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Coin Rules Everything Around Me
February 5, 2014 6:19 AM   Subscribe

In 2014, Bitcoin (BTC) has become established as increasingly "real" money with government regulatory interest, law enforcement, and growing acceptance in commerce, but also as the reserve cryptocurrency for hundreds of "altcoins," making them also convertible to legacy money. Foremost among these is Litecoin (LTC), which introduced the scrypt hashing algorithm to cryptocurrency, democratizing coin mining by being best suited to common GPUs rather than Bitcoin's dedicated mining equipment. Recently donated LTC paid for a forest in Madagascar. Peercoin (PPC), next in prominence, introduces "proof of stake" where less energy is spent mining and existing coins pay interest. Dogecoin (DOGE), a fork of Litecoin (previously covered on Metafilter), continues heading to the moon, with more transactions than all other coins combined, thriving markets in digital goods, tipbots, an upcoming party in NYC's Bitcoin Center on Wall Street, much charity, and the recent announcement that new Dogecoins will be generated indefinitely. A selection of other foremost and interesting cryptocurrencies is within.

  • NXT, uncommonly not based on Bitcoin's code/protocol, is a 100% proof of stake coin aiming for "next generation" features.
  • Mastercoin attempts to supplement Bitcoin with "next generation" features.
  • Quark uses multiple hashing rounds and CPU mining.
  • Primecoin searches for prime numbers.
  • FedoraCoin is a loser crypto which recently announced it plans to add anonymity, also a goal of Anoncoin.
  • LottoCoin has occasional super-high-value mining rewards.
  • DataCoin can store files in the blockchain.
  • 42Coin will only ever have 42 coins, with about 1 mined so far.
  • PotCoin will have 420 million coins at 420 coins per block.
  • Coinye got sued, caused drama.
  • NameCoin is a key value store including a DNS replacement.
DISCLOSURE: Your aggregator holds < 0.1 BTC/equivalent in a diversified portfolio of major cryptocurrencies including many listed in this post.
posted by save alive nothing that breatheth (319 comments total) 42 users marked this as a favorite

 
Call me when it isn't hideously painful to cash out into real money.
posted by koeselitz at 6:34 AM on February 5 [23 favorites]


If BTC is ever going to become a "real money", doesn't the seemingly trivial abiltiy to create splinter and copycat crypto-currencies undermine any legitimacy or actual value?
posted by T.D. Strange at 6:39 AM on February 5 [2 favorites]


Why, when I click on the Litecoin link, does it download something?
posted by NoMich at 6:42 AM on February 5


Coinbase works fine for USA, few days' delay. The ability to create new crypto no more undermines BTC than my ability to draw up monopoly money undermines USD - I have to convince someone to take my monopoly money.
posted by save alive nothing that breatheth at 6:42 AM on February 5 [1 favorite]


And the best part is the way true Bitcoin aficionados unironically deride all these other crypocurrencies as not being real...
posted by Jimbob at 6:42 AM on February 5 [17 favorites]


>> Why, when I click on the Litecoin link, does it download something?

It appears to just be markup for the page. Which is still kinda weird though.
posted by JohnFredra at 6:50 AM on February 5


This stuff is super cool. I don't think *coin makes any sense as a store of value, but as a means of exchange, it's brilliant. Basically, Square and the other people trying to disrupt the credit card companies could get their lunch eaten by BitCoin and its friends, as long as someone can figure out how to get money into and out of the network quickly and easily.
posted by Aizkolari at 6:51 AM on February 5 [2 favorites]


I was one of the naysayers early on. I'm still not fully sold (sold, get it? hahaha, I kill me).

But I have to admit I'm completely shocked at the fairly rapid take off in Bitcoin when it comes to a lot of everyday places accepting it.

One of the first things I pondered was if someone would end up making a Wörgl -Scrip style coin, one that reduces in value. Recently I heard about freicoin, started by some NASA dude who wanted to implement in some ways Silvio Gessell's freegeld theory. (aka: Wörgl -Scrip).

