Bitcoin

[J.Twendrist]

How can you say something created on a computer couldn't be recreated? It might be hard, maybe exceedingly so, but given enough time and effort I am sure they could be replicated.

[Kyzarius]

I have 8 servers in a room that process freight invoices, host email, and run a website for me, makes my company over a million a year as of 2010.

bitcoin?

[Pali]

I was indeed misunderstanding you, inscribed... my points were related to vulnerabilities in bitcoin transactions and exchanges (edit: none of which are unique to bitcoin, btw, in case I was giving that impression), not to the bitcoin protocols or coding itself, which you were addressing. I'm not as convinced of the safety of the former as you seem, given the past problems (though most have admittedly been addressed by new security measures which we'll have to wait and see the effectiveness of), but it's personally rather irrelevant for me, so I'm happy to bow out.

[inscribed]

How can you say something created on a computer couldn't be recreated? It might be hard' date=' maybe exceedingly so, but given enough time and effort I am sure they could be replicated.[/quote']

The Bitcoin network is the most powerful computing network in the world, at the moment. It is more powerful than the top 20 supercomputers in the world, combined, and then some. To duplicate or recreate a bitcoin transaction, one would need at least 51% of the global Bitcoin hashing power. No one is capable of this (i.e. no one has a supercomputer or chain of computers more powerful than 51% of the global bitcoin network). That's why we can say with certainty that a bitcoin can't be duplicated. Time is not a factor.

Think of it this way. Bitcoin is already a billion dollar market. It is the single most valuable network in the world, and has been around for over 5 years. Every single hacker in the world has had their sight set on it for years. So far, there has not been a single incident of someone managing to hack the network. Not one.

[inscribed]

I have 8 servers in a room that process freight invoices, host email, and run a website for me, makes my company over a million a year as of 2010.

bitcoin?

Electricity costs will be your major concern. Video card hashing beats CPU processing, but video card hashing is beat by ASIC hashing. Difficulty is at an all time high, and at this point, you really need dedicated hardware to be able to make a return on investment in mining. I made a fairly large gamble on purchasing some ASIC hardware in May, which doesn't even go online until September, but it's the only way I could see to make a profit mining at this point. Time will tell whether or not I make a return on investment with my purchase! If I had it today, I'd be making roughly 1000$ USD a day, but September is a long ways away.

[inscribed]

Bitcoin related, and humorous:

Internet drug dealers are really nice guys!

[inscribed]

US citizens may soon no longer be able to open accounts with foreign banks. This will apply to any 'accidental' Americans, many who don't even realize they are US citizens according to the IRS. Move overseas, renounce your citizenship, and have kids who never even step foot on American soil? They will still be counted as Americans for tax purposes. So will the next five generations of your family.

Foreign financial institutions trying to avoid these new requirements have two alternatives: to drop American clients, or don't invest in the U.S. Neither scenario benefits America. And yet it's hard to believe that Chinese financial institutions will acquiesce in reporting their clients' account information to the U.S. Imagine the howls down the halls of Congress if China informed U.S. banks that they must report to China all of the bank accounts held by Chinese citizens in the U.S. or face penalties.

From the comments:

I was once fined $20,000 by the IRS while living abroad. The IRS never notified me -- I only learned of it when my US bank told me that the US government had "levied" $20,000 from my account.

The IRS officer I called told me that a) since I live abroad I am by definition a tax criminal so he had no obligation to answer my questions and in any case the IRS keeps no files on their decisions so there was no way I could appeal.

I hired a tax accountant, who figured out that the IRS was claiming I'd underpaid by around $1,000, but was able to fine me an additional $20,000 because if an expat makes any mistake, the IRS can add all kinds of extra fines.

The accountant also determined that I had actually overpaid my taxes. We filed an appeal, which involved piles of paperwork, including a form called 2555X. The IRS (after 6 months) replied that the signature on my 2555X was illegible and I needed to resubmit it. I duly resubmitted it. The IRS then responded that if an overseas taxpayer refiles an 2555X during an appeal, they automatically lose the appeal and surrender their right to further appeal.

Case closed.

This was *before* FATCA, which is much worse. Fines of minimum $10,000 are mandatory for any and each mistake, even immaterial ones, going up to $500K with 5 year jail term. Punishments are "administrative" (which means: no judge involved, virtually no right of appeal.)

The filing burden is ridiculous and includes 5 generations on both sides of any family with a US citizen -- e.g., my foreign wife's grandparents have US filing requirements because she is married to me.

Quite worrisome, but just one more reason to start holding bitcoin.

