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1  Economy / Speculation / Re: Iran discovers Bitcoin on: December 01, 2012, 01:57:57 AM
As much as I like this usecase - the story does strike me as a bit of an exaggeration.

I've no particular insight into what's going on in Iran - but while there have been a few nodes popping up in Iran over the past couple of weeks as evidenced on:
... it doesn't look like much.

Perhaps they're using things like the rather than full nodes, but I'd like to see some evidence that there are even as many as 100 people using it there.

Given the Iranian government's stance on the internet, I'm pretty sure Iranians have practice hiding where there internet use appears to be coming from.
2  Bitcoin / Bitcoin Discussion / Re: There could be much more than 21'000'000 bitcoins... on: September 11, 2012, 12:28:43 AM
people who deposit their bitcoins in a fractional reserve institution will lose their bitcoins at some point. it is inevitable as bank runs on fractional reserve entities are not a question of if but are a question of when.

Exactly.  I accept that fractional reserve systems will eventually become, for some time, a part of the Bitcoin economy, and I don't intend to fight this through the protocol.  All I care about is that, if I don't want to take the risk, Bitcoin allows me a clear way to isolate myself from it, by only accepting "in the chain" bitcoins, so I dont' suffer from the inevitable bank runs that will hit the people who try FRB (and do it without Central Bank Sugar Daddy to backstop them).

I don't have an analogous option with existing fiat currencies.  Since central banks can print money to make up for any shortfalls and runs on banks, it doesn't do me any good to "only accept physical cash", since they can just inflate it right along with the pyramiding of loans.  No one can do that, however, with "in the chain" bitcoins.
3  Economy / Economics / Re: How are you for Preparing Aug 12 if the Market Collaps on: July 31, 2011, 05:40:08 PM
Some of those work, but highly-visible, bulky things are not going to be safe.  If they're not outright seized, they'll be taxed to death ... and they know you have them.

Best option is gold coins ... easy to conceal, and easy to redeem for its previous purchasing power when the shizzle hits the fan.

until private possession of gold is going to get forbidden again!

That's a risk, but gold is far more resilient against that threat than the other options.  How easy is it for the government to track illegal drug holdings vs. "illegal home holdings"?  No, they can ban it, but you can still cash in the gold as easily as you can find your next fix.
4  Bitcoin / Bitcoin Discussion / Re: Bitcoin Chargeback system on: July 29, 2011, 04:32:28 PM
One of the reasons Bitcoin exists is because people want to avoid chargebacks.

That's an oversimplifcation.

Bitcoin exists so that there's a decentralized digital currency that, at the base level, does not allow chargebacks, just as physical cash does not.

However, Bitcoin is certainly not intended to prevent people who want such a feature from layering a chargeback-allowing protocol on top of the basic Bitcoin protocol, for users who really want such a feature.  This is the role played by Bitcoin escrow services, and whatever other services people are coming up with.

Similarly, physical cash does not itself allow chargebacks, but it allows people to layer systems on top of this that allow chargebacks.

Bitcoin is supposed to take the role of cash, not prevent analogous mechanisms from interfacing with it to reduce the reliance on trust between the transacting parties.

Still, to the extent that you want to modify the Bitcoin protocol *itself* to allow chargebacks, you can GTFO and take your phail with you.
5  Bitcoin / Bitcoin Discussion / Re: Republic Of Bitcoin on: July 29, 2011, 04:22:58 PM
The Bitcoin military would have the motto, "I solemnly swear to preserve, protect, and defend the integrity of the Bitcoin blockchain, from all enemies, whether spammers, forks, or protocol attacks."
6  Economy / Economics / Re: Why is the btc stuck between 13 and 14 USD? on: July 29, 2011, 04:20:44 PM
I think this thread is about ready to be moved to the "Price Speculation" child board...
7  Economy / Economics / Re: How are you for Preparing Aug 12 if the Market Collaps on: July 28, 2011, 08:52:20 PM
How will you keep your money safe..
Buy goods, yachts, sports cars, paintings, land, jewellery and watches....before the dollar crashes.

Some of those work, but highly-visible, bulky things are not going to be safe.  If they're not outright seized, they'll be taxed to death ... and they know you have them.

Best option is gold coins ... easy to conceal, and easy to redeem for its previous purchasing power when the shizzle hits the fan.
8  Bitcoin / Bitcoin Discussion / Re: Republic Of Bitcoin on: July 27, 2011, 05:55:56 PM
How about a Bitcoin army?

