Trading bitcoins for dollars is accepting it as currency.  And yes, I am speculating that there will be more traders in the future than now.


Thanks.  I've had great luck so far.  Of course, its not pure luck but also good foresight, IMHO.

None of this can help.  Trojans can take screenshots at every mouse click so it knows what the password is because it knows where you clicked.  This is already a standard feature in bank theft trojans.

The thief should be smarter than that.  Or he wants everyone to know just how many he stole.

Another thing to consider is that the windows 7 iso torrent you downloaded years ago was pre-infected with a trojan.  Later, the author repurposes it remotely to scan for bitcoin wallets.  When the new client is released that supports wallet encryption, the trojan author will update it to keylog the encryption password for your wallet.  That's why an encrypted wallet really won't help much.

If the windows iso wasn't pre-infected with a trojan, you could have been infected in any number of ways (binary downloads, pdf, java or browser (IE) exploits, remote exploits).  And again, old and dormant trojans can be updated later by its controller to nab bitcoin wallets.

Anti-virus programs won't help much either.  Anti-virus programs will only detect known viruses/trojans, not new ones and new variants.  The trojan authors were already winning the arms race.  I warned back in May that it would only get worse when the Zeus trojan source code was leaked.  AV companies simply won't be able to keep up.

Using an OS besides windows can help but is far from a guarantee.  The only guarantee is a properly prepared offline wallet.  Create a new wallet and address on an offline and clean computer.  You don't need to be connected to the bitcoin network or even online to generate a wallet and an address.  Save your new address to a text file on a USB.  Back up the wallet file to a different USB.  You can safely back up the new "offline" wallet online too, if its encrypted and the encryption password is safe and secure somewhere else.  That way if you lose the USB or the house burns down there's a second backup copy in the cloud.

Now you have your offline wallet backed up and you have the offline wallet address in a text file.  Send your bitcoins to the offline address.  Send them from your current wallet or withdraw them from the exchange.  Check the address in block explorer to verify the bitcoins are there.  Now that bitcoin is safe in your offline wallet.

edit:  Don't forget to reformat the clean, offline computer.  You don't want forgotten extra copies of your offline wallet sitting around.

There were a couple of bugs brought to MagicalTux's attention on IRC.

One was that a sell order for the entire BTC amount in an account didn't seem to take.  Replacing the sell order with 0.01 less BTC than the account total worked.  MagicalTux fixed this big.

The other is the mismatched trades or rogue trades which occurred at $15.00 and $18.00 (among a couple other prices) when they should have traded within the $16.xx bid-ask spread.  These were, fortunately only a couple of glitches which occured under rare circumstances. MagicalTux said he was checking into this.

You've already assumed that people buy BTC in order to buy real goods.  They don't.  We know that because the volume on the exchanges (who trade BTC for USD etc) is far greater than the volumes merchants see (who trade BTC for goods). 

So we know that most people buy BTC to store and transfer value, not goods per se.  They do so because bitcoin has many advantages over USD and gold (digital, decentralized, etc).  I agree it carries more risk, but with that risk also comes reward .  Bitcoin is like any other speculative asset (which can include any investment: currencies, real estate, commodities, tulips, etc) and is certainly one of the riskier (since it is newer).

But the speculation is not that people will want bitcoins as collector items or to buy alpaca socks or virtual avatars or anything else.  I speculate mainly that people will want bitcoins to store or transfer value not seizable by a central authority (which is to say that bitcoin is secure), and that others will continue speculating.

Ask the financial industry if speculation isn't a "real economy".  Or ask a homeowner burnt buy the mortgage crisis.  Bitcoin is a very real economy of a digital good and could be sustainable for as long as we live in a digital age.

Jessy Kang explained that BTC isn't good for porn sites because most of their income is from recurring subscriptions.  She's talking about that $1 trial which rolls over to $25 the next day when you forget to cancel.

This highlights the difference between paying with bitcoin and paying with a credit card.  When you pay with bitcoin the merchant doesn't get the private key to your wallet.  When you pay with a credit card you give the private key (the cc number) to the merchant.

That's an aggregate order.  A dark pool order needs to be of $10k or more.  The wall at $16 now is many buyers with less than $10k each.

Us dollars, Euros, etc. aren't something of value in return?  They are.  All that trading for USD is the real economy.  It doesn't need to be trades for drugs, porn, or socks to be real economic activity.

Fixed that for for you.

In US, do a dwolla transfer from your bank account to mtgox.

In EU, do a SEPA transfer from your bank account to mtgox.

Those are the safest and cheapest.  Of course, it can take a few days.

Anywhere else, do an international wire.

