Bitcoin News

The Bitcoin Trader - Bitcoin's Liquidity: A Third Look

Sat, 26 May 2012 22:04:28 +0000

The Bitcoin Trader - Bitcoin's Liquidity: A Third Look:

GoWest of The Bitcoin Trader (@GoWestBTC) looks at how much sway $50K USD has when buying or selling bitcoins today versus previous points in time. Excerpts:

“The market is looking considerably more stable. Today, a $50,000 purchase would only move the price from $5.11 to $5.16, a 1% increase.”
“The Bitcoin market has clearly matured significantly, making it increasingly stable and usable as a currency; something many merchants have been waiting for before deciding to accept Bitcoin.”

- http://bitly.com/MI6uMg

Bitcoin Money - Gone With The Cloud (Bitcoinica Kept No Backups)

Fri, 25 May 2012 20:22:00 +0000

Bitcoin Money - Gone With The Cloud (Bitcoinica Kept No Backups):

A post on the Bitcoin Money blog (@BitcoinMoney) describes the developing story from Bitcoinica following the May 11th security incident which has shuttered the service and prevented customers from accessing their funds. Excerpts:

“Revealed today was something that many traders had begun to suspect — Bitcoinica kept no ‘off-site backups’”.
“Without the customer and transaction databases though, the service will have a hard time verifying customer claims. The claims form asks for customers for their USD and BTC balances and to choose the qualifier ‘Exact’, ‘Approximate’ or ‘Guess’.”
“Most individual traders do not keep this type of information to be able to provide an accurate claim.”
“The service reported that it had about 5,000 accounts.”
“Many of these accounts were opened with no more information than an e-mail address.”

[Update: A later reply by Zhou Tong in that forum thread does reference “all kinds of records” and specifically describe a set of older records being available which can help in the account reconstruction process. The as-of date for that set of records is purposely not being shared for obvious reasons.]

- http://www.bitcoinmoney.com/post/23748723157

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Gone With The Cloud - Bitcoinica Made No DB Backups Revealed...

Fri, 25 May 2012 20:11:00 +0000

Gone With The Cloud - Bitcoinica Made No DB Backups

Revealed today was something that many traders had begun to suspect — Bitcoinica kept no “off-site backups”. Not only did Bitcoinica’s hacker steal 18K BTC of funds (worth about $80K USD) but that individual had also deleted the Rackspace Cloud Server instances which held the service’s customer account and transaction history databases.

The financial service’s USD funds remain intact and 80% of their bitcoin funds were kept in an offline wallet, so the only remaining gap that would have been needed to make customers whole was the remaining bitcoin funds (about $80K USD worth). Without the customer and transaction databases though, the service will have a hard time verifying customer claims. The claims form asks customers to provide their USD and BTC balances and to choose the qualifier “Exact”, “Approximate” or “Guess”.

At the time of the hack, many accounts still had open positions in the service’s BTC/USD contract for difference market (being either long or short the BTC/USD) so those account balances will be affected by gains or losses when those positions are closed out. Presumably this will be at the level just under the $5 spot where the BTC/USD was at when the service was hacked. The claim form asks for the net position and the cost basis for those open positions. Most individual traders do not keep this type of information to be able to provide an accurate claim.

The service’s founder, teenage college-student Zhou Tong, is no longer a part of the organization but is providing information as to what records the service might have available to help administer account recovery. The service reportedly still has its e-mail messages which sent out verifications for deposits, withdrawals and transaction executions as well as in/out transaction information with financial partners and includes bank transactions as well as redeemable code transactions that transfer funds to and from Bitcoin exchanges.

Organizations that handle customer’s funds don’t often trust cloud computing for their customer financial transaction data. This was the second security incident that Bitcoinica had where root access to cloud infrastructure was achieved using attack vectors that wouldn’t normally be available for self-managed systems. As far as recovering, even those organizations that do use cloud infrastructure are advised to have sufficient archives with a recovery plan to recover should the cloud provider have technical issues or should some other service problem arise.

It is possible that the hacker still holds a copy of the database though no public leak has occurred, even though the hacker has communicated in a unique way the message “expect mass leak soon”. Nearly all the stolen bitcoin funds appear to remain unspent by the hacker, though some amount of the funds were given away Robin Hood-style recently.

The service reported that it had about 5,000 accounts though some of those accounts would have low or no USD and BTC balances (e.g., under 1 BTC and/or under $5 USD). Additionally, some accounts still hold negative balances. That can occur for accounts that use the highest leverage levels but see forced margin call trading occur during periods when there is great exchange rate volatility.

Many of these accounts were opened with no more information than an e-mail address. To claim funds, more complete information is required, and in many instances where the claim amounts to any funds of significance it is likely a photo ID will be required.

There will be a few accounts where a lot of money is involved. A few months ago the service had begun offering interest on USD and BTC balances to attract a wider level of liquidity that would be used for providing leverage to Bitcoinica’s customers.

Earlier this week a forum user “tseale” (possibly by Tihan Seale, who is already known for his investment in Bitcoin startup CoinLab) posted information that has yet to be confirmed. The statement asserts that Bitcoin Consultancy is a General Partner in Bitcoinica LP. Bitcoinica LP was registered as a Financial Services Provider in March.

The Bitcoinica service had been wildly popular and it had days where nearly a million dollars worth of positions were traded. For a period of time, those volumes were second only to Mt. Gox, Bitcoin’s largest exchange. There had been plans that Bitcoinica will be reopening but that will depend on a few factors Servicing customer claims is the organization’s first priority and the amount of time it will take to implement proper security measures before reopening is unknown. As the details emerge of what security and processes had been employed the organization may find it difficult to regain customer’s trust.

A competing “forex-like” service, Kronos.io, is likely to end up with a head start over a re-opened Bitcoinca, though there is likely sufficient demand for leveraged trading that more than one service could operate profitably. Having multiple, separate, providers may even bring stability as leverage extended to Bitcoinica’s customers came from the organization’s own reserves which were often insufficient for the level of demand. Traders frustrated by insufficient reserves at Bitcoinica previously had few options elsewhere.

Little did they know at the time that insufficient reserves were about to become the least of their problems.

Bitcoin Money - Discount For Cash - Advantage: Bitcoin

Tue, 22 May 2012 18:06:49 +0000

Bitcoin Money - Discount For Cash - Advantage: Bitcoin:

A post on Bitcoin Money blog (@BitcoinMoney) describes how Bitcoin as payment method can be used by merchants for competitive advantage. Excerpts:

“For every $100 worth of credit card transactions, the merchant gets only an amount in the range of $97. The difference is withheld from the merchant and become fees paid to the payment processor.”
“Bitcoin transaction fees are ridiculously low (usually under a penny, regardless of the amount being sent).”
“Additional savings to the merchant comes from the fact that with Bitcoin, there is no concept of a chargeback.”
“Bitcoin payments have another big advantage — fast settlement.Bitcoin payments received by a merchant can be used for spending within minutes.”
“The first merchants to start offering discounts for bitcoin payments are starting to arrive, however. Tangible Cryptography has begun offering prepaid wireless refills at a discount.”

- http://www.bitcoinmoney.com/post/23551708288

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Discount For Cash - Advantage: Bitcoin For a merchant, Bitcoin...

Tue, 22 May 2012 17:41:00 +0000

Discount For Cash - Advantage: Bitcoin

For a merchant, Bitcoin has properties that are advantageous over other payment networks. These advantages make it so that it costs the merchant less to accept payment in Bitcoin than it costs to accept payment using other payment networks.

Some gas stations in the U.S., for instance, are cash or debit card (ATM) only. Others will have signage displaying two separate prices, a cash price that includes a discount, and a higher price for those paying with Visa, Mastercard, American Express, etc.

