The thing is, you can lie about how much gold is in your vault, but it is modally impossible to lie about how much BTC is in your address.

Anyone can look there! Just go on blockexplorer!

If there's anything to worry about here, it's naked shorts.

Made contact. The mom came down with an illness soon after the son left town, and so the honey didn't get shipped out until Friday (June 28th). It should be arriving in the next few days.

I'll see if I can get tracking numbers.

I'm trying to get in touch with my apiarist friend. The honey was supposed to ship early last week, but with him out of town the duty of actually shipping out the honey would have fallen to his mother (the other apiarist here), whose contact information I do not have. I'll let you know as soon as I've reestablished communication and know what's going on.

I hope it doesn't come to this, but if it gets to be late this week and he isn't responding, I'm willing to refund your money or do whatever else to make things right for you.

The "temporary hiatus" was described as a two-week affair as of June 20th. So, theoretically, we'll be back to normal on the Fourth of July.

I think there's some trepidation in the market as to whether Mt. Gox will actually meet that schedule.

Right now, it's impossible to withdraw USD from Mt. Gox.

Because of that, there's a glut of USD relative to Bitcoin - people have been buying BTC just to get their capital out of Gox.

Hence, a higher USD/BTC exchange rate compared to any exchange with functioning USD withdrawls.

Hmm.

On the one hand, this is an important reminder (and an example of the importance of discipline). On the other hand, I feel like I have to chime in that there are reasons to still be holding BTC, even for a trader, provided that the held BTC is not, nor ever was it, part of a trading position. Trading and investment can coexist in a single person, provided that that person doesn't let them mix. (Letting them mix, as always, is letting your emotions get in the way of making money.)

Right now, Mt. Gox is higher because it's impossible to get USD out of Mt. Gox.

I don't expect normalization until/unless wires get reenabled.

Bitfinex shorts have single-digit APRs right now. Bitfinex BTC shorts have existed since before the crash.

I'm not going to argue about most of your post but this "there's no way to short BTC" meme has gone on way too long.

The protocol support for a feature like this can be reduced to something much simpler.
Suppose you have a way to mark a transaction as "tentative". That is, even after the transaction is committed to the blockchain, for X blocks it can be double-spent against and - should that occur - defers to any such spend attempts.

Then, your "revokable multi-factor" support can be implemented simply as addresses that read:
(sign the transfer with key 1 AND key 2)
OR
(sign the transfer with key 1, revokable for 1000 blocks [about 7 days])

If someone transfers the coins with key 1 only, and you have key 2, you can successfully double-spend against that person for seven days and move your coins to new, uncompromised keys.

You don't have to use Mt. Gox to use Bitcoin. Anyone who cared about anonymity to begin with is entirely unaffected by this turn of events.

I'm not going to argue about most of your post. But since you're new, I want to provide a history lesson, along with an argument as to why I consider <$1 to be an extremely unlikely scenario.



This is a chart of the end of 2011. After the first Big Bubble popped at $33/coin, the BTC market was in a downtrend. Many predicted, on this very forum, that BTC was dying and it was just a matter of time.

The price got to $2 in mid-November. At that time, Mt. Gox experienced the biggest trading volume ever - a record that remained unbroken for eighteen months. For several days, the market threatened to break through $2/BTC. It did not. Even in the face of a bubble that brought the price above $1/BTC and had been slowly sputtering out for six months, even among doomsayers who believed with all their hearts that the Bitcoin experiment had failed and prices like $30/coin were a one-time event, never to come again... even in such a climate, people wanted BTC for $2. People wanted them enough that the price never crossed that line. It was an insurmountable foundation of support, and from there the price began to climb again.

Now, the BTC price has beaten the previous bubble - market participants know that high prices were not a one-time opportunity. There are major online services that accept it, other than Silk Road. There's been media attention. In today's environment, what could possibly hurt confidence in the currency any worse than it was hurt in November 2011? What could possibly make people less confident in BTC than they were a year and a half ago, when they bought in with all their might at $2 a coin?

Don't get me wrong; I think the price is going to keep falling for a while. When I try to rule out my emotionality, the math of it looks like we're going to either $30ish or $11ish as our nadir. But given what happened in the latter days of 2011, I cannot imagine what would force the price below $2/coin that wouldn't have done it then.

You do realize that treasury bonds usually have nothing to do with money creation, right? The usual way that MZM grows is via the discount window and/or the exponential expansion characteristics of fractional reserve banking, not anything to do with federal borrowing.

I mean, sure, if the Fed's M0 expansion is resulting in them holding 80% of newly issued federal debt, that's pretty disturbing. But... it's not like the Fed outbidding everyone in that particular market means that "the dollar is dead". It just means that people have better things to do with their money than sink it into sub-inflation 30-year loans.

