The Elephant in the Payments Room
by Jon Matonis


 - http://www.americanbanker.com/bankthink/the-elephant-in-the-payments-room-bitcoin-1058703-1.html?zkPrintable=1&nopagination=1

Announcement:

BCTIP - Printable Bitcoin Tips
 - http://bitcointalk.org/index.php?topic=190400.0

This is fantastic!

One question though regarding the currency.  If I make a $5 BTCTip, that means that the BTCTip URL holds an amount of bitcoins that were worth $5 at the time that I generated the URL?   (Versus holding $5 USD and converted to BTCs at the time of redemption?)

Sorry for necrothread, not sure if there is a more recent one of the topic.

Anyway, today this happened:

- https://twitter.com/marciahofmann/status/328618584836304896

@marciahofmann is a senior staff attorney @EFF.

A single account can have a wallet in each currency.  Simply click the icon for which currency wallet to use.

To transfer funds from GBP to USD or vice-versa is as easy as buying bitcoins with one and selling in the second currency.

Mt. Gox terms prohibit multiple login accounts, and since they can ask for AML verification at any time, it is not recommended that you chance it just because they allow small value accounts without verification.

There are two methods, if I remember correctly.  Firstly, the client learns what peers believe is the block number at the tip of the longest chain.  So immediately the client knows it has at least N blocks to go.  

Secondly, there is a targeted rate of one block every ten minutes.  If the highest block a client knows about is N, and some period of time goes by (e.g., an hour) and the highest block is still N then it can be suspected that somehow the client isn't getting updated blocks (and the out of sync message displayed)

I'm not positive on either of these, hopefully someone knowledgeable of the details can confirm or correct me.

Maybe Bits of Proof is more suitable for you?

 - http://bitsofproof.com/?page_id=34

Did you pay a fee?

If not, then are there any outputs below 0.01 BTC?   If there's no fee and there is one or more outputs below 0.01 BTC then peers following the default will not relay the transaction.

What you can try doing is have an explicit outgoing connectioin to a node that will relay regardless of whether a fee is paid or not:
 - http://en.bitcoin.it/wiki/Free_transaction_relay_policy#Participating_miners

Also, make sure to leave your Bitcoin-Qt/bitcoind node running so that it will re-broadcast periodically.

Unfortunately only a few people are using WeExchange.co or their FIAT.CAD instrument on BitFunder.com

 - https://www.WeExchange.co  <--  Accepts Interex
 - http://www.BitFunder.com

The rate of currency inflation is limited (currently just under 11% per year on an annual basis).  That is what allows a bitcoin to hold its value.


A digital cryptocurrency does require computing hardware and connectivity, but either $40 android devices or dedicated hardware wallets will extend bitcoin to even the poorest regions of the world.   Additionally, there will be innovations such as inexpensive scratch-off prepaid cards allowing bitcoin value to be stored and carried by even those with no technology.


Bitcoin is a proof-of-work based cryptocurrency.   It is vulnerable to a 51% attack, however the prerequisite to such an attack is accumulation of tens of millions of dollars of hardware.  (though if just ASIC, that amount is still under $10 million today but ASIC hardware is not available in quantity yet, so it will be tens of millions of investment by the time excess ASIC capacity is available).  

But alternative proof-of-work based cryptocurrencies (like Litecoin, and especially a new one like you suggested with a desi version) are more vulnerable to a 51% attack.   The thickness of the walls of a bank vault need to be the same whether inside is just $1 million or $2 billion.   The same issue exists with proof-of-work based cryptocurrencies.  

Now Ripple might be something to look at.    With Ripple, one might extend an INR loan to another person through Ripple -- a family member perhaps, or even a member of the local community with repayment of the INR loan informally backed by some gold jewelry.

Or Open-Transactions might be the enabler.   With open transactions, contracts for any type of asset can be issued and traded.   A specific Open Transaction node could even be tailored to a specific community (versus a larger region or nation even).

Peers won't relay certain transactions, including ones in which the amount is below 0.01 BTC and no fee is paid, or ones which are invalid because the "parent" transaction assignment hasn't been seen before.

Is this possibly what happened?

FYI,

Bitcoin in San Diego (CA) April 30 at 7 PM
 - http://bitcointalk.org/index.php?topic=189222.0

 - http://LocalBitcoins.com

You sometimes can even get better than spot price, paid in cash.

