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1721  Bitcoin / Press / Re: Bitcoin press hits, notable sources on: November 22, 2011, 12:39:59 PM
The site mentioned in the article seems to be a relatively minor one and the claim dubious:
"world’s first poker site to offer players the chance to play poker using controversial virtual currency Bitcoin."
(although it might be the first poker site which also takes more traditional money to accept bitcoin)


- but the site carrying the article (cardplayer.com) is a well known poker-news site. (and magazine)

Quote
World’s First Bitcoin Poker Payments Launched
Mobile Poker Site Switch Poker First To Offer Virtual Currency Deposits And Payments

Brendan Murray
2011-11-22

http://www.cardplayer.com/poker-news/12362-worlds-first-bitcoin-poker-payments-launched

edit: it seems the article came via some syndication arrangement and is on other general media and poker media sites too.
e.g http://finance.yahoo.com/news/switchpoker-com-adds-controversial-virtual-110400254.html
so I guess this is a case of switchpoker having done some decent media work.

Well.. it's bitcoin exposure to the poker world anyway.

Here's their blog entry on bitcoin:
http://blog.switchpoker.com/2011/11/22/bitcoin-payments-added
1722  Bitcoin / Bitcoin Discussion / Re: More Bits on freetalklive.com on: November 22, 2011, 04:05:50 AM

Mybitcoin was amazing, reliable, and innovative. but they got hacked.


Mybitcoin was not hacked,  they planned to steal everyones money from day one.

Roger, I generally love your work - but that's an unfounded claim.
It might be reasonable for you to harbour that as a personal suspicion, and it may even be true - but it's not reasonable to peddle it as fact.

edit: Whether hacked or not - the mybitcoin case serves as an interesting warning about doing business with an anonymous entity, even if it had a good reputation/rating.
1723  Other / Beginners & Help / Re: My guess ==== $250 or more on: November 22, 2011, 01:55:05 AM
I could easily envision that the worldwide transaction demand for BTC could easily reach $2 billion or more.  Given that there are less than 8 million bitcoins out there, that would equate to $250 per coin.  Bitcoins is the perfect instrument for small ticket item transaction ecommerce and people will have to hold a bitcoin inventory to transact, so I'm very optimistic.

Optimistic - yes wildly so I think.
My own 'optimistic' scenario I wrote above suggested that over $90Billion per year in transactions *could* be supported on only a fraction of the coins, and with only a value of $30 per coin.
Now there were probably a lot of wild assumptions in my scenario - but I don't think you can just take some transaction demand in $billions and divide by the number of coins to get a per coin trading value.
1724  Bitcoin / Press / Re: Bitcoin press hits, notable sources on: November 21, 2011, 03:25:20 PM
Quote
POLICY & LAW
How the Internet Evolves to Overcome Censorship

Jerry Brito
2011-11-21

http://techland.time.com/2011/11/21/how-the-internet-evolves-to-overcome-censorship/
1725  Other / Archival / Re: delete on: November 21, 2011, 02:14:11 PM
Quote
..to protect the network from trusted nodes which may be attempting malicious activity.

Damn and blast those untrustworthy trusted nodes!!  Grin
1726  Other / Beginners & Help / Re: how much could bitcoin actuall gro to per coin? on: November 21, 2011, 01:56:25 PM
Let's assume a highly efficient merchant/exchange/wallet system integrated with existing currency systems such that customers don't need to hold BTC, and neither do merchants.

If you are going to instantly sell every bitcoin you earn, and buy every bitcoin you need on the spot, you are taking almost no advantage of bitcoins. You are not using it as a currency, you are using it as a wire transfer.

Banks and exchanges Im sure wouldnt mind, but it would be stupid beyond belief to pay exchange fees and banking fees twice for each and every transaction when one of the key advantages of bitcoin is that transactions are essentially free. Im all for theoretical arguments, but this one is a bit over the top Smiley.

