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1  Bitcoin / Development & Technical Discussion / Bitcoin JSON RPC API (bitcoin-cli) in your web browser [new launch for 0.18.0] on: August 07, 2019, 08:37:31 PM
Access the Bitcoin JSON Remote Procedure Call API (bitcoin-cli) in your web browser. Includes docs on all 127 RPCs, and the ability to call and receive responses for 25 RPCs (and growing).

Completely redesigned for easy user experience, security, and speed.

https://chainquery.com/
2  Bitcoin / Bitcoin Discussion / Brave Web Browser released for iOS - Bitcoins killer app? on: February 19, 2016, 11:10:51 PM

This is one sweet browser:

  • HTTPS everywhere
  • Ad block
  • 3rd party cookie blocking
  • Tracking pixel blocking

All on by default.

Bitcoin micropayment integration w/ wallet slated for next month.

iTunes Store iOS version:
https://itunes.apple.com/us/app/brave-web-browser/id1052879175?mt=8&ign-mpt=uo%3D4

I also added the dev version to my Mac, its great:
https://brave.com/
3  Bitcoin / Bitcoin Discussion / [tutorial] Monitoring soft fork enforcement using getblockchaininfo on: December 03, 2015, 08:56:07 PM


Monitoring soft fork enforcement using getblockchaininfo
https://chainquery.com/tutorials/monitoring-soft-fork-enforcement-using-getblockchaininfo

4  Economy / Service Announcements / ChainQuery.com: Built for the average Joe to use and explore Bitcoin's core API on: December 02, 2015, 08:07:03 PM
A web based interface to the Bitcoin API JSON-RPC.

Just getting rolling with the full beta release today, take a look and let me know what you think.

Looking for folks who want to create tutorials as well....

https://ChainQuery.com
5  Bitcoin / Bitcoin Technical Support / Getting Genesis Block transaction on my node on: July 28, 2015, 04:56:06 PM

I have my node (Satoshi 0.11.0) set with txindex=1

Given a random set I can pull up any transaction by TXID using getrawtransaction, however when I try to pull up the transaction in the Genesis block I get:

Code:
bitcoin-cli getrawtransaction 4a5e1e4baab89f3a32518a88c31bc87f618f76673e2cc77ab2127b7afdeda33b

Code:
No information available about transaction (code -5)

I'm wondering if there is a way to get the transaction on my node?
6  Bitcoin / Bitcoin Technical Support / bitcoin-cli help encryptwallet on: July 28, 2015, 01:28:18 PM
Running "bitcoin-cli help encryptwallet" returns the help page as expected if the wallet is not encrypted, however if the wallet has been encrypted "help encryptwallet" returns "unknown command".

It does not feel like this should be expected behavior, but maybe it is intentional?

Command:
Code:
bitcoin-cli help encryptwallet

Result if wallet is encrypted:
Code:
help: unknown command: encryptwallet

Result if wallet has not been encrypted:
Code:
encryptwallet "passphrase"

Encrypts the wallet with 'passphrase'. This is for first time encryption.
After this, any calls that interact with private keys such as sending or signing
will require the passphrase to be set prior the making these calls.
Use the walletpassphrase call for this, and then walletlock call.
If the wallet is already encrypted, use the walletpassphrasechange call.
Note that this will shutdown the server.

Arguments:
1. "passphrase" (string) The pass phrase to encrypt the wallet with. It must be at least 1 character, but should be long.

Examples:

Encrypt you wallet
> bitcoin-cli encryptwallet "my pass phrase"

Now set the passphrase to use the wallet, such as for signing or sending bitcoin
> bitcoin-cli walletpassphrase "my pass phrase"

Now we can so something like sign
> bitcoin-cli signmessage "bitcoinaddress" "test message"

Now lock the wallet again by removing the passphrase
> bitcoin-cli walletlock

As a json rpc call
> curl --user myusername --data-binary '{"jsonrpc": "1.0", "id":"curltest", "method": "encryptwallet", "params": ["my pass phrase"] }' -H 'content-type: text/plain;' http://127.0.0.1:8332/

Edit: Satoshi Client 0.11.0
7  Bitcoin / Project Development / Chain Query [Alpha] - A web based interface to the Bitcoin API JSON-RPC on: July 09, 2015, 02:04:13 AM
Originally planned on holding off on releasing this until all the API commands were integrated, but with the recent large increase in transaction volume, an Alpha release with what is ready seemed appropriate.

