The Chinese population is attracted to bitcoin because they see it as a better alternative to the obvious government control of the official currency.  

The main reason that bitcoin holds value is that long-term speculators see that bitcoin has value as a widely-used currency.   Bitcoin volatility will reduce once its use as a medium of exchange becomes more widespread.  As the volume of transactions is due to people actually buying goods and services with bitcoin rises in comparison to the transactions due to speculation, then Wall Street becomes more interested.

I think bitcoin has sufficient value to not go worthless.  Wall street might fear that the US government might outlaw bitcoin in some way, such as making it illegal to buy bitcoin in its jurisdiction, on par with buying drugs or gambling.  At this point, the only reason to use bitcoin would be to buy drugs or gamble online, but there would still be demand.  Instead of public exchanges that would restrict your participation due to being a US citizen, you would hookup with your local underground bitcoin dealer that exchanges between fiat and bitcoin.  I see the situation being like alcohol prohibition -- eventually public pressure would force an end to the prohibition, since the argument can be made that an uncontrolled underground bitcoin economy would be more harmful to the country than a semi-regulated controlled economy.

I believe that would be the objective of anti-Bitcoin forces at Apple.   Establishing and growing a base of Bitcoin software on OSX would put public pressure on Apple to open iOS to Bitcoin.   Removing that base eases the pressure.

I use multiple, non-password protected paper wallets, which I generated myself on a offline, non-compromised system, so I can reasonable be sure that the wallets are not compromised, which I keep physically secure, only accessible to myself.  Bitcoins are kept in small denominations on multiple paper wallets.

My goals are to 1) keep my private keys physically secure; 2) anomymize my usage of bitcoins and  3) make my private keys accessible to my heirs in the case of my death.

I do not use a password, because if I were to die or become sick or injured in a certain way,
otherwise my wallets would become permanently inaccessible.  My heirs could hire a consultant to attempt cracking passwords, but that would be a situation that could potentially in end in fraud.

If I need to spend stored bitcoin, I will use the private keys and load them to a hot wallet.  I consider the paper wallet exposed once brought in contact with an online system.  While the keys are "online", I consider this a riskier situation than offline, because I imagine the common bitcoin hacker attack of the future would be for hackers to install key loggers along with stealing encrypted wallet files containing private keys.  The amount of time and value that my bitcoin would be exposed to online attack would be minimized, as any remainder of the bitcoin I transact would be swept back to a fresh offline paper wallet with private keys that exist nowhere online.

When I conduct cash transactions, I don't record the serial number of every bill that I use and keep a record of where I got it and where I spent it.  While impractical to do with cash, it is very easy to do with bitcoin.   I'm concerned with my privacy, I don't want this information to exist or be accessible to other people.   For instance, I may have contributed to an activist organization that is later declared to be a terrorist organization by the Department of Homeland Security.   Evidence of my contribution would open me to further scrutiny or possible criminal prosecution.  Or I may have transacted with an apparently legal business that turns out to be a cash cleaning front for a drug cartel.  If I am connected to the transaction, I may be legally compelled to testify against the drug cartel which could put me and and my family in danger.

By destroying used paper wallets (after all transactions involving the wallet address are confirmed), I remove the major proof that I possessed the bitcoin at the wallet's address at one time.  Keeping backups of private keys hinders this process.  There are still other methods of exposing my usage of the address by making the address public, the sender of funds associates the address with me, the signed transaction submitted to the network traces back to an IP node associated with me, the receiver of the funds associates the address to me.  Being found in possession of the private key would serve to collaborate the other evidence.

Keeping multiple backups I believe decreases security and increases the possibility of theft, since a determined thief would have multiple points to gain access to the private keys.

Essentially, I store my bitcoin in a way that is very similar to the paradigm of storing physical currency.  I only have control of my bitcoin if I physically possess the paper wallets with unexposed private keys.  To get my bitcoin, you would have to compromise the physical security of where my paper wallets are stored; or somehow find a weakness in the way I generated my paper wallets in the first place.

My idea is to make investment anonymous.  Investors would supply a receiving address along with their payment.  Investors would only be referenced by their receiving address.  To encourage trust in the operator,
the operator would regularly post a semi-public record of payments and mining profits which would be available to the investors.  Investors should be able to verify the records, otherwise it looks like a shady scam.

