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5301  Other / Beginners & Help / Re: Just some Newbie's Questions. on: March 20, 2013, 06:32:01 PM
With 700KH/s you can just forget about mining.  I know you are excited but the end result will be you earning less than a cent and likely destroying your laptop.

All miners make the same amount in the long run.  Pooled mining just reduces variance.   Would you rather have $1 per day or a 1% chance at $100 each day.  The expected value is the same.   Now some pools charge fees and that reduces the expected value of mining.  It is simply a trade of a little less revenue for more consistent revenue.
5302  Other / Beginners & Help / Re: As a new user, problems I see with bitcoin on: March 20, 2013, 06:10:55 PM
On the employee/salary angle give there are a lot of options.  The simplest would be to price the salary but give them the option to take some/all of their take homepay in BTC.  Actually in the short/medium term this is really the only option.  Taxes need to be collected, payroll deductions like healthcare and life insurance need to be in fiat.  Until there is a scenario where every aspect of employment can be paid in BTC some component of wages needs to be fiat.  So the solution is easy.  Your wage is $100K.  What % of your takehome pay would you like sent to ACH (DD) in USD and what % sent as BTC transfer.  BTC fanatics could pick 100%, BTC skeptics 0%, most would pick something in the middle.

Most people are more concerned with the purchasing power of their wages not the nominal number.  You could be a trillionaire in Zimbabwae dollars but I am guessing you neither elected to receive your salary in Z or move there.  Smart employees will (either initially or over time) realize that although they get less nominal BTC the go further and their standard of living is better.  Dumb employees will happily take fiat and your company saves money (hold their salary in BTC and convert smaller and smaller amounts of it into fiat each paycheck).  Still there is a psychological aspect to it so don't force your employee (what would be the benefit).  Give them the option and if they want tired rapidly devaluing fiat ... let them.  Freedom is about choice, even the choice to do dumb things.

As for the other points which all can be simplified to "Bitcoin is too volatile".  The market will get deeper.  If there is so much profit to be easily made pushing it around with mere millions then lots of people will dump mere millions into the market and the market will get deeper.  100 or 1000 people chasing the same "easy money" will boost those walls real quick. It really comes down to a fundamental question ... do you believe in free markets?  If you don't then Bitcoin will fail and there really is nothing that could be done to fix it.
5303  Economy / Lending / Re: Why is nobody shorting BTC on: March 20, 2013, 05:53:53 PM
Think about it this way.  Your intent is to naked short BTC with someone elses coins.  Great for you horrible for lender.  So if BTC crashes you can repay easily but anyone thinking BTC will crash would likely just sell instead of lending.  There is no counterparty risk in selling.  So really the only people who would be willing to lend coins to you are those who think that BTC will hold value.  Now lets say that instead of crashing, BTC skyrockets your ability and likelihood to repay is greatly reduced.  So lenders coins are worth more but they never see them.  Throw the fact that ALL business has risk on top and it is just a lose-lose-lose for any lender.  Better to put it all on a high % SD game. 

Your history/rep doesn't mean you WILL scam but it certainly means you have absolutely nothing to lose by walking away.  Likewise someone with significant history/rep doesn't mean they WON'T scam but it does mean they have something to lose by walking away.

Lastly 20% interest?  If someone did want to lend coins to someone looking to short they could do so bitfinex.  Collect and interest and have some assurance the borrower can't walk away (although the site could).

5304  Bitcoin / Bitcoin Discussion / Re: FinCEN addresses Bitcoin on: March 20, 2013, 01:36:48 PM
Still , mtgox and others have more than 2 currencies and are thus "dealers in foreign exchange". I can perfectly exchange EUR against USD there (via BTC).

Well no you can't.  You can exchange USD for BTC and you can exchange EUR for BTC.  MtGox (and other specifically) don't have a USD:EUR market for this exact reason.  APMex sells gold bullion in USD, CAD, EUR (and likely half dozen other currencies).  In theory you could use them to trade USD for EUR using gold purchases and sales as a middle man.  They aren't a dealer in foreign exchange.

If you want real info go to the source:
http://www.ecfr.gov/cgi-bin/text-idx?SID=1b9bbca34ea4e56340935841929ee09c&c=ecfr&tpl=/ecfrbrowse/Title31/31cfrv3_02.tpl#1000

The two sections most relevent to MSB are 1010 and 1022.  If you are real interested open 1010 and 1022 is seperate tabs/windows because both sections make lots of references to the corresponding other section.
5305  Bitcoin / Bitcoin Discussion / Re: FinCEN addresses Bitcoin on: March 20, 2013, 01:35:58 PM
I think we should request this administrative ruling as soon as possible to ...