Why yes.. it would rather function as a form of more accessible wire transfer.
(credit cards would still be the more serious competitor in this scenario than 'wire transfer' though I guess)
As it has some distinct advantages in speed and cost compared to the wire transfer currently offered to consumers - it doesn't seem unreasonable to think bitcoin could compete it's way to occupy some of that space.  
Yes, I did say to assume a 'highly efficient' exchange system - so the assumption is that competition has driven down  banking/exchange fees.
Quote
...pay exchange fees and banking fees twice for each and every transaction...
I don't see how a consumer is paying fees twice for their transaction. Whether they get their bitcoins in a batch up front or on the fly as needed shouldn't make much difference in a reasonably efficient system.  At the moment everyone seems to ignore the cost of acquiring bitcoins when they talk about bitcoin transactions being nearly free - but unless you're both a merchant and a consumer (or a miner), then those costs should in theory be apportioned to work out the real per transaction cost.

The argument about fast recycling of coins in the merchant-consumer loop doesn't suggest that all merchants and all consumers always use it in that fashion alone.   I chose 10% of coins to indicate that a relatively small proportion of coins involved in that fast-loop would do to provide a large amount of value for trading, and so potentially reduce interest in hoarding. Maybe another 40% are held by consumers as ready cash and merchants yet to bank.   There's still 50% left for the hoarders speculating on whether the coins looping around are enough to support the current level of activity.

Edit:
Quote from: P4man
If I was convinced this would happen, and BTC would become the new world currency...
I guess we're arguing different scenarios here..    I'm considering the case where bitcoin is in widespread global use - but side-by-side with other currencies Tongue


1727  Other / Beginners & Help / Re: how much could bitcoin actuall gro to per coin? on: November 21, 2011, 12:24:47 PM
I guess it depends on whether bitcoin can become seen as a good stable place to store value.   If there are enough serious bubble/crash cycles - the dominant way of using them may be to convert into them only long enough to perform an exchange. 

Again, the keyword here is theoretical. If I was convinced this would happen, and BTC would become the new world currency,  I wouldnt only have 100BTC. But even with its current flaws ensuring people only keep a fraction of their wealth in BTC and use only a tiny fraction of their consumption using BTC; assume your estimate is accurate, and there are 100k users today. There are over 2 billion internet users. Do the math.

I'll give some maths a go. (I might be a bit crap at it!)

Let's assume a highly efficient merchant/exchange/wallet system integrated with existing currency systems such that customers don't need to hold BTC, and neither do merchants.

If we assume 6 confirmations are required, then one set of coins could potentially come full circle and be reused 4 times per day (probably more if smart wallet services allow) 

Even if only 10% of all coins are available in the pool of actively cycled coins - we have (2.1M * 4 * $btcvalue)  in available $ for transactions per day.
Even at BTC value of $30 - we get over $90Billion worth of transaction that can be done per year - more than paypal's transaction volume in  2009.


The point is that a relatively small pool of highly mobile coins could sustain a decent size economy - which may then drive down the incentive for others to hoard and thus the value.   

It all depends on what sort of velocity of coin recycling gets going - and smart wallet/merchant software is quite likely to enable this I think.

(You'll notice I seem to be arguing two opposing cases in this thread - that's because I'm not attached to either as being more likely - just sounding it out!)






1728  Other / Beginners & Help / Re: how much could bitcoin actuall gro to per coin? on: November 21, 2011, 12:00:01 PM
Even though at the moment they are lousy as a store of value - it seems plausible to me that they *could* become primarily seen as a savings mechanism.
Under this scenario, the merchant side of the equation would be less important.

Then you are not seeing bitcoins as a currency, but as a scarce commodity. If bitcoin doesnt gain usefulness as a currency for trade, it has no value as commodity. You cant do anything with bitcoins other than conduct trade.

While I'd personally prefer to see them used widely in trade - I'm just not convinced it's a requirement for them to function as a store of value.

Gold has historically been used in trade - but now seems to be predominantly considered to have some magic 'intrinsic value' - even though this is wildly above it's value for use in industry.   

All bitcoins would require in order to fulfill the savings role would be a *history* of people using it as such and developing confidence in it.  The attributes that make bitcoin a theoretically good unit of trade, may in my opinion be enough to 'kick start' them as a store of value and the amount of actual trading done becomes less important.