"I solemnly swear to preserve, protect, and defend the integrity of the Bitcoin blockchain from all enemies -- spammers or forks."
9  Economy / Economics / Re: Anyone tracking "real" BTC transactions? Is it even possible? on: July 26, 2011, 04:13:41 PM
I'm talking about BTC transfers for goods, not from mining pools to miners or miners directly by finding blocks.

I think that's what we need to start looking at.  Unless people start using it more to buy and sell goods & services ... BTC won't survive.

No, it's not possilbe, except if maybe people report their "real" transactions to a central database ... which would kind of defeat the purpose of Bitcoin.

Incidentally, this is why all proposals to tie bitcoin (or new bitcoin-like currencies) money growth to the volume of transactions are fundamentally flawed.
10  Bitcoin / Bitcoin Discussion / Re: Bitcoins will become Betamax if we don't do THIS on: July 26, 2011, 03:01:26 PM
A lot of this is getting off topic.  I think the TC's point is fundamentally sound.  I think the way to pursue is to make it possible for businesses to "accept bitcoin without accepting bitcoin".  That is, make it so that they list it as a payment option, but once you choose to pay with bitcoin, it automatically converts (perhaps through some intermediary service) into the currency the merchant wants and pays the merchant that way.  This would significantly increase bitcoin's visibility and remove a lot of the frictions and uncertainty associated with it.

Maybe if we could get a major BTC exchange to go along in and reduce the fee on such currency trades in exchange for all the business that would come their way?
11  Bitcoin / Bitcoin Discussion / Re: Oh, the growing pains of Bitcoin! on: July 22, 2011, 05:48:55 PM
Bitcoin will be Paypal's biggest speed bump.

One of Paypal's founders, Peter Thiel, is an outspoken libertarian and I have been impressed with many of his statements and commentary. Let's see how true to principle he is as Bitcoin starts competing in an open market with Paypal. When and if he makes a statement about Bitcoin, I expect it will be positive. If not, I will be seriously disappointed in him.

Tip: Peter Thiel is a BIG donor to the Singularity Institute for Artificial Intelligence, a group which as of February started accepting bitcoins as donations.  Donation page.

12  Bitcoin / Bitcoin Discussion / Re: TurboTax advertises Bitcoin as a tax dodge! on: July 22, 2011, 04:33:23 PM
Did anyone mention that you do not have to file taxes as long as you do not make over a certain amount? even if you solved 1 block youself, you still would not have made enough to pay any taxes in any state. this also assumes you do not make any money elsewhere.

But the easy solution is to simply "forget" that you made money via bitcoin when the 1st rolls around  Roll Eyes
$600 is the taxable minimum.  A block = $13.6 x 50 = $680.  And technically, since you received the "value" of those "credits" during the tax year, even though you didn't sell them, you should report it as income with the basis equal to the value of the coins at the time of acquisition.

I'm going to made a SWAG at this point that if you actually declared X Bitcoins as income on your taxes, the IRS would just go, "WTF?  Whatever" and move on.  That may change in the future.
13  Bitcoin / Bitcoin Discussion / Re: The Multi-level Marketing scheme argument on: July 22, 2011, 02:09:02 AM
I just got trolled, didn't I?  Roll Eyes
14  Bitcoin / Bitcoin Discussion / Re: TurboTax advertises Bitcoin as a tax dodge! on: July 22, 2011, 12:26:33 AM
Why does it suck? You are only paying if you are MAKING money, profit, income, Earning, dropping fat stacks, be happy you arent in debt.

It sucks because if I mine just 1 BTC, then, to stay compliant with the law (which would be a nice bonus regardless), I have to report that "income" at its present USD exchange rate, even though:

- I haven't converted it into USD
- I may *have* to convert it just to pay the taxes on it
- it could be worth less when I do convert it, meaning I have to keep records just because of this tiny transaction.

And remember, even if I get bitcoins, that doesn't mean I made a profit!  I have to deduct the cost of the mining rig I put together to get that, which (in the case of receiving just 1 BTC) is a lot more than revenue.  Now, if the IRS actually allows those deductions, it's not so bad.  But really, how much crap do you think you'll have to go through when they see you trying to deduct high-end computing/graphics equipment, and audit you, and you have to convince them the machine just sat in the corner and computed hashes?

Most likely outcome is that they'll declare some arbitrary fraction of its cost to be "personal use" and non-deductible, and then fine you for not guessing that number.

