We're also discussing this here How to NOT be a victim of a sting operation

That's not how it works, and is why FinCEN issued "guidance" and administrative rulings. The most recent is here:

http://www.fincen.gov/news_room/nr/pdf/20140130.pdf


Again, that's federal not state, but realize the two are separate. States so far have not clarified the legal classification on Bitcoin. That's important. New York may be the first to do so, which is why there has been so much focus there recently.

The FinCEN guidance is federal not state, and it doesn't define Bitcoin as a currency. This charge is apparently in violation of Florida state law which prohibits “currency or payment instruments exceeding $300 but less than $20,000 in any 12-month period”.

To my knowledge no state has declared Bitcoin is currency. It hasn't been declared a 'payment instrument' either. If these people met to transfer two wheelbarrows full of grass in exchange for 30K would the arrest have been made?

We need some lawyers on this. The State/vested interests are clearly starting to push back on Bitcoin now, probably betting individuals by themselves won't have super legal defense resources.

EDIT: in fact FinCEN/Treasury just confirmed that miners and businesses that buy and sell virtual currencies purely as an investment will not be considered money transmitters. (of course, that's federal level)

Just watched. I agree completely. Nice job, Gavin!

I was really envious, though, when the question or suggestion rather came up of the role and benefit of people manipulating the inflation rate, and forced incentive to spend money (inflation/deflation etc.). At home all I could do was grit my teeth. If it was me in the chair I probably would have let them have it. Gavin was unbelievably controlled, almost hospitable to their advances. I don't think the meeting could have went better. Probably good that it wasn't me  

I like to agree with everything you said. That's why I'm concerned. If you think those with the power money provides will give it up without a fight, well let's just say you're more optimistic than I am.

Aha, you touched on a key point!

It's not Lawsky himself I'm talking about, but something bigger. What we're dealing with is political perception/persuasion which may be more important than you realize. Politicians will do what they can get away with. It's how the game is played. The thing to focus on here is the "Should businesses that accept Bitcoin need licenses to deal in the currency?" Lawsky wasn't bold enough to speak those words, but the tone nevertheless was set by displaying this prominently. It's the same reason when Congress first worded the order for this to be looked into they referred to it as "ersatz" currency. Ersatz, or inferior, before they knew anything about it.

They don't need to make Bitcoin illegal if they can control who can accept it. That's just as effective. Making Bitcoin illegal (or the equivalent) wouldn't kill it, but it would curtail the level of use it could reach in the US.

Let me give you some solid investment advice: only invest in things you know about. Asking others for investment advice is already a bad start, but if you do that at least do it with money you can afford to lose.

That being said some people have a high risk tolerance (gamblers for instance) so I'll give my views regarding this space. First, I'd say this space has the most opportunities, but that doesn't necessarily mean it's the best place to invest, if you're not a professional investor. The best way to invest here is with your own time and energy. Take time to learn all you can because knowledge itself is valuable. If you have skills invest those too. Investing in the form of your own equity stake in what's going on here is probably the best investment approach and can be done many ways.

As to the question of mining equipment or coins I'd say mining hands down. Coins are too volatile, even Bitcoin, and often require the ability to hold for long periods through downturns. Mining OTOH has different dynamics and you can sell your equipment at the least if/when things fall apart (except asics of course).

Great! Welcome to the Bitcoin community. We can never have too many exchanges.

Site looks okay so far. The word schedule is misspelled in the title of this page https://www.atomic-trade.com/Fees

Good luck!

EDIT: I would add some sort of data for people to view, though, without the need to sign up. I understand not having an active order book before launch, but get something up there as soon as you can even if it's a 'no active orders' message

Check out this video of NY superintendent of financial services Ben Lawsky on Fox Business talking Bitcoin regulation:

http://video.foxbusiness.com/v/3147952575001/regulations-coming-to-bitcoin/#sp=show-clips

His comments are actually not bad and he appears to be speaking with caution and care, but the text on the screen is disturbing: "SHOULD BUSINESSES THAT ACCEPT BITCOIN NEED LICENSES TO DEAL IN THE CURRENCY?"

Come again? The question is whether businesses, which can be mom and pop ordinary people, need to ask permission to barter/privately exchange a non-government commodity. Swap out bitcoins for pretty seashells to see how absurd it sounds. That's what it comes down to.