I'm thinking here also of the 'bad money drives out good' theory... which suggests to me that there is a plausible case to be made that the hoarding eventually dominates - and they may retain value even in the face of a relatively low amount of trade and transactions.





1729  Other / Beginners & Help / Re: how much could bitcoin actuall gro to per coin? on: November 21, 2011, 11:43:13 AM
It is still early days but like it is said above if no-one is trading or spending them then they will be worth virtually nothing.

I do wonder about the often stated requirement that there be lots of trade and merchants in order for them to be worth much.
That's just one possible scenario.

Even though at the moment they are lousy as a store of value - it seems plausible to me that they *could* become primarily seen as a savings mechanism.
Under this scenario, the merchant side of the equation would be less important.

1730  Other / Beginners & Help / Re: how much could bitcoin actuall gro to per coin? on: November 21, 2011, 11:35:54 AM
Quote
If between 50K and 100K users can't even sustain a $3 price - I expect that a million users may similarly not be able to sustain much more than $30 per coin.

There is a big fallacy in your reasoning. You count me as a bitcoin user, which I am, but I hold less than 100 BTC or ~150 euro. I can definitely support a few orders of magnitude more than that (and the same will go for most other users) if bitcoins become more useful and stable. That may or may not happen, but this was a theoretical question. If it does happen, theoretically, even the same amount of users could support a price level thats orders of magnitude higher than today.

I guess it depends on whether bitcoin can become seen as a good stable place to store value.   If there are enough serious bubble/crash cycles - the dominant way of using them may be to convert into them only long enough to perform an exchange. 
1731  Other / Beginners & Help / Re: how much could bitcoin actuall gro to per coin? on: November 21, 2011, 11:20:01 AM
I don't know for sure how many people use bitcoin at the moment - but I'm guessing it's not much more than 50K
(there are about 44K users on this forum - and  people come and go, plus not all users would be here on this primarily english-language forum)

If between 50K and 100K users can't even sustain a $3 price - I expect that a million users may similarly not be able to sustain much more than $30 per coin.

Now perhaps there's no particularly good reason to assume the relationship between *sustainable* price and number of users will be linear, but if it is, then there aren't enough people in the world to sustain the 'million dollar' bitcoin some people dream of.

edit: You have to realize that many 'users' in the future may never hold coins for any decent length of time. If they use them only during exchange - and there is always a ready pool of coins available for sale, then you can't assume the crazy high valuations.


1732  Economy / Speculation / Re: Where do Bitcoin prices belong? on: November 21, 2011, 04:48:39 AM
All bitcoins can be spent the same and therfore have the same merit.

This just isn't necessarily true.
As I explained - governments could easily make certain bitcoins less spendable.

Already, mtgox is known to have been tracking certain stolen coins.   I believe recently someone's mtgox account was temporarily locked because of this.
In that case - it ultimately didn't stop the coins being spent as the depositor was considered an innocent party - but there's no reason a larger such system couldn't enforce the issue more strongly.
1733  Economy / Speculation / Re: Where do Bitcoin prices belong? on: November 21, 2011, 04:30:28 AM
I hope bitcoin will turn out to be a great thing but it could very well turn out to be a terrible thing as we have seen with SR.

I don't see how Silk Road has been a terrible thing.
What could turn out to be a terrible thing would be if radical groups who otherwise couldn't get together enough resources, manage to use bitcoin to source enough financial backing to be dangerous.

I suspect governments will employ sophisticated software to track the blockchain, and rather than attempt to ban bitcoin as a whole - will do something like declare that all bitcoin transfers must be traceable to a 'clean' source.  ie - all the way back to an exchange which keeps records in accordance with AML laws.
or at the very least require that businesses subscribe to government blacklist of known 'dirty' bitcoin address-chains.  
Businesses/individuals which accept 'dirty' transactions will risk penalty, or at least the inability to spend those coins with other regulated businesses etc.
Once certain coins become hard to spend at popular merchants - the government 'coin-checking' software would spread and become an appealing add-on to ordinary users because they don't want 'dodgy' coins.

While it would be a lot of data to track, I think it's well within the range of what software can do.  
Eventually Bitcoin may turn out to provide a lot less privacy from governments than people imagine.