Hawala is about the same as Western Union, except that it is an informal value transfer system.   This means nobody is filing currency transaction reports (CTRs) for transactions greater than $3K USd or $10K or whatever.   And nobody is asking questions.     It exists today, ... someone in one country hands over some amount of cash to a hawalder and in another country that person's family member visits the hawalder partner there and receives the cash, less a 10% or 20% fee.

A hawalder is a network ... requiring presence in both countries ... the sender's country and the recipient's country.

Bitcoin breaks this down into there being two domestic transactions.   The person sending the money goes to 7-eleven, or does a domestic bank transaction or whatever to buy coins.   On the recipient's side, that too is simiply another domestic transaction -- the recipient redeems bitcoins in exchange for cash of the local currency.

So simply educating the hawalders about bitcoin, and how they can become independent bitcoin exchange agents to serve the remittance market, is one way to cause bitcoin to become more widely used for remittance payments.

Since there already is a pretty developed method for the person in the western world to obtain bitcoins, the challenge comes in ensuring that the remittance recipient can cash out securely, without losing a ton during the exchange.

Here's the problem that I see, however.   The independent local exchangers don't have much capital.   The "round trip" between selling bitcoins and using those cash proceeds to restock can take many days, and the fees to do so may be relatively prohibitive.    

So what is needed is a mid-level wholesale buyer who has an inventory of coins who can sell to the local exchangers in exchange for their cash.  This lets the local exchanger negotiate a trade with the confidence that cash proceeds from the sale can be converted back into bitcoins within a short amount of time (same day even) and thus exposure to exchange rate risk is lower and the capital requirements for operating the exchange business are lower.

The mid-level wholesale buyer would sell the coins purchased to local buyers or would convert the proceeds on an exchange.  This mid-level buyer would need to be well capitalized to accommodate the short term demand for cash as well as have banking connections sufficient to ensure that bitcoins sold at the exchange (generally in USDs, or EURs) can be converted back in to the local currency for use in making further purchases.

This is a function that can develop organically (as a better funded local trader with an entrepreneurial mind can rise to become a mid-level trader), however someone purposely filling this role can help cause this service to be available to the small time traders sooner.

So that's what is needed to bump Bitcoin's share of the remittance market up a notch or two.

 - http://en.bitcoin.it/wiki/Trade#Financial

More are coming as well, CoinSetter.com, Kraken.com, BitcoinFund.eu, Coinlab, and more promise methods to short and/or leveraged trading.

Seriously.  Ask the people who plunked down 150+ BTC in June 2012 for a BFL single if they today had the option would they take back the 150 BTC or would they still want deliver of their ASIC single.

Mining has very rarely returned more than 1 BTC per BTC invested.

Every metro area needs a Joerg, to serve as a local "Mayor of Bitcoin".

No, that hasn't changed.

If you are claiming that v0.7.x broadcast a transaction without being in sync, I'm not sure why that would be.

But this is really a moot point.  Let the client sync and then your problem is resolved (or at least if there is still a problem, such as no connectivity, this can be properly diagnosed).

Well, offering them for sale is one way to establish a local trading network.  Knowing who will buy and/or sell bitcoins locally is often something that opens doors in the future. There currently aren't any sellers listed.
 - https://localbitcoins.com/country/zw
Though this could be offered through Craigslist as well.

There may be even international trades.  For instance, maybe a person in Zimbabwe has a relative in Kenya and wishes to send money (where a trader in Kenya will distribute schillings in exchange for bitcoins received).  Bitcoins can be used to enable that transaction.  Here's a site to help make the introductions:
 - http://bitcoins.co.ke


Additionally, there might be people that would like to earn bitcoins.  So those coins could be used as the compensation method for performing tasks.  Because of the difficulty in obtaining bitcoins, sometimes you can find very qualified people willing to provide work at below market rates simply because bitcoins are the form of compensation earned.

There's a bunch of merchants that started accepting bitcoins prior to when BTCBase existed.  A list including some of them is here:

 - https://twitter.com/clubalpaca/bitcoinmerchants/members
 - https://twitter.com/ClubAlpaca/acceptsbitcoindonations/members