There are a few things I will look for on either side of legitimacy: - Bitcoin is made more legitimate by a large corporate player becoming vested. This could be in the form of a new exchange such as Tradehill, which now operates on an "institutional level" (you need about $10,000 USD to open an account) or even an established brokerage such as Paypal. Really what it comes down to is someone willing to pay the legal fees to fight if the Justice Department comes knocking. It's clear by his comments that Gavin Andresen would put up no fight. Maybe the Winklevoss twins would with their stake. I need to see some positive legal precedent to move forward.
- Bitcoin goes through a major legal apocalypse... and survives underground. I definitely see Bitcoin as a currency and P2P system continuing to exist regardless of any attempts to shut it down. The nature of it's protocol and the hardcore community will keep going even if it has to resort to being TOR network only. At that point, once the common methods of the underground existence (new exchanges) of Bitcoin is established I'll evaluate my options. Case in point: Napster to Emule to Torrents... the idea is unkillable it just morphs.
The key problem for me right now is uncertainty and high risk of frozen assets/total loss keeping capital (BTC or USD) on website exchanges. It's too much for me as a professional trader to have a significant portion of my capital on the current mediums with all the government threats facing the market. This is a serious risk for a trader but not for a long term investor who buys BTC in small amounts over time. My current exposure to this kind of risk is less than 1% of my BTC holdings. The rest of my BTC are safe backed up in a multitude of ways including a 5.25in floppy disk. |
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The issuers of Ripple debt are going to be in the regulators cross-hairs in a big way if they are large enough in order for their debt to be considered trustworthy and consequently liquid. Considerer what would happen if Liberty Reserve had issued Liberty Reserve dollars over Ripple and then the US Government seizes the underlying assets. Those who were short the Ripple Liberty Reserve debt would see gains similar to those who have been long Bitcoin.
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No. According to the article there is already a fair amount of competition in this space. |
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Ah, you are legitimately confused then. If off-chain processors wish to avoid BTC transactions themselves when practical, they can probably trade directly with other off-chain processors on an exchange or via individual relationships. That's a little tangential, but it is not critical to their operations nor particularly visible to their customers other than that it will further reduce fees and increase performance and feature set.
An exchange or 'clearing house' formed to facilitate such interactions is tiny and vastly more conducive to operating smoothly than one who deals with fiat. They can easily lurk in the shadows.
Customer's of the off-chain processor still enjoy the protection offered by the Bitcoin blockchain and mathematics. Off-chain providers who leverage such a 'clearing house' risk only what they have on balance since the last time they squared on the block chain.
tl;dr, the Bitcoin block-chain is THE clearing house. Other auxiliary ones are perfectly possible.
This does not address the critical question of multi jurisdictional regulatory compliance and the sky-rocketing costs for the processors involved. Ever wonder why M-Pesa does not work in the US or Dwolla in Canada or Interac in China? |
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I'm genuinely trying to understand why you believe BTC banks and clearing houses would be any different than fiat ones, and struggling to do so.
So am I. Especially after reading the FinCEN guidance http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html
I just explained it to you in what I thought were very clear terms.
Processors who deal with fiat are encumbered by all of the baggage that fiat systems and their regulatory apparatus bring along.
Processors who deal directly with a free Bitcoin blockchain simply don't have these problems to pass along to their customers.
The FinCEN guidance above makes it abundantly clear that this is not the case. It does not matter if the underlying asset is gold, USD, Bitcoin or any other form of money. Set up a MSB and one is subject to regulation. |
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If you want to trade USD in this exchange it doesn't matter where its physically located you will need to comply with all the same regulations you would have being located in the US.
This is not true. Ever heard of Eurodollars http://en.wikipedia.org/wiki/Eurodollar for example. What does apply is for an exchange doing business outside the US is, US citizens, which is why many financial institutions simply deal with this regulatory issue by refusing to do business with US citizens even if those individuals reside out side of the US. |
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Start in your own country which for a United States entrepreneur means the United States. Pick a large state say for example California and register there, and federally. Then limit your market to that state. This keeps the initial compliance costs low to start. Then expand first to other states and the internationally as the business grows.
The is in fact the model that Virtex in using very successfully in Canada. They limit their market to Canadian Citizens living in Canada this keeps the cost of regulatory compliance under control.
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Sure this isn't a UI/Unity issue? Did you mouse over to the very, very top-left of the screen, where the panel usually lives?
