Brought my $10K (USD) in late-April/early-May (average basis just under $100); I have 94.75549464 BTC + 1 BTC (Casascius coin Christmas gift from my son) -- I gave 4*.2BTC away but am helping the recipients learn about Bitcoin.  Is there a list of crashes?

Age: 55
<1.5% with a desire to grow to at least 10%

My position is, I have deep concerns regarding the US Federal government monetary policies.  I want a hedge against the inevitable inflation coming.  Commodities, e.g. physical gold, are one form of diversification but not without their cons.

*If* Bitcoin flops (seems unlikely) then at <1.5% of my net worth I'll be ok -- one less cruise during retirement.  *When* the inflation hits, if Bitcoin hasn't flopped then it should preserve wealth nicely.

This early adopter capitalization is great but obscures the thought processes of folks around me.  The pressure to take profits is relentless.  If I reach or exceed my target portfolio goal of at least 10% in Bitcoin then to appease my friends/family I will cash out my original investment (unless they've come around to my way of thinking).

When the rise of the $US/BTC exchange rate causes my portfolio to be too out of balance then I will diversify.

I took ~1% of my net worth, $10K US, in at an average basis of $100/BTC.  If/when the exchange rate passes through $1,000/BTC (assuming everything else holds still) then it will be over 9% of my net worth.

The question is always, "What are my needs and wants?"  If a need or want exists then will I use some of my Bitcoin or other assets to fulfill it?

Um, short of (getting all of that computing power to cooperate to brute-force attack is unlikely in the extreme) but even 78.65 bits (rounding up to 80 is not reasonable; it is over 2.5x harder)  is a very long way from 160.  Whatever computing power it took to get to this 78.65 bit result is 81.35 bits short, i.e. over 3 billion trillion times.  If you can gather even 1/65536th of it I'd be stunned but that would put you at 62.65 bits, i.e. over 200 trillion trillion times short.  Spend your energy pursuing something a little more likely to bear fruit.

What can I do to help?  I've tried to understand the topic.  To me it seems like there's a pretty small window (if any?) through which delayed block announcing can gain any advantage.  Clearly delaying too long is nonsense.  When is the block chain considered fixed?  Is 6 blocks the number of blocks required to be considered immutable?  Even with 100% of the hashing power no one can go back and rewrite the chain before some point, right?  If a new very fast miner comes along and picks some historic point in the chain and computes a longer fork, i.e. they catch up to the rest of the miners (an impressive amount of computing power), are the rest of us obliged to accept it?

What I do see is the need for a reliable and vigorous development community to respond/handle each and every threat.  How can we ensure that community is and remains reliable and isn't compromised?  I am willing to run a variant of the client if it would help secure Bitcoin against delayed block announcing.  Or I will ignore the threat if the consensus of the development community points in that direction.  How can we be sure what the consensus is?

Yes.

If you or anyone else is interested then let me know and I will connect you to the folks I'm working with.  Perhaps we should suggest a referral program.

Gold coins are allowed in an IRA *but* they must be held by a custodian -- you are not allowed to store the coins yourself.  This is a common misconception.

I would *much* rather just buy Bitcoins but I can't with my IRA -- btw, I have purchased Bitcoins with non-retirement funds which is great but I want more.  The next best thing would be to find a custodian that would hold Bitcoins for me but I tried but failed to find one.  I even started to explore creating a trust company but I soon discovered that's real work and very costly.  Now I have found Equity Institutional is willing to be my custodian to hold shares of a Unit Investment Trust (UIT), specifically the Bitcoin Investment Trust offered by SecondMarket.  Granted it is not the same as owning Bitcoins myself but it'll have to do for now.  Perhaps one day another custodian will come along and offer to hold Bitcoins for my IRA but until then I don't have that option.

If/when the/an ETF is finally stood then I will evaluate that approach as compared to the SecondMarket UIT.

Reasonable guesses; it will be interesting to get SecondMarket's response.

Would there be a way for someone to "sign" a message proving they have control of a certain amount of Bitcoins *without* revealing any public addresses?  Is this akin to what I've heard discussed called "Proof of Stake"?

The custodian for my IRA will be Equity Institutional (formerly Sterling Trust).  I have submitted all of the application forms (not too tough).  I am just waiting now for the final clearance from SecondMarket.  So, last chance for any vital revelations.  I appreciate both the votes of confidence from Windjc and Rygon, etc., *and* the plea to strive for purity.  I have felt for a very long time a desire to diversify out of US dollar denominate investments but never could see any sense in the Euro, Yen, Yuan, etc.  Physical commodities are not without their cons.  I want to take retirement funds, especially Roth, into Bitcoin but do not want to wait for the ETF; transferring to the ETF in the future might be reasonable.  I have no intention of dumping Bitcoin when the exchange rate reaches some magical amount.  If Bitcoin fails then my diversification play looses; so be it.  If Bitcoin succeeds then I will spend mine on goods and services as I see fit or pass them along to my beneficiaries.  I am no day trader.

Based on the limited research I've done, I trust SecondMarket and Equity Institutional enough to plow $25K in.  If they screw up then they will miss out on a tremendous opportunity to do more business with many people.  Someone has to take a chance and go first/early; I'm willing and able.  I will continue to report on my experiences.

I am technically familiar with Bitcoin yet I am also very close to becoming a SecondMarket client -- perhaps I am just rare/special.  So far I haven't found a way to bring my retirement funds into Bitcoin; SecondMarket gives me that.

I have yet to encounter anyone else (except my son who was the one that spark my interest in the first place) I personally know that wants to enter Bitcoin at all -- I am perhaps not the most effective ambassador.  Well, I've gotten a couple of very minor nibbles but nothing big.