[inscribed]

I haven't updated this in a while. The current price of bitcoin is currently ~$94 USD/BTC.

http://www.nbcnews.com/technology/bitcoin-currency-federal-judge-says-virtual-cash-real-money-6C10874611

Federal judge rules "Bitcoin is a currency". One of the major downsides of bitcoin before was the lack of legal means to seek restitution if you fall prey to theft. This ruling is a huge precedent.

http://techcrunch.com/2013/08/09/bitcoin-ticker-available-on-bloomberg-terminal/

Bitcoin price history now tracked on Bloomberg ticker (as XBT). It's only available for employees at the moment, but will soon be open to all traders. One step closer to worldwide legitimacy.

http://lfb.org/today/is-bitcoin-real-or-not/

Author discusses Bitcoin as a defense against civil asset forfeiture. Good read. My favorite quote from it:

it is not possible for Bitcoin as such to be destroyed any more than government can destroy algebra.

[inscribed]

http://www.marketwatch.com/story/in-surprise-fed-decides-not-to-taper-2013-09-18?dist=tcountdown

The Fed was thought to begin cutting back on qualitative easing today. Instead, after a 9-1 vote, QE will continue at full rate. USD is pretty screwed.

Meanwhile, Bitcoin continues to climb in acceptance. Currently ~$127 on Bitstamp and ~$140 on MtGox.

http://www.digitaljournal.com/pr/1454756

CEO of ForexMinute, Jonathan Millet, proudly launched the Bitcoin news section for traders and interested readers, as he feels that Bitcoin has a bright future ahead. Thus, it is not just venture capitalists that are hopeful that they can make good money investing in Bitcoin companies, but the owner of a leading online portal too believes that Bitcoin is promising.

http://www.commodityblog.com/bitcoin-increasingly-adopted-in-trading-markets-as-xbt/

Matonis also noted the increasing adoption of XBT into Forex trading, which he expects to be a game-changing development for bitcoin. One major Forex dealer, OANDA, currently quotes XBT rates in other currencies but does not offer it for trade. Likewise, XE.com, a popular foreign exchange rates website, has recently begun to quote bitcoin rates– though it offers no trading itself– which undoubtedly has been catching the eyes of a number of Forex traders.

[inscribed]

John Stossel on Bitcoins. (I <3 Stossel)

I suggested to Anume that she should started accepting bitcoin donations for server fees. She said bitcoins were dumb.

[f0xx]

Stop trying to sell your bitcoins

[inscribed]

****, son. No one has to try very hard right now to sell. Look at those pretty colors.

http://bitcoinity.org/markets/mtgox/USD

[inscribed]

http://www.leetcoin.com/

Ever think that your skills at a game were just so good that you could make a living off of it? Ever think to yourself, "Why can poker players make a living playing a game, but I can't do it playing Counterstrike?". Well friend, the times, they are a-changin'.

How It Works

- Deposit Bitcoin into your account.

- Authorize one of our high speed game servers.

- Play and Earn! BTC will be transferred instantly to the winner's account.

So far, only Counterstrike is supported, but support for more games is on the way.

[bavarianbrew]

@$400

[inscribed]

Over $450 on Gox now. China is pretty much steering the market right now. Not only do they buy the most gold, but now they buy the most BTC. They're definitely set to be the next major economy after the US goes bust.

The major questions right now are concerning how much of the recent activity is a bubble, where the top will be, and how far we'll drop. Max Kaiser is calling a top at around $600 next week. I've been trying to buy/sell on these numerous dips, but so far have only managed to largely break even. Fingers cross that if this is a bubble, that I'll be able to cash out close to the top and buy back in after the bounce. If it's anything like the April bubble, then there's potential to double or even triple your pool of BTC.

I've also started trading on a few BTC stocks. Mostly just getting my feet wet. With how quick bitcoin is catching on, some of these companies sprouting up in the BTC economy have huge potential, so I'll enjoy some dividends on top of what I've already made. Imagine if you had the chance to buy something like Ebay stocks back in 1999 for a dollar each. On top of the huge returns you'd have seen in dividends, you could now sell those stocks for over 50x what you bought them for.

[bavarianbrew]

I only began researching and following BTC after you initiated this thread, more out of curiosity rather than investment.

It is an obvious bubble now, so, the question is, how does one hedge against a bitcoin collapse?

How did people hedge against the Beanie Babies collapse?

[inscribed]

Just because it might be a bubble, doesn't mean it's on the verge of collapse. We've already seen a few bubbles in the few years it's been around. Back in 2011, a bubble saw Bitcoin hit $31USD/BTC before crashing back down to $2.51, with many calling it's death. Again, just this past April, we saw it spike to $266/BTC and crash back down to around $55. Now, it's over $400, testing $450. Will it crash again? It's a safe bet. I would guess down to around the $200 range. Then we will see a slow build up back to a new all time high in another few months. As I've said before, the outcome of Bitcoin is binary. Either it will hit $0, or it will hit $100k+. There is no in between, and the only way it would ever hit $0 is if some unforeseen exploit or development rendered it useless.

Comparing Bitcoin to Beanie Babies is dishonest. Beanie Babies were a commodity, like baseball cards, and had no use outside of being collectible items. Their fall to worthlessness was inevitable. Bitcoin is a cryptocurrency, a secure, limited supply currency that has the potential to completely reshape our society. The only way it would ever fall to worthlessness is if another, more advanced cryptocurrency rises to take it's place. Even then, we would expect to still see Bitcoin in use, much like any out-of-print currency in use across the world. Comparing Bitcoin to Beanie Babies is like comparing the Internet to two tin cans and a piece of string.