F*** that.  From now on, I'll shut up about how many bitcoins I have, and I'll leave it to them to prove I know the trapdoor information about this or that elliptic curve (i.e. the private keys to certain addresses, in case you missed the reference).

EDIT: OTOH, if the IRS decides to be cool and accept payment directly in BTC, that's one more argument the haters can't use  Cheesy "Bitcoin's stupid because, unlike the dollar, you can't pay your taxes in it."  "Actually, you can.  See this IRS ruling." "Oh.  Nevermind!  Wait, I've got another one..."
15  Bitcoin / Bitcoin Discussion / Re: TurboTax advertises Bitcoin as a tax dodge! on: July 21, 2011, 09:16:13 PM
Example 3 on Page 19 seems like the most relevant tax information... talks about a barter club giving people credits to use.

You must include in your income the value of the credit units that are added to your account, even though you may not actually receive goods or services from other members until a later tax year.

So, you should record taxable income when you mine or receive bitcoins for any purpose at the value of the bitcoins at that time.  Then, at the time you sell or use said bitcoins, and they have increased or decreased in value, you would record a capital gain/loss in the extended amount of the difference between the value of the bitcoins at time of receipt, and the fair market value of the goods/services purchased with the same number of bitcoins.

Well, that f***ing sucks.
16  Bitcoin / Bitcoin Discussion / Re: The Multi-level Marketing scheme argument on: July 21, 2011, 08:33:40 PM
Synaptic's claims are outright ridiculous, and I assumed he was trolling.  But it also seems like no one has given a thorough reply to his specific (moonbat) criticisms, so, at risk of feeding a troll, I will do it.

"Criticism has focused on their similarity to illegal pyramid schemes, price-fixing of products (BITCOIN BOTS, "EARLY ADOPTERS," EXCHANGE OPERATORS MANIPULATING MARKET PRICE),

You misunderstand what is meant by price-fixing of products in the context of MLM -- that criticism refers to how they keep the products' prices fixed regardless of the economics, through a contract between all of the distributors and the company.  There is no such price fixing in Bitcoin in that sense -- it's too decentralized for anyone to conspire to fix the price of anything in bitcoins.  Also, bots aren't an official part of the system.

As for the early adopter thing, we've been over that here a thousand times: this is no different from buying shares at an IPO that turns out to become hugely profitable.  If it turns out that your investing in the IPO enables significant productivity gains, you make a lot of money.  Likewise if you "invested" early on to get Bitcoin off the ground and make it a respectable currency, you could make a big profit if it gets to that stage.

high initial start-up costs,

No, the software is free, it costs virtually nothing to start trading stuff for bitcoins.

emphasis on recruitment of lower-tiered salespeople over actual sales (RAMPANT SPECULATION VS. REAL ECONOMY),

Who's doing the emphasizing?  The project leads sure as hell don't, and you don't have to deal with any kind of indoctrination from that kind of person in order to use bitcoins.

encouraging if not requiring salespeople to purchase and use the company's products (BITCOIN "ECONOMY"),

No one's required, and they're only "encouraged" to use those vendors because, um, those are where you can spend your bitcoins.  It would be different if people were pressured to make non-Bitcoin purchases from vendors that accept Bitcoin, but that's not happening, and if it were, it's not because of the "owners" of the non-existent "Bitcoin company".

potential exploitation of personal relationships which are used as new sales and recruiting targets (DITTO),

WTF?  Most people heard about this online, not through some "personal relationship", and unlike MLM, you're not required to go through an "upline" or licensed agent or whatever to get involved.

complex and sometimes exaggerated compensation schemes (DITTO),

What's the "Bitcoin compensation scheme"?  Are you talking about the transparent miner policies?

and cult-like techniques which some groups use to enhance their members' enthusiasm and devotion (NEED I SAY MORE)."

Alright, where are these cult-like Bitcoin activities?  Where's the Bitcoin worship meeting?  Where's the pledging fealty to a leader, etc?

"Independent, unsalaried salespeople of multi-level marketing, referred to as distributors (or associates, independent business owners, dealers, franchise owners, sales consultants, consultants, independent agents, BITCOIN MINERS, BITCOIN EVANGELISTS, etc.),

Er, the existence of independent distributors, and commission-based salespeople isn't what MLM is criticized for -- that exists everywhere.  You're just misreading the article now.

represent the company (BITCOIN P2P NETWORK) that produces the products or provides the services they sell (ONLINE TRANSACTION PROCESSING, COMMODITY SPECULATION).