In particular estimatefee and getmempoolinfo are now publicly available through your browser, along with 25 other API commands.

When all the Bitcoin Core 0.10.2 commands are complete the whole thing will be released on GitHub as open source.

So without further ado, http://ChainQuery.com/bitcoin-api

Currently supported commands:


Built for the average Joe to explore Bitcoin's core API and to serve as the foundation for PHP web applications to easily communicate with bitcoin core.

I hope you like it so far,  any questions or feedback are welcome and appreciated.
8  Economy / Service Discussion / Top 10 items sold on Overstock.com for bitcoin on: March 18, 2015, 01:42:39 PM
1. Sheets
2. Donations to non-profits
3. Headphones
4. Cases and holders
5. Area rugs
6. Cables and tools
7. Mattresses
8. Coffee tables
9. A/V cables
10. Fashion sunglasses

Pretty cool that donations is #2.

Sheets at #1 is surprising, maybe people madly stuffing paper wallets into their mattresses created a need? Wink
9  Economy / Computer hardware / ANN - TREZOR The Bitcoin Safe Now Available on Amazon.com! on: January 15, 2015, 07:40:26 PM

TREZOR - The Bitcoin Safe Now Available on Amazon.com



TREZOR White: http://www.amazon.com/gp/product/B00R6LSAZI

TREZOR Black: http://www.amazon.com/gp/product/B00R6MKDDE

TREZOR Grey: http://www.amazon.com/gp/product/B00R6MRI50

Now enjoy the benefits of purchasing your TREZOR through Amazon.

  • Same great product
  • Same price
  • Free shipping (free 2 day shipping with Amazon Prime)
  • Pay with any available Amazon payment method
  • Next day shipping available
  • Amazon in-stock quantities are limited


SatoshiLabs has teamed up with CoinCadence.com to make the TREZOR available for purchase directly through Amazon.com.

Security: Your TREZOR was shipped directly from SatoshiLabs to Amazon’s secure warehouses in the United States.

Shipping: Shipping and returns are handled by Amazon’s world class fulfillment centers.

Support: For technical support for TREZORs contact support@bitcointrezor.com

Want to pay in bitcoin? visit buytrezor.com (DHL express shipping available, free standard shipping. Shipped from Czech Republic)

TREZOR FAQ: http://doc.satoshilabs.com/trezor-faq/index.html

TREZOR User Manual: http://doc.satoshilabs.com/trezor-user/

CoinCadence.com is a SatoshiLabs authorized Amazon reseller.

For more information visit:

http://www.coincadence.com/trezor/
http://www.bitcointrezor.com/

10  Bitcoin / Mining / Bitcoin: The magic of mining on: January 08, 2015, 05:16:52 PM
11  Bitcoin / Bitcoin Discussion / Marc Andreessen’s 26 Twitter Posts (Jan 5) on: January 05, 2015, 10:37:35 PM
Marc Andressen took to Twitter today to share his thoughts on the state of Bitcoin in 26 tweets. Here is what he had to say...

Quote
Some thoughts on the state of Bitcoin, cryptocurrencies, and distributed transaction and trust networks at start of 2015!

A year ago I articulated my views on Bitcoin in the New York Times, and I wouldn’t change a word today: http://dealbook.nytimes.com/2014/01/21/why-bitcoin-matters/

Over the last several months of 2014, there were three Bitcoin counter-narratives that I will describe and analyze:

First, what I call the “dumb” critique: “Bitcoin BTC currency price dropped to below $300, proving Bitcoin is a stupid idea.”

Same class of critics slamming BTC for price falling in 2014 were slamming BTC for price rising in 2013. Only consistency is the slamming.

