bitcoin is in a 'catch 22' where it prospers because its anonymous but it wont become regulated because its anonymous. if it became regulated the userbase would jump ship. instead it is left stuck in a 100k population only able to get small businesses onboard for miners to spend their earnings on. very hard to get bitcoin to mass market to compete alongside fiat. (yes i said compete with. not overtake or remove fiat as thats impossible)

and litecoin is just the same in regards to tax evasion, capital transfers. but it doesnt have a major desire for anonymity due to the lack of drug users. so it is less so stuck in the catch 22 bitcoin is in.

it is possible that bitcoin would get regulated. the drugs business runs off, userbase decreases. and then slowly builds up as a regulated, consumer friendly virtual currency. But that is alot of hurdles to jump.

where as litecoin is like a clean slate for the crypto world that want a proper real world alternative to FIAT (in a few decades after many stepping stones are dealt with ofcourse). never to replace FIAT as that will never happen, but to atleast work along side of fiat.

when speaking to merchants, they still have a few main objections to accepting bitcoin from the pretence of just the crypto community using their service, (ill talk about non tech savvi consumers further down)

1) easy non headache solution to getting their fiat for stock/wages
2) media propganda puts them off..
3) no loss of value if the exchange value drops from the time of product purchase to the time they get 'after hours' to cash-up and cash out of BTC.

so bitinstant prepaid card for bitcoin would solve point one and point three. and the same goes for litecoin if bitinstant made a litecoin prepaid card too. same also goes for any virtual curency so lets say, facebook credits if there was a option for a FBC to FIAT. a merchant would accept anything if it was easy to manage and there was a population demand for it.

litecoin already solves point two as there is no bad press, its just like bitcoin but gone back in time a couple years.

i never said that tomorrow litecoin would be a mass market virtual currency for consumer. it involves stepping stones. i and many have found talking about bitcoin to merchants, a hurdle(reasons above). but then slipping into the conversation, litecoin as the clean alternative and a possibility of a crypto to FIAT automated exchange to a debit card gets there interest.

lets address the regulated/consumer protection thing.
trying to get BTC regulated and removing / reducing silkroads presence is not an easy task. so isnt it just easier to start with a fresh slate and make a few notable real world businesses being the flagships for that crypto. to then encourage more business, instead of dealing with drug propoganda and go against what bitcoin is all about in the first place.

just like bitcoin when it gets to the point of non tech savvi consumers using it for wages/groceries you are right it does require many steps to get price stability and regulations in place along with other needed stuff. which BOTH currencies are not in any way, shape or form ready for the non crypto consumers to handle.

but the baby steps are to atleast get some businesses to adopt Litecoin for us tech savvi, crypto lovers to spend our mining earnings on, just like bitcoin done a couple years back. the businesses themselves would pay the crypto instantly to a debit card at a fixed value using the live price of the time of product purchase/crypto deposit to debitcard provider.
Meaning they are safe from large volatile changes because they never keep the crypto in their hands for long.

the difference is that if a crypto currency was to become regulated i know those druggies and anonymous loving users would not want it to happen to bitcoin because that is what bitcoin is all about, anonymity. so litecoin would be a positive solution to them. they could continue doing what they have been doing for the last couple years without their fears of regulation and enforcement agencies.

basically learning from bitcoin, and overcoming objections with actual solutions for both the anonymous lovers and the businesses.

but then again i am talking about litecoin on a bitcoin forum so i take favouritism from anyone with a pinch of salt as its expected.

im not sure if charlie thinks bitcoin is going to be the mass market thing in a few decades. or they think both wont ever get beyond the niche market of mining earning being spent meaning no non tech savvi consumer use of it. or if they just don't want anything to do with litecoin purely on bitcoin favouritism.

but it doesn't sound like charlie likes litecoin much.

i will just add this to my lengthy waffle. The 50+pages of troll statement about the foundation objectors.. i understand the thread you think i refer to. but i did not limit my numbers to just that single thread. i count many threads with objections to the foundation which total 50+.

due to my reply being off topic to the good work bitinstant done at las vegas ill just link in my reply. to avoid sidelining the main topic.

https://bitcointalk.org/index.php?topic=121480.msg1309971#msg1309971

i advocate ANY crypto for many different reasons, and i salute bitinstant because of the ideologies as an alternative to FIAT payment systems.

i think half of the posters did not read the full article and are trying to grasp how to legally classify bitcoins compared to digital version of fiat so here goes...


if the value in digital form represents the same numeric value (minus commissions/fee's) as the FIAT payment made to obtain it, and also the digital balance uses the FIAT symbols £ $ Euro etc then this is called 'E-Money' which is regulated by financial institutions. EG paypal, moneygram, online bank account balance
if the digital numeric balance has no obvious comparison to the FIAT amount paid and does not use FIAT symbols this is called virtual currency.  which is not regulated by financial institutions. EG 23Bunny points for $1 or 1BTC  for $11

e-Money regulated. Virtual currency not regulated. they are separate classifications and not the same thing.

