For those talking about repurposing large parts of the city for farming etc., you're right there is something to that. People should check out some guys actually doing it: http://theurbanfarmingguys.com/about (with video) We are the seed that died and went into the ground. We have purposefully relocated our homes into one of the most blighted and dangerous zipcodes in the U.S. 64127, Lykins Neighborhood, Kansas City to put down our stake for the youth and the poor and for the next generation. What is going to happen to us … who knows? We are a band of pioneers. We don’t claim this is good idea…. it is our lives. It runs in our blood… to rebuild the ancient walls and cultivate the life of the inner-city, here in the land where the Police helicopter is the favorite bird, and neighborhood meetings hold stories of wild drama, where dropping crime stats are our touchdown cheer. IMO these kinds of small start over communities are ideal places to integrate Bitcoin and bootstrap strong local economies. |
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So I just looked into this, not thoroughly so someone please correct me where wrong, but have the following assessment. The FBI conducted a successful operation against a big person in the Tor world named Eric Eoin Marques who runs a company called Host Ultra Limited. They are trying to extradite Eric to the US to face charges. I'm guessing Eric either distributed directly, or hosted sites dealing in child pornography. Apparently he was conducting business as a Tor Hidden Service. Now, Tor Hidden Services is different than using Tor normally. Tor Hidden Services is what allows Silk Road to operate because the server itself can gain anonymity while still handling incoming client requests. What is not readily apparent (to me) is how the FBI found Eric's servers, and what was done with them. It could be that his servers were found with investigative methods outside Tor. However, there does appear to be a way to de-anonymize servers using Hidden Services revealed in the following paper at a security symposium in May 2013: Trawling for Tor Hidden Services: Detection, Measurement, DeanonymizationI only read the first couple pages but have no reason to doubt the claims. Whether or not the FBI used similar exploits for this case isn't apparent, but I'd say Silk Road looks vulnerable unless and until there is a patch or re-work of the Hidden Services protocol. |
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But without the exchanges will it not create disorganization in terms of who wants to buy and who wants to sell.. as well as making it harder for the USD/BTC transaction to take place as large scale as the exchanges?
Exchange will go on. You're forgetting Bitcoin is growing and making gains every day. Sites like localbitcoins.com where people meet in person and Satoshi Squares where crowds make local markets will keep growing. Also, more people will trade bitcoin directly for things of value other than fiat currency. |
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I've read, though I have not really looked at the process but I've read you can use a public key to generate new addresses which can only be spent using the private key that originally produced the public key.
You're talking about a Type 2 Hierarchical Deterministic Wallet. You don't use a public key, but a public seed to generate new public keys which can't be spent because there are no private keys. Here is the video you want: HD Wallets - Bitcoin 2013 Conference - Pieter WuilleType 2 wallet description starts at 6:00. Yes, Electrum and Armory currently do this. |
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After comparing all the different wallet choices I think the best bet is to go with blockchain.info with watch only (paper) addresses. This way thieves would have to physically break in and demand my private keys for my paper wallet. But I've been thinking about this and this isn't really ideal. What if in the future everyone is doing this and we all have paper wallets kicking about the place? What do we do: 1) Have safe deposit boxes, this will cost us around £300 a year. This would prevent coercion. 2) Trust banks to keep our keys safe? This scenario worries me but I don't know why. 3) Hide it, secure it better somehow. Still not going to stop someone.Someone could break in and steal my money this way right now. But the bank will refund payments, but not with BTC. The problem you're talking about is similar to when people traded gold nuggets etc. Someone could break in and steal whatever was hidden (under the mattress or whatever) so people started storing their gold with vaults and getting claim checks. Then people started trading the claim checks instead of the gold (since it was convenient) and that became modern paper money. So there is still the problem of securing your money for yourself. I think people will again outsource this to some degree, and banks will hold bitcoins for them. The nice thing is that this time there is no need to start trading paper claim checks as a more convenient exchange mechanism. |
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Best line from the article: This, however, is rare. Indeed, there have only been 56 cases of hyperinflation.