It is an issue on how Bitcoin-Qt integrates with Unity and as the github issue shows this has been going on for over a year. In fact since Unity was introduced in Ubuntu. Mousing over the top left of the screen does not display the menu in Bitcoin-Qt. That is exactly the issue. |
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This is because the aggregate their transactions and perform them periodically. Using an aggregator is not always possible and will not always happen. There could be two networks that have few transactions occurring between them. How are you going to transfer your currency from one network to another without a $20 network transaction in that case? Use Ripple? Ignoring the fact that $20 was pulled right out of someone's ass at some point (and is doubled when it does not sound like enough to make a point...) I mean they aggregate their internal transactions and square periodically with other entities when they need to. If at the end of the day they have only a $100 imbalance, they don't even bother to square that day. They'll just cover something like that with their own buffer of working capital. In any event, the user see's a UI and can drag-n-drop funds as they please. Again, with minimal fees. What you are describing is nothing more than the clearing of cheques between competitive banks at the national level and it has worked well within a single country for well over a century. The trouble is that this does not happen effectively at all between competitive propriety e-money providers on an international level. Try moving money between say Perfect Money. PayPal, WebMoney, OKPay, etc and see how much you will end up paying in fees. By the way if this were possible in a cost effective manner there would little use for Bitcoin in the first place. The key advantage of Bitcoin blockchain transactions have is that the end users can move the Bticoins themselves across international and sub national borders thereby freeing the respective MSBs from having to be compliant in, and develop trust in, multiple jurisdictions. This places Bitcoin in a unique competitive advantage over other forms of money transmission ranging from Hawala, to PayPal to Credit Cards to Bank transfers to Western Union etc. |
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One issue that seems to persist here is the lack of a menu for Bitcoin-Qt after installation in Ubuntu unity for example in Ubuntu 12.04.
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I wonder if FinCEN could come out with an additional "guidance" along these lines...
A) If you operate a bitcoin node, defined as any client or server software that forwards bitcoin transactions to the bitcoin network at large, regardless of whether or not you are mining said currency, then you are a "money transmitter" and need to be licensed as such.
B) The preceding paragraph applies to anyone operating a node which accepts transactions from or forwards transactions to any U.S. citizen, regardless of the location of the node.
C) If you store your bitcoins on a hosted wallet, where someone else forwards your transaction to the network, then you are not a money transmitter.
Thoughts on the likelihood of such a scenario and its impact on bitcoin? Do we all move to Tor/I2P?
IANAL. Fincen has already provided guidance and as far as I can see in. A) and B) the answer is no. The key is that you have no discretionary control over the private keys to the transactions unlike a MSB. C) The owner of the Bitcoins is not a MSB since they are sending their own funds but the company who provided the hosted wallet is a MSB if they have control over the Bitcoin private keys. Why because the receive direction from you and then send the BTC upon your direction to a third party. |
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There are legitimate concerns with an unlimited blocksize limit that does not address the incentives for miners once the new coin subsidy is eliminated in a ballpark time frame of 100 years. This is the reason why a dynamically changing maximum blocksize must take into account the impact on difficulty. The other important consideration is that an increase in the blocksize must be driven by genuine transaction demand and not be the result of artificial manipulation. This is critical to ensure a decentralized network. While I do not believe that genuine transaction demand will lead to centralized control of the blockchain, for the reasons I have stated above, artificial manipulation can. For example if one were to allow the artificial expansion of the maxblock size to say that needed to accommodate 10x the current VISA transaction volume over say a 6 month period one will drive the little guy out, on the other hand a similar expansion over say a 10 - 20 year period will not.
I do not see transactions outside of the blockchain as the solution here simply because such transactions become replacing Bitcoin with either a regulated PayPal, bank transfer, Western Union, Credit Card etc option or an unregulated and illegal e-gold, Liberty Reserve etc., option. If one reads the Fincen guidance carefully one can understand why. Blockchain transactions can be unregulated and legal like fiat cash transactions, while outside of the blockchain transactions must be either be regulated and subject to centralized control or illegal.
One another note what exactly is the advantage of using Bitcoin with say a 40 USD transaction fee when I can send a bank wire transfer for less?
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...
Lastly, nobody in their right mind thinks that home users are going to be running VISA+ scale systems. So the use of native Bitcoin will increase until it stops increasing where-upon use will be off-chain in some form of another. The only real question is do we stop when an ordinary geek could still operate the infrastructure? When 'a few thousand enterprises' can? When '6 large entities' own the blockchain?
...
