I thought it was a known thing that Coinbase uses Bitstamp as their backend (but on a quick search I didn't find proof of it). They aren't an actual exchange AFAIK. You act surprised, though?

I have a different answer than the ones I read so far in this thread.

My answer is that the mining pool backs bitcoin. Building up a crypto-currency is a chicken-and-egg problem: how to build up a computational network that can secure my transaction for all time to come, allow me to transfer my family's wealth to this thing and absolutely know that it won't be invalidated. The mining pool is the chicken, and then now the faith of all these users in the mining pool to deposit funds is the egg. Then the egg feeds back to make more chickens.

Since mining seems to be (like farming in the 1980's) a zero-profit industry over time, we will see approx $1B spent on building the network to verify transactions over just this next year.

If you heard of a startup that was well-funded to the tune of $1B going to invest in building out the world's most rigorous financial transaction system, would you think it was worth a $12B market cap? Hell yeah, it's not even up for question.

I think that safely gets you out of "tulip" arguments.

Bitcoin really has one hell of a lock-in model. So I find it surprising that LiteCoin (in particular) is able to make reasonable headway. I had written it off. In fact, being human and having invested in BTC (like the OP I presume), it kind of bothered me until I decided to can't-beat-em-join-em buy some LTC with BTC over at BTC-e. That was pretty easy and soothed my emotions

Also, I find it amusing in self-reflection that I am jealous of someone making 20x in a couple weeks when I "only" made 2x.

But overall, look, I think the fact that there is demand for the alt coins shows that there is just huge pent-up demand for all cryptocurrency, just the whole concept of it, people are looking for something to save away their wealth safely. This can only benefit BTC as the clear front-runner.

USA Today will decide. I like mils and mikes. If I were writing a sci-fi book that has a cool factor. "Satoshis" is DOA, no way a guy drinking beer with his buds is going to use that term.

I like rpietila's plan, it's solid and what I've planned for BTC. It's what I've done for angel/VC investments (at least the one out of 10 that worked). Sold 10% at 10X (there was no liquidity before that point), then another 20% at 20X (20X total, an additional 2x I mean), and another 20% for a total of half of it sold by the time the investment was at 80X. Then it went IPO and dropped back to 20X and I feel like, hey, that sucks but it also worked ok, I sold a few times and hit it right some of the time. Now I'm selling some of the rest for BTC

For BTC, something like this has been my plan: get in fast and then taper out. I came into this late and bought at about $300. Still, it has doubled already, and I don't want to pay (US) short-term ordinary income rates, so I plan to wait until 1 year for my first draw down (rake). I do wonder though, if it goes up 10X from 300 well short of 1-year--possible, depending if these weeks have been a flash or just taste of worldwide demand just opening up--should I let taxes get in my way of raking out some of it.

Had my first retail experience with bitcoins and thought I would share it to get some perspective.

I saw in the local paper Coupa Cafe has been taking Bitcoin for a few months. Bought an omelette and some drinks, it came to $38. i asked about paying in Bitcoin.

First observation: it feels awkward to ask this. Geeky like. It takes some guts to hold up the line and make a special exception.

The cashier knew about Bitcoin but didn't know how to deal with it, said she would have to get her manager, who came over a few minutes later with a cell phone. I had since noticed the cash register said "$38" and then below it "0.098 bitcoins" on a separate line and I knew that exchange rate was over 2x wrong, in Coupa Cafe's favor.

Second observation: working in mBTC (maybe "millies" eventually to the public) is a requirement. I had trouble parsing "0.098" so general public for sure would. "96 millies" would work a lot better.

I knew as of today we're getting close to $1/mBTC ($850/BTC) so I knew 96 millies was crazy wrong. But I was there for the experience so I went with it. $80 omelette and coffee. (But I had paid $285 for this bitcoin so what the heck)

They pointed to the QR posted crooked on a little dingy sign on the cash register. I aimed my phone at it, poof, came up no problem. That part worked great.

I had expected them to have some way of generating a QR code that would have included not only their address but also the amount they wanted, so I would have just scanned that and then clicked "ok". That's not the way it worked. I had to type in an amount.

Trying to see if I could squeeze a more reasonable deal, I chose to enter the $38 USD amount instead of the bitcoins, and I showed it to them by flipping my phone around on the counter. The phone translated that to 0.046 BTC.

Third observation: the "send" delay was fast. To my understanding of a quick point-to-point transaction like this I had read you don't have to wait a bitcoin network confirmation time (that would kill any point of sale). So that part seemed fine. The unconfirmed transaction showed up on his screen pretty fast (ten seconds?)

But then whatever wallet software he was running on his phone showed only the 0.046 BTC that I sent. Either he or the software knew this was not what the cash register wanted, and he asked me to send more. He couldn't do the math in his head, so we had an awkward moment when I didn't really want to pay $80 for the omelette, and I debated getting into a discussion of exchange rates with him, but I finally capitulated to the growing line behind me and said ok I'll send over another 0.052 BTC.

Fourth observation: I had thought somehow the "system" (BTC peer software or some convention of scraping the major exchanges at least) would create a well-accepted exchange rate (my bitcoin wallet on android phone does the conversion and it appeared so built-in I thought that would be the case universally). Not true at all. It looks like every merchant can set their own exchange rate. And you can bet it will be in their favor, way more than the few percent you might get as a cash discount saving them MC/Visa processing fees. In this case it was more than 2x wrong.