Further, the critique that BTC is bad because it was down in 2014 changes completely if one uses a 2-year window instead of 1-year window.

BTC was below $14 in Jan 2013. If 1-year performance has been disappointing, 2-year performance has been spectacular.

As a general rule, arguments that rely on cherry-picking specific date windows are not very good arguments.

The second critique I call “smarter”: “BTC is too volatile — it goes up and down too much and so cannot be used as a store of value.”

This is largely correct at the moment, and yet misses most of the point of Bitcoin as a distributed transaction and trust network.

Bitcoin was specifically designed to use speculation early on to overcome the normal chicken/egg boostrapping problem for new networks.

Attacking Bitcoin for having speculative levels of volatility is missing the point of how the system was designed for this point in time.

Now, yes, in the long run, BTC does need to stabilize — which I think will happen with a combo of scale + use of derivatives (hedging).

In the short run, Bitcoin is still highly useful as a transaction and trust network in many uses cases even with high volatility.

For example, payment applications of BItcoin don’t require users/merchants to hold BTC for any period of time. All benefits still gained.

Further, all other uses cases of Bitcoin and the blockchain are unhampered by volatility of BTC. The system continues working just fine.

Net net, the network boostrapping process is happening pretty much exactly as Satoshi designed and anticipated. It’s a thing of beauty.

The third critique I call the “innocent” one — “Are there enough sufficiently compelling uses cases for Bitcoin to succeed at scale?”

I previously identified many uses cases here http://dealbook.nytimes.com/2014/01/21/why-bitcoin-matters/ … ranging from ecommerce to remittance to micropayments to anti-spam.

Two particular areas of focus today are A use outside the US where currencies + banks are often awful, and B machine-to-machine payments.

At our venture firm, we continue to see an escalating stream of fascinating new Bitcoin uses cases and applications from entrepeneurs.

In addition, there are entirely new vistas of technological creativity opening up, such as sidechains http://www.blockstream.com/sidechains.pdf .

The price of BTC has very little to do with the level of creativity of thinking that’s going into new Bitcoin apps, or their usefulness.

By loose analogy, the price of domain names didn’t determine the usefulness of the Internet. This is a broad-based technology phenomenon.

What to watch in 2015: New apps, new use cases, international adoption, consumer education, technological innovation & spinoff ideas!

Final thought: The entire Bitcoin system is 6 years old. TCP/IP was 6 years old in 1981. Big things take time. Onward!

Source and links to the tweets: https://medium.com/@CoinCadence/marc-andreessens-26-twitter-posts-6d8189f74499

12  Other / Meta / Troll takeover? on: January 05, 2015, 10:23:23 PM
Man, is it just me or has this whole forum been taken over by trolls shouting "the sky is falling" in the last few days?

What gives folks?

13  Bitcoin / Bitcoin Discussion / Bitcoin Transaction Volume Historical Data, Graphs & Visualizations on: December 04, 2014, 10:03:56 PM
Well, it's just like the title says...

http://www.coincadence.com/charts/

14  Bitcoin / Bitcoin Discussion / TIL: Where the bitcoins at… Mysteries of the Blockchain on: November 17, 2014, 05:15:33 PM
My original post here: http://www.reddit.com/r/Bitcoin/comments/2mkmoq/til_where_the_bitcoins_at_mysteries_of_the/

TIL: Where the bitcoins at… Mysteries of the Blockchain

I love both the transparency and the pseudonymity that bitcoin provides, so I thought I’d take a gander at the blockchain and see what there was to see.

There are a couple sites that list the “100 richest addresses”, but I’m a curious guy and a bit of a data junky and wanted to see what else the blockchain could reveal.

A little PHP, a current bitcoin node with the full transaction index, a MySQL database, 5 days(!) of processing time on a server and I now have every single unspent output in the blockchain in my DB.

An unspent output is essentially a transaction to a public addresses that not been spent, i.e. has a balance.

I started with the genesis block (#1) and followed the coins all the way up to today. The data is not perfect, there were some transactions I simply could not parse that were either null or non-standard.

