That doesn't make sense, because a free market is always approaching equilibrium. If everyone were anticipating a further rise in the exchange rate, it would have happened already.

Really? Nothing?

Given the way the market has moved, I'll change my window of strike prices to 1.10 - 1.50. If you're not interested in offering American options but will offer European, I'll consider it.

I'm just learning to keep these terms straight. I want the option to pay USD, and receive BTC, at a rate of 1.00 - 1.30 USD per BTC.

I'm interested in buying 91-day bitcoin options, up to 2000 BTC. I'd require "American-style" options: that is, redeemable at any time until expiry. I'll be paying in USD, either Mt Gox or ACH.

I'm looking for a strike price in the 1.00 - 1.30 range. Open to negotiation on the premium.

Note: In addition to price, I'll take reputation into account in choosing an offer. (I assume this won't be an issue for anyone who seriously has 1000-2000 BTC to put up.)

Also note: I reserve the right to refuse all offers.

Not that I'm a big name or anything, but June is much better than August for me. I can make time for either one, but I'll be bringing my wife, and if it's in August I'll be bringing my very pregnant wife.

A single-piece plastic token containing a private key inside.... good idea! They'd still have to be hard to counterfeit, so that you'd know the token really was issued by a trustworthy source (else you might be unpleasantly surprised when you try to break the token open and redeem it).

Another low-cost idea: those security mailers that are used to send out debit card PINs and the like. Put a private address inside, or a QR code for a transaction. Making this simple enough for an average user might require some additions to the client software, but the average user would probably be satisfied bringing the note to a local bank or computer-savvy friend.

No high technology is needed to encode the private key---a simple text printout is good enough.

I point out that I'm still nervous about these ideas. Speaking for myself as a potential guarantor, if I'm going to be held responsible for other peoples' bitcoins, I want to be in control of how they leave my possession. If I issue self-redeeming notes I will have to disclaim responsibility for missing deposits.

Is there really an invisible ink that lasts forever (or for years at least) and absolutely cannot be revealed by any method that doesn't render it permanently visible? If so, I suppose that works. The issuer wouldn't even need to retain his own ability to access deposits, if he was willing to let some bitcoins be potentially lost forever. If not, then the idea doesn't work, no matter how cool it would be.

I'm wary of any attempt to make notes self-redeeming, because it is basically DRM---you are giving out the keys to the vault in an obscured form, so that people can only use them in the way you would like. We all know how well this has worked for software and movies. I'm smart enough to know I'm not the smartest man on the planet---and whatever scheme I come up with for hiding private keys, one of those smarter men will find a way to reveal them without voiding the note. If he's smart enough to keep his mouth shut, he could do this for years before anyone even notices there's a problem. It would be negligent of me as a guardian of deposits to leave them vulnerable like that.

Anyway, here's a proposal: If I attend the upcoming conference, I can design and print some notes for use there. No expensive high-security mechanisms, unless someone else wants to foot the bill---copy-proof paper and my personal signature will suffice. I'll keep the design secret until the conference itself, and require redemption within a week or two, so there's no opportunity to counterfeit. The idea will be to use them at the conference itself and cash in before leaving, with a short grace period in case you forget. I'll eat the cost of printing---consider it market research.

moa, I followed your link and read, but I don't see the connection to what we're talking about. The real bill doctrine seems to be that, if a note is in principle payable on demand, then its issuer can issue as many notes as it wants as long as those notes are balanced by assets accrued.

An example would be if Big Bank Inc. promised to redeem its notes in bitcoin, and perhaps even kept some bitcoins on hand for redemption purposes, but also disbursed loans in note form without holding enough bitcoins to cover them. The bank would then book the loan itself as an asset. In case of a run, the bank would either call in accounts early, liquidate assets, or borrow against its accounts receivable.

This system works, sort of, but becomes unstable when the note/reserve ratio grows too high. The danger is simply that assets can be lost, particularly assets that are only accrued and not yet received. In the above example, some debtors will default and their loans will be written off, reducing the bank's assets while leaving its liabilities untouched. Charging interest on loans provides some protection against this, but given enough time the bank is quite likely to have a long run of bad luck and become insolvent.

