There does seem to be a few definitions around but this was my understanding of it too.  So someone taking out a fiat loan to buy Bitcoins is in effect shorting fiat.

Did I just draw a bull's attention to sterling 60btc was all it took to take back down to £9.80

Yaay £10 GBP reached on mtgox for the first time!

I won't be offended by your failure to see that an accusation of ignorance is a personal attack and will risk being branded myself by joining jl2012 in disagreeing with you - or at least questioning what you wrote.

I'll start by going miles off topic!  I could loosely be called a Georgist in that I believe hoarding land is harmful to the economy and that measures to disincentivise the purchase of land for investment are a good thing (for instance implementing a policy based on the principle that any raise in the value of land arising out of the actions of any parties other than the owner is not by right the owner's).

Hoarding Bitcoin on the other is not harmful, providing the amount remaining continues to be divisible enough to be practical.  Available land being 1/10th of what it would be other were it not for hoarders has a big impact whereas available Bitcoin being 1/10th of what it would be were it not for hoarders makes no difference as far as I can see.  Does it matter if it's 3 million Bitcoin or 30million Satoshis that are being traded daily if the value (based on labour/loaf of bread etc.) is equivalent?

I also see an implication in what your wrote of a false dichotomy.  Even if 'most hardcore believers' hoarded virtually all their mined Bitcoin it does not mean they are not 'moving coin'.  If we're looking at the small minority, let's say the 'hardest core believers' the likelihood is they're already pretty active a Bitcoin venture or more and if they can afford to and believe that strongly, would be more likely leave whatever they can afford to in Bitcoin to further gain from the raise in Bitcoin value arising partially out of their Bitcoin business activities.

Just some thoughts

I suppose I could write my ha'penneth worth on the potential impact of ASIC on price too...

My guess is what is likely to have the biggest impact is not amounts of Bitcoin being sold or not to pay for hardware but how the fact of ASICs appearing (or not) affects people's confidence in Bitcoin as a project.  There are some who believe ASICs would be a bad thing for Bitcoin whilst others see it as a sign of Bitcoin 'growing up'.  I would guess the biggest impact is likely to be dependent on the consequent actions of those who trade on their respective beliefs.  And seeing as I have no idea how many believe each of those viewpoints let alone how, how much or when they are likely to trade then I can happily say I haven't a clue whether there will be an impact on price

...and after all the back and forths on it I'm convinced by finite now

Thank you both,

Correct
They contain a Bitcoin wallet, like a Casascius coin.  This is the only reason two machines are necessary really.  By using the tokens to separate the fiat > bitcoin transaction and the transfer it allows users both ends to walk away with part of the transaction as 'physical Bitcoin'.


Yes.  And that I think is what got me most excited about the idea was that of using a machine to verify the value on the token (having the machine check the RFID public key against the blockchain)  and to send that same value from a Bitcoin client which does the inverse the other end.  Whilst you're talking to someone, pop in one Bitcoin and it pops out however many thousands of miles away A simple means to let money go where people want it to without the learning curve.

This had crossed my mind and I think you're right.  Apparently even just buying GBP for Bitcoin is likely this year to start coming under the auspices of the Financial Services Authority meaning one will have to have passed an exam to trade let alone to be responsible for the international aspect.

Then of course the question of whether there's a business case for it.  My guess is, as I sort-of knew but as Stephen Gornick put clearly, it also needs to be local for the recipient.  So without forking out for a massive network abroad to serve one community here the odds of it working from that perspective are getting thinner by the minute.

I think that is much more sensible than what I had in mind.  In fact it could just be an informal network of individuals rather than an organisation that can be held responsible for the international aspect.  For instance if/when a means of receiving/sending with a dumb phone with SMS is worked out it could be a matter of using smartphones this end to sell them the BTC and giving them a contact in their family's city with whom they could meet the other end with their old Nokia to receive their Rupee or whatever.

THEN, as you say, if ever there becomes sufficient activity between two particular locales it is easier to make the business case for investing and setting up an automated solution, rules permitting!

Thanks again, tf

I agree that it is good that he is rewarded and am also pleased to hear it likely to be the case.  I had just wanted to keep my stated assumption as broad as possible which was why I didn't go there specifically.

