Have some imagination man... all you do is swap Bitbills, then crack them open and redeem the money to whatever account you want. The point is that it creates a solid break in the transfer history of wealth. The blockchain never knows about these swaps and they make tracking identities plausibly deniable. You only have to trust Bitbills for the duration of the time you keep your wealth there.

I think a possible solution is this:

1) Send your coins to a new instawallet address
2) Send those coins via instawallet "green address" to yet another instawallet address
3) repeat step 2 (again via green address)
4) Send the coins to their final destination via green address again

Note: for extra protection, break each step into multiple amounts to different places within instawallet, all using green addresses. Do the process over a few days and never send the same numerical amount twice to obscure any relationships

If you do this, and check block explorer, you'll just hit dead ends. It's untrackable via the block chain alone. This technique isn't bulletproof... but I think in order for your coins to be tracked it would require subpoena of instawallet servers, and that may be futile as well. If done over days, in varying amounts, the plausible deniability becomes substantial.

Anyone wanna point out how my technique is flawed?

Alternative: swap bitbills with people, and combine it with the above process.

Great post OP.  Whether designed for this purpose or not, I think this is the likely result =)

If Bitcoin grows to become widespread, we need a very easy, comfortable name - nothing techy like "uBTcents". Bleh.

I think something like "minicoins" would be perfect. Your Starbucks latte will cost perhaps 15 minicoins.

Green addresses. Look it up. Confirmation can be instantaneous.

I just sent my friend in Dubai $50 worth of value. After clicking "send" I went to pee, and upon my return he had confirmed receipt of payment. Zero fees.

Awesome!!!! I love how easy that is. Really well done.

The issue of table/counter space is an issue though... but wow I'm impressed.

Let's assume for a second that the author's thesis is true - that people won't spend Bitcoins on day to day transactions. That's fine... a successful medium of exchange doesn't need to necessarily be used in such a way. Gold is a great example. It's not used ever in day to day trade, yet it's the most reliable and successful form of money in history.

The author misses that vast benefits of this technology exist regardless of day to day use. For example, the international remittance market. Even if the only long-term use of Bitcoin was for international money transfers, it would be enormously valuable. The Mexican immigrant in the US can transfer money to an exchange in his home country for a fraction of the cost of what he would pay with dollars and bank systems today (and the transfer could be done in 5 minutes, instead of 3-10 days). There is no need for him to be buying food and gas with Bitcoin for there to be value in the international transfer of funds. All that's required is a relatively stable exchange rate, and this will stabilize over time as the market grows and decides the value of Bitcoins. There have already been days where BTC was less volatile in percentage terms than the USD. Consider that in an efficient market, the immigrant's USD could be sold at the exchange in Denver, then transferred via Bitcoin to Mexico City, and then converted to Pesos at the Mexican exchange in the span of a few minutes (using trusted "green addresses") - in such a case even volatile exchange rates are not a big deal.

"Hoarding" of Bitcoin may perhaps be a hindrance to daily use, but daily use is but a fraction of Bitcoin's potential value.

The bid depth has indeed increased significantly in the last couple months. It will take quite a bit more money to move in either direction now. It is important to remember, though, that those bids (both buy and sell) can disappear instantly if the person withdraws them. If some amazing news occurred, the price could move very fast.

Note that even though the bid depth is much higher now, there still isn't yet much "real money" in this market. Pro traders and finance guys may spend hundreds of thousands or even millions on a single trade. If that happens, BTC price will not be so stable

In any case, it's safe to say the price is more stable than it used to be - probably by a fairly significant degree.

I'm only 50% made of reality, but you're purebred, huh? What's that like?

Yeah I need their services, but am a bit concerned they can't even keep their own site running?

Actually, no. No "phony" Bitcoins were sold in any way. REAL coins were sold, but from a hacked account. Big difference. One could say the sale was phony, but not the coins.

That's because most conferences aren't about something as freaking awesome as Bitcoin.

Chillax, man. The OP was completely reasonable and well-spoken. The short-term price action is not important, but the broad point about lack of coverage and info is valid.

As one of those in attendance, I was very happy with the whole weekend but that's because I was there. I think it's a legitimate criticism to say that much more attention should've been given to broadcasting the event and informing the community at large about the goings-on.

I'm sure the lesson will be learned, and there will be no excuse not to have excellent coverage and info-distillation at the next such event.

I have 20 mint-condition Philharmonics which I am considering selling for BTC.

At current prices, I'd probably be enticed to sell the lot for 85 btc (roughly $45 per oz). PM if anyone is interested.

Where are these auxiliary currencies traded? I'd be interested to watch the price patterns in action, or see a chart of them as they bubbled and popped. Any good resources for this?

Meze Grill had printed out a unique QR code for the day, it was posted right at the check-out. After ordering food, the cashier rang me up and told me the price in Bitcoin (was 0.87 btc I think). Then I opened my Android wallet, scanned the QR, and sent .87. I showed the cashier that it had sent and he trusted me enough to let me go after that without waiting for confirmations.

I don't know what software they were using behind the counter, or how they did the btc calculation... it was all just smooth and effortless.

"Proof of concept" for brick and mortar retail is now an understatement in my mind. And this is all done without any specially designed POS system for Bitcoin... so it can only get easier.

And yes, a Bitcoin meal tastes way better than a Federal Reserve Note meal.

Whew... 2:15am. I'm totally wasted and just stumbled back to my room. Laptop was on so of course an update is called for =)

Outlook is: good!

Quick report from NYC on the conference - I've now met quite a few of the people and my impression is very positive. Lots of great discussions, and I can tell the energy level is high. Unlike the forums, everyone "gets" Bitcoin here.  No tedious reiterations of why "deflationary spirals" are not a big deal, or why Bitcoin can't work because it's not "backed" by anything. The attendees get it, so the conversations are enjoyable on a higher and more productive level.

So many things being worked on - ideas are even just getting tossed around because people are already too busy working on their first and second and third projects. Real solutions are emerging for merchants... Bit-pay and BTCinch both look outstanding. MtGox is releasing a new site to make trading super easy (no ask/bid orders, just buy at market rate for Grandparents, etc.) Lots of networking going on, venue is very nice at the Roosevelt. Meze Grill easily handled over 25 subsequent, individual orders for lunch today in Bitcoin. I was worried it would get backed up, but process was almost as quick as if everyone was using credit cards.  I'm seeing the Android wallet used everywhere, as well as iPad systems.

A diverse group. Americans and Europeans, multiple races, multiple demeanors, multiple areas of interest and specialty. Some jeans, some suits. Even a couple women! Lots of hand-shaking, smiles, and intelligent conversations.

Bitcoin is still very much an enthusiast community- on to something big, and waiting for the world to catch up.

If this is true, it's pretty darn exciting. Given that there's already a wonderful Android bitcoin client, there's nothing standing in the way of Kenyan's adopting the coin widely. They're already using the M-PESA system which has been amazing well-received. They're used to banking with their phone, and sending money to each other.

What language do they speak there, and is there a version of the Bitcoin page in that language?