When learning about this I went to a forum and dear god... The cryptolibertarians were all aghast at the idea of a central committee holding on to 80% of the economy and doling it out. I don't know what I have to say about that, but they were virulently against the idea of freicoin.

Then I saw a post about Dogecoin in /r/bitcoin, and it was a lot people talking about dogecoin being very open and communally very happy and fun, versus the VRY SRS BSNS of bitcoin, and the attitude that bitcoiners have that they are the ONE TRUE CRYPTOCURRENCY.

This sort of puts me off bitcoin itself, but I am fascinated by cryptocurrency. I have mixed thoughts on the very idea, because in some ways I do like decentralized economic systems (local money, such as HOURS for example), I do worry that in the first place, we need a proper healthy functioning economic system in place nationally/internationally. I'm not so sure I like a completely decentralized system, because there are benefits of some centralization. In particular, the SOCIAL (Welfare, in particular -- disability, social security, food stamps, etc...) needs that a central system provides (vs the MILITARY or other forms of crap that the nation-state ends up spending so much on).

I would like dogecoin, and I suppose based upon the attitude of the users, I do, but GODDAMN I HATE DOGE.

The bitcoin people make me think they don't realize that if you don't have users then your currency is worthless. Right now, they clearly have the advantage of being first mover, but if dogecoin really does take off because as a community it's more "fun" (however nebulous that word may be), then bitcoin best look out.

Another idea I had, but then found out it's apparently not a good idea, was to pay people for crunching data (like folding@home, seti@home, etc...), the difficulty is in the effort to reproduce and verify the results... I still think there should be a way to usefully pay people to use their systems instead of just crunching crypto things.

As a bonus, I also saw this strange strange strange idea from Ted Nelson (he of Xanadu fame) wherein he posits that the real identity of Satoshi Nakamoto is actually Shinichi Mochizuki.

What's fascinating about that is who Shinichi Mochizuki is, which is a fascinating story in its own right.... Seriously read that if you have the time. "500+ pages of proof, now kindly fuck off and leave me out of it."
posted by symbioid at 6:51 AM on February 5 [11 favorites]


I'm gonna go buy a cheese burger with Bitcoin today! It'll cost .0125, wait no, .001, hang on, now it's 1, or maybe it's .004...

In all seriousness, a lot of the hype around Bitcoin is based on the price listed on MTGOX (Magic: The Gathering Online Exchange), but the problem with MTGOX is that the feds tightly control how much of their money they're allowed to actually touch (it's something like low five digits a month, last I heard)- so while MTGOX currently says a Bitcoin is worth about $922 right now, actually selling one for cash won't get you your money for months, if then. And who knows what a bitcoin will be worth then?
posted by Pope Guilty at 6:52 AM on February 5 [2 favorites]


PG, I never realized MTGOX stood for that. I'm glad I didn't know before.
posted by bbqturtle at 6:55 AM on February 5 [11 favorites]


Speaking of rapidly changing currency, I recall some hardcore libertarian positing dynamic real time pricing. Like the store shelves would have digital price displays and as items were bought or sold, the realtime pricing would be reflected on the displays. I think the idea was the supply vs demand would inextricably be realtime woven or something. If this tied into bitcoin, it'd certainly be... weird.

This, along with Anonymous, Wikileaks and Edward Snowden continue to make me think in a William Gibson novel.
posted by symbioid at 6:57 AM on February 5 [4 favorites]


PG, I never realized MTGOX stood for that. I'm glad I didn't know before.

The best part, and this is one of those "seriously, how completely incompetent are these people" things, is that MTGOX wasn't for trading actual Magic cards. It was for trading virtual cards from Magic Online. Which... has a fully-featured suite of trading interfaces already. So basically it was a website created to accomplish with more effort something that was already done, and now it's been repurposed into the most useless exchange not named "localbitcoins".
posted by Pope Guilty at 6:59 AM on February 5 [8 favorites]


Also, if you're looking into cryptocurrencies and not liking what you see with Bitcoin, you might check out the latest in currency technology.
posted by Pope Guilty at 7:01 AM on February 5 [6 favorites]


I dunno... The more I read about cryptocurrencies, the more I'm left with the feeling that this is not really an alternative to money and mostly a form of limited edition collectible randomized byte sequences being hoarded like superhero comics with foil embossed holographic covers.
posted by ardgedee at 7:08 AM on February 5 [49 favorites]


>> Why, when I click on the Litecoin link, does it download something?