Here is some of what I learned as of block 330,433 (Monday November 17th, 2014):

There are currently 14,104,525 unspent outputs in 3,609,649 unique address.

Zero value transactions:

There are 3,393 unspent outputs that contain 0.00000000, this is curious because obviously you cannot spend a 0 balance. In looking at the transactions many of the early ones include a high fee, and then sent 0 BTC to many addresses, talk about blockchain spam and bloat… The first occurrence was in block 82,627 and the latest was in block 329,151.

Here is an example of an early one that simply looks like some kind of spam attack on the network, these stopped occurring so I assume someone fixed it:
https://blockchain.info/tx/9173744691ac25f3cd94f35d4fc0e0a2b9d1ab17b4fe562acc07660552f95518

Here is one of the more recent ones, it only sends 0 BTC to a single address, but its still an unspent output that is worthless:
https://blockchain.info/tx/83277716e29cfaef9525fdd732fa39e008afd7a50302218eaf5073e87a082b24

Perhaps someone with more knowledge then I can shed some light on these…

1 Satoshi Multisig:

There are 16,848 multisig addresses with a 0.00000001 balance. Why? who knows…
example: https://blockchain.info/tx/045727591618d2154239956332f307c754a52c0e7896856a05848ec7065db1c3

Total of 1 Satoshi addresses:

There are 732,959 addresses with a 1 Satoshi balance totaling 0.00732959 BTC

Untouched early mining income:

In the early days of mining using the bitcoin client each 50 BTC mining reward (when 0 transaction fees were included) would go to a unique address, there are still 39,228 transactions with an unspent 50 BTC balance, thats 1,961,400 Bitcoin. Some of these are not newly generated coins, simply a transaction containing 50 BTC, however the vast majority are old mining income. Many of these probably belong to Satoshi…
example: https://blockchain.info/tx/b0a478fc79ecca1173cefe5975dd4a9874593cceb44b66ea4ea14eb40d587a14

Broken addresses:

There are 326 addresses with a balance where the address is “non standard”, a non standard address is one that cannot be decoded by the bitcoin core, and most likely can never be spent again.

Total non standard unspent outputs = 2,614.256208 BTC
example: https://blockchain.info/tx/ddddf9f04b4c1d4e1185cacf5cf302f3d11dee5d74f71721d741fbb507062e9e

Many 1’s:

There are 531 transactions going to a very unique address: 1111111111111111111114oLvT2 (many of them with advertisement like notes)
https://blockchain.info/address/1111111111111111111114oLvT2

While this is a valid address it is very likely that no individual has the private key for it, and the 2.98804915 BTC in it can never be spent



A selection of other unique addresses that are valid and contain a balance, but most likely no one has the key for:


  • 1BitcoinKicksAss1111111111114BbAUx
  • 11111111111111111111BZbvjr
  • 12TisTrueWithoutALie22222221wT3qjn
  • 1CertainAndMostTrue2222222225YPnJF
  • 12ThatWhich1sBe1ow1sAs222221y3G7mv
  • 12ToPerformTheMirac1es222221zShqDE
  • 12ofThe1Thing222222222222221wv1hge
  • 1AndAsA11ThingsWereFromThe1xxdJJ2U
  • 1ByMeansofTheMeditation22221xJd9GS
  • 12ofThe1xxxxxxxxxxxxxxxxxxxy1aqzJW
  • 12ThusA11ThingsWereBornFrom2vX3xAk
  • 191tsFather1sTheSun2222222225iM4gY
  • 191tsMother1sTheMoon22222221z3BtXD
  • 12TheWindCarried1t1n1tsBe11y31r5NB
  • 191tsNurse1sTheEarth22222221zkkvAq
  • 12TheFatherofTheWho1eWor1d2249xs5g
  • 191sHereXoXoXoXoXoXoXoXoXoXo72uqJv
  • 12YouWi11SeparateTheEarth2223tzWxE
  • 1FromTheFire11111111111111113MzD3d
  • 13Sweet1yWithGreatSki11x3332wyNKnf
  • 12oXoXoXofTheWho1eWor1dXoXoXhjQBMS
  • 1F1eeFromYou21111111111111111t6TRM
  • 1Phi1osophyofTheWho1eWor1d5547QMgV
  • 191t1sFinishedWhat1HaveSaid539kgve