You can't simply ask for a "generic" administrative ruling.  You need to provide a specific example.  Say you are the owner (or legal counsel for) a company called CoinFort which allows clients to buy and sell coins using ACH as a funding and disbursement method.  If you have specific question on your business model related to specific MSB regulation (most likely needing clarification on a definition or meaning) you can request an administrative ruling.

In an administrative ruling, FinCEN is obligated to respond to the specific questions asked by an MSB.  The purpose is to prevent a lawsuit (which would be the only other way to get a resolution).

There is no legal right (sadly) for them to answer general questions, hold open hearings, or hear criticisms/concerns in a public forum, etc.
5306  Bitcoin / Bitcoin Discussion / Re: FinCEN addresses Bitcoin on: March 20, 2013, 01:32:22 PM
Dealers in Foreign Exchange

            A person must exchange the currency of two or more countries to be considered a dealer in foreign exchange.19 Virtual currency does not meet the criteria to be considered "currency" under the BSA, because it is not legal tender. Therefore, a person who accepts real currency in exchange for virtual currency, or vice versa, is not a dealer in foreign exchange under FinCEN's regulations.

Not sure if anybody has highlighted this yet.

Nobody has ever thought Bitcoin (and other virtual currencies) are legal tender.  Not sure what you think that means.
5307  Other / Beginners & Help / Re: Where is anonymity if your address is public on: March 20, 2013, 01:17:59 PM
I do understand that I, the sender, remain anonymous.

What I do not fully understand is how a recipient can remain anonymous. I mean, every recipient has to send his public address to the sender, right? And businesses have to "announce" this on their website. So if you would keep track of the addresses that, let's say WordPress, announces on it's website for senders to send their bitcoins to, you can see which transactions are going to WordPress. Everybody could see the incoming cashflow of WordPress. Am I wrong?

Users can create an infinite number of addresses.  It would be foolish for Wordpress to use a single address for all incoming payments given there is no cost to create thousands, millions, even billions (if they need that many) new addresses.  Most businesses use a new "one time use only" address for every single order/deposit/transaction/customer. The only person seeing a particular address is the person making the payment. 

As an example, please tell me how many Bitcoins FC4B has received from clients.  ( https://fastcash4bitcoins.com )  Grab your calculator I will wait.  If you get it exactly right down to the satoshi I will give you 1,000 BTC.
5308  Other / Beginners & Help / Re: "Transaction is over the size limit" On ALL of my transactions? on: March 20, 2013, 03:46:46 AM
You keep sending low priority spam?  Good news is you are making the network more secure.

My guess is you have a huge number of tiny inputs (SD? worthless "free" BTC sites? miner which set pool to auto-payout at something ridiculous like every 0.0001 BTC?).  Your wallet is spammed to hell.

Bitcoin priority works on the concept of coin age.  It takes roughly 1 Bitcoin-day (1BTC which is 1 day old, or 10 BTC which are ~2 hours old, or 0.1 BTC which are 10 days old) to avoid low priority fees.  The tx must also have all outputs be 0.01 BTC or more and total size less than 10 KB to avoid anti-spam fees.
5309  Economy / Speculation / Re: Ultimate bear chart on: March 20, 2013, 02:50:03 AM
Oh man some good laughs in there.

"Bears are like, WTF"
5310  Bitcoin / Bitcoin Discussion / Re: Bitcoin and me (Hal Finney) on: March 20, 2013, 02:42:09 AM
For those who haven't made the connection the "Finney Attack" commonly referenced on this forum is named after the OP who first theorized this double spend attack vector.
https://en.bitcoin.it/wiki/Double-spending#Finney_attack

Thank you for sharing Hal.  I have sometimes wondered what would have happened if nobody had responded to Satoshi's idea.  Would it have simply died on the vine and vanished into the pages of history?
5311  Bitcoin / Bitcoin Discussion / Re: When the power goes out.... on: March 20, 2013, 02:33:12 AM
It is highly implausible that all fiats would all be worth nothing simultaneously.  If the USD hyperinflated for example you could find that 1 BTC = $100,000 and that is just about enough to buy a video game on steam.  If  most/all fiats became some hyperinflated as to be worth less than the paper they are on (i.e global Zimbabwae) I would expect most exchanges would be pricing BTC:GLD and BTC:SLV.
5312  Bitcoin / Bitcoin Discussion / Re: FinCEN addresses Bitcoin on: March 20, 2013, 02:04:29 AM
A reasonable way to test how these guidelines work in practice would be to inform FinCEN about suspected illegal activity of the "Linden Lab's currency brokerage" and monitor what happens then.
I am not sure if asking FinCEN about interpretations will bring us further. I have no idea how vague official clarifications are in US, but in Poland You get 4 different (contradictory) official opinions and none of them tells You the answer to your questions. Provoking court decisions was always a slow but more reliable alternative.