This is because for every $100 worth of credit card transactions, the merchant gets only an amount in the range of $97. The difference is withheld from the merchant and become fees paid to the payment processor.

For customers, this discounted price difference is enough to cause them to patronize the merchant offering the discount. As a result, retailers can use a cheaper payment system to gain an advantage over their competitors.

With Bitcoin, transaction fees are paid by the customer sending payment. This is in contrast to traditional payment systems where fees are subtracted from the amount delivered to the merchant. Because Bitcoin transaction fees are ridiculously low (usually under a penny, regardless of the amount being sent) customers don’t even factor transaction fees in when considering payment alternatives.

Additional savings to the merchant comes from the fact that with Bitcoin, there is no concept of a chargeback.

The BItcoin payment network protocol simply does not support any mechanism that would allow the customer to dispute a payment where the transaction could later be reversed. If the customer is due a refund, then the merchant simply creates a new transaction to return funds to the customer.

For businesses without access to credit or whose cost of capital is expensive, Bitcoin payments have another big advantage — fast settlement.

Bitcoin payments received by a merchant can be used for spending within minutes. Compare this to payment networks where funds don’t settle for several days, or worse — systems like PayPal and Stripe which employ multi-day holds on funds as a fraud prevention measure.

Some of the critique of Bitcoin from economists is based on Gresham’s law. They may argue that if bitcoin is expected to rise in value, a consumer will consider bitcoins to be “good money” and will instead choose to pay with another form of payment. If the cash discount is considered in the equation however, bitcoins become the preferred payment method for the consumer.

Consumers can easily replenish funds in their Bitcoin wallets thanks to the links between banks and exchanges.

Merchants who accept bitcoins should be able to offer enough of a discount to make the payment alternative attractive enough for the customer to choose it yet at the same time keep the discount no deeper than necessary causing sales where bitcoins were used to be more profitable than any others.

While there are hundreds of merchants that accept bitcoin payments, few have offered a discount, particularly for those in low margin businesses.

The first merchants to start offering discounts for bitcoin payments are starting to arrive, however.

Tangible Cryptography has begun offering prepaid wireless refills at a discount. With a list of two dozen mobile carriers including T-Mobile, Verizon, AT&T and more (mostly just U.S.-based carriers though, for now) nearly every subscriber for prepaid wireless service can save by paying for the next refill with bitcoins.

A $50 T-Mobile refill e-code is available for $49.50 worth of bitcoins, for instance. Larger discounts are available for larger purchase denominations (e.g., 2.5% discount on the $100 card.)

Tangible Cryptography is now the second source for prepaid wireless, as BTCBuy.info started offering wireless refills weeks ago, though not at a discount.

Until there is a first wave of merchants successfully converting Bitcoin’s cost difference into market share gains, top tier eCommerce such as Amazon, NewEgg, and eBay will probably not consider accepting bitcoins directly. Fortunately, there are options for these now with SpendBitcoins (Amazon, eBay, Costco, Kroger/Ralphs/etc.) and BTCBuy.info (NewEgg) such that when these e-Code sales volumes rise to sufficient levels the companies might realize there is profit to be made when accepting bitcoins directly.

Other intermediaries such as GiftCoin.net (Starbucks, Quiznos, Chevron, Target and dozens more) are able to charge a premium even for converting bitcoins to cash (prepaid gift cards). To these retailers, that’s money they could be earning themselves. It may be just a matter of time before they come to the same conclusion.

Bitcoin Money - "Stock Market"? It’s Time To Have A Chat

Mon, 21 May 2012 22:25:11 +0000

Bitcoin Money - "Stock Market"? It’s Time To Have A Chat:

A post on Bitcoin Money blog (@BitcoinMoney) hopes to raise awareness that the Bitcoin stock market may not really be what it first appears to be. Excerpts:

“The reason for building such a system was described by one of GLBSE’s founders quite clearly: ’A bitcoin stock market, will involve 0 law, it will evolve and grow at a much faster rate than any normal stock market without so much overheads or red-tape holding it back.’”
“Buying a GLBSE-listed asset became less difficult than buying a book from Amazon.”
“Instead of this Bitcoin “stock market” being a rapidly advancing innovation for capital formation, there is instead a growing concern that the whole place is becoming a cesspool.”
“Investors seem to proceed with the belief that there is some association between the concept of listed “assets” being related to the concept of stocks or other investments made in the regulated world.”
“There are some good “assets” listed on GLBSE and more will be forthcoming. But don’t make the mistake of thinking of any of these as “equities” in any shape or form.”

- http://www.bitcoinmoney.com/post/23499116232

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Bitcoin “Stock Markets” - It’s Time To Have A...

Mon, 21 May 2012 21:27:00 +0000

Bitcoin “Stock Markets” - It’s Time To Have A Chat

Over a year ago a Bitcoin-related service named GLBSE (an acronym for GLobal Bitcoin Stock Exchange) had launched. The reason for building this exchange system was described by one of GLBSE’s founders quite clearly:

The market, when it comes will be in an unknown location. Backed up, encrypted, anonymous, secure. Away from the hands of any typical terrestrial law enforcement agency. And nothing short of banning cryptograhy and turning off the internet in most countries worldwide would be able to stop this one it begins.

A bitcoin stock market, will involve 0 law, it will evolve and grow at a much faster rate than any normal stock market without so much overheads or red-tape holding it back.

And that is the system that was built. But it didn’t necessarily thrive. It did, however, become the stepping stone that brings us to GLBSE v2, launched in March. With this release, the exchange became much more usable. Buying a GLBSE-listed asset is now easier than buying a book from Amazon.

This enabled a broader user base which then brought greater investor interest. The number of “assets” that are listed on the market exchange has exploded since v2’s launch and there are several entries showing per week on the “IPO” schedule.

The first bit of evidence indicating how successful GLBSE would be with this new audience came when the “IPO” for the GIGAMINING “asset” occurred. The IPO raised for its issuer tens of thousands of dollars worth of capital, in bitcoins — the currency used for all GLBSE transactions. The GIGAMINING asset continues to trade above the price from the IPO.

These asset size levels are much higher than many would have believed possible after watching the boatload of fail for investments made through GLBSE v1.

The inflow of bitcoins since that IPO launch have been steady. A table of asset valuations from GoWest (@GoWestBTC) indicates there is over a half million dollars worth of “asset” shares now in just the top half of the exchange’s listed assets.

As far as equity markets go, that amount is still a trivial amount of funds — less than a rounding error even. Last Friday’s Facebook IPO alone was 200,000X larger than the current value of all assets on GLBSE combined. The amount of money in GLBSE assets is enough though to begin stirring interest in wider circles than just the Bitcoin community which was exclusively GLBSE’s initial base.

And that is why it is becoming necessary to see a greater amount of conversation about what this “stock market” is now and what it becomes.

The author of this post is not qualified to know what that conversation needs to include, but is qualified to see that there are a few turds floating in the punchbowl. Instead of this Bitcoin “stock market” being a rapidly advancing innovation for capital formation, there is instead a growing concern that the whole place is becoming a cesspool.

Progressively more and more bitcoins are being invested in “funds” listed on GLBSE as assets. These funds might be acting as feeder funds dependent on a larger underlying investment. If this is what truly is occurring, these things usually end badly.

When the Bitcoin digital currency first caught the media’s attention, there was intense scrutiny into every conceivable aspect that Bitcoin touched. The amount of discussion from technical, legal, political, and economic angles was expected, warranted and truly useful in helping Bitcoin rest on a more stable base.

