Yeah it's definitely not the USD
Actually the strongest fiat currency is indeed the US dollar, the de facto reserve currency of the world. If it was not the strongest, it would buy a lot less than it does now. This is well known to economists. TonyT |
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The Empire (governments, collectively) strikes back! One is attempting to tax bitcoin (Japan), while the other to regulate it (with an eye towards tax or 100% transparency). TonyT http://www.bbc.com/news/technology-26538378 11 March 2014 Last updated at 21:39 New York regulator plans 'regulated' Bitcoin exchanges http://www.bbc.com/news/business-26478059 7 March 2014 Last updated at 02:15 Bitcoin not a currency says Japan government Japan's government said Bitcoin is not a currency but that some transactions using the virtual unit should be taxed. |
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Would you use or trade bitcoin if it was illegal? See the below story about how due to Mt. Gox troubles, regulators worldwide are thinking of regulating bitcoin. It's the thin edge of the wedge. Now, Google "Zerocoin" and learn how it is designed to be completely anonymous (or take it by faith for purposes of the poll). Keep in mind that bitcoin is pseudo-anonymous, meaning it protects your privacy but governments can, if they devote enough resources and a bitcoin user makes enough trades, figure out who you are. Given the above, would you trade in bitcoin if it was illegal? How about Zerocoin(ZC)? Respectively? Vote Y/Y, or N/Y etc, with Y/Y being Yes I would trade in bitcoin even if it was illegal and Yes I would trade in Zerocoin even if it was illegal. Rationally, there should be no votes for "Y/N", if you think it through, unless you have a blind faith in bitcoin since you are an investor. ;-) TonyT http://dealbook.nytimes.com/2014/02/26/japan-studies-regulation-of-bitcoin-after-mt-gox-goes-dark/?_php=true&_type=blogs&_r=0February 26, 2014, 8:40 am Now, Nations Mull the Ways to Regulate Bitcoin |
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Whether the answer is ZeroCoin or something else, I think that we have seen that there are enough problems already with the Bitcoin protocol and approach to mining that something else may be necessary to protect a buy in from loss due to government efforts to seize or trace funds, scams, and volatility. There's no question in my mind that there's a tremendous need for an anonymous digital currency. My investment in the protocol is to push the bleeding edge. Get more people into this to try it out, find out what works and what doesn't, then
Ethereum is, in my mind, a great evolutionary step forward in digital currency. However, putting everything behind the Bitcoin brand name is a strategy that I don't entirely agree with. For the time being, I think that we need a whole marketplace of altcoins that employ and different technology and different ideas.
I agree. And I agree with Dalmar that anonymity by black marketeers spurred the creation of bitcoin, sort of like porn spurred the development of the mainstream internet. Follow the money... I see a bright future for Zerocoin, and a not so bright future for bitcoin, especially after the Mt. Gox fiasco and impending regulation, see below. TonyT http://dealbook.nytimes.com/2014/02/26/japan-studies-regulation-of-bitcoin-after-mt-gox-goes-dark/?_php=true&_type=blogs&_r=0February 26, 2014, 8:40 am Now, Nations Mull the Ways to Regulate Bitcoin |
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What comes to mind is doing a simple Caesar cipher, see http://en.wikipedia.org/wiki/Caesar_cipher for more information. Though not fool proof, if you pick a simple key phrase that you can remember (like "BitcoinIsCool" for example) it will be difficult for anybody, even with the private key that is encrypted, to make money off you without a supercomputer and your thoughts in mind (that is, knowing you did a Caesar cipher). Just make sure to practice reverse engineering the encrypted private key using pencil and paper (after you do it say three or four times it should be automatic, and practice it once a year so you don't forget), and, by all means, don't ever forget your key phrase (or lock in under another Caesar cipher, lol!) TonyT |
