Not really surprising. The entire BitCoin thing sounded like a scam in the first placeIt's possible that MyBitcoin.com was a scam, but there's nothing wrong with the underlying system itself. The problem is essentially that people built systems on top of the bitcoin system that were really just personal projects to work with a toy currency. MyBitcoin apparently started in 2009 or something, when bitcoin was hardly worth anything.
The BitCoin saga is an excellent demonstration that the government supported monetary system that fringe Libertarians rail against is helpful and necessary.Far more money has been stolen in real currency since bitcoin has been around. A few months ago people lose real money to hackers from time to time as well.
Huang immediately denounced the charges as unauthorized and fraudulent. The bank was subsequently able to stop payment on the second draft for $99,100, but the other $50,000 already had been paid to the Croatian bank and the money had been withdrawn. When Bao asked for the money back, Bank of America told him the missing $50,000 wasn’t their problem.I've heard of even larger thefts done the same way. The FDIC protects individuals, but that doesn't apply to company accounts.
And this is what always confused me - say Bitcoin takes off, and gets extremely popular. If I recall, there are only a few tens-of-millions of Bitcoins able to be produced. Say 30 million people are in on it - that makes about one Bitcoin per person, say? The extreme deflation that would be involved makes it difficult to understand how it could possibly be viable...Bitcoins can be divided up to 10-8 or so. There are actually trillions of indivisible units. Mostly people who use bitcoin denominate things in dollars anyway, rather then a fixed price in bitcoins.
According to whom? Could you even offload ten thousand of these things and get cash for them if you wanted to? Last I checked, this wasn't the case.Daily volume on MtGox is in the tens of thousands per day, so yes you can sell that many if you want too. It might be enough to move the market though. But tens of thousands of coins are bought and sold every day.
How did Mt. Gox manage to recover from their fiasco in June? I'd think after being offline for days and demonstrating they had no contingency plan for problemsPeople got their money back.
There was also the Dwolla charge back scam that happened, where people bought thousands of bitcoins using credit cards, got the bitcoins into their wallets, and then had the credit card companies refund them the money they paid for the coins. Because there's few ways to get the coins back after that, Dwolla ended up getting hosed pretty hard.Well, what happened is that Dwolla just took the money back from TradeHill, basically screwing them. Ironically this shows the problems and risks involved with transferring real dollars online. There's always a risk of a reversal or chargeback. That's good for the consumer, but bad for the seller. Bitcoin makes irreversible micropayments possible, but at the same time transfers risk from the seller to the buyer.
The difference with MtGox is that it's impossible to tell if they can actually afford to write anything off and the government won't help the customers if they can't.I don't think they claim that they'll be able to recover your coins if you get hacked. But a few months ago pitomat.pl, which was a polish exchange lost the primary wallet.dat file, which means that the bitcions it held became unrecoverable. This was about 17,000 bitcoins or about $170,000 worth at the time. You know what happened? MtGox bought the company and agreed to reimburse everyone who's bit coins were lost.
Memo to the Bitcoin guys: you can build a community that has some cool microfabricated steam engines and open source software. But the first time your grandma need a pacemaker, or blood pressure pills and dies, and when your neighbors decide to just use squatholes for shitters and there's a cholera outbreak which leads to your clan leader finding out about that girl you like from the Smith clan, which your clan hates and clan integrity is the only thing protecting you from a cruel world, and the only person who would have spoken up from you was your grandmother, and then the boiler of that micro-fab steam engine you built that didn't need those commie government regulations explodes and kills half your clan members, and that cute girl, and then your clan leaders excommunicate you and put your sorry ass naked out in the street, bleeding, with a latent head trauma that only an MRI could diagnose and only a neurosurgeon in a sterile ER could fix, then you'll miss the common good. Right before you bleed out.Ugh. It's true that there are a bunch of annoying libertarians who use bitcoin, but bitcoin isn't dependant on a libertarian worldview being 'correct' in order to work. It's ideologically independent. As long as the math work, bitcoin works.
So, rather than continuing to destroy the social fabric of America, I'd prefer that you all get the fuck out now. Thanks.This is some seriously paranoid nonsense.
Far more money has been stolen in real currency since bitcoin has been around.Well, there's no way to know, right? Not all theft is reported, there's no way to measure all real money transactions, and so on. There are lots of people who consider the 2008 bailouts to be a kind of theft, and that was $700 billion, almost 10% of the M2 money supply.
Per transaction?
Right, my point is the fact that more real money has been stolen is meaningless because real money is actually used by the population of the Earth.What are you talking about? I assume your point is that bitcoin somehow isn't? There have been about 326,700.58 bitcoins sent in the past 24 hours, that's about $3 million dollars worth.
delmoi, a currency is only as useful as the institutions that trade it. If my money has to go through MyBitcoin or MtGox to trade BitCoin that means that BitCoin is only as good as those services.chrchr the whole point of bitcoin is that it's decentralized Everyone keeps a complete list of all transactions on their own computers to ensure that the money isn't double spent. That's it. You can send and receive bitcoin with anyone you want without involving any third parties.
There was money lost, it's just that MtGox absorbed the losses. The problem will come if another hack exceeds their ability to cover the losses or if they feel like just closing up shop like MyBitcoins. The "got hacked" exit strategy is already out there if someone wants to run a long con, and nobody is even close to cracking the Mybitcoin situation.The FBI was at least taking cursory interest in the MyBitcoin thing. Doing that would be just as illegal as ripping off a bank. Yes, it's true that bitcoin banks aren't regulated but the whole point of bitcoin is that they are unnecessary, you don't need to store bitcoin anywhere but on your computer (which carries it's own risks)
Far more money has been stolen in real currency since bitcoin has been around.Is this true in any terms other than raw value? If not, it seems like an absurdly unfair way of framing the issue, as there is a whole lot more value in "real currency" than there is value in bitcoins.