Conversation on various topics regarding GLBSE (and with related markets such as MPEx) are nearly absent though and information on each listed “asset” is usually sparce. For instance, what does an investor holding a share of a listed asset really own?

Investors seem to proceed with the belief that these “asset” listings closely resemble the concept of stocks or other security investments made in the regulated world. We might blame Kickstarter for that.

Kickstarter in its initial form is a platform that simply allows a donation towards a project where the donation earns some type of reward. Without there being equity there need not be the concept of a corporation as issuer. Equity markets are not equity markets without the concept of a corporation which can have ownership shared by its equity investors.

Without this concept of a corporate entity there is then little parallel between an asset listed with GLBSE and a company that trades on a regulated exchange. But when a GLBSE “asset” fails financially or the issuer defrauds, some investors feel the issuer has responsibility for the capital invested into the cyber-equity. These investors may believe that there is responsibility that extends to the real world. Already occurring is evidence of pressure by investors being applied against individuals who had been issuers of assets where financial losses were the result.

The purpose of this post is to try to raise awareness that should there be any doubt, a $100 investment into a GLBSE “asset” is vastly different than a $100 investment into a Nasdaq or pink sheet (OTC) stock even. There needs to be conversation about this difference each and every time the words “equity”, “fund”, “dividends”, “shareholder”, “stock”, “company”, “capital’ and “investment” are used.

There are some good “assets” listed on GLBSE and many more will be forthcoming. But don’t make the mistake of thinking that of any of these “assets” are “equities” in any shape or form.

These investments are either donations that come with benefits (à la Kickstarter) or they are speculative gambling at the cheapo casino. There is nothing in between.

who can I use to buy bit coins with my cell phone

Mon, 21 May 2012 18:03:26 +0000

Presumably you are asking how to buy bitcoins using SMS where the payment goes through the mobile provider?

Carrier billing is a very expensive method to acquire bitcoins. But if the size of the purchase is small enough the convenience using that method may outweigh the higher cost.

Btc-Direct.fr offers bitcoins using SMS billing in two dozen countries. My Wallet from BlockChain.info/wallet also offers an SMS deposit method (max one purchase per-month).

In most areas, there are preferable methods for buying bitcoins. In the U.S., cash can be deposited at a bank and the link to claim the bitcoins would arrive via e-mail thanks to that service by BitInstant and their partner Coinapult.

Bitcoin Trader - 20Mission Tech Space, San Francisco

Sat, 19 May 2012 16:36:00 +0000

Bitcoin Trader - 20Mission Tech Space, San Francisco:

GoWest (@GoWestBTC) labels the partly-finished 20Mission (@20Mission) tech space in San Francisco as “Bitcon’s Hogwarts”. Excerpts from his post:

“Jared Kenna, formerly of TradeHill, and Jonathan Ryan Owens of RingCoin have teamed up to launch 20Mission, a huge 41-room tech space project in the heart of San Francisco.”
“[It is hoped that] the space will produce a wide array of successful projects, most of which will be focused on Bitcoin-related businesses, though the space isn’t being advertised as ‘Bitcoin-only’.”

- http://bit.ly/JWTB0G (Bitcoin Trader post)
- http://www.youtube.com/watch?v=yFqWI-bvR2Q
- http://20Mission.com

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Free Guide - Introduction to Bitcoin Mining

Fri, 18 May 2012 22:16:30 +0000

Free Guide - Introduction to Bitcoin Mining:

Available for download on CoinDL (@CoinDL) is a 30-page guide (eBook PDF). Subtitled “A Guide for Gamers, Geeks and Everyone Else”, the eBook explains the background of mining, the tools used, and a few techniques that help get the most for your efforts.

Though the eBook is free, the author, David R. Sterry (founder of CoinDL), is requesting donations, as was stated in his forum post announcement of the eBook. The proceeds will be used towards the purchase of an ISBN so that the additional marketing and sales channels.

- https://www.coindl.com/page/item/201
- http://bitcointalk.org/index.php?topic=82428

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Slideshow - The Evolution of E-Money

Thu, 17 May 2012 07:22:41 +0000

Slideshow - The Evolution of E-Money:

bitcoinnews:

Jon Matonis (@JonMatonis) presented this slideshow on E-Money and Bitcoin at ITWebSec in Johannesburg, South Africa:

- http://slidesha.re/JlbfHQ

Bitcoin Money - SWIFT White Paper on Mobile Payments

Thu, 17 May 2012 07:15:00 +0000

Bitcoin Money - SWIFT White Paper on Mobile Payments:

A post on Bitcoin Money blog (@BitcoinMoney) reviews the analysis and recommendations from SWIFT regarding global payments, and adds to it with how Bitcoin can compete. Excerpts:

“Because Bitcoin doesn’t need to be introduced to a country by a bank or mobile network operator and needs no government sponsor or prior approval it can start to become entrenched, organically. Bitcoin doesn’t need a bilateral agreement to have interconnectivity between the sender in one country and the recipient in another. Bitcoin used for mobile payments doesn’t need multiple variants, each different due to specific requirements before each target nation would grant approval.”
“Bitcoin is the one-size-fits-all mobile payments system that clears all the hurdles this SWIFT research and analysis presents.”

- http://www.bitcoinmoney.com/post/23218328771
- http://bit.ly/J7tfuq (SWIFT White paper)

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SWIFT White Paper on Mobile Payments Interbank messaging network...

Thu, 17 May 2012 07:00:00 +0000

SWIFT White Paper on Mobile Payments

Interbank messaging network SWIFT put out a white paper identifying opportunity for its bank industry customers to build and deploy regional and global mobile payments technology and services. The paper includes the photo used in this post which surveys the innovators in the mobile payments space. Excerpts from the paper:

Out of a world population of 7 billion, over 5 billion or 70% have a mobile phone, whereas only 2 billion or 30% have a bank account. Take India: on a population of 1.2 billion over 800 million have a mobile phone and only 250 million have a bank account.

Deploying a mobile payments service is not straightforward as legal frameworks across countries are not harmonised.

So where is the next big opportunity? [Multiple factors including] population size (to develop a significant business), lead us for example to Nigeria, India, Pakistan, Brazil, Mexico and Colombia.

Not one single bank or mobile network operator covers the whole world, so there is a need for cooperation and partnerships.

Today, most mobile payments services are closed-loop systems whereby one customer cannot send a payment to a customer in another system, even within one country.

Because Bitcoin doesn’t need to be introduced to a country by a bank or mobile network operator and needs no government sponsor or prior approval it can start to become entrenched, organically. Bitcoin doesn’t need a bilateral agreement to have interconnectivity between the sender in one country and the recipient in another. Bitcoin used for mobile payments doesn’t need multiple variants, each different due to specific requirements before each target nation would grant approval.

Bitcoin is the one-size-fits-all mobile payments system that clears all the hurdles this SWIFT research and analysis presents.

Of course, Bitcoin yet has hurdles of its own to surpass. Apple yet once again has removed Blockchain for iPhone from App Store and referred the app’s developer to their legal department. There are technical issues relating to growth and griefing from cyberattackers that have plagued even this third-party provider’s service for its Android users over the past few weeks.

Additionally, unless the mobile network providers enter the bitcoin exchange business, the need exists to develop local Bitcoin exchanges in each area — something that would probably need to find its start in the unlikeliest of places before catching on elsewhere.

Bitcoin may first need to prove itself with at least one specific use as a currency or payment method before adoption would spread to parts of the world where Bitcoin is yet an unknown.

That may take some time yet or, perhaps, success with just one of the many opportunities for Bitcoin will cause subsequent fast track adoption globally.

