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It is an arbitrary number. The network began at difficulty 1 which requires on average 2^32 attempted hashes to solve a block.
Difficulty 11 million is simply 11 million times more difficult than difficulty 1. In terms of hashes it currently takes on average 2^32 * 11,187,257 = 48,048,902,946,947,100 (~48 quadrillion) hashes to solve a block.
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Why is this not in alt-coins forum?
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Is this really going to happen or has it already happened. I'm just curious to see if it did or did not.
And do any of yous know what the new minimum limit is?
It is in version 0.8.2 of the QT client. 0.8.2 is sill l RC and not final yet. There is no hard minimum however the default value for dust is 5430 Satoshis (~0.6 US cents at current exchange rate). |
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Is this version still seeing "merged transactions" as separate transactions for calculating the "minimum fee"...
The prior version was seeing things like this...
Example only... (min fee 0.0005)
{Attempting to send 0.000018506, pulled from many "partial amounts"}
ldfjslkfj 0.000000123 ->
sfoisud 0.000018273 ->
osidufo 0.000000010 ->
doifusid 0.000000100 -> = dkfjsldk [0.000018506] @ fee (0.0005 x 4):[0.00200000] = -0.002018506 total deduction.
Fees get real large, with up to 100 partial "change" mergers into one singular transaction. (Eg, it is treating every change-packet as a separate transaction, though it is simply merging them into ONE singular transaction... thus, expected payment would be 0.0005 not 0.0005x4 = 0.0020...
Fees are (and have always been) PER KB. If your tx is 4KB then the total fee would be min fee x 4. |
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The must see panel:
Issues of Regulatory Compliance
Hope it was recorded.
It was being recorded not sure how/when it will be made available. I was surprised by the number of participants. Has foundation stated how many tickets were sold? My guesstimate is that is 300 to 500 but with so many simultaneous events going on it is hard to judge. Looks like it is a little more than 1,100 attendees. So far a great conference, with great speakers, well worth the price of admission. |
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d) this change is trying to prevent the sending of amounts so small it costs more to spend them than they are worth (how is it sane to want to keep this property?!).
Who decides what a transaction is worth? Value is subjective, and even if you can't think of a reason why someone might be willing to pay a lot to send a transaction that doesn't mean they don't exist. The fees do. Lets say the only way to spend USD was to mail them to a recipient. A stamp costs $0.46 obviously paying $0.47 ($0.01 + $0.46) to make a $0.01 payment is UNECONOMICAL. The fact that you could make a $0.01 payment (literally mail a US penny to a creditor) doesn't change the fact that it is UNECONOMICAL. Right now transactions below ~5000 satoshis are uneconomical. They won't be spent because the cost to spend them is greater than the value gained in spending them. In the future (if/when exchange rate rises significantly) the threshold on economic transactions will decline. That is all "dust" is. Dust is the threshold where an output isn't economical to spend. Prior it 0.8.2 you could create outputs that due to economics likely would never be spent after 0.8.2 you can't. Remember the dust threshold is now a variable. The default value makes it 5430 satoshis however miners are free to set it to whatever they want. Miners have an incentive to both: a) not exclude economical (meaning will be respent in the future) transactions because that would be turning away paying customers AND b) exclude non-economical transactions as they bloat the UXTO and raise miner's costs perpetually. Thus miners have no incentive to set the dust threshold incorrectly. Too high means less revenue and too low means excessive future cost. 0.8.2 lays the foundation for a more comprehensive system to balance the needs of small transactions with the cost paid by everyone There is cost to bitcoin, there will ALWAYS be a cost to Bitcoin. Now today that cost is partially "hidden" because the block subsidy is so large but the cost still exists. Bitcoin is an efficient payment mechanism because it is p2p and there are no natural monopolies so (economic theory tells us) the cost of transactions will be low. Low doesn't mean zero. |
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Don't feel bad it happens to everyone ... well except maybe Satoshi. Bitcoin is information dense and a lot is buried in the details.
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I am sure. I have observed fee behavior being per KB on tx less than 10KB. All fees (even optional ones) are per KB. Remember space in the blockchain (KBs) is the critical resources. I am not sure if it always (i.e. 0.3 or earlier) has been this way but it has been this way for a long time. https://en.bitcoin.it/wiki/Transaction_feesSending
A transaction will be sent without fees if these conditions are met:
It is smaller than 10 thousand bytes.
All outputs are 0.01 BTC or larger.