You can seek an administrative ruling.  Essentially it is a letter which requires FinCEN to provide specific written direction/clarification.  While it isn't the "law", if FinCEN gives you an administrative ruling stating "x" it provides some measure of protection if they later change their mind.
5313  Economy / Service Announcements / Re: bitfloor needs your help! on: March 20, 2013, 01:56:14 AM
The company has a debt denominated in BTC.  The hedge would be to hold any profits in BTC.  Having a debt in BTC and holding assets in USD isn't a hedge, it is a short position.   Imagine if hypothetically Bitcoin rose to $500 USD per BTC.  Suddenly the company would owe $15M USD worth of debt.  I had hoped that bitfloor would seek outside investors make a deal to fix the debt to USD offer something like a 33% haircut, 33% repaid upfront, and 33% repaid over next x years.  As it is holding USD and watching the BTC denominated debt skyrocket is just a stone around the neck of bitfloor.
5314  Economy / Trading Discussion / Re: Is Mt Gox hacked? The volume of the last few trades are all repeating digits on: March 20, 2013, 01:29:04 AM
John we're talking about two different things.  "Volume" is the count of trades over a period of time.  It should always be a whole number.

No it isn't.  Think about how utterly worthless that would be as a metric.

You trade 1 order of 100,000 BTC = 1 volume?
I trade 100,000 orders of 1 satoshi each (0.001 BTC total) = 100,000 volume?
What use would that be as a metric?

VOLUME on any currency exchange is the amount of currency traded.  MtGox measures the BTC volume (i.e. the total BTC traded in the prior 24 hours).
5315  Bitcoin / Bitcoin Discussion / Re: FinCEN addresses Bitcoin on: March 19, 2013, 11:50:06 PM
Just to clarify, is there anything in this that affects the direct exchange of bitcoins for goods and services?

The guidance specifically states that is NOT a MSB or an activity regulated by FinCEN.
5316  Bitcoin / Bitcoin Discussion / Re: Color checksum system for fast visual checking that entered address is correct on: March 19, 2013, 11:26:49 PM
Quote
The last few characters ARE already a checksum. Well made bitcoin sites don't let you enter an address with a wrong checksum.
Which sites display the "correctness" of the entered address before the form is submitted?

We do Wink
Anyway, your avatar image is already wrong by $10 Grin

We do also.  Still implementing a color system would require websites changing (or caring enough to change) so couldn't they just validate addresses?  Also there is little danger in a site taking an invalid address.  An invalid address (doesn't comply with proper address structure and checksum) can't be accepted by the network.  It is potentially confusing to the user but funds can't be lost.  The tx even if forced would be ignored by the network as invalid.
5317  Bitcoin / Bitcoin Discussion / Re: FinCEN addresses Bitcoin on: March 19, 2013, 11:17:31 PM
This is good news. With clear rules the economy can really begin to prosper.

The problem is the rules aren't clear.  The guidance simply says (simplified) virtual currency exchangers are money transmitters.  Well that is all well and good except the guidance doesn't provide any guidance on complying with the BSA.  Just registering as a MSB is easy.  Anyone (company or individual) can do it in about five minutes by filling out a 4 page form. 

The problem is compliance.  Registering is saying "yes I am in compliance" and if you aren't well that is lose all your money or jail time.  The problem is that "compliance" isn't possible if you can figure out how to comply. 

Just on example of the inconsitencies and vagueness of applying money transmitter rules/requirements to currency exchangers. Money transmitters are required to collect and record information on money transmissions in excess of $3,000.  If I buy 100 BTC from you and pay you $5,000 by bank wire.  Who is the sender?  Who is the receiver?  In a classic money transmitter scenario (the one in all FinCEN courses, and documents) the money transmitter is the middle man.   Sender -> Money Transmitter -> Receiver.  The MT records the information both both entities.  Is the MT both the MT AND the sender?  Are you the sender and receiver?  Are we both MT and one of the roles?  Who knows.  There are some plausible "guesses" but get it wrong and you could be fined up to $250,000 for each inaccuracy.

