Jesus christ what was that?  

I apparently put a sell order at 3.4658 last night thinking that was about where the spike would go if it went above 3. Let's find out just how far off I was.

My offer is withdrawn.

Demonofelru is just shy because I totally skinned him on a call option not too long ago---and he should be, because I'm worried about getting skinned too!

I won't do 1000, but I'll do 100 at a 0.45 premium (so $45). I have the bitcoins now and can put them in escrow if you like. This is my true valuation---my expected profit/loss from this deal is just about 0---so you won't get a better offer from me unless the market changes.

I'd assume that selling bitcoins for more US dollars than they're bought for is subject to capital gains tax. But then, selling them for less than they're bought for is subject to a tax credit for capital loss. Mining would probably be treated as self-employment. You could declare it if you like, but be sure to write off your mining rig as well.

Disclaimer: I'm just some guy on the internet, don't listen to anything I say.

Our contract, for posterity.

-----
demonofelru ("Writer") agrees to sell SunAvatar ("Buyer") five (5) contracts, at a price of 15 US dollars per contract, text as follows:

At any time on 2011 July 31, UTC ("the expiry date"), Buyer may at his option sell 100 bitcoins to Writer at a price of 2.10 US dollars per bitcoin. Writer is obligated to accept this price. This obligation does not hold on any day before or after the expiry date.
-----

Buyer:
SunAvatar
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Writer:
demonofelru
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I tried to sell tutoring here some time ago and got zero responses.

I might buy some candy if it was hard to get around here. Where do you live?

Could be spectators refreshing 100 times per second.

Could be people repeatedly checking to see if their coins have arrived yet so they can sell those puppies now.

(I'm still holding---I have never failed to regret selling my bitcoins.)

I'm interested in setting up a pool that will pay out bounties to those who find and publicly reveal the offline identities of scammers and thieves. One of our community members recently lost over 1,000 BTC to a hacker. Fortunately this person seems easy to track down, but what if they hadn't been? Since the legal status of bitcoins is still open in every jurisdiction in the world, it is entirely possible at the moment that you can have your life savings stolen with no recourse available. I'd like to do something to remedy that situation.

Contributing to this pool will be an act of charity, in the sense that bounties will be offered on behalf of victims regardless of whether they have contributed. But contributing will still be beneficial to you if you're interested in the growth of our small community. Making life difficult for thieves will keep many of them away altogether, as well as easing the minds of people nervous about trading in such an "unofficial" currency. Businesses will enter more readily, trade will be faster, and more people will be willing to invest. Your contributions can be seen as an investment in the security of the bitcoin-based economy.

There are two major questions I have. One is how to determine policies on things like how to set bounties, when to offer them, and when to pay them. I could just declare that I'll figure that out myself, but then I'm basically saying "Give me your money and I'll decide what to do with it." I think a better idea would be to create a tradeable entity on Nefario's exchange, with one share. (Not exactly a corporation, as it will have no fiduciary duty to shareholders and probably won't pay dividends.) Then we'll leave it to shareholders to elect folks for the actual work.

The other question is legality. Could this be construed as vigilantism? I'd assume it's okay as long as we require bounty hunters to provide some assurance that they haven't violated any laws to obtain their information, but this will probably vary by jurisdiction. (I should note that I actually do expect them to stay within the law---I don't want people breaking the systems of innocent third parties to invade their privacy, even if it's in a good cause.) We may need to hire a lawyer or twenty to make sure we're in the clear.

At the moment I'm not looking for donations, just statements of interest. If you feel you're interested in contributing to such a thing, whether by donating or buying stock or collecting bounties or helping me write a charter, please say so.

No way---I'm not spending any more money on mining hardware. Next time I have a few hundred bucks to bet on bitcoin, I'm just buying the things.

The way this is going is making me think biddingpond needs to switch to reverse auctions.

I bid 10 BTC.

My card is overclocked like never before right now. This will probably be my last grasping attempt at solo mining.

No, it's definitely $2.10---I keep thinking it's $2.00 because that was what I had in mind when I started the thread (as its title indicates), but I changed my mind in the process of writing the first post.

Sure, I'll explain it. (I see demonofelru beat me to it, but maybe two explanations are better than one.)

I am buying a put option. This is a contract that gives me the right, but not the obligation, to sell bitcoins on some later date at a previously agreed-upon price, called the strike price---in this case, $2.10 per bitcoin.

