Congressman Ron Paul's Final Domestic Monetary Policy Subcommittee Hearing
Aug 2, 2012
Location: United States

Abstract: Ron Paul's subcommittee met on August 2nd, 2012 to examine sound money and parallel currencies.

 - http://www.youtube.com/watch?v=oPCFKHCCKF0&feature=player_detailpage#t=2918s

Bitcoin touched on beginning around 48:38 and it was referred to in the context of being a barter currency.

Just to make sure it is clear how it works.  If there is more network hashing power than is supported by the current level of the block reward compensation plus the transaction fees, then that excess capacity will go away (i.e., unprofitable miners will stop mining), and an equilibrium will be found.

So that was a record, in terms of USDs ... about $3K USD (using today's exchange rate).

This draw was a little bit more than half of the record draw in terms of BTCs (486.33 BTC) from the June 1 draw.

With BitLotto, 99% of the ticket revenues go to the payouts.

If it was structured similar to MegaMillions lotto, the payout to all winners for the month would have been something like 136 BTC, and because there are other winners than just the MegaMillions jackpot, the jackpot wouldn't even have been that much.  The amount that the MegaMillioins jackpot is quoted at presumes you will take it as an annuity (over a period of years).   If you want the money right away (cash payment lump sum), the jackpot amount is lowered another 20% or so (depending on the interest rate at the time it is won).  Then from that there is federal withholding at 25% and likely state taxes and ... ya.   Go BitLotto!

No, that kml no longer gets updated.

Rowit stopped updating mid-July.

There probably are some traders collecting this info but nobody is sharing it as far as I know.  

Here's one reason why:
 - http://blockchain.info/charts/my-wallet-n-users

Electrum, BitcoinSpinner, and online hosted (shared) EWallets are another.

Sorry there's not much to go on to quantify if though.

What might be useful is to watch the growth of this metric:

"Total Unique Ip Addresses: 1,151,068.00"  - Bitcoin nodes blockchain.info has connected to in the past.
 - http://blockchain.info/ip-log

That is if the merchant is prepared and has access to one of those card swipers (either the Square dongle or the dedicated one you referenced).  Though with a Square account you can also do Card Not Present transactions to then manually enter the card.  

But you are likely correct -- as long as there is even just mobile communications and battery powered mobile / tablet / laptop devices, the existing payment systems can continue to function even with an extended power outage.  Bitcoin doesn't really offer merchants anything they need in this scenario.

As far as enabling person-to-person exchange if the ATMs are down, I still think Bitcoin is uniquely positioned for that.



 - http://www.youtube.com/watch?v=QoRlyPZ3zJ0
 - http://bitcointalk.org/index.php?topic=86012.msg1026722#msg1026722

I have about a dozen bet statements currently, and have another dozen from the past that have expired.

A few get a pretty decent amount of participation, but even more have been very sparse -- not earning enough commission to even cover the entry fee (0.1 BTC).

Since all commission earned comes from the losing bets, it would make sense that a bet statement that is profitable is one that is interesting enough to attract bettors but also bets that are uncertain enough that there will be bettors on the losing side.

The most profitable one that I had so far was the one about gas prices.  At the time I placed the bet, gas prices were zooming.  It got over 10 BTC in bets saying the price would hit $4.25, and before the prices started dropping it got about 10 BTC on the Agree side.  When the price started dropping, there was almost no more betting on that side.    In the end, I got 0.55 BTC commission (5% of the 11 BTC wagered) for a couple minutes of work, and my bets placed were all on the winning side so I did OK, on a percent return basis.

So the financial success of a bet statement entirely comes from the ability to attract bets that ultimately are on the losing side.

Whomever wrote that one about BS&T defaulting by the end of the year will make out nicely ... up to 15 BTC commission no matter which way it ends is a nice reward for a few minutes of effort.

There are some regular financial bet statements ... like "the price of bitcoin will be X on a certain date" and those work as a low cost "binary option" that speculators like.  But there aren't many other topics that get a fair amount of bets.  There are a categories that get a lot of bet statements (e.g., sports, olympic results, etc.) but there's not a whole lot of wagering occurring with them.

Does anyone have any suggestions of categories of bets they would like to see?

I believe any bets on the calendar day (a U.S. timezone) that the event occurred and any made after that day are all canceled.

There is more to come from Bitcoin in terms of capabilities (easier to use multi-party signatures, smart contracts, etc.) but Bitcoin will always have some shortcomings including requirements for anonymity, transaction fees, microtransactions (volume limits), security, reversability (with bitcoin, this is the confirmation time), etc.

 - http://en.bitcoin.it/wiki/Ideal_Properties_of_Digital_Commodities

The solutions that could fill in the blanks where needed don't necessarily need to be alternate currencies.  Redeemable codes issued by the exchanges are one (relatively poor) approach.    A decentralized proof-of-work blockchain currency will likely have most of the same shortcomings as bitcoin.