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As we all know by now, bitcoin is not really anonymous (though I agree it's close). But Zerocoin is. And Zerocoin will kill bitcoin, you mark my words. Excerpts from a blog on Zerocoin below from The Economist. See link for full article. TonyT http://www.economist.com/blogs/babbage/2014/01/cryptographic-currency Babbage Science and technology PreviousNextLatest BabbageLatest from all our blogs Cryptographic currency Washing virtual money Jan 26th 2014, 15:55 by G.F. | SEATTLE MATT Green would like you to think of Zerocoin, a Bitcoin-like alternative currency in the process of finalising its specifications, as a bulletin board in a shared space—like an office tea room. Pin a ten-pound note to the board and you may later remove any other similar note from the board so long as you can prove that you pinned a like amount at any previous time. Such a pool of cash would launder a transaction, disconnecting the serial number on the note you pinned from the one you claimed. Bitcoin was designed, in part, to ensure complete and permanent transparency about each transfer of value from one party to another, while uncoupling it largely from the concept of an independent identity. Researchers have shown it is possible in many circumstances with the current version of the common Bitcoin software code, widely used on servers and client software, to track transactions well enough to group them by the parties engaged. Tie that to an exchange, which converts legal tender to and from Bitcoins, or a wallet service, which stores the coins on behalf of members, and external authorities could issue warrants and finger individuals. Dr Green and three colleagues at Johns Hopkins University—Christina Garman, Ian Miers, and Aviel D. Rubin—released a paper in April 2013 that charted a different path relying on zero-knowledge proofs (ZKP). In Zerocoin, originally proposed as an extension to Bitcoin that could be incorporated into the currency's basic protocols, a Zerocoin is minted by a party who creates a unique serial number for a coin and then generates a random number. The two numbers are combined with a cryptographic function called hashing that is effectively impossible to reverse: only the possessor of the serial number and random number can produce the resulting hash. Dr Green explains that this proof gives no insight to other parties as to which coin is possessed by the owner even though the serial number has been revealed. The random number remains private and cannot be deduced. But because the owner knows it, the ZKP provides full assurance to the rest of the currency ecosystem of that ownership as all other parties can duplicate the ZKP without knowledge of that secret number. "We are proving to you that we are talking about something that is in the set of previous transactions," says Dr Green. Dr Green says he has no particular political agenda for Zerocoin. Instead, it's the academic delight of perfecting a system which takes Bitcoin's pseudo-anonymity into something approaching full anonymity. His group wants to sort out now how to fairly administer the early generation of coins and the like, but "if people want to go a different direction with it after it's out there, that's fine." Once the genie is out of the bottle, Dr Green doesn't plan to retain the stopper. |
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Once I get my first .1 Btc, what can I do to get what I have to grow hopefully grow into 1 BTC.
It is people like you who are driving the bitcoin market more bullish. But beware of regulation: it will doom bitcoin in the long run, but in a way regulation is necessary for bitcoin to become mainstream, if you really want it to be a payment system and not just a black market currency or vehicle for speculation. Bitcoin = bitcon in the long run! :-) TonyT Bitcoin “will eventually be made as a payment system, I think, to follow the same standards as the other payment systems, and that will probably be the end of them,” Dimon said Jan. 23 in an interview on CNBC. http://www.bloomberg.com/news/2014-01-27/new-york-duels-california-to-write-bitcoin-rules.html |
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More evidence that Bitcoin is at a cross-roads: if it is not regulated it will not prosper. But if it is regulated, it will become like any other payment service, like for example PayPal, and have costs that will make it less competitive. This is one theme in this thread and it's recognized below by Jamie Dimon. TonyT Bitcoin “will eventually be made as a payment system, I think, to follow the same standards as the other payment systems, and that will probably be the end of them,” Dimon said Jan. 23 in an interview on CNBC. http://www.bloomberg.com/news/2014-01-27/new-york-duels-california-to-write-bitcoin-rules.html |
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Hi Ed my name is Ed too
I think there is a lot of overkill on this. I've been involved with IT since 1986 and one thing I know of a fact is that hacking takes time and money. NO one is going to spend more time and money then it would take to mine bitcoin just to grab a few mBTC's. If your wallet is off-line don't worry about it. All this "booting" and other nonsense is just not necessary. Just place your wallet in an external HD and disconnect whenever you are not using it. Then let time take care of security. Meaning that this is open source, better security options are and will be developed as bitcoin matures. Just make sure you have a good password.