You are trusting it to banks/exchanges with no accountability to anyone across national borders,No, you are not. How many times do I have to repeat this. bitcoin does not require you to trust anyone at all. You can use it from your computer, without using any third parties at all.
not the local deposit box. If you can't understand why this makes it fundamentally unsafe, I don't know what to tell you.Are you not even reading what I'm writing or do you have some kind of reading comprehension problem? Here is what I said in another comment:
Yes, it's true that bitcoin banks aren't regulated but the whole point of bitcoin is that they are unnecessary, you don't need to store bitcoin anywhere but on your computer (which carries it's own risks)In fact, you absolutely can store bitcoin in a safety deposit box if you want too. Just put the wallet.dat file on a USB stick, take the USB stick to your bank and stick in a box. Done. If you don't have any other backups, then no one can ever spend those coins without that flash drive.
Dude, I'm aware of the technical aspects of it. I'm talking about the functional reality, it's useless currency if you don't switch it back to dollars at some point.And you realize people do this all the time, right? Yes, right now it means trusting a Japanese company if you want to use the highest volume exchange. But how is that any different then trusting a smaller PayPal competitor like Obopay, Dowlla, or other small online transfer companies? The people who run MtGox aren't secret.
*any company involved in bitcoin is shady.But that's completely circular logic. What exactly is it that you think makes MtGox "shady"? What about CampBX, which is a U.S company. Lots of websites get hacked. RSA which makes those one time use password fobs got hacked. Lots of banks get hacked. It happens all the time.
* In order to convert bitcoin back and forth you need to deal with a company involved in bitcoin
*Therefore, order to use bitcoin, you have to deal with a shady company
Funny how the folks who talk about the US Dollar as a ponzi scheme who have been taken in this actual ponzi scheme. Yes I know there are members here who have made money processing blocks and mining. Ponzi schemes always payout some of the people. One way to work this would be to setup a kind of "bank" where people keep their money in the system rather than demanding their return immediately.Bitcoin isn't a Ponzi scheme. There's no requirement to use any kind of "bank" with bitcoin, and if you want to access your money from multiple computers you can keep your wallet encrypted on dropbox or S3 or something.
No.
Fake money was a scam?
GTFO!
You seem to be opperating based on a sort of tautology: Like:In what way is that "circular logic"? It doesn't look circular at all to me. Nor does it look tautological (at least not in the formal logic sense of the word).
*any company involved in bitcoin is shady.
* In order to convert bitcoin back and forth you need to deal with a company involved in bitcoin
*Therefore, order to use bitcoin, you have to deal with a shady company
But that's completely circular logic.
I'm...what? What I am telling you is unregulated banks on the other side of the world backed by no deposit insurance are a bad place to park any of your money, especially based on their history of scamming and hacking in regards to bitcoin, nothing more, nothing less.Yes, and it's very bizarre for you to point that out since it doesn't really have anything to do with bitcoin.
Further, I am telling you that without these systems bitcoin is currently worthless in the real world. I am at a loss to figure out how you can change this situation without compromising the untraceable anonymity that makes bitcoin attractive in the first place.Bitcoin is not untraceable or anonymous, and using sites like MtGox actually tie your bitcoins directly to your name and IP as far as the government is concerned. They actually make it less anonymous.
In what way is that "circular logic"? It doesn't look circular at all to me. Nor does it look tautological (at least not in the formal logic sense of the word).According to furiousxgeorge every company involved with buying and selling bitcoin is an "unregulated bank" with a "history of scamming and hacking in regards to bitcoin". Except as I've said, those things aren't all true for any existing bitcoin companies. So I guess yeah, the problem is that there's no support for the premise that all bitcoin companies are shady.
I believe this will turn out to be the exact definition of a ponzi scheme. A fake financial vehicle is created (i.e. the bitcoin). Simulated returns are created to draw in speculators.How exactly would you "simulate" a return with bitcoin? You can't create fake bitcoins, that's the whole point of the system.
I did do math, I talked about infinity and limits--"talking about" infinity and limits isn't the same as actually using those concepts mathematically.
How is Bitcoin superior to United States Dollars?You can send them over the internet to anyone in the world, instantly, with no risk of being lost in the mail (which is what would happen if you tried to mail dollars). If you look at credit cards, paypal, bank transfers, western union or whatever then you're not really looking at "Dollars". The all have various downsides and upsides. But sending money western union takes a while and costs a ton. Using paypal has risks and bank transfers aren't necessarily international. Right now credit cards don't let you send money to individuals at all, unless they own a CC gateway.
Can I pay for food with Bitcoins?There are a couple of restaurants that will take bitcoin. here's a partial list of products and services you can buy with bitcoin.
If I convert my dollars to Bitcoins, and do the savings-to-flash-drive thing, and my flash drive gets corrupted for some reason, is there some way for me to get my Bitcoins back?Nope. It's like cash. If you had a large amount of cash in your house and it caught fire, you would lose it.
Is there anything like the FDIC/NCUA for Bitcoins?Not yet. I think that's one problem with the bitcoin 'economy' so far. And hopefully one that will be solved. If someone had a large amount of USD they could offer to secure people's bitcons (for a fee), along with the guarantee that if they got hacked, they would cover you at $x/bitcoin.
While the security concept behind bitcoin seems sound, the bitcoin supply model seems awfully wrong in my eyes. The problem with finite supply of currency is that the goods and services which the currency represents and is traded for are not finite. When the currency supply runs slower than the supply of goods and services you have deflation, which may sound great at first sight ("My money is worth more every day. Yay!"), but it's a disaster in practice.I think most people involved in bitcoin wouldn't be too upset if they became too valuable to be used. The thing is, though that they can be divided up up to 10-8. So even if bitcoins became worth a million dollars a piece, you could still use them for for transaction on the scale of a penny.
