And your comment has done nothing to help the situation.  imo.

In my admittedly limited understanding of the situation matauc12's layout seems more right than wrong.  I would be a little less charitable to Nefarious, however, and derive lulz over his bluster about screwing 'the man' then his bowing his head when the rubber actually met the road.  OTOH, I would bet money that about 99% of everyone else who thinks they are so tough would fold just as easily...and most of them would not have gone as far as Nef in terms of trying to make some segment of his user-base whole.

Scams detract from the Bitcoin solution generally and thus directly harm me personally as someone who both holds BTC and appreciates the potential that the solution offers.

I think it quite relevant that potential scams are explored and I appreciate everyone's input.  If there is a legitimate complaint about the community generally it is that they/we are not willing enough to explore potential scams.

If BFL's ASIC campaign is not a scam then at least a thread such as this might coax out a little more transparency which is probably not a bad thing especially since they ride on the back of an open-source project.  Or it might not.

My feelings about guns generally are that they mostly just cause more problems than they are worth.  Even though I have them and some training with them, I would go a long way not to use them in any circumstance.  Guns are not my first line of protection for anything, and I would not even consider bringing them to a BTC transaction.  I see almost no scenario where they would be useful (in part because I would only perform a transaction under well controlled conditions.)  I don't even concealed carry at this time because I feel that it limits the types of responses to certain types of events that I could legitimately undertake.  But that's a personal choice, and I can accept other people making a different one.  Fortunately (in my opinion) many people in most states in the US have the option.

Now perhaps you are talking about bringing weapons other than firearms to a Bitcoin transaction?  I'd probably avoid that as well, and for similar reasons.  It would be worthwhile to have a trusted observer hanging out in the same general area though, but this goes for any transaction which is similar.

I disagree with my bud ~cypherdoc that anyone should stay away from person-2-person transactions no matter what their position.  This largely because I feel it important to 'work out the bugs' of doing such transactions absent functional exchanges.  Just in case.

That said, it would obviously make sense to be as careful as possible, particularly since BTC is useful for criminals and (possibly) of increasing interest to law enforcement.  Since my BTC and other assets tend to be pretty static I've not done any person-2-person BTC transactions but I intend to if/when I wish to liquidate some BTC (but will likely buy on an exchange if I buy more BTC and the exchanges remain viable.)  Thus, I've put some thought into how I would do things and it is along the lines as follows:

 - outline and document in detail with the other party how things should go ahead of time.  Including:

   - we meet in place which has good video surveillance, security staff, and other people around.  A large corporate campus would be swell, particularly if it is near a bank.
   - I send x-BTC to an address of other's choice (likely something like Instawallet so transactions are reliable without waiting for confirmations.)
   - other gives me {x} $$$  (likely a function of Mt. Gox spot price.)
   - I send another {x} BTC
   - other hands over some more fiat.
   - etc, etc, until transaction is complete.
   - say goodbye.

The step-wise nature of the transaction limites losses should one party run.  Now due to this note, add one more bullet point to the outline.

 - neither party says a peep about anything not necessary for the transaction.  If we want to meet up for a beer several hours later and talk about politics, drugs, guns, etc, fine and good.  My USD will be tucked into bed well before that.  And if the transaction goes the other way, my BTC will similarly be squirreled away in cold storage.

Even if everybody (except BitcoinNV) is being 100% honest and up-front in everything they say, the question remains about when the 'fallback' would be exercised.  Would it be when they run out of money, or when outflows threatened to exceed inflows?  Time will tell, or at least will tell what the answer probably would have been.

I cannot see your 'W Effect' being a huge deal though it could lop off the 'long tail' of the PM market which could be fairly significant in some scenarios and admittedly could seriously impact PM's role in low value exchange markets.  That said, debasement is nothing which has not existed and been dealt with in the past when PM's were in widespread use as exchange currencies.

I see a pretty significant opportunity for entities combining the rolls of an escrow and quality assurance body for PM transfers, and using the 'lubricity' of Bitcoin to facilitate certain parts of the multi-way transaction in a reliable manner.  I'm tied up at the moment but may expand on it later.

All I can say is that yes, this form of fraud is real and a legitimate concern.  Or at least if it is not currently, it will be under many of the potential scenarios which induce me to wish to own PMs.

By way of making lemonade out of lemons, I am tenatively planning to 'diversify' into obtaining whatever technology and skill set is required to assay metals to a higher than normal degree of precision.  When I get around to it.


That comment is a bit unclear to me.  I guess you are saying something like: 'how is this not equivalent to Bitcoin having been cracked?'  If so, I guess my answer would be that it's more equivalent to Bitcoin realizing a weakness that one should be careful to avoid.  Pretty much everything suffers from such a thing actually.

Maybe he's a subscriber to Cypherdoc's newsletter?

It's often kind of fun to 'miss' the KWN weekly metal wrap and listen to it later while watching the early week action.  It happened to me yesterday and I must say that Trader Dan utterly nailed it this week.  I would go so far as to say that that is not unusual for him in my observation though of course everyone has their mis-steps.  Or at least everyone who has the cojones to try to make calls (I don't.)