The nitty gritty:

  • 424,925 transactions with a single output over 1 BTC
  • 122,093 transactions with a single output over 10 BTC
  • 11,403 transactions with a single output over 100 BTC
  • 1,102 transactions with a single output over 1,000 BTC
  • 53 transactions with a single output over 10,000 BTC
  • 0 transactions with a single output over 100,000 BTC

Some more...

  • 732,959 transactions where exact output = 0.00000001 BTC
  • 84,155 transactions where exact output = 1 BTC
  • 13,946 transactions where exact output = 5 BTC
  • 13,438 transactions where exact output = 10 BTC
  • 2,683 transactions where exact output = 25 BTC
  • 39,228 transactions where exact output = 50 BTC
  • 5,358 transactions where exact output = 100 BTC
  • 866 transactions where exact output = 500 BTC
  • 485 transactions where exact output = 1,000 BTC
  • 27 transactions where exact output = 2,500 BTC
  • 50 transactions where exact output = 5,000 BTC
  • 30 transactions where exact output = 10,000 BTC
  • 7 transactions where exact output = 20,000 BTC
  • 1 transactions where exact output = 30,000 BTC
  • 1 transactions where exact output = 100,000 BTC

Largest single unspent output: 100,000 BTC
Balance: https://blockchain.info/address/1i7cZdoE9NcHSdAL5eGjmTJbBVqeQDwgw
Transaction: https://blockchain.info/tx/796684ce2c46c73eec4e67a4bd530603c2e0529855080187cde241a6b06c2a5b


10 Richest Addresses:

  • 1i7cZdoE9NcHSdAL5eGjmTJbBVqeQDwgw - 144,341.54672136
  • 13Df4x5nQo7boLWHxQCbJzobN5gUNT65Hh - 134,173.14791082
  • 1JEC8vYP9cEDSu6N6DXkkYd3RaeWAdsCqN - 120,223.31441612
  • 1FeexV6bAHb8ybZjqQMjJrcCrHGW9sb6uF - 79,957.10818636
  • 1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx - 69,471.10124134
  • 1PnMfRF2enSZnR6JSexxBHuQnxG8Vo5FVK - 66,452.06330135
  • 1AhTjUMztCihiTyA4K6E3QEpobjWLwKhkR - 66,378.80759963
  • 1EBHA1ckUWzNKN7BMfDwGTx6GKEbADUozX - 66,233.73540359
  • 1DiHDQMPFu4p84rkLn6Majj2LCZZZRQUaa - 66,141.88463485
  • 194DnvmLR2HULRvxUsVag8mn2fm7dA3U2B - 66,112.30181684

There is a lot more to be discovered, but that’s it for now.

If there is anything you would like to know about unspent transactions just ask, if your question can be expressed as SQL I’ll do my best to get you an answer…

I’m considering keeping the database updated in real time and publishing some or all of this on my website, http://www.CoinCadence.com would that interest you?


15  Bitcoin / Hardware / New Player: SFARDS? on: October 18, 2014, 04:14:10 AM
Quote
Claiming to be China’s largest holder of bitcoin, angel investor Li Xiao Lai has funded a new Beijing-based currency mining operation, Sfards Technology. The company is the result of a merger between Gridseed and WiiBox. Additional funding was provided by venture capital firm Matrix Partners China. The seed capital for the new endeavor was not disclosed in a press release.

Lai will lead the management team for the new operation which plans to launch “next-stage” ASIC technology, promising more power and efficiency.

“We are also expanding the capabilities of the WiiBox: an open-source mining hardware control system,” the company said in the release. “The platform will now also include an innovative hash rate rental feature, granting users the ability to seamlessly rent their equipment and use bought hashing power to mine a multitude of coins with complete autonomy.”

