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This is a self-moderated thread. I will moderate for:
-not contributing to the thread. If you don't have anything worthwhile to say, go fill your sig campaign quota elsewhere.
-Being an ass. Stick to the point. Personal attacks and speculation on others' sinister hidden motives will get your post deleted.

If you want to tell me you don't like this moderation, start a new thread.

Edit: If I do delete posts, I'll start a thread in meta to collect them and post a link here. Transparency and all.

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The more I think about it, the more it seems to me like the only option, if we truly want Bitcoin to be a free market system, is to remove the block size limit altogether. The decision on what kind of transactions to relay and include in blocks would then be left to miners and nodes. IOW, the service providers, who bear the cost of running the Bitcoin network. A fixed block size amounts to a policy-based intervention in the free market, an attempt to improve market efficiency through central planning.

So if we accept the claim above, the question is: Can Bitcoin be run as a free market system, or does it require managing by an authority, either centralized or distributed? How much faith do you have in the free market's ability to protect against spam attacks and to optimize resource usage so that the network neither withers nor bloats until it dies?

Personally, if the conclusion is that Bitcoin's resource usage can't ultimately be left to the market to self-regulate, I think that might be the end of the experiment. It's possible that simply uncapping blocksize right now would be a bad mistake, but if we can't aim to at least do it eventually, I don't see how we can call Bitcoin a free-market experiment in any way.

Am I wrong? Does blocksize capping not equate to central planning?

Here's an idea:

How about those of us who don't appreciate what sig campaigns are doing to this forum decide to only start self-moderated threads, deleting any posts with sig campaign ads in them?

To get the idea to spread, we can use a sig of our own, come up with a slogan for it.

"END ADVERTISING SPAM - ONLY START SELF-MODERATED THREADS AND DELETE SIG CAMPAIGNER'S POSTS FROM THEM!"

Doesn't exactly roll of the tongue that way, but I'm sure we can work on that. How does it sound?

PS. I'd make this thread self-moderated but that's not possible on the meta subforum...

Does anyone have a current chart of tthe BTCUSD price, adjusted for BTC inflation relative to some date in, say, 2011 or so? Or maybe with the current date as the supply reference?

Let's gauge the sentiment a little... What point do you think we are closest to on the good ol' chart below:



This poll will run for 1 day only. You need to vote to see the results. Thread is self-moderated - be nice.

NLC has filled almost the entire 1st page of the spec subforum wih his spam. Easier for a mod to just go in and delete all  the threads than for us to report them individually.

I know IP bans don't help against proxies, and may result in banning users who've done no harm, but I was wondering if they're used here at all?

We've got a particularly industrious troll, NotLambChop, creating several alts a day to spam repetitive junk in the speculation forum. Their latest post claims they create new accounts in 15 seconds. This suggests they're not using TOR or any widely used  proxies, since those seem to require quite a bit of effort (and a bit of payment) to use here.

So is it just that IP bans aren't used? Or does this spammer have access to a pool of "clean" IPs?

How are Greek webstores etc. handling payments now that capital controls are in place? I'd imagine it has to be a problem for merchants serving the domestic market as well as those with foreign customers. It's my understanding Greeks don't shop online nearly as much as other Europeans, but this still seems like a niche where Bitcoin could genuinely be useful as a payment method.

Let's ponder a question: what kind of news is good news for the price?

Lately there's been a lot of good news of the "Expedia accepts Bitcoin" and "New bitcoin ETF coming" variety, yet  a rally is decidedly not underway. Why would this be?

Maybe it's relevant that while these new developments may increase Bitcoin's utility to existing holders, or provide avenues for new speculators, they bring little to the table to increase adoption of Bitcoin in the short to medium term. Competing as a payment method for traditional online commerce is a tough proposition for Bitcoin: Niche cases apart, credit cards work just fine for most consumers. Merchants would have to systematically offer high discounts for their customers to deal with the added hassle and high volatility of buying BTC just to pay for their purchases.

As for increased investor demand, that can't supplant fundamental growth of the ecosystem. New funds etc. may end up running the price up again, but if Bitcoin doesn't gather true utility for non-speculative demand to catch up, it's a bubble waiting to happen at best.

The most ambitious promise of Bitcoin, IMO, is to introduce sound money into commerce, reducing the deleterious effects of debt bubbles. It's an ambitious goal to say the least, but I don't see a noble idea driving consumer adoption. Most people do not voluntarily inconvenience themselves for the future greater good absent incentives in the here and now.

So, what are the incentives that will drive Bitcoin to true mainstream adoption? What is the pitch at this point?

P.S. This is a self-moderated thread - signal, not noise, please!

http://www.bbc.com/news/business-27717594

Commercial banks will now "receive" negative interest to the tune of -0.1% from the central bank. The ECB is hoping this will get money flowing. This whiffs of an attempt to kickstart a new bubble to cover over the mess the popping of the last one made to me... Thoughts from better educated minds here?

