Bitcoin News

Bitcoin Magazine - Bitcoin 2013: Day 2

Sun, 19 May 2013 00:43:52 +0000

Bitcoin Magazine - Bitcoin 2013: Day 2:

Bitcoin Magazine’s Vitalik Buterin shares developments from Bitcoin 2013 conference, Day 2.

- http://bitcoinmagazine.com/day-two-at-bitcoin-2013-live-coverage

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Bitcoin Magazine - Bitcoin 2013: Day 1

Sun, 19 May 2013 00:40:34 +0000

Bitcoin Magazine - Bitcoin 2013: Day 1:

Bitcoin Magazine’s Vitalik Buterin shares developments from Bitcoin 2013 conference, Day 1.

- http://bitcoinmagazine.com/bitcoin-2013-day-1/

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Mt. Gox Gets Goxed - Dwolla Account Seized By U.S. DHS

Tue, 14 May 2013 21:13:10 +0000

Mt. Gox Gets Goxed - Dwolla Account Seized By U.S. DHS:

bitcoinnews:

In a post on BetaBeat by editor Jessica Roy (@JessicaKRoy) includes confirmation from Dwolla that funds held by Mt. Gox in the U.S. had been seized by the U.S. authorities. Excerpts:

“‘The Department of Homeland Security and U.S. District Court for the District of Maryland issued a ‘’Seizure Warrant’’ for the funds associated with Mutum Sigillium’s Dwolla account (a.k.a. Mt. Gox),’ [a representative from Dwolla] said. ‘Dwolla has ceased all account activities associated with Dwolla services for Mutum Sigillum.’”

[Note - Camp BX, based in the U.S., is the only other market exchange that allows accounts to be funded with Dwolla and performs withdrawal of USD balances to Dwolla. FastCash4Bitcoins performs cash-out service to Dwolla.]

- http://bit.ly/10wQRvI (Betabeat article)
- http://i.imgur.com/soOTB5N.png (Dwolla notice received by Mt. Gox customer)
- http://bitcointalk.org/index.php?topic=205370.0 (Further discussion on the development)

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Video: Kashmir Hill's Week Of Bitcoin

Fri, 10 May 2013 19:33:00 +0000

Video: Kashmir Hill's Week Of Bitcoin:

Forbes writer, Kashmir Hill (@KashHill), invited Bitcoiners to join her for a dinner at Sake Zone in San Francisco to celebrate the conclusion of her Week Of Bitcoin series of posts. In her video she interviews some of those who joined her.

- http://bit.ly/16mUiNA Video - Length: ~4 minutes
- http://onforb.es/199d9Zo (Week Of Bitcoin Series Of Posts)
- http://bitcointalk.org/index.php?topic=201343.0 (Further discussion of the video)
- http://bitcointalk.org/index.php?topic=200458.0 (Further discussion of the series)

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Forbes writer, Kashmir Hill (@KashHill), invited Bitcoiners to...

Fri, 10 May 2013 19:14:00 +0000

Video: Kashmir Hill's Week Of Bitcoin

Length: ~4 minutes

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Reminder: Hard Fork Coming May 15th, Backports Of v0.8.1 Fix Available

Thu, 09 May 2013 19:11:00 +0000

Reminder: Hard Fork Coming May 15th, Backports Of v0.8.1 Fix Available:

A post on Bitcoin Money (@BitcoinMoney) blog describes the upcoming May 15th 2013 hard fork:

“Released following the Bitcoin blockchain fork on March 11th 2013 was an updated v0.8 client (v0.8.1) that temporarily respects an undocumented limit found in all prior versions of the Bitcoin-Qt/bitcoind clients.”
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“That temporary grace period ends and on May 15th 2013 (12:00 am UTC) any node that still hasn’t been fixed to remove this limitation will eventually find itself rejecting valid blocks from the Bitcoin blockchain. It is possible that these unfixed nodes will see block confirmations but those blocks will not be part of the longest chain so it is critical that no commerce continue on or after May 15th using a node that hasn’t been upgraded.”
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“Release v0.8.1 of Bitcoin-Qt/bitcoind has been available since March 18th, 2013 and accommodates the May 15th 2013 hard fork properly. The fix has been backported to v0.7.3, v0.6.5, v0.5.8, and v0.4.9 clients as well.”

- http://www.bitcoinmoney.com/post/50027334954
- http://sourceforge.net/projects/bitcoin/files/Bitcoin/bitcoin-0.8.1
- http://bitcointalk.org/index.php?topic=199699.0 (Backports)

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Reminder: Hard Fork Coming May 15th, Backports Of v0.8.1 Fix Available

Thu, 09 May 2013 19:02:00 +0000

Reminder: Hard Fork Coming May 15th, Backports Of v0.8.1 Fix Available:

Released following the Bitcoin blockchain fork on March 11th 2013 was an updated v0.8 client (v0.8.1) that temporarily respects an undocumented limit found in all prior versions of the Bitcoin-Qt/bitcoind clients.

That temporary grace period ends and on May 15th 2013 (12:00 am UTC) any node that still hasn’t been fixed to remove this limitation will eventually find itself rejecting valid blocks from the Bitcoin blockchain. It is possible that these unfixed nodes will see block confirmations but those blocks will not be part of the longest chain so it is critical that no commerce continue on or after May 15th using a node that hasn’t been upgraded.

Release v0.8.1 of Bitcoin-Qt/bitcoind has been available since March 18th, 2013 and accommodates the May 15th 2013 hard fork properly. The fix has been backported to v0.7.3, v0.6.5, v0.5.8, and v0.4.9 clients as well.

- http://sourceforge.net/projects/bitcoin/files/Bitcoin/bitcoin-0.8.1
- http://bitcointalk.org/index.php?topic=199699.0 (Backports)

Previous Posts - Twitter: @BitcoinMoney

Phil Archer - U.S. Regulators Confused On Bitcoin

Thu, 09 May 2013 17:45:00 +0000

Phil Archer - U.S. Regulators Confused On Bitcoin:

Phil Archer’s post on TheGenesisBlock.com describes how regulators are having a difficult time figuring out what where Bitcoin fits. Excerpts:

“[CFTC’s Bart Chilton] stated on bloomberg.tv: ‘In essence, we’re talking about a type of shadow currency, and there is more than a colorable argument to be made that derivative products relating to Bitcoin falls squarely in our jurisdiction.’”
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“Bitcoin clearly does not derive its value from the future purchase of an underlying asset. Therefore, if the CFTC plans to regulate bitcoin, they must consider bitcoin either a commodity or forex, with the intent to regulate bitcoin forex or bitcoin derivatives.”
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“Since bitcoin is not the currency of a foreign government, but rather the first global currency, it would seem their power to regulate bitcoin as forex does not apply.”
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“Bitcoin being declared a commodity would create an interesting contrast with fincen’s March guidance requiring bitcoin exchanges to be registered as Money Service Businesses (MSB).”
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“So it seems the US Government has no idea how to classify bitcoin: is it a currency or a commodity? Any CFTC ruling would likely declare bitcoin a commodity and put it in a Schrodinger’s Cat state – it would coexist as both a currency and a commodity.”
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“FinCEN was forced to create a new definition for virtual currencies, and we expect the CFTC to do the same. However, those living in fear of what the CFTC’s decision may hold should have solace in the fact that any regulations will be largely unenforceable anyway.”

- http://bit.ly/10vfONv
- http://bitcointalk.org/index.php?topic=200305.0 (Further discussion of the topic)

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Kashmir Hill - Living On Bitcoin For A Week: Day 4

Sun, 05 May 2013 02:50:00 +0000

Kashmir Hill - Living On Bitcoin For A Week: Day 4:

Through daily posts by Forbes writer Kashmir Hill (@KashHill) we learn how far Bitcoin as a payment system has come along. Her assignment ais to live on bitcoin for a week — without spending any dollars. Excerpts from Day 4:

“[Bakery owner] Jennifer Longson is there, wearing a cupcake apron, filling cupcake tins with fresh batter along with two employees. She says I’m the second customer of the day asking to pay in Bitcoin.”
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“Cups and Cakes [receives publicity] as one of the first stores to accept the currency. Her little shop has been featured in international news: on the BBC, in the Financial Times, on NPR Marketplace, and beyond.”
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“Longson is surprised that I’m able to use my Blockchain iPhone app to scan her QR code and make the payment. “When you update your iOS, you’re going to lose that,” she says. ‘Apple has blocked it.’”
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“[Market owner Adam Sah] didn’t want to take the currency risk with the Bitcoin I paid him so he paid it out the same day to Name Cheap, the company which provides their domain name services (and accepts Bitcoin). ‘I paid our fee for the year with it,’ he says. ‘More and more IT services accept Bitcoin. […] With all these new things, you have a bunch of early adopters who experiment,’ he continues. ‘Then there’s a crossing of a chasm and then it becomes mainstream.’”
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“‘As a retailer, I am salivating over the idea of having this silently competing with credit cards and their fees and the hidden cost of dealing with cash: counting it, the fee I pay to Wells Fargo for a business account, transferring it,’ [said Sah]”.
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“When I go to bed, Bitcoin is valued at $96; by Saturday, it is shooting back up in value.”