That raises the interesting spectre of loss of fungibility.  Some bitcoins will be worth more than others - and we'll end up with 'blackmarket' bitcoin exchanges as well as 'whitemarket' exchanges.   Am I way out of line with this reasoning?
1734  Bitcoin / Bitcoin Discussion / Re: Large transactions, 15 X 500k in a few days. on: November 20, 2011, 03:28:44 PM
This doesn't look like 15 big transactions to me.
I'm assuming it's 15 small spends from a wallet with a large balance. (So the larger amount is returned to the wallet as change)
Not so exciting.

1735  Economy / Speculation / Re: Store of Value VS. Method of Exchange on: November 20, 2011, 02:03:48 PM
For the most part, people don't trust something not because they understand how it works, but because others trust it.

That's a fair point.. although I'd think you need a critical mass of geeks to understand something in order to get that initial momentum.


Quote from: Etlase2
Assuming bitcoin somehow becomes widely adopted, the speculation could go on for decades or more as people hold back hoards waiting for the right opportunity.

If it were that widely adopted - there'd be less interest in 'cashing out' of the hoard anyway..   maybe holding it and spending it directly as needed would be more appealing. 
1736  Bitcoin / Press / Re: Bitcoin press hits, notable sources on: November 20, 2011, 01:52:31 PM
In March 2012, various anti-money laundering specialists will be including bitcoin in their conference discussion.
This is nothing surprising, but I guess it's notable that it's on their radar.

Quote
17th Annual International Anti-Money Laundering Conference -  Co-Organized by ACAMS

Conference Program
http://www.moneylaunderingconference.com/2012/program.asp


New Trends in e-Payment Methods: Understanding the Virtual Customer
Monday, March 19  |  1:30 PM - 2:45 PM

Analyze financial crime trends and vulnerabilities in credit cards, Bitcoin and pre-paid cards, especially in developing countries
Learn how to adapt your institution’s systems to include controls to monitor e-payments and alternative money
Mitigate the risk of abuse through mobile devices, the fastest growing method for transmitting money
Examine the impact of FinCEN’s Final Rule on Prepaid Access

1737  Economy / Speculation / Re: Store of Value VS. Method of Exchange on: November 20, 2011, 01:20:40 PM
I wonder if anyone has come up with a way to separate network security from coin creation. Hmm.

I know you've suggested a way with encoin - but a complex trust system involving a mix of anonymous and non-anonymous nodes is far from easily understandable at the moment.
Bitcoin is hard enough to reason about, so it's a hard sell to push something more complex.  

Anyway - obviously this isn't the thread to discuss alternative systems, but I hope you manage to get at least a prototype going to test your ideas.

It's not clear to me just how much the 'store of value' aspect of a currency is dependent on the technical design aspects vs just mass psychology - but I imagine understandability (as a prerequisite to trust/confidence) plays an important role.. and bitcoin is already really stretching that as far as the general populace goes.
1738  Economy / Speculation / Re: Store of Value VS. Method of Exchange on: November 20, 2011, 11:15:35 AM
store of value and medium of exchange are two complementary functions - Bitcoin will always have both to some degree.

^This..

oh.. and bears and bulls are indistinguishable once they become roadkill on the bitcoin highway.
1739  Economy / Speculation / Re: Store of Value VS. Method of Exchange on: November 20, 2011, 11:08:58 AM
Quote
a. When you send 0.1 bitcoins, it costs roughly 2.82 to send that transaction.

While mining cost per transaction is a nice metric to have - I don't think you're reading it right.
It's not valid to describe that as a 'cost' for the transaction.
It's a cost for the transactions plus network security - plus, dare I say it - for the property of storing value Wink
1740  Bitcoin / Bitcoin Discussion / Re: [COMIC] the sharks and the trampoline on: November 20, 2011, 09:41:09 AM

the chain is meant to be fastened to the ground - it symbolizes the constraints on going short / leverage by the account deposits.

Oh...    I assumed that the chain indicated that there used to be *two*  little bitcoinica bouncers!
(or maybe even a whole chain-gang of them)
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