I expect that Dwolla would be vastly more palatable to governments due to (what I am supposing without specific knowledge is) it's adherence to 'know-your-customer' procedures and non-P2P architecture.  I think it's safe to bet that if any 'legitimate' company operating in the US 'knows-its-customers', so to do a lot of government agencies, their friends, and their contractors.

So, I would suppose that governments would do what they can to foster Dwolla and it's cousins and deter Bitcoin (and it's possible cousins.)  I'm hopeful that Bitcoin will eventually strangle or starve out those in the other camp at an opportune time...at least I am currently and hope that nothing changes my mindset.  How this plays out will be very interesting.

If you adhere to the philosophy that 'money is debt'  (as I, Ben Bernanke, and I believe pretty much all modern bankers do) then it starts to make a whole lot more sense.

If one has run out of the ability to take on debt then they have by definition, run out of the ability to produce money.  And who wants to have dealings with an entity who is in that situation?

Dig up the 'Money as Debt' vid by Paul Grignon on Youtube if you have not already.  I have come to accept most of his assurtions simply because they are so good at explaining so many otherwise baffleing things.  My favorite quote from it is as follows:

  “The process by which money is created is so simple that the mind is repelled.”
        -John Kenneth Galbraith

Without really understanding or having thought through things fully...and if the basic premise of the system stands the test of time...

I kind of envision a situation where the coins in the first chain becomes backing for further chains.  Those who hold coins from the first chain would then be able to back a given branch which is managed to their liking, and people could choose which branch to use for similar reasons.  I theorize that if both the 'funders' and the 'users' of a currency need to arrive at a mutually agreeable management strategy, more equitable end results will fall out.

Here's my formula.  I expect it would work the same on Windows with reasonably full cygwin installed, but have not had occasion to try it.  I didn't feel like dicking with public key crypto and installing software that other people compiled and so forth.

I do this when I want to squirrel away an entire savings wallet with {n} number of coins in it.


1) bitcoind stop     (However it is done on your client.)

2) cat ~/.bitcoin/wallet.dat | openssl enc -aes-256-cbc -salt > ~/wallet.dat__whatever.enc

3) wipe .bitcoin/wallet.dat    (better than a simple 'rm' which a competent attacker can possibly re-find.)


---

Before I remove my wallet, I actually do do some sanity checks.  Such as:

1)  sha256 .bitcoin/wallet.dat

2)  cat ~/wallet.dat__whatever.enc | openssl enc -d -aes-256-cbc -salt | sha256

---

I use a pretty good password and am comfortable putting the entire encrypted wallet in a public area.

I really like Unix because it is so damn _easy_.  Really!  GUI software really does confuse the heck out of my and as often as not just does not do what I wish it to do.  After learning a few basic principles, the simple command line tools really are super easy and really flexible.  That is my opinion.
 

I'm finding the same problem with BTC and I have with USD...there is just not very much that I want to buy no matter what 'currency' I hold.  I can drop a few on Wikileaks, buy a Tee-shirt or some such, but that's not cutting it.

I fully expect to _not_ have this problem at some point in the future, and that is what I care about and spend an inordinate amount of time thinking about and dealing with.  I am taking a bet on BTC with some of my resources in part because I have more confidence it holding it's value and retaining long term usefulness than I do with USD.  I hope that that would not offend Satoshi and/or end up being bad for the project or whatever.

At this point, I believe that a default would help the US economy in the same way a re-boot helps my Windows machine...and is about the only thing which is likely to have any long term effectiveness.  In most cases the machine comes up with the same OS, but at least it is stable for a few weeks.  In other cases the machine comes up running Unix and typically runs well until I no longer wish it to be powered on.

In case any project developers are reading this, I'll just interject my use case:

I run my main client on an always up and very low powered machine with no video hardware.  I run only bitcoind (and like the current interface just fine.)  When I wish to perform a transaction, I log on to this machine from wherever I am and from whatever platform I happen to be using.