- http://onforb.es/10eKkXe (Day 4)
- http://onforb.es/Zszg8U (Day 3)
- http://onforb.es/ZYlttF (Day 2)
- http://onforb.es/10VXn6b (Day 1)

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Dan Kaminsky - Bitcoin "Not Going Away Anytime Soon"

Sat, 04 May 2013 05:38:00 +0000

Dan Kaminsky - Bitcoin "Not Going Away Anytime Soon":

Wired contributor Dan Kaminsky (@DaKami), the security researcher who “broke the internet” some years back, opines on Bitcoin. Excerpts:

“The internet has proven to be a pretty big deal for global society, and Bitcoin could basically be thought of as the Internet, applied to Money.”
-
“Bitcoin is about as friendly to [regulation] as the rest of the internet is — not very. To put it another way: Bitcoin’s a dollar bill, with a teleporter built in. We can just poke in a few coordinates and poof, off it goes, with the ease of posting to some forum somewhere. That’s somewhat new.”
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“But its real value proposition is as a medium for transfer. It really works. And keep in mind, if we’re just holding the currency for a few minutes, we don’t care about the absolute value.”
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“Bitcoin’s resilience comes from a property I refer to as Too Big To Regulate. Put simply, it’s easier to tell ten people to behave, than ten thousand. So if we want a system that’s impossible to regulate, get the power in the hands of ten thousand rather than ten.”
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“In Bitcoin, because everything’s backed by cryptographic keys, one can actually prove s/he has access to a certain amount of Bitcoin. We are either able to sign messages linked to the private keys, or we are not.”
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“I don’t really see the volatility declining in the present model. But this is an experiment. And it continues.”
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“Short of an all out war on technological innovation, it’s just really tricky to see how to even try to stop Bitcoin. The internet was not the first time networked communication was tried, but it was the first time a major network became available that didn’t have gatekeepers everywhere.”

- http://www.wired.com/opinion/2013/05/lets-cut-through-the-bitcoin-hype
- http://bitcointalk.org/index.php?topic=194554.0 (Further discussion of the article)

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Jon Matonis on The Elephant in the Payments Room

Mon, 29 Apr 2013 18:14:00 +0000

Jon Matonis on The Elephant in the Payments Room:

The latest article by columnist and Bitcoin Foundation board member Jon Matonis (@JonMatonis) is on how Bitcoin is the only real disruptive technology in the payments space but is disruptive in a way that others might be missing. Excerpts:

“We are witnessing something unique in money and payments. For those that do invest and successfully navigate the potential traps, the reward is a first-mover advantage for a new international monetary unit.”
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”Here’s the important part. Disruption in the unit of account is the way to disrupt the payments space.”
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“With a nonpolitical monetary unit, many new possibilities become apparent structurally that would not have been contemplated before, such as: peer-to-peer mobile applications that don’t require permission from legacy transaction carriers; global remittances that don’t require high-fee currency conversion; merchant categories that are no longer disallowed due to fraud and chargeback risk; and merchant reach into countries that are not even on the map for Visa, MasterCard or PayPal.”
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“Disruptive technology disrupts. That is its mission. It annihilates any substandard process or product in its path and it originates outside of the established paradigm. You don’t see it coming.”
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“A payments startup that ignores Bitcoin in its strategic plan is like a publisher ignoring the Web in 1999. Certainly, innovators can design routes around Bitcoin and established players can dismiss it as insignificant, but that won’t make the elephant go away.”

- http://bit.ly/17tznX5
- http://bitcointalk.org/index.php?topic=191021.0 (Further discussion of the article)

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Guardian - Bitcoin Migrates Off The Internet (Video)

Fri, 26 Apr 2013 13:50:07 +0000

Guardian - Bitcoin Migrates Off The Internet (Video):

Guardian’ s Kate Connolly (@ConnollyBerlin) and Guy Grandjean (@guygrandjean) cover the story happening in Kreuzberg, which is becoming a the world’s largest Bitcoin local economy. Excerpts:

”’[Bitcoin is] an easier way of digital payment than credit cards, which cost me a lot of money as a business and to which I’m forced to sign up for years,’ [says Florentina Martens owner of Parisian-style cafe Floor’s].”
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“Graefekiez, a cosy neighbourhood established in the 19th century in the southern Berlin district of Kreuzberg, currently boasts the highest density of businesses accepting the currency in the world.”
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“‘Kreuzberg is traditionally an area in which people are very politically aware, critical towards existing systems and are constantly discussing and looking for alternatives to them, which makes it the perfect breeding ground for Bitcoin,’ says Joerg Patze [owner of Room 77].”
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“[Law student Jeff Gallas] taps the amount he owes Room 77 into the virtual Bitcoin wallet on his Android phone and, aligning it with a code on the bar’s device, presses a button to process the payment. A theatrical ‘kerching’ sound follows and Gallas is grinning from ear to ear. ‘It could hardly be easier,’ he insisted.”
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“[Wilko Bereit] likes the fact that Bitcoin scares people in suits, ‘because if this thing were to really take off, it would bankrupt a lot of bankers.’”

- http://bit.ly/12rZ73O
- http://bit.ly/17m9pER (Video)
- http://bitcointalk.org/index.php?topic=188269.0 (Further discussion of the article and video)

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letstalkbitcoin: Let’s Talk Bitcoin! is a show for users new...

Wed, 24 Apr 2013 06:44:00 +0000

letstalkbitcoin:

Let’s Talk Bitcoin! is a show for users new and old of Cryptocurrencies and the current king of them all, Bitcoin!

Listen to Episode 1 now at SoundCloud
Temporary URL: letstalkbitcoin.tumblr.com

[More …]

Covered is a fantastic discussion with Bradley Jansen of Freebanking.org in which regulation (including FinCEN’s guidance on Virtual Currencies) is discussed (beginning at about the nine-minute mark).

The podcast may be downloaded as an MP3.

Previous Posts - Twitter: @BitcoinMoney

Jon Matonis - Must-see Presentations At Next Month's Bitcoin 2013 Conference

Wed, 24 Apr 2013 01:00:00 +0000

Jon Matonis - Must-see Presentations At Next Month's Bitcoin 2013 Conference:

Bitcoin Foundation board member Jon Matonis (@JonMatonis) describes upcoming presentations at the Bitcoin 2013 Conference (May 17-19) in San Jose, CA. Excerpts:

“The conference is attracting technologists, venture capitalists, bankers, traders, payments specialists, and financial regulators.”
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“The agenda will be particularly interesting to those in the banking and payments fields.”
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“BitPay co-founder and CEO, Anthony Gallippi, will explain how he’s been driving business adoption of Bitcoin.”
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“Paymium’s co-founder and chief operating officer, Pierre Noizat, will talk about bridging the gab [between bitcoin and the traditional regulated banking infrastructure].”
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“Rainey Reitman, the activism director of the Electronic Frontier Foundation, a nonprofit civil liberties law firm and advocacy center, will hold forth on the liberating aspects of Bitcoin.”
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“Tuur Demeester, author of the financial newsletter MacroTrends, will talk about bitcoin’s emerging role as a separate asset class alongside precious metals, equities, and bonds.”
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“Online payments industry veteran Peter Šurda about how nonpolitical cryptocurrencies like bitcoin could alter the future of fractional reserve banking.”

[Note: Though registration for the event continues online through May 15th, the deadline for the conference rates is April 26th.]

- http://bit.ly/17IYUcR
- http://www.Bitcoin2013.com
- http://www.bitcoin2013.com/topics—schedule.html (PDF)

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Gwynn Guilford - Why Chinese People Will Drive Next Bitcoin Bull Market

Sat, 13 Apr 2013 23:12:44 +0000

Gwynn Guilford - Why Chinese People Will Drive Next Bitcoin Bull Market:

Reporter Gwynn Guilford ‏(@sinoceros) writes on Quartz.com reasons why China could drive a further bit-boom. Excerpts:

“They’ve already done the whole virtual currency thing—with Q Coin.”
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“Property, stocks, art, tea—speculation dominates in every major asset market you can think of in China. The Chinese are a people used to high risk-reward investments.”
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“As the online gamer source tells Quartz, ‘the currency’s system is so decentralized’ that it would be extremely difficult for the Chinese government to do anything about bitcoin.[…] And unlike with Tencent, there’s no company or entity to target for regulation. ‘To China’s conservative regulators,’ he adds, “Bitcoin is a game [that’s] way more dangerous.”

- http://bit.ly/ZgOoc6
- http://bitcointalk.org/index.php?topic=176010.0 (Further discussion of the article)

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Jon Matonis - Bitcoin and the Rebirth of Financial Safe Havens

Fri, 12 Apr 2013 11:16:09 +0000

Jon Matonis - Bitcoin and the Rebirth of Financial Safe Havens:

E-money researcher and Bitcoin Foundation board member Jon Matonis (@JonMatonis) describes how financial privacy of individuals is being trampled upon. Excerpts:

“‘Private individuals should have more privacy [than politicians would be afforded], as they have not placed themselves into the political arena. They have not agreed to give up their privacy,’ [says Attorney Jenice Malecki (@SecuritiesLawUS)]. However, she also concedes that when it comes to offshore numbered accounts, ‘it does seem that banking secrecy is eroding. Slowly, but surely, banks are releasing information for governmental investigations.’”
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“Decentralized cryptocurrencies such as bitcoin arrived on the scene in early 2009 and now provide an outlet for personal wealth that is beyond restriction and confiscation. The exchange rate for government fiat currencies may be volatile now, but as the market price eventually finds equilibrium and stabilizes, bitcoin will become an important store of value.”
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“Think of bitcoin as your own personal financial safe haven or offshore bank.”
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“Future regulatory and confiscatory attacks on safe havens and banking secrecy will become irrelevant, because bitcoin provides for a personal ‘offshore center’ under direct and sole control of the individual.”
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“Legitimacy is a politically charged term. One person’s legitimacy may be another person’s aggressive and unjustifiable overreach. Also, what a certain government sees as legitimate may be viewed in other parts of the world as a violation of fundamental human rights. This is clearest in authoritarian regimes that impoverish and imprison their political opponents for so-called crimes against the state.”

- http://bit.ly/150p0Ly
- http://bitcointalk.org/index.php?topic=174567.0 (Further discussion of the article)

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Rick Falkvinge - What We Learn From This Bitcoin Correction

Fri, 12 Apr 2013 10:07:21 +0000

Rick Falkvinge - What We Learn From This Bitcoin Correction:

Rick Falkvinge (@Falkvinge) describes some lessons re-learned with Bitcoin’s recent exchange rate correct. Excerpts:

“An exchange [Mt. Gox] that has a ten-minute lag in trading orders at best, and is completely unreachable at worst, can barely be taken seriously as a hobby project – and certainly not as the main hub of a next-generation billion-dollar trading system. MtGox shutting down trading mid-correction was just the icing on the cake that confirmed this.”
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This was not the second peak, but something like the fourth or fifth similar event. We can be certain it is not the last.”
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“Most importantly, failure or success of short-term speculation is irrelevant to bitcoin’s eventual success as a decentralized, resilient currency.”
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“The good news, as said, is that we may expect a lot of [the exchanges] to be fixed by the next time this happens. Maybe in the spring of 2015, maybe sooner, maybe later.”