Open Transactions (OT) is very well suited to be one of the technologies that becomes successful at filling in the gaps -- better privacy (blinding), instant transactions with no confirmation delay, low or no fees, microtransactions, transparency into an asset's "backing" -- once auditing module is developed, etc.)

Because OT doesn't offer the prospect of direct financial gain to speculators it doesn't get hardly anywhere near as much attention as it should,  There are some bitcoiners who are helping to develop, build, test, operate and improve OT technology.  I would bet that OT has more impact on cryptocurrencies in the next year to five than LTC ever will.

Now I'm not saying there's no place for LTC, and after GPU miners give up on BTC mining following the one-two punch from the block reward drop and the arrival of FPGA clusters and ASICs, hobbyist mining operators will probably switch to LTC mining -- at least those who aren't paying hardly anything for electricity.  But without an alt improving much over bitcoin other than how it can be mined by a wider subset of the general population then I don't see it following Bitcoin's path.  I see a lot of speculation hoping it will, but that's not the same thing.

Also, where does my profile with this info ever show for the potential trade counterparty then?

I was confused by the instructions.

Now that I completed it successfully I can no longer see the instructions that I was confused by, but following is how I think the instructions could have been presented:

-----------------
Field - Bitcoin otc nick:

If you already have a #bitcoin-otc Web of Trust (WoT) nickname, enter that.  If you haven't yet registered a Bitcoin return address, you then need to register one, using these instructions: http://wiki.bitcoin-otc.com/wiki/Bitcoin_address_authentication#Change_address

If you don't already have one, create one using these instructions: http://wiki.bitcoin-otc.com/wiki/Bitcoin_address_authentication


-----------------
Field - Bitcoin otc signature:

Use bitcoin client to sign the message in bold below.  Sign it using the bitcoin address you registered with the #bitcoin-otc Web of Trust (WoT).

Here's a prediction from another thread:

A mobile version of this, at least for the map / navigation, needs to happen.

I see that functionality is available as guest / unauthenticated.   Could there be an API created so that an open source mobile app could be built for this?

From another thread:



FinCEN has not said much about Bitcoin other than that they "are aware of [it]".  Former Federal Reserve economist David Barker likes it.  Former U.S. Treasury Secretary Larry Summers likes it. Google Chairman Dr. Eric Schmidt likes it.   Citibank's Global CTO jokes about it. At the most recent AML conference, there was only a single 1 hour session on it, and there was little interest reportedly.  Traders and analysts at Morgan Stanley and Goldman Sachs trade it on their personal accounts.

Where might these serious concerns be originating?

Depends on difficulty.   Someone with free electricity even would be wasting their time mining on a CPU.

If difficulty gets to 100 Thash/s (from let's say $3.2 million worth of purchases of SC mini rigs) then a 0.7 Ghash/s 5970 will mine about 0.025 BTC per day (after the block reward drop to 25 BTC).  Thats just a little over a quarter dollar per day per 5970, or about $8 per month.

If I had to bet though, at this exchange rate GPUs will make the effort worthwhile for a few months yet.

FastCash4Bitcoins should get a bank account at Veridian Credit Union (or some other bank that is adding Dwolla FiSync).  This is like Instant ACH.  This way a bank wire could be sent (or cash deposit made) and the transfer to a Dwolla account can be completed using those funds within hours.

The @CAVirtEx Twitter feed has the latest status of exchange, which happens to be down at the moment for an upgrade, or so they have reported:

"Our update is causing has caused a longer then usual delay to update our db our technicians are working on it now."
 - https://twitter.com/cavirtex/status/231579126035787777


 - http://twitter.com/cavirtex

"Our update is causing has caused a longer then usual delay to update our db our technicians are working on it now."
 - https://twitter.com/cavirtex/status/231579126035787777

Thanks for that.

Those businesses are prepared then for a power outage.  Where power is relatively stable most businesses simply must close in the rare instances that power is out.

As far as exchangers it only takes a few in a large metro area to get things started.  Right now the list of traders on LocalBitcoins is starting to grow -- globally.  So, let's say there is a multi-day outage (for example, physical damage to multiple parts of electrical distribution infrastructure).

Basically starting just with those few who are already familiar with how bitcoin works, they could basically fast-track adoption of bitcoin.  Simply print up (or have community print themselves) paper bitcoins from BitAddress.org  -- then fund them with small denominations (e.g., $5s, $20s and a couple $100s.)   Then work with a few key merchants to accept these paper bitcoins (scanning the QR codes to redeem the coins).

This handful of individuals wouldn't likely have many bitcoins themselves but many in the community would have relatives and businesses outside the affected area that could buy and send bitcoins to bitcoin addresses for the paper bitcoin wallets.  These individuals then could facilitate exchange, providing fiat for those without smartphone mobiles or laptops.

The biggest barrier is that bitcoin isn't known to the merchants and exchangers and they wouldn't move very quickly towards this.  But if this scenario were to occur some day, it will get some press as a novel solution -- digital currency to the rescue, and will be tried the next time it happens elsewhere, and will spread from there.   Hopefully.

If the slides were published ... link please.

I wonder if the slides were published.