Looking at what's going on with the price discrepancy between Mt. Gox and other exchanges, I can't help but think this demonstrates a bad incentive for exchanges.

Right now, anyone able to get funds onto Gox can make a ridiculous profit by arbitraging. Trouble is, most people can't withdraw BTC, so the play seems risky. But who's best positioned to get funds onto Gox accounts? Gox, of course. And who has most reason to trust Gox to allow BTC withdrawals? Gox again.

I don't know what's going on at Mt Gox. Right now, however, they have a financial incentive to not fix their problems, if they're buying BTC themselves and selling elsewhere. The same incentive exists, in principle, for any exchange. Run your service to the ground, get people good and scared and use your house edge to buy their BTC on the cheap. Even if this isn't what Gox are doing now, as long as the incentive is there, someone will do it eventually.

I'm not sure how this can be solved, other than not using exchanges.

So far, overall long-term volatility of BTC price has been going down. For the 2011 crash, the ratio of the bottom following the peak to the peak preceding the crash was about 0.0625. In spring 2013, from 266 USD to about 40 USD gives a ratio of about 0.15. For the current time, we know the peak but not the bottom.

If the ultimate severity of the correction is the same now as it was in spring, we would bottom out at about 180 USD (Bitstamp). If decreasing volatility is still a valid trend, though, the correction should be less severe. How much less severe? No way to know. Two data points isn't much to work with, but I thought I'd write this down just to see afterwards how things turned out.

In percentage points, the change in the bottom-to-peak ratio defined above was 8.75. (0.15-0.0625). The same change now would give a ratio of 0.2375, meaning a bottom around 285 (Bitstamp)

On the other hand, the 2013 ratio was 240% higher than the 2011 ratio. If this were to be true for the current crash, then the bottom-to-peak ratio would be 0.36, with a bottom around  432 (Bitstamp again.)

Again, not a prediction, but a few price points for comparison when considering overall volatility. This is pretty flawed thinking in many ways, as I'm not considering time at all here, and also am only looking at downward volatility. Still, if we bottom out above the 430s on Bitstamp, the overall reduction in intra-crash volatility will have been greater than before.

http://safeandsavvy.f-secure.com/2013/12/26/mikko-hypponen-on-the-internet-in-2014-were-losing-the-utopia/#.Ur3XYeqSxHT

F-Secure's Mikko Hyppönen lamenting the Internet's recent loss of innocence. Included is his prediction that 2014 will be the year cryptocurrencies break into the mainstream, in the form of Bitcoin or some other currency.

http://www.wired.co.uk/news/archive/2013-12/16/bitcoin-demos

"In truth, no-one can be sure what will happen. Chinese authorities have in the last few days banned their banks from handling bitcoin and, anyway, it may not be bitcoin that eventually triumphs. Peercoin, Anoncoin, Zerocoin, Litecoin are all bring different strengths and benefits, from privacy and anonymity to the efficiency of the transaction. What bitcoin is however showing us is that Vires in Numeris is not ringing hollow. We will likely wake up to a world that uses currencies secured by cryptographical systems, and it is time that our social and political institutions seriously consider what this will mean for them and the people they protect and represent."

[Edit: I should note I'm not a lawyer or in any way familiar with Finnish tax codes. I write this as a layman, my translations may be inaccurate, and I may have misinterpreted some things. Caveat lector.]

Something went wrong with this post! Let's try again:

Edit: I should note I'm not a lawyer or in any way familiar with Finnish tax codes. I write this as a layman, my translations may be inaccurate, and I may have misinterpreted some things. Caveat lector.

http://vero.fi/fi-FI/Syventavat_veroohjeet/Verohallinnon_ohjeet/Virtuaalivaluuttojen_tuloverotus

In Finnish, I don't have time to translate fully or go into a deeper summary. They use BTC as an example, but say the same rules apply to other currencies as well. I'll use the same device here.

At a glance, some of the more interesting points:

-Virtual currencies are not "real, official currency", nor are they securities or bonds in the sense meant by the law. They are, however, legal to use, and are treated as "an other, unspecified type of agreement between users".

-Fiat-denominated gains are taxable as capital gains. This applies when selling bitcoins for fiat at a profit as compared to when one bought the BTC, as well as to using bitcoins to buy goods or services directly. In both cases, the value of the BTC spent is calculated at the time of spending, and the cost of acquiring them is determined by when they were bought, first in, first out.

-Losses from investing in BTC are *not* tax-deductible. BTC trading is said to be similar to trading in CFDs, for which there is a precedent from the Finnish Supreme Court, with this conclusion.

-Profits from mining are treated as income gains, realized at the moment the miner gains control of the BTC, and calculated at the exchange rate at that time. (No kidding. Good luck with that!)

