No it means nothing of the sort.  Regulations aren't mutually exclusive unless they specifically define an exclusion.

The SEC could approve this as a "virtual asset", the CFTC could say it is a "commodity" and FinCEN could still define it as "monetary value" (and thus MSB/MT provisions apply). Don't try to apply logic to the law it will make your head hurt.  If regulators try to impose conflicting regulation that defacto is IMPOSSIBLE to apply they will still each expect that you apply their regulation.  It is quite common for regulators to be utterly dysfunctional.  Your recourse is to file a lawsuit.

That isn't true.  It isn't true even with full strength scrypt but the point is moot as the scrypt used in Litecoin was intentionally weakened significantly (2^10, 1, 1).  It is more than 100x less memory hard than the default for low security applications (2^14, 8, 1) and closer to 8000x less memory hard then what is recommended for high security applications (2^20, 8, 1).

My guess is your dad doesn't have a giant trash can full of dollar bills as an investment. He likely has investments in ASSETS  (equity in companies, bonds, real estate, etc) while those assets may be valued in dollars (i.e. 1 share of google is $886) the asset has value independent of what a dollar is worth.  Printing more dollars doesn't reduce the value of the asset, and it doesn't increase their value either although the nominal price in USD will rise.  The rising price is simply a reflection of the falling value of the dollar.

Did you think this through.  A wealth gap .... between rich people and poor people?  Really?

Breaking news at 11 "Rich people have more wealth than poor people."

and in related news
http://www.theonion.com/articles/report-rich-consistently-outearning-poor,1514/

Yes.  They make good gifts.  I wouldn't try to do anything beyond that.  For many people they simply aren't going to be comfortable with the idea of Bitcoin until it has been around for DECADES.  Not months or even years but decades.  If Bitcoin is still around there is a good chance your Dad will own some in 2033.

Nonsense.  You do realize that registration, approval, underwriting, listing, and pre-IPO process is measured in month lots of months.

200K BTC over 6 months is 1,800 per day.
200K BTC over a year is 547 per day.

Far easier to just sell a "small" on the market each day then go through all this process plus you gain the added advantage of selling over a period of time and getting capital back quicker rather than waiting 6-12 months and selling it all at once (at potentially a much lower price).


I mean it is that hard to actually read the S-1 (publicly released).  It isn't a company it is an ETF and the Bitcoins are held by a trust.  0.2 BTC per share issued.  The trust can't spend any of those Bitcoins not a single Saotshi for anything... ever.   The trust simply keeps 0.2 BTC * the # of shares outstanding.  Nothing more, nothing less.

The sponsor (a company which is NOT going public) can charge a management fee but usually these are something like 0.4% so we are talking decades before any significant fraction of the coins in trust are "paid out".

The ETF may be a bad idea, it may not ever get approved, it might be downright silly but it would be the absolute worst possible way to sell 200K BTC.  I can't possibly think of a method with more cost, more legal complications, more chance of failure, more risk, and require more time.

So does PayPal but they both require centralized control.

Bitcoin transactions only take a few seconds.  Confirmations take 10 minutes (on average).  Credit card payments aren't confirmed until 30 days and one could look at that as just 1 confirm as they can still be reversed up to 180 days later.

Do credit cards have a 0% fraud rate? No.
Do merchants still use CC despite a non-zero fraud rate? Yes.
Will 0 confirm in person Bitcoin transaction have a 0% fraud rate? No.
Is it difficult to execute a double spend in person against a well connected mechant? Yes.

If fraud from 0-confirm in person transaction is lower than the fraud losses for CC transactions is that a problem? .....  The million Bitcoin question


Bitcoin has less of a competitive advantage for in person transactions and I think that area will be developed much later.  Ecommerce, gambling, virtual goods, and international fund transfers are the low hanging fruit.  Those areas will be developed more aggressively than in person POS systems as that is where Bitcoin provides a significantly superior system.   For many areas 0-confirm transactions are likely viable.  A vending machine for example can be fooled by counterfeit money or stolen credit cards far easier than a merchant however we haven't seen vending machine companies go out of business.  Who steals credit cards or counterfeits $1 bills to get free sodas?  Who will attempt an in person double spend to get a free soda?