Its priority is large enough (see the Technical Info section below)
Otherwise, the reference implementation will round up the transaction size to the nearest thousand bytes and then add a fee of 0.0005 BTC per thousand bytes. Users may override the default 0.0005 BTC/kb fee setting, but cannot control transaction fees for each transaction. Bitcoin-Qt does prompt the user to accept the fee before the transaction is sent (they may cancel the transaction if they are not willing to pay the fee). 0.8.2 will use the same system as the quote above except the min fee is reduced to 0.0001 (~$0.01). |
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Yea, no bad news there but the bad reporting is pretty apparent.  More like ignorant reporting. The conclusions reached by the author are just nonsense. |
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That is not correct Danny. Close but a couple misconceptions.
There is only one mandatory fee and it is on low priority txs. It is 0.0005 per KB (round up). This will be going to 0.0001 per KB in 0.8.2.
To avoid a the min mandatory fee your tx must meet ALL the criteria:
a) priority of inputs higher than "one bitcoin day"
b) all outputs >= 0.01 BTC
c) tx less than 10KB.
If a tx doesn't meet ALL THREE criteria it must pay the min mandatory fee which is always per kb (0.005 in prior to 0.8.2 and 0.0001 in 0.8.2+).
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Bitcoin is not democracy-rule or minority-rule, it's a consensus. What Bitcoin is to you is whatever client you choose to run. If the majority decide to adopt a hard fork that changes something in a way you don't like, you can choose to continue using the old client and connecting to a network with others who do the same.
Wrong, News: All users of Bitcoin-Qt/bitcoind versions 0.7.2 and earlier are required to upgrade to 0.8.1 or apply a manual workaround by May 15. More info. It's up to the devs, and now bitpay where bitcoin goes. Nobody can fork you to upgrade, however eventually an incompatible block will come along and the older version will be forked off. You can choose to remain on the old fork. As long as 2+ nodes exist on that fork and at least one miner the network will continue. That is the whole point 0.7.2 will always exist as long as users want it to. Now if 99.999999% of users, merchants, service providers, and future development is on the 0.8.2 fork there may not be much value to your "legacy" coins but they will still exist. If you can find someone who wants to exchange them you can't. |
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The default fee for low-priority transactions is lowered from 0.0005 BTC
(for each 1,000 bytes in the transaction; an average transaction is
about 500 bytes) to 0.0001 BTC.
Won't that cause old clients, which will comprise the majority of the network, to ignore and not propagate transactions from the new client that only have .0001 BTC fees? Existing client will relay low priority txs with a fee of 0.0001 but wont' allow you to create a new (low priority) tx without a fee of at least 0.0005. This rule change should simplify things. Understand however that miners are free to impose whatever fee requirements they like so a tx (low priority or high) with a fee of only 0.0001 BTC may wait a while before inclusion in a block. |
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You can't just look at one tiny section of the code. The money transmitter definition is more broad (one could argue overly broad) and thus covers more than just currency. 5) Money transmitter —(i) In general. (A) A person that provides money transmission services. The term “money transmission services” means the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means. “Any means” includes, but is not limited to, through a financial agency or institution; a Federal Reserve Bank or other facility of one or more Federal Reserve Banks, the Board of Governors of the Federal Reserve System, or both; an electronic funds transfer network; or an informal value transfer system; FinCEN guidance assets that virtual currencies (even decentralized ones like Bitcoin) fall under "other value that substitutes for currency". Now the definition is painfully broad and you could argue in court that Bitcoin does NOT meet that definition. The definition is there. The definition is the regulation. FinCEN guidance is there way of saying "when we take you to court this is what we are going to argue". You can disagree but ultiimately at the end of the day what matters is what the guy in robes thinks. If he agrees with FinCEN that Bitcoin is "other value that substitutes for currency". The the activity of exchanging virtual currencies falls under the definition of the MSB. If he disagrees then the guidance has been overturned. Of course even if you won the next logical step would be to FinCEN in Congressional hearings to argue that their scope needs to be expanded to explicitly (by name) regulate the exchange of virtual currency. If Congress then passed a law giving them that authority well you are right back at the beginning. TL/DR version: Do you think lawyers for the state (FinCEN) could convince a judge that Bitcoin is "other value that substitutes for currency"? If so then you should heed their guidance. If not then don't but you should EXPECT to end up in court as FinCEN has all but told you that is where you will end up. |
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This is the US government going on the warpath against bitcoin. There is nothing to date to suggest the US government is going to war against bitcoin. FinCEN for example provided guidance on the applicability of existing regulation on exchanges. If FinCEN believed Bitcoin was illegal they wouldn't be regulating it. Now the regulation is a little heavy handed and in some parts nonsensical. It likely will raise cost and stifle innovation but that is something a thousands different industries deal with everyday. Even DHS warrant outlines the violations of MSB regulations as the reason not that Bitcoin is defacto illegal. I mean if the government is seeking a seizure warrant for a drug dealer (an activity completely illegal) they don't cite technical violations of money transmitter laws they site the underlying illegal activity (namely selling illegal drugs). This could change in the future but it always could have changed in the future. Also one can be "immune" to the US government by simply operating outside of the US (to include US residents). An exchange could open tomorrow taking steps to prevent use by US residents and not deal with the hassle of US regulation. Granted the "US market" is a lucrative one but also a regulatory minefield. Some companies may opt to simply bypass the entire issue. |
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I don't undestand people who are happy that Gox can go down. When Gox goes down and there is still nothing in to reaplace it, it will be a major blow at bitcoin infrastructure.
