Just got a pone call from a young woman, obviously working at a call center in a country, not the United States where the national language is Tagalog who said she was calling on behalf of Butterfly Labs and that they were offering a 20% discount to all previous customers for the purchase of any product on their website.

Of course, I am amazed by that and considering how long everyone had to wait for the previous shipments, am not ready to take a risk with BFL again. But it would mean that their 600 GH Monarch would go for $3744
That is $6.74 per GH.






P.S. Nothing is meant to be disparaging about the Philipines in my message. It is just that it seems BFL is using a commercial call center. What does that mean? Does it mean that BFL is lacking enough sales? Does it mean they are actually selling Monarchs well and merely want to show former customers some gratitude?

Did anyone else get such a phone call?

Today I received the following email from Dwolla:

    Dear Dwolla Account Holder,

As you know, Dwolla does not sell, accept, mine, value, take possession of, or hold Bitcoin or any other virtual currency product, and none of Dwolla’s users transact business with Dwolla using Bitcoin or any other virtual currency product. However, recent interest involving virtual currency and its exchanges has created uncertainty and confusion around virtual currency, and Dwolla's relationship with a small number of its exchanges. This has forced Dwolla to reassign resources, funds, and services.

As Dwolla gears up for a new stage of growth, we recognize that we can no longer sustain this merchant base (.1 percent of Dwolla merchants) and its unique needs, and that attempting to do so jeopardizes both of our communities' starkly different, but similarly ambitious, vision for improving payments.

Effective October 28, 2013 at 4pm CT, Dwolla will be withdrawing its service offerings to virtual currency exchanges and virtual currency related services.

What does this mean?

    Your account, and its functionality, will remain unaffected. However, you can deactivate your account from within your Dwolla dashboard, if you so choose.
    Dwolla aims to provide its users and the few affected merchants with the guidance necessary to ensure a smooth transition. To do that, we encourage users to over-communicate with our support team, report any suspicious activity, and revisit our terms of service to ensure uninterrupted services.

What is the timeline of events?

    October 10: Only existing users with a 30-day history with Dwolla will be able to send funds to merchants affected by this change.
    October 15: Affected merchants will be limited to sending money only, and will no longer be able to receive funds from customers. They will be able to issue refunds to customers at this time.
    October 28: Affected merchants’ accounts will be suspended. No further activity will be provided.
    October 29: Provided no security or fraud concerns, Dwolla will transfer any of the remaining funds inside the affected merchant's Dwolla account to its linked bank account.

The decision to remove anyone from the network -- no matter the circumstances -- is not something Dwolla takes lightly. We are grateful for the opportunity to service and learn from these users. We wish the community and its pioneers the best.

Sincerely,
Dwolla Support

http://lorenzomoney.wordpress.com/2013/06/17/strange-transactions/

For about a week, I have not looked at my main bitcoin wallet. Then today, I opened my Bitcoin-QT wallet and saw that someone had sent me .0001 bitcoin.

That was rather surprising, since I have not done any trades or business using the addresses I have in that wallet. What I did find is that the fractional bitcoin was sent to the main address I use on my Twitter feed, and which I use to identify myself on bitcoin-otc.com and on the freenode IRC bitcoin channels.

So, I checked with blockchain.info and discovered that someone with a set of unusual vanity addresses had sent .0001 bitcoin to just about everyone who had labelled their address on Blockchain.

Take a look! Here is the blockchain entry for my main address https://blockchain.info/address/1EttqaSSCksRAXrwejoChs5zmGjSikN9mC

That fractional bitcoin came from

1FUCK1DoBdHY29bcsPzp1zg6ZPVPoekFx8
1SCAMPsg9t4qWd4fdiuWtDzTdxQwCzzdQ
1CpornXuZwbsjoFcrBZaMY56hfQ2xWDtLG
1CPxxxBUeah9g53QS7Je8J8V8x4PV27vhT

 

Whoever owns those unusual addresses seems to have made many small gifts.

https://blockchain.info/address/1SCAMPsg9t4qWd4fdiuWtDzTdxQwCzzdQ

 

If you know why this person did that, or if you are the owner of those unusual addresses, thanks!

