Greed is a powerful force and it's an important aspect in the bootstrapping of bitcoin as a currency. Without the early adopter incentive there might not have been as many early adopters. It gets the ball rolling. And the ball is definitely rolling.

Just curious how possible it is for chinese exchanges to get around not being able to fund with dollars by using ripple

Just curious.... isn't the fact that the trading fee was 0 essentially mean  that btc chinas volumes importance is unknown? As another question how come Bobby lee hasn't said anything or made any statements?

620

It seems to me that if the rumors are true china basically just wants more control over the money going into and out of bitcoin exchanges so they can keep track of things.

"I don't see how this would be such bad news. China is banning only 3rd party payment processors from bitcoin exchanges.
The situation is exacly the same as for trading gold and silver in China. Here is a quote from Chinese gold and silver regulation law "All gold and silver purchases shall be transacted through the People's Bank of China. No unit or individual shall purchase gold and silver unless authorised or entrusted to do so by the People's Bank of China."
So by banning 3rd party payment processors all the bitcoin exchange traffic is going through Chinese banks which are under the control of People's Bank of China. Chinese regulators are essentially treating bitcoin trading same as gold and silver."

For a while now I have believed that bitcoin would wildly succeed... but even in that success the banks would still have their place because loans are popular and nobody would want loans in bitcoin. But doesn't colored coins change that? Lending industries could spring up on top of bitcoin and how they would work is exactly like how people predict colored coins would replace the stock market..... people would essentially lend colored coins to someone and in this way the problem of deflation is avoided. 

It does seem insane that they would come at him for this. It's almost like they don't even understand what bitcoin is. With the power of cryptography and private and public keys you can easily make it crystal clear that you are not in any way transmitting money by letting the customer themselves load the keys. The only downside I can really see is that someone might take their coin and try to tamper with the public key on the outside to make it different and then try to trade the coin to someone else..... who is looking at a forged public key for a verification on the proper loading of the coin. I'm not sure if you can make the public key on the outside tamper proof........... BUT........ if you can't then mike could keep records of his coins public keys and some kind of serial number. So if someone ever doubted the legitimacy of the public key on the outside of the coin they could check with him and see if it is legit? it would be okay to keep logs of public keys.

Isn't it possible for mike caldwell to mint bitcoins exactly as he did before but instead of payment for them in the amount of the coin plus his service fee.... to just be the service fee and then the customer can load their own private key with their coins? This means that he would not even be moving money around. all he would be doing is accepting some bitcoin for the service.

Customer wants a cassacius coin
Mike makes the coin like he does now with a hologram and everything
Mike charges .05 bitcoins or something for the coin
mike sends the coin to the customer
the customer loads their own bitcoin on to the key using a public key of the private key
the public key would be somewhere on the outside of the coin and it's amount would be easily verifiable
the coin is still tradable to someone else since the private key was never exposed still under the hologram seal

the more people buy things with bitcoin like tesla cars the more the price should go down.... they are exiting the market and their coins are being converted to fiat so that means they are unloaded onto an exchange somewhere.

does it mean people are finally moving to better exchanges? Or......... there is just no buying pressure

So what you are saying is money needs to be good at doing something besides being money in order for it to be money. Right.   /s

Nothing has value in and of itself. Before man walked the earth... fruit hanging from trees didn't have a value, because no one was there to give it a value. We give things a value based on different circumstances. When someone says that gold is better because it has intrinsic value.... this intrinsic value they are talking about is simply the fact that it can be used for things other than money. But are those things it's used for worth the cost of gold currently? When gold broke over $1800 was the intrinsic value also 1800? Of course not. All the intrinsic value adds is a pretend price floor. All it means is that gold is less likely to be worth nothing because it can be used for things other than a store of value. I say less likely because there are no guarantees. Even gold could be worth nothing in certain circumstances. Imagine if a group of people were trapped in a cave with a limited amount of water. What do you think would be worth more a bottle of water or an ounce of gold?  When you realize that all the intrinsic value of gold does is add a psychological effect to the money and not much more you see that it's somewhat pointless. It means that although you might lose 9/10ths of your value you probably won't lose all 10/10ths. Big deal. Having that psychological effect is a slight advantage in golds favor... but bitcoin has it's own advantages that are better than just mere psychological advantages because they happen to be real and concrete. A limited supply. A predictable amount created in the future. A very transparent and open source protocol for anyone to see the inner workings of. The list goes on.  I don't necessarily dislike gold... I think at one time it had a great usefulness. When money was tied to gold that limited the creators of money to how much they could print. That was pretty invaluable. But it's also ancient history.

http://www.reddit.com/r/Bitcoin/comments/1sizg7/gold_vs_bitcoin_and_intrinsic_value/

If you see bitcoin as a global currency it's obvious that it's incapable of handling many transactions per second if it is really used much. Payment networks built on top of bitcoin would be the answer right?
what about ripple though... essentially ripple is already a payment network that is sort of "built on top of bitcoin" in that bitcoin could be used with it. Will it be ripple? or something else.

