I'm pretty ignorant outside of common law countries, where that's a general truism. There are definitely places like Russia where it's unclear because things like "monetary substitutes" are prohibited, and no one knows exactly how Bitcoin is categorized. The Russian prosecutor general and other officials have actually stated that using Bitcoin is illegal, but it's never been brought before the courts.

That's the beauty of it. I think most governments realize that officially prohibiting cryptocurrency and trying to enforce it will only expose their impotence.

Pay-per-view at a fraction of the cost sounds great to me, especially since TV/movie licensing means you have to use different services to watch different titles. I rarely watch TV. Maybe a few times a month when someone suggests a random movie or documentary (which often isn't on Netflix anyway). I do have a Netflix subscription, but it's a waste since I hardly ever use it. I only pay the subscription so it's there when I need it.

I definitely see a use case for ad-free video and music streaming.

We'll keep hearing from people like Mike Novogratz and Tom Lee because they are regular guests on the CNBC financial TV show circuit. I don't really think of them as "famous" -- more like talking heads. They get paid to talk about this stuff, and it's a chance for them to publicly hype their holdings.

I assume he used the library as an extra layer of privacy. If there were a vulnerability in TOR, or whatever else he was using to hide his location, administering the Silk Road from his home could have compromised his identity. Turning off his PC would accomplish nothing, since all activity on his home internet connection would be trafficked through his ISP -- who knew his identity. The library provided some level of plausible deniability, since so many people access the internet from there. It obviously wasn't good enough, though.

If you're going to make these kind of threats, you probably shouldn't do it on VOIP that can be traced to your IP address. Better yet, don't make threats to international airports. The US government takes that pretty seriously post-9/11.

Hopefully this kid doesn't have to serve too much time over a hoax. I hear Indian prisons are quite bad...

But the CFTC didn't really "let the futures markets go live." The exchanges self-certified without their permission. The CFTC would have had to amend their regulations to prevent that from happening. In this case, Bakkt needs affirmative approval from the CFTC.

My gut says you're right about ease of approval though, because that's how it went with LedgerX.


I'm guessing Bakkt will mostly be used for speculation, just like the CME & CBOE markets. If you look at physically delivered markets on Nymex or Comex, most traders close out positions before expiration.

It seems like the FEC is treating Bitcoin contributions like any other contribution -- not restricted like anonymous/cash contributions. That's surprising to me as I doubt the FEC is doing blockchain analysis to rule out prohibited fund sources like foreign nationals. In an audit scenario, checks and credit cards leave a much easier paper trail to analyze, especially since banks cooperate with federal regulators. That's why cash contributions are restricted like this:

Indeed, it's not the SEC that is playing games. It's people like the Winklevoss brothers and VanEck, who were never realistic in their expectations, and encouraged pipe dreams among the community. Even today, VanEck says, "We are the closest we can be. It’s very clear to me America wants a bitcoin ETF and we are here to build it." Actually, it's not clear that America cares about a Bitcoin ETF at all, and by all appearances VanEck isn't close to getting approval.

It's taken multiple years to get ETFs for longstanding commodities approved. Nobody should be surprised if this drags out for decades, let alone years.

I imagine that represents disgorgement of profits. I don't think most of these cases even involve tax authorities -- tax evasion is a much smaller issue. It's more about millions of dollars being transmitted without complying with AML laws. His taxable profits are tiny compared to the amount of money he transmitted.

If you sell bitcoins to someone in amounts beyond $10,000 but structure the payments to avoid CTR reporting, you're liable to get charged for this. It's amazing to me that people keep doing this so egregiously when there are obviously undercover federal agents infiltrating Localbitcoins.

The article says it's near Reno, which isn't the driest of desert areas -- 24 inches of snow and 10 inches of rain per year. How near is not clear, though. Supposedly this company has "preliminary county support" for a new town built along the Truckee River, which may offer some irrigation possibilities. Higher volume irrigation to desert areas isn't impossible either -- consider Las Vegas. But it's also a sensitive issue because of the prolonged drought in Nevada and California.

I still don't understand what a "successful attack" entails here, though. I don't see how the above establishes a lasting or permanent attack on Bitcoin. It just temporarily offsets the cost -- how effectively, we don't know.

And it requires the Chinese government to flood offshore exchanges distributed around the world with money -- some which are tightly regulated by their governments -- in order to short sell. Also, since so many exchanges don't offer margin, they would have to borrow massive amounts of bitcoins on the OTC market to short sell on those exchanges. I say, good luck to the Chinese government there!

They'd be taking on immense counterparty risk. That the attack was state-sponsored by China would also probably be obvious in hindsight, which could strain relations with other governments. All for what? This would be a short term attack. They'd need to close shorts by buying back bitcoins -- that's not a sustainable position considering that maintaining the attack is quite expensive. I don't see how they can "shut down" anything.

I also think if the attack were sustained for long enough -- unlikely -- that SHA-256 miners could be bricked by a hard fork. How the market would react to that is anyone's guess, but if there is demand for the forked coin, China would have a difficult time claiming that they can shut down any cryptocurrency.

Governments would probably be wise not to show their powerlessness by their failure to shut down anything.

Government-issued currency isn't all that's regulated. The legal definition of "monetary instruments" includes "negotiable instruments, in bearer form or otherwise in such form that title thereto passes upon delivery." Bitcoin functions like a bearer instrument, and no one has successfully contested that in court.


