Today is a historic day for me. For the first time in my life I have made a profit trading a currency - a whopping 30 dollar cents.  

Now I am going to reveal my secret trading strategy, ingenious in its simplicity:

1) Buy Bitcoins whenenver you can afford to lose the USD (or EUR in my case).
2) Never sell Bitcoins for less than you bought them. Ever.

I was thinking about launching a Bitcoin accepting website and to get around all these pesky regulations (most of which I probably never even heard about!), what if I just post a disclaimer on the website saying

"WARNING: Bitcoin is nothing but Monopoly Money."

Would that work?

I mean, is it my fault that some crazy people are prepared to trade Monopoly dollars for real dollars on some crazy website in some corner of the big wide web? 

How do you interface your auto trading program with MtGox? Do you simulate keyboard input or is there  a less clumsy way of doing it?

He kept insisting that "if there is no guarantee, it's worthless". He was quite dogmatic about this and no argument would convince him, no matter how rational. Oh well. Maybe it's easier to explain it to someone who is ignorant in this area and thus unprejudiced.   

I've used bitcoinexchange before. Their exchange rate is sometimes unfavourable compared to what what you can get at MtGox, sometimes favourable. The difference can be 30% but it usually levels out within a few days.

Bear in mind that at MtGox you will need to pay paypal fees + paypal USD/EUR exchange commission. At bitcoinexchange EUR bank transfers are free.

Since volume at bitcoinexchange is low, it's only good for small amounts at a time.

An anonymous investment market with no enforcement whatsoever is nothing but a game with possible win-win outcomes. Investors and borrowers would eventually arive at an optimal game strategy. This is likely to end up being tit-for-tat with some tolerance for honest mistakes built in.

Defection would never be completely eliminated but it's likely to be a small percentage. The aim of the investor is not to minimise defection but to maximise returns. She accepts that this optimum point may entail a degree of defection.  She knows it's part of the game.

The most likely defectors would be the newcomers. A newcomer would thus need to offer higher rates of return to attract investors.

No contracts, no rules (except those hardcoded into the Bitcoin network), no right and wrong, just winning and losing.

If the government knew a secret algorithm that allowed it to break encryption faster than anyone else, that algorithm wouldn't stay secret for long, given the government's dismal record on securing data.

Idea:
Bitcoin Easter Egg Hunt.

Hide wallet.dat files in a software, game, or website you are developing and leave some clues with your users.   

I do care about organised crime using bitcoin.

The fact that a technology can be abused does not make that technology immoral.  But that doesn't mean that we should ignore such abuse.  We will never be able to eliminate a degree of abuse but we can use our common sense and refuse to do business with people who seem fishy. On a strictly voluntary basis of course.  If the Bitcoin economy becomes too dominated by criminals it will hurt Bitcoin's reputation.

 

It's still one of the most secure packages you can get because it's open source and has been peer-reviewed.

Problem with other packages is, even if they use good encryption standards they may implement them poorly. The likelyhood that there is an undiscovered security hole is bigger because they haven't been peer-reviewed as much as Truecrypt.

Technically, it is impossible to steal them because technically, they are not property.

Apart from that,

They can even be protected against divulgation by torture.

Store your wealth in 1000 wallet.dat files. Make sure that you use a scrambler to make the transactions so that it's impossible to link those bitcoin addresses to you. Then hide the wallets in different places. Perhaps Truecrypt hidden volumes. Perhaps Truecrypt hidden volumes nested inside hidden volumes. Perhaps usb sticks buried in your garden.  Perhaps steganographically stored in a photographic print in your grandmother's house.

When you get tortured, divulge only a few of you wallet.dat files. The torturer can never know the true number.  

The difference is psychological. There seems to be a consensus among the community that bitcoin exchanges should rely on reputation rather than contracts. There isn't a sense of obligation like there is with money. We are more tolerant to the possibility of scams. We see a degree of leeching as a given and factor it into the equation. We try to minimise it instead of preventing it by force. We rely on relationships rather than a sense of universal morality.

Sure, whether you call Bitcoin money or not is "just" semantics.  Unfortunately, semantics matters. It doesn't matter for people in this forum. Most of us understand Bitcoin.  But it does matter in terms of PR. 

