to a special address using the serial number on a $1 US dollar note. To release the coins, you need 2 keys. 1 key is the serial number (public info), and another is one that I own (private). Nothing is written on the note. Bitcoins could then trade off-line using the counterfeit security of the USG, with me as a trusted party. To redeem, you must send me the physical note and another address to move the coins. (https://bitcointalk.org/index.php?topic=305590.msg3443357#msg3443357)

As a resident of the US, am I asking for trouble? I would not exchange any fiat for bitcoins, just use the inherent security features of US fiat. I'm keeping the $1 as fees. I wouldn't issue the bitcoins, that is done by the person first holding the $1 bill and the address is calculated by him.

DeathAndTaxes's recommendation seem relevant in: Online Wallet/Holding Services FinCEN registration? https://bitcointalk.org/index.php?topic=322821.msg3456848#msg3456848
"If I were creating a e-wallet service that did not exchange virtual currency for EITHER 'real currency' or another virtual currency I would not register at this time"

However, using the term "3rd party" means regulation in my experience.

Yeah, I might have to do just that. Any idea what the legal issues would be? I don't want to go to SEC jail over $20

The probability of finding a private key to a specific address is the same probability of finding a hash of all zeroes. I don't know what the lowest hash found to date is (maybe 17 leading zeroes of of 64?), but its not even close. You'll need to have computing power many trillion-trillion times more powerful than the current bitcoin network, and a few trillion-trillion+ years to run it.

just because the market is 1 BTC = $200 USD at the moment doesn't mean everyone must exchange freely at that rate. You chose not to (you would rather buy BTC with USD), others choose to do so (sell BTC for USD).

Critique my idea?

If a trusted entity is involved, send coins to sha(serial number) under their trusted public key.


* A Trusted Bitcoin Company puts out a public address on a website:
04C4F72B99D120AFDE0C4CEAD09CFA4C0336F4C672807E5D8BAA80C1F984A260AA1F2EAFC579546 4F7EC97D5D642F7ECB72EB1F1E53F554CCB1A4B67B309FB78BE

* I look in my wallet, and have a $1 US fiat note serial number b71626423n. Using an EC calculator (bitaddress.org or armory for instance), I multiply the public key and the sha(serial number). The sha of "b71626423n" is : 0aecd03819d9c5a693df67e876d5d228270b8f9b725e6b3c7da9c9bd5f83d723

* Which results in a public key with bitcoin address: 1PnMoiwmLBmGMgyNTHVYo1jq467JzAN3jo

* I send 0.10 BTC to 1PnMoiwmLBmGMgyNTHVYo1jq467JzAN3jo.

* The Trusted Bitcoin Company probably doesn't know that I sent coins to the bill (adding optional entropy to the bill ensures they don't.)

* I meet you for a trade, and say this note is worth 0.10 BTC. You do the math yourself and discover that there is indeed 0.10 BTC at that address. Because you trust the Bitcoin Company (or know someone who does), you know they are the only ones who can decrypt the private key and coins are locked until redeemed.

* You wish to redeem the 0.10 BTC. You physically send in the $1 note to the company with an address that you control. The Trusted Bitcoin Company receives the genuine note and sends the balance to the address provided. Depending on how trustworthy the entity is, there wouldn't be many redeemed, as the physical form may be superior.

* Trusted Bitcoin Company keeps the $1 fiat as fees.


Here is the private key to the public key above:
5JjVqgLXS1cRmjxBJRcpfSnR6o4nYhmafMhDDWbyYiCfviJMQUM


EDIT: The bitcoin ATM system would be an optimal trusted entity. You put that $1 into the machine, it reads the $1 bill and serial number and asks where do you want your 0.10 + $1/200 = 0.105 coins sent.

Bitcoin needs to be viewed as an asset among portfolio managers. I haven't done the analysis, but bet that the correlation between bitcoin and any other traditional asset is zero. From there, it doesn't matter what the volatility is - it can be added to portfolios to reduce overall portfolio risk no matter what the volatility of bitcoin happens to be.

proof?

Maybe we are all talking ourselves up and that in reality, no one gives a damn about us, including law enforcement.

Fixed. Looks like a ripple hiccup and we got out of sync. Thank you for pointing it out. The site had flagged us that there was an imbalance and we like to do things manually when something doesn't go as planned. There was no chance that funds were lost.

Thanks for using DR!

it is automatic/immediate* (but have to wait for 1 confirm due to the site being hit with double spends)

Well yes, but for non-china customers it involves the BTC/CNY spread at the moment. My fault, I shouldn't have inferred that it is currently easy to get CNY into ripple.

There is a CNY.ripplecn / USD.bitstamp pair on ripple for those that want to take a shot at arbing. Not the most liquid at the moment (.1506 bid / .1610 ask), but more eyes on it the better.

the "How to Play" describes in better detail (http://diceoncrack.com/howtoplay), but here is a quick rundown:

* Sending an amount to the "Simple" strategies is a fixed amount (0.10 TRC in this case) up to 15,000 times. You can change the threshold and exit points by the dust you send on your payment. For example sending X.XXXXX407 TRC to the simple address will look for a "magic" number less than 100 and if you ever get to 2x your initial wager, your wager loop exits.

* Martingale strategies will keep betting enough to get you positive if you win the next bet. The [BUSTO] and [EXIT] form define how you treat the situation when you have to wager more than your balance to get the desired effect.

* There is a fun reverse Matingale strategy (elagnitraM), where you keep parlaying wins until you get to an exit point.

* Minefield is quite popular. You need to make 1000 steps through a minefield. Each step defaults to a success to 99.93%, which returns (about) 2x the initial wager.

* 3 Card poker is just like the casino game. Send an amount to the address and it will simulate a 3 card poker hand.

For these games, you'll need to own the private keys that you send. Otherwise, any winnings will be sent back to the shared wallet.

Best of luck!

Why the assumption the OP negative on bitcoin? OP's may be saying there is room for $1000 coins.

OP has tried to move assets in the past, but government regulation is very cumbersome and costly. Bitcoin makes it possible

OP is saying very few people are selling their coins at these prices. If prices were higher, it could flush out some of the early adopter's coins.


OP is saying bitcoin popularity is booming. There is even specialized equipment built just for bitcoin.

It doesn't of course. Haven't used vanitygen in a while, and think it gives out a probability of 50% to start with? if it guesses at a rate of X/second and the probability of success of each guess is Y, the chance of success in the next second is 1-(1-Y)**X.

example:
I'm thinking of a number between 1 and 10,000. You have 10,000 guesses per minute. (blah blah, assume i get to choose new number after each guess)

The chance you hit in the next minute is 1-(1-0.0001)^10000 = 63.21%. If you want the 50% mark, solve as ln(.5)/ln(.9999) = 6931.125 guesses. Since you guess at 10,000 per minute, the 50% mark is in 6931.125/10,000 minutes or 41.59 seconds

And that is what vanitygen puts out, 50% chance in the next 41.6 seconds. If it still acts the same way, once 41.59 seconds goes by, it says 75% chance in the next 41.59 seconds, but it really means 75% chance in 83.17 seconds from when you started.

Its game theory & con game rolled into one.  If the debt ceiling can be raised forever, I can assume at some point it will be 950+ Trillion and growing. This requires dollar creation to pay off. Knowing that each dollar is worth less in the future ad infinitum, I can conclude the dollar today is worthless.

But keep the dog and pony show going every time the ceiling is hit, and I might not make that conclusion. Expect bigger and better shows in the future.