You realize that Bruce Wagner was exposed as a scammer who previously ran a mortgage scam, right? He lost all credibility about two weeks ago. See the various Bruce Wagner threads for details.

Yes, the price went up from about $8.62 to a high of around $8.68 for around 15 minutes around 7 AM, then dropped briefly to around $8.35, and is currently around $8.58.

That's not a rally. That's a slow trading day.

Right.

Also right.  Originally, Bitcoin was supposed to be a medium of exchange, a form of money that was easy to e-mail. That didn't happen much. As an investment vehicle, Bitcoin is zero-sum; for every winner, there's a loser. If the Bitcoin world had a huge business transaction volume and minor speculation, it might have worked. The other way round, it's a pyramid scheme.

Someone might do one for fun, if they're taking an ASIC design course or something.  But, remember, all miners collectively are limited to about 7200 BTC per week.  Building vast amounts of mining capacity can increase your share of that, but not total production.

Bitcoin, the last six months.  (Purple line is the 30 day trailing moving average)

That chart pretty much says it all: a speculative bubble, followed by a long, slow slide. For the last two months, the price has dropped about $4 per month.

That's Bitcoin.

That indicates there was a previous default judgement (indicating the defense didn't show up), and this is a "prove-up" hearing, where the court looks at the default judgement.  This time, Wagner is represented by an attorney, but did not show up himself: Counsel for the People is PRESENT; Counsel for Defendant Bold Funding does not exist; Counsel for Defendant Bruce Wagner (Cantwell & Cantwell) is PRESENT; Defendant Bruce Wagner is ABSENT ....

"The court has considered the People's Amended Complaint, the Prove-Up Affidavits, and the previously entered orders in this case; has heard the witnesses testimony presented at the Prove-Up hearing, has heard the objections of Defendant Bruce Wagner, and over his objections, and being fully advised in the premises, the court finds that..."

So he had his day in court. It didn't go well for him.

Going back to the Bruce Wagner / Bold Funding case, here's what the court had to say:

C. In the course of trade or commerce in Cook County,Illinois, in 2004, Defendant Bold Funding and Defendant Bruce Wagner engaged in the following deceptive acts in violation of the Consumer Fraud Act:

(i) As part of a fraudulent plan or scheme, the Defendants falsely represented, or directed others to falsely represent, that Defendant Bold Funding would locate and secure private funding, for a fee, for homeowners in foreclosure; when in fact, Defendant Bold Funding did not intend to provide such services and did not provide such services. This activity is a violation of paragraph 505/2 of the Consumer Fraud Act [8 ] 5 ILCS 505/2J.

(ii) The Defendants falsely represented, or directed others to falsely represent, that Defendant Bold Funding had failed to secure private funding for homeowners on only one (1) or two (2) previous occasions; when in fact, Defendant Bold Funding had not secured private funding for most, if not all, of its customers. This misrepresentation is a violation of paragraph 50512 of the Consumer Fraud Act ISI5 LCS 505/2J.

(iii) The Defendants falsely represented, or directed others to falsely represen, that Defendant Bold Funding was a private real estate investors' group; when in fact, Defendant Bold Funding did not invest, directly or indirectly, in real estate. This misrepresentation is a violation of paragraph 50512 of the Consumer Fraud Act [815 LCS s0s/2|.

(iv) The Defendants falsely represented, or directed others to falsely represent, that Defendant Bold Funding had been a member of the Better Business Bureau for twelve (12) years; when in fact, Defendant Bold Funding joined the Better Business Bureau for the first time in 2004. This misrepresentation is a violation of paragraph 505/2 of the Consumer Fraud Act [815 ILCS 505/2J.

(v) The Defendants falsely represented, or directed others to falsely represent, that Defendant Bold Funding had staff attorneys who assisted homeowners in foreclosure; when in fact, Defendant Bold Funding did not have any attorneys on staff who assisted homeowners in foreclosure. This misrepresentation is a violation of paragraph 50512 of the Consumer Fraud Act [815 ILCS 505/2J.

(vi) The Defendants falsely represented, or directed others to falsely represent, that Defendant Bold Funding had helped homeowner save their homes for the past twelve (12) years; when in fact, Defendant Bold Funding did not save homes from foreclosure and Defendant Bold Funding had only existed since 2004. This misrepresentation is a violation of paragraph 505/2 of the Consumer Fraud Act [8]5 ILCS 505/2J.

(vii) The Defendants falsely represented, or directed others to falsely represent, that Defendant Bold Funding had seventy-four (74) regional offices; when in fact, Defendant Bold Funding maintained and staffed only one (1) office. This misrepresentation is a violation of paragraphs 0sl2 of the Consumer Fraud Act [815 ILCS 505/2J.

There's no question about it.  He's a crook.  No amount of explanation or spin control will help.

(Thanks to whomever OCRd the original document.  Now we have the full text.)

Of course. That was when the price was going up.  Once the bubble burst and the price went downhill, the mood became grouchy. That's normal for speculative investments.

We're now entering the "find the people behind the scams and string them up" phase.

The mining forums have extensive discussions of this. The consensus seems to be that running already-purchased GPU-based mining rigs is still profitable, but it's no longer profitable to buy more hardware. Most of the calculations assume that floor space and operator time have zero value, and that air conditioning has zero cost. No way would data center sized mining operations pay.