Does anyone know why those gifts were made and who did it?

At the Bitcoin MeetUp in Miami, Charles Evans was talking about how Bitcoin can be used to sign legal documents. Professor Evans said that even though GPG or PGP or whatever it is exists, it really is too hard for some people (including me) to figure out how to use easily, and if Bitcoin is going to grow,  there will be all sorts of business deals which will require some sort of electronic signature. When he said that, I did not really understand the implications of encryption versus signature. So, I played around with signature feature on my Bitcoin-QT wallet. 

Let's say someone wants to do business with me and me with him.  He lives in Argentina and me in Florida. We write out a contract and agree to all the terms, we even agree that binding arbitration will be done by a committee of specialists in international bitcoin trade. We don't care about keeping the contract secret so we don't need encryption. All we need is a verifiable signature.

Bitcoin provides the means for a proveable signature to sign contracts and prove one's identity.

It also provides a way to make sure the contract text is complete and wasn't tampered with.

Write out your contract or text or agreement. Open your Bitcoin-QT wallet. Go to Receve Coins. Click on the bitcoin address you use to identify yourself. Then, click on Sign Message. Copy your text or contract to the big space in the middle, then click on Sign Message. Now, copy the signature that gets generated.

Now, send your original contract text, and the signature, and your public bitcoin address to the person you are doing business with to show them that you signed the contract. Or you have them do this, to show that they signed the contract.

Your business partner, or the arbitration court can verify that that contract is signed merely by using the Verify Message feature of the Bitcoin-QT wallet.

They would click on Verify Message, copy your public address to the correct field, copy the text that was signed to the large space, and then copy the signature to its spot and click on verify message.

The Bitcoin-QT wallet will then verify if the owner of that public address actually signed that particular text.

Basically, Bitcoin provides a way to verify your identity and sign contracts.

Years ago, a friend of mine who was an actor and writer told me, Never rob a bank, instead write about it.  That idea that dangerous activities could be explored trhough fiction has stuck with me. I myself would never break any laws or engage in any activity which was meant to harm anyone, or cause harm to their person or property. Despite that, it is always interesting to speculate. For example, who hasn't sat around with friends, and tried to come up with cool band names, or speculated on what they would do if they won the lottery. And, who hasn't had that most horrible and vulgar speculatvie conversation about how you would dispose of a dead body. Now, just because you sit around and speculate on such morbid thoughts doesn't mean you actually wold kill anyone. It is like talking about what you would do if you were Alexander the Great, or playing some multi-player role playing game in which you kill other players or their avatars.

So there I was, thinking about naughty uses for bitcoin. And, as everyone who has ever watched thousands of hours of NCIS and Law and Order re-runs on Hulu+, the biggest danger in kidnapping someone, the place in the process where the kidnapper is most vulnerable is when he (or she) goes out to retrieve the ransom. 

So, I got to thinking. What if some rich person was kidnapped in Mexicoor Argentina, or even Colombia, places known for kidnappings both for political as well as purely financial goals, and the kidnappers  asked for the ransom in bitcoin. They could provide a paper wallet address, monitor that address online, and then release the kidnap victim once the address was funded.

There would be no way for the ransomers to be able to retrieve the bitcoins once sent. The kidnappers could release the victim in any location, and the law enforcement authorities would not need to know where, since the kidnappers would not need to set an location to retrieve any ransom money.

Let's pick a country, any country south of El Paso, Texas, where such activities are still rampant. Now, imagine that the kidnappers grabbed their target, have him or her in a safe location, have sent their demands by e-mail, and are now sitting, watching Tom & Jerry cartoons via Netflix, while watching the  blockchain, to see if the ransomers have fulfilled their demands. The demands are simply to send some large amount of bitcoin to an address. The ransom email was sent from a toremail.org address. For the sake of this speculative fiction posting, let's say they ask for 10,000 Bitcoin.

