The ebay listing has been ended.

I'm kind of a dummy - I hadn't messed around with Dwolla at all, and didn't realize how easy it is to fund MtGox that way. Nobody in the U.S. is going to be interested in a marked-up gift certificate when they can just use Dwolla.

I could always sell a certificate to international folk who can't use Dwolla, but then I'd have to deal with scummy Nigerians in internet cafes. (No offense if that is you)

OK, I take that back. Go ahead and be offended you dirty 419ers.

I'm aware of the bad experiences you and mndrix had. I'm hoping that selling "gift certificates" rather than currency will avoid that problem.

And that is awesome, but as I mentioned earlier, this is very different from an anonymous predictions exchange.

Consider the uses:
  - I could bet that bitcoin won't be on the front page of the new york times this year. Somebody at NYT with the power to make it happen could take the other side.
  - I could bet that a certain Libyan dictator won't be assassinated. His housekeeper could take the other side.
  - I could bet that a thousand shaved monkeys with bitcoin tattoos won't invade the white house lawn

You get the picture. Obviously an assassination market could lead to some very bad things, but that would be unavoidable in a decentralized unregulated market.

That reminds me of another IM conversation I had with . . . somebody else:

him: on December 21 2012  is the day everyone will become aware.
me: aware of what?
him: UFO's are here, and always have been.
me: Interesting prediction
him: I don't think its a prediction.
him: its pretty well set in stone.
him: no pun intended
me: Do you think that on December 22nd 2012, I will believe that "UFO's are here, and always have been."?
him: I would bet my life on it.
me: Wow. Forget betting your life. I wish there was a way to bet money on it.
him: I guess we'll have to bet on December 20th.
him: 2012

I sure hope there is a predictions market running by then.

It would not be Osama Bin Laden that would bet on it, but his housekeeper who overheard the plan. She would bet big on a terrorist attack happening, because she doesn't care about Jihad and she sees a way to make some easy money.

There is a good chance her bet would NOT foil the attack, because she would not give specific enough information, but her employer would definitely not be pleased if he found out she was doing this. The CIA on the other hand, would be pleased to have some intel on when an attack might be happening.

The idea of a totally anonymous decentralized currency immune from government shut-down seemed pretty far-fetched to me a few months ago. What stops the same principles from allowing anonymous prediction markets?

Very good point. And if you were such a terrorist, wouldn't you rather cash out in a completely untraceable anonymous currency?

99.9% of the time when people are speculating that such-and-such asset might be worth an absurdly large value, the price spikes (like bitcoins are), but then reality sets in and the price settles back down (you can learn all about how this happens with penny stocks from Timothy Sykes).

Most of the time, the boosters of the asset have their heads in the clouds and are ignoring important key facts.

With bitcoins, I keep running the numbers, and I keep calculating absurd values for what bitcoins could easily be worth someday. But everybody on the forum who suggests that these values might really happen seem to be nutzo government haters who only keep dollar bills for toilet paper.

I keep wondering: am I the only sane person who thinks this could actually be massively successful without requiring a doomsday scenario?

Ah - I thought InTrade was just another stock trading platform.

Yes, that is exactly what I am talking about, EXCEPT it has to be decentralized somehow (like the informal system using mediators I described above) or hosted anonymously (like the silk road).

Regardless of HOW it happens, the important thing is that it WILL happen. Whether it happens with bitcoins or some other e-currency is anybody's guess. Still, I ain't selling MY bitcoins

Oh, and by the way, there is a huge first-mover advantage to the first system set up to do this. Once people are trading somewhere, it can be very hard to start a competitor (think of ebay's 9% fees versus all those free auction sites).

And . . . go!

Please post a link. I think maybe you are talking about the bitcoin stock exchange?

I glanced at that site. Looked like they were going to start a stock exchange where companies register and are traded in bitcoins. That may be a good idea, but it is not at all what I am imagining.