Sfards also states that it intends to offer cloud mining services in the future.

http://www.sfards.com/
16  Economy / Services / [SOLD OUT] Waiting List: Laser Target Miners and/or Speculators With Your Banner on: September 23, 2014, 02:08:28 AM

Laser Target BTC Miners and/or Speculators With Your Banner

Coin Cadence Now Has Banner Ad Space Available

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1. The Coin Cadence Bitcoin Exchange Price Index
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3. Coin Cadence Public P2Pool Node
http://minefast.coincadence.com/index.php

4. Global P2Pool Miner Payout Stats (only available form Coin Cadence)
http://minefast.coincadence.com/miner.php
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Target 1, many or all.

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To Pay By Bitcoin Read This First: http://blog.buysellads.com/2014/buysellads-now-accepts-bitcoin-payments/

17  Bitcoin / Bitcoin Discussion / IBM's proposal using Bitcoin block chain! on: September 12, 2014, 05:56:01 PM
Quote
Combine Bitcoin’s block chain technology, BitTorrent and a secure messaging protocol called telehash and you get a distributed infrastructure that some IBM researchers think would be ideal for the internet of things.

https://gigaom.com/2014/09/09/check-out-ibms-proposal-for-an-internet-of-things-architecture-using-bitcoins-block-chain-tech/
18  Alternate cryptocurrencies / Mining (Altcoins) / Bitmain Antminer L1 - Speculation... on: August 30, 2014, 08:01:04 PM
Anyone care to comment on what this will be?

From the bitmaintech site...


19  Bitcoin / Bitcoin Discussion / Oxford English Dictionary Example Sentence on: May 20, 2014, 06:47:33 PM
The Oxford English Dictionary just added "crypotcurrency", after adding "Bitcoin" last year

Check out this example sentence:

Quote
decentralized cryptocurrencies such as bitcoin now provide an outlet for personal wealth that is beyond restriction and confiscation

Love it!

http://www.oxforddictionaries.com/definition/english/cryptocurrency
20  Bitcoin / Legal / RECORD OF MEETING Federal Advisory Council and Board of Governors on: May 19, 2014, 06:49:21 PM

http://www.federalreserve.gov/aboutthefed/fac-20140513.pdf#page=10

Item 5: Bitcoin
Does Bitcoin pose a threat to the banking system, economic activity, or financial stability?

Concerns about Bitcoin can be summarized as follows:

1. Banking: disintermediation of traditional payment networks, promoting shadow transacting.
2. Economic activity: disruption of traditional channels of commerce with high potential for illicit use.
3. Financial stability: potential as a contagion of instability through volatility or lapse in network integrity.

Systemically, Bitcoin’s nascency makes it more curiosity than threat. Its greatest near-term hazards are its avoidance of consumer protection measures and illicit use, both of which support increased regulation. Medium - to long - term effects could be more pronounced as the network self - refines and adoption increases, requiring traditional payment processors to adapt and respond.

1. The Banking System

Bitcoin does not present a near - term threat to the banking system by way of disintermediation.

While it does have peer - to - peer utility, the network effect has prevented adoption from accelerating to the point where Bitcoin supplants traditional payment methods.
Bitcoin transactions correspond to only a fraction of today’s global fund flows.

Various security concerns will continue to hinder adoption.

Lack of deposit insurance and other “wallet” protection magnifies exposure, as shown through the Mt. Gox theft and subsequent bankruptcy.

Unpredictability in Bitcoin’s value undermines its reliability as a regular medium of exchange.

Bitcoin’s longer - term impact could be more pronounced and require adaptation by payment processors.

Lower transaction fees, particularly for small transactions, are especially attractive to merchants.

While existing payment networks have a footprint advantage, it is largely confined to the developed world. Bitcoin enables cheap international remittance to the developing world and the developed world’s “unbanked,” expanding financial inclusion.

Consumers are likely to use Bitcoin if they perceive its benefits – namely faster settlement and geographic flexibility – to exceed those of its alternatives.