A loud minority notwithstanding I don't think most people want to see Gox "go down". However Gox does need to fix their issues and it likely would be better if Gox played a smaller role among a larger network of exchanges all over the world. |
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Right. So far, the regulatory framework has it's pivot foot in fiat. That is, crypto-to-crypto exchanging and dealing doesn't seem to be the topic of any MSB regulation at all. Well lack of enforcement doesn't mean there won't be future enforcement. Per FinCEN they at least believe Virtual Currency exchanged for other Virtual Currencies fall under their domain. An exchanger is a person engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency.
....
The definition of a money transmitter does not differentiate between real currencies and convertible virtual currencies. Accepting and transmitting anything of value that substitutes for currency makes a person a money transmitter under the regulations implementing the BSA. http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.htmlSeems an over reach to me but they are the ones with all the guns (and monopoly on lawful violence). (Note this was a surprise to me too. Missed it in the first reading back in March. I noticed it when looking up a different cite for the post above and updated my incorrect post.) |
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Are all banks registered as money transmitters? It seems to me that a money transmitter should be transmitting money between _different_ people.
Banks are exempt from registration as a MSB. (  Limitation. For the purposes of this section, the term “money services business” shall not include: (i) A bank or foreign bank;(ii) A person registered with, and functionally regulated or examined by, the SEC or the CFTC, or a foreign financial agency that engages in financial activities that, if conducted in the United States, would require the foreign financial agency to be registered with the SEC or CFTC; or (iii) A natural person who engages in an activity identified in paragraphs (ff)(1) through (ff)(5) of this section on an infrequent basis and not for gain or profit. Of course Banks are subject to FinCEN regulation as a "Bank" which is a superset of the requirements of an MSB. |
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Something that may be useful for people who sell products or services for BTC might be something like a How-to to avoid inadvertently becoming a money transmitter. For example, does someone who sells a single Green Dot MoneyPak become a money transmitter? What if they do it a few times? What if they actually set up a business that sells items like this? How about Linden Dollars for BTC? What level of activity triggers these obligations? If your nephew visits you and you take 1 BTC from him in exchange for walking around money, does that? Pretty much anyone in the BTC community has done some kind of transaction like this.
A couple clarifications. 1) Selling goods or services (no FinCEN doesn't consider "real" currency in any form to be a "goods or services") is never a MSB regulated activity. So you can sell computer parts, gold bullion, heroin (illegal for non MSB reasons but still not MSB), diamonds, webhostings, search engine optimizations, relaxation therapy, etc for BTC without running afoul of MSB requirements. 2) It is the action of exchanging virtual currency for real currency (or other virtual currency) which requires registration as a MSB (specifically money transmitter type)*. As for "what level" per FinCEN any amount of conversion makes you a MSB if done as a "business". Per the guidance letter. An exchanger is a person engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency. ... An administrator or exchanger that (1) accepts and transmits a convertible virtual currency or (2) buys or sells convertible virtual currency for any reason is a money transmitter under FinCEN's regulations, unless a limitation to or exemption from the definition applies to the person. Looking at the actual MSB regs we see ... (ii) Facts and circumstances; Limitations. Whether a person is a money transmitter as described in this section is a matter of facts and circumstances. The term “money transmitter” shall not include a person that only:
(A) Provides the delivery, communication, or network access services used by a money transmitter to support money transmission services;
(B) Acts as a payment processor to facilitate the purchase of, or payment of a bill for, a good or service through a clearance and settlement system by agreement with the creditor or seller;
(C) Operates a clearance and settlement system or otherwise acts as an intermediary solely between BSA regulated institutions. This includes but is not limited to the Fedwire system, electronic funds transfer networks, certain registered clearing agencies regulated by the Securities and Exchange Commission (“SEC”), and derivatives clearing organizations, or other clearinghouse arrangements established by a financial agency or institution;
(D) Physically transports currency, other monetary instruments, other commercial paper, or other value that substitutes for currency as a person primarily engaged in such business, such as an armored car, from one person to the same person at another location or to an account belonging to the same person at a financial institution, provided that the person engaged in physical transportation has no more than a custodial interest in the currency, other monetary instruments, other commercial paper, or other value at any point during the transportation;