It would suggest that the reporter was being truthful about the statement.

However, it is plausible that Dorian was confused between "classified government work" and bitcoin when answering the question.  I had read somewhere that he had suffered a stroke.

Assume the following business arrangement:

A fund is established for investors to pool funds for the purchase of a bitcoin mining rig.   Investors contribute bitcoins to the fund.

The mining rig is purchased in bitcoin and delivered to an operator.  Any remainder of the fund is redistributed back to the miners according to share.

The operator runs the rig.  Profits from mining are pooled into a fund.

Periodically, this fund pays the operator a reimbursement in bitcoin using current exchange rates that compensates the operator for the electricity and any other overhead, plus a commision from the net profit.

The remainder of the net profit is distributed to the investors according to share.

This operation continues until the mining rig is no longer profitable to run.

So in this arrangement, would it be sufficient for investors to pay their tax liability as capital gains from when they convert their bitcoins from and to USD?

Would the operator have to pay a tax liability?  (As a business that accepts the bitcoin reimbursement as gross income, then deducts the overhead costs for electricity and other overhead?)

Assume USA jurisdiction, but discussion of other tax jurisdictions is welcome.

I think it's a shame that a public wifi operator would do this.  A VPN prevents the leaking of possibly sensitive data that could be observed by a hacker monitoring the same wifi network.

But fungibility IS limited while you are not at home.   No buying a hotdog from the street corner vendor that doesn't have the approved limited-fungibility-bitcoin terminal, or the girl scout selling girl scout cookies until after you get back home and convert it.

There is really no need to have such a system until bitcoin becomes the only form of payment.  In spite of anarcho-libertarian wishing for this in the near future, it's not gonna happen for a long, long, time.  VISA/Mastercard's legacy system would be sufficient, but I'm sure they would rather have your money under their control (as a demand deposit or credit) as it would be currently than sharing partial control with them.

Using the sharedcoin method, assuming that the javascript code wasn't hacked in some way, you keep control of the bitcoin at all stages of the process.

Using a mixing service, you are trusting that your bitcoin goes into a black box and will come out the other end.   You have to trust that the mixing service isn't going to steal your coins.

Here's the problems that I see in keeping your anonymity: 

With a mixing service that doesn't enough traffic from other people, it would be fairly easy to trace the funds through the service.  You are at the mercy of their own mixing method.

With sharedcoin, you will be generating a chain of transactions that probably all end up in the same block on the blockchain.   Each transaction will look fairly unique, many multisig inputs to many outputs.  Your source address can be traced to an output exiting a tree of these special transactions.  If the source address and optional change address are known, it would be fairly easy to find the exit point if the amount is unique or large. 

I use sharedcoin myself because of its trustless design, but I'm not going to fool myself in thinking that it makes my coin completely anonymous.

You are still talking about limited fungibility bitcoins, and there can't and shouldn't be such a thing.  You may be able to make a hardware device that limits itself to generating transactions only to white-listed addresses, but it's only a hardware protection that could be hacked or cracked to get access to the private keys.   It might even get you killed if an armed mugger doesn't believe that your hardware bitcoin wallet is limited in that way.  Such a business or group should use their own gift card system, rather than trying to use bitcoins.

If you insist on grafting such a system to bitcoins, probably the only way is to have private keys in escrow with the "business or group", in a system where it requires both parties to access the private key.  But it would require the other party to release them back to you in the event you want to spend fully fungible bitcoins.  (update - just read jimhsu's suggestion https://bitcointalk.org/index.php?topic=505455.msg5574757#msg5574757 would could work)

What you are seeking is the current credit/debit card system with reversible transactions an no anonymity.  Such as system currently does not allow payments to individual private persons.   I normally can't meet with a person that I find on craigslist selling an item I want and pay him with my debit card.


You shouldn't be carrying devices that have access private keys to large amounts of bitcoin, so they can be coerced from you.   The average person doesn't carry large amounts of cash so it minimizes the risk.  The risk vs. reward ratio should be large enough to deter most criminals.   If you are uncomfortable with carrying around a certain amount of cash, you should also be uncomfortable with carrying around the private keys to the same amount of bitcoin.