It appears to just be markup for the page. Which is still kinda weird though.


The link is working for me now. Weird.
posted by NoMich at 7:12 AM on February 5


I recall some hardcore libertarian positing dynamic real time pricing. Like the store shelves would have digital price displays and as items were bought or sold, the realtime pricing would be reflected on the displays. I think the idea was the supply vs demand would inextricably be realtime woven or something.

Sounds more like someone's petty dream of being able to squeeze even more money out of arbitrage. Soon we'll all be buying Slim Jims low and selling high.
posted by RonButNotStupid at 7:15 AM on February 5 [2 favorites]


I don't have any particular object to these new currencies, I just don't quite understand what problem they solve.
posted by octothorpe at 7:23 AM on February 5 [1 favorite]


JohnFredra: ">> Why, when I click on the Litecoin link, does it download something?

It appears to just be markup for the page. Which is still kinda weird though.
"

Given everything that I've heard about the sketchiness of the *coin underworld, there's no way that I'm touching that site with a 10-foot pole.
posted by schmod at 7:23 AM on February 5


octothorpe: "I don't have any particular object to these new currencies, I just don't quite understand what problem they solve."

Taxes and regulatory oversight?

Whether or not those are "problems" is up to you.
posted by schmod at 7:24 AM on February 5 [4 favorites]


I don't think Mt. Gox even goes into the standard BTC / USD numbers anymore - widely known that price is distorted. The accepted price has been around 800 for many weeks.

Vault of Satoshi recently opened up DOGE / USD, I think it's technically facilitating exchanges between users.
posted by save alive nothing that breatheth at 7:24 AM on February 5


The husband actually gets paid in Linden dollars (which are converted at a fairly terrible rate to real dollars) when he performs in Second Life. Does that count as a cryptocurrency also?
posted by emjaybee at 7:25 AM on February 5


I don't have any particular object to these new currencies, I just don't quite understand what problem they solve.

The basic problem is one of exchange. If I want to buy something from a dude in Britain, I need to get my dollars into euros, for which the bank will take a bite and the price will vary based on the going exchange rate.

With *coin, you can cut out the middleman. Price will still vary at the exchange rate, but at least you aren't paying a fee for the exchange. (or, more accurately, you are, but it is much much smaller).
posted by Pogo_Fuzzybutt at 7:26 AM on February 5 [2 favorites]


I don't have any particular object to these new currencies, I just don't quite understand what problem they solve.

In theory they're anonymous, and allow users to transmit money without being tracked, but the reality of Bitcoin's protocol is that literally everybody has a log of every transaction ever made. This is how the feds caught Ross Ulbricht- the dipshit used the same email address for his Bitcoins as he did for some online posting, and from there they were able to figure out who and where he was. Mostly it's an effort to dodge taxes and legal oversight of commerce, so figure out for yourself who would find that helpful.


The husband actually gets paid in Linden dollars (which are converted at a fairly terrible rate to real dollars) when he performs in Second Life. Does that count as a cryptocurrency also?

No, because Linden dollars aren't an effort to prevent governments from tracking economic exchanges.
posted by Pope Guilty at 7:27 AM on February 5 [4 favorites]


This, along with Anonymous, Wikileaks and Edward Snowden continue to make me think in a William Gibson novel.

The future is already here; it's just unevenly mined.
posted by thecaddy at 7:28 AM on February 5 [11 favorites]


The worst part about bitcoin are bitcoiners; that subreddit is a sewer. Far too many people are all about getting rich quick, scamming newbies and/or defeating the evil trilateral statist overlords to have a useful conversation about the real world (or the crypto).

Mind you the naysayers are very nearly as annoying. Most of the big concerns right now are comparing a hundreds-of-years-old fiat system with a ~5 year old, more or less entirely novel one. Shockingly there might be some growing pains like volatility and liquidity.