Bitcoin Magazine - Adam Kokesh on Bitcoin and Free Market Money

Tue, 15 May 2012 20:04:10 +0000

Bitcoin Magazine - Adam Kokesh on Bitcoin and Free Market Money:

bitcoinnews:

Ryan Taylor asks Adam Kokesh (@AdamKokesh) some questions in a post on Bitcoin Magazine. Excerpts:

“Adam: Bitcoin kind of throws a lot of people like us for a loop and we go “Wait, wait, wait a second! It’s just another fiat currency, right?” because there’s nothing backing it.”
“Adam: Bitcoin is proving itself, at least in this controlled market, as an alternative, to be extremely effective to provide people with a way to opt-out from the US dollar.”
“Adam: I’m surprised that there hasn’t been a serious government crackdown attempt on Bitcoin because it is a huge threat to the government fiat currency scam. It is a huge threat to the Federal Reserve.”
“Ryan: Do you think fractional-reserve banking could happen once Bitcoin stabilizes and gets enough usage?”
”Adam: […] I can only issue certificates and promissory notes and say ”Here’s a promissory note for one Bitcoin and if you bring this back, I will redeem it for a Bitcoin”. Then it’s based on the credibility of my institution and me as an individual, not on special privileges granted by government.””
“Adam: I don’t want to say what I want Bitcoin to be because it would be a meaningless stance when, really, what Bitcoin will become will be determined by the market.”

- http://bit.ly/JlSUic
- https://www.adamvstheman.com/invest (with Bitcoin address)

BetaBeat - FBI: Bitcoin Report Was Authentic

Mon, 14 May 2012 23:22:01 +0000

BetaBeat - FBI: Bitcoin Report Was Authentic:

A post by Adrianne Jeffries (@ADRJeffries) on BetaBeat reports that an FBI representative has confirmed that the previously leaked report did in fact come from the agency. Excerpts:

“The report, titled ‘Bitcoin Virtual Currency: Intelligence. Unique Features Present Distinct Challenges for Deterring Illicit Activity,’ was the FBI’s first research report on Bitcoin. The report was not classified, but it was marked ‘for official use only.’
“Betabeat, Wired, and a number of blogs ran with the story without confirming the report’s authenticity, but today we got a call back from the FBI. ‘It is legitimate, but it was not leaked by the government,’ an FBI representative told Betabeat.”

- http://bit.ly/J6eet6
- https://www.dropbox.com/s/0nc35rpevjcu9p4/Bitcoin%20FBI.pdf

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Bitcoin Money - What’s Your SHTF Plan?

Mon, 14 May 2012 22:58:01 +0000

Bitcoin Money - What’s Your SHTF Plan?:

A post on the Bitcoin Money blog (@BitcoinMoney) takes a look at how Bitcoin has a place in a world where trust breaks down. Excerpts:

“Anyone paying any attention to the events in the world, particularly with what is happening in Greece, Spain and elsewhere in Europe does at least already have thoughts along the lines of ‘What will I do if the shit hits the fan (SHTF)?’”
“By the time it is apparent things are swirling down the drain it is then too late to only begin trying to adapt to and survive the new realities of life,”
“Actions taken now can begin to prepare us for the scenario where instability reigns. Not coincidentally, Bitcoin has a place in these preparations.”
“Preparations for a time in the future where banking systems fail and government protections are unavailable might include gaining experience with the #bitcoin-otc markeplace and earning a (Web of Trust) rating history.”
“With bitcoin being non-reversible, the escrow process becomes significantly easier to offer. […] In addition to the Bitcoin ecosystem having trusted escrow partners, the bitcoin network itself can facilitate escrow thanks to a new feature referred to as P2SH.”
“By acquiring and then holding bitcoins locally (in a paper wallet even) one has an asset that is valued globally, yet usable locally. This asset becomes even more useful when institutions become unstable and trust deteriorates.”

- http://www.bitcoinmoney.com/post/23061931511

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What’s Your SHTF Plan? This video clip from the movie...

Mon, 14 May 2012 22:14:00 +0000

What’s Your SHTF Plan?

This video clip from the movie classic Trading Places shows the scene where Louis Winthorpe III (Dan Akroyd) is at a pawn shop having a hard time getting any amount of value for his seven thousand dollar authentic “Rouchefoucauld” hand-crafted watch.

In the film, Louis is reduced to poverty in an instant when all ties to his affluent life are forcefully cut as part of an experiment by his former bosses.

This scene tells a significant lesson, however. The pawnshop broker knows that every person that comes through the door with something to sell is desperate. Having the upper hand then the broker gives a lowball offer and resists any haggling on the price. Louis needs the pawnbroker’s cash much more than the pawnbroker needs Louis’ watch.

How many individuals don’t realize how little they’ve done to prevent themselves from becoming a Louis? Due to a sudden and unexpected turn of events, the concerns of a privileged life or even a middle-class one suddenly become no different from those of the very poor, including being forced to sell any assets that are not absolutely critical for survival and trading them for cash to buy goods and services that are.

Louis’ pawnbroker will only want just one or two luxury watches for his display case. The next Louis to come through the door might not even get a buy offer. Nowadays Louis might consider selling on eBay or HipSwap, but those services are not for the naive. Louis would be better off taking the $50 from the pawn shop than selling through an eBay auction to a $500 winning bid only for that amount to later get charged back once the buyer has taken possession of the watch.

Anyone paying any attention to the events in the world, particularly with what is happening in Greece, Spain and elsewhere in Europe does at least already have thoughts along the lines of “What will I do if the shit hits the fan (SHTF)?”.

What does a SHTF world look like? Does it turn into a ‘Mad Max’ or do things stay civil as a severe economic depression causes living conditions to collapse? Nobody knows. The problem is, by the time it is apparent things are swirling down the drain it is then too late to only begin trying to adapt to and survive the new realities of life. Only actions taken previously to prepare will help to avoid dire consequences once dependencies on institutions and other people start to fall apart.

There are various degrees and forms of preparation and there is no shortage of advice on ways to prepare. What doesn’t get discussed enough is what life is like for those who failed to prepare once the SHTF actually occurs.

Even relatively trivial changes can become a catalyst towards insolvency and desperation for the unprepared. A large limit on a credit card is not cash, for instance. In 2008, credit card companies began to lower credit limits and do “involuntary credit card cancellations”. These cancellations meant people could no longer use their credit cards for new charges, even if they were current on their payments and hadn’t even been close to their previous limits. That situation alone is enough to start a downward spiral for the unprepared.

Even those who believe they are prepared may not be. A stash of gold and silver may cause a person to feel prepared for any eventuality, but when transportation and security become obstacles, even if the metals are traded the effort to do so lessens their usefulness. And just as Louis’ trip to the pawnbroker revealed, the buyer may have less desire to acquire the asset than the desire of seller wishing to unload it. This can cause a trade to occur at a value lower than the seller had hoped and planned for.

Actions taken now can begin to prepare us for the scenario where instability reigns. Not coincidentally, Bitcoin has a place in these preparations. In addition to Bitcoin being a resilient payment network and also functioning very well as a store of value, Bitcoin and its ecosystem thrive in this future scenario — one in which there is the loss of trust.

For instance, Bitcoin transactions are non-reversible. Once a payment is received, there is no technical means for a chargeback to claw back the funds. There is a “confirmation” step that means the transaction shouldn’t be accepted as a payment for a period ranging from a few second to as long as an hour or so, but after confirmation the funds are secure. This means bitcoins can be accepted as payment from parties without needing their identity or any other mechanism to lessen the risk of loss to a fraudulent buyer.

The #bitcoin-otc marketplace is an IRC-based live market and order book that allows trading between pseudonymous parties, oftentimes from opposite ends of the earth. Though most buy and sell offers include bitcoin on at least one side of the trade, there is no requirement that Bitcoin be any part of the deal. For instance, a party with a Starbucks gift card might be willing to sell the card for Dwolla funds which opens up the market who can buy the gift card yet provides Dwolla funds for the seller which are easily convertible into bitcoins.