The "guidance" is nothing of the sort.  Paraphrased version of FinCEN "guidance":
Quote
Um you guys are money transmitters and stuff, so figure out how what we expect you to do without us telling you what we expect you to do and BTW if you get it wrong or we later change our mind and decide you got it wrong well you go to jail.

Below is the regulation in question, now figure out what needs to be recorded.  

Quote
(e) Nonbank financial institutions. Each agent, agency, branch, or office located within the United States of a financial institution other than a bank is subject to the requirements of this paragraph (e) with respect to a transmittal of funds in the amount of $3,000 or more:

(1) Recordkeeping requirements. (i) For each transmittal order that it accepts as a transmittor's financial institution, a financial institution shall obtain and retain either the original or a microfilm, other copy, or electronic record of the following information relating to the transmittal order:

(A) The name and address of the transmittor;

(B) The amount of the transmittal order;

(C) The execution date of the transmittal order;

(D) Any payment instructions received from the transmittor with the transmittal order;

(E) The identity of the recipient's financial institution;

(F) As many of the following items as are received with the transmittal order: 1

1  For transmittals of funds effected through the Federal Reserve's Fedwire funds transfer system by a domestic broker or dealers in securities, only one of the items is required to be retained, if received with the transmittal order, until such time as the bank that sends the order to the Federal Reserve Bank completes its conversion to the expanded Fedwire message format.

( 1 ) The name and address of the recipient;

( 2 ) The account number of the recipient; and

( 3 ) Any other specific identifier of the recipient; and

(G) Any form relating to the transmittal of funds that is completed or signed by the person placing the transmittal order.

(ii) For each transmittal order that it accepts as an intermediary financial institution, a financial institution shall retain either the original or a microfilm, other copy, or electronic record of the transmittal order.

(iii) For each transmittal order that it accepts as a recipient's financial institution, a financial institution shall retain either the original or a microfilm, other copy, or electronic record of the transmittal order.

(2) Transmittors other than established customers. In the case of a transmittal order from a transmittor that is not an established customer, in addition to obtaining and retaining the information required in paragraph (e)(1)(i) of this section:

(i) If the transmittal order is made in person, prior to acceptance the transmittor's financial institution shall verify the identity of the person placing the transmittal order. If it accepts the transmittal order, the transmittor's financial institution shall obtain and retain a record of the name and address, the type of identification reviewed, and the number of the identification document ( e.g., driver's license), as well as a record of the person's taxpayer identification number ( e.g., social security or employer identification number) or, if none, alien identification number or passport number and country of issuance, or a notation in the record of the lack thereof. If the transmittor's financial institution has knowledge that the person placing the transmittal order is not the transmittor, the transmittor's financial institution shall obtain and retain a record of the transmittor's taxpayer identification number ( e.g., social security or employer identification number) or, if none, alien identification number or passport number and country of issuance, if known by the person placing the order, or a notation in the record of the lack thereof.

(ii) If the transmittal order accepted by the transmittor's financial institution is not made in person, the transmittor's financial institution shall obtain and retain a record of the name and address of the person placing the transmittal order, as well as the person's taxpayer identification number ( e.g., social security or employer identification number) or, if none, alien identification number or passport number and country of issuance, or a notation in the record of the lack thereof, and a copy or record of the method of payment ( e.g., check or credit card transaction) for the transmittal of funds. If the transmittor's financial institution has knowledge that the person placing the transmittal order is not the transmittor, the transmittor's financial institution shall obtain and retain a record of the transmittor's taxpayer identification number ( e.g., social security or employer identification number) or, if none, alien identification number or passport number and country of issuance, if known by the person placing the order, or a notation in the record of the lack thereof.

(3) Recipients other than established customers. For each transmittal order that it accepts as a recipient's financial institution for a recipient that is not an established customer, in addition to obtaining and retaining the information required in paragraph (e)(1)(iii) of this section:

(i) If the proceeds are delivered in person to the recipient or its representative or agent, the recipient's financial institution shall verify the identity of the person receiving the proceeds and shall obtain and retain a record of the name and address, the type of identification reviewed, and the number of the identification document ( e.g., driver's license), as well as a record of the person's taxpayer identification number ( e.g., social security or employer identification number) or, if none, alien identification number or passport number and country of issuance, or a notation in the record of the lack thereof. If the recipient's financial institution has knowledge that the person receiving the proceeds is not the recipient, the recipient's financial institution shall obtain and retain a record of the recipient's name and address, as well as the recipient's taxpayer identification number ( e.g., social security or employer identification number) or, if none, alien identification number or passport number and country of issuance, if known by the person receiving the proceeds, or a notation in the record of the lack thereof.