And here, surely, is why it smells like a scam. For all the talk of it being a currency, I don't believe for one moment, that anyone is getting into it to actually but anything, except for fringe case like buying drugs, they are getting into it because they believe make them money.How does that make it a scam? Who is the scammer and how do they make money? Bitcoin may be in a speculative bubble, but that's different from a scam.
This whole thing sounds like it could have happened on Eve. BitCoin players have wallet files, and they start corporations and exchange markets and "online banks". Then the players hack each other. The main difference seems to be that BitCoin players don't realize that they are playing a game.It's very "late cyberpunk", for sure. But those things also happen with real money, on a much larger scale.
It means a very particular kind of scheme which, no matter how much you refuse to admit it, the SSA meets and BitCoin (as a whole) does not.Social Security is not a Ponzi Scheme. Unlike a Ponzi scheme, Social Security does not promise returns in excess of ordinary investments. It's true that early entrants are paid by payments from the new entrants, but because Social Security payments are tied to the wage level, if for some reason new entrant's wages go down, so would Social Security payments (at least according to the rules. Obviously it's likely that the government, when faced with actual deflation would avoid making actual cuts Social Security. But that money would not come from Social Security itself, but rather from the general fund)
The fundamental aziom of macroeconomics is MV=PQ. The amount of money times the rate at which it exchanges is equal to the summed price of all goods.What units are each of those four variables in? Because in my naive interpretation of your explanative sentence which follows the equation, the left hand of the equation seems to be in different units than the right hand. For example, the left hand might be in "dollars squared per second", while the right hand might be in "dollars".
And follow me here, unless you are a miner or run one of the very few legitimate bitcoin businesses...how are you getting the bitcoins to send?Man, this is so bizarre. Are you even reading the thread? this comment directly addresses the issue. I said several times in this thread that CampBX doesn't have any of the problems with being hacked that MtGox did. I also mentioned TradeHill.
CREDIT CARDS, WESTERN UNION, PAYPAL, BANK TRANSFERS and then on to companies like Mt.Gox with security issues or MyBitcoin with scamming issues. What the fuck have you gained? -- furiousxgeorge
What happens when an exchange sends too much money by accident? Nothing, because there are no consequences like with real money.What the hell is this axe-grindy bullshit? Why exactly are you so amped to twist everything to make bitcoin look as bad as possible? When you send bitcoin, it's irreversible. It's like mailing cash. If you send someone real money by accident then they get to keep it as well.
You cannot guarantee the accountability of any of these businesses, for the very reason you just posted, the irreversibility. That's not axe grinding, it's attempting to show you my point about how vulnerable the bitcoin economy is to scamming at the moment. -- furiousxgeorge
What exactly makes you think that what CampBX is doing is at all legal? -- humanfrontWell, there are lots of examples in the 'real world' where you have to trust your counter-party. As a consumer, you get some protection from banks going bad from the FDIC and some protection from transactions that go bad by using chargebacks. But they don't protect you 100%. If you have any investments in the stock market, you're taking a risk that the company isn't fraudulent, like Enron or AIG.
delmoi: One thing I don't understand about the MtGox refund situation - since the bitcoin transactions were irreversable, did MtGox give refunds in bitcoin, or in USD?Well, when the hack occurred, someone created a bunch of fake sell orders, which dropped the price to pennies. One person put in a bid to buy them all for $0.0101, but it wasn't the hacker. MtGox had (and still has) a $1,000 withdraw limit. The person who got the bitcoins said they could have done multiple withdrawals if they were withdrawing bitcoin, but he only did one because he wanted to look "legit". He thought the transaction would be honored.
There is a difference between saying something is 100% unsafe and saying something represents a severely increased risk. The bitcoin economy is the latter, at the moment.Well, you are making a very specific claim. That there is a reasonable probability that bitcoin exchanges are criminal fronts for people who are going to run off with all the bitcoin at some point. As far as I can tell you're not basing that on anything at all other then the fact that it's theoretically possible. But you've never presented any evidence that any of the exchanges actually are run by criminals. All you're doing is bringing up MyBitcoin which was run anonymously in the cayman islands -- very different from MtGox and the US exchanges which are run by real companies in the US and Japan.
And has been done on a large scale in a similar situation, with MyBitcoin. Done via the excuse of hacking. The next Gox hack could be the same thing, same with any other exchange holding balances.Well, you just keep repeating the same thing. MtGox and MyBitcoin were both based on bitcoin, and it's thought MyBitcoin may have been a scam. But that has nothing to do with MtGox at all.
Never mind that there are more divisible units of Bitcoin available than there are atoms in the universe.The Bitcoin FAQ tells me that there is a hard limit of about 21 million bitcoins (although it predicts it will take until the year 2140 to actually produce that many), each of which can be divided into 10^8 pieces. So about 2 quadrillion fundamental units.
The more Bitcoin is used and transacted, the bigger the history file gets, and eventually you get back to the trust problem because you either waste your life on transaction costs or you automate the process and hope that your automatic transaction verification software isn't lying to you. Anyway, you'll never eliminate the counterfeit problem because there'll always be the possibility that someone somewhere has a quantum computer and is debasing the currency, just like there's always the possibility that someone will transact successfully with fake gold or dollars and skip town before we realize we've been had.Yeah, I'm sure if someone developed a working quantum computer they would keep it secret and use it to make fake bitcoins, instead of collecting their Nobel prize and making billions.