They most could be, but I'd prefer a reusable device that could have it's private keys changed.  I'd personally would be taking the money off the wallet when I wasn't using it, and putting it back on when I did, using paper wallets that had private keys that didn't exist on any machine.   Anonymity could be preserved by loading and unloading with anonymous paper wallets.  If it traces to your exchange, that is information that only LE should be able to access, not the retailer or an individual person.

I don't see a reason to create such a thing, there already exist gift cards (as a private payment system)


I image a hardware wallet as a device is a device that can be purchased anonymously.  It would be cheap, and designed to cheaply connect to a public network wirelessly to send transactions and monitor the blockchain.  You would use it to transfer money to another private person's wallet or the pay terminal of a retailer.   It's not designed to hold a lot of money, that is, more money than you are willing to lose.  It would be analogous to filling your own wallet with cash for the cash purchases you intend to make for the day.  The reason people may want anonymous wallets is the same reason today you would choose to buy something with cash rather than using a credit card.  You may not want the receiver to be able to know who you are.  

Now, if you lose your hardware wallet, you can go home and sweep the addresses that it owns with the optional wallet backup program.  Same thing if a thief physically takes your wallet, you can sweep the wallet with the backup program before the thief does, you get your money back.  If the thief sweeps the wallet before you do (after cracking or coercing the password on the device such as a 4 digit pin), then the police can track the money until it hits a public address that may unblind the thief (i.e. a retail pay terminal with surveillance.)  

If you keep a large amount of money in such a wallet, then you may be asking for trouble.   There's always a small possibility that manufacturer of the wallet may have inserted or allowed a hack that allows someone else to gain access to the wallet's private keys.  

The idea of a hardware wallet is that it would become an acceptable risk to carry certain amounts of money, and the device or the money can be lost without causing a catastrophic loss of funds.  There's no reason to implement a specialized limited fungibility system for bitcoin, the retailer can just sell you a gift card instead.

This supposes that hardware wallets will be offline and not communicating with the public network that far in the future.   Every wallet should have this feature, such that two individual parties (that do not trust each other) could transfer coin between two wallets (otherwise it's a race to see who can get online first to double-spend or claim).

It's just not that big yet.   There's obviously not a TV-network-cabal enforcing a ban on the mention of bitcoin.   I've seen multiple mentions of bitcoin on fictional television, bitcoin has been used multiple times as a plot device in Fox's show "Almost Human".  Bitcoin was used as a plot device in a recent episode of FX's "Justified".  I'm sure there are more examples, but public awareness will increase. 

In regards to bitcoin, I really think any press, good, bad or neutral, does nothing but generate public interest in bitcoin and moves it closer to widespread adoption.   Exposure of Dorian the alleged Satoshi as formerly working for the government may scare off tinfoil-hat anarcho-libertarian extremists, but for the general public it may increase confidence in bitcoin.   Actual confidence should only be put in the public protocol of bitcoin and in the core developers that currently develop and maintain it.

That would only prove the real Satoshi decrypted it (or surrendered his private keys).   He can have another identity disclose the contents.

That's only one writing sample from Dorian.  It could be a fraud or an outlier.   A much bigger dataset would be required to increase confidence in the conclusion.  I'd be much more interested in the results from an algorithm designed to compare writing samples, rather than human analysis, which could be put up against control samples and other  suspected Satoshis.

I destroy addresses and private keys to not keep evidence that I had coin there at one time. The only evidence that it was once my coin is any forensic evidence in the blockchain, or tracing originating node of the network for the transaction that sweeps the money out of that address.   Otherwise, it is kinda like keeping a list of all the serial numbers and usage notes for all the physical currency bills that have passed through your wallet, information that most people with privacy concerns wouldn't want to have around to be possibly compromised.

If you send me money to an address that I give you, assume that I'm going to throw it away once the transaction is completed.   If you want to send more coin later to that address that was not solicited, consider the coin permanently destroyed.  After I've sweep the address and see 6 confirmations, I'm destroying the paper wallet.  I'm not going to keep it around in hopes that you're gonna send a tip.    When transacting BTC, you shouldn't let yourself think that an address is reusable, unless the receiver says so.

An independent analysis comparing the known writings of Dorian to Satoshi would be informative.


Not possible, unless you gain majority control of the mining network.