(ii) If the proceeds are delivered other than in person, the recipient's financial institution shall retain a copy of the check or other instrument used to effect payment, or the information contained thereon, as well as the name and address of the person to which it was sent.

(4) Retrievability. The information that a transmittor's financial institution must retain under paragraphs (e)(1)(i) and (e)(2) of this section shall be retrievable by the transmittor's financial institution by reference to the name of the transmittor. If the transmittor is an established customer of the transmittor's financial institution and has an account used for transmittals of funds, then the information also shall be retrievable by account number. The information that a recipient's financial institution must retain under paragraphs (e)(1)(iii) and (e)(3) of this section shall be retrievable by the recipient's financial institution by reference to the name of the recipient. If the recipient is an established customer of the recipient's financial institution and has an account used for transmittals of funds, then the information also shall be retrievable by account number. This information need not be retained in any particular manner, so long as the financial institution is able to retrieve the information required by this paragraph, either by accessing transmittal of funds records directly or through reference to some other record maintained by the financial institution.

(5) Verification. Where verification is required under paragraphs (e)(2) and (e)(3) of this section, a financial institution shall verify a person's identity by examination of a document (other than a customer signature card), preferably one that contains the person's name, address, and photograph, that is normally acceptable by financial institutions as a means of identification when cashing checks for persons other than established customers. Verification of the identity of an individual who indicates that he or she is an alien or is not a resident of the United States may be made by passport, alien identification card, or other official document evidencing nationality or residence ( e.g., a foreign driver's license with indication of home address).

5318  Other / Beginners & Help / Re: Working on rebranding Bitcoin on: March 19, 2013, 06:04:31 PM
Drop the word free.  The first time someone gets prompted for a mandatory fee because their tx is low priority or over sized that false free promise seems like bogus advertising.  Bitcoin isn't free, it has never been free, and it will never be free.  Even people who are able to send a tx without a fee pay for the network through the inflationary effect of new block subsidies.
5319  Bitcoin / Bitcoin Discussion / Re: FinCEN addresses Bitcoin on: March 19, 2013, 05:50:44 PM
Fincen called me back. ... He had no idea

Yeah this is the hard part
Quote
If you get someone knowledgeable on the phone

MSB is an umbrella term.  A money transmitter (or check casher, or issuer of prepaid access) are all MSB.  All Money transmitters are MSB but not all MSB are money transmitters.  FinCen has no specific "Money Transmitter" registration.  They register MSBs.  They register check cashers as MSB, issuers of prepaid access (stored value) as MSBs, and Money Transmitters as MSB.  There are seven activities which a company can declare when registering as a MSB.  It is possible for a single entity to be registered as an MSB conducting more than one activity (i.e. WU is a money transmitter and also issues money orders).

From the source....
Quote
(ff) Money services business. A person wherever located doing business , whether or not on a regular basis or as an organized or licensed business concern, wholly or in substantial part within the United States, in one or more of the capacities listed in paragraphs (ff)(1) through (ff)(7) of this section. This includes but is not limited to maintenance of any agent, agency, branch, or office within the United States.

(1) Dealer in foreign exchange. ...

(2) Check casher ...

(3) Issuer or seller of traveler's checks or money orders. ...

(4) Provider of prepaid access ...

(5) Money transmitter ...

(6) U.S. Postal Service. ...

(7) Seller of prepaid access. ...

http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=1308d21216c7d185f6892cfa3276c899&rgn=div5&view=text&node=31:3.1.6.1.2&idno=31#31:3.1.6.1.2.2.3.1


5320  Bitcoin / Bitcoin Discussion / Re: FinCEN addresses Bitcoin on: March 19, 2013, 05:20:57 PM
I think the actual creation occurred in 2009 when the Bitcoin Protocol was launched. I would argue that the protocol "creates" the coins, and USA based miners are just claiming them.
It's a point that a hostile regulator or judge would not likely accept.

However someone would have a legit argument if they wanted the cost and complexity of a court case.  A Bitcoin miner can't make any Bitcoin not allowed by the protocol.  The protocol has always allowed only 21M coins.  On day zero there were 21M coins available (for someone with sufficient hashing power).  The protocol decides how and when a Miner will receive a coin (as a subsidy for securing the network).

^ Note the above shouldn't be seen as legal advice.  Ultimately on this or any other issue what matters is what the old guy in a robe thinks, still many judges are logical and a logical argument can be made that Bitcoin miners aren't "creating" coins anymore than gold miners are creating gold.  They are simply "unlocking" them.
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