Although my setup is reasonably well hardened, I happen to be pretty careful to not store more BTC than I need for immediate work in the wallet which is 'live'.  This is, in part, because I have tried to allow port 8333 traffic in in order to assist in 'pulling the wagon' and I do not fully understand nor track the bitcoin source tree.  My main BTC stash(es) are tucked away in other places.

I don't anticipate a high percentage of users operating in the manner I do, but I dearly hope that there remains an official low overhead and reasonably efficient client and basic UI.

Hmmm...seems like that might be an advantage to be able to move the market if one is a huge trader.  For instance...

I dunno if MtGox tracks Tradehill at all, but I would expect that it would to at least a small extent if there are people doing arbitrage (which I think is likely by now.)  If so, one could realistically depress Tradehill for a while to try to get a cascade of bots going, then make a killing on MtGox....in my (likely defective) theory.

(Not that I have any direct experience with it, but...)  Probably everyone knows that there are a *lot* more IOU's for PMs than there are PM's to back pay up.  Most people are OK with this because 1) nobody is expecting much delivery, and 2) delivery is a genuine hassle.

An interesting thing about bitcoin is that there is no real reason not to hold the actual coin.  So my #2 and thus the reason for #1 vanishes.  This, I expect, will manifest itself in significantly different market organization and dynamics than most other commodity or semi-commodity markets.

I would hope for a market which was much more difficult to game by market makers.  And even better, captured regulatory agencies would be a thing of the past (since there is no need for such agencies at all!)

My idea which I am working on and off on:

I have some number of bitcoin.  As I envision things, I can transfer them to someone else to play with quite easily and safely if I (or and escrow) holds collateral.  If there is a margin call (the short lost his bet) then I can have my bitcoin automatically bought in on an exchange and I lose nothing.  The level at which the buy-back happens would be proportional to the collateral put up by the speculator.

I want to do naked trades (not bothering the hassle of borrowing money or bitcoin...non-naked trades are so 90's   Any ideas?

Perhaps someone is confident that they can have your wallet.dat at will and is trying to 'launder' value through your identity.  That would be a method I might employ if I had need to cover my tracks. (I would probably leave you with your initial balance since I am not a thief...though it could be argued that using your existence in this way would be a form of theft.)

Note that this is a _hypothesis_ and nothing more.  Many people get confused on the meaning of that word.

You would probably get a kick out of this:

  http://www.youtube.com/watch?v=Ef0VG1WEP10

even if it proves Ben's point...among other things.

I actually side with Ben on this one.  All current legally supported monetary systems are, I would argue, debt based (which gold...and bitcoin...are not.)  I don't think it means a whole lot, and I expect it is just a matter of time before things shift in this respect.  Perhaps not a lot of time.

I'm a big fan of both bitcoin and PM's, but...

...in practice I suspect that bitcoin and PM's would/will be an even more effective tool than is debt-based money for a small group of people to manipulate a larger group.  That is to say, to rob them of a good portion of their freedom and guide the wealth of civilizations into a few people's pockets.

So, I do not really see bitcoin or PM's as the ultimate final solution but rather as a tool to help us during the death throws of our current debt-based system (USD being the proxy by virtue of it's reserve status) which is reaching EOL and a moderating force to help steer a replacement debt-based monetary system on along a more healthy path.

I'm not so sure about virus scanners.  My experience with them is that having them is usually worse than having a virus.  I have need to run Windows on one old machine for work reasons (because retards make systems which only work with IE...and even then only on occasion) and I simply don't bother with virus scanners.  I use mild caution about what I install and where it came from, and if I have picked up any viruses or whatever, I've not discovered them yet.  Cygwin makes the machine actually useful for real things...mostly ssh-ing into a real machine.

(My virus discover technique involves sniffing traffic at my packet filter.  I can see my girlfriends computer is loaded with something(s) interacting with machines in China all the time.  And she has various anti-virus software on a very new and powerful but also very slow machine which is quite aggravating to use.)