But seeing as you brought it up I've got a few ifs lined up (none of which am I assuming to be true):  If Erik owns a substantial amount, let's say he is the majority stakeholder and everyone else is coming along for the ride, if he is is also SD's main 'technical staff' whilst largely occupied with let's say BitInstant projects, is it possible that the SD project, which is doing just fine with minimal intervention, thank you very much, would not get the same attention to take advantage of its position today as it might were it the passion of someone who wanted it to bring him fame and fortune (or to sell out for maximum return)?

I am no VC and I am not claiming rights to know everything about the business, nor even am I saying Erik is obliged to answer at all, but the principle of investing in the person as well as the business counts for me and even if nothing is forthcoming I don't think it is unreasonable to make a request forsome kind of broad statement of what is planned for SD.

I don't think the shovel metaphor is that unreasonable - at least not to be told to STFU (I hope )

First there are still some who don't use pools so there is definitely a significant element of luck.

More significantly though, and something meowmeowbrowncow didn't mention is the fact nobody knows how many ASIC are going to hit and when. Even the number of ASIC manufacturers who will actually end up providing the goods is up in the air so even without USD/BTC exchange variance there is I would say a massive element of luck in whether ASICs will be profitable or not and for how long.

If there were just one manufacturer with the capacity to dwarf and drive out a significant proportion of current mining capacity I guess they'd have a reasonable chance of making a good prediction as to how much they're likely to make.  However by taking cash up front (and I'm not talking in the pre-order sense but in the sense of not having to wait for coins to be mined) these risks are mitigated.  The difference in risk might even make the difference between getting VC or not.  I would venture to suggest it would be a lot easier to convince a VC with projected sales on physical units versus 'The hardware will produce so many hashes which, depending on who else is out there will give us so many Bitcoins which, depending on what happens on the exchanges, may give you x return on your investment'.


@myself: I'm not saying I'm right.  Just that I don't think it's as retarded a point of view as you appear to think.

Thank you for this.  Appreciated, especially given that I was so critical of a blog of yours the other day!  I'm a bit slow picking up on who is who round here but I've just twigged SD was your baby so congratulations on that

The potential buyout aspect wasn't something I'd given much thought to.  Talking in terms of general Bitcoin companies I can see that as well as being a good thing for Bitcoin, as you suggest,  if those owning/running these businesses now are doing so with this in mind it could also lead to their not thinking as long-term as if they planned to run the business themselvesi ndefinitely.  Just as the odds of hitting 5 consecutive heads of a coin is a lot smaller if you're only planning on tossing 50 times rather than 5,000 times the same applies for instance to the odds of being hacked.  This may not be that relevant for SD but for other businesses if one is only planning to stay in the game and hold out until a takeover the attitude to security might not be the same as a business planning to stay for the long haul where the risks of being hit are much higher.

I'm assuming you know the mystery SD 90% holder so I wonder if there are plans to issue any information for shareholders other than financial info - such as plans as I discussed or intention to sell?  If you and others involved in the project are busy with other projects, given the business is growing without any active promotion it might be useful to know whether there is an intention to develop it so that if and when such an offer comes along it is more worth the potential competitor/buyer's while buying in rather than competing against.

BTW I notice the SD entry on the Bitcoin wiki is still pretty negative starting with the statement '...  is generally considered to be DDoS attack against the Bitcoin network'.  There are plenty who do see SD as spamming the blockchain but as molecular pointed out here, and others have elsewhere, it can also be looked at as providing a service as a catylist to the devs finding a solution they'd have needed to deal with sometime anyway.  I'm finding there is no consensus such as is implied on the wiki and maybe someone could amend it accordingly.

I've got an idea that is so complex the odds are there's at least one critical flaw in it meaning it wouldn't fly.  However, there are so many separate elements to it I think there's a reasonable chance something useful could come out of it so let me throw it into this ideas pot.  Of course I'd greatly appreciate any thoughts...

The way it is envisioned is as a service for low-tech folk in international communities (let's say a London-Bangladeshi district) who regularly wish to send money home (anonymously) - and to talk to their loved ones.

It does so using a combination of two pairs of identical machines set up, one of each in a local store (serving said community) at the sending end, the other at the far-flung receiving end.  It also needs a new physical bitcoin token.

