Bitcoin is the digital equivalent of gold. Is gold a currency? No, gold is neither currency nor money. This is what Bernanke said - http://www.youtube.com/watch?v=jyTBhsEliUE
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No one settles debts (IOW, pays for stuff) with gold; in that sense, its not a currency (anymore). Bitcoin arguably is. It is used to pay for goods and services.

Ive posted this elsewhere, but I think it deserves its own thread. I bumped in to this today:

http://www.fbi.gov/charlotte/press-releases/2011/defendant-convicted-of-minting-his-own-currency

Its about a US citizen who is convicted for minting his own currency. Granted, its debatable whether bitcoin is a currency, but there is certainly a case to made for that, and while not a given, its entirely possible a court would rule that way. Then read some of the argumentation of the US attorney, its pretty damn scary:

It is a violation of federal law for individuals, such as von NotHaus, or organizations, such as NORFED, to create private coin or currency systems to compete with the official coinage and currency of the United States.
[..]
“Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism,” U.S. Attorney Tompkins said in announcing the verdict. “While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country,” she added. “We are determined to meet these threats through infiltration, disruption, and dismantling of organizations which seek to challenge the legitimacy of our democratic form of government.”

Domestic terrorism? Wow    Time to reread some of that anti terrorism legislation.
Also the references to infiltration and disruption are at the very least... interesting.

IANAL, but I think its the creation of a competing currency thats illegal for a US citizen. Miners reserve your corner jail in Gitmo now .

Granted, in theory maybe it could, but first it would require legal "approval" of bitcoin or other electronic currencies, and thats not likely going to happen when the current legislation in most countries explicitly outlaws it. Let me quote from a link I published earlier:

http://www.fbi.gov/charlotte/press-releases/2011/defendant-convicted-of-minting-his-own-currency

Particularly the reference to terrorism and what that allows under the patriot act, should worry anyone interested in bitcoin.

Moreover, bitcoin knows no national borders. Since its trivial, and potentially untraceable to send bitcoins abroad, legislation in any single country will likely have very limited, if any, effect on rampant speculation happening everywhere else.


Because it could be  extremely expensive. With fiat currency this is paid for by the taxpayer (or through inflation), who indirectly benefits from a stable currency. I dont see how you would solve this for a nationless currency. Unless you are fantasizing of a future where bitcoins become legal tender. Thats simply not going to happen, but even if it would, how much of the popular attributes of bitcoin would remain then?

It already is illegal.
http://www.fbi.gov/charlotte/press-releases/2011/defendant-convicted-of-minting-his-own-currency

The question is wether bitcoin is a currency, legally.

If bitcoin is outlawed, having an exchange in the caymans wont make your transactions legal, Im not even sure it would protect you in any way. Most of these tax heavens do share financial information with our governments when a crime is involved, no?

As for whether bitcoin is already illegal or not, is a good question that can only be answered in court. There are good legal arguments to be made either way.

And you have no way to regulate it or even tax aspects of it to limit speculation to a point where its helpful rather than harmful. No central banks to dampen price volatility.  The libertarians consider all that good, as they believe free markets will regulate themselves, but tbh, I think bitcoin is proving the exact opposite by turning in to a casino rather than a viable alternative currency.

You might as well ask wallstreet to "please stop". Ask all you want, you know its futile.
For wallstreet at least you can ask politicians to force wallstreet to stop (hey, you can ask at least), for bitcoin however...

But this ruling isnt about banning bitcoin. Its about requirements for operating a financial service company that holds your Euros (or swiss francs or whatever).

Thats why I said, to some extent.

Why? Its not because banking laws in these countries protect (to some extent) banking privacy that they would have no regulation of financial institutions. I wouldnt be surprised if in fact regulation would be more strict and it would be more difficult to operate there than, say france.

True if you only look at your house. however, electric heating is inefficient if you look a the total picture, the losses on conversion and transport of electricity from the plant to your house are substantial. That inefficiency is also part of your bill.

So is (at least 90% of) our fiat currency. Its less distributed, but good enough to fit your definition

cur·ren·cy  (kûrn-s, kr-)
n. pl. cur·ren·cies
1. Money in any form when in actual use as a medium of exchange, especially circulating paper money.
2. Transmission from person to person as a medium of exchange; circulation:

Sounds like bitcoin to me. Perhaps more so than fiat currency since most of those transaction dont happen from person to person, but through what you call a "distributed accounting ledger" at the bank.

Do you really care?
0.01LTC=$0.00007

If you can make that work, it would indeed be a very good thing, as you would separate the currency from the gambling, and put the risk of currency swings where they belong, in the casino.

I just fear it will be too expensive to be practical to hedge against such enormous volatility. If you look at mature commodity markets with more stable prices, with ever increasing speculation, price hedging to actually protect your business form price swings is getting less and less common, because the prices are so high. For a currency that may be different, and perhaps less of an issue, since the absolute value of it is not important, but Im still skeptical.

Just a small headsup for fellow headless linux miners. Ive only just come to appreciate the power of "screen".

What I already knew, and I think most know, if you log in to your machine via SSH, you can attach and detach sessions with screen; so for instance, from your windows machine you open ssh session, you launch your miner in a "screen", detach it, and you can shut down the ssh session and windows machine, the miner keeps running. From any other session or machine you can simply reattach the screen to monitor it, or change settings or whatever. Just like you would with VNC.

But now that Ive started to read the man page, it doesnt exactly stop there. You can do amazing things. You can have "screen" monitor the screen (*) for inactivty, you can do split screens and a host of other useful things. If you want to know it all, "man screen" or go here:
http://www.softpanorama.org/Utilities/screen.shtml

Here is screenshot of a putty session where Im running cgminer, top and a litecoin cpu miner in one window:
https://i.imgur.com/LlRU3.png

(*) okay, you may have to read that twice lol.

It isnt (AFAIK), but the client is not an executable, its flash based. Its the exact same software BTConTilt used to use. While Im not a fan of flash, I wont avoid using it all costs either.

That said, if someone is going to setup a bitcoin backend to PokerTH (which is oss), then Ill switch there.

To be more precise, if it were not for the loss of the speculators. Yeah the casino makes a profit on the roulette too, after all, exchanges and casino's provide a value added service, but not the gamblers.

Dont get me wrong, I dont think you can blame them, or enablers of services that empower them. You cant expect them to go against human nature and seek a profit if you believe in capitalism, so the problem Im afraid is more fundamental: without any possibility of regulating or taxing, I dont see how bitcoin is going to get out of this viscous circle of volatility, but it will be interesting to watch.

I do fear for bitcoin to have a future as a trade facilitating currency, rather than as casino chips,  someone is going to have to come up with a bright idea for bitcoin 2.0.

The amount of actual trade by merchants in the bitcoin economy is completely neglectable compared to the amount of speculation.

If you read my other posts, you would have noticed I fully realize the value of speculation for merchants as long as the trade volume by speculation doesnt completely dwarf the actual economic activity. What we are seeing now in bitcoin is almost exclusively speculation, and the overwhelming majority of that doesnt benefit anyone (other than the speculator that placed the right bets, at the expense of the speculator that made the wrong ones). All of that is no profit to bitcoin, its a net loss because of the excessive volatility it creates .

Any buys or sells by speculators from merchants cashing out or to customers cashing in, those are valuable. Speculator to speculator transactions, which is like 99.9%, are not.

Bitcoin speculation brings no profit, its a zero sum game. whatever you win, someone else loses.
Its as productive as a roulette table.