The family of the kidnap victim panic. They go to the local police, but the police of this unspecified country being corrupt and lazy suggest that the best thing to do is just pay the ransom, like so many other families in their country do, and just hope for the safe return of their kidnapped family member.

Not being familiar with bitcoin, the family at first freaks out. They then figure out how to buy enough bitcoin through OTC, or through whatever exchange to which they can find access. At first, this is a problem for this family because there is no bitcoin exchange which accepts their national currency. A nephew of the family is going to school in the USA and so buys bitcoin on an exchange to which he has access from the USA using US dollars.

The kidnappers, tired of waiting, are thrilled when they see that the 5,000 bitcoin finally are confirmed. They decide that they will keep communication to the family at a minimum, and they just drive the hooded victim to a secluded location, return to him his fully charged cell phone, so he can call his relatives, and they drive off.

They immediately go to the airport, fly somewhere else, and since there is no money to carry with them, they merely disappear.

The victim returns to his family who now have a greater education into the intricacies of cyrpto-currency.

Now, here comes the problem. The kidnpapers return home to their safe first world country. In the mean time, the purchase of those 10,000 bitcoin has driven the price of bitcoin up by 30%. The kidnappers know they will have a hard time converting their bitcoin to fiat since every exchange now has decided to comply USA laws regarding money laundering and identifying customers and laws created to prevent the financing of terrorism. The kidnapping victim, unbeknownst to the kidnappers decided to hire a former FBI agent and white hat hacker to track them down.

The kidnappers had planned for that and have no intention of trying to convert their 10,000 bitcoin into fiat. They had bought several thousand bitcoin prior to the kidnapping, and when the price move up after the purchase of bitcoin in such great quantity by the ransomers, they all sold their holdings and made profit. But now, they have to figure out what to do with those 10,000 bitcoin.

They fear splitting up the 10K BTC and sending it to their individual accounts, because that speculated to exist former FBI white hatter might detect some activity and find a way to track them down. Instead, they transfer their 10K BTC to an account they opened in a foreign exchange. This exchange only requires users to supply their identifying documents if they want to withdraw fiat. The kidnappers do not want to withdraw fiat. They merely had planned all along to manipulate the market, so they sell all 10,000 bitcoin at once. That causes the price to crash on several exchanges. Having known and planned this, the kidnappers were set to buy at the low by having accounts in their own names with no connection to their ransom account. They sell their ransom bitcoin, and then buy bitcoin on another exchange. After all, the price on one exchange does ripple over [no pun intended] to other exchanges.

Now, they have fiat in an exchange from which they cannot withdraw money. So, they wait a few months. The former FBI white hatter is a clever fellow who reads my Twitter feeds and also reads on this forum as a part of his research. He suspects that the kidnappers just wanted to acquire a large sum of bitcoin to manipulate the market, but he cannot determine the natioality of the kidnappers, their location or from where they are logging on. And, it seems that the kidnappers are using a Russian based exchange. That exchange has just enough volume for them to manipulate the price. They sell bitcoin on the Russian BTC Exchange and the price drops on that exchange and speculators on other exchanges begin trying to buy on the Russian Exchange. The kidnappers are patient, and a year later, they just go on a buying spree with their Rubles, and that pushes the price up further. They conveniently planned it and sell their privately owned bitcoin on other exchanges after the price rise.

After a couple of years, the kidnappers meet in San Diego at a coffee shop and decide to send their 10,000 bitcoin to a mixing service. They talked about making some large ridiculous bets at Satoshi Dice. They talked about just giving away the 10K BTX since they already made loads of money from manipulating the price by buying and selling their large quantity of bitcoin several times.