It seems to have escaped everyone's attention that governments can just impose price controls instead. Oh sure, I can transport Bitcoin through cyberspace without regard to natural borders, and so no one government can force me to pay a particular price...for anything that can likewise be transmitted through cyberspace.So what, exactly? Does it matter if people don't end up buying gasoline with bitcoin? If bitcoin becomes a viable system for digital goods, that would be great. Bitcoin is, right now, the only realistic micropayment system out there. You can send a fraction of a cent of value with bitcoin today. That's never been feasible across the whole internet before, the whole world even.
You and your fellow bitcoin miners are trying to sell everyone on the idea that the value comes from the limited supply,The value comes from its utility. Once two people are using bitcoin it's very easy to transfer money between them. It can be a pain to fund your account using dollars initially -- I've never had to do that -- but once you have them sending and receiving bitcoin is actually much, much less of a hassle then sending and receiving dollars.
I applauded the elegant conceptual foundations of Bitcoin when I first encountered it more than 2 years, because I have found alternative currencies and crypto fascinating for a good 20 years.Sounds like sour grapes to me.
You are in the grip of an exciting delusion. Enjoy it while it lasts, but please don't lose sight of the opportunity cost, because that's what's going to dictate the quality of your hangover when it wears off.
LOL. It might he easy to send bitcoins between two individuals, but bitcoins are not money. If you are converting them to local currency it is difficult and high cost. Even before you consider the volatility of the market.I dont know how you can say it's "High cost". The fees on MtGox are 0.65% per transfer. Dwolla, which is the most popular way to move USD in and out of MtGox costs $0.25 per transaction.
delmoi: Alao dint forget if you receive money in bitcoins (e.g. you sell a good or service) and pay in bitcoins that same money, the fees are pretty close to zero for all intents and purposes...Yup, sending and receiving bitcoin is basically free (I think a 'high priority' transfer might cost 0.01 btc? I'm not actually sure. But it's practically free compared to paypal)
People used to withdraw their money in a mob-like frenzy when the economy got bad enough, which compounded problems in a fragile financial system.Right. There's only that problem because of fractional reserve. And it's that fractional reserve that enalbes a pays out interest. These days this interest payout is effectively zero (because we have far too much liquidity and not enough demand in the system, but that's an entirely different discussion). Banks take your money and lend it out, that's why there's a problem with a run on the bank. Bitcoins are a different matter entirely. I'm only mildly exaggerating when I say with bitcoins you are the bank. Bitcoin transactions occur with substantially fewer intermediaries. You don't have default risk because there is no debt markets. Bitcoins markets favor equity over debt. There's a lot of huge implications for equity financing over debt financing (especially when you do it large-scale), but they're not exactly relevant to your arguments. You have to understand that fractional reserve is a DIRECT cause for the existence of deposit insurance. This is not a matter of opinion.
A currency with no central bank, no nation, no interest rate or ability to float in the open markets, and a vulnerable electronic exchange mechanism is doomed except maybe for the black market.I cannot emphasize enough that commodity backed currencies (e.g. gold) has been in existence far far longer than the US Dollar in its current incarnation (40 years). Bitcoins, like gold, float on the open market like any other currency. Those arguments are just as valid against gold as it is with bitcoins. You can make arguments that a Chartalist backed currency is better for society, and I'd be willing to have this discussion, but saying commodity money as the basis for currencies is not viable. Whether commodity money is more viable for the foundation of currencies or an IMF ADR situation is an interesting discussion, but I really don't understand why it's not a viable foundation for a currency. It might not be viable enough to encompass the entire global economy, but even if it replaced the market cap of PayPal it would be wildly successful.
So, call it what it is, an alternative to PayPal for online payments. It's not a good foundation for a currency.What's the difference? Currencies are a medium of transactions. You're doing currency wrong when you hold cash equivalents long-term. Bitcoins are not an investment, that's only for teabaggers, they're a medium for commercial transactions, much like dollars. Nobody holds cash long term.
In order for this to really work, the bitcoin needs to have an interest rate and have a floating exchange rate on the open currency markets. Otherwise, nobody will ever take it seriously.Yeah you can't price it based on the same metrics you might use for an ordinary currency but bitcoin does have a 'central bank', one that's defined by the bitcoin software itself. You know exactly what it will do in terms of the money supply. Instead of lending it to banks, it's distributed directly to miners. You could think of that as zero interest loans to miners if you wanted too, except with a fixed amount lent every two weeks or so.
So, call it what it is, an alternative to PayPal for online payments. It's not a good foundation for a currency.
People buy and sell stock for very different reasons than they use currency to exchange for goods and services. There is such a thing as trading and investing in currency, but that can only be done properly on open exchanges. MtGox is not one, nor is it connected to interbank exchanges.I would ascribe that towards the fact that the market is incredibly new and small. Realize that bitcoins were released in 2009 and only really became a currency this year (and really for less than 6 months). This is ridiculously new. A lot of tools don't exist yet. I think you'll see really cool new tools and ways to use bitcoins start coming online especially relating to the more complex transactions in our economy in the coming months, high-margin bank related transactions such as Letters of Credit can be made substantially cheaper with bitcoins, some transaction types even completely disintermediated. This isn't just about buying coffee with bitcoins. The people (I highly doubt it's just one person) that designed bitcoins put in some serious forethought into the system. One look at the way it handles transactions shows some serious thought into it. I'm not exaggerating when I say it can disintermediate entire swaths of the financial services industry.