Just curious... I just found out about the site called fiatleak. It looks like tons of volume is going on in china but maybe I am not seeing things right. Is this how it normally looks in china? Is it normal?

if you hold bitcoins and then think the price may go down so you sell them and then buy back in at a lower price are you then supposed to report that to the IRS?

One of the most ridiculous arguments I have seen against bitcoin stems around the deflationary spiral myth. The idea is that when something rises in value... people hold it and so they stop spending and as that happens the situation escalates because of even more hoarding.

Here is why it's not a very intelligent argument. Ask the person asking it if they have invested in bitcoin? Surely if something only rises in value then you would be stupid not to have invested in it already. If they haven't invested in it then they would be throwing an opportunity away. But wait.............. the real reason they haven't invested in it is because they don't believe it will keep rising.

Wait what? If your argument is that something is bad because it only rises in value how could you possibly simultaneously think that it's bad to get in because it will lower in value? How can you think two completely opposite things?

The truth is that if something only rose in value... it's chart would look like a straight line. Bitcoin doesn't have such a chart.
The truth is that the hoarding problem is proven wrong every day...... right in your face.  When a trade happens on an exchange , on one end somenone is buying bitcoins and on the other end someone is selling bitcoins for currency. Selling your bitcoins for currency is the same thing as "spending" . You are simply spending your bitcoins and trading them for something else of value. There are only 2 reasons why you sell your bitcoins..... You want to buy something, or you think the price is going to go lower. Both of those reasons are incentives to spend. When the price rises on exchanges you don't see trading come to a halt... or stop.  Even during the last few weeks with a huge increase in popularity you don't see trading come to a stop. So even at times when bitcoin is at it's most extreme, temporary deflation........... spending doesn't stop (trading would start approaching a complete halt if the "spiral" part of the deflationary spiral problem was true).

Now that I have taken care of the "spiral" part of the argument.... I'll address the deflation part.  Even at times of bitcoins most extreme deflation... people still spend. But could it be argued that during those times.... less people are willing to spend their bitcoins? Of course it could be argued that because that is the whole reason the price rises drastically in the first place. Is it a problem, however?

Consider this...... if a merchant accepts dollars and bitcoins... then they could not be negatively effected by a sudden rapid deflationary period in bitcoin. When the price of bitcoin rises... that increased amount of dollars that are spent for them are given to someone new. Those dollars aren't consumed. They are still floating around in the economy , waiting to be spent and are no more or less likely to be spent than before they were traded. A merchant allowing payment in bitcoins is adding to their potential earnings so it is a win -win for them regardless of possible periodic deflationary periods.

Could it be argued then.......... that a bitcoin-only merchant would be negatively affected by one of the rapid deflationary periods? Before you answer that question though you must ask another...... why would a merchant only accept bitcoin? And the answer is......... because bitcoins allow that merchant to do something or operate in a way that they could not in dollars........ or it's because of the benefits bitcoin provides in payment and fraud superiority....  so if that bitcoin merchant is hurt in some temporary rapid deflation... you couldn't really say bitcoin is bad as a currency because the reason they exist as a bitcoin only merchant in the first place is because of other advantages gained from using bitcoin in the first place.

I keep hearing about how bitcoin will destroy banks and lead us into a new age. I like bitcoin as much as any avid bitcoin fan could........ but I think most people don't understand the situation fully.
Bitcoin's success would eat into certain profits that banks have.... for instance wire transfers as an example. But the bread and butter of banks profit isn't from some petty fees (even though they add to billions). It's from loans.

For instance with the dollar...... every dollar in circulation (electronic or cash version) has been created because it was loaned into existence. Therefore every dollar is also earning some bank interest. They create it from nothing.... lend it out with interest attached... and reap the rewards. No one has a better gig than that. The president doesn't have a better gig than that. God himself doesn't have a better gig than that. A slave owner from centuries ago didn't even have it that good. And bitcoin doesn't affect that. No one in their right mind is going to ever say hmmm...... should I get a loan in dollars (which is an inflationary currency ) at this low interest rate.... OR should I get a loan in bitcoin (deflationary) at this high interest rate ? No sane person is going to want a loan in bitcoins. Even if there was some fancy bitcoin bank giving them out.

And people love getting loans. They love living beyond their means on credit. Loans won't go away. And of course ...... the dollar won't die. Even if bitcoin is wildly successful.... the fact of the matter is the government taxes us. It forces us to pay taxes. Therefore we have no choice but to pay them and since the dollar is accepted in the payment of taxes then it will always have some value.
None of this is a problem for bitcoin. Bitcoin doesn't need to kill banks to be successful. In fact........ of all the people in a position to profit wildly from bitcoin it is banks themselves.... because if one bank was to integrate an exchange and offer deposits and the exchange in the same place that would be pretty nifty.

would it be cruel to do like an 8 year delayed transaction so they couldn't spend it until that time? aha

Anyone have an idea? I want to give my sister a bitcoin for graduation. Should I keep a backup copy for her?

Gambling is run by mobsters... regardless of whether or not they are employed by the government. Does anyone think that this is simply a case of some anti competitiveness in the gambling area?