- http://bit.ly/10ZdzyK
- http://bitcointalk.org/index.php?topic=174514.0

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Oleg Andreev: How to keep your bitcoins safe

Fri, 12 Apr 2013 02:31:42 +0000

Oleg Andreev: How to keep your bitcoins safe:

oleganza:

This is a decent article describing the importance of taking measures to protect your bitcoins.

Many people spread a lot of FUD about speculative bubble, government intervention, potential backdoors in code and scalability issues in the future. But they never talk about real…

Previous Posts - Twitter: @BitcoinMoney

Dealbook - Bitcoin Gets Ready for its Close-Up

Thu, 11 Apr 2013 20:45:00 +0000

Dealbook - Bitcoin Gets Ready for its Close-Up:

Reporters Nathaniel Popper (@nathanielpopper) and Peter Lattman (@peterlattman) share some new investments made both in Bitcoin and Bitcoin startups. Excerpts of their NY Times Dealbook article:

“Cameron and Tyler Winklevoss have been many things in a short time: Olympic rowers. Nemeses of Mark Zuckerberg. Characters on ‘The Simpsons.’ Now they can add a new label: bitcoin moguls.”
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“The Winklevii — as they are popularly known — say they own nearly 1 percent of that, or some $11 million.”
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“Now mainstream investments in the digital money are starting to emerge. On Thursday, a group of venture capitalists, including Andreessen Horowitz, announced that they were funding a bitcoin-related company, OpenCoin.”
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“But the 6-foot-5 Winklevii were unfazed by the latest tumult. Indeed, the brothers said they used the low prices to buy more. They argue that bitcoin will have much further to soar once a broader audience sees its virtues: a unit of exchange that can be moved around the world at the click of a button without requiring any payments to Western Union or American Express.”
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“‘People say it’s a Ponzi scheme, it’s a bubble,’ said Cameron Winklevoss. ‘People really don’t want to take it seriously. At some point that narrative will shift to [how] virtual currencies are here to stay.’ We’re in the early days.”
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“For their part, the Winklevoss twins have used some of their bitcoin to pay for the services of a Ukrainian computer programmer who has worked on the site of their venture capital firm.”
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“In addition to the purchase of bitcoins, they also say they have invested in a bitcoin-related company, but declined to disclose which one.”
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“’It has been four years and it has yet to be discredited as a viable alternative to fiat currency,’ said Tyler Winklevoss. ‘We could be totally wrong, but we are curious to see this play out a lot more.’”

- http://nyti.ms/151cJqg
- http://bitcointalk.org/index.php?topic=173772.0

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Jeffrey Tucker - What Bitcoin Is Teaching Us

Wed, 10 Apr 2013 08:09:34 +0000

Jeffrey Tucker - What Bitcoin Is Teaching Us:

bitcoinnews:

Jeffrey Tucker (@JeffreyATucker), editor of Lassez-Faire Books and past editorial vice president of the Ludwig von Mises Institute, posts how deflationary currency brings a change to what we know about money. Excerpts:

“None of us in living memory has had experience with a currency that rises in value. The emergence of Bitcoin — a digital currency that has grown in purchasing power over time — has changed that experience dramatically.”
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“The 20th-century experience flipped our expectations for what money should do. Especially in the postwar period, the falling value of the dollar punished savings and rewarded spending. This is exactly what the Keynesian economists hoped for. They wanted money always circulating and never ‘hoarded.’ ‘Deflation’ was to be avoided no matter what.”
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“Bitcoin is often described as a ‘deflationary’ currency. This is exactly why Paul Krugman hates it so much.”
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“Here’s what beautiful about this experience: It doesn’t matter in the slightest what Paul Krugman thinks. It doesn’t matter how many economic experts Paul Krugman lines up to oppose Bitcoin. It doesn’t matter how many Nobel Prize winners denounce it and oppose it. That’s because Bitcoin is not a “policy” invented by elite and privileged intellectuals. It is a market-based currency, one created by an entrepreneur and chosen by market players.”
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“That is an essential postulate of the free society. When government gets hold of the money, freedom is in peril. When the market makes and manages money, freedom has a built-in reinforcement in half of every transaction. In short, just based on our experience with Bitcoin so far, we see the conventional wisdom of a century completely turned on its head. Fantastic!”

- http://lfb.org/today/what-bitcoin-is-teaching-us
- http://bitcointalk.org/index.php?topic=171577.0 (Further discussion of the article)

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Timothy B. Lee - Four Reasons Bitcoin Is Worth Studying

Mon, 08 Apr 2013 10:55:00 +0000

Timothy B. Lee - Four Reasons Bitcoin Is Worth Studying:

Forbes contributor Timothy B. Lee (@BinaryBits) writes again on Bitcoin. Excerpts:

“Even if you think the current value of of more than $140 is a bubble, it’s clear that Bitcoin has some genuine applications. The number of daily Bitcoin transactions has soared from around 1000 at the beginning of 2011 to about 50,000 today. Figuring out the “fundamentals” that drive the currency’s long-term value seems like an interesting theoretical puzzle.”
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“A core part of Bitcoin’s appeal is that it’s not under anyone’s control. Supposedly, nobody has the authority to change the Bitcoin money supply, cancel or reverse transactions, or otherwise change the attributes of the protocol. But in practice that’s not really true. In the wake of last month’s fork, the elites in the Bitcoin community effectively changed the rules in a matter of hours. In principle, there’s no reason those same elites couldn’t make other changes to the Bitcoin protocol.”
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“In principle, these two pools might be able to join forces and execute a 51 percent (or 53 percent) attack on the rest of the network. But doing so might prove foolish in the long run, since that kind of power grab might undermine public confidence in the currency’s long-term viability, since a mining cartel might have the power to change the rules of the Bitcoin protocol in ways that benefit themselves at the expense of ordinary users.”

- http://onforb.es/10yeRSe
- http://bitcointalk.org/index.php?topic=170270.0 (Further discussion of this article)

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Gigaom's David Meyer - Yes, You Should Care About Bitcoin

Fri, 05 Apr 2013 08:36:14 +0000

Gigaom's David Meyer - Yes, You Should Care About Bitcoin:

David Meyer (@superglaze)’s post on Gigaom offers a current introduction to Bitcoin for any of its readers who haven’t yet brought themselves up to speed. Excerpts:

“No one’s really sure where [Bitcoin] will end up, because no one has really done this distributed, borderless digital currency thing for real before – yes, there are Facebook Credits and Linden dollars, but these are still centralized and controlled as such.”
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“There have also been multiple previous attempts at creating non-digital alternative currencies, such as the Liberty Dollar, which earned its creator Bernard von NotHaus a counterfeiting conviction. Bitcoin may share the anti-statist motivation behind that wannabe currency, but it’s hard to see how it could constitute counterfeiting.”
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“If you lose your Bitcoin wallet, the money is lost forever, to everyone. If you lose your bankcard, it doesn’t wipe out the money in your account, and your bank will issue you a new one. There is no such mechanism in place here; losing Bitcoins is effectively like burning banknotes.”
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“From where I’m sitting, Bitcoin is already proving its worth as a disruptor and as a test-case for how technology could divorce currency from certain external factors.”

[Note, the same article was syndicated on CNN Money]

- http://bit.ly/XfAVAz
- http://bitcointalk.org/index.php?topic=167472.0 (Further discussion of the article)

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Video: FBN's Melissa Francis Interviews Trace Mayer

Fri, 05 Apr 2013 05:29:33 +0000

Video: FBN's Melissa Francis Interviews Trace Mayer:

Trace Mayer (@RunToGold) helps Fox Business News’ Melissa Francis understand Bitcoin.

Duration: 5 minutes

- http://bit.ly/ZbyDiJ
- http://bitcointalk.org/index.php?topic=167267.0 (Further discussion of the interview)

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Rick Falvinge - Bitcoin Poised To Change Society

Thu, 04 Apr 2013 08:38:00 +0000

Rick Falvinge - Bitcoin Poised To Change Society:

Rick Falkvinge (@RickFalkvinge) posts his view that Bitcoin can change society even more than the Internet has. Excerpts:

“We essentially have four different types of players that keep the economy going, and by extension, the government funded and operational.
One, there is the government itself, which issues money and regulates banks.
Two, there are commercial banks which are in complete control of the money flow, in exchange for sharing that insight with the government and letting it siphon off as much as it likes to operate itself.
At the bottom of the food chain are, three, corporations which are tasked with using this system, running all its operations through these banks,
and four, the ordinary citizen, who is supposed to be doing actual work and actually produce something that fuels the entire ecosystem.”
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“What bitcoin does is cut the banks out of the loop, and by extension, the government’s ability to operate.”

- http://bit.ly/10wqNT8
- http://bitcointalk.org/index.php?topic=166432.0 (Further discussion of the article)

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Bitcoin Lied, Confirmed Transactions Died

Wed, 03 Apr 2013 21:02:00 +0000

Is there a lesson to be learned from the March 11th hard fork?

Bitcoin as a new technological and financial innovation might not have reached its current level of success had it not been able to make one specific promise: “Confirmed” transactions will never be reversed.

This isn’t an actual promise that is written anywhere but it is the widely followed practice of treating Bitcoin transactions that have reached the threshold of six block confirmations as being transactions that have attained this confirmed status. Once reaching this status the transaction is relied upon as being finalized and that the status can never change at any time in the future.

However last month, that presumption was false.

A customer of the payments company OKPay took specific, deliberate measures to effectively cancel a Bitcoin transaction after it had already confirmed. This transaction had a value worth over $10,000 USD at the time it was made. The transaction had confirmed with six confirmations and upon reaching that status OKPay then had delivered away, per the customer’s instruction, a $10,000 USD payment using another form of non-reversible funds.