But if you're referring to banking systems where deposits held could be less than the total deposits, then possibly. Even so, it's more a problem of credit expansion and contraction cycles than fractional reserve banking, per se.Right but can we agree that without fractional reserve (i.e. the bank lending out money), that it's quite difficult for the money to suddenly disappear? Say I made a bank in USD that just took your money and held it as cash and didn't lend it out. There isn't any substantial default risk. The default risk in banking with USD is entirely derived from fractional reserve, I don't see how this is an argument at all. Credit cycles imply lending by definition. Bank runs cannot be a problem by definition if the bank doesn't lend out the money. Why is this a point of dispute? My point is that a bitcoin economy eliminates the role of banks as a temporary storage of currency, nothing more nothing less. Look the FDIC is an interesting institution, there's been a lot of arguments recently about how the FDIC doesn't charge the banks enough for FDIC insurance, because the long tail risks aren't priced in, and insufficient oversight during the Bush years encouraged moral hazards. The FDIC isn't perfect, there's some serious tradeoffs which really doesn't apply AT ALL to bitcoins.
Do you consider PayPal currency? Nobody who trades or invests in currency does.No. PayPal is money, it isn't a currency a priori, it's derived from the USD or whatever currency you choose to use. True interbank exchanges don't exist because it's so new and untested. Currencies don't become a global force out of nowhere.
The exchange rate doesn't float like global currencies.What? The currency is as real of a float as there is. There's no counter you can go up to that will exhcange an exact amount of bitcoins for dollars. It's a true free float currency. There is no Bitcoin Company. There is no bitcoin Central Bank. There is no server that you talk to and no central exchange. It's as much of a float as the gold market. There's no widespread interbank exchange for gold, but there is a healthy market. Bitcoins are the same way. How can you possibly say it doesn't float like global currencies?
Despite what Ron Paul might lead you to believe, gold is not currency. It's a precious metal with little inherent value.I've never been a teabagger and never will be, but if you don't think gold is a currency we have to stop here. If you think money has anything at all to do with inherent value you really need to rexamine what money really is. All money has zero inherent value. Gold's inherent value is zero, and so is the USD. All currencies obtain value from their economy around it. Just because an economy is small and not as many people will accept it does not mean it isn't currency. Canadian dollars are currency but you probably can't buy gas with it. I really don't understand why the size and influence of a currency is relevant to its future viability.
Not exactly. That's the problem. They must let it float eventually, or they will continue to have difficulty in world markets.What? Who are "They"? There is no "they". It's free float. It has been and always will be. This is not an opinion.
Really? So, what interest rate can I expect if I bought bitcoins today? If I can't find out easily and transparently, and if banks don't use it, and if it's not traded through foreign exchange, it's not worth my time.There is no market currently for long-dated bitcoin bonds, but again it really shouldn't be worth your time to do stuff like that now because there is substantial exchange rate risk (again, new currency, etc.)
No, there is no way to trade Chinese currency in foreign exchange. The exchange rate is pegged by the Chinese government. That's not a free-floating currency, by definition.I'm talking about bitcoins. Bitcoins are free float. There is no "they". If you still disagree you really need to explain who "they", as they would be the party that would be ensuring the fixed exchange rate.
As I read it they are misrepresenting their business to the court and their 'victory' to their customers.And you think the french court and appeals court was just too dumb to figure it out? There are apparently still legal issues to figure out but it comes down to the definition of these terms under french law. It may be the case that bitcoin doesn't fall under those laws for various reasons. That doesn't mean they're misrepresenting anything
Yeah, not to mention when you scratch the surface you see their staff on bitcoin forums defending people like Bruce Wagner from the mortgage fraud allegations. After the MyBitcoin thing I wouldn't exactly be putting my faith in his bitcoin friends.Oh shit, messageboard drama? Really? Well I had no idea there was message board drama relating to bitcoin! This changes everything!
Yup, combine that with the understanding that scammers are smart and understand this too and welcome to my point! It isn't just the electronic currency that is the problem here, but also the electronic communications medium. Cash shouldn't be used here.This is ridiculous. Being able to send the equivalent of cash, without all the fees and uncertainty of existing bank transfers is really useful.
They were defending him against charges a civil court has already confirmed in the matter of the mortgage fraud, yes.Because people on the SA message boards say so? Like I said, I don't really care either way.
You sound like one of those old communists, always eager to tell us how it works in theory. I've seen the code, read the docs.Really? Because I've gone through a decent portion of the Satoshi bitcoin C++ implementation myself, especially the transaction scripting parts. I've run private testnet networks with a new test blockchain. Do explain what I'm missing here -- how can bitcoins not scale if transactions increased 100 fold? Why would international shipment example I gave above not work in practice from a network/code perspective if the market were 100 times larger?
The market isn't 100x larger. It is tiny. It isn't going to get there for the reasons stated above. Did your simulation factor in abandonment, bad actors and multiple networks with competit chai forks.humanfont: You haven't actually explained why the market couldn't technically scale to 1000x as many transactions. It doesn't matter how large they are, the question is just the number of transactions.
I have used Paypal, to sell things to individuals and to buy from them, it works fine and has fraud protection features.Hmm, if you wanted to send money to wikileaks tommorow, how would you do it?
No. If it doesn't bother you at all that Gox is good friends with a scammer like this that is fineYeah it doesn't bother me. Are you going to tell me that every single one of your friends has never done anything shady? This is the kind of bullshit we hate in politicians, attacking someone by making insinuations about the people they're friends with -- you saw it with the attacks on Rev. Wright, Rashid Khalidi, Bill Ayers, Rezko, etc. If you dig up dirt on someone and twist it around it's easy to make people look bad. And it's even easier when all you have to do is find some dirt on the people those people are friends with. It's also something that's impossible to argue about, since it's entirely subjective.
I think it's odd to try and make this forum v. forum when delmoi is breaking out some of the same denialism as you see over there.I'm not denying anything about Wagner. I just don't care, and I think it's irrelevant to the future of bitcoin. There are millions of dollars in transactions eacy day. Bitcoin is bigger then one random guy. If other people are friends of and want to deny various accusations, that's their right. I don't think you can call someone a criminal because they have a different oppinion then you about someone.