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OP FWIW I've watched scam sites come and go. There are sites which don't fit the scam mold IMO. BTC-e, Blockchain.info, and MtGox don't fit. At the end of the day it's up to the operator(s) of the site to not cheat their clients, because there is no regulation other than what the free market itself provides.
BTC-e was hacked early on (at least that's the story we were told) and had many coins stolen. This happened to many sites, but BTC-e was one of the few that replaced the lost coins out of their own profits. They seemed to be looking longer term. This was long before they were as popular as they are now. They couldn't have been making much at the time. I've also watched their site go offline without warning from DDoS etc., a classic start to a site disappearing with coins, but they come back. They are now the biggest exchange site for mixed bitcoin/alt-coin trading, moving hundreds of thousands of dollars daily. They are clearly profiting well now. It would hurt their exchange profits to lose customers over trust issues.
Am I saying people should give them full trust? Heck no. I don't say that about any exchange. Any site can pack up at anytime and disappear. That's why I've always said never keep more coins than you can afford to lose in any online service for the longer term. However, you can look at track record to get an idea of how much trust a service might receive. Same thing applies to Gox and Blockchain.info.
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This could be huge. Gary Vaynerchuk actually had a similar idea. I searched for the video but it's gone. If you don't know who Gary V. is he basically is a young marketing genius that turned his parents' liquor store into a multi-million dollar wine selling operation. He was talking about traditional currency, but the basic idea could be used with Bitcoin. He said essentially what you're talking about. You do a Home Shopping Network, but on the Internet. You Ustream live show a product and have a link to buy underneath. He was really excited a customer wouldn't even need to lift a phone, just click. Gary was sad he wouldn't be able to do the idea himself but asked anyone that used his idea to, after making a billie, kick him down with a couple hundred millie  |
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Thanks! Awesome video. When he got to the chart about volatility OMG friggin hilarious  |
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My understanding is the paper used keeps the image about 7 years.
No, it won't. They may say that, but it's not true. Know what archivists do when they get given something to archive that's on thermal paper? The usually tranquil and relaxed archivist goes batshit insane, cursing hell and heaven for about half an hour, trying to summon demons or angels to smite the retarded fuckup who tasked him with this idiocy. After that fails he calmly walks over to the copier, makes a paper copy, files that and throws the thermal paper original away. When his workday is over he walks into the nearest bar and drinks himself into a stupor while loudly and slurredly complaining about the mere existence of thermal paper. lol Yeah I think you're right. Something as questionable as thermal paper shouldn't even be offered for storing something of high potential value, even with digital backups. It's a false sense of security. |
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Bitcoin is the opposite of a secret society. Everything is in the open.
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How do you protect your offline computer from viruses that may try and transfer themselves via your usb stick? That seems to be the number one way offline computers can be compromised.... Stuxnet anyone?
Disable autorun on your OS. You should do that anyway. |
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IMO, just pay the taxes on capital gains. Just went through this with the accountant myself. If BTC really takes off in the future and the IRS has a 3 year lookback, you could really find yourself in some trouble. The only way I would say you could avoid this is by selling in cash locally/buying locally.
Be careful that local exchange might not hide much. For example, say I have an account at an obscure exchange and I withdraw 100 bitcoins with a USD value of 10K. Bitcoin wallet addresses are not obviously linked real world identities. However, all transactions are on the block chain as a permanent public record. If at any point some agent found my identity was linked to a certain address (lots of things can link this), then saw 100 coins go to that address that might trigger an audit if I never explained it come tax time. Even if I sold those coins locally the IRS auditor might want to know what happened to that 10K USD worth of value. Now what's interesting is that the digital nature of bitcoins makes it incredibly easy to lose them, accidentally and permanently (scams/theft). It's going to be very messy for agents trying to enforce taxes on something as fleeting as virtual currency. |
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It would be trivial for interested government agents to link your identity with Bitcoin related activity.