Fortunately, in this instance, the customer did end up voluntarily returning the bitcoins and OKPay didn’t suffer much financial loss as a result but this illustrates the exposure to a risk that exists for those who accept Bitcoin for payment.

This risk that merchants, exchanges and individuals are exposed to is the double spending attack that comes as the result of either of two attack methods:

Brute force from a fractional amount of Bitcoin mining capacity combined with a bit of luck, or,
The overpowering force attained by matching or exceeding the entire sum of all existing Bitcoin mining capacity.

The latter is called the 51% attack because the attacker’s computational strength, once brought online, represents more than 50% of the total mining capacity network-wide.

These attacks can be successful because of Bitcoin’s decentralized architecture. A simplified way to describe Bitcoin is to equate it to being a ledger of value assignments.

A savings account at a bank might be described as being a ledger in the same manner where the ledger holds a record of all deposit and withdrawal transactions. However, with a bank account there are methods for the bank to reverse or cancel a transaction.

For example, if a check is deposited into a savings account but then the check bounces the bank would then later reverse the deposit transaction and might even instantiate a new transaction to assess a fee.

The Bitcoin ledger is designed to provide neither of these two capabilities to anyone, anywhere.

Bitcoin does this by using math to assess a relatively enormous cost for attempting to change the past record of the ledger transaction history.

When a transaction is included in a block in Bitcoin’s blockchain, and then additional blocks are built atop that block, only through the expenditure of a great amount of computational effort (and/or a significant amount of luck) can that historical record be rewritten. With each additional block extending the chain further, the amount of computational effort necessary to change the history becomes so extreme that any attempt to do so gets prohibitively expensive. Without an economically viable use case for performing such an attack, it is generally accepted that the threshold of six confirmations is sufficient to recognize a payment transaction as being settled.

Tens of millions of dollars worth of value are transferred daily now in which the recipients extend their trust based on the presumption that a confirmed transaction with six or more confirmations has reached its final, permanent status.

The March 11th Hard Fork

On that day at about 10:39 pm UTC a previously overlooked limitation in the Bitcoin client reared its head. Following that event some exchanges, merchants, and individuals were processing payment transactions unaware that part of the Bitcoin network wasn’t able to accept the historical record being produced. The Bitcoin blockchain had forked with one side after the split advancing relatively normally but the other side, using client software with the limitation, was following a different path of the blockchain and was advancing at a snail’s pace.

The fork was the result of new software — the version 0.8 Bitcoin-Qt/bitcoind client that had been released just a couple weeks earlier. The v0.8 client uses a different database engine and thus it was ignorant of the limitation imposed by a configuration setting used with all prior versions of the Bitcoin client. The new v0.8 client allowed a block to be built that prior versions of the client (pre-v0.8) couldn’t process.

Only a small fraction of the Bitcoin mining capacity was still using the pre-v0.8 client software however most merchants and exchanges had not yet switched over to v0.8. Many releases prior to v0.8 are still supported so a solution that wouldn’t exclude those users was needed.

Those using the v0.8 client were seeing transactions reported as having confirmed (with six or more confirmations) and at the time that was an accurate status. However unknown at the time was that this incident would be resolved through having a vast majority of mining capacity abandon the v0.8 client and then revert to a prior release (or to use an emergency patch hastily made available for v0.8 miners). This action would cause the confirmed status for those transactions to be meaningless — giving those exchanges, merchants, and individuals a false sense of security.

The defection by the miners was essentially a 51% attack as it was a conscious effort made to direct mining work to a forked branch that was not the blockchain tip that had the greatest height. However this was not done with malicious intent nor was it an attempt to defraud.

In the short term, much mining capacity is controlled and directed by a handful of mining pool operators. It took about ninety minutes before individual reports of trouble led to the realization that Bitcoin’s network had split. From there the Bitcoin-Qt/bitcoind development team began notifying some pool operators and exchanges as to the situation and others in the community delivered the alert through various informal communications channels including other IRC channels, Twitter, the BitcoinTalk forum and more.

Within a very short time frame some pool operators, including the largest — BTC Guild, concluded that the economic majority would not object to the pools abandoning the blockchain that was longest at the time in order for them to instead support the pre-v0.8 fork. The aim for this support was to cause that pre-v0.8 fork to gain a vast majority of mining capacity sufficient to quickly converge the chains causing that pre-v0.8 fork to become the new longest chain.

The presumption was that transactions that had become confirmed in the v0.8 side would also soon be included in the pre-v0.8 fork. But that would not be instantaneous nor was there a guarantee that it would occur for each and every transaction.

For about eight hours many transactions that had already confirmed on the v0.8 blockchain would not yet be included in blocks on the pre-v0.8 fork.

BitconTalk forum user “macbook-air” reported that after discovering this delay he created and broadcast an intentional double-spend transaction against OKPay to “void” his pior payment to them. That double spend transaction attempt made its way into a block, eventually, causing the original Bitcoin transaction (worth about $10K) to become forever invalid on the pre-v0.8 fork.

When the chains converged, the transaction that OKPay received and had seen as confirmed essentially then died. OKPay’s v0.8 client would then show the transaction with a 0/unconfirmed status and eventually the transaction would be purged. It would then appear as if the confirmed Bitcoin transaction worth over $10K USD had never occurred.

This was the first fork involving a confirmed transaction since an August 2010 incident — an event that had occurred before Bitcoin was being relied on for transactions of any significant economic value.

The Successful $10K USD Double Spend Attack

With Bitcoin using a peer-to-peer architecture, transactions made by a client node are communicated to only the peers that node happens to be connected to. Those peers each first verify the transaction is valid and then relay the transaction to the other peer connections. Within seconds most every Bitcoin client node in the world is aware of that spend transaction.

An attempt to broadcast a transaction that spends funds that have already been spent will not get relayed by that node’s peers because they will reject the transaction as a double spend. At least that’s the general design.

When a client node gets started or restarted it is ignorant of any transactions except those confirmed transactions in the blockchain it already knows about. When that node receives a transaction, it has no way of knowing if that transaction is being rejected elsewhere as a double spend and gladly adds that transaction to its memory pool for eventual inclusion in a block. With the Bitcoin-Qt client that transaction will be displayed as a 0/unconfirmed transaction. Normally this causes little problem because until a transaction has reached confirmed status, any merchants accepting payment on 0/unconfirmed (or anything less than 6 confirmations) are generally aware to not presume that the unconfirmed transaction is final.

A client node will hold a list of the transactions that have not yet confirmed but those transactions consume memory. This list of transactions are stored in what is called the node’s memory pool.

The tens of thousands of client nodes around the world are being run on computing hardware that ranges from enterprise-level server systems to the lowest end of the old spare laptops. To accommodate that range, the Bitcoin client purges unconfirmed transactions when valid newly arriving transactions would overflow the memory pool. This makes a node receptive to receiving, verifying, storing and relaying a double spend transaction that it previously might have rejected as being invalid.

Because nodes generally have only a few connections a particular node’s absent mindedness isn’t very harmful because that node’s peers will generally still know about the original valid transaction and will continue to reject the double spend.

When the mining pools and solo miners downgraded to pre-v0.8 clients or restarted with the emergency v0.8 patch, a large number of nodes started up around the same time and each started with a clean memory pool. This was a dangerous time for merchants and a forum post by a core member of the development team recommended that merchants stop processing transactions. For merchants and exchanges like OKPay that had already delivered value based on confirmed payment status, that message came too late.

The bitcoin client follows a protocol to protect against a number of denial-of-service attacks. Because of this, transactions propagate first with an initial transaction broadcast, and then only sporadically when the sending node realizes that some time has passed and the transaction has not yet been included in a block.

This gives a double spend attacker plenty of opportunities to repeatedly broadcast the alternate transaction in hopes that a transaction will reach a miner who will see the transaction as valid and then include it in a block. And that is exactly the approach macbook-air took — spewing the double spend transaction every ten seconds until either the original transaction or the double spend got included in a block. Within minutes of first trying, Macbook-air’s double spend was successful. The transaction that OKPay had seen as confirmed with six transactions was now invalid. The bitcoins OKPay had received were now gone.

Where’s The Flaw?

The bitcoin client evolves to protect against existing or anticipated threats. This unplanned hard fork scenario was not something impossible to envision however with the limited resources of a mostly all-volunteer development team, the risks and remedies for successful double spending in this type of situation might not have been given the proper attention deserved.

Even if this had been carefully thought through at one point in time, Bitcoin network activity changes over time. Recent scalability issues including both how blocks are now becoming full in increasing number as well as how transactions are being purged from each node’s limited memory pool sooner now are items that might not have been given proper weighting in any earlier studies of unplanned hard fork scenarios.

Should this same type of event occur today, some recommendations might be considered:

On startup of a node, allow the memory pool to be initialized first from a set of transactions. A set of transactions could have been prepared and made available to miners (or created by miners themselves) that included all transactions that existed in the soon-to-be-orphaned blocks, from where the fork began.
This is an emergency mode protection but since pool miners knew they were abandoning a chain in which merchants had already received transactions showing confirmed status this courtesy would have caused macbook-air’s later transaction to be seen as an invalid double spend.
Aggressively re-broadcast transactions from the abandoned chain, including those from that side’s memory pool. Essentially Macbook-air was more aggressive at broadcasting double spend transactions and won the “race” as a result.
It has not been publicly disclosed (and possibly something not even studied) why several hours after mining with the v0.7 client the miner that included Macbook-air’s transaction (again, BTC Guild) didn’t yet know of the previous transaction that OKPay had seen as confirmed on its blockchain, or if instead that transaction had been seen but later purged from the node’s memory pool.
The larger exchanges, merchant processors, and others might have the means and incentive to perform this added service to make sure transactions involving them get aggressively rebroadcast but that leaves vulnerable the individual merchants and traders. Perhaps a commercial service could provide this.
Re-evaluate whether six confirmations is enough. At the time the first alert was received on v0.8 clients, transactions in the soon-to-be-orphaned blocks had over a dozen confirmations. Perhaps merchants who deal in larger transactions and have no recourse against losses might wish to impose a confirmation threshold that has less risk. Requiring two dozen confirmations is something that could cause recognition of payments to be delayed for about four hours, but if OKPay had that policy they would likely have been alerted as to the problem long before sending out the USD funds that its customer had requested.
Lead developer Gavin Andresen was quoted as saying 24 hours (120+ blocks) is the threshold to be “100% safe”.