the virtual currencies are then divided into sub categories depending on their use and impact to real world markets
type 1 (least impact) where you can purchase points but not redeem them back for FIAT. EG facebook credits, microsoft points.
type 2 where virtual currencies can be traded back and forth for FIAT
type 3 like type 2 but also used as means of trading real life products and wages.

if you skip down to chapter 4 of the PDF :THE RELEVANCE OF VIRTUAL CURRENCY SCHEMES FOR CENTRAL BANKS it has a few things to note about it.

regulations do not affect the bitcoin community by controlling what you do with coins to purchase products. so if you buy gold. you are 100% free of income taxes (but the sellers value stil incorporates sales tax if they are a legitimate business that requires sales tax in that country).

BUT if you want FIAT for your BTC then regulations do come into play once a fiat request happens or when fiat exchanges hands. which is where MTGOX, Bitinstant have to be regulated. but the guy selling alpaka socks for BTC does not have to be regulated.

they cannot find enough evidence that it is a ponzi scheme due to the fact that there is not one single entity in control of it to in human terms. close the doors and run off with all the FIAT equivelent of all the coins.

but they can class it as high risk due to the monopoly where there is a lack of multiple main payment gateways in and out. basically bitinstant mtgox holding the largest value exchange with a few dozon very small in comparison exchanges.

that due to this if a majority stake was to cash out it would easily destabilise the market.

EG the 5 people with other 300k BTC could take a huge portion of the FIAT market capital. as noted by the summer 2011 events that made BTC shrink to only a few cents

hoarders are mainly people with day jobs to pay the bills so have no great desire to spend the coins just yet

in response to robkohr statement
are you kidding me?

lets say there is 11mill coins in circulation. and hoarders keep 10mill of them. all the other users will fight for the remaining 1 mill of coins left in the ether. raising their bids to get those elusive coins, causing a price increase.

because bitcoin cannot buy a loaf of bread or a carton of milk its not like it would be hard for people to adapt to higher prices seeing as value can auto adjust due to live pricing API's used in sourcecodes of websites.

basically if this week $10 gives you 1 bitcoin which is worth a viagra pill or other drug. in a couple years that $10 only gives you 50,000 satoshi's which still equate to a pill.. so all them pill pushers still get their fiat value and same amount of pills no matter what the btc price does. so traders don't lose out

and for the hoarders, by not trading them, their investment grows.. but by spending them they would dilute the demand causing a prices drop. so its always best to hold and wait.

so how is hoarding bad??

why do you think the rich guys are rich.. because they accumilate and they hold. those with million dollar a year salerys don't spend that million dollars each year. maybe spend half keep half. but those on minimum wage have no choice but to spend their income.

the other thing to think about is if everyone cashed out via bitinstant instead of holding them. bitinstants 'reserves' will empty. so say goodbye to the $110mill that is floating around in bitinstant, moneygram, mtgox, BTC-E and other reserves.

if all that is left is $10k to represent the 11mill coins then the value of a BTC would go down to under 1c a coin. so i ask again

how is hoarding bad??

didnt the bitcoin euro convention 2011 mention going to the restaurant at the end of capitalism.

EDIT
just googled it:

http://www.bitcoin2012.com/speakers
Joerg Platzer (founding member of the Berlin based Crypto Currency Consulting Group) finds a crypto-currency based financial system would be the second best financial system we can imagine. He loves Bitcoin to bits. That's why he accepts it at ROOM77, the restaurant at the end of capitalism. His talk is on certainty. Probably.

maybe because cash only means they have to live nearby to hand you the cash. id suggest. "local meet only bring cash in hand"

read the other threads, as there are too many drug dealers loving the anonymity of bitcoin to ever let bitcoin become regulated.. EG the 50+ pages of trolls objecting to the BTC foundation, the pages on the economy subsection hating the identification AML/KYC regulations that MTGOX and bitinstant NEED to follow. its soo much easier to start with a clean slate such as litecoin. instead of unsuccessfully pushing drug dealers away from bitcoin.

let druggies continue to use bitcoin after all its their money, no one should tell them what to do with it. let them live in their blissful existence. and allow the rest of us more reputable people concentrate on getting A cryptocurrency to mass market to counteract the FIAT ties that bind our hands.

by overcoming merchants main objections to handling propoganda'd media press of bitcoins (ponzi, silkroad reputation). It would get a lot more merchants accepting crypto sooner. which would then ripple onto merchants taking the risk and adopting bitcoin too.

i do understand money. but u dont understand the world and statistics.

so a quick lesson..