We can't expect the average Joe to understand Bitcoin. (I have given up trying to explain Bitcoin to my cousin, and he is a frigging FX trader by profession!). That's why we need to pay attention to how Bitcoin appeals to the emotions of the average Joe. Details that seem silly to us geeks may make all the difference between success and failure. It doesn't hurt to discuss them.

That is the problem.

In order to enforce a contract involving Bitcoins, all the following conditions need to be fulfilled:

1) Bob and Alice need to agree on some centralised court or protection agency.
2) Bob needs to prove to the court that he "owns" Bitcoin address X by digitally signing a court statement.
3) Alice needs to prove to the court the she "owns" Bitcoin address Y by digitally signing a court statement.
4) Alice and Bob need to digitally sign a contract that 100 bitcoins will be sent from X to Y and that Alice will deliver 10 widgets to Bob.
5) Either Bob or Alice needs to leave some sort of collateral with the court, either in the form of an escrow deposit, or in the form of giving the court jurisdiction over their meat identity.
6) Alice needs to have the ability to prove to court that she has delivered 10 widgets.
7) Bob needs to have the ability to prove to court that he did not receive 10 widgets.


Bitcoin CAN be utilised in this way, but this would be cumbersome, expensive, and it would negate most of the advantages of Bitcoin, namely:

1) anonymity
2) low transaction costs
3) speed
4) independence from a centralised third party
6) irreversibility

People are not likely to use Bitcoin in the first place if they have to relinquish that much authority to a centralised court; they may as well use the court's own mint and be done with it.

This is why I said that Bitcoin doesn't pass the Duck Test for property.  The economic reality for the majority of Bitcoin users is that it doesn't behave like property. 

On the other hand:

Google vs. Altavista
Facebook vs. Friendster
IE vs. Netscape

I'm not saying that Bitcoin won't become the market leader; I think it has a good chance.

All I'm saying is that the first mover advantage can be overestimated.

Bitcoin has most of the advantages of gold and few of its disadvantages.

I think that some manner of cryptocurrency is likely to become the next gold. However, it might not be Bitcoin and it might not be the current block chain.

Once cryptocurrencies enter the mainstream, the price of gold will probably drop to something that reflects only its usefulness in jewellery, electronics, etc., as people stop perceiving it as useful currency.

This is likely to be a slow process, because the perception of gold as a currency is ingrained into most cultures.  It could take a couple of generations.  

so if I understand correctly, you take all the coins the cluster generates in a  week and divide them among the investors, in proportion to how much Mhash/s they rented?  Or do I only get the coins that "my own" rented GPUs generate?

I don't think it does because Bitcoin isn't property.

Money (even gold) relies on some sort of centralised court or protection agency that enforces property rights. Without these institutions money would be worthless.  Bitcoin is different from money because it functions in a universe completely devoid of rights, whether positive or negative.  

You can't "own" a Bitcoin, you can only know a piece of information that allows you to spend it. If somebody "steals" that information you can't take the coin back by force.

Neither can you "owe" a Bitcoin. Sending someone a bitcoin does not oblige the payee to do anything in return.  Reciprocity is based purely on reputation. There is no enforcement of reciprocity.

We all agree that a physical person has certain rights, but a bitcoin address has no rights. None whatsoever. There is no way of proving whether a bitcoin address "belongs" to a physical person.

Your model of paying for divulgation doesn't solve the free rider problem.

Still, lighthouses can be run profitably in a voluntary market so there is no reason that this can't.

Only difference is that it's likely to be less profitable than the paying for diffusion model (back when it used to work). You will never be able to completely eliminate free riders.

Another paradigm altogether is that instead of selling static data, you sell algorithms or services. Or rather, you sell their data output and never divulge the actual algorithm.

Computer game makers have already caught on to this. This is why you don't see that industry fighting to maintain the copyright staus quo the way the MAFIAA is doing.

Who cares what Satoshi's goals are? He has given us a wonderful tool. We can use this tool for whatever we decide is our goal. History has shown that new technologies often end up being used in ways which the original inventor didn't intend, or couldn't even imagine.