Remember this is all concept-stage stuff although I acknowledge some very similar elements are already established (I am a fan of casascius coins and I've seen some cool stuff in terms of vending machine prototypes too).

Let's start with the tokens:

They are plastic - lets say like poker chips with both a visually readable private key and an RFID with the public key buried inside that can only be accessed by smashing it!  They  could also have the public key on a QR code on the token.* This would mean they could work like casascius coins but also be verifiable as valid by a vending machine checking the public key against the blockchain.

So...

The first machine is a simple cash (and maybe card?) vending machine that
Sending end: dispenses physical Bitcoin tokens for sender local fiat payment;
Receiving end: dispenses receiver local fiat for physical tokens.

The other machine is a PC running Skype and a Bitcoin wallet with a touchscreen monitor and headset and also has a BTC token coin slot and dispenser (and maybe a camera in the dispenser tray too).

So the process is:
Sender and receiver arrange to 'meet' in their respective stores at a certain time.
Sender, using the vending machine, pays for and obtains BTC tokens (which can also be taken away to keep/save, to trade with as a physical token or destroyed to put in a wallet as per casascius);
Sender Skypes the receiving machine and whilst chatting (having identified the receiver using the oldest facial/voice recognition technology in existence!) drops a token into sending machine which sends token value to receiving machine which dispenses token.  (Sender uses the receiver dispenser camera to fisually verify tokens being dispensed the other end).
At the end of the conversation the receiver takes tokens to vending machine and receives local fiat.  The receiver may also decide to keep some coins and not to convert all to fiat.

Machines are locked and set up with equal value amounts of Bitcoins in Skype wallet, tokens and cash according to storekeepers' requirements.

A the sender end when the Bitcoin wallet in the Skype machine is near enough empty the Storekeeper sends Bitcoin to it which then dispenses the tokens, which the storekeeper then puts back in the cash vending machine and takes out the cash (using it to replenish his own Bitcoin wallet by another means).

At the receiving country end the storekeeper needs to charge the vending machine with cash which releases the tokens that get put back into the Skype machine which sends the Bitcoin to the storekeeper's wallet (which he'll then need to sell for fiat for next time).

Profit for both storekeepers (and machine owners) is in the exchange rate and sale of tokens.

Obvious disadvantages I can see:
People who use a machine that serves a concentrated ethnic community in London can only send to one vending machine (or one per city) the other end so relatives have to travel to the 'meet'.
Shopkeepers at both ends have to keep on the machines three times the value of the transactions that can be made before having to reset them.
Amounts to be sent have to be rounded down to token values which may require a number denominations.
Machines with mechanisms such as these need maintaining which would require people both ends to be able to come in and do the maintenance and to be available for call-out when something stops working.

What do you think folks?

*I seem to recollect reading here about the pros and cons of using a QR code on a coin in relation to the casascius coins.

To be fair to the author, when criticised on this first he pointed to his source to defend his corner, then when the flaws in the argument were pointed out to him he conceded.

Yup, it looks like the bears have decided they want to come out and play while the bulls are sleeping

For now SatoshiDICE has got fantastic free publicity:

• The proportion of transactions v. all non-SatoshiDICE transactions showing on Blockchain.info et al;
  
• the debate surrounding its affect on the blockchain;
  
• that it's one of a few 'big' successful ventures in the whole Bitcoin marketplace let alone in the gambling Bitcoin marketplace;
  
• the controversy regarding its legality or the legality of its use in various jurisdictions and the philosophical debate surrounding that;
  
• S.DICE shares being traded, discussion of that, of counter-party risks and the topics that are being discussed in this thread;
  
• All the above also keep discussion of some sort about SatoshiDICE almost perpetually in the limelight at bitcointalk and everywhere else Bitcoin is discussed.
  

All of the above means it currently has a tremendous advantage over any copycat newcomer coming into the field.

However, as a potential investor, I'd like some idea as to whether there are plans to invest in protecting this immense market lead.  There are some gambling outfits out there valued at magnitudes of order larger than SatoshiDICE who could potentially overnight launch a competing service with a slick marketing campaign and loss-leading incentives.  The tiny costs SatoshiDICE manages for such a huge turnover is fantastic but existing companies who are potential competitiors have customer service, PR and marketing departments and budgets.