I find it fascinating regardless and can't wait to see how it shakes out. Certainly I hope sha256 doesn't stay the proof of work function for long, asic mining defeats a lot of the decentralization the protocol tries to encourage.
posted by Skorgu at 7:29 AM on February 5 [4 favorites]


A proof-of-work system that includes designed-in deflation? A system whose inventor is a false name, no one can track down, and mined 5% of the currency (that will ever be available) before releasing his system to the public? A system that works largely because there isn't enough money in it to be of interest to governments? A system ... oh, I give up. The list is mighty long.

Sign me up!
posted by introp at 7:29 AM on February 5 [21 favorites]


An interesting guest post by L. Adleman (the A in RSA) was recently on John Baez's Azimuth blog about rare bit strings.
posted by TreeRooster at 7:30 AM on February 5


No, because Linden dollars aren't an effort to prevent governments from tracking economic exchanges.

Ah. I suppose I was conflating the "crypto" with the kind in "cryptozoology" and not with "cryptography".

Most of these seem a lot closer to the first one, though.
posted by emjaybee at 7:30 AM on February 5 [4 favorites]


Britcoin
Make It Rain ®
posted by 0 answers at 7:30 AM on February 5


doesn't the seemingly trivial abiltiy to create splinter and copycat crypto-currencies undermine any legitimacy or actual value?

Only in the sense that photocopying a bunch of $20s with Alfred E. Neuman drawn on top of Mr Jackson undermines the Federal Reserve. I'm not exactly bullish on Bitcoin but I don't think anyone is going to mistake Dogecoin for Bitcoin, and in fact the different software required to transact either one makes that mostly impossible.

Though the low barrier to entry does, one hopes, make obvious to everyone that there's no inherent value at all. There's no reason why Bitcoins should be worth more than Dogecoins or FedoraCoin or Joe's Pretty Good Digital Currency. So that should give everyone pause, but it's pause that they should have had anyway.

The steady-state value of a Bitcoin in a rational market would seem to depend on the demand for BTCs for transactional purposes, which is the only real strength that they have over traditional, non-digital currencies. So if other digi-currencies allow for the same ease of transactions and conversion to/from real currencies, then I could see the value of BTC falling. Of course, the market can always stay irrational for a long time; the novelty value of owning a few Bitcoins might prop up the value for a while.

And as for the silly argument that "well fiat currencies don't have any inherent value EITHER whaagarbl" that's crap. Fiat currencies do too have value; the inherent value of Federal Reserve Notes is, in fact, printed right on the front: 'this note is legal tender for all debts, public and private.' That's where the value comes from (well, that and the implicit guarantee of a reasonably stable money supply). You can hold dollars and as long as your debts are denominated in dollars, you're always good to pay them off that way, and there's a nifty state apparatus you can employ, which itself is backed up by violence, in case you get any guff like your creditors demanding payment in gold or Michelin Dollars or Loonies or whatever. The value of dollars is QED when you have a guaranteed demand and a controlled supply; BTC has the latter but not the former.
posted by Kadin2048 at 7:31 AM on February 5 [5 favorites]


Most of the big concerns right now are comparing a hundreds-of-years-old fiat system with a ~5 year old, more or less entirely novel one. Shockingly there might be some growing pains like volatility and liquidity.

There's also the fact that Bitcoin is limited to 7 transactions a second, which isn't enough to support a small city, or that there's no such thing as a chargeback (meaning that if you get screwed there is literally no protection), or the fact that since mining bitcoin requires a lot of electricity being used for literally nothing other than mining bitcoins, it's basically a coal-backed currency...
posted by Pope Guilty at 7:31 AM on February 5 [27 favorites]


Call me when it isn't hideously painful to cash out into real money.

People constantly post that link. But everyone ignores the first parapraph "Mt Gox apparently wants an insane amount of personal information and even then he has to be added to a waiting list to even get any money out, and even then there is apparently some stupid low limit."