If you absolutely feel that tx must be confirmed (zero fraud) you are limited to centralized solutions but solutions are possible. Some ideas to get you thinking:
a) customer prepays.  Customer on way into grocery store deposits Bitcoins.  By the time he checks out funds are confirmed.  Payment at POS is actually Merchant -> Customer being the balance between the deposit and amount purchased.

b) backup payment method.  Customer pays with BTC but is required to swipe a CC as well (which authorizes but not collects payment).  If Bitcoin transaction is reversed customer agrees to be charged.  Once merchant confirms payment the CC authorization is released without payment.

c) eWallet provider.  Yes it is centralized.  Say coinbase gets physical merchants to accept payments from coinbase accounts.  The merchant doesn't need to trust you, they just need to trust coinbase.

d) multi-sig.  A bitcoin "bank" of sorts has 1 of the 2 keys required to sign transactions.  The bank will sign anything you sign as long as it isn't a double spend.  If the merchant trusts the bank to not allow double spends they can accept 0 confirm without risk.

I liken it to keeping gasoline soaked cash in your house as a hedge against the financial loss if your house catches fire.

That has never stopped them before.  Also contrary to popular opinion naked short selling is NOT illegal in the US.  It likely should be.  There is no conceivable reason that entities are allowed to sell something they don't have but the SEC has NOT made naked short selling illegal.  Now there are rules which make certain activity illegal like naked short selling with the intent to artificially manipulate the price lower however the problem there is "intent".  What is the difference between short selling something because you believe it is overvalued and short selling it because you believe you can manipulate it downward.  On the ticker absolutely nothing and that provides entities which do it plausible deniability.  They are almost never prosecuted and barring a whistle blower it is almost impossible to prove the case even if they are.



However naked short selling an ETF which allows redemption to manipulate the price below NAV is a good way to simply lose a lot of money.  1 share = 0.2 BTC.  Now it will be traded in dollars but for simplicity I will use BTC pricing just remember it would be the BTC equivalent in USD.  The naked short seller inflates supply causing the ETF to fall below NAV.  Lets say it trades to 0.19 BTC per share (whatever that is in USD).  A large institutional investor could simply purchase 50,000 shares @0.19 BTC ea = 9,500 BTC.  The institutional investors then redeems the basket of 50,000 shares for 10,000 BTC.  The institutional investor who already has some "physical BTC" can execute both of these simultaneously and simply profit 500 BTC instantly.  Obviously this is a zero sum event so the amount of profit the redeemer makes is simply a transfer of wealth from the short seller.  One gains 500 BTC the other loses 500BTC.

Would you like to buy 10,000 BTC for 9,5000 BTC?  I know I sure would.  

Simple answer ... don't.   Let him come around to it on his own.  Bitcoin isn't going away, it isn't a race and there really is no reason for a financial conservative, technologiclaly unsophistication person who sees no need or use for Bitcoin to get "into it".

If you want, the next time you need a gift get him a physical Bitcoin and tell him to keep it safe.  If 5, 10, 30 years from now he realizes that gift you got him is worth a fortune well that might get him into it.  If Bitcoin fails well it didn't really cost him anything except not getting a different gift in the past.

Nice thing about Bitcoin is it would be possible to provide cryptographic proof of ownership.  Move coins to holding addresses (with encrypted private keys in vault).  Since redemption and issuance is always in basket of 50,000 shares (1,000 BTC) it would make sense to use 1 address = 1 basket.

Provide public addresses and digitally sign a message stating ownership with private key.

The digital signature provides irrefutable proof the trust has ownership of the private key.
The blockchain provides continual audit that the coins haven't been spent/moved.
If shares are redeemed or new shares are issued that is also provable.

Essentially at all times the number of BTC in digitally signed holding addresses should always reflect NAV (initially 0.2 BTC) * shares outstanding.

If the paper Bitcoins trade at higher than actual Bitcoins one can instantly collect a risk free profit.

Example:  1 share = 0.2 BTC.  The average bid for depth of 50,000 shares is currently 0.21 BTC (obviously it will be in USD but 0.21 BTC equivalent).

Sell short 50,0000 shares @ 0.21 BTC
Deposit 10,000 BTC with trustee
Trustee issues 50,000 new shares
Use new shares to cover short.

Net-net bought @ 0.20 BTC, sold @0.21 BTC.  Gain 0.01 BTC per shares * 50,000 shares = 500 BTC.

The ability for the fund to have subsequent share issue and redemption is a mechanism to "balance" the ETF and ensure it will trade very close to NAV.