And, as they sat there in that San Diego coffee shop, they argued about  just letting the bitcoin sit in an offline wallet for years. They argued about using a mixing service. They argued about about manipulating the market by buying and selling large amount all at once a few more times. They also thought about just waiting a few years until the former FBI white hatter woiuld get bored and move on to other projects.

 They left that coffee shop agreeing to wait a few years before meeting again to discuss, in person, because of course communicating by email is not secure. So, they agree to meet in a year at the same coffee shop.

I have an idea about the characters for my short fictional story about this, but there are some technical issues that I haven't figured out. So, here is the problem, I keep imagining a sort of cyber-fiction story about kidnappers asking for their ransom in Bitcoin. Getting teh ransom in bitcoin solves the problem of having to pick up cash in a bag at some transfer location. I just haven't figured out how they can convert their bitcoin into fiat without getting caught.  Bitcoin is really only pseudoanonymous. Any ideas? Remember, this is just research for a science fiction story.

Here is a link to the warrant that the Department of Homeland Security filed against Dwolla:

http://cdn.arstechnica.net/wp-content/uploads/2013/05/Mt-Gox-Dwolla-Warrant-5-14-13.pdf

The warrant refers to laws which can be found at: http://www.law.cornell.edu/uscode/text/18/981 and
http://www.law.cornell.edu/uscode/text/18/1960

I am not a lawyer.  But, in my limited understanding of what I read, to transmit money in the USA, your company must be licensed in the state in which you conducting business. From the warrant, it was not the assets of MtGox that were taken, but Mutum Sigillum, the intermediary company between Dwolla and Mtgox. It was the Mutum Sigillum account that was confiscated.

From my limited understanding of the law, and I am NOT a lawyer, it would seem that had Mutum Sigillum been registered or licensed to transmit money, then this would not have happened.

I do believe that the US Government, in particular, the Department of Homeland Security, is frightened of bitcoin and has been looking for anyway possible to destroy it.

Since, bitcoin itself cannot be stopped, since it is not localized, and since its status as a currency is vague, since it is only data, transaction records on a blockchain, to stop it, DHS has taken the strategy to attack the exchanges. Had the MtGox people not lied on the forms to open their Veridian account, this might not have happened.

Why is DHS frightened of Bitcoin? Because they, rightfully so, want to protect the American people from terrorist attacks. One of the ways that various (both politically and radical, fundamental religious based) terrorist groups sustain their efforts is by getting donations from supports in one country and sending those funds to another country. I can imagine the meeting in some office in Washington, D.C. or Langley, where some men in suits come up with a hypothetical scenario where someone buys bitcoin in Europe or Africa, or the Middle East, sends it to someone in Russia or Asia to buy arms, and sends some of it to the US, where it is converted to USD in order to fund some terrorist activity. Whether or not that scenario could ever really happen, the fact that it could be hypothetically imagined, and that these bitcoin transactions could occur independent of the conventional banking system, which at present is highly scrutinized by US and EU law enforcement agencies, caused these men in D.C. and Langley to become very fearful.

I personally, do not condone or support the engagement of any illegal activity with bitcoin. I have visited SR (Silk Road) three or four times and frankly, after the initial novel amusement that that stuff was being sold, I found SR to be boring. I would prefer to promote cooperation and communication between people who are enemies by using Bitcoin to fund and finance true charities that help people constructively. Bitcoins could be used to pay a Saudi software engineer to write code for an Israeli agricultural company. Or, to for a jewelry artist in New Zealand to sell his artwork to a woman in Canada without worrying about the rip off that is credit card merchant processing.

Despite all the good things that could be accomplished with bitcoin, I can imagine the fear of certain people about how bitcoin could be used for funding evil people's actions.

But, I am not sure whether to be angry with MtGox for not making sure their operation was completely legal and could withstand legal attacks, or with the DHS for being overzealous in protecting Americans from imagined menaces.