This is sound advice. If you're Mt. Gox, then you should be paranoid about being hacked. But Joe Blow? Unlikely you'll be a target. If you're really paranoid however, check out the below story... "the walls have ears" as the Persian saying goes. TT http://www.theregister.co.uk/2013/12/19/acoustic_cryptanalysis/ Code-busters lift RSA keys simply by listening to the noises a computer makes |
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Just as I said in this thread: a contract to short Bitcoins cannot be legally enforced, even outside of China. So until regulation comes along, you invest in Bitcoin at your own risk. Having said that, it is theoretically possible to enforce Bitcoins (except in China where they are banned) if you get the counterparty to sign an agreement. But it has to be a signed document, possibly notarized with a lawyer (in certain countries) and in practice nobody goes through the trouble of doing this. So bitcoins are effectively "illegal" (or rather, outside the law) in most jurisdictions. So the original question was right on point and topical too, in view of the events of the last few days in China. TT PS--for those of you that might argue that an exchange will make you whole if something bad happens, I urge you to read their "fine print" that you agree to when you sign up. All of these exchanges have "fine print" that promise NOT to make you whole if something bad happens. That's standard business practice. http://www.theregister.co.uk/2013/12/18/buying_virtual_currencies_risky_warns_european_banking_authority/ By OUT-LAW.COM, 18th December 2013 Buying virtual currencies, such as Bitcoin, presents a number of risks that consumers should be aware of before purchasing such assets, the European Banking Authority (EBA) has warned. The regulator said that because virtual currency is not regulated, consumers risk losing their money by "buying, holding or trading" them. "Currently, no specific regulatory protections exist in the EU that would protect consumers from financial losses if a platform that exchanges or holds virtual currencies fails or goes out of business," the EBA said in a statement. Consumers do not have refund rights when they use virtual currencies in transactions, and they may also have to pay tax on the assets, the EBA said |
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Can I keep bitcoins offline? Best wallet? Best forex?
I read bitcoins can be kept offline but how to buy them, if you don't know if the seller is trustworthy?
What is the best wallet for online transactions? For offline I guess you can store the private key anywhere secure, like print it on paper and put it in a safe, or similar encryption scheme on your hard drive. The trouble is, I read there are 'bitcom wallet viruses' that somehow live online and will (I guess) try and infect your machine if you go to a bitcom site like presumably a online wallet site, and then suck the bitcoins out of your online wallet. Hence my question about online wallets. Offline I don't have any problem with (either offline wallets that generate a public key and keep your private key secure--btw, which open source or otherwise offline wallet is the best?), but it raises the question whether you can trade bitcom coins without having an online wallet. For example, at Mt. Gox bitcoin exchange, do they allow you to "settle" a trade without having an online wallet with bitcoins in their possession? I doubt it. So if you convert bitcoins to dollars at Mt. Gox or elsewhere, you need an online wallet maybe, with the virus problem I mentioned above.
BTW if you have a favorite place to buy bitcoins please do post here. I would imagine most of them have the same prices, as more or less determined by Mt. Gox, but with the rapid daily fluctuations we had recently the highs and lows may vary widely interday.
TonyT
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If someone want's to short sell, it's his problem, let him do it. It's not like someone can conjure large sums of BTC out of thin air. And even if - how would you regulate that?
While I would act in a manner akin to described in OP. 'Lose money' when it's at it's highest and 'find it' later when it's at it's lowest I doubt that TF had this planned, because his reputation suffers even if he repays everything, and it's kinda pointless.
You regulate it like in the NYSE in the USA. All BTC exchanges need to go through the SEC. I don't know if TF had it planned, but the way I described it in this thread, it's the perfect non-crime. It's not pointless at all: he makes money, probably half the 1.5M being 750k USD, and it's fool-proof: nobody can sue you, nobody can go to the police, and in the end TF even gets sympathy for being ripped off, and then gets more sympathy a year from now when he pays back everybody with lower valued bitcoins supposedly 'out of his own pocket'. TF however becomes a villain if the price of BTC continues to go up from the date of the theft, and, today I see that the price of BTC has recovered to near all-time highs, which, if my hypothetical is correct, is probably giving TF heartburn and spoiling his plans to be a Good Samaritan and refund everybody's money. TonyT |
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So what are the regulations which need to be put in place?