One thing to realize is that it doesn’t necessarily even take a software bug for a confirmed transaction to eventually become invalidated. In his paper Analysis of hashrate-based double-spending, Meni Rosenfeld describes how with just 10% of the hashing capacity of the Bitcoin network, one out of a thousand trials would cause a blockchain reorg for six blocks in which double spending of transactions with a confirmed status could be the result. With even greater hashing capacity, the number of trials needed decreases significantly.

Every party that accepts Bitcoin for payment has some degree of exposure to these double spending risks. The question about the risk isn’t being asked perhaps because no other payment systems are decentralized and the concepts of a “51% attack” and “race attack” are foreign and not easily explained.

It might be easy to dismiss the risk as with this very rare event there there were maybe only a few hundred transactions that were at risk anyway. And of those, there was just one successful double spend reported. This was the extent of the damage over several dozen months of continuous operation. But instead this might just have piqued the interest of those seeing for the first time a new attack vector and should this type of scenario ever play out again, the outcome could be losses that are much, much steeper.

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New Yorker's Maria Bustillos - The Bitcoin Boom

Tue, 02 Apr 2013 17:36:25 +0000

New Yorker's Maria Bustillos - The Bitcoin Boom:

bitcoinnews:

In one of her first contributions to NewYorker.com, Maria Bustillos (@MariaBustillos) excels with her introduction of Bitcoin for that site’s audience. Excerpts:

“[The fearmongering typical for most media coverage of Bitcoin] is a red herring, and has so far prevented the rational evaluation of the potential benefits and shortcomings of crypto-currency.”
-
“Cash is also anonymous; it is also used in money laundering and illegal transactions. Like bitcoins, stolen cash is difficult to recover, and a cash transaction can’t readily be traced back to the source. Nor is there immediate recourse for the reversal of transactions, as with credit-card chargebacks or bank refunds when one’s identity has been stolen. However, I find it difficult to believe that anyone who has written critically of the dangers of bitcoin would prefer an economy where private cash transactions are illegal.”
-
“‘I think if the U.S. government decided that Bitcoin was a bad thing and told me [to stop development of Bitcoin] I’d stop doing what I’m doing, quite frankly. But that wouldn’t be very effective […].’ [said Gavin Andresen] .”
-
“In response to a question about his politics, Casascius’ Mike Caldwell had this to say:I am not an anarchist; I believe in the rule of law and a civilized society. But I also believe that unchecked power is a threat to the common good, and that anything that the public can do to challenge that power is a benefit to society. As an individual, if you accept bitcoin in exchange for your goods or your work, that is a vote for economic fairness’.”

- http://nyr.kr/14C8LEo
- http://bitcointalk.org/index.php?topic=164977.0 (Futher discussion of the article)

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Bloomberg TV's Sara Eisen - Bitcoin Fever

Thu, 21 Mar 2013 23:43:44 +0000

Bloomberg TV's Sara Eisen - Bitcoin Fever:

bitcoinnews:

Bloomberg TV’s correspondent and foreign exchange expert Sara Eisen (@SaraEisenFX) provides an update on Bitcoin for the Market Makers global audience.

- http://bloom.bg/11nEQiA
- http://bitcointalk.org/index.php?topic=155993.0 (Further discussion of the segment)
- http://www.reddit.com/r/Bitcoin/1aqgs6 (Reddit weighs in)

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News Roundup - FinCEN's Guidance Re: Virtual Currencies

Tue, 19 Mar 2013 19:22:00 +0000

News Roundup - FinCEN's Guidance Re: Virtual Currencies:

The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Dept. of Treasury, issued its first guidance brief for 2013 Monday and it addresses the Application of FinCEN’s Regulations to Persons Administering, Exchanging, or Using Virtual Currencies.

First the good news:

A person’s acceptance and/or transmission of convertible virtual currency cannot be characterized as providing or selling prepaid access because prepaid access is limited to real currencies.

Bitcoin is not a debt instrument nor is there any “backing” by a commodity or some promise that it can be be redeemed for value. Therefore it is not being recognized as a “real currency” by FinCEN. This helps Bitcoin avoid the regulations that specifically apply to “prepaid access” (formerly referred to as “stored value”) products.

More good news:

A user who obtains convertible virtual currency and uses it to purchase real or virtual goods or services is not an MSB under FinCEN’s regulations.

This means a holder of bitcoins can spend those funds without any MSB registration requirement or reporting concerns regarding money transmission.

From there the guidance starts to get murky, or Murcky. Bitcoin Foundation’s general counsel posts his interpretation:

Patrick Murck: https://bitcoinfoundation.org/blog/?p=152

Following is the list of articles on this development:

Payments Source (Bailey Reutzel): http://bit.ly/ZQP5Wg
Bitcoin Magazine (Vitalik Buterin): http://bit.ly/148nx5M
FreeBanking.org (Bradley Jansen): http://bit.ly/ZqSXj1
BLOGDIAL: http://irdial.com/blogdial/?p=3488
TheNextWeb.com (Jon Russel): http://tnw.co/WBP2zW
Ars Technica (Timothy B. Lee): http://ars.to/XX0FT9
Forbes.com (Timothy B. Lee): http://onforb.es/YpshNb
http://bitcointalk.org/index.php?topic=154672.0 (Forum post: FinCEN addresses Bitcoin)
http://bitcointalk.org/index.php?topic=154754.0 (Forum post: I am a / “AMLCA”)
http://1.usa.gov/117bnWj (FinCEN FIN-2013-G001)
National Journal (Brian Fung): http://bit.ly/YIItbA
Wall Street Journal (Jeffrey Sparshott): http://on.wsj.com/Z4rF1T

Further articles will be added to the list as they are discovered. Feel free to post a replly with any that were missed.

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Aljazeera - Bitcoin Rises, by Nicolas Mendoza

Wed, 13 Mar 2013 13:30:59 +0000

Aljazeera - Bitcoin Rises, by Nicolas Mendoza:

bitcoinnews:

Nicolas Mendoza (@NicolasMendo) follows up to his May 2012 article in Al Jazeera with the more recent developments. Excerpts:

“What we have here is radically different from the current system where money creation is based on debt, politically motivated, surrounded by secrecy, inflationary, unilateralist, colonialist, and exploitative of powerless nations, etc. The flaws in the design of modern currency are at the roots of the social and ecological disasters we face today.”
-
“An economy built on debt-based currency can only “grow”, the 2008 economic collapse showed us, by putting more people deeper into debt. Inevitably, this leads to a society where the many always owe more and more to the few, eventually making democracy a farce. Bankers, as Robert Fisk puts it, are the dictators of the West.”
-
“The P2P money creation system that Bitcoin proposes is truly something else as it deflates the dark power of debt-based money in society; it allows envisioning a world where the wheels of debt are no longer at the origin of economic activity.”

- http://aje.me/YrpzWo
- http://bitcointalk.org/index.php?topic=152671.0 (Further discussion of the article)

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ALERT: Serious Bug in Bitcoin Client, Details To Follow

Tue, 12 Mar 2013 00:56:00 +0000

bitcoinnews:

There is a developing situation in which a bug in the Bitcoin client software is causing a blockchain fork. Those using Bitcoin-Qt v0.8 should not trust the transactions as being non-reversible even if the client shows the transaction having received six or more confirmations.

This latest on the situation may be monitored on the #bitcoin-dev IRC channel.

[The tl:dr on the bug … the v0.8 client software allows a larger transaction that the previous releases did not. As a result v0.7 clients aren’t accepting those blocks.]

[Upate: The original post on the BitcoinNews will include any updates.]

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Audio: Erik Voorhees on the Peter Schiff Show BitInstant’s...

Fri, 08 Mar 2013 22:09:00 +0000

Audio: Erik Voorhees on the Peter Schiff Show

BitInstant’s Erik Voorhees (@ErikVoorhees) was a guest on the Peter Schiff show, hosted by Thomas E. Woods (@ThomasEWoods).

The interview gives a general overview of Bitcoin, from a libertarian perspective, and concludes with Q&A with calls from the show’s listeners.

Runtime: 31 minutes.

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Jon Matonis - First Bitcoin Hedge Fund Launched

Fri, 08 Mar 2013 19:50:02 +0000

Jon Matonis - First Bitcoin Hedge Fund Launched:

bitcoinnews:

Forbes contributor and Bitcoin Foundation board member Jon Matonis (@JonMatonis) writes an update on BitcoinFund (from Malta), the first Bitcoin Hedge Fund. Excerpts:

“Institutional investors and hedge fund managers have secretly sought a regulated investment vehicle for bitcoin placements. Malta-based Exante Ltd. has the solution with their new Bitcoin Fund.”
-
“Authorized and regulated by the Malta Financial Services Authority, Exante offers the Bitcoin Fund with an initial minimum subscription of $100,000 and a 0.5% upfront subscription fee.”
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“U.S. persons and U.S. institutions will not be able to access the fund directly.”
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“The fund charges an annual management fee o.5% of Net Share Value payable monthly in order to provide the sophisticated security and wallet management that one would expect with such large amounts at stake.”
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“Using Shamir’s Secret Sharing algorithm, the container password is then split into three parts utilizing a 2-of-3 secret sharing model.”
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“Exante intends to provide a two-way secondary market for the trading of fund shares [which will] provide shorting opportunities without having to own the underlying asset.”

- http://onforb.es/WyW6Q1
- http://bitcointalk.org/index.php?topic=150659.0 (Further discussion of the article.)

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MTGUSD Redeemable Code - The End Is Neigh

Fri, 08 Mar 2013 14:51:00 +0000

Mt. Gox today notified its customers via e-mail that the Mt. Gox redeemable codes used for transferring U.S. dollars (USD) and Canadian dollar (CAD) funds will no longer be issued beginning April 10th, 2013.