Not having an easy way to fund your account on the world's largest bitcoin exchange does stifle trading and I think damages the future of Bitcoin.


Lorenzo Money

Bitcoin is in trouble.

You may not agree with me, but at least hear me out (or read me out, since this is being written).

For Bitcoin to succeed in the long run, it has to be widely adopted internationally, vendors, online retail companies, individuals, college students and your grandma all have to be able to use Bitcoin easily. The price can't be so volitile that it scares away regular folk. The price must be predictable enough that the factory in Vietnam will accept bitcoin for the products it is manufacturing for the market in Australia, and to pay for the raw material it gets from Brazil.

What can kill bitcoin is having no exchanges to buy bitcoin. Or, if regular people cannot easily transfer fiat currency into an exchange to buy Bitcoin. Bitcoin won't survive if the only way to trade it is in person from someone met online or through OTC trades on irc freenode #bitcoin-otc.

Unlike so many bitcoiners, I am not lent to believe in conspiracies. No, 9/11 was NOT an inside job. The CIA/Mossad/Freemasons did use plastic explosives to take down the WTC. On the other hand, with the loss of Bitfloor, and loss of Dwolla from MtGox due to direct court orders and various bank regulations clearly suggests that the government, or at least some regulators within the US government, are not keen on bitcoin.

Can't say I blame them. They do not understand Bitcoin. Bitcoin initially gained fame as being the medium through which illegal could be bought online. Bitcoin could be used to transfer large amounts of money from one part of the world to another. I can imagine some regulator sitting in some office becoming distressed that some American might leave the US not with $10,000 US in his suitcase, but with nothing in his suitcase but with $10,000 US in bitcoins in an online wallet to be retrieved once he gets to his foreign destination, avoiding all government regulation.

On the other hand, imagine a political dissident in Myanmar, Thailand, Russia, Iran or Saudi Arabia who is asks for bitcoin donations for those of us who are better off and living in a free, democratic country, like Canada, or Australia, or even like my birthplace and home, The United States of America.  We who are free and live in free democratic countries can send bitcoin to the wallet of some political dissident living in a non-free, undemocratic country and provide them with bitcoins to help them in the fight for freedom. See? Bitcoin can be used to make the world more free.

Of course, that is obviously a big threat to DHS or ICE or whichever agency was responsible for the recent events in the Bitcoin world.

Even if ownership of bitcoin was made illegal in the US, there is no way it could be stopped since bitcoin is decentralized, and is not located in any one location or country. Probably, it is legally impossible to make bitcoin illegal, but it is possible to restrict and control the flow of fiat from banks and individuals into a hosted exchange, thereby effectively, if not killing bitcoin, forcing it onto lifesupport.

In this article, http://www.businessinsider.com/dwolla-mt-gox-2013-5, it is suggested that to encourage wide spread adoption of bitcoin, the move shoudl be to encourage charities to accept bitcoin. I admit, I myself would be more likely to send a bitcoin or fractional bitcoin to some charity's bitcoin address  than go through the complex process of filling out a form to use my credit card to make a donation to some international charity. Also, with a credit card, you have to trust that the credit card number won't be stolen. So, let's imagine this scenario: A woman running a micro loan organization in Mexico (micro loans, giving small amounts like under $200 US to really poor women to start businesses) is encouraged to accept international donations via bitcoin. Ok, so she would have to find a way to convert the bitcoin to local currency, but it would give her access to donors far way in wealthier countries. And imagine that loads of small charities, and larger charities began accepting donations from all around the world in bitcoins. In the same way that pornography popularize VHS and even the Internet, I think that charities could popularize bitcoin. If bitcoin was widely adopted by charities and non-profits all over the world, it would make it much harder, on moral grounds, for governments to try to try to destroy bitcoin as a concept and movement. Besides, if many more small charities and non-profits adopted bitcoins it definitely would do lots of good on a global scale.