Do we know whether the 90% holder is happy to leave SatoshiDICE as it is, prepared to accept a substantial loss of market share and a potential decimation of turnover should/when this happens in order keep costs and risks minimal or is he/she up for the challenge of preempting one of the 'big boys' coming in to try and crush it?  I'm also intrigued if this challenge were taken up at which point would it be profitable to take marketing into the non-Bitcoin world resulting in SatoshiDICE bringing newbies into Bitcoin?

Funnily enough I was putting something together today and wondering about the word 'scarcity' in relation to Bitcoin.  I went with it in the end I think because scarcity is relative.  Thinking in terms of the number of Satoshis scarcity may be among the last word to come to mind yet fewer than 21 million maximum globally helps me feel it is justified.  Also, if you think most people reading such a list would be thinking in terms of comparing with other currencies scarcity works because there's no other currency people are prepared so pay so much (of any other currency) for for a single unit.

But nobody is obliged to follow any new standards.  Its heritage and the respect the devs have earned means it's not to most outrageous when they change something the new standard is largely followed.  Which also means it's not unreasonable for BF (officially not 'the' BF) to consider and talk of themselves accordingly.  However I agree with hazek when he says 'They are but a voice, just like everyone else.'  It is fact that they have zero power over the future of Bitcoin and in my book that means no authority too in terms of 'benevolent dictatorship'; they only have earned authority that remains as long as the vast majority of us continue to consent to it.

Also, I think 'no central authority' is very fair if we think of the power BF has over Bitcoin and its users compared with the issuing banks of entity-controlled currencies, whether fiat or private.  The fact of Bitcoin's rules being built into every client dictating how Bitcoins behave requiring the vast majority of its users to agree to any changes leads me to the conclusion that ' no central authority' is in no way an exaggeration.

The only one I'm slightly uncomfortable with is the 'anonymity' line.  I tend to prefer to say Bitcoin can be used anonymously (although I acknowledge this is not the format of the OP) - and to add a caveat it's a topic that needs to be studied for those for whom this matters.  I fear many more Bitcoin users than realise are leaving themselves exposed from having read about the anonymity in the headlines and jumped in without having done their homework first.

But nice list hazek, thanks

Thanks Myself (and Adam),

So if its purpose is not with the intention of the order being taken I'm guessing there's no way it depends on manual intervention to take it away when it's about to be eaten.  Could it be put there by a bear so that people act as if the price is on the way up, thus driving the price up in order to sell before removing the wall, clearing the decks for a price plummet in order to buy back in again?  Or am I'm just sucumbing to the dangerous* temptation to read waaaay more into this than the data and its visual representation can actually tell me?!

*Well, dangerous if I acted on the basis of my fiction being the way it is in reality!

Hey you wall experts here,

I was just looking at a 831 BTC bid wall at $14.25 USD which as the highest and only order there stood for about 10 mins with virtually no activity.  Then there was a flurry of relatively small trades at which point it was taken back to about $14.03.  Looking at the wall I had to assume, unlike 'safer' walls further back, that it was actually the intention of the trader that the order be sold.  So why would it be taken away?  I'd appreciate something that can help me make some sense of that one.

Sorry, I wasn't clear.  He certainly gets property - and business in general come to that.  What I meant to say is he's not technically inclined and doesn't get Bitcoin.  He just liked the look of the shiny coin and trusted me enough that its value was what I said it was at the time.  Of course he's gained about 10% on it since!

I took a sell order yesterday which had got left behind the market at the time I made it - and I was very impressed with the seller honouring it 12 hours later when the price relative to market was distant history.

You don't happen to be in SW London do you?!

Around the same time I'm going to be looking for somewhere new to rent and was considering requesting a landlord to take Bitcoin on Craigslist.  I managed to persuade my current landlord to take one casascius 25BTC physical coin in part payment one month but he doesn't get it and will simply leave it in his safe for the foreseeable.  Better than nothing but ...  the whole of my rent monthly in bitcoin? - now that would be good.

Having said that, even on the 1 month chart, the RSI on the 6-hourly, says all is well   I don't think this current bear charge is going to go very far for very long before some fresh young bullocks come start bushing them back a bit (just