Anyway, that's not the sort of thing I was planning. I'm interested in a 100% reserve kept safe by multiple offsite backups and strong encryption---the most mucking about I'd allow for is a sort of very short-term bond system wherein the bank might issue notes payable at the end of the month, and secure the bitcoins before then, in the interest of fixing very short-term liquidity problems. As long as this was stated up front on the notes I don't think it would be a serious problem.

As for expiration dates, you people are far more accepting of the idea than I would have guessed. Of course they'd have to be both prominently written and easy to predict---perhaps notes could be released in batches that expire at the end of a calendar year, with "VOID AFTER DECEMBER 2013" written in large print on the reverse. The revenue from unredeemed notes would easily make up the printing costs--if we assume each note costs 0.1 BTC to print, a single unredeemed 50 BTC note would cover the cost of 500 notes printed. Given the amount of cash destroyed in every year, not to mention the number of people who can't manage to mail in a $100 rebate form, issuing cash could be very profitable indeed.

I just might attend this if I can swing it. I'm close enough to bus in, and I have some interesting ideas myself.

Features I had considered printing on notes, besides denomination:

• a unique public key that can be verified to hold the amount on the note;
• enough contractual language to make the note a binding promise;
• a line/box on the reverse to actually write in an address you would like the note paid to, like depositing a check.

For a moment I got really fancy and considered having postage pre-paid so you could just drop the whole shebang in the mail, but I don't really think sending cash naked via USPS is a great idea, and I don't want to encourage it.

An expiration date was one of my suggestions earlier. It would be good for security, as you said, and the issuer could forego a minting/printing fee in hopes of turning a profit on unredeemed notes. But first of all it would be easy to pass off expired or nearly-expired notes to someone who wasn't looking too closely, and secondly I just don't like the smell of it. Stockpiling cash should be a feasible method of saving money.

What to do about small denominations (like less than one bitcoin)? There's no theoretical barrier to having a 0.05-bitcoin paper note, but it seems unusual. The terrible part is that hard tokens will cost more to produce, but it's the smaller denominations they'd be wanted for. No one will pay 0.55 for a 0.05 coin. Maybe cash could be sold in fixed bundles that include some number of "coins", and enough paper notes to offset the cost?

Sure, your coffee will be 0.04 grams, please.

No way can I break a gram, I'm sick of people coming in here with their large bills!

I'm bringing up this old topic again because I think, while we're all hip and cyber-savvy here, a surprisingly large number of normal folks still don't put much stock in that blasted inter-net and won't really take an intangible currency seriously. This may be reasonable or not, but either way I think it would improve our perceived legitimacy and lower the barriers to entry if we had some physical tokens to hand out. I'm sure my friends would be more interested in bitcoins if I could hand them one.

There have been some really clever technical solutions as far as sending bitcoin "checks" or scratch-off cards worth a certain amount, with a private key or part of a private key included. I think this is a good idea for what it does, but I don't think it's suitable for cash, which would have to put up with too much abuse. You'd need a note that was secure in the hands of potentially hundreds of people of varying levels of cleverness and malice.

Instead, I'm interested in paper money that works the old-fashioned way: on the honor system. Bitcoin Warehouse X would issue a receipt saying, "This note is redeemable by the bearer on demand for ONE BITCOIN (or whatever amount)" on the obverse, perhaps with redemption instructions on the reverse. A public address could also be printed on the note, and the holder could check that indeed there were ten bitcoins stored at that address.

"Honor system" isn't quite the right term: Distributor X could agree to audits and such to ensure that it had enough reserves. You'd need to trust that they wouldn't renege on their obligations, but that sort of trust can be justly earned. You'd need to trust that they would remain solvent, but for a single-purpose warehouse that didn't try to branch out into market speculation and such, insolvency wouldn't be very likely.