So basically he wasn't prepared to provide the ID docs (scan of passport and proof of address etc) that MtGox asks for - and (please note) _has_ to ask for to comply with money laundering regs. So he tries lots of other ways, and fails. Whats the story?

I'm sure if you have unexpectedly become a millionaire on bitcoin it is pretty hard to cash out, because all the exchanges have daily limits etc. But for day to day use plenty of people are converting bitcoins back into real money.
posted by memebake at 7:34 AM on February 5 [2 favorites]


Only in the sense that photocopying a bunch of $20s with Alfred E. Neuman drawn on top of Mr Jackson undermines the Federal Reserve. I'm not exactly bullish on Bitcoin but I don't think anyone is going to mistake Dogecoin for Bitcoin, and in fact the different software required to transact either one makes that mostly impossible.

Dogecoin is instructive in how much of a joke cryptocurrency is, because somebody took Litecoin's source code, changed the names of a few variables, and boom, Dogecoin. (This is how nearly every altcoin works- virtually all of them save a few are somebody taking the Bitcoin or Litecoin source code and changing a few variables). Which would be like people printing up Alfred E. Neuman dollars except that people are using Dogecoin to buy and sell things. That's like people accepting Monopoly money for their goods and services. It's something that only happens when the "real" currency is itself a joke.
posted by Pope Guilty at 7:35 AM on February 5 [5 favorites]


Taxes and regulatory oversight? Whether or not those are "problems" is up to you.

My (old) neighborhood had a scrip you could use for paying for services like lawnmowing and haircuts and whatnot. Very technically, you are supposed to count those transactions on your taxes but I don't think anyone ever did.

As for regulation, the fed has stated that they could, in theory, regulate cryptocurrencies, but at this point have not interest in it.

And yeah, on the one hand, that benefits drug cartels, but it also benefits Russian GLBT groups, too.
posted by Pogo_Fuzzybutt at 7:35 AM on February 5


I use Money2 on the Internet2 while enjoying my Crystal Pepsi. Every 1000 beats of Internet Time I make another 1.45x10e-1 credits. Who wants in?
posted by blue_beetle at 7:36 AM on February 5 [13 favorites]


The money aspect of *coin is so much less interesting to me than the other cool stuff you could use the whole blockchain/verification stuff for.
posted by jason_steakums at 7:36 AM on February 5 [4 favorites]


There's also the fact that Bitcoin is limited to 7 transactions a second

That's a software limit they can change any time by common consensus

or that there's no such thing as a chargeback

True, but could be added by layering another service on top. Cash doesn't allow chargebacks either, but people use it to buy things.

or the fact that since mining bitcoin requires a lot of electricity being used for literally nothing other than mining bitcoins, it's basically a coal-backed currency...

its not just mining bitcoins, the mining process is also the transaction processing engine. But yeah, that is a lot of power. Probably less than the power used by the traditional money-moving system of the world (all the banks, visa etc)
posted by memebake at 7:37 AM on February 5 [1 favorite]


blue_beetle: "I use Money2 on the Internet2 while enjoying my Crystal Pepsi. Every 1000 beats of Internet Time I make another 1.45x10e-1 credits. Who wants in?"

What's the conversion rate into Beenz?
posted by Chrysostom at 7:39 AM on February 5


Dogecoin is instructive in how much of a joke cryptocurrency is, because somebody took Litecoin's source code, changed the names of a few variables, and boom, Dogecoin.

Do you have a link or a cite for this ?
posted by Pogo_Fuzzybutt at 7:40 AM on February 5 [1 favorite]


I love doge. And I hope dogecoin obliterates bitcoin. At minimum you can at least spend dogecoins cheering on someone witty on reddit.