This transaction is something that can occur without the need to trust a counterparty. To help lessen the chances of being defrauded, the #bitcoin-otc Web of Trust (WoT) includes ratings and trust histories. Preparations for a time in the future where banking systems fail and government protections are unavailable might include gaining experience with the #bitcoin-otc markeplace and earning a trust rating history.

The #bitcoin-otc marketplace and several other services in the Bitcoin ecosystem employ GPG authentication. This open source technology is also used with e-mail systems as well, through the use of a plugin for Microsoft Outlook or as an add-on for Thunderbird e-mail. With GPG (or PGP), a message can be encrypted and sent protected. This is important because the SMTP mail protocol through which most all email traffic passes uses only clear text, so your message is visible to your ISP and to any parties monitoring the traffic as the message is relayed to its destination inbox. In a SHTF environment, criminals will use technology to identify where the most lucrative targets exist and even use our own communications against us. Encryption keeps the message contents hidden.

Cryptography such as GPG can also be used to verify identity or to perform an action referred to as signing a message. For instance, spreadsheets and word processing documents are easily editable and changes that are made are hard to detect or prove — especially when transmitted electronically. The document could instead be electronically signed by the parties involved leaving no doubt as to the contents and the details which are relied upon when the document is a contract agreement, for example. When trust is harder to come by, methods to independently verify help to lessen the incentive for a counterparty to misbehave.

Escrow is another tool that becomes important when trust disappears. Escrow traditionally has not been offered inexpensively and thus is not yet widely used except for high-valued transactions. With bitcoin being non-reversible, the escrow process becomes significantly easier to offer. When escrow is used, buying from an untrusted seller even becomes possible. In addition to the Bitcoin ecosystem having trusted escrow partners, the bitcoin network itself can facilitate escrow thanks to a new feature referred to as P2SH.

And, of course, the use of bitcoins themselves are a necessary component to be able to take advantage of these services available through the Bitcoin ecosystem. Waiting to see whether or not Bitcoin takes off before buying them does not ensure that you can become prepared. The banking system could suddenly experience a crisis in which withdrawals to Bitcoin exchanges become restricted activity, for instance.

The only way to ensure you have spending power for that day is to acquire bitcoins in advance. By acquiring and then holding bitcoins locally (in a paper wallet even) one has an asset that is valued globally, yet usable locally. This asset becomes even more useful should the system deteriorate where institutions become unstable and trust deteriorates.

Holding bitcoins and learning how to transact where trust is nonexistent are the preparations not covered well elsewhere. With what is at stake however, starting preparations now would not be unwise.

Bitcoin Money - Déjà vu? Bitcoinica To Require Customers To Verify Identity

Sun, 13 May 2012 17:12:00 +0000

Bitcoin Money - Déjà vu? Bitcoinica To Require Customers To Verify Identity:

A post on Bitcoin Money (@BitcoinMoney) blog describes Bitcoinica’s plans for allowing customers to get access to their funds following the firms major security breach. Excerpts:

“[Zhou Tong’s announcement reads]: ‘We are building an account claim page. You can submit your account information, financial information (balances) and trading information to verify your identity. We will then match with the records we have. If they have matched, we will [return funds]”.
“Current positions will all be liquidated at a settlement price [that has yet to be determined].”
“The [claim] page will be up in a few days but I don’t have accurate information on this.”
”~~It has not yet been determined if the service will continue to operate after returning funds. ‘Likely we will either shut down the platform or re-develop entirely’ Zhou writes in another post~~.” [see blog post for an update describing plans to re-open Bitcoinica.]
“[Kronos.io and MPEx) might be useful alternatives for those who were using Bitcoinica to hedge.]

- http://www.bitcoinmoney.com/post/22977822600

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Déjà vu? Bitcoinica To Require Customers To Verify Identity

Sun, 13 May 2012 16:51:00 +0000

Déjà vu? Bitcoinica To Require Customers To Verify Identity:

The founder of Bitcoinica, Zhou Tong, explains in a forum post what will happen going forward following the firm’s recent security incident, the second of which that resulted in major amounts of the company’s bitcoins being stolen. Excerpts:

We are building an account claim page. You can submit your account information, financial information (balances) and trading information to verify your identity. We will then match with the records we have. If they have matched, we will [return funds].

Current positions will all be liquidated at a settlement price [that has yet to be determined].

The [claim] page will be up in a few days but I don’t have accurate information on this.

If this process rings familiar to Bitcoiners it is because it is nearly the same type of account recovery that Mt. Gox’s customers were required to follow after their June 2011 security breach.

~~It has not yet been determined if the service will continue to operate after returning funds. ”Likely we will either shut down the platform or re-develop entirely” Zhou writes in another post.~~ [Update: Intersango has described how Bitcoinica will be reopening after security improvements are completed]

Zhou sold his holdings of the company in 2011 (though at the time hadn’t been forthcoming with many details, even being opaque months afterwards) and last month the company re-emerged as a company out of New Zealand that has registered as a Financial Services Provider there. Zhou is now attending college and after helping during this shutdown will no longer be involved in the company nor will be participating in any other Bitcoin-related projects.

The type of trading offered by Bitcoinica is referred to as a Contract For Difference (CFD), a financial offering where settlement for price movements occurs in cash. The regulations by the Securities and Exchange Commission (SEC) prohibit firms from offering CFDs in the U.S.

Bitcoinica’s trading volume had been been very significant from late 2011 through early 2012 thanks to larger swings in the BTC/USD exchange rate that rewarded speculators whose positions happened to be on the right side of the trade. As the BTC/USD exchange rate became more stable in recent months, Bitcoinica’s volume had dropped significantly with daily averages a quarter of the levels previously common.

Another service, Kronos.io, reportedly will launch soon and will fill the gap that this Bitcoinica shutdown created. Another service offering that competes to some degree with Bitcoinica is the CALL and PUT options offered on MPEx. This might be a useful alternative for those who were using Bitcoinica to hedge.

So ~~if or~~ when Bitcoinica does restart, it will no longer benefit from being the only game in town.

Forbes - The Somali American Remittance Dilemma

Sun, 13 May 2012 01:11:34 +0000

Forbes - The Somali American Remittance Dilemma:

bitcoinnews:

Jon Matonis (@JonMatonis) describes how Bitcoin can come to the rescue for Somalis in Minnesota who have been barred from making the small regular transfers to their family members in Africa. Excerpts:

“Instead of trying to comply [with regulations], [banks] are electing to opt out so as not to encounter heavy federal fines. It sure would be nice if the world had a decentralized peer-to-peer digital currency that could be transferred to mobile devices in a secure fashion.”
“If it hasn’t happened already, a savvy merchant in Somalia will start accepting bitcoin for Somali shillings. Or a traditional currency exchange dealer could get in on the action too — the spreads are certainly there.”
“As a distributed network, bitcoin possesses the capability to route around interference and disruption. In fact, this was a key design consideration as resiliency has grown to become an imperative for privacy-enhancing electronic cash.”

- http://onforb.es/J7heXd

The Bitcoin Trader - Bitcoinica Offline Following Another Hack

Fri, 11 May 2012 17:19:05 +0000

The Bitcoin Trader - Bitcoinica Offline Following Another Hack:

GoWest (@GoWestBTC) posted an alert that Bitcoinica was brought offline by its founder after the second major successful hack against the service. Excerpt:

“Bitcoinica has been shutdown until further notice, following a theft of 18,000 BTC.”
“Bitcoinica was also the victim of a 43,000 BTC ($215,000 USD) heist back on March 1st.”