A good answer probably relates to what one is trying to achieve.

For my part, I just wanted to accumulate for now.  I went with Tradehill in part because MtGox was hosed at the time, in part because I would rather see a number of more equal sized exchanges, and in part because I hoped that Chile would be less prone than other places to bow to US pressure if/when Chuck Schumer figures out how to work the will of those on Wall Street who sponsor him.  No real complaints with Tradehill at the present, and the exchanges track one another well enough so it does not matter much to me.  In fact, Tradehill having less market depth allowed the price to come down and hit one of my buy points where I think it would not have on MtGox (but I am not certain of that.)

On a tangent, I am now wondering if some of Chuck Schumer's sponsors may not be eyeing bitcoin to solve some of the same issues I have (albeit on a much larger scale.)  These would involve opacity of assets and transportation of the same.  Indeed, I wonder if I will end up with the conclusion that bitcoin is being exploited by those who have run our current systems over the cliff to protect their loot.  Among the insightful thing that Satoshi did was to extend the period of bitcoin inflation past the time when most of our current monetary systems are likely to have imploded and thus make it more likely that at least a part of the currency circulates amongst us plebs.

When I decided I wanted some exposure to bitcoin it seemed to me that an efficient mining setup would exceed the amount of $$$ I wanted to have in play in the near future.  Also, that there were significant risks in terms of overall mining participation.  For that reason, I choose to simply 'speculate'.

I cannot begrudge any miner for any liquidation strategy they may choose...they did the work and carry the water to make the system sound at this point so what they do with their earnings is not my business.  Indeed, I may well continue to accumulate so any miners who 'mis-manage' their liquidations and cause price dips on the exchanges are doing me a big favor.  Similar to the (purported) paper shorts in the PM markets over the years...if they have the half the impact on price that many PM-bugs assert, I owe them a giant debt of gratitude.  (Though I am sure I would feel differently if/when I wish to be a seller

If miner liquidations are a major reason for the decline in BTC value and subsequent loss of confidence by otherwise interested participants, that would be unfortunate.  But I actually doubt that this is a large factor though I have nothing more than a hunch to back this up.

I was introduced to the 'proof of work' idea via bitcoin (Satoshi's paper?) as a method of limiting the number of attempts that a robot could make to a level which would be tolerable to a human.  Originally envisioned as a way of dealing with spam mail iirc.

I would much rather us a separate program (or browser plugin) which implemented such a proof-of-work idea vs. messing around with capchas.  I'm about half-way dyslexic as it is, and it usually takes me several attempts at most capchas (including Tradehill's.)  I would vastly prefer to watch a little mini-miner whirlygig thingy for a few seconds than go through repeated cycles of trying a capcha, then modifying my last string of swear words.

Anyone heard of or seen such a thing?

I guess his bitcoin work was not deemed to be effective enough by his handlers.  To bad.  I really enjoyed his vids. And I thought it was awfully amusing that he had so many 'fans' on this forum and when a new vid hit the waves it would generate an excited post heading.

I expend some cycles thinking about attacks on the global internet from time to time.  My thoughts always seem to come back to there being a reasonably high likelihood of a successful and lasting attack under two conditions:

 1) Pretty much 100% of governments are on-board and coordinating.  Thus, if it can somehow be the case that some relatively important country or coalition of countries have some interest served by not cooperating, that would be a good thing.

 2) If countries were willing to take very drastic measures to impose their will (i.e., a bullet in the head), _and_ if life was otherwise tolerable without a free internet, I am not sure that there would be a sufficient core of people to keep a mesh network or whatever functional.  I doubt that it will ever be difficult to track down 'terrorist' who are committing the crime of communicating with one another and 'putting the country at risk.'  A country with a developed and technically competent police state infrastructure could likely do so within seconds.  I think that the best counter to this is to work on things now which would make such assertions of 'public risk' appear as clownish and contrived to the general public as they would actually be.

My vote (if this were a vote and I had any voting power) would be 'XC0' for 'Chain #0'.