Now for other questions:

How would the issuing agent turn a profit (or at least recoup its costs)? Off the top of my head, options include

• a mint fee, wherein first-issue notes are sold with a surcharge to cover the cost of production, plus some. (Could be prohibitively expensive with small denominations.)
• a deposit fee, wherein all notes (new or old) are sold at a small amount above face value. (Not bad, but it may take a while to recover the costs.)
• a redemption fee, wherein notes are redeemed at a small amount below face value. (May hinder general acceptance of the notes.)
• a fractional reserve system, wherein the issuer only keeps enough bitcoins on hand to honor, say, 90% of notes issued, in anticipation of never being called on more than that at one go. (Not very dangerous in itself, but could set a dangerous precedent: once you're at only 90% reserve, dropping to 89% reserve doesn't sound so bad...)
• an expiration date: notes must be redeemed within, say, five years of issue, or be forfeit. (Sort of defeats the idea of cash.)

I'm sure no one will admit here to preferring the last two options (though a limited fractional reserve pegged to the expected rate of accidental note destruction might actually work out). But what about the first three or some combination thereof? Someone has to pay for the production, and it sure won't be the issuer. Under this view, a mint fee is the most "honest" in that it reflects the actual cost of business, and would be appropriate for (say) a volunteer effort to create physical bitcoins for the good of the community. But for a for-profit agent, transaction fees would probably make the most sense since deposit and redemption are the actual services being provided.

Another, no less important question: What would you like physical bitcoins to look like? There's no need for them to literally be paper notes, though that's probably the least expensive possibility: imprinted vinyl or ceramic "coins" would be possible too, or plastic cards, or really just about anything that can be made hard to counterfeit. Since one aim is to improve the perceived "normality" of bitcoin, coins and bills might be most appropriate, but I'd love to hear more ideas.

In case you haven't guessed, I ask because I'm interested in producing these if I find out there's a demand. I'm looking for any sort of input on what would increase the chance of general adoption, because I really can't afford to spend a ton of money on printing with no expectation of recovering the costs. In addition to design and implementation advice, it would be great to hear advice about the business model as well.

My last special offer yielded an underwhelming response, so here's another.

Here is my referral link. If you join under me and send me a message with proof (username and password), I will

• send you a 15% rebate on your 1 BTC signup fee, and
• enter you in a drawing to win the jackpot!

("The jackpot" is 0.5*[number of responses to this offer].)

This offer is going fast! Ends April 30 at the latest!

Can't connect... "Problems communicating with bitcoin RPC"

It's really unfortunate---my other pool has had some of its own technical issues lately so I was coming back to this one, but I can't even connect. If I had already gone to bed by now like I should have, I probably would have disconnected and not found out for at least 6-8 hours. And my solo mining has been luckless since day 1 (as in, 0 blocks generated in a month), so even falling back on that seems like a bad idea. This kind of sucks.

I'd say buying bitcoins is about as difficult as buying yen---that is, not hard at all if you know where to find a seller.

When I decided going through Mt Gox was too complicated, I went to the Marketplace forum and made an offer to pay ACH direct credit for bitcoins, and got a bite within a few hours. You could probably do the same. In fact, right now I'll invite an offer at a 1.15 exchange rate, for up to 500 BTC---message if you're interested.

There's also Bitcoin 4 Cash, which has been operating as long as I've been here. 2% commission, which really isn't bad overall, though you need to make a 10 BTC deposit if you want to lock in the exchange rate.

The chargeback problem can be solved the way it's usually solved, by collecting enough customer information to file a fraud suit if necessary. Amazon delivers hard physical products paid for by credit card, and they seem to be doing okay.

Admittedly, a lot of people like Bitcoin because it doesn't require anyone to give out this sort of personal information. Those people are free to keep handling their own finances and not use BitPal or whatever other service is out there.

What reubgr asked. I'm interested in setting up an exchange service and I have no idea what the legal barriers are.

I'd say that's enough, except that I've been mining solo with about that much power for quite a while and still haven't generated a block for myself. I'm still within the realm of ordinary bad luck, but it's quite frustrating nonetheless.

Be warned: The path of the solo miner is good for your expected value but bad for your mental health.

Did anyone point out this site to him? He has well over 150 BTC worth of pledges. Not exactly enough to retire on, sure, but it's decent money for a few hours' labor setting up an Mt Gox account and a Bitcoin checkout.

15 for Bioshock (buy it now), 1 for Portal.