Biggest phail.  There is no "bitcoin company", and the p2p network is not at all like one.  The transaction processing fees and block rewards exist simply because enough people follow a protocol (which they do to ensure their transactions are not rejected), not because of some corporate compensation scheme.

They are awarded a commission based upon the volume of product sold through their own sales efforts as well as that of their downline organization (USD ENTERING THE MARKETS).

Complete non-sequitur.  You've given no explanation for how Bitcoin has a "downline"-based compensation scheme or organization.

Independent distributors develop their organizations by either building an active customer base (BITCOIN EVANGELIZING),

That's not "building a customer base" in the sense of MLM, which would involve a group of people you have exclusive sales rights to -- which can't even happen with the way Bitcoin works.

who buy direct from the company (BITCOIN EXCHANGE OPERATORS),

There is no "the" company, certainly not one that sells at some "wholesale price".  There are, rather, numerous buyers and sellers (you don't have to go through an exchange!) that compete, yielding a market-driven price.

or by recruiting a downline of independent distributors who also build a customer base (BITCOIN MINERS, BITCOIN MERCHANTS)

Another complete non-sequitur.  How are these miners and merchants anything like the "downline distributors" of MLM?

thereby expanding the overall organization. Additionally, distributors can also earn a profit by retailing products they purchased from the company at wholesale price (EARLY ADOPTERS, BITCOIN MINERS)."

Unless the non-fixed price happens to fall or something.

Seriously, I have no idea what you're on about.  Maybe too many bitcoiners are fanatical, but beyond that, I don't see how you are justifying anything more than a superficial resemblance between Bitcoin and MLM (and in a way that would indict the stock/bond market, IPOs, etc as well).  And I just wasted, well, too much time responding to a non-argument.

If you want to be taken seriously -- and I do want to know any negative aspects of bitcoin -- please describe, specifically what the negative aspects of Bitcoin are and how they resemble MLM.  Don't just quote a criticism of MLM, mention a kind of Bitcoin user, and expect me to see the connection.

If I don't get a serious reply to this, you're going on "ignore".
17  Bitcoin / Bitcoin Discussion / Re: TurboTax advertises Bitcoin as a tax dodge! on: July 21, 2011, 07:54:45 PM
If you're growing say cucumbers in your backyard and pickled them for storage. How would your taxman view that? Logically it seems to me that if you're not selling away your pickles, then there's no tax. But if you start selling them or trading them regularly on significant volumes, then there might be a tax.

Right, cucumber growing would be like Bitcoin mining, and I agree the IRS probably doesn't see that as income.  But if you trade cucumbers for carrots, the IRS sees that as barter income, which they claim is taxable (at least if over a certain volume) at the market rate for what you received.  So it would follow if you traded bitcoins for condoms, they would view the condoms as taxable income at their market value  Undecided
18  Bitcoin / Bitcoin Discussion / Re: TurboTax advertises Bitcoin as a tax dodge! on: July 21, 2011, 05:24:26 PM
Same in most parts of europe.


So, I sell some, to pay and expand, and keep some fo which I dont pay income tax until I sell them and get "real" currencyl.

Real and not currency totally in the definition of the law here Wink

yes.  if you keep them they're not taxable, but if you sell them for the currency of your country, they are.

Are you sure?  The IRS pages linked above suggest that merely receiving bitcoins would count as barter income and so is taxable at its market exchange rate to dollars Sad
19  Bitcoin / Bitcoin Discussion / Re: TurboTax advertises Bitcoin as a tax dodge! on: July 21, 2011, 03:32:07 PM
On a related note, a merchant could probably easily hide all evidence of having received bitcoins, and then record any product dispensed in return for those bitcoins as a "promotional giveaway", deducting the "forgone income" on their taxes.  Not recommending it, but I don't know how they'd enforce this if the buyer didn't say anything...
20  Bitcoin / Bitcoin Discussion / Re: TurboTax advertises Bitcoin as a tax dodge! on: July 21, 2011, 03:26:33 PM
Er, this doesn't give much of a reason for how it avoids taxes.  The only argument I can discern from the graphic is that it's not taxable because the bitcoins are produced "without the involvement of government or banks".

Um ... yeah.  Good luck using that argument with an IRS agent.

(Note: this is separate from the issue of whether you can conceal your transactions from the IRS with bitcoin, keeping the government from ever finding out about this barter/private currency/whatever income.  But that's tax evasion, which is illegal.  That doesn't mean the TurboTax graphic's argument is remotely plausible if you ever do have to justify why you didn't list it as taxable income.)
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