FIAT money was developed for the trade of food and provisions like horseshoes, candles, etc.. u know the morally accepted stuff.. (couple centuries later) drugs only play a small part of it. if you do that statistics research you will see under 2% of money is directly linked to a drugs trade. and 10% of bank noted are tainted with drug residue.

that is the general statistics.. those who actually do drugs will find all their notes get residue on them from their mucky paws touching them. where as a retail store in a upperclass neighbourhood may see only a few percent taint. so don't quote me on the last paragraph as any statistic has to be put into context.

so thats the reality. FIAT has an acceptable taint because its a small ripple in a very big pond compared to the many legitimate uses it has.

but bitcoin has been noted as atleast 30% of trades have a near or direct link to drugs trade. and a higher percentage then that is tainted even after passing hands many times for legitimate trades after the fact.

bitcoin doesn't have big uses to buy food, clothing, cars, pay wages, utility bills. so the dominance of drugs within bitcoin is high, to high to ignore.

if you are worried that when you cash your bitcoins into bitinstant for FIAT. a taint analysis will show the drugs trade and you lose your earnings. here is a perfect solution for you.

help push bitinstant to do a 'litecoin to fiat' service then simply trade your BTC for LTC and then give bitinstant your LTC. that way 0 taint as it is a totally different blockchain...

no need for mixing services or putting vulnerable backdoors into clients for ALICE clients to steal. just swap it for a different currency.

and secondly if you want to hold the stance that all money is tainted then there is no need for programs to mix your coins, coz everything is dirty.. (in your mind)

glad we both have a sense of humor.

i am not someone to wants to police bitcoin. so lets see how litecoin goes in the future. see you in 2 years time to compare litecoin to what bitcoin is today.


"Litecoin: silver carbon to Bitcoin's gold"

many more uses worldwide for carbon, and oneday it can be made into diamonds lol

as i said i aint saying stop silk road to make bitcoin clean.. so i wasnt dictating what people do with their money. its their own business..

but if a crypto has any chance of going mainstream then a drugs cartel being the main trade of it, is not helping.

so all those drug traders for pleasure or medical use, continue to use bitcoin.

while many of us get litecoin promoted. as i see that as the most fair way to win the arguments about anonimity vs legitimacy

lol spoken like a true drug user that only sees if for their selfish purpose and only ever wants to use it for that purpose..

litecoin is another crypto that has just celebrated its first birthday. its being traded largescale on BTC-E where other cryptos and virtual currencys have slipped off of BTC-E's radar. EG solidcoin.
litecoin is still fighting strong and many users all have the same mind set of learning from bitcoins mistakes. so far the strength of litecoin to bitcoin trades has prompted BTC-E to add russian and Euro currencies into the options to by. instead of just USD. thus expanding Litecoins reach.

in relation to learning from bitcoins mistakes by getting something big to the litecoin market, worthy of alot of press coverage to advertise litecoin. BUT, (big but) instead make it a LEGAL merchant so it is not drugs as its flagship market.

Imagine a domino's pizza TV advert, advertising 10% discount if paying by litecoins 20 times a day across with world. good product, good press, positive rep.

bitcoin has a supposed 100k population but with a smaller population for regular users.

for instance this link http://bitcoinstatus.rowit.co.uk/countryHosts.html shows that a year ago there was 75k of regular users. which now seems to be only 30k..

bitcoin isnt currently a success because of silkroad. but WAS a success due to silkroads publicity. Now its its' own downfall.

many passionate people wanting bitcoin to expand have tried pushing it to their local real world legitimate merchants. and end up returning home with head banging against a brick wall because merchants mention the propoganda of ponzi's scams and drugs.

so why would litecoin be a zombiefied sheep and become a drugs pushers best friend. i have nothing against stopping silkroad my actual mind set is to leave bitcoin to the drug pushers. and start afresh with lean, clean fighting machine known as litecoin.

none of the 'going mainstream' matter much to drug users beyond having more ways to launder tainted coins. so i wont explain more. enjoy your drugs, stick with bitcoin. i and many others will divert our passion of a crypto competing against fiat by using litecoin.

hope you enjoy buying your weed online so you can hide from mommy and daddy by not having to trawl the streets for a shady dealer. enjoy ur mind altering drugs. take care now. bye

another way to ruin any chance of getting bitcoin some clean legal rep' to go to mass market.

by making everyones coins dirty......

great for the druggies in the sort term. but not great for any expansion plans into real world markets. not great for bitinstant when every single coin they receive has taint. and banks stop dealing with them. causing all legitimate FIAT conversion services to disappear..

causing bitcoin to be harder to buy into or sell out of.

causing bitcoin to move back 2 years..

atleast think of the wider picture for the whole community and bitcoins future. not your own personal selfish desires to hide your drugg obtained funds.