Actually some of us actually believe that this will happen in the near future. https://en.bitcoin.it/wiki/Scalability. Take for example bandwidth. It would take 2.2TB a month for Bitcoin to handle the transaction load of VISA with a block size of say 0.5 GB. Well I can now purchase a consumer internet connection with 1TB of bandwith a month. So it is very reasonable to assume that in a few years 2.2TB of bandwith a month will be readily available to consumers. As for storage and CPU power this is even less of a concern. By the way the amount of computing power available to consumers has been growing at an exponential rate. What has also happened is that the typical consumer computer running Windows comes with so much marketing bloatware and DRM that the perception is that there is no increase in computing power. Replace Windows with GNU/Linux and watch some really old hardware shine. By the way I currently run a full Bitcoin node on a laptop that is over 10 years old and has a Windows 2000 logo. The OS is GNU/Linux. |
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I would suggest that we can support at least 50x the current block size with existing technology and easily keep the ability to run a full node in the hands of many consumers let alone computer enthusiasts. Hard drives in the 3TB are well with the reach of consumers and so are Internet connections that allow 500 GB of data per month. The more important point is that the price of storage, bandwith and computing power is falling faster than any reasonable growth of the Bitcoin network, so while in a few years we could have a block size that approached say 1GB a typical consumer and most certainly an enthusiast would have the computing power, storage and bandwith to be able to handle it. Let us not forget that 100 years ago sending 1MB of data over the telegraph network would have cost about 50,000 USD in 1913 dollars. Well out of the reach of the average person, but something that J. P. Morgan, the individual, would have been able to afford. Should we limit future generations of Bitcoin users with a hard limit based on today's technology and cost, on the argument that only J. P. Morgan, the corporation, would be able to afford today what in the future would be easily accessible to large numbers of people? When it comes to the block limit we need a dynamic solution that responds to network demand, difficulty and the real cost of bandwith, digital storage and computing power. If developed correctly this will allow the network to grow while at the same time ensuring that mining and the running of full nodes remains possible for consumers and computer enthusiasts. By the way transactions outside of the blockchain are not the answer. To understand why one can read http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html. |
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Cash will not go away anytime soon. The main reason is the poor.
The media stories I can find seem to acknowledge your issue of "the poor" and at the same time discount it, claiming that physical cash is being eliminated anyway, despite the negative effects on "the poor". For example: http://www.huffingtonpost.com/2012/04/11/cashless-society-week-without-cash_n_1418390.html"Low-income people stand to lose the most as cash loses currency." So many questions. Is it happening? If so what does it really mean? If not, is it about to happen? The main theme I've been reading is that the phenomenon is happening, but that most of us are still imagining a world of printing presses that no longer exists. We are locked into a mental model in which the Fed really prints physical banknotes through a Mint, and that these physical notes travel through the pecking order of banks with various fatcats grabbing crumbs along the way. In the new model, the Fed can "surgically" and instantly insert digital cash into any part of the global system. The mechanisms appear to have changed dramatically and relatively suddenly. Even as recently as the Iraq war, huge cargo planes loaded with greenbacks were the clumsy, slow method of cash distribution. Now, allegedly, a single keypress could do the trick. What does that kind of change imply for us all? (I have no idea what the answer is, but I suspect it is important). Yes I have found the same thing in the media they mostly dismiss the question of the poor, largely I must say this is because the media pundits involved have not experienced poverty or had the opportunity to interact with large numbers of poor people. I have seen a lot of the same even within the Bitcoin community for the very same reason. I would also say say that the poor will be one of the largest driving forces behind the adoption of Bitcoin, for online transactions for the very simple reason that it makes economic sense for them while the other options for online payments simply do not. Take a look at where Bitcoin has had the biggest growth. It is for online transactions. Why? Because it opens ecommerce to those who could not participate in a cost effective basis because for example they cannot get a credit card. These are the same people who use cash for in person transactions. I have said it before and will say it now. The low hanging fruit for Bitcoin adoption has a FICO score well below 600, more in the 350 range or has no FICO score at all. Now for the other example. For any kind of commerce in a war zone cash is king, which is why the US would ship plane loads full of cash to Iraq during the Iraq war. Other options are gold, or some other valuable commodity. Interestingly Bitcoin could work in that kind of environment, but I doubt very much VISA, MasterCard or American Express would get you very far on the ground in a war zone. Neither will PayPal for that matter. |
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Cash will not go away anytime soon. The main reason is the poor. In fact I would not be surprised that the use of cash actually goes up as a result of the the current economic crisis. For example in the United States the rise in home foreclosures leads to poor credit and the substitution of credit / debit card use with cash.
The banking industry and governments have been trying to wipe out cash for over 20 years without success, the only way to eliminate cash is actually to eliminate poverty.
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the poll is reset. feel free to vote again
0 votes for "down" atm... Bears? Where y'all at?? hehe Hibernating |
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How do you even know that it is Google and not Apple who is at fault here? Given that tight control, DRM, and lockdown that Apple applies to the iPhone, I would blame Apple first for any problems here not Google.
As for personal responsability if the device was rooted and running a Free Software operating system then yes the owner of the device should be the one that is reponsible, however in the case of an iPhone we have a device where the "owner" does not have complete control, this control lies with Apple, so if something goes wrong it is perfectly fair to blame Apple.
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IANAL It is the coupons, both BTC and USD. It can also happen if the exchange allows the withdrawal of BTC to a Bitcoin address not under the account holder's ownership and control. The transfer of funds that are incidental to an exchange of USD for BTC or vice versa do not make the exhange a MSB. The Fincen guidance in clear on that.
Now when it comes to the seizure I suspect a that a good lawyer may be able to quash the warrant on the grounds that no evidence of a MSB was actually provided to the judge. To put it bluntly the DHS informant missed a crucial step namely the transfer of USD via a MTGox code or BTC via MtGox code or by a transfer to a Bitcoin address not under the control of the account holder to a third party.
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