- http://bit.ly/JhB3HE

All News

Bitcoin Miner - Commercial GPU Mining Farms

Thu, 10 May 2012 08:46:03 +0000

Bitcoin Miner - Commercial GPU Mining Farms:

A post on the Bitcoin Miner (@BitcoinMiner) blog features a photo from a commercial mining operation which helped to contribute to the latest difficulty adjustment increase. Excerpts:

“The leading GPU farms use economies of scale combined with low power costs to solve blocks at a lower cost than any solo miner paying residential rates could ever hope for.”
“The recent difficulty threshold for generating bitcoins went from 1,508,590 to 1,733,208, representing nearly a 15% increase in just over 12 days.”
“This increase is the biggest, in percentage terms, since June, 2011.”
“The capitulation by the small miners suffering electric utility bill pain is benefiting these commercial operators whose facilities can accommodate further expansion and letting the overhead costs be spread out over a growing number of producing rigs.”
“If hardware costs are amortized much past when the upcoming drop in the block reward is expected to occur (sometime around December), then these commercial operators could be facing a rude awakening.”

- http://www.bitcoinminer.com/post/22769728108

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The Bitcoin Trader - Bit-Pay's 3K BTC Transaction, Largest To-Date

Thu, 10 May 2012 08:36:19 +0000

The Bitcoin Trader - Bit-Pay's 3K BTC Transaction, Largest To-Date:

GoWest (@GoWestBTC)reports that Bit-Pay processed its largest Bitcoin transaction to-date, a purchase for 3,095 BTC (which is worth over $15,000 USD at current exchange rates). Excerpt:

“The merchant? Butterfly Labs, selling one of its 25 Giga Hash mini-rigs.”

- http://bit.ly/JhB3HE

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Bitcoin version 0.6.2 released

Wed, 09 May 2012 08:03:44 +0000

Bitcoin version 0.6.2 released:

A new version of the Bitcoin-Qt and Bitcoind clients from Bitcoin.org, v0.6.2, includes a number of bug fixes and and performance improvements.

- http://bitcoin.org/releases/2012/05/08/v0.6.2.html
- http://sourceforge.net/projects/bitcoin/files/Bitcoin/bitcoin-0.6.2
- http://bitcointalk.org/index.php?topic=80187.0

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Bitcoin Money - Crowdfunded with Bitcoins, Screw Banks Released

Wed, 09 May 2012 03:09:00 +0000

Bitcoin Money - Crowdfunded with Bitcoins, Screw Banks Released:

A blog post on Bitcoin Money blog (@BitcoinMoney) describes the crowdfunded project Screw Banks, Use Bitcoin which resulted with the release of a video and promotion website. Excerpts:

“The video started out as a project on Max Keiser (@MaxKeiser)’s Pirate My Film (PMF) (@PirateMyFilm) crowdfunding platform. Pledges at $5 and up were made by the Bitcoin community, and once the project was fully funded, the only way to send funds was with bitcoins.”
“Fundraising for the project started in started in November, 2011 with the goal of raising $1,500 USD but the project was oversubscribed by the end of January and after funds were collected from all 114 “shareholders” the project took in an extra 15%.”
“Screw Banks was the first project on PMF in which Bitcoins were accepted for payment.”

- http://www.bitcoinmoney.com/post/22683633233
- http://www.piratemyfilm.com/projects/304
- http://www.screwbanks.net

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Screw Banks Video and ScrewBanks.net Website Launch

Wed, 09 May 2012 02:59:54 +0000

Screw Banks Video and ScrewBanks.net Website Launch:

Announced on the BitcoinTalk forum by Anthony Gallippi is the Screw Banks video and ScrewBanks.net website. The announcement reads:

“After many months of hard work and collaboration, today we are proud to release ‘Screw Banks’.
- http://screwbanks.net”
“Starring…the Vampire Squid, Jon Corzyne, a Bought Congress, PayPay, and a Colombian Hooker! Check out this crazy cast of characters:
- http://screwbanks.net/credits.html
it’s a great video targeted towards people upset with the banking system, for one reason or another.
This video introduces people to bitcoin in a nice cartoon, focusing on usability, not on technicality.

- http://www.ScrewBanks.net
- http://www.youtube.com/watch?v=5CrOKDOyW-Y
- http://bitcointalk.org/index.php?topic=80190.0

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Video: Crowdfunded with Bitcoins, Screw Banks Released A video...

Wed, 09 May 2012 00:18:00 +0000

Video: Crowdfunded with Bitcoins, Screw Banks Released

A video promoting Bitcoin with the title similar to the domain where it is hosted, ScrewBanks.net, has been released.

The video started out as a project on Max Keiser (@MaxKeiser)’s Pirate My Film (PMF) (@PirateMyFilm) crowdfunding platform. Pledges at $5 and up were made by the Bitcoin community, and once the project was fully funded, the only way to send funds was with bitcoins.

Fundraising for the project started in started in November, 2011 with the goal of raising $1,500 USD but the project was oversubscribed by the end of January and after funds were collected from all 114 “shareholders” the project took in an extra 15%. Though PMF does offer equity-based projects and each $5 contribution is referred to as a “share”, this particular project was not pitched as a revenue-generating film so there will be no dividends given to contributors (which the site labels as “shareholders”). Screw Banks was the first project on PMF in which Bitcoins were accepted for payment.

Producer of Screw Banks is Anthony Gallippi of Bit-Pay, a U.S.-based Bitcoin payment processor. ”It’s a great video targeted towards people upset with the banking system, for one reason or another” wrote Gallippi on the forum post announcing the release.

The project’s page on PMF shows the writers were StacyHerbert (@StacyHerbert) and Erik Voorhees (@ErikVoorhees), though the inclusion of a Columbian hooker in the video’s storyline means the writers made edits due to the story to reference recent developments. Other characters in the video, as shown in the Screw Banks - Credits page include Vampire Squid, Jon Corzyne, Bought Congress, PayPay and The Ben Bernank Printer.

This is the second video to be crowdfunded and paid for by the Bitcoin community. The What Is Bitcoin video on WeUseCoins.com was initially a bounty project which yielded 8,511 bitcoins (now worth more than $43K USD though that bounty was open back when Bitcoins were worth a fraction of their current value).

Request For Participation - Bitcoin Testing Project

Mon, 07 May 2012 20:08:00 +0000

Request For Participation - Bitcoin Testing Project:

The development lead for Bitcoin.org, Gavin Andresen (@GavinAndresen), has placed a call for participation to create a Bitcoin Testing Project.

In a post on the BitcoinTalk forum, Gavin writes:

“I’m creating a decentralized, transparent organization using the BetterMeans system. I’ll need help from people willing to be fundraisers, testers, project managers, toolmakers, troll-catchers, etc.”

Bitcoin.org is an informal association of participants who architect, design, build, release and support the Bitcoin.org client software.

Bettermeans bills itself as an open, democratic project management platform service.

- http://bitcointalk.org/index.php?topic=80019.0

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Forbes - Bitcoin Funded Debit Cards

Mon, 07 May 2012 18:35:38 +0000

Forbes - Bitcoin Funded Debit Cards:

bitcoinnews:

Jon Matonis (@JonMatonis) writes in Forbes about the ability to add funds to a credit card (just like what might happen when getting a refund from a merchant). Excerpts:

“[This feature] leverages a little-known type of transaction that is available on the VisaNet system called ‘Original Credit Transaction’. The other major card payment networks have a similar feature too.”
“Previously, it was cumbersome for bitcoin account holders to transact in national currencies because they had to go through one or more exchanges and then wait further for funds to arrive in a bank account or other intermediary.”
“Withdraw2Card’s] service fee is $9 plus 1.99% (for MtGox USD) with a $1,000 maximum transfer amount.”
“By removing friction from the process, bitcoin becomes easier to spend overall because not every merchant will accept bitcoin directly for payment yet and not all transactions demand irreversibility and privacy.”