all i can say is make ur own client and let the druggies swap between themselves and those that dont care about taint that have clean coins can join the mix only if they are given a good profit to outway the risk.. but in no way, shape, or form should this be adopted as a standard practice for all clients and all users of bitcoin.

replying to OP first post.

back in the medieval times people could easily mine gold with just a bucket and filter out all the minerals to keep the shiny stuff.. now'a days you need expensive machinery, experts in mechanics, explosives and geology...

so this is the natural progression of mining a limited resource.

so trade in your bucket (GPU) for a box of TNT and a drill (FPGA) and if you have the money an excavator/ gold wash filtering machine(ASIC).

i understand you want to keep your bucket so u can mine gold, and know it has other uses such as making sand castles or fetching water from a well. but times move on. gold miners wouldn't take their kids to school in a excavator, but they do see the benefits in having one.

very well written especially then making a point about separating the term electronic money from the term virtual currency.

if you did not already know electronic money is displayed as the FIAT amount using FIAT symbol so it remains regulated as it clearly represents a FIAT equivelent EG paypal balances. where as virtual currency can be points, credits or crypto that does not look anything like a FIAT balance.

as long as the AML/KYC stick to their electronic money and paper FIAT and leave virtual currencies to fend for themselves and adopt their own best practices it will all be good.

nah daddy will just procreate another spawn if satan.

+2
Very grateful for the update. Especially with all your efforts in the legal world concerning banks. and also your work at for instance Las Vegas recently and other financial venues. very much appreciate the time you guys put into bitcoin publicity.

can we also have an update on the prepaid card for withdrawal. its been a couple months. so even if you cant give a deadline date. can you atleast indicate if your stuck at 10% of the way, 50% or nearing 90%.

i have many uses for this. predominantly getting real world merchants to get a card from you so that they can advertise the linked bitcoin address in their shops and instantly accept bitcoin, knowing they will have their FIAT to pay wages and buy stock the same day (within one bitcoin transaction confirmation if i believe what i have read).

i make this next point because if merchants who don't want to keep bitcoins but desire their FIAT, will eat at the FIAT pot.

what protection will you have to avoid everyone just cashing out all their coins. and no mega purchasing of coins to reimburse the FIAT pot. Because what we all don't want to happen is, for instance 10k of people who only withdrew 200 BTC each(within whatever legal AML/KYC limits), where your left holding 2million BTC and there only being a small pot of FIAT left to represent BTC value on the markets. making BTC less then a cent each.
hopefully you will have super strict limits on spending both to prevent value dumping and of-course AML concerns.

hopefully at least on smaller accounts under the KYC threshold, (not requiring photo ID). Putting a limit on one card per household/address. would help both dumping of large amounts a single user has in one go, to avoid rapid drop in BTC value. and also going beyond what AML guidelines require of you.

separate question: a few people have shown interest and contacted yourselves about adopting litecoin, any update on this? again predominantly a litecoin address linked to a prepaid debit card, but secondly a FIAT to litecoin service.

i am a litecoin fan and if any of the your problems/delays with the card-processors are to do with the drugs cartel propoganda. then maybe litecoin debit cards would be the solution. as they haven't been stigmatised (yet, hopefully never)

hopefully next years financial get-togethers will have a litecoin logo along side bitcoin on your advertising. (me dreaming)

yep.. paypal is a division of eBay incorporated.

my point was that the paypal division (purely the payment gateway) wont get killed off. because of the profits of its Ebay division. you cant kill the kid because daddy is protecting it. basically.

the hard part is even though users can verify it has value at the time of purchasing there is no protection once the transaction is complete, from the seller spending the card and also keeping the bitcoin.

if for instance you adopt a reputation scheme where funds are not transmitted until positive feedback is given. there is no way of knowing after the fact who used the balance.

EG buyer receives card, spends it then leaves negative feedback saying non receipt and balance of card now zero. which means they get the bitcoin back. leaving the seller at a loss.

thats why giftcards should remain in the FIAT trade system as there is atleast chargeback rules which if used ethically would protect actual losses.. bitcoin has no protection.

and dont get me started on parcel tracking..

its possible to have an envelope get it posted using a tracking service. claim that as your proof of delivery. but when the buyer receives it and opens it, all they find is a letter saying:

"ha ha sucker, by reading this i have given proof of delivery, so i get your coins. you loser!" or something to that respect with no card in the envelope.

you guys do realise something though.. paypal doesn't make its money.. eBay does.

think about it. chargebacks from banks cost paypal money. verifying accounts by sending those 2 random amounts of pennys costs paypal money. sending cash to your bank costs paypal money.

its eBay that makes the money. so as long as eBay is used by the majority of online traders giving them all the listing fee's final value fee's etc. Then paypal wont disappear as it has and will continue to be funded by the profits of its eBay division. so if you want to kill paypal you have to kill eBay.