(E) Provides prepaid access; or
(F) Accepts and transmits funds only integral to the sale of goods or the provision of services, other than money transmission services, by the person who is accepting and transmitting the funds. and for MSB in general ... ( Limitation. For the purposes of this section, the term “money services business” shall not include: (i) A bank or foreign bank; (ii) A person registered with, and functionally regulated or examined by, the SEC or the CFTC, or a foreign financial agency that engages in financial activities that, if conducted in the United States, would require the foreign financial agency to be registered with the SEC or CFTC; or (iii) A natural person who engages in an activity identified in paragraphs (ff)(1) through (ff)(5) of this section on an infrequent basis and not for gain or profit.The part B above could be nicknamed the "BitPay" exception. BitPay is simply acting as a payment network and thus isn't (my opinion not legal counsel) subject to regulation. The part iii is likely the exemption most applicable to a user. Key words are infrequently and not for profit. Actually making a profit doesn't matter, as you could be a bad businessman as still be for profit. So if you exchange $100 into BTC for your nephew so he can get his first coin and do so without any markup well you probably are not a MSB. If you do so for 100 of his friends over the course of a year and collect a 10% markup for your time well you probably are a MSB. Ultimately the regs are very "loose" so it comes down to does FinCEN think you are a MSB (or if it gets that far does a judge agree with FinCEN determination). Edited for clarification and included cites: "FinCEN Virtual Currency Letter": http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html"FINANCIAL CRIMES ENFORCEMENT NETWORK, DEPARTMENT OF THE TREASURY" regulations: http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=b3dbf70d55232935bba654ea6c52ba2b&tpl=/ecfrbrowse/Title31/31cfr1010_main_02.tpl"PART 1022—RULES FOR MONEY SERVICES BUSINESSES" regulations: http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=b3dbf70d55232935bba654ea6c52ba2b&rgn=div5&view=text&node=31:3.1.6.1.6&idno=31* Prior to FinCEN guidance the "common sense" conclusion would be that exchangers would be classified as a "Currency Dealer" but FinCEN makes it clear that this type of MSB is only for conversion between two REAL currencies. The conversion of virtual currency nonsensically falls under "money transmitter" type of MSB. So as of today an entity which exchanges virtual currency for real currency is a money transmitter and one that exchanges real currency for real currency is a currency dealer. One that does both is both. Both currency dealer and money transmitter (along with check casher, money order issuer, etc) are sub-types of the MSB. |
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It is interesting that point (2) seems to refer to something like bitcoin mining. I am unaware of any convertible currency which is created in such a manner.
Well that probably is because "convertible" doesn't mean what you think it means. Still I do agree that it was horribly bad form for FinCEN to use the word "convertible" without providing a definition. Still you are making an assumption that "convertible" means "a fixed 1:1 exchange rate" which is quite a leap not supported by other datapoints (presentations by FinCEN, responses given on FinCEN hotline, DHS action, etc). However if you still aren't convinced request an administrative ruling from FinCEN demanding clarification of the term "convertible" and asking for examples of both convertible and non-convertible virtual currency. http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=9cd941ce33a75e80167579c14e862a5a&rgn=div6&view=text&node=31:3.1.6.1.2.7&idno=31 |
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Are you looking at the FinCen guidance of March 18 FIN-2013-G001? This document does not contain the word "decentralized" nor the prefix "crypto". It states very clearly that it addresses convertible virtual currencies.
How could you possibly miss it. c. De-Centralized Virtual Currencies
A final type of convertible virtual currency activity involves a de-centralized convertible virtual currency (1) that has no central repository and no single administrator, and (2) that persons may obtain by their own computing or manufacturing effort.
A person that creates units of this convertible virtual currency and uses it to purchase real or virtual goods and services is a user of the convertible virtual currency and not subject to regulation as a money transmitter. By contrast, a person that creates units of convertible virtual currency and sells those units to another person for real currency or its equivalent is engaged in transmission to another location and is a money transmitter. In addition, a person is an exchanger and a money transmitter if the person accepts such de-centralized convertible virtual currency from one person and transmits it to another person as part of the acceptance and transfer of currency, funds, or other value that substitutes for currency. |
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