-Profits from gambling and games (sale of in-game items, for example) are taxable as income, valued at the exchange rate at the time the BTC gained is traded for fiat. Losses are, again, not deductible, but are treated as costs incurred in hobby activities.

-When receiving Bitcoins as payment, as a business, such income is taxable at the exchange rate at the time of the transaction. Here they give some definition of how value is determined: The value is converted to Finnish currency (EUR at the moment...) at the daily rate, if such is available, otherwise the value agreed upon by the parties of the transaction is used. Intrestingly, here, it seems losses from selling BTC *are* tax-deductible.

-At the end there appears to be a concession to professional Bitcoin trading, where the taxation of such can be treated more like taxation of securities trading,  with a cursory list of requirements, but I'm afraid I don't quite grasp what the implications are. Maybe someone familiar with Finnish tax law on investing can clarify?

Please use the title formatting described when posting new links here. Adapt if needed, use your own judgement. Please always include date and source.

Maybe someone can sticky this, I don't think people read the posting guidelines...

BitstampBTC is, at least since Gox's Dwolla seizure, clearly below the MTGOXBTC price. Furthermore, the market depth on Bitstamp is heavily skewed to the sell side.

The obvious conclusion would be that this reflects the perceived risk of holding currency in Mt. Gox accounts, as well as difficulty in getting funds out. You can make about 3% on arbitrage after fees, buying on Bitstamp and selling on Gox, but it seems that's too dicey a proposition for most - to make any real cash at 3% you'd have to lock in quite a lot of funds.

However... What does the situation tell us about who's buying bitcoins in general? Traders must concern themselves with the concerns outlined above. Joe Schmoe, just looking to buy bitcoins to either hold or spend directly, however, would be interested in getting the best price. Yet, not much buying is going on at Bitstamp.So does the bid/ask disparity between gox and bitstamp tell us something about the ratio of currency speculation to "naive" buying interest?

It seems short-term speculation must currently be very significant in determining the price versus buying to hold or use, otherwise the bid/ask on bitstamp would look quite different.

First off, no BTC were lost, nor were at risk of being lost, just so we're clear.

Today, I decided to move my remaining bitcoins from an old wallet to some paper wallets I'd generated. My local copy of the blockchain was way out of date, so I decided to just import the wallet.dat into a blockchain.info wallet. The import appeared successful, except the final balance showed 0, when there were supposed to be quite a few coins there. The last transactions shown were made at a time I remembered sending some BTC to another wallet. One of the outputs was an address I recognized, while another, with a larger sum sent, I didn't remember seeing before. I'd created a new,  encrypted wallet around the time of the last spends from the wallet in question and figured I must have sent the remaining coins there for safer storage... But where was that wallet? Feeling a cold stone descend into my stomach, I started rooting through the various old wallets I'd accumulated to find where my coins went, spending an hour or so looking, trying to remember what I'd done, wondering if I'd somehow managed to delete the wallet and any backups... Couldn't find it, though.

I took another look at the transaction history, and noticed the two spends were part of the same transaction, meaning the larger spend was change. The receiving address wasn't listed in the relevant wallet's receiving addresses since I hadn't generated it myself, and for some reason, blockchain.info's wallet import didn't pick up the change coming back, even though the wallet.dat contained the relevant keys. Firing up Bitcoin-qt, the wallet showed the correct balance and I realized I don't need the blockchain synced beyond my last spend, and was able to transfer my savings to the paper wallets.

So, lesson learned? Don't panic, have patience, think things through. And there is something odd about the wallet.dat import of blockchain.info. Perhaps it's because it was quite an old wallet. Also... This business of being your own bank can be pretty damn unnerving.

So here I am, reading a surprisingly interesting sci-fi book called "The complete Atopia Chronicles" when all of a sudden I find this bit in it:

"The world population was declining and fertility rates were collapsing. I didn't have to add the failing prospects for the Yen and greenback, as bitcoin derivatives gained ground."

---

WTF?

Anyhow, if you like sci-fi, this is so far a very good read.

Lately I've had this feeling, not particularly well articulated yet, that a part of the problem with the way we think of economies is that we measure their growth and decline in currency. It's a feedback loop, isn't it?

GDP is measured in currency, but the value of that currency is dependent on the GDP of the states issuing said currency. From what I can gather, the "proper" thing to do is to take GDP growth and substract the inflation rate from that to arrive at a realistic figure... but what happens when the inflation rate radically changes? What if the inflation rate isn't properly reported?

I'm too much of an economics noob to ask more insightful questions about this, but it bothers me. Hopefully someone here can catch on to what I'm circling around?

edit: From what I can gather, it seems economic policy, in an idealized form, is a balancing act between keeping inflation to a "sustainable" level while achieving GDP growth of a couple of percent a year, but where did the idea that a few percent a year is a sustainable rate of growth come from? If you discard the idea that significant yearly growth is sustainable, doesn't a deflationary currency become preferrable?

So, TA folks, whose chart-fu saw this crash coming?