Currencies aren't meant to be held, they're meant to be traded. If the currency is used as a medium of exchange it doesn't matter whether the value is $100/BTC or $0.01/BTC, bitcoins still serve its purpose. Exchange rate doesn't matter, market cap does (because it brings price stability).Right. Even if the price does continue to go down, that doesn't mean the currency itself is a failure, what you have to look at the transaction volume -- hopefully the number of transactions, rather then just the dollar value.
and Wagner is hanging around in the background just like he was with MyBitcoin.Hanging around in the background? You mean, by talking about it? That's the extent of his relationship with MyBitcoin, he used the service and talked about it.
Luckily there are many sources for this info beyond SA, an an unbiased look at it leaves you with the same conclusion.Your only 'conclusions' are innuendo about a specific person, and then extending that companies that employ people who defend him. You don't have any evidence that MtGox is letting Bruce Wagner "in the medicine cabinet" or whatever. You don't have any evidence that they've done anything bad.
People who steal credit cards don't want to have to buy merchandise with them instead of an anonymous currency.No one who sells bitcoins takes credit cards.
Yeah, he used it. He was one of the biggest promoters of the service and was in it to the tune of 25,000 coins and...The fact that Wagner was one of the biggest users also meant that he was one of the biggest victims -- if he wasn't in on it.
Look, I don't know what to tell you, we've been over Gox and MyBitcoin and those are big deals regardless of Wagner. We also had the third largest exchange delete their coins via incompetence. These are not isolated incidents.No one lost money with the MtGox hack, and no one lost money over pitomat.pl. And they are absolutely isolated incidents.
If you are going to bury your head in the sand and not look at the clear facts, please STFU instead of continuing to...I don't have an interest in debating the character of one specific person. I think Bruce Wagner is irrelevant, and has zero relevance as to whether or not bitcoin itself is a scam, and little relevance for MtGox.
...pretend you are facing a different argument so you don't have to back down and admit you are wrong.Well, I have no idea argument actually is. I thought the argument was that the people who run MtGox were criminals or likely to be criminals, just waiting to steal everyone's bitcoin. If that's not the argument, then what is?
If you want to send someone $1000 dollars there are many ways that are vastly superior to bitcoin.
...pretend you are facing a different argument so you don't have to back down and admit you are wrong.What exactly am I wrong about? What is it you believe is both: 1) Not true and 2) something I believe?
Yeah they keep getting "victimized" by hackers. Great business plan. -- humanfontIt happened once. Companies get hacked all the time. Suggesting that only illegitimate companies get hacked is ridiculous. And importantly, people didn't lose money. (there may be posts complaining online, but those could be trolls or the cases may have been resolved. I'm not aware of any verified cases of users not getting their money back)
Now, let me repeat again, I'm not saying they are all criminals. What I am saying is the lack of oversight means both that scams are more likely and that the damage of the scams is multiplied by having virtually no chance any government is going to be able or willing to recover the lost funds. They will be as gone as a Moneygram to Nigeria.
NO ---> THEY ARE ALL DEFINITELY CRIMINALS.Not definitely, more likely. You were very clear that you thought it was likely that MtGox was all a huge scam. You said so many times.
Holy shit you are reaching dude, no that was not what I meant by a history of hacking.If someone had been mugged multiple times, you wouldn't say they have a "history of mugging". You were using misleading language to make them seem more shady then they are.
Listen, I've lost patience with this. This is the biggest example of douchebaggery I have ever encountered on this site.Sure, the people at MtGox are criminals because they disagree with you about Bruce Wagner. And I'm a douchebag because I disagree with you about MtGox. I don't really know why you're so butthurt about this, but it's not my fault you're bad at making arguments, or seemingly knowing what your own arguments even are.
They will be as gone as a Moneygram to Nigeria.It seems like most of your comments were based on the premise that using traditional transfer methods were immune from fraud. Now you're saying moneygram transfers can dissapear. Which is it?
Now you want to muddle a reference to 419 scams with Nigerian remittances. How do you expect us to react to that line of argument?He didn't say 419 scam, he just said 'money to Nigeria'. It's a sloppy use of language and it's obnoxious.
It is an obvious inference to well established scam. Your response just further harms your credibility.Credibility on what? This has nothing to do with bitcoin, it's an entirely separate issue from bitcoin. I don't find it particularly credible when people act like sending any money to Nigeria means being involved in a scam. As I said, 150 million people live there, about a million Nigerians live in the US and people send billions of dollars there every year.
Another scandal? Another scam? Ordinary panic? Just trading?Yeah, huge volume as well.
Again pretending my arguments are something they are not will still not magically make it so.Okay... All I said was that if your argument is that there is an increased risk of scamming in principle, then all your posts about whether or not MtGox is somehow a scam are irrelevant to your argument.
I have listed examples of potential risk and warning signsYes, you've pointed out over and over again that some people who work for them defended a guy on a message board, and that's pretty much it. The rest is innuendo, innuendo that's completely irrelevant to the argument that you claim to be making.
As you can see, you are wrong. Stop making shit up.First of all, you were quoting yourself replying to pla, not me. I never said MtGox was better then an FDIC insured bank -- Just to clarify in case someone things I wrote that. I didn't (another sloppy use of language on your part)
Why do you feel it necessary to try and suggest I am implying things I clearly am not?Again, it's not my fault you can't express yourself clearly. I'm responding to the words you write, not whatever it is you think you mean.
The Bitcoin forums have just been hacked, with a bunch of Cosby jokes which are a reference to an inside joke on the SA YOSPOS forum.Well, it looks fine to me (not that I ever go there). All this proves is that 1) SA obviously has some weird issue with bitcoin and 2) You're obviously spending a lot of time on the SA forums if you even heard about it.
Do you still stand by your position that no one has lost money in MTGox?Well, link to a verified example.
