I just dont understand what is going on . . . and a question on Chase seizure

[TheBanker]

500:1??? Seems Mtgox are buying all the coins by themselves, is there a japanese bank behind them? Say, this bank would like to support the bitcoin price as much as possible in a ten-years period with some of their spare USD reserve and acquire at least 20% of total coin supply 

I dont know if its a bank (or whatever) but sometimes I do wonder about where those Gox BID orders come from. I don't want to derail my own post but (1) I'm often worried about the BID side on Gox because a ton of those orders are usually for 0.1 BTC. Those are small, insignificant orders but they can effectively pump up a price. When a large seller like me comes along, if I act improperly I can collapse the price by a few dollars (2) also, I always have my questions on the utility of BTC - what can you actually do with it. I just don't see why so many people would demand it. Again, my ratio of sellers/buyers is like 10:1 - is Gox THAT much better???

On Point 1 above, ASIC scares me because you have to exercise good judgement when trading large amounts of BTC. I shudder at the thought of an ASIC newbie posting their orders on Gox 

Obviously, I'm not trying to imply any malfeasance on the part of Gox or anyone else (Gox has a ton of positives going for it too) but I will admit that on some days I will cancel a meeting with a BTC seller if I see these types of anomalies on the Gox books and re-schedule for another day.

Your ratio of 10:1 could be a indicator of recent sentiment after price shock in April, how is that ratio before April?

I dont agree with this. Yes, its possible that the high April prices made more sellers enter the market, that's possible. But the lack of buyers is still indicative of a lack of utility of BTC. At the end of the day, unless you can use it somewhere, people will not demand it (ie become buyers). The other problem is that everything that has been done for mass acceptance has already happened - ie you can't be one the front page of the New York Times twice and expect the same "pop". So the only thing left is to have someone like Amazon accept BTC. At that point there will be good things, but until then, the lack of utility is hurting BTC.

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[johnyj]

We have discussed this before, even all the merchant accept bitcoin, it does not automatically make it easy to use, only a special group of people will be interested in it, but the demand is there. It's not the money average joe used to buy milk, but very special utility can be derived from it

There is one occasion that bitcoin shines: You are a super agent that lost your memory in a foreign operation and only have a paper wallet engraved in your nails

I suppose that CIA and KGB will be more interested in supporting bitcoin than anyone else

[Rygon]

So the only thing left is to have someone like Amazon accept BTC. At that point there will be good things, but until then, the lack of utility is hurting BTC.

The Gyft application allows people to easily buy gift cards to Amazon and Lowes. Sure, it's in increments, but the process is pretty smooth. It doesn't look like they are using the higher exchange rates at MtGox, most likely the lower ones at Bitstamp/BtcE because that's where they can cash out.

[TheBanker]

So the only thing left is to have someone like Amazon accept BTC. At that point there will be good things, but until then, the lack of utility is hurting BTC.

The Gyft application allows people to easily buy gift cards to Amazon and Lowes. Sure, it's in increments, but the process is pretty smooth. It doesn't look like they are using the higher exchange rates at MtGox, most likely the lower ones at Bitstamp/BtcE because that's where they can cash out.

Thats good, thats encouraging. The problem is that ventures like this tend to disappear quickly because they find that they can't deal with all the paperwork and regulations. If memory serves, selling gift cards is also a form of MSB and they will also have to register with the right paperwork.

[johnyj]

I just noticed that there is a trend of mobile payment ongoing, if you have to first purchase payment credit to be spent by your mobile phone later, then bitcoin is no difference than any other mobile payment solution, even better, since the merchant will have extremely low fee

[31337157]

So the only thing left is to have someone like Amazon accept BTC. At that point there will be good things, but until then, the lack of utility is hurting BTC.

The Gyft application allows people to easily buy gift cards to Amazon and Lowes. Sure, it's in increments, but the process is pretty smooth. It doesn't look like they are using the higher exchange rates at MtGox, most likely the lower ones at Bitstamp/BtcE because that's where they can cash out.

Thats good, thats encouraging. The problem is that ventures like this tend to disappear quickly because they find that they can't deal with all the paperwork and regulations. If memory serves, selling gift cards is also a form of MSB and they will also have to register with the right paperwork.