Yes, but think bigger. If I can place a wager based on any external variable, I can not only speculate on stocks, I can also speculate on sporting events, political races, and anything else that people want to bet on. All I need is a counterparty to take the other side of the bet, a trusted mediator to hold the money, and a way to advertise my bet so that my counterparty can find me (and so I can see other people's advertised bets).

This could literally be as simple as:

1) A few trusted forum members offer to hold money for any bet and dispense it to the winner
2) Some people start advertising bets (and who is holding the money) in some public place that can't be easily censored or taken down (i.e. TOR or Freenet)
3) Counterparty finds bet they want to take, sends their money to the mediator
4) Mediator dispenses winnings according to the advertised terms of the bet

Not much needs to be built that doesn't exist already.

You never need any companies to register with a new exchange. You just need a way to speculate on existing companies. IE I bet the price will rise, you bet it will fall.

The most important thing missing from bitcoin right now is a way to create transactions that are dependent on an external variable (like what a certain stock does tomorrow).

The second most important thing missing is a way to advertise that anonymous person A wishes to bet on such a possibly-illegal external variable.

Stock trading in a separate bitcoin black market would definitely affect the real markets, because real traders will see a price difference between the real markets and the black market - if google is trading at $1 on the black market, they will buy google on the black market while shorting Google on the real market, then they will collect the difference. This kind of risk-free profit is called "arbitrage".

Not just big investors. Have you ever tried to trade stocks? It is a royal pain to get set up (they want to know everything about you), then you pay several dollars MINIMUM for each trade, and then if you are lucky enough to profit, the government taxes you.

Bitcoin solves all of those "problems".

I also don't like insider trading. I just know that like the drug money, it is inevitable. And I plan to profit from the resulting increase in bitcoin prices.

OK - I can't stand holding onto the idea any longer. I posted my logic why I think bitcoin price increases are just getting started:

http://bitcointalk.org/index.php?topic=7985.0

OK - I can't stand it anymore. I have to let you guys know why I think bitcoin price increases are just getting started. I think my logic is best described in this IM conversation I had with my best friend:

Friend: So what is the economic reasoning why this stuff should become super-valuable?
Me: Well, there's this: http://www.google.com/search?tbm=isch&q=drug+money
Me: That will probably always be a big part of it, because it has all the advantages of cash plus a lot more
Me: The main reason though, which I haven't told anybody except my wife, and that only briefly, is that it is the perfect commodity for trading stocks, bonds, commodities, options, etc.
Me: It won't be legal, but I guarantee it will happen
Me: There are TRILLIONS of dollars in those markets
Me: But only 21 million bitcoins
Me: You get some percentage of that moving to bitcoins, and the math is easy
Me: Plus, of those 21 million bitcoins, most of them aren't for sale
Me: So if billions of dollars of ANYTHING moves into bitcoins, their value will be much, much more than billions of dollars
Me: Depending on how you do the math, you can come up with some pretty absurd future values
Friend: Why would someone start trading in stocks/bonds/com mod,
Friend: In a currency that may magor-inflate?
Me: Well, there are some trades you just can't make right now.
Me: For instance, there are no futures or options for many smaller stocks
Me: Remember when I was interested in penny stocks? One of the biggest problems with trading them is that there are never enough short-borrows available, so even though you KNOW a stock is going to crash, you can't profit from it
Me: Also, there is always insider trading. That's why this stuff won't be legal
Me: I know my stock is going to crash because I spent all the money on hookers and blow, so I short it on the bitcoin black market
Me: Completely untraceable insider trading profits
Me: I'm confident that billions of dollars are going to move into digital currencies like bitcoin. The main risk I see is that a different digital currency will take it's place. That would make bitcoins much less valuable, if not worthless
Me: Bitcoin price instability is one of the biggest reasons this sort of thing will be hard to do, but there is a solution for that as well
Me: You can "short" bitcoin to equal the amount of bitcoins you are holding, so that you are neutral to any bitcoin price swings. You can do something like that with only a small amount of bitcoins using options

Note for posterity: current bitcoin price is in the $5-$6 range after a big run-up.