And that they got hacked for an amount equaling, IIRC, 1/13th of the entire bitcoin economy at the time.Are you confusing MtGox and MyBitcoin.com again? MtGox only lost a few thousand bitcoins. Another example of a factual mistake on your part.
And that they got hacked for an amount equaling, IIRC, 1/13th of the entire bitcoin economy at the time. And that Wagner is close enough that he has personally visited them. And that another similar company he associated with also suffered a hack.Another example of innuendo on your part. I asked if you were claiming that you throught MtGox were likely to be criminals because they knew Wager, and you said no. Yet, if that's not what you're trying to imply with this statement, then I have no idea what you are trying to say.
It is only unclear if you are intentionally looking for the worst possible reading.It's a direct, literal reading of what you wrote. You can't keep making factual or linguistic errors and then when called on it claim that you meant something else when all of the mistakes that if they were deliberate would be designed to make the "bitcoin community" (or whatever) look worse then it is.
Trusting them when they face multiple allegations of breach of trust seems a bit crazy. The burden of evidence is mtGox. -- humanfrontLike I said, link to a verified example of someone who lost money. I don't really care what you think about their system from a technical perspective. If someone lost money, it should be easy to prove.
No, I am referring to the amount reported missing here.Yeah, and you're wrong. First of all, that article was written during the event, when most of the facts weren't known. It was updated later, but apparently you didn't read the whole thing or maybe you didn't understand it.
What does "verified" mean? Who's going to verify a loss claim? It takes just 5 seconds on Google to find lots of people who claim they've lost money on Mt Gox, or more specifically that it's still locked away and they can't access it. I have no idea if those people are honest or if there problems have been resolved. But what authority does? Financial exchanges without a regulating authority have drawbacks.Right, but the problem is anyone can make that claim. There are obviously people who have a real problem with bitcoin and are obsessed with trolling that message board.
I prefer to manage my finances with currency and institutions that have a claim resolution process. -- NelsonThere are other bitcoin exchanges. You can read their policies and see if you agree with them or not. MtGox is just the most popular one. It's also false to say that MtGox didn't have a claim resolution system in place, you can read about it here.
I also find it pretty astonishing that Mt Gox unilaterally reversed the trades. -- NelsonWhy? As I said, it happens on the real stock market as well. here's the example I was talking about with respect to Google. Are you equally astonished that those trades were reversed?
2. What evidence do you have other than MTGox's own word tha all accounts are restored?That's just my impression. If you don't want to believe it, you don't have too. If you're too lazy to do the research needed to prove your point, that's not my problem. Again, as I said, just show me a single proven example of someone who had their money stolen on MtGox.
You are also lying about that being a "direct, literal reading" ... So you stripped the context where I earlier said Gox was hacked ... Now, you were 100% wrong when you said I was confusing it with MyBitcoinIt's not my fault if you're a poor communicator.
What I am telling you is unregulated banks on the other side of the world backed by no deposit insurance are a bad place to park any of your money, especially based on their history of scamming and hacking in regards to bitcoin, nothing more, nothing less.That clearly implies that you think MtGox has a "history of hacking" at the very least. If not a history of hacking and scamming. Anyone who read that, farily, would have to come to the same conclusion. (In fact, you actually pasted the incorrect context earlier.)
And that they got hacked for an amount equaling, IIRC, 1/13th of the entire bitcoin economy at the time.Now, I think most people reading that would assume you meant that 1/13th of the economy had been stolen. I think that's what "hacked for" would typically mean in this context.
Now, you were 100% wrong when you said I was confusing it with MyBitcoin so please stop claiming that.Look, it's not my fault you're making so many factual errors and/or mistakes in your comments. You seemed to say that 1/13th of the entire bitcoin economy was stolen. That was completly wrong. It was so wrong I assumed you had gotten Gox and MyBitcoin confused. Apparently it was just a mistake about what actually happened to MtGox. It's hard to have a debate with someone who keeps making factual errors, because you have to guess about what mistake they are actually making.
Look dude, you're the one saying they are terrorists.Okay....
Since this thread has started the exchange rate has gone from $14 to $4.66. Yet in the wake of inflation the system is unable to adjust. It just keeps spamming out 300 new btc/hour.I see you're joining the furiousxgeorge "make ridiculous factual errors" bandwagon. The price was about $8 when the thread started. It hasn't been $14 since July. Seriously wtf?
In this transaction, there will be one transaction with two inputs and two outputs. The first input would be the old transaction with two signatures (whether it be the escrow and one party, or preferably Jenga and OtherParty, only 2 of 3 needs to sign). The second input would be $100 USD priced in bitcoins. The output would be $100 USD priced in bitcoins to OtherParty's bitcoin address, and the remainder going to Jenga. OtherParty then converts to USD in an exchangeThe problem here is that there is no way to input the 'exchange rate' in the transaction. I don't think the bitcoin scripts can do any kind of network IO.
So far you you have "did not 100% accurately recall details of article in statement marked with IIRC"."not 100% accurate" = factual error. That's how it works.
I'm sure manufacturers of locks, gates, and burglar alarms derive economic benefits whenever there's a crime wave, but that doesn't mean crime is a net positive. I feel pretty sure that having the Playstation store go dark for a month stimulated more thinking about computer security among the general population than Bitcoin ever has, or will.There is a big difference between computer security and home security, for the most part when people's machines are hacked they're not the ones who end up paying. Their machines are used for botnets, or if attackers do get credit cards or bank accounts they can be reimbursed. It's a hassle, but they don't end up paying themselves. On the internet everyone is in the same 'neighborhood' so anyone can be a target.