So, how do we get more world charities and non-profits to accept bitcoins? Personally, I think the Bitcoinfoundation AND all of us as individuals should spread the world, evangelize, if you will, the idea and promote and encourage our favorite charity, whether it is a politcal organization, a social service organization or a dog shelter or some NGO, to begin accepting Bitcoin. Both fortunately and unfortunately, no one person or group speaks for bitcoin. The Bitcoin Foundation, In my less than humble opinion, has some responsibility to push and promote bitcoin, but each of you, each of us, could suggest to each of our favorite non-profit to adopt bitcoin as a means of collecting donations from a wider worlwide audience.

Having spent a fair amount of time chatting and reading in the #bitcoin, #bitcoin-otc and #bitcoin-pricetalk channels on IRC Freenode, I think it is fair to say, that a large proportion of bitcoiners hate paying taxes, feel that the US Federal Reserve is a private company independent of the US Government, that the IRS and federal income taxes is illegal or unconstitutional, and that bitcoin is the way to avoid all government scrutiny.

I have read their arguments and think their ideas are completely without merit. Sure, no one likes to pay taxes. But, my tax money, (and that of all Americans) finances DARPA and DARPA helped build the Internet. I am happy to pay taxes to build and maintain roads, schools, and civil regulatory bodies. Sure, there are some regulations that are overly restrictive and arbitrary, on the other hand, I am quite happy that the FAA keeps the skies safe, for example. I wish there was more banking regulation, not less. I believe there should be no helmet laws for motorcyclists, yet I always would wear a helmet in the days that I rode. Not an inconsistency, but a recognition that in certain areas, freedom is important, but not foolish decision. We each have personal responsibility for our own choices when able to make those choices freely.

By the way, I do pay my taxes.

I love bitcoin because it is both wild and unregulated and is distributed and decentralized. I have some money in a big, nation wide bank, and money in smaller banks. I support both bitcoin and multinational banks and credit unions. Yes, unlike so many bitcoiners, I have no intention to use bitcoin to avoid paying taxes or hiding money. On the other hand, I just wish the US tax system was simpler. Why can't tax forms be easy? Instead of all the regulations, instead of all the variations, loopholes, political accommodations, make it easy:

Line one: How much did you make last year in both salary and capital gains and other profits? _____
Line two: What is 15% of the amount in line one?_______

Please pay the amount calculated on line two.


That is all there needs to be.

Maybe the percentage rate should be higher or lower. But, it really could be that simple.
Of course, it would mean that tax lawyers, tax accountants, certain lobbyists, tax preparers would all be out of business.

I like elegance and simplicity. Perhaps that is part of the reason I like Bitcoin . It is simple and elegant. A transaction does not require all the complexity of a bank check, credit cards, and it cuts out the fees and costs of the unnecessary intermediary (the credit card companies).

Widespread adoption would make some people rich and cost others money. Just like a simple US tax system, which would eliminate those jobs which depend on the complexity of the tax code to exist, if bitcoin were widely adopted, some people in the credit card industry would have to adapt, adopt or find other professions.

Like some of you, my sleep is ruined because I sit and stare at the graphs and numbers on http://bitcoin.clarkmoody.com/ for hours at a time trying to discern and discover some pattern.  Then today, the price which had been hovering at around $142 on Gox, moves up and up to about $160 and then it drops to $129 and then back to $142 and then as of this writing, it is hovering at around $134.

Does anyone know why it jumped like that? Was it just one person who was trying to buy in to the market? If there really was more interested all of a sudden in Bitcoin, why did it just settle in at around $134? Should there still be volatility?  It is almost as if just one, or just a small group of people suddenly had too much money on their hands and decided to buy all at once, and that panicked other people who decided to sell. And then other people bought in.

Has anyone had any success using any sort of technical analysis to predict anything about the price of bitcoin?

Today's spike and return, seems so sudden and without any explanation or discussion anywhere.