I just came here to post about this. I think it is brilliant.

Technically, it's a small step in that it's a twist on the brain wallet. The private keys are not stored anywhere. And yet it's so easy to use and almost foolproof.

In principle I guess it could be vulnerable to a key logger, except that entering the pin is done in the manner of clicking on buttons. I don't know if that's enough to defeat all possible key loggers or not. And the logger would have to be there when the salt is first typed in.

I'm a bit worried that if the particular website that hosts the html5 app goes away (braincontrol.me at the moment), then it would be a bit more work to get the coins back. You have to run the html5 app from the same URL as when you transferred the coins in, since the url is used to create the private key:

<script>
var keys = btc.keys(Crypto.SHA256(salt+url+Crypto.SHA256(username+password+pin)));
</script>

Not that you couldn't create your own script that hard codes the URL that was used when you transferred the coins in, so as to create the private keys when all the other factors are known.

To me this is starting to look like the secure storage your grandmother could use. Or maybe someone more knowledgable could point out what I'm missing.

Edit: Having read the Reddit thread, I see someone pointed out an obvious vulnerability that didn't occur to me. You have to trust that the html/javascript isn't malicious because it could record/compromise your private key. Doh. Not saying the website creator would do so, but the site could be hacked, obviously.

Maybe what we need is a browser plug-in that performs a checksum/signing on all html and javascript that gets executed so you can see if it changes. Though that might require some independent (trusted) agent to determine that the code is safe at time of signing.

Not banned at present:

https://bitcointalk.org/index.php?action=profile;u=79085

I doubt he's Atlas.

Interest on BTC balance? The only way you could swing that that comes to mind is you're contemplating extending margin loans and letting people short BTC. Which sounds like a good way to self detonate, and lose people's BTC.

I suggest you consider structuring this as a decentralized exchange, exploiting OpenTransactions. If you're not familiar with the idea, this is a good place to start:

https://soundcloud.com/mindtomatter/miami-2014-chris-odom-on-1?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheDailyBitcoinShow+%28Let%27s+Talk+Bitcoin%21%29

Thanks. Are the slides he was using available anywhere?

You forgot:
epsilon - 1 .... BUBBLE!

I remember in early-mid 2011 around here people pleased as punch that a bitcoin was worth a whole euro, or a whole dollar. Forget which.

I didn't notice anyone post link to the whole presentation.

http://www.youtube.com/watch?v=bTPQKyAq-DM

This one includes the Q&A session, which is not to be missed.

Yeah, what kind of fool thinks there needs to be any honesty in a financial system.

1) Run bitcoin-qt.
2) Click "Settings | Options"
3) Select "Display" tab
4) Click the "Units to show amounts in" and change it from BTC to mBTC

Presto, you've done your own personal bitcoin "stock split".

Hoarding is not a problem. The word merely means saving. Saving is virtuous, not a problem to be "solved". I'm not interested in what "mainstream" economists take, give or do. If you want what they are selling, then please just stick with dollars or the local currency of your choosing, and leave us bitcoiners alone.

Thinly-traded market.

Regarding using bitcoin as a transactional currecncy; the simple fact is, in order for it to function in a widespread way for a significant fraction of the population, it has to have a much larger valuation than it presently does. The monetary base is on the order of trillions of US dollars. There's simply no way for a fraction of the transactions (business and personal) that occur in the world to take place unless bitcoin has a market cap on the same order of magnitude. So even if there was no one speculating in a get-rich-quick-fashion, the price would still first have to follow a trajectory to much higher $/BTC. It's conceivable BTC is doing that that now substantially on the back of people who want to do money transfers from and to places with capital controls or financial repression. Or it could be that some small fraction of the world is choosing to diversify a small fraction of their savings into this new asset class, not in a speculative manner, but merely for risk management. Are you so sure that's not what's happening, more so than speculation?

Now as for why people don't choose to spend their bitcoins: if one has dollars, and one has bitcoins, and can purchase a good with either one, Gresham's law (or something much like it) will always push people to spend the one that can be debased or seized (a la Cyprus) by the central bankers or sovereigns. Seems natural and expected to me that people don't choose to spend their bitcoins if they don't have to, and thus there's not much consumption transacted in it. I suspect bitcoin is resistant to circulation for the same reason 60% silver US coins don't circulate at face value.

I know some people are buying and holding bitcoins not in a speculative manner, but merely as a means of saving in a currency that can't be inflated away (or inflated away beyond the increase in coins that's already built into the system). I was taught that saving for the future was virtuous. "Hoarding", near as near as I can tell, is merely a pejorative way of saying "saving". If dollars or whatever your favored vehicle for saving, in your judgement, is a good, no one is calling you "Idiot" for doing so. OK some people might. Not me at least. Please allow others to have a different opinion on the matter of whether saving in bitcoin is idiocy.

Overlooking the impossibility of selling at a non-finite price, I think if the price ever got to anything absurdly high, it would probably be because the fiat currencies had failed and were hyperinflating. Such that the price is not due so much to appreciation in real terms, but merely loss of value of fiat currency for which btc can be traded. The last thing someone does at that point is turn their savings into a hyperinflating currency. So I don't think that would be "selling out of bitcoin" as it would be "buying into dollars".  You can read a lot about what happens in a hyperinflation, and the first thing people in that circumstance do is trade their paychecks for something they think or hope will retain value. In post-Soviet Russia during its hyperinflation people traded their earnings for dollars on the black market. No I'm not saying we are hyperinflating now. Obviously not. At least yet. I was describing a possible scenario that would cause a ludicrous valuation.