His bit coins were eventually replaced. In the meantime the price has fallen quite a bit. So the OP is still out quite a bit of money.Fallen quite a bit? Seriously, what is it with people who can't get their facts straight in this discussion? It's mind boggling just how many errors you guys are making.
I can understand why you might choose not to use BitCoin. I really don't understand your blatant hatred for it. You attack every aspect of it you can possibly think of, relentlessly. I don't get it.I know right? They hate bitcoin the way Rush Limbaugh listeners hate Obama, or like Blazecock Pileon hates Microsoft and Google. It's so bizarre. At least with those examples they hate those things because they love something else (the republican party/Apple).
It reminds me of a number of religious cults that built themselves up on a mashup of real science and some woo-woo garbage. I loathe those as well.Soo... basically you're an idiot who doesn't understand how it works?
And the other they loves it like Rush Limbaugh loves Republicans and Blazecock loves Apple.There is a big difference between loving something and thinking it's cool. I'm defending bitcoin from your attacks because they've been factually wrong and otherwise delusional. The same way Blazecock Pileon talks about Windows or Android. The question is why someone would get so obsessed with hating bitcoin that they can't even tell reality from fiction the way hardcore 'fanboys' tend to. It's fucking weird.
Christ almighty Delmoi. If there is a Metafilter award for being the most dishonest prick of all time in a thread, you win like all top ten spots for your contributions to this thread.You're the one who's being dishonest here, not me. You're like Blazecock Pileon when he spouts bullshit about how no one ever used the term "smartphone" before the iPhone came out, how windows and android are full of spyware, or how Apple was responsible for USB. He doesn't know it's bullshit, he's just obsessed with something and it's clouding his ability to comprehend things. You're doing the same thing with bitcoin.
Does everyone agree on these facts?Uh sure, except for the deepbit thing. They don't control that close to 50% and the last time they did get close a bunch of miners switched to prevent them from crossing the 50% mark. Looking at a current chart they have a little over 40%
2-This software ran for a long period of time, and allowed miners to extract a large number of coins at extremely low difficulty.You make it sound like this was some shadowy conspiracy or something. In reality, the people involved at that stage probably just thought of it as a fun hobby, not something that would reach $30 a bitcoin. Remember the 10,000 bitcoin pizza, that's about $52k today, or even as much as $300k at the peak.
6-MtGox holds a large number of coins in a common wallet withIt's really unlikely they are storing all the coins in a single wallet.dat file. They could be. It's not even clear what this is supposed to signify, exactly.
You have been asked to cite that, and you can'tAnyone who wants to can go back and read the whole thread, and in fact if they're reading this comment they've probably already done it. Since you keep repeating the same nonsense, I'd have to keep repeating how you're wrong, which is what I did earlier in the thread. particularly all the nonsense about how you had to 'park' your money with a shady, unregulated third party website hosted on the other side of the world. here's an example
What happened was you made a factually incorrect statement that the FBI was investigating, which they aren'tYawn. Two quick points: 1) As far as I know, you can't say for certain whether or not the FBI is investigating, and 2) that has nothing to do with this comment which I linked too as an example of me pointing out a factual error on your part.
Your claim about fake information is incorrect. It is trivial to send coins to yourself, heck it is a privacy feature. How many tx per block are just guys sending coins from one disposable address to the next.If people do that, you still have a 1-1 transfer. You also have to pay a (very low) transaction fee, so if you did that too much your money would whittle away (very) slowly.
Are all the trades and bids and asks on MtGox real? The information would be easy to manipulate. There is no bank auditor showing up to verify reserves and check the books.As I said, it is theoretically possible that MtGox is a ponzi scheme, but that doesn't mean that the underlying system itself is a Ponzi scheme. As I said, I think it's really unlikely that the people who setup bitcoin are running MtGox. Even if MtGox were a Ponzi sceme, it wouldn't mean that the underlying system is itself a ponzi scheme, although it would probably a lot of damage to the bitcoin 'brand'.
Apple has an actual balance sheet with income growth. First you tell kenit isn't a security and then you compare it to Apple stock. Don't you see the contortion in your logic?Enron and Madoff both had balance sheets. They can be faked, even when the government is (supposed to be) regulating. The only point I was making was that people who invest early on make more money in a growing stock then those who invest later.
Gold is a traditional reserve metal and still used as part of the portfolio of most governments hard currency holdings, and is seen as a sfe haven by investors. It is also an industrial metal that is actually consumein the production of goods.Gold's industrial value isn't $1800 an ounce. Just like bitcoin, almost all of the value you currently see is because people hold gold as a reserve. And just like bitcoin, if those governments decided to sell off gold for cash at some point the price would crash, just like if bitcoin early adopters sold off. But that doesn't make gold a ponzi scheme or a scam. The physical gold would still be there, just like the bitcoins. The price would just go down. no one is saying the price of bitcoin can't go down. In fact, the slow decline we've see is actually good for bitcoin going forward. In a real ponzi scheme the price would have crashed completely by now. But a slow decline proves that it's not going to collapse once people stop seeing huge increases in value.
May I ask what would you think of BitCoin if you learned that Satoshi Nakamoto was the NSA?...Directed by M. Night Shyamalan
It's fairly obvious that bitcoins are a US government project, I mean that really doesn't need to be said, right? There's a really good case for it from a strategic national security standpoint. It's a really good insurance policy against people like China/Venezuela hoarding gold and pushing for the gold standard. It's fairly obvious that there's only two viable solutions in the future without bitcoins, IMF ADRs or Gold. Either leaves the west in a deeply powerless situation.Come on that's ridiculous. First of all, the U.S. has the largest national gold reserves in the world We have 8 times as much as China and 13 times as much as India. We have 80% as much as the entire eurozone.
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what's the saying? pig..poke... you get the idea.
posted by zombieApoc at 1:50 PM on September 1, 2011 [3 favorites]