Same regulations as at a bank or exchange. Shorting allowed but not naked shorting, so you must show you borrowed bitcoins before you can short. Online wallet vendors have to post a bond with US regulators if they are based in the USA. One reason I'm going with Kraken for my trading and thin client wallet is that they are based in the USA so more regulation than say Australia. Regulation for banking type institutions is good. Who needs a 'wildcatter' in this day and age? In cyberspace anybody can pretend to be a banker. I'm also not in favor of anonymity, but at the same time I realize the only people not hoarding BTC and actually using BTC in transactions, which keeps the price stable, are probably drug dealers, who require anonymity. So I'm somewhat leary of making BTC less anonymous, though if you check out the Youtube video below you'll see that with a bit of effort the authorities can figure out who traded what. TonyT Must see Finextra Youtube video interview with Richard G. Brown, a CompSci expert who works for IBM, who is bullish on bitcoin but around 3:30 states it is not anonymous, and eventually Big Brother is going to use it to tax people under an 'asset register' scheme. But Brown's bullish on bitcoin, even though bitcoin is not anonymous. At 9:00 he discusses how machines can trade bitcoin amongst themselves! @10:20 "On the blockchain, nobody knows that you're a fridge"! @10:45 bitcoin will not be the only cryptocurrency. Litecoin is a 'psychological' play, and others. TonyT https://www.youtube.com/watch?v=gERNbqUNMm4Finextra interview with IBM architect Richard G Brown about Bitcoin and Litecoin |
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C'mon BTC community, I love this place, but objectively speaking, if you look at the posts, even the serious posts, you come to the conclusion that the bitcoin community is phoney. Full of dreamers, schemers, b.s. artists, wackos, cultists and flim-flam artists of all shades. Ignorant if not stupid people abound. Criminals abound. It's like multi-level marketing, it's like those vitamin pyramid scheme parties that I attended once, it's like a cult, it's like Amway. It's clearly hype, when it's not downright stupidity. It's so obvious. Do you think the promoters of BTC believe their own hype? No. They are selling us newbies a bill of goods so they can profit. It's the Greater Fool theory. Nothing personal but if it walks like a duck, quacks like duck...c'mon, it's duck, not a platypus.
I really thing that the bitcoin community is unstable, like the coin itself. But I still love this place and intend to research it some more.
Vote your opinion at the poll above.
TonyT
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Is this a hypothetical, or can you show me an actual contract? Also, what do you mean "unlike in the real world". What world did TF and his customers live in? In any case, if the contract really says what you claim it says, it's highly likely that the part that allows TF to steal from his customers will be found unconscionable. That's the downside of bitcoins not being regulated.
Please explain what you mean by "bitcoins not being regulated". My response to this is really dependent on my other questions. Is this supposed to be a hypothetical or is this what actually happened? In what way is bitcoin "not regulated"? Or to put it another way, say instead of bitcoin that TF did this with dollar bills. Would the situation be any different? If you read the fine print of any internet bailee, they'll have language that makes them not liable for anything. This is standard practice on internet. In fact, no online wallet that will say they guarantee your money. As for theft, while it's true if TradeFortress admitted to his theft, he would be prosecuted, but keep in mind what he's doing is not really 'theft' in the classic sense but misappropriation--he intends to return the coins after he's made money shorting. In fact, I bet he sold all the coins a few days after the theft (since Mt. Gox had a big sale of exactly the amount 'stolen' at Inputs.io), and now is, as the price of BTC drops, buying these coins back with the sale proceeds, and again he intends to make money off the short sale price as explained before. Eventually most, if not all, of his customers will get their bitcoins back, but at a lower price. If he did this with dollar bills, as you say, it would be a different story since dollars and traditional banks are highly regulated. You cannot just take depositors money for a while and return it a year later...you'd have government agents swarming your bank. TonyT |
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Must see Finextra Youtube video interview with Richard G. Brown, a CompSci expert who works for IBM, who is bullish on bitcoin but around 3:30 states it is not anonymous, and eventually Big Brother is going to use it to tax people under an 'asset register' scheme. But Brown's bullish on bitcoin, even though bitcoin is not anonymous. At 9:00 he discusses how machines can trade bitcoin amongst themselves! @10:20 "On the blockchain, nobody knows that you're a fridge"! @10:45 bitcoin will not be the only cryptocurrency. Litecoin is a 'psychological' play, and others. TonyT https://www.youtube.com/watch?v=gERNbqUNMm4Finextra interview with IBM architect Richard G Brown about Bitcoin and Litecoin |
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EDIT: people called Van Gogh crazy, too!