Regardless of the level of mining activity, about 7200 new Bitcoins are created every day. The difficulty of mining self-adjusts to maintain that number. So it's inherent in the system that, from now on, mining is just barely profitable.

I, too, was looking for "hard evidence". I found some, which I previously posted in another thread.

Bold Funding, Inc.
Nevada corporation search
Status: "Permanently Revoked".  President: "BRUCE WAGNER" Address "2248 MERIDIAN BLVD STE H   MINDEN, NV".  

The address is actually "Sutton Law Center", an "Incorporate in Nevada" firm specializing in "asset protection". "Corporate Direct forms and maintains your entity, and you subscribe to the Corporate Formality Services, we guarantee that you will not be exposed to personal liability from an attempt to pierce the corporate veil. If you are planning to form an entity to create asset protection, subscribing to the Corporate Formality Services will give you the added confidence that your protection team is working for you."

Updating...

An image of the court judgement against Bruce Wagner and Bold Funding is available.
"... Defendant Bold Funding and Defendant Bruce Wagner did not possess a license to engage in the business of a mortgage broker, mortgage servicing company, or a mortgage company in Illinois. ... Defendant Bold Funding and Defendant Bruce Wagner received thousands of dollars from homeowners for the purpose of providing funding for them, but the Defendants did not provide such services and then retained these monies for their own use."

The Bruce Wagner associated with Bitcoin has already admitted on these forums that he is the same Bruce Wagner associated with Bold Funding.

Any questions?

Before the Glass–Steagall Act was repealed in 1999, banks had to stay out of the investment business. After repeal (which, in retrospect, was a big mistake), banks got into investment banking and started marketing investments to their customers. Those investments, unlike deposits, are not insured by the FDIC.

Some banks blur the lines between their banking side and their investment side. Around 2000, I had several million in Treasury bills in a BofA custodial account, the banking side of the business. BofA transferred those assets to their investment unit, against my explicit written instructions. I pulled those assets out of BofA for that. 

So you have to be careful to deal only with the banking side of a bank. They're required to state whether something is FDIC insured or not.

That's a criminal offense in Japan. Mt. Gox is a money transfer firm at best, and those are required to keep customer funds separate from their own funds.

Now we need hard data establishing that the Bruce Wagner of Bold Funding is the Bruce Wagner of The Bitcoin Show.

OK, let's see what hard data we can find.

Bold Funding, Inc.
Nevada corporation search
Status: "Permanently Revoked".  President: "BRUCE WAGNER" Address "2248 MERIDIAN BLVD STE H   MINDEN, NV".  

The address is actually "Sutton Law Center", an "Incorporate in Nevada" firm specializing in "asset protection". "Corporate Direct forms and maintains your entity, and you subscribe to the Corporate Formality Services, we guarantee that you will not be exposed to personal liability from an attempt to pierce the corporate veil. If you are planning to form an entity to create asset protection, subscribing to the Corporate Formality Services will give you the added confidence that your protection team is working for you."

Updating...

An image of the court judgement against Bruce Wagner and Bold Funding is available.
"... Defendant Bold Funding and Defendant Bruce Wagner did not possess a license to engage in the business of a mortgage broker, mortgage servicing company, or a mortgage company in Illinois. ... Defendant Bold Funding and Defendant Bruce Wagner received thousands of dollars from homeowners for the purpose of providing funding for them, but the Defendants did not provide such services and then retained these monies for their own use."

Mt. Gox seems to have a major crisis about once a month. And we still don't know if 1) they have the financial strength to cover the losses they had in the break in, and 2) if they're trade on their own market. As the price goes down, and they have to pay out more cash than they take in, we'll find out about 1).

Remember, the trouble with Bitcoin "exchanges" is that they're also depository institutions, holding the funds of others.  Uninsured, unaudited depository institutions.  That didn't work out well for the customers of "online wallet" services.


Silk Road appears to be real, but it's not clear how much Bitcoin traffic it generates.

When Tradehill had their disagreement with Dwolla, their guy said on the Bitcoin web show that they were Dwolla's second biggest customer, and Mt. Gox was first.  So a high percentage of Dwolla's business is related to getting money in and out of Bitcoin exchanges.

You'd think from their site that Dwolla was competing with PayPal and WePay. But apparently they're not getting much of that business. 

A year from now,

- Tradehill and Dwolla, which are legitimate but have real operational costs, will have shut down as unprofitable.
- Mt. Gox will still be around, about as flaky as it is now. Commissions will probably go up.
- Almost nobody except Silk Road will accept Bitcoins for merchandise.
- Price will be somewhere below $3.  Maybe much lower, but fan interest alone may keep it above $1.
- Some mining will still be going on, but not much.

Mt. Gox needs to charge for limit orders that are revoked. They don't need to charge much, just enough to discourage junk orders.

"Unbroken uptrend since the 8.00 $ resistance."?  That's the last 18 hours.

You want to see an "unbroken trend"? Look at the 30 day moving average, the purple line:



Now that's an unbroken trend, going steadily down for two months now.

Almost every week, there is a major financial conference. I doubt that Bitcoin businesses could get into the High Growth Markets Summit (UK), now that the bubble has popped.  The Alternative Asset Summit (Las Vegas) might be a possibility. Anyone with a serious Bitcoin-related business should be attending and presenting at conferences like that, not a low-rent Wagner event.

Tradehill and Dwolla might be able to play in that league. Maybe Mt. Gox. (Probably not Mt. Gox - people who go to conferences like those want to see audited financial statements.)