The message reads:

Generation of USD and CAD redeemable codes will not be possible due to legal issues.

The codes, sometimes alternatively referred to as vouchers or coupons, enable account-to-account (A2A) transfers between Mt. Gox customers. The codes have been popular for those trading over-the-counter as a method for exchanging between other payment systems such as Dwolla to or from a Mt. Gox exchange account.

For instance, after selling bitcoins on Mt. Gox a trader Bob might be looking to receive $100 of Dwolla funds quickly so that he can make a purchase where only Dwolla is accepted for payment. Alice has funds in her Dwolla account and is looking to transfer those funds into Mt. Gox for immediate credit. So Bob and Alice agree to trade. Alice sends $100 to Bob using Dwolla, Bob creates a $100 Mt. Gox redeemable code and sends that securely to Alice. Then Alice redeems that code into her Mt. Gox exchange account. When that happens, Dwolla only knows of a $100 transfer from Alice to Bob. Mt. Gox only knows of a $100 transfer from Bob’s account to Alice’s account.

Because the codes are pseudonymous, they function as a bearer instrument. In the example above, rather than redeeming Bob’s voucher code herself Alice could have later traded that redeemable code with any other party or the code could change hands multiple times even before being redeemed.

This may explain why “legal issues” were cited. When Seattle-based Coinlab transitions Mt. Gox’s customers from the U.S. and Canada next month, these redeemable codes would likely be considered as forms of “prepaid access” (formerly known as “stored value” instruments). In the U.S. an issuer of prepaid access is required to be licensed as a money transmitter — something Mt. Gox has not done and discontinuing this product means they likely won’t be applying for that status.

Mt. Gox isn’t the only organization to get caught up with these restrictions. Last week the State of Illinois issued a cease and desist order to payments provider Square for their prepaid access product (digital gift cards) which differ very little from Mt. Gox’s redeemable codes.

Mt. Gox will continue to offer redeemable codes for bitcoins (BTC) as well as for another dozen fiat currencies that the exchange offers for its customers funds (e.g., EUR, GBP, JPY, HKD, NZY and more).

Some merchants, such as Cinfu hosting, had been accepting the MTGUSD redeemable code as a payment method alongside other digital currency payment methods. These merchants could simply switch to another currency that is still supported (e.g., MTGEUR) however Mt. Gox’s U.S. and Canadian customers will likely be unable to hold wallets for any foreign currency.

Some exchanges, including Bitcoin-24.com and WeExchange.co, currently accept MTGUSD redeemable codes as a funding method. Other exchanges that previously used these tools no longer do. Exchange intermediary BitInstant, for example, now transfers funds directly to a specific Mt. Gox account rather than delivering a redeemable code to its cash-paying customers.

There are other issuers of USD redeemable codes, such as AurumXChange’s VouchX vouchers but no other issuers have taken any steps towards dropping support for the redeemable codes.

Mt. Gox had never shared publicly how much transaction volume occurred through these redeemable codes so the impact of them being discontinued is unknown. Perhaps the over-the-counter traders will be the only ones to notice.

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ADAM DRAPER: Boost VC Welcomes Bitcoin

Tue, 05 Mar 2013 01:32:43 +0000

ADAM DRAPER: Boost VC Welcomes Bitcoin:

adamdrap3r:

I am excited about Bitcoin. It’s exciting to watch a global digital currency get traction.

If you wish to learn more about Bitcoin, there is a great video, or read up here.

The primary advantages of Bitcoin are:

Speed and price. You can transfer money anywhere in the…

[Original: http://adamdraper.com/post/44563343164 ]

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Video: Bitcoin Symposium at NH Liberty Forum A discussion on...

Tue, 26 Feb 2013 06:46:00 +0000

Video: Bitcoin Symposium at NH Liberty Forum

A discussion on Bitcoin at the 2013 New Hampshire LIberty Forum, an annual gathering of voluntaryists and Libertarians, included panelists Erik Voorhees (@ErikVoorhees), Roger Ver (@RogerKVer) and Charlie Shrem (@CharlieShrem). There are 8-separate videos with each under 10 minutes in length:

http://www.youtube.com/watch?v=xkgc00ANETc (Part 1)
http://www.youtube.com/watch?v=giT7KT6i9rU (Part 2)
http://www.youtube.com/watch?v=NGMDwx5b6F4 (Part 3)
http://www.youtube.com/watch?v=irTcRUoC0cc (Part 4)
http://www.youtube.com/watch?v=YbLYmjXsydM (Part 5)
http://www.youtube.com/watch?v=MJCLCQ8zTC4 (Part 6)
http://www.youtube.com/watch?v=4y4Z-k4mJFU (Part 7)
http://www.youtube.com/watch?v=RAAjFF_Wwfk (Part 8)

It was at that forum that Jeffrey Tucker (@JeffreyATucker), publisher and executive editor of Laissez-Faire Books, used for the first time the Bitcoin ATM. He later featured that ATM in his post Top Alternatives to Paper Money.

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Guardian - Remittances Around The World The photo above...

Mon, 25 Feb 2013 14:58:00 +0000

Guardian - Remittances Around The World

The photo above accompanies a Guardian article featuring an interactive map that shows the remittance flows for the particular nation selected.

The ability to explore the map on a nation-by-nation basis (as shown above for Peru) is available only after clicking the “Leave Tour” button from the application.

Bitcoin, as a decentralized digital currency with no authorative source is beginning to gain some traction as a remittance payment method. Bitcoins are becoming fairly easy to acquire inexpensively in many areas (e.g., U.S., UK, Canada, and Europe) which correspond to areas where much of the remittance flows originate.

Since most remittance recipients use the funds for paying expenses and shopping, bitcoins aren’t (yet) quite useful to them and there are still just few methods to cash out bitcoins with a local exchanger. These methods are improving with independent exchange agents listed on LocalBitcoins.com now providing cash-out service in over 700 cities worldwide and the upcoming launch of BitcoinWireless which will let bitcoins be used to pay for mobiile phone service in more than 100 countries.

Bitcoin may have an even bigger impact for those who currently send remittances by enabling investment capital to flow quickly and cheaply to where the opportunities lie. If there is more work near a worker’s home then there is less need for that worker to live away from the family in order to provide for them. Knowledge workers are already the first to be able to work for a foreign employer without having to live abroad. And since bitcoin payments have no concept of borders, the employer can sent bitcoins to the employee at a lesser cost to both employer and employee. Increasingly these knowledge workers with foreign employers are requesting that their compensation be paid in bitcoins, and employers are increasingly willing to oblige.

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Bitcoin version 0.8.0 released

Mon, 25 Feb 2013 11:58:00 +0000

Bitcoin version 0.8.0 released:

A significant new release of the Bitcoin-Qt and Bitcoind clients from Bitcoin.org, v0.8.0, is now available for download.

This v0.8 release includes a number of new features, performance improvements and bug fixes and is the first major feature release since the v0.7 release about five months ago. This release was designed to improve performance and to handle the increasing volume of transactions on the network.

A subset of the improvements, features and fixes includes:

Compatibility with new security features in OSX 10.8 and Windows 8.
New, dramatically faster database platform for storing the blockchain (No longer is BDB used except for wallet.dat)
Parallel operation for improved performance on systems with multiple CPUs and multi-core CPUs.
“Bloom filtering” for supporting requests from lightweight peer nodes.
Fix for the “change address ordering” regression issue which impacted transaction privacy.

With a huge increase in the amount of transaction activity the Bitcoin network is receiving, previous versions of the Bitcoin.org client had been taking an unacceptable amount of time to synchronize the blockchain. This release will reduce the amount of time to reach the synced status to a level that should be acceptable for those with even the least capable computing hardware.

The first time v0.8 is ran the program will migrate the blockchain data and reindex, a process that can take several hours on lower end computing hardware. Proper shutdown from a previous version before installing this release is required.

While it is recommended to back up the wallet.dat before performing this upgrade, the update will not overwrite an existing wallet or blockchain database.

When performing a new installation (versus upgrading from a previous release), a file called bootstrap.dat may obtained as a torrent and placed in the Bitcoin data directory to speed the installation process.

http://bitcoin.org/releases/2013/02/19/v0.8.0.html
http://sourceforge.net/projects/bitcoin/files/Bitcoin/bitcoin-0.8.0
http://bitcointalk.org/index.php?topic=145184 (Announcement)
http://bitcointalk.org/index.php?topic=145386.0 (Bootstrap.dat thread)
http://gtf.org/garzik/bitcoin/bootstrap.dat.torrent

Alternatives to the Bitcoin.org client, now featured on the Bitcoin.org Clients page, have seen updates recently as well:

MultiBit: A secure, lightweight, international Bitcoin wallet for Windows, MacOS and Linux. No blockchain download required.
Armory (Alpha): An open-source wallet-managment platform for the Bitcoin network.
Electrum: A lightweight Bitcoin client, based on a client-server protocol. No blockchain download required.
Bitcoin Wallet: A standalone wallet for Android devices that uses simplified payment verification (SPV).

A review of various wallet options was recently updated by Bitcoin Magazine and is a good resource when choosing a wallet.

Previous Posts - Twitter: @BitcoinMoney

jerrybrito: I was on NPR’s Morning Edition this AM talking with...

Wed, 06 Feb 2013 15:38:00 +0000

jerrybrito:

I was on NPR’s Morning Edition this AM talking with Cyrus Farivar about the legality of gambling using bitcoin. What I find telling is that the casino operators, who are making a tidy profit, are keeping everything in bitcoin and at no point converting to dollars or other currency.