I think it is appropriate that this is my hundredth post

Edit: Since this thread is now my signature, I want to include my official bitcoin predictions I made in another thread before starting this one:

Edit 8/11/2011: My proposal for "the ticker and the hole" is quite possibly the way this will happen: https://bitcointalk.org/index.php?topic=36453.0

Edit 4/2/2013: I now have much more sophisticated ideas about how bitcoin will achieve stability (see my signature). Bitcoin cleared $100 yesterday, and I'm reviving this thread in which in 2011 I predicted wild growth ahead before even the first bitcoin bubble. Note that the arguments above are no less valid today!

I have a background in trading speculative stocks, and I can tell you that this kind of speculative price explosion usually collapses back to nearly nothing eventually (thanks Timothy Sykes).

However, I have my own reasons for believing that bitcoins won't collapse, and may in fact reach the astronomical values people are dreaming about. I'm keeping those reasons to myself for now until I get a chance to gather more bitcoins.

$1000/bitcoin won't make me filthy rich, but I might be rich enough to quit my day job and devote the rest of my life to ministry, raising my kids (and maybe foster kids?), and developing bitcoin-powered websites.

I'm going to step out on a limb and make some predictions about bitcoin price increases:

1) A lot of kids with graphics cards are going to get a LOT of spending money just because they saved the few bitcoins they mined after reading about it in a forum somewhere
2) The term "bitcoin billionaire" is going to become somewhat commonplace, and will refer to someone who became a billionaire through bitcoin investment.
3) The world's first trillionaire (by USD valuation) will be one of the first big investors in bitcoins.
4) This will all happen WITHOUT the collapse of the US dollar, and without bitcoins becoming a commonplace way to pay at the grocery store.

I guess we'll see if I'm right.

Note for posterity: current bitcoin price is in the $5-$6 range after a big run-up.

Post #1 in the thread has been updated to reflect that I am now selling $100 in MtGox USD on Ebay. Ebay listing is here:
http://cgi.ebay.com/300556550490

Buy-it-now price is $115, which I think should cover ebay fees, paypal fees, and shipping costs.

His auction is here: http://cgi.ebay.com/280675399419

I can't find the official policy, but everyone seems to think if you accept PayPal, you have to accept e-checks. For instance: http://answercenter.ebay.com/question/Paypal/Echeck/900247346

The real hang-up is that a new PayPal user won't know that they are paying by e-check until after they send Payment. This actually happened to me the first time I tried to pay somebody with my new PayPal account. I hit "send payment", and then when I looked at my transaction history, it said an e-check would be sent in a few days. I had to cancel the e-check and jump through some hoops before I could send the instant payment I had meant to send.

Just for the fun of it, I put in a low bid on your auction

P.S. If your auction sells for more than $250, you need to ship with signature confirmation in order to be eligible for seller protection.

Yeah, the e-check is through PayPal. If I accept PayPal, I have to accept their e-checks.

I discovered that I am vulnerable to price speculation selling these gift certificates on Ebay, so I had to cancel my $100 auction early.

Assuming the e-check clears, I will still pay the 14.29 bitcoins to the winner of my earlier auction.

The problem is that the winning bidder can pay by e-check, which takes a week to clear. The winning bidder can cancel that e-check at any time. If the price of bitcoins doubles, they let the e-check clear, and I send them the gift certificate that they bought at a much lower price than it is currently worth. If they don't like the price in one week, they cancel the e-check before it clears, and I have to re-list the gift certificate. Ebay rules won't let me exclude e-checks.

I've learned an important lesson, and I'm changing my strategy. From now on, I will be selling gift certificates good for MtGox USD on ebay instead of bitcoins. Since the price for them doesn't vary wildly, there isn't a vulnerability to price speculation.

Block me! Block me! I deal with corruption all the time!