Or you can go to #bitcoin-otc and find someone accepting paypal or MoneyPak.  Check the seller's rating so you know who you're dealing with, or you might get ripped off.

Because they are scared they'll have to sell them for less tomorrow.

I've been updating graphs of the price over difficulty ratio since a couple of months ago (check my sig).  With difficulty at 1.3 million and price at $15, that's near the 1:1 ratio which is quite low historically.  Record low was around 0.75 in march when but difficulty was at 100,000 and price was $0.75.  (Yea, it rose that much that quick).

Speculators are fearful right now.  A lot got burned buying at $30.  Now they're selling on the cheap.  Look to price increases around the corner (yes, it will be increasing as a result of the difficulty increase.  Price drives difficulty and difficulty drives price: two-way causality).

BTC is like any speculative asset:  Its only zero-sum if it goes back to zero.  If it stays high its considered wealth creation, not zero-sum.

I agree with you that merchants are at a disadvantage.  That's why its obvious that bitcoin, a floating currency, will probably remain as a speculative value storage and transfer system more akin to gold and silver.  Also plainly clear that merchant activity is not the economic activity supporting the price of bitcoin,  but the exploding volume of trading which occurs on the exchanges.

Maybe it will also succeed along the lines of a conventional currency or micropayments system, maybe not.  But a lack of merchants says little about the health of the economy.  The growth in volume of trading on the exchanges does.

For the nth time, miners have to look beyond the difficulty increases to the price increases which will come.  I charted this as a price over difficulty ratio (see link in my sig).

If you don't think the price will increase then sell your coins and sell your rigs.  If you think the price will increase then keep mining but for goodness sake, hold onto your coin.

Mining/trading is a speculative business, not a business of consistent returns.

I predict a long thread a couple months from now full of old "bitcoin is on its death bed" quotes, after (yet another) massive increase in bitcoin valuation.

We can accept that speculators may be fools.  But do we really want to bet that there aren't enough fools in the world to go around?  Please, the market is a long, long way from running out of fools (or foolish money, as it were).

Nifty idea to generate your own blockchain among friends for fun.  Don't be surprised when they switch to another for profit.

Much less than 2.42 million.  That's the change from MtGox's 48,480.94 BTC being counted multiple times as it moves from address to address.  At the end of the block 46,391.666 BTC remains, so its closer to 2,000 BTC (plus) that actually changed hands in that block.

The limit is on money out, not money going in.  The price goes up when more goes in than out.  More goes in than out because people tend not to sell an asset increasing in value.  That's how real estate, the stock market, asset bubbles, HYIPs, ponzi/pyramid schemes, etc. work.  After the price doubles, most people don't withdraw their gains.  They keep their money in so the principle plus the gains double again.  I'm holding (and buying more) BTC because I expect way more new money to come in than money going out (excepting short-term fluctuations).  Also, much of the sale of BTC aren't actual withdraws.  Its traders holding returns on the sidelines waiting to buy back in.  All the new money coming in + old money going back in pushes the price up, bringing in more new money, creating a self-reinforcing positive feedback loop.  Still a thin market with much room to grow (estimated market capital between $100 and $200 million or about the size of a small cap stock).


Its open source.  That's why people trust it.  Copies won't proliferate, because bitcoin was first to market and the network effect is far too great.  Additionally, miners have enough hashing power that one big miner could overtake a newly competing block chain by becoming more than 50% of its hashing power.  Bitcoin is the only one already big enough to resist this attack.  Network effect.  Same reason why any Facebook competitor is probably doomed to failure at the start, though it is simple to make a social networking website (there is even open source code to start a competing social networking site for minimal cost).

https://claim.mtgox.com/forgot_login says login so you put in your login there.  The email should go to the email associated with the login (was still working last I heard).  This will only work after you've successfully claimed your account.

You can only reset the password once per 24 hours.

After 10 bad login attempts, your IP is locked out (for 24 hours I think?).  Try logging in from a different IP (go to different wifi somewhere or use a proxy).  Some users have reported success from a different IP.

Newly created accounts aren't working yet.

The forgot password link on mtgox login page is returning 404 right now.

This one works:  https://claim.mtgox.com/forgot_login

You can only reset pw once per 24 hours.

Yup - an economic carrier needs to derive its value from the rest of the world (unless it grows in complete isolation).

Its a core problem BTC shares with every other asset: dollars, houses, gold, silver, sugar, gasoline, etc..

Well, miners were installing hash power long before BTC even had a price.  And difficulty rose faster than the price.  There will always be some miners willing to hash at a short-term loss for the potential reward of long-term gains.  That's how all business works.

History does not show the hash rate to be a one-way function of BTC/USD.  They are correlated indicators demonstrating two-way causality.