My second "send" went through as smoothly as the first, at least on my phone (few seconds), but he spent some time (minute or so) looking at his phone to make sure it was ok before I could gracefully walk away from the counter with my $80 omelette.

So I don't know--we are way early, lots of work to do both technically (integrating it into the POS system) and socially (making me not feel weird asking to pay in bitcoin, even to a store that got press in silicon valley as a VC hangout on the leading edge). Both solvable for sure, but it's a ways out yet.

(anecdotal) I work for a super high tech company in silicon valley. Everybody's got PhDs in computers and physics and stuff. Over beers I brought it up with coworkers and most didn't have any idea how it worked and were highly skeptical, echoing the FUD you see from the dumb press articles ("what if the creator decides to take all the money", "what if bitcoin 2.0 comes along", "what if everybody stops believing all at once and the price crashes" ... actually that last one is not a bad objection but large numbers of adopters continually works in our favor)

We are *way* early still. Whether that means enormous spikes in price I don't know, but we are definitely "geeky for geeks" as someone said earlier.

I wish there was some way to short USD

Yeah, it doesn't mean much other than a fun milestone. Party!

At 3600 BTC/day that's 277.7 days until 13.000000M BTC (Aug 20, 2014), but that's only if the mining rate stays constant. As I understand it, every 2016 blocks (nominally two weeks) it adjusts based on previous two-weeks actual time of completion, so if there is say a 10% increase in mining power every week sustained then each next 1016 blocks would be 10% faster than 2 weeks. So that would be 250 days.

Looks like we are 11.998M bitcoins right now. At +3600/day, that should mean within the next 12 hours we will hit exactly 12.000000M bitcoins in "circulation" I think.

Yeah... um, I don't think anyone buying in at $400 is doing it for a greater cause.

I think your "don't care about anyone else" is too strong though, I don't know what gave you that impression. Addressing criminal intent with some sort of bitcoin mods would be of general benefit to people, I believe.

You fellow newbies following the heated discussion in the other forums where the old timers are getting all heated about even the remote possibility of
adding support for redlisting suspected addresses used for criminal activity?

Coming in late to BTC just a few weeks ago, I'm more pragmatic about that kind of stuff, working with government to establish clear rules etc. I just want to make money and don't fear the prospect of paying taxes. BTC may make it easier to demand/pay randoms of all kinds in the future, not just crypolocker, so I would welcome some blockchain analysis/marking/whatever that might prevent me or my loved ones from being a victim in later years. I do understand the objections about how hard it is to do without tainting everybody (the "most US bills have cocaine on them" reference and so forth)

Am I correct guessing newcomers are less fired up in general than the old timers about anonymity and privacy, and more interested in just making a buck... or is it just me?

I think big hacks will be rare. Small user hacks will start to get under control with more products (hardware wallets and reduction of windows OS machines etc)

If bitcoin were an idea for a single country like the U.S., I would say it would be vulnerable to govt legislation. As a global idea, that makes it robust. Governments will have to compete for liberal (i.e. not restrictive) regulation. So I've gotten comfortable with the govt risk part of this investement, at least as an individual buyer of bitcoin. I can't imagine legislation preventing ownership of these things, as long as we pay our taxes. If I were trying to do a bitcoin business it's a whole 'nother headache.

So my "down" scenario isn't a huge crash but more that just the marketplace friction remains with U.S. or others shutting down transfers of money a la Mt Gox and the market just cools for a while (year or two) which shouldn't be a terrible thing.

Bitcoin is the mother of all lock-in business models, probably in our lifetime, so I can't see an alt coin making headway against the dominant player.

This thread is like: http://www.youtube.com/watch?v=NpYEJx7PkWE

starts out all nice and sweet, like sorry man, then goes into some ass kicking

Hmmm. Maybe that was foolish of me. Bitstamp dropped to $385 now. On its way back to $300...?  ;-O

In trading near the $400 barrier I did notice a big wall right at 400, thousands of coins. But people kept jumping in offers at 394, 395, 396. It makes me wonder what the situation will look like at the $1000 barrier (next April seems to be the consensus from the log graphs in other threads), since a whole bunch of the old timers I've read saying things like, "boy I'm sure gonna cash out at $1000".

I used a chromebook, went to bitaddress.org, generated 7 keys, printed them, then take a picture of them for backup.

Then the trick is, should you send money to the addresses without really confirming the private key. I mean, it's gotta be almost zero chance that bitaddress.org would have a bug but suppose it did, you'd be screwed. So I used (again, probably not so smart) bitaddress.org in the wallet details section to confirm the private key. I didn't want to put that private key anywhere on the net like in a test wallet.

I should probably fire up some linux command to check the private key but I was lazy.

Bitstamp rocks, they confirmed my deposit in under 24 hours (from US). For anybody looking for a marketplace I highly recommend them.

For perverse fun, I jumped into that (potentially historic) run up to $400 but as I suspected it fell back. As the price keeps going up, worrying about a few dollars in the market timing isn't worth it, it's < 1% of the price. I had bought some on one of the earlier dips by good karma, so I figured just blast away!