This is if the companies are based in the US, is that right? Could future businesses setup up HQ outside of the states and work with companies inside with a mobile format? Like for example, if Gyft were to be based in Europe somewhere and only sent cards to the US.

[halfawake]

So the only thing left is to have someone like Amazon accept BTC. At that point there will be good things, but until then, the lack of utility is hurting BTC.

The Gyft application allows people to easily buy gift cards to Amazon and Lowes. Sure, it's in increments, but the process is pretty smooth. It doesn't look like they are using the higher exchange rates at MtGox, most likely the lower ones at Bitstamp/BtcE because that's where they can cash out.

Thats good, thats encouraging. The problem is that ventures like this tend to disappear quickly because they find that they can't deal with all the paperwork and regulations. If memory serves, selling gift cards is also a form of MSB and they will also have to register with the right paperwork.

This is if the companies are based in the US, is that right? Could future businesses setup up HQ outside of the states and work with companies inside with a mobile format? Like for example, if Gyft were to be based in Europe somewhere and only sent cards to the US.

It doesn't really matter where they're based.  MtGox is proof of that - they're getting flack by US regulators and they're based in Japan.  If you're working with US dollars, you have to follow the US laws.

[PeZ]

Its great for most traders, but I'm selling 100+ BTC at a time, so CampBX is less than ideal

If you're selling that much you probably have your customer's IDs on file including copies of their drivers license and utility bill, and are reporting each of these transactions to FinCEN? Anti-Money Laundering laws don't give you a 180 day reprieve.

[PeZ]

It doesn't really matter where they're based.  MtGox is proof of that - they're getting flack by US regulators and they're based in Japan.  If you're working with US dollars, you have to follow the US laws.

TBH, MtGox's problems stem from mis-management. If they had followed through with their CoinLab deal they would have had clear sailing. It's only a matter of time until they destroy themselves.

[johnyj]

The main reason that people need exchange is a trust problem. No one wants to send money first, so a trustworthy entity must be used

If this problem can be solved, then essentially you need only a broadcasting platform to matching each buyer and seller's order, and the real transaction will happen in bank wire and bitcoin network seperately, totally unrelated

Nashx, localbitcoin provide some kind of escrow service, but I think this kind of service is still centralized, need some more advanced solution

One solution I can think of is an insurance that everyone can buy to cover the transaction risk, but that do not prevent people from creating more and more scam, so some kind of credit rating system will be needed, but then the degree of anonymity will reduce

[andrewsg]

Just a theory to try to explain the apparent imbalance between buyers and sellers.

If you are a buyer, exchanges are a fuss-free option to convert your fiat into BTC. If you are a seller of BTC, I can imagine that you may prefer cash from localbitcoins or other local buyers, over attention-grabbing wire transfers into your account. If you are a silk road seller, I can imagine you would like to avoid large bank balances that you cannot explain, and I can also imagine you would be willing to pay for the privilege (through accepting a lower price for your BTC). These sellers would also tend to do larger than "casual" amounts, regularly. All these concerns do not apply to BTC buyers. The authorities are also generally unconcerned about how you spend your taxed income, they tend to be a lot more concerned with incoming, untaxed proceeds of sales.

[johnyj]

Just a theory to try to explain the apparent imbalance between buyers and sellers.

If you are a buyer, exchanges are a fuss-free option to convert your fiat into BTC. If you are a seller of BTC, I can imagine that you may prefer cash from localbitcoins or other local buyers, over attention-grabbing wire transfers into your account. If you are a silk road seller, I can imagine you would like to avoid large bank balances that you cannot explain, and I can also imagine you would be willing to pay for the privilege (through accepting a lower price for your BTC). These sellers would also tend to do larger than "casual" amounts, regularly. All these concerns do not apply to BTC buyers. The authorities are also generally unconcerned about how you spend your taxed income, they tend to be a lot more concerned with incoming, untaxed proceeds of sales.

Nice reasoning. I did noticed that government even give you some tax deduction if you booked a large amount of after tax income by mistake, they don't even need any prove that you actually have those money