I'm absolutely thrilled that dogecoin has taken actually being a currency seriously by establishing a fixed permanent inflation.  
wow   such logic   much economy

Zerocoin (github) has sought to bring stronger anonymity to crypto-coins, but the bitcoin folks snubbed them, like bitcoin snubs all protocol upgrades, so Zerocoin will become an independent cryptocurrency.
posted by jeffburdges at 7:42 AM on February 5 [1 favorite]


Metafilter's first Bitcoin thread, back in 2011. People were so snarky back then, we've come a long way.
posted by memebake at 7:43 AM on February 5 [2 favorites]


Even after Bitcoin goes back to zero (by replacement or crashing), the fact that it solves the Byzantine Generals problem, offering a way to distribute ownership of a resource among peers who don't necessarily trust each other, but trust the whole group (on average).

Voting this way could be a very useful thing.
posted by MikeWarot at 7:44 AM on February 5 [3 favorites]


Ah. I suppose I was conflating the "crypto" with the kind in "cryptozoology" and not with "cryptography".

I really like the idea a cryptocurrency in the sense of cryptozoology -- reading posts on weird message boards with blurry photos of bills which might possibly be the fabled currency of the Republic of Qu, supposedly accepted by a bartender in Nome, but later stolen by a shifty customer with a glass eye and no knowledge of history since 1980. Later, the same photograph is claimed to be dolors, a currency from a different, and sadder, dimension.
posted by GenjiandProust at 7:47 AM on February 5 [22 favorites]


In particular, I hope dogecoin, zerocoin, etc. obliterate bitcoin because most bitcoins are held by a couple early adopters, giving it an atrocious Gini coefficient, etc.
posted by jeffburdges at 7:53 AM on February 5 [3 favorites]


So can I pay for things with Flooz again now?
posted by koolkat at 7:53 AM on February 5 [8 favorites]


The husband actually gets paid in Linden dollars (which are converted at a fairly terrible rate to real dollars) when he performs in Second Life. Does that count as a cryptocurrency also?
No... Linden dollars are only an account balance in Second Life, they aren't a currency. They are not part of a cryptographically secured balance sheet either... which eliminates the "crypto" part.
posted by MikeWarot at 7:53 AM on February 5 [1 favorite]


Its in the fpp but worth noting anyway: Overstock.com and TigerDirect.com both now accept Bitcoin payments. Overstock planned to add the feature later in the year but deployed it much earlier than expected when the CEO put a crack team of 40 people on it and they made the site changes within a week. In the first day it went live, they sold $126,000 worth of goods in Bitcoin.
posted by memebake at 7:54 AM on February 5 [6 favorites]


I've turned around on bitcoin a bit since the price stabilized, it's weathered some pretty major shocks, and the supporting infrastructure has come online and have stuck my toe in, kind of using coinbase as a little savings account. So far, I've done better than I would have with my bank, but I'm not sure that is worth the risk. Still, I'm going to keep a little bit in just to make watching the exchanges a bit more interesting.

And, re: Mt Gox:

There are some real signs that they are going to collapse. The price there is completely disconnected from all the other exchanges because people can't get dollars out, so they've been buying bitcoins and withdrawing that way, driving up the price. Except now people can't withdraw bitcoins, either. There's a reasonable possibility that the assets aren't there any more, and that they were seized or stolen or embezzled.
posted by empath at 7:54 AM on February 5 [2 favorites]


Maybe I'll make my own currency called Scotsman Coin, because there sure are a lot of arguments here that a cryptocurrency can't be a True one.
posted by RobotVoodooPower at 7:56 AM on February 5 [1 favorite]


I've always been confused by the claim that Bitcoin solves the Byzantine Generals problem in a novel way. It's a problem we solved many, many years ago in the computer realm, so in order for systems to make news about their solution they have to do it better (typically faster) than known solutions. Bitcoin's proof-of-work solution isn't novel, and is computationally more expensive than alternatives. I've been offered arguments that it doesn't require side-channel communication, but given that the BG problem requires communication from command and among the peers for it even to be a problem and that public PoW systems don't appear to offer any general savings on payload/bandwidth, I don't see it.
posted by introp at 7:59 AM on February 5 [3 favorites]


The part I'm really excited about (even though I'm neither a Redditor or a particular *coin fan) is the dogecoin tipbot. Here's a sample thread where you can see people using it in context. Basically a Reddit commenter can tip another user by including somewhere in their reply a line like "+/u/dogetipbot 50 doge".