Dude, I think technically Van Gogh *was* crazy! :-) As for your scheme, it might work with small amounts, but once the amounts get bigger it might fail. Very common for business schemes to not be "scalable". TonyT |
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I had a better, longer reply, but I lost it.  What I am saying is this: if somebody took your bitcoins for a year, sold them, bought them back a year later at a lower price, gave you back your coins but kept the profits from this short sale, and the fine print says he is not liable if he does that, then you're OK with this?
As long as the "fine print" was just as readable as the rest of the contract, and I indicated my agreement with it, it seems like I'd have to be fine with it. The alternative would be to tell the world that I'm not a man of his word. I probably wouldn't agree to such a contract if I wasn't paid interest for the loan, though. And I certainly wouldn't do it if I had thought the value of bitcoin was going to go down over that year, and the interest weren't enough to compensate me for that. (By the way, this is what banks do all the time. You've basically described fractional reserve banking.) But you are exceptional anth0ny. Most people would be pissed, and on top of that claim they did not read the fine print or anything before they signed up. Because that's the state of bitcoins now, with online or even offline storage. No regulations means anything goes
If no regulations means anything goes, then that's most certainly not the state of bitcoins now. Embezzlement of bitmoney is just as illegal as embezzlement of anything else. but again, see my TF post--actually TF is doing the community a favor by 'screwing over' his customers, so you could say that for the greater good what TF did in my hypothetical is net good, not net bad
That TF post seems to rely on the premise that bitcoin contracts are illegal. But they aren't. Not in the jurisdiction that I live in, anyway. Furthermore, the idea that screwing over your customers is "for the greater good" is absurd, and it highlights the problem with trying to determine "the greater good" rather than trying to determine what respects the individual rights of everyone. Hopefully I won't accidentally delete this response like I did the last one. The TF post does not rely on the premise that bitcoin contracts are illegal. To the contrary, it relies on the premise that the contract between TradeFortress and his customers is the ONLY thing that matters, and if you read such online "bailor/bailee" (that's the legal term) contracts, they always say that the bailor (TradeFortress) has no legal obligations whatsoever (unlike in the real world). Anything goes. So if TF shorts your bitcoins, makes money, and a year later gives you back your coins that he "stole", he's not liable to you, even for the lost interest, and certainly not for the profits he made shorting, in any court, based on what the contract says. Of course you are free to flame TF online, and seek another online wallet company for your bitcoins. That's the downside of bitcoins not being regulated. That lack of regulation is the genesis for my headline, which I admit is a bit confusing, "Do you think shorting of Bitcoins should be allowed?". What spurred me to write this post was the realization that what TradeFortress did was not only not against the law, but actually it's completely defensible, even heroic, under the academic theory of greater "price discovery" by shorting (Google this). Now whether or not you believe in better price discovery being a worthy goal or not, that is, whether volatility or not is a good thing for bitcoin, regardless it remains that the unregulated nature of bitcoin means what TradeFortress did could become, unless bitcoin is regulated, the "norm" in the future. Only the threat of losing future business would prevent people like TradeFortress from doing the same thing as TF did, in the future. And as for future business, if you make a huge profit from a 1M short of bitcoin, using other people's money, who cares about future business? You can always open another online wallet company under a different assumed name, and you're way ahead financially from the unethical (but not technically illegal) short. And if you believe shorting helps the bitcoin community, what TF did is not even unethical--he's in fact a hero. TonyT |
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