Should adoption accelerate, banking could participate increasingly in Bitcoin fund flows, especially as multicurrency accounts proliferate and reputational concerns subside.

One area of focus should be Bitcoin’s circumvention of currency controls, evidenced by China’s high share of transactions and the use of Bitcoin to
transmit funds out of Cyprus post - bailout.

2. Economic Activity

Bitcoin does not present a threat to economic activity by disrupting traditional channels of commerce; rather, it could serve as a boon.

Its global transmissibility opens new markets to merchants and service providers.

Driving capital flows from the developed to the developing world should increase consumption.

Illicit applications are rampant but not endemic to Bitcoin; sovereign - issued currencies and other precious goods are similarly used.

Sizing estimates for the world’s black markets reach into the trillions of dollars. At this stage, the total value of Bitcoin is approximately $6 billion, a sum that is dwarfed by other forms of payment, whether illicit or not.

Furthermore, Bitcoin’s anonymity is overstated: it is better characterized as pseudonymous, with all transactions logged in a central and transparent block chain. Law enforcement has recently shown that it can trace the flow of specific Bitcoins, connecting user identification numbers to physical users.

3. Financial Stability

Bitcoin’s impact on financial stability is two - pronged: its intrinsic stability and its impact on systemic stability. In intrinsic stability, Bitcoin has room to improve.

Extreme price volatility is similar to other speculative forms of stored value, undermining Bitcoin’s credibility. This volatility is likely to diminish over time.

Susceptibility to theft increases uncertainty for users seeking alternatives to traditional institution - based deposits.

While Bitcoin’s protocol (its network infrastructure) has not been compromised, disruption to it could render the cryptocurrency worthless.

Bitcoin does not yet have the scale to act as a systemic contagion of instability.

Recent volatility shows that swings in value have not resulted in consequences beyond those felt by Bitcoin holders.

In an economy hypothetically dominated by Bitcoin, its finite number (21 million) would prevent the application of traditional monetary policy tools to provide support in a downturn or reduce growth during excessive expansion.

Should this medium of exchange be prohibited or regulated, and if so, what
considerations should be taken into account for its prohibition or regulation?

Regulation is advisable; considerations include protecting consumers, addressing illicit use, and avoiding Balkanization. Bitcoin advocates may argue that increased regulation minimizes one of its greatest advantages, namely decentralization. Recent events suggest that some flexibility should be sacrificed to address obvious problems.

1. Protecting Consumers

Bitcoin’s most obvious consumer flaw is its susceptibility to theft, which can be addressed in several ways:

Supervised risk management of Bitcoin exchanges, including requirements for business continuity planning

Regulatory oversight to ensure that exchanges invest in appropriate cyber and other security measures. This includes fully secure storage of Bitcoin wallets.

Additional consumer protections would be fraud prevention, a forum for transaction disputes, and disclosure of Bitcoin’s risks and costs.

2. Addressing Illicit Use

Illicit use, either as payment for unlawful goods and services or to fund illegal activity, remains a problem.

The same measures employed to minimize illicit applications of traditional currencies could be appropriately extended to Bitcoin.

Anti-money-laundering procedures, including modified Know Your Customer policies, would ensure that organizations trafficking in Bitcoin are not facilitating
criminal use.

Transaction and suspicious activity reports would enable ongoing monitoring and pattern recognition.

As with any regulation, transparency will be key.

3. Avoiding Balkanization

Consistency across geographic areas is necessary to preempt regulatory arbitrage, as is consistency with regulations governing existing payment networks.

Recent guidance from regulators indicates growing awareness of the need for oversight:

The Internal Revenue Service has characterized Bitcoin as property rather than currency for tax purposes, effectively making each transaction a taxable event and increasing recordkeeping requirements.

The Financial Crimes Enforcement Network (FinCEN) guidance obligates certain Bitcoin participants to register as money service businesses, subjecting them to greater reporting and recordkeeping requirements.

Additional efforts to address consumer protection and general network safety will hopefully follow.
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