The entire basis of enforcing this law in this case is how much he was selling:


What undercover police often do is persuade the seller to structure multiple payments that aggregate to more than $10,000, but also avoid complying with AML reporting requirements. If the seller takes the bait, they've violated the Bank Secrecy Act.

Could you elaborate on the theory that production cost is important here? I'm sympathetic to the labor theory of value, but I don't see how it applies to money.

Stores of value are essentially faith-based. Take gold, for instance. The reason it can sustain its value is because the market believes it's a store of value, hence why central banks hedge with it. Central banks don't have gold reserves because of its use in dentistry. If reduced to its actual utility in industry, the market would be tiny by comparison.

In this context, the subjective theory of value seems appropriate. "Value" is what anyone else is willing to pay. If no one is willing to pay the production cost, the price will inevitably fall, and unprofitable miners will be forced out of business. It's the same for Bitcoin as it is for gold -- this is from a few years back:


If price falls low enough for long enough, bankrupt Bitcoin miners will fold just like bankrupt gold miners. At least with Bitcoin, unprofitable miners can be squeezed out of the market, and then difficulty can reset to allow lower mining costs.

LN is one of many possible complements. Altcoins, sidechains, and other offchain protocols/methods can offer other alternatives. The point is that the fee market is well equipped to deal with this problem. Too much demand per block = fees rise too high = users/services pushed to economize their transactions, use other protocols, etc. Then fees drop, although we should expect them to trend upwards over time given limited block space and growing demand. I just see no reason why we wouldn't see $10-$20 fees in the future. It's going to happen eventually. And we'll have plenty of options to avoid them too, for day-to-day transactions. If you don't need Bitcoin's level of security, other options are likely fine. The same goes for Lightning: It can't provide the same security guarantees that Bitcoin can.


Then perhaps price should fall, miners shut down and difficulty adjusts downwards. Less users, less fees, less security. It's all already built into the design.


Security via honest mining. That was the design.

That's how any backward compatible soft fork change will work. They're voluntary upgrades that no one is forced to use. We have to expect that some users and services will continue with the status quo. That's why we shouldn't put all the emphasis on Schnorr signatures or MAST or RSK or Lightning, either. I think people should brace themselves for higher fees, period.


I wouldn't put everything on LN -- it's a different protocol with a different security model. You need to keep private keys online. Its usability can't compete with Bitcoin. Etc.

I also don't think there's evidence that high fees reduce demand for Bitcoin. If anything, there is a correlation between rising fees and rising price. I don't buy the argument that $10-$20 fees matter. In fact, I believe on-chain fees will be much higher than that in the future.

I see higher fees as a good thing, not a bad thing. In the future, there will be no block subsidy. If users won't pay what Bitcoin's security costs, there is little incentive for miners to honestly secure the blockchain. This need is much more important than the need for users to have cheap fees.

I think Nejc Kodrič and other early investors are just making a smart exit. This is what angel investment is all about. Kodrič still owns a piece and will continue running operations, which sounds promising.


I was always a bit put off by the unexplained account closures and reportedly overly invasive KYC. I would never put significant volume through Bitstamp for those reasons.

What do you mean by "scale?" It's not something that can be quantified into the price. If demand outpaces scaling optimizations, and usability of off-chain protocols like Lightning lag behind, transaction fees will just rise. Bitcoin doesn't need to be cheap to transact with -- in fact, its hash rate suggests it shouldn't be. And it also doesn't need to scale to include all the world's transactions.

People have been complaining about Bitcoin's user experience from the get-go. Nothing new there.

That's more than I expected. It's not a huge sample, but it gives a confidence interval of +/-3% at a probability of 95%. Chances are pretty high that the results are in the realm of accurate.

It seems tricky to me from a regulatory perspective because of the prohibitions against large anonymous or cash contributions. It's not totally clear what cryptocurrency is in terms of FEC, FPPC, etc. regulations.

This is the federal law:

You need to hold a license in all the states you operate to make a business of money transmission. Money laundering can carry a twenty-year penalty. I imagine he won't serve the maximum sentence since he plead guilty. Maybe a couple years in prison.


People are reckless at that age. He's basically a kid.

He'll grow up fast in prison, I'm sure.

Bitcoin has a very small monetary supply; only 21 million BTC will ever be created. Because the supply is limited, increased demand -- from adoption, speculation about future adoption, etc. -- drives the price up.


There are different kinds of security. Bitcoin is "secured" by an incredible amount of computing power, to the point that most people consider its ledger immutable and its payments irreversible.

Exchanges are trusted third parties that hold custody of bitcoins on behalf of customers. When exchanges get hacked, that's a matter of their own faulty security practices. It has nothing to do with Bitcoin's security.


Some small governments have banned cryptocurrencies. Most are trying to regulate them, and some (like Japan and Malta) are embracing them. I think that over time, most governments will realize the need to embrace cryptocurrencies for the sake of their country's economic growth and fiscal wellbeing.


Fiat currencies -- dollars, euros, etc. -- can be freely devalued by governments and central banks. This can't happen with Bitcoin because its supply is enforced by decentralized software protocol. Because of its predictable supply and scarcity, Bitcoin is better than most other currencies or commodities at being "money."