(MP3 download)

Previous Posts - Twitter: @BitcoinMoney

Thomas Edison, Bitcoin, and Intrinsic Value

Jim — Sat, 02 Feb 2013 17:05:00 +0000

A Response To Smiling Dave's Article Named, "Bitcoin and Intrinsic Value"

Smiling Dave is a blogger who has in an interest in Austrian Economics. He has written several articles about the demise of bitcoin. In one of this articles, "Bitcoin and Intrinsic Value," he describes a hypothetical situation where Robinson Crusoe is isolated on an island where he finds gold:

The first value comes from answering the question, “What could Robinson Crusoe do with [gold]?” Crusoe had nobody on his island to buy from or sell to, so the gold coin had no use as money. But it did have some use. He could use it for jewelry, if he was vain. He could use it as a component of his computer chips, or whatever.

OK, now Crusoe comes off the island back to civilization. He finds that everything has a price pretty much as he valued things on the island, except for one thing. His gold coin, he finds, is worth much more than he thought. “Why are people setting such a high value on something of so limited a use?” he wonders. Then he finds out that gold is the coin of the realm. Aha, that explains it. It has a use in civilization it never had on the island. You can easily buy stuff with it, anything from everyone. That is a useful feature, that increases the usefulness, and thus the price, of gold.

- Smiling Dave

In these two paragraphs Smiling Dave is explaining why gold has intrinsic value, and claims that bitcoin has no intrinsic value because it has no use on the island. I am going to describe a situation where bitcoin does indeed have intrinsic value.

Imagine a scenario where instead of Robinson Crusoe another man named Thomas Edison, a prolific inventor, somehow became stranded on an island. Thomas Edison loved to invent new contraptions, but in order to secure his distribution rights he had to file an application with the patent office. Because he was isolated on the island he felt it was futile to invent unless he was able to prove with 100% certainty that he was the first person to conceptualize his ideas. The patent office would only grant rights to Thomas Edison if he submitted his patent application before anyone else did, but maybe they would grant him some leniency since his ship was capsized a day before. He knew that it could be a matter of days that other competitors could reach the patent office. Is there any way for Mr. Edison to prove that he was the first person to think of his new idea?

As he was thinking a bottle was washed ashore with a note and an algorithm explaining how it was possible to timestamp information inside something called a "blockchain". The note was signed by "Satoshi Nakamoto," and it contained a special key which had tokens that allowed him to timestamp his latest invention. Mr. Edison followed the instuctions and implemented the algorithm, which he did with pen, paper, and a whole lotta mathematics. Without a doubt he had proof that he was the first to come up with his idea, even though no one was on the island.

OK, the following day a ship picks up Thomas Edison and returns to civilization. He finds that everything has a price pretty much as he valued things on island, except for one thing. His tokens were also known as bitcoins, and he finds that it is worth much more than he thought. "Why are people setting such a high value on something of so limited use?" he wonders. Then he finds out that the bitcoin is the coin of the realm. Aha, that explains it. It has a use in civilization it never had on the island. You can buy stuff with it. That is a useful feature, that increases the usefulness, and thus the price of bitcoin.

Conclusion: Did Thomas Edison just solve a block using pen and paper? My point of the story is that it is feasible to perform bitcoin transactions on the island since it is based on mathematics. One could even change the story slightly and include a mining rig on the island, which would make the story even more believable, or there could be Internet access on the island, which allowed him to broadcast his transactions to the bitcoin network via satellite or whatever. Or, maybe Satoshi included a solved block inside the bottle. Nevertheless, it is still possible, however improbable, that with just pen, paper, and mathematics for someone to utilize the bitcoin protocol. The time-stamping ability of bitcoin is an intrinsic property and that is why bitcoin has intrinsic value using Smiling Dave's logical foundations to formulate his arguments.

The Sequel: Thomas Edison returns to the island to put a cryptographically signed message in a bottle so anyone in the universe will know he was the one who wrote the original message. Cryptography has intrinsic value...

Transfer of Wealth To Asia Accelerating Faster Due to Unreasonable U.S. Regulation. U.S. Losing Bitcoin Race

Jim — Fri, 24 Feb 2012 10:19:00 +0000

Politicians in the United States frequently talk about the transfer of wealth to China. Jobs are moving from the U.S. to China due to lower costs. Most of the manufacturing jobs that formerly existed in America have been transferred to China, Vietnam, South Korea and other Asian countries. There is, however, another transfer of wealth that is occurring that is not so apparent to government authorities. The future of banking jobs, financial institutions, and anything involving money transactions are also beginning to move to countries outside of the U.S. Currently the value of the U.S. dollar is strong compared to other currencies, but this will soon change. The U.S. has too much regulation, overhead, and red tape over the transmittance of money. If it were not for needless U.S. regulation more successful bitcoin companies would have been created on U.S. soil, thus creating more jobs. Instead companies such as “Mt. Gox”, based in Japan, and “Bitcoinica”, created in Singapore/China, are completely dominating the bitcoin market. The U.S. is destroying itself from the inside because of excessive regulation.

In America, credit card companies, banks, and PayPal charge high fees when compared to other systems. Expect to pay 2-3% fees for purchases that are under $10. Some may argue that these fees protect the consumer from fraud because it allows credit card companies to perform charge-backs on the merchant. In China, however, the banking system works differently and favors the merchant instead of the consumer. Most transactions in China are irreversible when using a system like Alipay. Alipay is the most popular payment website in China with hundreds of millions of active users. According to Zhoutong, founder of Bitcoinica:

"...the root of all reversibility is the Visa/MasterCard credit card system used by Americans. Chinese banking system is entirely different. Chinese people don't use Visa/MasterCard for domestic purchases. [Online payments] require strict authentication, banks are usually not responsible for fund losses, etc. Everything is very Bitcoin-like, and non-reversible. More than half of Alipay's transactions are escrows."

So in the Chinese system they only pay for what they need. If for some reason they need to use escrow then they can pay for escrow services. In the U.S. credit card companies force consumers to pay for escrow services even when you buy a Happy Meal from McDonald’s. This can be seen as a waste of consumer’s money. The merchant loses, the consumer loses, and the credit card companies win. The Visa/Mastercard credit card system is inefficient when compared to the Chinese.

Why do Americans continue to use Visa and Mastercard if these credit card companies are practically stealing from them? Big banks and credit card companies control the financial plumbing of United States by lobbying Congress and state legislators to create laws which make it difficult for small start-up companies to be competitive. A small business attempting to go into the business of transmitting money would have to hire expensive lawyers to follow federal and 50 state laws. There is a general fear among American entrepreneurs of breaking laws, paying hefty fines, and/or going to prison. These feelings of uneasiness and fear has stifled innovation in the financial sector. For example, FaceCash, has been involved in a dispute with the California government over the Money Transmission Act (MTA). For over seven months Aaron Greenspan, founder of FaceCash, has been trading snail mail with government authorities who have no idea how the MTA laws should be enforced. In that same time frame Bitcoinica and Mt. Gox grew from practically nothing to trading around tens of millions of dollars worth of bitcoins a day.

Another small company named BitInstant is being forced to move from New York City to New Hamphire because they cannot afford lawyers to take care of all of the legal paperwork. Erik Voorhees, the Director of Communications for BitInstant says:

"We've not even been in business for a full year, and yet we've spent tens of thousands of dollars hiring lawyers to consult us on which licenses we need, in which states, and more important, they advise us on which areas of business we must stay away from because those areas open up new requirements and huge financial costs. Unfortunately, in practice this means many of our best ideas have simply been thrown into the waste bin - not because they would be illegal, but because our lawyers have said that pursuing them means paying hundreds of thousands of dollars in license fees, and much more time on the lawyers' invoices."

Mr. Voorhees continues on later saying, "...our margins are too thin, and our risks too great, to comply with perpetually arduous regulations - we will either fall apart, or be forced to go somewhere else."

Over-regulation is beginning to destroy another American dominated sector. The U.S. will lose the bitcoin race to other countries since most bitcoins will be owned by companies beyond the borders of the U.S. In addition, not only will Asian companies own more bitcoins but Chinese individuals may own more bitcoins than American people. Why? Because the Chinese are now able to buy bitcoins with Alipay while Americans cannot with PayPal. PayPal, Mastercard, Visa, and even Google Checkout have rules which make it impossible for merchants to sell bitcoins. It is ridiculous that Chinese individuals have more freedom to buy bitcoins while citizens of the United States are forced to buy bitcoins through “non-standard” methods due to excessive laws.

The pace of financial innovation is occurring faster outside of the United States and it is due to a mountain of outdated laws, piles of paperwork, inefficient government, and a lack of understanding of technological concepts by legislators. Will the United States continue to let this virtual gold slip through its pockets?

FOX Reports on Bitcoin

Jim — Sun, 27 Nov 2011 19:25:00 +0000

Buy Bitcoins With PayPal or Credit Card

Jim — Sun, 30 Oct 2011 18:24:00 +0000

Memory Dealers is proud to announce that it's acquired the rights to sell the famous Casascius Physical Bitcoins. Customers can purchase these physical Bitcoins (which have hologram-coded private keys) with credit cards or Paypal. Each coin is worth its face value in BTC and is cast in brass with the special tamper-proof hologram on the back.

Available versions:
1 BTC
25 BTC (plated with real gold)

FREE shipping on orders over $50 within the USA.

To learn more about these physical Bitcoins, visit www.Casascius.com
(note: avoid Casascius.net, it is a fraudulent phishing scam)

Click HERE to purchase from MemoryDealers.com

Bitcoin A Popular Target for F.U.D. (Fear, Uncertainty, and Doubt)

Jim — Wed, 26 Oct 2011 14:54:00 +0000

Eric Mack of CNET news has just released an article titled, "Are physical Bitcoins legal?" He compares it to the recent case of "Liberty Dollars", which appear to be designed to look like U.S. legal tender.

Liberty Dollar

The man responsible for creating the Liberty Dollar, Bernard von NotHaus, was convicted of "making coins resembling and similar to United States coins." When I look at a Casascius bitcoin it does in no way resemble a U.S. coin.

Casascius Bitcoin

Here are some other alternative currencies that were created that are completely legal.