- http://onforb.es/JM11Qv

Matthew Green: The future of electronic currency

Mon, 07 May 2012 06:45:00 +0000

Matthew Green: The future of electronic currency:

bitcoinnews:

Cryptographer Matthew Green (@Matthew_D_Green) provides a brief background into e-cash and an overview of the problems that e-cash must solve once money goes digital. Excerpts:

“The combination of easy-to-search electronic records and big data seems like a death-knell for our individual privacy. Cryptography holds the promise to get some of that privacy back, if we want it.”
“Funds transfer systems offer none of the privacy advantages of real cash. This is probably by (government) preference: untraceable cash lends itself to unsavory activities, stuff like drug dealing, arms purchases and tax evasion. Our modern banking system doesn’t necessarily stop these activities, but it’s a godsend for law enforcement: just about every transaction can be traced down to the $0.01.”
“Chaum’s original solution dealt with double-spenders by requiring the bank to be online, so users could immediately deposit their coins — and make sure they were fresh. This works great, but it’s damn hard to handle in a system that works offline.”
“While the Bitcoin block-chain is essential to security, it’s also Bitcoin’s privacy achilles heel. Since every transaction is public — and widely disseminated — there’s no hiding that it took place.”
“As our society moves away from dirty, messy cash and into clean — and traceable — electronic transactions, I really do worry that we’re losing something important. Something fundamental.”

- http://bit.ly/Jaq6Wv

Bitcoin’s “Hockey Stick” Growth Attributed To...

Fri, 04 May 2012 08:59:00 +0000

Bitcoin’s “Hockey Stick” Growth Attributed To Novel Gaming Service

Eleven months ago Bitcoin’s trajectory was nearly vertical as each day brought a higher price and the daily transaction volumes on the Bitcoin network were seeing new record levels each day as well. But then suddenly the ascent stopped and what followed was a long slide back towards earth.

In the months that followed those June 2011 highs the exchange rate had dropped by more than 90% from the earlier highs and the transaction volumes had dropped as low as 68% from the peak. While the exchange rate is still down considerably with bitcoins trading around $5 USD now the daily transaction volume has shot back up and is once again breaking new records.

While the daily transaction volume had been steadily growing at a casual pace since October, there’s been a development in the past weeks that has had a significant impact. The ten-day-old service SatoshiDice.com has been growing at a blistering pace.

The daily totals with the exact numbers haven’t been compiled yet but extrapolations of hourly data show there to be nearly four thousand blockchain transactions resulting from Satoshi Dice for the most recent 24-hour period.

Each wager by a player causes a response from Satoshi Dice as even losing bets earn a payout (the service returns a fraction of what the house earns from each wager). As a result each wager can be responsible for two transactions occurring on the Bitcoin blockchain.

The vast majority of Satishi Dice transactions are for just a single wager but a player can instead combine multiple wagers into a single transaction. Thus there isn’t an exact 1:1 ratio between blockchain transactions sent to Satoshi Dice and the number sent in return.

Essentially, Satoshi Dice allows the Bitcoin wallet, whether it be the standard Bitcoin.org client or a hybrid Javascript-based browser wallet like My Wallet from Blockchain.info, to function as gaming terminal. What sets Satoshi Dice apart from most other Bitcoin-based online gaming services is the ability to play in an instant and to receive winnings back within seconds.

Wagering on Satoshi Dice occurs without any account needed on any website — the service simply sends a new, return transaction with the full payout when the transaction was a winner or the fractional bit awarded for each losing bet.

Because the payouts include coin from the wager transaction that made the bet, the site can provide payouts immediately and doesn’t need to wait for payments to confirm which is a process that would otherwise take from twenty minutes to two hours, depending on various factors.

Another difference is Satoshi Dice’s novel approach towards determining the winners. At a basic level, the concept of the game is that for each wager a “dice roll” occurs and a number from 0 to 65,535 is the result. Each wager is evaluated to determine if the number rolled is below the wager’s threshold. For instance the “less than 16,000” wager will payout if the roll is any number up to and including 15,999. Other online wagering services would employ a random number generator (RNG) to ensure the roll values are unpredictable and statistically random. PokerStars, for instance, uses a third party auditor to assure players that the output of the RNG used truly is “cryptographically random and truly unpredictable”.

Satoshi Dice’s method uses an alternate form of cryptography, where the cryptographic secret used for the roll is not revealed until a period (from 24 to 48 hours after the wager occurs). To ensure that the secret was not altered, a hash of each secret is published in advance and as a result the integrity of each roll can be verified once the secret is revealed.

There has been a concern expressed that the particular method that Satoshi Dice uses in performing the roll appears to be an approach that is unique and possibly not one that has been verified to be a statistically true RNG. The operator of a competing wagering service was asked about Satoshi Dice’s method and the response was: “It’s probably not equally distributed and worse than something designed to be a PRNG like Mersenne, and almost certainly less random than a real RNG.”

Another area of concern is with the amount of resultant activity on the Bitcoin blockchain. Each of the thousands and thousands of nodes on the Bitcoin network receive and relay each of the transactions and store them on disk once they are included in a mined block. A doubling in the transaction workload then will mean a near doubling in the amount of storage. The Bitcoin blockchain and index is already over 1.7 GB in size. If the blockchain growth rate accelerates, the priority for resolution of the known scalability issue might be raised by Bitcoin’s developers.

There are also levels at which the Bitcoin network maxes out though these are limits set arbitrarily and would likely be increased when the limits might start approaching which would restrict Bitcoin’s future growth. If the use of Satoshi Dice grows much more than an order of magnitude greater than its current level that would likely trigger some attention on the topic.

Even with Satoshi Dice being no threat to the Bitcoin network, there is the matter of transaction fees causing the payout amount to be misrepresented for a fairly decent portion of all wagers. Though the Bitcoin network will pass along most transactions even without a fee, most players are using a client which will either require a transaction fee or will strongly encourage the player to include a fee. When a fraction of a percent of odds can mean the difference between coming out ahead and losing money this transaction fee can become a significant drawback. For the smallest wagers on Satoshi Dice, even the sub-penny transaction fees typical with Bitcoin can extract more from each wager than what the house earns on odds. Additionally, every transaction sent by Satoshi Dice back to the player includes a fee as well, reducing the house’s take. Asked about this topic, the operator of a competing online wagering service suggests that “in practice this is not efficient for large-scale betting where you have thousands of small bets [like this] taking place.”

Efficient or not, players appear to not mind. Getting a payout in a matter of seconds after placing the wager provides the speedy reward that keeps the players in the zone.

Though the desire for a dopamine hit may be the main reason Satoshi Dice is seeing so much activity, there is another potential contributing factor. One of the misconceptions about Bitcoin is that it is an anonymous currency. Bitcoin can be used in an anonymous manner, but Bitcoin transactions are traceable. For this reason, there has been interest in mixing services which help to improve anonymity.

What may be occurring then is that Satoshi Dice is seeing some level of participation by those intending to alter the makeup of the coins held in their wallets. Satoshi Dice in its present form makes a poor solution for mixing however the operator of the service has indicated that some features such as alternate payout addresses and a time delay that might improve on this specific use are forthcoming.