If you are going to rely on the S-1 please READ the S-1.  The ETF doesn't value coins at anything.  To pay the registration fee they need to provide an approximate IPO because the fee is a % of the fund value.  The price they used in the S-1 was the volume weighted average for the price across the three largest exchanges on the day of the filing and for the sole purpose of paying the SEC their fee.


If they would have filed the day Bitcoin hit $266 they would have used that price for the filing as well.   If/when the ETF is approved, the initial baskets of shares will be sold pre-IPO at the CURRENT price whatever that may be $20 or $20,000.

If you are "scared" about an investment/asset/purchase (any investment/asset/purchase) it likely is too large.  Life is short why inflict optional stress of yourself.  Ask yourself what about of Bitcoins could you hold such that you won't be scared, you won't panic, you are willing to ride it out to its inevitable conclusion (regardless of if that is success or failure).  Most likely you can logically reach a number in your mind.  Nobody else can tell you what it should be because everyone's risk threshold and personal wealth is different.    A venture capitalist with a billion dollar net worth might not blink at hold 100,000 BTC and an out of work family man might not be able to handle 10 BTC.

My guess is your current holdings are significantly larger than that comfort threshold.  As long as it is you will be stressed out.  Someone might reassure you today but tomorrow will come.  The price may go up and you feel better temporarily but at the first sign of weakness the doubts will come back.

The good news is you can later delete your post and pretend it never happened .... but you will always know it did.

Terminology, sherminology.  It is a great "plain english" starter.

I don't want to be a ballerina.  Strangely I don't spend my days on ballerinatalk.org

Most people will not be miners.   Most people don't mine gold.  Most people don't grow their own food.  Most people don't build their own cars.

Most people will not be miners.  Anyone who had a belief that the Bitcoin network would someday have billions of miners was simply delusional.  Reality is crashing into that delusion and that is why we get threads like this.

Decentralized doesn't require 100% of users to mine Bitcoin.  The reality is today many people <gasp> don't mine.  Do you think most of the shops using Bitpay are also miners?  Anyone think namecheap has nothing better to do then build a bunch of GPU rigs in their datacenter?  I made enough from Bitcoin related services that it is now my sole employment and (I know this will be very difficult to comprehend) I don't mine.  My GPU rigs went dark in January.  Gavin collects a salary developing the client.   The list goes on and on. 

The idea that mining = Bitcoin is simply a delusion. 

Now Bitcoin does need to be decentralized.  It would be optimal to have four or five companies producing hardware competing on cost, efficiency, features, etc.  We aren't there yet.  BFL shares a lot of the blame for that.  They simply weren't ready in 2012 (lolz it is funny how not ready they were) to make the kind of promises they did.  That accelerated the time table.  People stopped working on FPGA and rushed ASIC plans.  Had BFL been even slightly more realistic about ASIC products the transistion would be be a little less rushed.  All that is water under the bridge though.

In time KnC, ASICMiner, BFL, Avalon, etc will all have sufficient capacity to have reasonable delivery timeframes.  New players will emerge, better tech will be developed, life will go on.  Not everyone will be a miner.  I was forced out of mining because of a lack of time and in hindsight it was the great.  Someday I will buy an ASIC rig, probably a small one (whatever that means in future hashing power) and just let it mine on p2pool.  It won't be a way to get rich, it won't be a hope that $1,000 in gear will someday make me a billionaire.  As long as it can break even and convert electricity into coins I will be happy.  I probably am not alone in that respect.  A lot of people have small realistic goals.  Thousands of people with modest amounts of hashing power will secure the network.   Now if you WANT to be a professional miner well the days of just buying 20 GPU from NewEgg and making a fortune are over (if they ever existed) it is going to require real capital, real resources, real commitment.  So those at that fork in the read think about what you want to do and be realistic about it.

What are the gains on a $100 GPU?  Mining was never intended to be a high profit, free moniez for everyone system.  The purpose of mining is to protect the network and miners are paid a fee for that service.  Mining is an almost perfect commodity and as such overtime the margins are going to be very low, especially as the risk premium declines.

Still the reality is you CAN get into ASIC mining. Maybe you don't like the return but that doesn't change the fact that you can get into it.

The eruptor uses 2.5W of power so once bought while your revenue may decline it is unlikely it will ever be unprofitable.  Difficulty will be constrained by electrical efficiency and that will ensure those eruptors will be able to trickle in some revenue for a long time.