[Imoutgoodbye]

Comparisons are cliche anyways. A is not like B. A is A. Something is only what it is. In my writings I've almost completely eliminated comparisons.

[Celerity]

for example, comparing comparisons in your writing to comparisons between bitcoin and beanie babies?

I don't think you've convinced me that you have managed to eliminate them quite yet..

[Imoutgoodbye]

I said almost. However, trying to eliminate binary beginnings ..

P.S. I miss our conversations on upgrading the peer review system and life in general.

[inscribed]

http://www.bloomberg.com/news/2013-11-18/u-s-agencies-to-say-bitcoins-offer-legitimate-benefits.html

Ben Bernanke, chairman of the Federal Reserve, is also weighing in on the hearing, saying that it has no plans to regulate the currency.

“Although the Federal Reserve generally monitors developments in virtual currencies and other payments system innovations, it does not necessarily have authority to directly supervise or regulate these innovations or the entities that provide them to the market,” Bernanke wrote in a letter to the committee.

Great news, although the official word from the hearing won't come until tomorrow.

Also, the price hit $590 on Mt Gox and 3630 Yuan(~$595 USD) on BTCChina. Remember it was worth less than $100 when I first started this thread.

If the recent growth is indeed a bubble (which I believe it is), then we'll likely see a crash this week, if it keeps to the time table of the last bubble. I doubt we'll see the price drop below $250, if it does crash. But... it's bitcoin, which means it defies all standard market predictors. It'll be an interesting week either way.

edit: Actually, as I was typing this, the price shot up to $605 on Gox and 3700 CNY ($606.79) on BTCChina. Insane growth...

[f0xx]

What are you doing with your bitcoins Inscribed? I hear 1BTC = $1000 now?

[Imoutgoodbye]

He's going to cash it out, urge others to cash out, and cause the bubble to burst. After it falls, he will reinvest. He will then "encourage" the Federal Exchange Commission to allow an economics professor to explain how Bitcoins are the future of currency and push the price back up.

[inscribed]

What are you doing with your bitcoins Inscribed? I hear 1BTC = $1000 now?

$1155 on Mt. Gox as of this posting. I'm not doing anything with them at the moment, other than the occasional day trade to catch some of these dips. I could cash out now and be able to buy just about any new midsize/luxury sedan in cash, or even buy a small house (in a crappy neighborhood), but I have my sights set a bit higher than that. I plan to cash out when it's enough to change my life, and right now we're not there yet.

Passing $1000 shouldn't be surprising, except for maybe how quickly we passed it. I've said it numerous times, but it bears repeating. The longterm outcome of Bitcoin is binary, either we head to $0 (due to some system breaking flaw which is highly unlikely), or we break $100,000. This isn't optimism or random numbers being pulled out of my ***, it's just simple math. Any price we hit in the mean time is just a temporary stop. That means that yes, we will see $5000/BTC, then $10,000/BTC, and so on. It's just a matter of how quickly we reach those milestones. Honestly, I don't see myself ever cashing out in full. By the time prices hit those milestones, then I'll be able to buy my yacht or whatever straight in bitcoin, no need to deal with fiat.

I haven't really been bothering to update this thread (other than to reply to other posters), since I don't think there is much interest in it here. I had a couple people PM me here and there, but I have no idea if they ever started buying any. If there's interest, then I'll continue to update... there's been a ton of news. I started this thread when it was under $100/BTC, and now it's over $1100. That's over an 11x profit you could of had in ~6 months, just for doing a little research on a new technology, and taking a bit of a risk.

He's going to cash it out' date=' urge others to cash out, and cause the bubble to burst. After it falls, he will reinvest. He will then "encourage" the Federal Exchange Commission to allow an economics professor to explain how Bitcoins are the future of currency and push the price back up. [/quote']

I'm not sure what the implication is here, so I'm not sure how to respond. The current market cap of Bitcoin is well over $13 Billion. I'm happy with my investments so far, but I'm not wealthy enough to cause any sort of fluctuation of price in a market that large, and I doubt anyone here is wealthy enough either (it would take millions).

My only purpose in making this thread was to point out a new technology that has the potential to make early investors a lot of money (in addition to revolutionizing society). There's no company that pays me for getting people to adopt, no "economics professor" giving a favorable opinion is going to significantly affect market price, and even if everyone on these forums picked up a few bitcoins all at once, the price still wouldn't move in any noticeable amount.

[Imoutgoodbye]

Simply a joke. High profile economic professors, especially those that work in the public sector in their specialized fields in addition to whenever they decide they want to teach or sit on boards, have been known to swing the stock market in terms of investment when speaking before the U.S. Securities and Exchange Commission, which releases investor educational materials.

The joke was that you'd have enough money and clout to pull off a federal felony.