Ithaca Hours (Legal)

BerkShares (Legal)

Twin Towers Silver Coin (Legal)

Happy Halloween Silver Coin Available at Apmex (Legal)

Zynga ZCoins (Legal)

Facebook Credits (Legal)

Bitcoin Set To Unleash Massive Tsunami Wave Of New Development With New Features

Jim — Mon, 24 Oct 2011 13:03:00 +0000

Bitcoin will be more than a currency if multi-transactional features are added to the core code. Right now the developers of the crypto-currency are designing initial support for new types of transactions. What are multi-transactions? Multi-transactions allow the possibility of ‘contracts’. According the wiki, “A distributed contract is a method of using Bitcoin to form agreements with people via the block chain. Contracts don't make anything possible that was previously impossible, but rather they allow you to solve common problems in a way that minimizes trust.” This means services based on cryptographic trust are now possible that was previously only possible with paper, pen, and a line to sign. The new possible services that could be developed include escrow services, secured deposits, dispute mediation, assurance of goods, smart property, etc. These features would eliminate the need for paper contracts in many different industries. In addition to banking, currently existing sectors that could be affected include title companies, lending services, billing services, ownership of anything digital (cars, phones, computers), home loans, car loans, funding services, etc. The cost of creating these contracts in bitcoin will be practically zero.

Suppose there is a person called ‘A’, ‘B’, and ‘C’. The new transactions could include the following:

(A and B)
(A or B)
(A and B) or C

Bitcoin will be more than a global currency. Right now it can replace paper based cash. It is now being designed to be able to replace paper contracts in many financial industries. Bitcoin could be the world’s first global cryptographic contract system. Anyone will be able to do business with anyone, anywhere in the world and in an cryptographically trustworthy manner.

Why It Is Impossible For Bitcoin To Fail

Jim — Fri, 21 Oct 2011 13:17:00 +0000

The media has been lampooning bitcoin by proclaiming that bitcoin has failed. For example, popular technology columnist John C. Dvorak has said that bitcoin is a “screwball scheme to bypass the system” and that bitcoin is “bogus currency”. In another article written by Tim Worstall of Forbes magazine, he declares (for the second time) the death of bitcoin in an article titled, “The End of Bitcoin Part II”. Timothy B. Lee a contributor to the online website, “Ars Technica”, writes a gloomy article that announces bitcoin has “imploded” due to a 90% reduction in price.

There is no denying that bitcoin has dropped in price, but the question is has it failed? Mr. Dvorak compares bitcoin to other failed currencies including Beenz, sponsored by Oracle dictator Larry Ellison, and Flooz a currency sponsored by Whoopi Goldberg. What Mr. Dvorak fails to realize is that Flooz and Beenz are corporations, central authorities that control the existence and value of their monetary units they have created. If the corporation fails, perhaps by filing for bankruptcy, by dissolution, or even by, heaven forbid, a nuclear strike from a war then the currency will fail. Bitcoin, however, has no central authority and because it is decentralized it cannot fail. Bitcoin is based on a peer-to-peer (P2P) network based on thousands of users running the bitcoin software client. If one were to attempt to stop the proliferation of bitcoin one could argue the entire Internet would have to be stopped.

Bitcoin can drop in price, but it is highly unlikely, most likely impossible, that the value of bitcoin will drop to zero. Using the price of bitcoin as an indicator of failure is like using the price of gold to determine failure. Gold cannot “fail”. Bitcoin cannot “fail”.

Bitcoins Give Rise to Crypto Casinos

Jim — Sun, 28 Aug 2011 11:03:00 +0000

Many online casinos use auditing services that allow accountants to verify a casino's winnings. Companies such as PricewaterhouseCoopers are hired so online casinos can earn a certificate to proudly display on their website that claims they are honest and trustworthy. Gamblers have to trust the auditing service and the casino that their games are completely fair. There are some cleverly developed gambling websites, however, that utilize cryptography to provide a greater level of trust that no human-based auditing service can provide. Cryptographic casinos allows patrons to verify each bet and that the games are fair.

One such gambling service is "bitlotto.com" which operates on top of the bitcoin network. To play, one needs to send 0.25 bitcoins to a bitcoin address. The transaction itself is the lottery ticket. Because the bitcoin block chain is visible to anyone you can see how many bitcoins were sent to that address, and thus how many lottery tickets have been bought for that specific lottery draw. BitLotto claims to be "anonymous, transparent, and cheat-proof with a 99% payout."

Another gaming site that uses a "crypto-proof" to prove the honesty of their games is "bitjack21.com". This blackjack site allow you to bet with bitcoins but the proof does not use the bitcoin blockchain. Instead, bitjack21.com developed their own cryptographic method that relies on a random number generated by the client computer that predetermines the location of each card before they are dealt. Once a hand is complete the user can verify that the cards that were dealt were in the same order as the order generated by the random number, and that card positions in the deck did not change during the hand. bitjack21.com claims they are "the only bitcoin blackjack site on the internet that can mathematically prove, in a verifiable manner, that [they are] 100% honest."

Cryptographically fair games provide a much higher level of trust to the end user. If you want to gamble online look for gaming sites where you can check and validate each wager that you will make. Remember to gamble responsibly and at your own risk. :-)

Buy Bitcoins Locally With Cash At Chase or Wells Fargo

Jim — Mon, 15 Aug 2011 21:36:00 +0000

http://www.betabeat.com/2011/08/15/bitoin-exchange-chase-wells-fargo-exch/

Update: ExchB.com is not longer in service.

You Can Now Buy Bitcoin With Cash at Any Chase or Wells Fargo

By Adrianne Jeffries 8/15 8:36am
The Redwood City-headquartered ExchB, founded in May 2011, just started accepting cash and check payments via brick-and-mortar banks to speed up the sometimes-lengthy process of crediting an account with USD in order to buy BTC. “ExchB customers can walk up to any of over 15,000 locations nationwide and make a cash deposit at any Chase or Wells Fargo branch,” president David Sterry wrote last week. “Simply walk up to the teller, deposit your cash or check, and e-mail us an image of your receipt. Cash clears when we verify your e-mail and check deposits typically clear overnight.”

Right now, it’s tough to buy Bitcoin with cash unless you’re meeting someone face-to-face. But in the wake of the most recent Bitcoin crash, a few high-profile incidents that drove the price down to $5 or so from around $13, it’s tough for any exchange, even a U.S.-based one with a phone number that goes to voicemail, to convince users of its trustworthines.

Although trust in Bitcoin is gaining again. MyBitcoin users report receiving the .49 percent refund they were promised after the popular service shut down, claiming it was hacked. The price of the e-currency has rebounded to $11 or so this morning.

ExchB, which bills itself as the first U.S.-based Bitcoin exchange, also announced a few new deposit methods and no fees on check withdrawals.

$10,000 Bet that Bitcoins will outperform Gold, Silver by 100X over the next two years

Jim — Mon, 08 Aug 2011 19:36:00 +0000

Bet Argument Update by MemoryDealers.com:

Bitcoins are the world's first peer to peer, distributed electronic currency. This means that they can be sent directly from person to person over the internet, without needing anyone's help or permission. They are free to send, receive, or to store, and they can be as public or anonymous as you want them to be.

With bitcoins, a person in California can send $20,000 USD worth of value to a person in Russia in a matter of seconds, for FREE.

In comparison:
Paypal would cost about $600, and take a few seconds.
Credit card would cost about $600 and take a few days, to a week, or more.
Bank wire would cost about $40, and take one or two days.

By all of the traditional payment methods, any government can block your transaction for any arbitrary reason.
Because Bitcoins are peer to peer, no one can block your transaction for any reason, ever.
A recent example of this property of Bitcoin being put to use, is with the online gambling industry.
Recently the USA Federal government blocked credit card companies and banks from being allowed to process gambling related transactions.
Since then, numerous online gambling sites that use Bitcoins have launched.
Because Bitcoins are sent over a distributed, peer to peer network, governments are powerless to stop them.

With traditional government issued currencies, politicians are always tempted to just print more whenever they have a budget short fall due to the most recent war, bailout, or “stimulus” package.
When governments do this, all the citizen’s savings lose value in real terms.
With Bitcoins, governments can never take the value of your money in this way.
Because the software is open source, we know that there will never ever be more than twenty one million Bitcoins. No one will be able to provide themselves with additional bitcoins by decree, as happens so often with traditional government issued currencies.

Bitcoins are also resistant to government tracking or seizure. With just a few steps, anyone can store their bitcoins in such a way that governments or other theives are powerless to access them without the correct password.

Bitcoins may also make paying most taxes voluntary since governments will lose the power to track or control who sends bitcoins to whom.
The IRS, DEA, Customs and Border Patrol, and other agencies will no longer be able to seize peoples money at will.

Bitcoins may also bring an end to war. Currently governments force all of their citizens to pay for war efforts whether they are in favor of the war or not.
Once Bitcoin use is wide spread, the people in favor of the wars will no longer be able to force the people against the wars to pay for them.
If suddently, the half the population who does not support the wars stop paying for them, it will quickly become much more expensive for the suppoters of war to continue funding it.
I suspect that many people who claim to be in favor of the current wars would change their mind if they had to pay for all of it themselves.

Because Bitcoins are limited to 21,000,000 and they have so many advantages over traditional government issued currencies,
once even a small percentage of the economy begins using bitcoins, the price will quickly soar to thousands of dollars per Bitcoin or more.

In short, I believe bitcoins are the most important technological revolution since the invention of the internet, and because of that, their price will skyrocket in comparison with Gold, Silver, the US stock market, and US Dollar.

https://bitcointalk.org/index.php?topic=34320.0

Another Bitcoin Mining Rig

Jim — Sun, 24 Jul 2011 23:53:00 +0000

Bitcoin Tattoo

Jim — Mon, 11 Jul 2011 20:13:00 +0000

Why will bitcoin succeed? Well, there are many valid mathematical, philosophical, and economic reasons why bitcoin could prevail. Here is another reason: The concept of bitcoin is so powerful that it can instill passion, desire, and inspiration. People will even get a permanent tattoo to show support for bitcoin!

Here is a proof video of it getting done:

http://www.youtube.com/watch?v=9d_fLh_Vn4o

http://forum.bitcoin.org/index.php?topic=27958.0