It is trivial for them if you do your transactions through exchanges that you have provided with your name, and other identifiable information. They don't need that. You have to ensure they can never link your computer or associated IP address with Bitcoin related activity. The way the Internet, computers, and Bitcoin works makes doing that pretty trivial unless the user has broken all the links which can be done using, for example, tools like Tor and coin mixing services, but still requires the knowledge and diligence to do it. |
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It still isn't clear when you need to pay taxes on Bitcoins in the USA. Do you need to calculate for every transaction you make from one cryptocurrency to another? If I trade one value (BTC) for an equal value (LTC), how is that income?
Disclaimer: I am not a tax professional and this is not tax advice. Generally speaking there are two U.S. taxes for an individual to be concerned with, income and capital gains. If you receive crypto-coins regularly, say from someone giving you tips to an address in your signature, then convert that into US dollars the government will want you to pay taxes on that as income. If you invest say 1K USD into crypto-coins and that doubles in value to 2K USD and you convert it back to USD then the government will want you to pay taxes on that extra 1K USD as a capital gain. There was a member that posted a Bitcoin related tax filing with H&R Block which eventually classified the bitcoin activity as "hobby". The key thing to be concerned with is conversion of crypto-coins (or any other virtual currency) to US dollars. If you purchase or receive crypto-coins/virtual currency and never convert it to USD then whether or not you have a tax obligation is less clear. I wouldn't think so. The guidance issued by FinCEN clearly says exchange of virtual currencies directly for goods/services by individual users is not subject to regulation. Say I'm part of a small town and we print up a bunch of notes that say "small-town-coins" and exchange them among each other for food/services, etc. That's called bartering, and there may be taxes even due on that activity although one wouldn't expect it and it's less clear when. Bitcoin is in a similar situation. A good strategy is simply keep good records of all the crypto-coins you buy or receive. The simplest way to stay compliant is don't convert anything to dollars, and report it as necessary at tax time. If you ever do convert crypto-coins to dollars then you should make a record of that along with whether or not you received a capital gain. If you are only exchanging from crypto-coin to crypto-coin that wouldn't require documentation (I wouldn't think). |
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With Armory you don't need a printer, just a pen and paper. It's more secure as well as you don't have to trust the buffer of the printer and your paper wallet looks far less generic.
Hmm, looking at Piper's FAQ page it's actually a full computer (Linux distro) allowing you to hook up peripherals like a different printer. You can also customize the wallets or just use pen and paper with it too. Copying addresses out by hand introduces human error and time into the equation, but yeah that's an option. There are lots of options with Bitcoin, however, Trezor seems most well rounded. |
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How does this improve over the paper wallet functionality in Armory (on a permanently offline computer with a fresh OS of course)?
I guess it doesn't, really. The Armory version will give you a more stable printout, but you have to have an offline computer and printer and get all the software set up. With Piper you just press a button. Of course then you have to take better care of the printouts as discussed. There is no single killer solution yet. Every option has pros and cons and can work better for some users depending on their specific use case. However, I think the Trezor for now provides the best combination of ease of use, unbeatable security, and range of functionality for coin management. It will be the silver bullet solution I think for a long while. |
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The killer flaw IMHO is the printer is a heat transfer printer. As anyone who has seen a paper receipt fade knows those are horribly unreliable for stability. Expose them to too much light or heat and you will ruin the image.
That is true. I'd rather see a different kind of printer in this thing but for that problem there are existing (easy) solutions (see above). Well I don't consider those solutions either easy or good. Someone who has an offline computer and scanner could simply use that computer for storing coins. Someone who puts private keys in a digital camera is very likely to accidentally upload them to a computer. Worse more and more for many people the cellphone is the most common digital camera. I doubt many people will use their instant-one-button secure printer and then go find a copy machine to make a lasting copy. No the most common scenario is someone prints out a keypair, puts it away and when they check months or years later the key has faded and all coins are lost. If you think about the target audience it is going to result in lost coins. I agree those printouts may not work well in practice... However people might also be more careful with them. Store them in a ziplock bag to protect from moisture and in a safe place, for example. I'd definitely make a USB stick copy too. Also, from what I understand the Piper stores all the keys in memory unless you tell it to forget them. |
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