By that standard, all dollars since Nixon have been counterfeit. I'm not saying that's wrong, but it's a bit strange to blame the Treasury for the "unbacked" nature of post-Bretton Woods FRNs.

I'm guessing your implication here is that the Nasdaq drop was due to the global downtrend rather than anything Bernanke happened to say? That's definitely one interpretation. But given that Asia and Europe have been "down for almost a month" with Nasdaq looking healthy, it's hard for me to look at the drop happening the same day as Bernanke's speech and write it off as coincidence.

I think he intends to stop buying bonds. But the keyword there is that it's his intent, not necessarily what he'll actually do when push comes to shove. After all, all he had to do was remind people that QE wasn't going to last forever, and the Nasdaq slid 3.5%.

Actually doing it, without destroying all the market confidence that we've been slowly recovering over the past few years, is going to be quite a trick.

As for its effects on the bitcoin market.... whenever news of this kind hits, it bumps up the trade value of the national currency (after all, when people are afraid of assets losing value, they flee to what they consider to be current), which means it's short-term bearish for BTC even if the BTC/USD exchange rate isn't affected (because it makes USD more valuable).

The long-term effect on the price depends entirely on how smoothly the bond market can get weaned off of QE. Lack of confidence in centrally-administered currencies is certainly one way to make people consider Bitcoin-like systems more seriously.

Can we prove that we can't do better than brute force with a Turing machine?

In such a scenario, is it more rational to unplug your ASICs and keep them in your basement, or to sell them to any takers and try to recoup your capital outlay?

In the latter case, OP's argument prevails, because the market value of an unprofitable device would be low, and the people who would buy it in such a situation are ones who would mine no matter what the exchange rate might be - whether because they have ideological ("irrational") reasons for doing so, or because they have an insignificant marginal cost to mine (e.g. people who don't need to pay for their electrons by the kilowatt-hour).

The point is that if you have hardware with no purpose other than mining, the market will eventually put it into the hands of a person who's willing to use it for that purpose - or, in other words, that in the long run all ASIC miners are online and mining.

Hmm.

In a white room, it's good advice, but I feel like it clashes with the running theme in this thread of "make a plan, backtest it, and then stick to it regardless of your heat-of-the-moment feelings". If the backtest included the occasional long period of drawdown, isn't reducing your trades and thereby increasing your risk of missing the next big move nearly as bad as increasing your trades and doubling down on bad weather? Doesn't either one amount to second-guessing the math?

Mm, no good.

See, when you spend from the address, your public key is exposed, but the spend isn't yet committed to the ledger. An attacker will have about a 5-minute window to crack your public key and double-spend your coins (and if they make the window, they're more likely to get into the ledger than you, because they can afford to lose most of the money in transaction fees - you're the one footing the bill, after all). What's worse, they have the ability to attempt a double-spend against every such transaction - against every unconfirmed transaction on the network.

Only way around it is if miners stopped taking transactions from the network, and instead switched to a model where you submit your spends to your favorite (trusted!) pools directly.

And just like that, Bitcoin loses its trust-free property - which was the whole point from the beginning.

Who?

There would be a fork. "The dev team" - and by this I assume you mean the core bitcoin-qt developers - do not have some magic power to convince everyone that SHA256 is old and busted. There are perfectly good arguments against it, that have nothing to do with an individual's sunk costs - for instance, that right now it would take a year and tens of millions of dollars for an attacker to outvote the network (whereas, if we switched to a new proof of work, this would probably not be the case).

So, it's a True Fork. Each user who had bitcoins now has an equal number of SHA2-bitcoins, plus an equal number of Newhash-bitcoins. Users who think the old proof of work is safer will probably trade their Newhash-bitcoins for more SHA2-bitcoins, and those who favor the new proof of work will do the opposite. Exchanges will have to decide which to support (or, possibly, that they will support both). This will be accompanied by, at minimum, about a 50% drop in the value of each coin, weighted by which variant turns out to be more popular (for instance, if Newhash-coins are more popular than SHA2-coins, maybe Newhash-coins will be worth 2/3 of the old BTC price, and SHA2-coins will be worth 1/3) - there's only so much fiat in the system. Furthermore, the schism will probably make people more willing to move their wealth to altcoins - BTC's advantage as the original and best-supported will have been undermined, since neither Newhash-coins nor SHA2-coins can make an unambiguous claim to be "the" Bitcoin anymore.

Grover's Algorithm is the best known SHA2 quantum algorithm. As previously mentioned, all it does is quadruple the difficulty, and then we're back to normal.

The real problem is that Shor's algorithm makes wallet theft by cryptanalysis into something that's actually possible on paper, and the best known quantum-safe digital signature schemes would push each transaction into the tens-of-kilobytes range. Good luck making Bitcoin even work on such schemes without 100MB blocks.