Lawsky seems most emphatic and concerned about money laundering, but that's pure hypocrisy. From Bloomberg Jul 23, 2012:

http://www.bloomberg.com/news/2012-07-16/hsbc-aided-money-laundering-by-iran-drug-cartels-probe-shows.html


Oh, well he stepped down. Awesome, all is okay then.

Meanwhile the CEO of BitInstant, Charlie Shrem, was arrested, accused of selling over $1 million in Bitcoin to Silk Road users who would then use them to buy drugs.


Make no mistake people. This isn't about morality or law enforcement. It's about power. Banks and other power players are held to different standards. If we the people don't assert our own rights we will simply be trampled over, while others get fines.


<--- not worried about regulators

Good point. Coinkite is pushing functional debit card use right now.

Yes, I think we'll see this in the future. The payments will probably be off-chain and authorized by an online wallet service (holding limited funds), but it will allow people to spend their coins in a practical manner.

Cold storage is a term now thought of as the safest way to store coins.

To understand the safest way to store coins you have to understand how coins can be stolen. The private key is the key to the coins. Anyone who has access to the private key has access to the coins. This means if some company uses all paper wallets but is careless about who has access to them it's probably not safe, and this can't be thought of as 'cold storage'.

Cold storage generally means not only are the private keys not on a computer with any Internet exposure, but they are typically locked away too, like in a safe/safe deposit box. As long as the private keys are printed on some medium (or multiple mediums) which will not typically become unreadable, the coins they protect are then thought to be in cold storage.

Note: addresses can continue receiving coins while the private keys are safely locked away in cold storage.

I would remind you many people to this day think Bitcoin is a scam.

At some point though that probably doesn't matter. I think Bitcoin has reached that point, and so has Litecoin.

I've posted many times why I believe some alt-coins have tremendous value for the cryptocurrency community, so I won't do it now. I will say the people only trying to make a quick profit were anticipated and are even necessary. By continuously flooding the market with coins of low value they make the ones with real value stand out and be viable. That's the reason Litecoin, for example, has a half billion market cap despite there being at least 30 other clones and 50 plus alts by now.

Ripple will rule? How much Ripple currency is there? Apparently there is no way to check, so the owners could have trillions for themselves.

Well, I'd say a pool fits the same description as a miner. When you mine in a pool you're only pooling work to have greater chance of making something, even if you must split the reward with others. The first ruling states:


I don't see how mining in a pool would make your activity not for your own purposes. It still is, just as mining actual gold in a group would be.

EDIT: an example of what could be a money transmitter I believe are miners that sell shares in their operation like CipherMine did.

No, that's not how I interpret that. The purchase/speculation can be your business, however it can only be your business, ie, it can't involve speculation/purchase on behalf of clients.

This is VERY positive overall, I believe. So far there doesn't seem to be momentum toward a fight/standoff between govt and virtual currency users. Maybe the U.S. is not quite as bad as Russia yet?  

Nice job FinCEN.

The article mentions Ripple. Does anyone know how many ripple currency units there are? My understanding is there is no way to check? Could be zillions I guess.

As usual thanks for the detailed clarification 

OP good job  

You've almost answered your own questions correctly. Let me fill in the details a bit more. First I'd recommend using Armory for offline/cold storage. It makes the process more intuitive and probably less susceptible for anything going wrong IMO.

It's not necessary to use bitaddress.org offline with linux etc. This is recommended because you're dealing with manually generating/handling private keys. Anyone with access to this has access to all the coins. If your computer has spyware or bitaddress.org is compromised then private keys you thought were safe could actually lose all your coins. By taking the key generating Javascript offline and encapsulating it you cut down the risk of exposure. Of course if the Javascript was compromised then those extra steps wouldn't help. That's why I recommend Armory which can put everything in a context users are familiar with.

Regarding generating keys offline you're basically correct. The only thing Bitcoin checks for is that a public key it is aware of (some coins went there) is accessed with a corresponding private key. However this is done with ECDSA (here is a great video explaining it) not SHA-256 which is the hashing algorithm used to mine blocks for Bitcoin.

Last regarding the possibility of generating a private key someone else has both you and DeathAndTaxes explain it correctly.