I am just inches from investing with them -- fees and all.  Until the ETF is available, retirement funds can't be moved into Bitcoin short of withdrawing them and paying 10% penalty and income taxes (if not Roth) -- yuk.

Assuming minimum investment of $25K, that would be;

$375 1.5% initial fee
$500 2.0% annual fee which piles up the more years you're in
$?     1.5% exit fee

But, there's also the Equity Institutional fees to be considered.

If Bitcoin goes to zero or just down it will be unpleasant.  If Bitcoin coins up enough then it is a win.  One invests in Bitcoin to be diversified; to hedge against the falling US dollar.

So, I asked SecondMarket, "Would you please help me understand; how would sharing the public addresses compromise security?  Obviously sharing the private key would absolutely do so.

Also, do you have insurance covering the unlikely loss of the private keys?"

I asked SecondMarket, "Will you provide the Bitcoin address or addresses where the trust holdings will reside so that I can use something like Blockchain.info to confirm balances?"

SecondMarket responded, "For security reasons, we will not be able to share the addresses. As you may have read, we have partnered with great service providers including Ernst and Young on the audit side and Sidley Austin on the legal side to oversee our storing of bitcoin."

SecondMarket is sticking to their $25K (USD) minimum.  They rejected my request to bring in just ~$14K (USD) at first.  They also insist on documentation showing one is an Accredited Investor, i.e. net worth excluding main residence >$1M (USD).  Even if I can make both hurdles do I want to pay their 1.5% front end, 2% annual and 1.5% back end fees besides the additional fees the trust company charges for their services?  The SecondMarket unit investment trust (UIT), Bitcoin Investment Trust http://www.bitcointrust.co/ (with a suspicious Columbian domain), will be something less than 100% Bitcoin (obviously they will have to have some cash on hand).  Finally, they indicate they will liquid by March 2014 (at that point allowing folks to get out) but how can we be sure?

Do you often underestimate folks?

There's nothing stopping folks from participating in fractional-reserve banking; they have to invent a device that is different than the underlying full-reserve commodity --- hmm, Alice sold Bob's promise (apparently Bob's promise is potentially just such a device).  Obviously Bitcoin could end up underneath a fractional-reserve bank system despite resistance.  What's new is Bitcoin let's folks avoid fractional-reserve banking if they prefer.  Without Bitcoin where can Alice and Bob make full-reserve deposits and take loans today?  Well, they can do so personally; e.g. we lent my daughter and son-in-law money to purchase a vehicle (rather than co-signing on a loan from an institution) -- I no longer have those funds at my disposal until they repay.  Where is there an institution operating thusly?

Proxy, monetary identity, or whatever jargon you like reveals no especially deep insight per se.

If a full-reserve bank can't compete effectively with a fractional-reserve bank then so be it.  I for one would rather try to preserve my wealth in non-interest bearing Bitcoin rather than $US denominated CDs that barely earn any interest at all and are at huge risk to devaluation due to quantitative easing (idiots).  If I happen to gain wealth relative to others that choose differently then great.  If Bitcoin goes to zero in the next 5 minutes then I am glad I remained diversified.

If Alice loans to Bob then Alice no longer has the thing she lent, period (this is simple stuff; it don't take fancy terms to describe it).  She has instead Bob's promise to repay.  If Alice wants to eat then the promise might not satisfy.  Perhaps Alice has enough other resources to make it by until Bob repays but if Bob fails to repay then Alice is screwed unless she can find and beat the repayment out of him.

If Alice and her many friends join together to make Bob a loan then each of the lenders lends less and can still eat with their remaining resources.  If need be then together they can more easily find the deadbeat and extract their due.

Alice and her many friends outsource the job of finding, qualifying, collecting from, etc., borrowers.  Let us call the outsourcing company a Savings and Loan (S&L).

Depositors at the S&L can make withdrawals only to the extent that resources have not been lent.  Perhaps the depositors would make deposits but stipulate only a portion for lending to remain more liquid.  Only the portion available for lending would earn interest.  The non-lendable portion might be charged a small fee for administration overhead.  Making a non-lendable deposit could make lots of sense; saves Alice from having to care for her own keys.

Lent lendable deposits are locked in until loans are repaid, period (see paragraph 1) -- well, I suppose Alice might sell Bob's promise to someone else -- one wonders what Bob thinks about this (he might have been happy enough to borrow from Alice but might not be too happy when Guido buys his loan).  If a depositor isn't careful and deposits too much as lendable then when they are hungry enough they will regret depositing too much.  Perhaps Alice will borrow to eat -- ugh -- but at least she "knows" she can repay since she has Bob's promise to repay.  So now Alice and Bob owe each other; what a tangled web we weave.

Yes, I do know; in fact, I borrowed against my 401k a couple of months ago but each payment back into $US denominate funds goes against the Bitcoin grain.

Plenty of folks are rich enough *if* they include their retirement funds.  As an alternative, paying the penalty and taxes to withdraw retirement funds prematurely is a pretty painful way to get into Bitcoin but with the kind of potential it could very well be worth it -- one does not need to be rich enough to use this approach just committed/brave.

I left a voice message with the Equity Institutional person directly and an awaiting a callback.  They are a trust company.  They can hold things, e.g. Bitcoins, in trust for folks.

SecondMarket is apparently partnering with Equity Institutional (and others) to connect Bitcoin investors with trust companies.  I'm sure SecondMarket will want a fee for making this connection but pretty quickly folks will find their own way to the trust companies.

https://www.secondmarket.com/ *but* I haven't actually transacted with them yet; I'll report how it goes.  All I have done so far is just signed up and exchanged a couple of emails.  The partner they are connecting me with is Equity Institutional http://www.equityinstitutional.com/ (formerly Sterling Trust whom I contacted a while ago but at least at that time they weren't touching Bitcoin yet).