I will continue to assume that another case would be that you made a credible offer of a stay in jail or other significant personal unpleasantness no matter what the 'just-ivity' may be.  Rightly or wrongly the assumption is an appropriate one to make for someone on 'my side' of deciding who to trust with what data/money/etc, and it is a general thing.  That is, not specific to ~theymos or bitcointalk.org server use.

If I had a widget or a service that I wanted to sell, I'd offer at least a 5% discount for BTC, and probably more like 15% or 20% just to avoid the hassles of acquiring BTC in other ways.  As it is I've got about the number of BTC that I want, nothing I want to sell, and there does not exist a means by which low-ish value transactions can be performed safely and inexpensively anyway (imo.)

You are of course right about the volatility, though it can work in two directions.  That is in fact a big part of the reason I am interested in holding BTC.  This speculative use-case is not appropriate for typical commerce though so I'll largely agree with your point here.  I don't think it dooms Bitcoin to a value-less state, and it could even work in the other direction in terms of values against other stores.

To me it's an expensive hassle to obtain BTC and through most paths I have to deal with entities who I don't trust (potentially including the likes of Dwolla, the various Bitcoin exchanges, my banks, and my government who is almost certainly logging all of my financial activity.)  To top it off, I am concerned that it will become even more difficult to obtain BTC going forward so the supply I hold currently exceeds the 'face value' in my mind.  That is why I have little or no interest in spending BTC when there are options.

Am I a bad person for failing to support the nascent economy?  Probably.  OTOH, I've not yet been ripped off either.  I consider the USD<->BTC hassles which currently exist to be something of a blessing insofar as it gives the solution an excuse to fail at the exchange level.  Perhaps the solution would not be so rife with bad apples absent the roadblocks to use which are currently in place.  I actually don't really believe that in a major way because the roadblocks are not that significant and the failures have been mostly associated with user error (aka, ignorance, greed, false mapping, etc) in my opinion.  But it makes a good story at least.

I thought the pirate joke was pretty funny.  His descriptions of things aligned generally with how I had guessed that things likely went down in many ways.

I'm betting it was a complete coincidence, and not even much of that due to the elapsed time.  It was pretty much a sure thing that some ignoramus was going to post something along those lines and I doubt that dear old Nefarious was particularly unprepared for it even given his lack of aptitude for predicting likely future events.  I'm surprised there were not more threats of violence, and sooner.  Maybe there were but I don't necessarily follow all the various threads.

Ya, ya...that old chestnut.  We hear it every time (to the detriment of Bitcoin) and it won't happen because it makes no sense.  Nothing to gain and a lot to lose.  Not to mention the fact that in this case poor old Nefarious probably didn't really start out with the expressed intention of robbing people but mostly just got in over his head and is trying to make the best of a bad situation that he was too dense to see coming.  Make the best for himself of course, but I personally find that understandable albeit not very laudable.

Seemed more like the gay biker look than the neaderthal look to me, though my experience with either group is limited.

As a pretty left-wing socialist type as well as a Bitcoin enthusiast, I would have to say that it's not the 'features' of Bitcoin that I consider 'libertarian', but more that the solution is most actively embraced by that group.  As I understand things, the philosophy is generally that it is OK to leverage any power that one can muster for personal benefit because the 'free market' will sort things out.  Eventually.  My observation of the economy which has grown up around Bitcoin does very little to disabuse me of my understanding of the philosophy, and needless to say I consider the philosophy to be objectionable and generally a fail.  Thus, to the extent that Bitcoin is considered 'libertarian', it certainly has some negative connotations to me and probably others of my general orientation.

Framed differently, I have about equal interest in having 'Joe Sixpack' be raped by 'banks/financial industry' as by any other group or exploitative individuals.  As long as Bitcoin facilitates this (in the real world vs. in some theoretical landscape) it is not especially much of a step forward.  But it does have potential at least if developments proceed in healthy directions.

As I mentioned in a different thread, I don't see that this would/will be that big a deal.  The total loss may be high, but it will impact a relatively small number of people, and a lot of observers will feel like they had it coming.

The official regulatory bodies (in the US at least) are clearly failing as evidenced by the lack of action in the Enron case, the 2008 fallout, MF-Global, the theft of many pension funds and social security, etc, etc.  It would be more than prudent to work toward alternate means of protecting our (the 99%) financial well-being since it is abundantly clear that this is not a priority for our regulators and government.  It's actually more of a necessity of survival than a nice-to-have as I see it.  So far the Bitcoin project and associated efforts are failing most miserably I must say

That does not concern me a whole lot.  Easy enough to white-list valid blocks if one is not so concerned about centralization.  And in a freely chosen community-based crypto-accounting system centralization is not such a concern.


There were a number of trade offs made in the design of Bitcoin.  All in all I am amazed at how prescient the balance the designer choose was, but different designs might fit different problems better.

My thought would be to induce people to use a given solution because it serves there needs best rather than force them into a solution through either lack of options more blatant expressions of force.  In this way the best solutions (for the user) will survive and even better ones will evolve.