I'm planning on being very small and don't really have the resources to do this.  I'm just asking for community advice since a lot of the community here.... well trades bitcoins.  I'm curious if they ran into any troubles and if so what.

Just because you are losing does not mean it's rigged;  You can potentially lose 20 times in a row.  Even Martingale does not increase your expected value.  Each "roll" is independent of the last.

It's just a dumb dice game with a house edge of 1%.  That means as you trend toward spending infinitely many BTC you will receive 99 BTC in return for every 100 BTC you spend.

https://en.wikipedia.org/wiki/Martingale_%28betting_system%29

Yes, but it's not that hard to become "huge".  Lets say someone sold 5% over spot.  That means you would be running $10,000 from your bank account to exchanges (or coinnbase) and more so if you are accepting bank deposits as payment to make $500.  I would hardly call this "huge" but I would think that type of activity would throw a SAR.  I've seen a thread here where some guy got AML flagged for wiring < $1,000 to GOX.  With bitcoins there is a lot of moving money around.

I also would hate to be that low hanging fruit that gets harvested if they decide to target OTC forums such as LB.

I'd prefer to stay within the parameters of legal OTC trading if it is possible.

It seems there is a lot of misinformation about this with a lot of SEO bloggers and e-lawyers spewing all kind of contradictory stuff.  Even the statements issued by FinCEN are contradictory with each other.  I hope to clear this up for me and others who trade Bitcoin OTC.  Responses from attorneys or those who work in AML compliance would be great.

I would like to start trading with others through localbitcoins.  If I do will I have to register with FinCEN?  Registration is too capital intensive for me since I hear you need $100k liquid and $1,000 registration fee.  I am going to be very small time and would simply like to help foster local adoption and make a little coin.  I do not want to go to jail or pay $50,000 for a lawyer to save me.  I have read the following:

* You do have to register if you are doing this "regularly"
* You do not have to register if you do it regularly but stay under $999 per day.
* You do not have to register if you keep a single transaction under $10,000.
* You do have to register no matter what if you are making a currency exchange of any kind outside of a registered exchange.

I found this (http://bitcoin.stackexchange.com/questions/12559/legal-issues-banking-issues-selling-bitcoins-to-people-otc) but I am not sure how much I trust their advice.  I also am unsure of the definition of "single person".  Does that mean you can only trade $999 with a single person, or are you the seller the person?

Does FinCEN even make "laws" that are prosecutable in court or are these just "guidelines".  I don't think I want to piss off FinCEN.

Just a newer i5 laptop w\ integrated graphics.  I am no where near maxing the CPU on this per task mgr.  Internet connection is 25 mbps.

I am using the official Bitcoin-QT client.  I placed my computer in the DMZ to eliminate the need for port forwarding.  I've been downloading the chain for several days and at this rate it will take a month!

Any special bitcoin.conf tweaks?  I am running Windows and do not have a bitcoin.conf by default.

I agree.  Local is the only way to go with a semi-large stash.  Be sure to back up your wallet.dat on multiple USBs and perhaps a paper wallet too.  Can't be too careful.  I've lost many of coins by keeping them on now defunct exchanges.

I see that butterfly labs and others sells those USB ASICS that push 5 GH/s.  Is it even worth it to buy these anymore?  It seems as if that would not even make a dent in the network hash power.  Even those big 500 GH/s rigs don't seem worth it (for $22k).  It seems as if all the big boys have monopolized mining to the point where only those who got in very early with a lot of capital have a chance.

I hope to move this to legal once I have the ability.  I would like to start trading with others through localbitcoins.  If I do will I have to register with FinCEN?  Registration is too capital intensive for me since I hear you need $100k liquid and $1,000 registration fee.  I am going to be very small time and would simply like to help foster local adoption and make a little coin.  I do not want to go to jail or pay $50,000 for a lawyer to save me.  I have read the following:

* You do have to register if you are doing this "regularly"
* You do not have to register if you do it regularly but stay under $999 per day.
* You do not have to register if you keep a single transaction under $10,000.
* You do have to register no matter what.

There is so much contradictory information regarding this.

I found this (http://bitcoin.stackexchange.com/questions/12559/legal-issues-banking-issues-selling-bitcoins-to-people-otc) but I am not sure how much I trust their advice.  I also am unsure of the definition of "single person".  Does that mean you can only trade $999 with a single person, or are you the seller the person?

Does FinCEN even make "laws" that are prosecutable in court or are these just "guidelines".  I don't think I want to piss off FinCEN.