You and I can agree that is pathological. And putting all or most of one's savings in BTC seems foolish to me, too. There are risks.  An asset class with a rising price does attract speculators. We won't stop them doing it. In the dot com bubble in the 90's people bought tech stocks on margin, and were wiped out in the crash. Same thing with real estate in the real estate bubble. I don't see how we can expect human behavior to be different in this case. Those people are putting the noose around their own neck. Yes, if what's happening now is mere chasing of price momentum by get-rich-quick speculators we could have a spectacular crash. And you can crow over their folly when it happens. I for one will not. But I think it's an open question whether bitcoin is indeed merely a bubble at this point, or is it rather just beginning to approach the valuation that it's merits deserve. But whichever it is, I don't see a crash being the end of bitcoin any more than the blow-off and crash in 2011 was.

It depends. Are the current buyers mere momentum investors chasing a rising price? Or are they people who understand the merits of BTC and expect that it could ultimately be a similar asset class as gold with a similar valuation (in which case each BTC would have to have a much larger valuation than at present)? If the former, yeah we could have a big crash. If the latter, then buyers are averaging in and willing to wait for the ultimate valuation to be reached. So I'm not really on the side of either naive bulls, nor of the cynical "BTC is a fad" haters. I tend to think more people are not mere momentum chasers because everyone can see the chart with the speculative blow off in 2011 and subsequent crash. I don't think it's a valueless fad, or it never would have bottomed out. It would have been a zero already.

Well, I think the Kurzweillean singularity is a plausible scenario. He's a bit selective in some of his statistics, and has made some predictions that have been plainly wrong (e.g. the solar singularity which isn't progressing on his schedule). But the basic insight is sound I expect (Unless the peak-economiclally-recoverable-energy limit is hit like some people expect). I don't think he's an idiot.

But you don't need to believe any of that to anticipate BTC to be a commodity more valuable than it presently is.  Yes, we know the risks. There's a good chance it will be a zero eventually. But there's also a good chance it could ultimately be regarded as a co-equal asset class with gold. By which I mean it's market valuation could equal that of gold. All gold in the world is roughly $10T US. In order for bitcoin to have that same valuation, it would be $1M/bitcoin (using 10M BTC, or half that value at 20M BTC).

Yes, a bit. The forum is showing that giddy kind of euphoria with lots of swagger and bravado and posts about huge anticipated prices that once often sees at the top in a market.

However. Keep in mind this is just the forum. Which is the tiniest sliver of the world. Sentiment indicators tell you it's a top when the sentiment is at a max. But the vast majority of potential bitcoin buyers probably don't know it exists yet. So I wouldn't take the sentiment you see here as any kind of broad indicator. Just read the comments in the latest Zero Hedge article that might mention bitcoin. They are almost uniformly hostile towards it, and so complacent in their ignorance. And those are relatively well-informed people who should know better.

Here are a couple things I think give some perspective:

The Fed's open market operations are buying up ~$80B every month. New money into the monetary base. At the current price bitcoin's total value (valued at $100/coin) is about $1B (order of magnitude). So the fed is "spending" 80x bitcoin's market cap every single month. That's a lot of dollars looking for somewhere to go.

If the bitcoin were regarded as an equal asset class as gold, such that the value of all bitcoins had the same dollar value as all gold in existence, bitcoins would be worth ~ $1 million/coin. (based on ~$10 trillion being the value of all gold in existence, and the current ~10 million bitcoins).

ha ha +1

But it's not always the whole story. Those who actually want to buy are glad to see a wall anywhere they can find it because it lowers the cost at which their market order for a fixed number of BC gets filled. I don't doubt the idea that the motive behind sell walls is to push sellers to sell at a price more favorable for someone who is trying to buy. I bought a sell wall on Bitfloor (when that sell wall was lower than the last price on Gox, at around $10/coin). Not so large as 2K, but large for Bitfloor. So it doesn't always work out for them if that is indeed the intention behind it. Sell walls help the liquidity of the market. Among other things, they also make possible arbitrage bots, which can force the prices at different exchanges to be the same.

zeroday or anyone: when they say "300 euro withdraw limit", umm.. businesses have to make payroll, obviously. So if that applies to them, no one is getting a paycheck anymore. So... does it not apply to businesses, or is no one getting a paycheck?

Banking is not inherently problematic or corrupt. The problem comes when the state 1) ensures deposits, and 2) gives them a monopoly on the creation of debt-backed money. The bankers book accounting profits when they make risky bets that pay off. But when the deflationary bust follows the inflationary expansion, the deposit guarantees become become a hammer over the sovereign and/or central bank, who ultimately take the bad debts off the balance sheets of the banks giving them good money in return (e.g. Maiden Lane and MBS) because they don't have any way of making good on the deposit insurance if they let the bank fail. Thus, profits are privatized for the bankers' bonuses, and losses are socialized, either through debasement of currency or outright bailouts from the sovereign (e.g. TARP).  This corruption is not even an unintended consequence of statism. It's right there in the FDIC charter (in the US case): "to create confidence in the banking system". Why is it a good thing to have confidence in an insolvent bank?

Under laissez-faire capitalism, bankers would have to compete on the basis of solvency, and would live in mortal fear of a bank run. They would never have taken the risks they ran in the runup to the banking crisis. Depositors would understand that their deposits are no better than the ability of the bank to make good on them. Depositors would want to know that the bank is solvent.

But because the sovereign and central bank are backing the banks, the ultimate consequence (historically) is debasement of the currency in an attempt to preserve the status quo by covering bad debts of banks (as well as to cover the fiscal insanity of the sovereign who can always find voters willing to vote for free-anything that the state otherwise has no way of paying for).

That's where Bitcoin comes in and why it's different. It can serve as a monetary base that cannot be debased by the state. It is a currency that can't be hyperinflated away.

You may have chosen the wrong numeraire for your profit.

You can't eat Bitcoin.

Checkmate!