This price isn't very good for me at the moment, but there's no saying for sure whether it will be on July 31. If the market price is below $2.10, I'll probably exercise my options and make the sale, and if it isn't, I probably won't. So I win either way---my bitcoins are basically insured against loss of value.

In consideration for this insurance, I'm paying a premium up front---in this case, $0.15 per bitcoin. demonofelru is taking on a risk and has decided this is enough to make it worth his while.

In this case, the later date, or expiry, is July 31. "European style" just means that I can't exercise my options early, I have to wait until July 31 and decide---compare to "American style," where I can exercise my options at any time until they expire.

Even if I trust a charity to do good with the money they receive, I don't really trust them to do well with it. If I'd spent the last month mining for my favorite charity, they would have received about 200 bitcoins---and probably sold them as fast as they got them, for a total of something like $195. Since I'm one of the bulls, I'd rather hold off on donating until those 200 bitcoins are worth something like $20,000.

But I don't think this is a bad idea to get attention from people currently giving their cycles to fold@home, etc.

Good work, hippich! This leaves me with an interesting question: Do I now owe you 10 BTC for identifying your own thief? I'll go with whatever the community says, but I'd prefer to make it my first contribution to a pool for paying similar bounties in the future, which I may start later today. Thefts like this will only become more common as the community grows.

@demonofelru: Sounds good. I'll take up to 500 BTC worth (making a $75 premium), as long as you're willing to let me exercise only part of that. (The only way this could work against you if bitcoins are simultaneously low-value and hard to buy, which seems unlikely---but I'd like a fully general hedge.)

I'm low on Mt Gox dollars, so the easiest payment method for me will be ACH push. Send me a message  letting me know if this is acceptable. I may not answer for a while since I ought to be working right now. 

An interesting sidenote: We are basically agreeing that there's a 7.5% chance Bitcoin will be worth less than $2 on July 31. I said 5.5% chance before and folks thought that was too low. Does this seem right?

Also interesting, to me anyway: With the closing of this trade I have officially broken even. 

Sorry to hear about the theft. I've got an idea:

I will pay would have paid (see below) a bounty of 10 BTC to whoever finds and reveals the identity of this thief (as in real name and address), as long as you aver that you have not violated the laws of your own territory in the process. You must provide enough evidence to convince me personally that you have correctly identified the guilty party.

This offer does not apply to you if you are the thief or are in collusion with the thief.

So that I don't have to hold my coins in reserve forever, let's say this offer expires on July 31. I may renew it then or not.

If others would like to contribute to the bounty, please do so! Feel free to split this off into a new thread if it's more convenient that way.

My original offer is getting better: exchange rate has hit all time highs in the last hour. I'm revising my "buy it now" offer to 0.15.

ribuck, I don't actually have 500 BTC at the moment, but I may still take 500 in options as long as I can exercise only part of that if necessary.

I'd actually suggest making the transaction minimum and fee user-configurable, with only the default setting changing with version updates, so that we never have to discuss this again. You can announce a small transaction with no fee if you want, but if none of your adjacent clients will accept it you're wasting your time, and if the fee is below average you may have to wait a looong time for it be be processed. (I'd expect every client to accept any transaction once it's already in a block, however.)

If 0.001 is too low right now, 0.002 ought to be okay. If Paypal charged a half-cent transaction fee I don't think anyone would be grumbling about it.

Actually---at the moment, if a <0.01 transaction with no fee is announced, what happens? Is it rejected by the network altogether and not passed on, or is it just left unprocessed indefinitely? I suspect the former, but if it's the latter then making fees configurable shouldn't cause much chaos.

Is there any good way to measure the number of people currently using Bitcoin?

I suppose, to make the question unambiguous, I'd have to form an operational definition of "using". I'd include at least

• buying or offering to buy bitcoins;
• offering to give or accept bitcoins as payment;
• holding bitcoins for their value;
• generating blocks;
• keeping a balance at some bitcoin exchange.

I'd exclude people holding bitcoins because they downloaded the client last year, mined for a few weeks, and then forgot about it---though presumably most of them will remember if they ever hear about it again, so maybe I shouldn't.

I was considering getting a lower bound based on the number of members here who have made a post in the last four months or so, but there are no advanced member search options that I could find. Maybe an admin or someone could scrape the database for that information.