Whatever the reasons for using Satoshi Dice’s service, the fact remain this is the fastest growing business to-date in Bitcoin’s short history. In the past couple of hours while researching for and writing this post, the wagering activity has increased at an even greater level. The level of wagers occuring during this 8am - 9am UTC hour caused there to be more transactions on the blockchain due to Satoshi Dice than there were for all other Bitcoin transactions, combined.

Houston, We Have Liftoff!

arsy: The FriendlyPay app is now the official Instawallet...

Fri, 04 May 2012 00:52:14 +0000

arsy:

The FriendlyPay app is now the official Instawallet iPhone app available now on the App Store.

Instawallet is a popular bitcoin wallet on the web. FriendlyPay allows you to track and manage multiple Instawallets.

To add, simply scan the unique link to the wallet on Instawallet.org. You’ll be able to send and receive coins from your wallet.

Study: Unprotected Bitcoin nodes vulnerable to double spending with "fast payments"

Fri, 04 May 2012 00:28:25 +0000

Study: Unprotected Bitcoin nodes vulnerable to double spending with "fast payments":

bitcoinnews:

A study by researchers released today finds that vendors not taking proper precautions could be vulnerable to double spending when accepting bitcoins as payment immediately.

The title of the paper is “Two Bitcoins at the Price of One? Double-Spending Attacks on Fast Payments in Bitcoin” and is believed to be the first formal study on the race attack double spending problem on the bitcoin network. An excerpt from the abstract reads:

“We focus on double- spending attacks on fast payments and demonstrate that these attacks can be mounted at low cost on currently deployed versions of Bitcoin.”

The method of attack (race attack against a vendor accepting 0/unconfirmed as payment) was widely known previously and the researchers did not perform the study using the recommendations widely believed to prevent most race attacks from being successful.

A forum thread contains further discussion of the results.

- http://eprint.iacr.org/2012/248
- http://bitcointalk.org/index.php?topic=79090.0

Bitcoin Magazine - Bitcoin in the Non-Western World

Tue, 01 May 2012 20:25:00 +0000

Bitcoin Magazine - Bitcoin in the Non-Western World:

bitcoinnews:

Vitalik Buterin published an article in Bitcoin Magazine (@BitcoinMagazine) which describes how Bitcoin has many similarities to payment methods already widely used in the developing world. Excerpts:

“[In the West when using a debit card online] you have to effectively give the provider unlimited access to your bank account, protected only by the assurance that you have the option of a chargeback and the bank is ultimately responsible for all your losses due to fraud.”
“How do these systems get around the consumer protection issue? It turns out that they use exactly the same solution as that which has been proposed and sporadically implemented with Bitcoin: escrow”.
“In the developing world Bitcoin-style finance is already here.”
“As there’s no distinction between consumers and vendors — anyone can send money or accept it — the potential for a decentralized and bottom-up economy is maximized.”

Though this specific article was published online by Bitcoin Mage a few months ago, Bitcoin Magazine put out a press release (link below) that their first issue has gone to the printer.

- http://bit.ly/HeMh0b (March 7, 2012 article by Vitalik Buterin)
- http://bitcoinmagazine.net/bitcoin-magazine-press-release

Market Monetarist: Bitcoin can solve Zimbabwe's coin problem

Thu, 26 Apr 2012 22:05:00 +0000

Market Monetarist: Bitcoin can solve Zimbabwe's coin problem:

In the Market Monetarist (@MaMoMVPY) blog is the “Good E-Money” post that describes how there is a very specific problem in the world where Bitcoin might uniquely be the solution. Excerpts:

[There is] a very visible monetary disequilibrium [in Zimbabwe] – the demand for coins simply is outpacing the supply of coins. As a consequence Zimbabwe is now struggling with a quasi-deflationary problem.

In Zimbabwe nobody is willing to accept in coins made produced by the government and who can blame them for that? Some shops offer credit slips, a kind of scrip that has begun to circulate here”.

Mobile penetration in Zimbabwe is much lower than in Kenya [where M-Pesa is widely used], but nonetheless even in very poor Zimbabwe mobile telephones are fairly widespread. Furthermore, if it could help solve the “coin problem” more Zimbabwean’s would likely invest in mobile phones.

It is much more likely that Africans in the future (probably a relatively near future) would trust money (or near-money) issued by international telecom companies – or Coca Cola for that matter.

Why not imagine a situation where Bitcoin merges with M-pesa so you get mobile telephone money backed by a quasi-commodity standard like the Bitcoin? I think most Africans readily would accept that money.

A following comment in the article by Zooko (@Zooko) reads:

M-Pesa has transaction fees too high for low-value transactions: a $5 M-PESA transaction carries a nearly 8 percent fee.

The reason Bitcoin transaction fees should be [lower than] the fees of any centralized service such as M-Pesa is that there is a global competition to be the transaction processor who claims the fee, and there is a very low barrier to entry to participate in this competition.

Rüdiger Koch and others have been suggesting Bitcoin as having potential uses in Africa. There are reasons why trials might not already be underway (e.g., few options for Bitcoin exchanges working in Africa) and mobile clients were not either already available nor are anny customized for the African market. But that can all change quickly.

Blockchain for iOS and the Blockchain for Android apps are now available (and free) on the App Store (iOS) and on Google Play (Android). That does require a data plan though whereas M-Pesa uses SMS/text messaging. While Bitcoins can be purchased using SMS from one or the other services that offer this no telecom networks in Africa are supported yet.

There’s no reason this same need is isolated to Africa either. A less expensive cash transfer method would be welcomed just as much in Indonesia, India, China, Brazil, and everywhere else too.

Because Bitcoin can technically be implemented by an individual without requiring approval or support from any telecom, bank or government, perhaps a solution will emerge sooner than we realize.

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

The Bitcoin ATM Is Coming at a Location Near You...

Jim — Mon, 04 Jul 2011 08:49:00 +0000

There are many annoyances with bitcoin including the following:

1.) Bitcoins are very difficult to obtain on the Internet.
2.) It is near impossible for an average user to generate bitcoins with his or her computer.
3.) Technical skill is required to obtain bitcoins via an online exchange.
4.) If money is sent from a bank account to an online exchange then the transaction is no longer anonymous and that money can be traced.
5.) Sending cash in the mail for bitcoins could take days, weeks, or not at all and is unreliable.

What is the solution to these many problems? Multiple teams within the United States are attempting to build and distribute ATMs in mass quantities. ATMs will allow bitcoins to be distributed anonymously with cash without the need for an exchange. With bitcoin ATMs it will only be a drive away before an average person can buy bitcoins! The value of bitcoin will skyrocket once a non-technical user can buy bitcoins as easy as buying local goods.

There are many ways to distribute bitcoins with an ATM and each development team is handling them uniquely. I could explain in further detail in how these bitcoin ATMs would work, but to protect the business interests of my sources I am going to remain quite for now. Who will win the race to provide the best bitcoin ATM with the most locations?

Here is an early attempt of one team hacking open an eBay bought ATM:

http://biticon.wordpress.com/2011/03/31/bitcoin-atm/
http://biticon.wordpress.com/2011/04/16/atm-progress/

TradeHill.com - A Competitor to Mt. Gox

Jim — Thu, 16 Jun 2011 21:04:00 +0000

Use this link to get 10% off for life:

https://www.tradehill.com/?r=TH-R11260

Bitcoin Billboard in Silicon Valley

Jim — Mon, 06 Jun 2011 08:54:00 +0000

Located in busy expressway in Silicon Valley, California. (Lawrence Expressway just south of Central Expressway)

Each Bitcoin Now Worth $10

Jim — Thu, 02 Jun 2011 09:10:00 +0000

This is a late post since the $10 peak occurred while I was sleeping in the Western Hemisphere. Bitcoin is a 24-hour currency and Mt. Gox operates 24-hours!