Here's what's amazing about this:
  • It's built on the existing Reddit commenting system; no changes needed to be made to Reddit in order to add a microtransaction layer.
  • It's easy to join and easy to use. If you're tipped, all you need to do is send an "+accept" message to the bot, and you can start tipping other users.
  • It's easy to implement; all of the hard parts are handled by the underlying dogecoin network, rather than by dogetipbot. (Sure, it's popular-web-service hard to implement a dogecoin bot, but not microtransaction-network hard.)
  • Real transaction costs are insanely low (a fraction of a fraction of a penny), so it's sustainable.
  • It's a "real" currency in the sense that it can be converted to cash in a relatively standard way.
I don't know of any other microtransaction scheme that could boast all of those things -- the underlying transaction network changes the basic rules of the game. And you can see that play out in the comment thread I linked to -- it's a microtransaction system that is actually being used.

So far it only seems to be used in doge-related subreddits, which makes sense if those are the people who have doge to tip. If it starts spreading, though, I could see it going to the moon.
posted by jhc at 8:00 AM on February 5 [6 favorites]


The most annoying thing about bitcoin is the stupid stock photos of physical coins stamped with "B⃦" that always show up in articles about it on the BBC. Where do these things even come from? Do editors have any idea how confusing those images are for people trying to grasp the concept of a virtual currency? It's like using pictures of brightly painted cardboard "pixels" to illustrate an article about digital photography.
posted by oulipian at 8:04 AM on February 5 [12 favorites]


And, re: Mt Gox:

There are some real signs that they are going to collapse. The price there is completely disconnected from all the other exchanges because people can't get dollars out, so they've been buying bitcoins and withdrawing that way, driving up the price. Except now people can't withdraw bitcoins, either. There's a reasonable possibility that the assets aren't there any more, and that they were seized or stolen or embezzled.

The risk of any one site where bitcoins are pooled and held (exchange, bank, investment firm) failing or turning out to be a criminal enterprise from the beginning seems VASTLY higher than the corresponding risk of such in any "fiat" currency.

Holding cyptocurrency assets seems to expose you to not only the obvious exchange rate risks, but unacceptable fraud risk and simply maintence risk of the site continuing to operate on a daily basis, where the acceptable level should approach 0.
posted by T.D. Strange at 8:06 AM on February 5 [2 favorites]


+/u/dogetipbot 500 doge verify

Think this would be a nice option to add to favorites.

I hope dogecoin succeeds and not just because I have a small stash in six figures of the stuff, thanks to early mining. Becoming deliberately inflationary was a very good move and could possibly ensure doge remains a relatively stable store of value and could possibly fuel microtransactions and lead to less dependency on Paypal. And the community is kinda fluffy but their friendliness and "to the moon" attitude is amazing compared to the bitter libertarian surliness of the bitcoin folk.

If there's anyone who doesn't have dogecoin and wants a little to play with or just stare at lovingly, memail me your dogecoin address or a link to a post of yours on Reddit.
posted by honestcoyote at 8:07 AM on February 5 [1 favorite]


Wake me up when someone buys a cocktail from me and puts a bitcoin in my tip jar.

Till then, me and the strippers will mostly exist in a world of folding money.
posted by Pirate-Bartender-Zombie-Monkey at 8:07 AM on February 5 [2 favorites]


introp: I've always been confused by the claim that Bitcoin solves the Byzantine Generals problem in a novel way

I think its to do with the decentralised running in an untrusted environment. See: Finally, [bitcoins] solution to the Byzantine Generals Problem can be repurposed to any domain where lack of trust on a distributed network is the core problem.
posted by memebake at 8:07 AM on February 5 [1 favorite]


The best part, and this is one of those "seriously, how completely incompetent are these people" things, is that MTGOX wasn't for trading actual Magic cards. It was for trading virtual cards from Magic Online. Which... has a fully-featured suite of trading interfaces already.

You can't trade the virtual cards for real money on the official site, can you? Wouldn't that be the purpose of a 3rd party exchange?
posted by ODiV at 8:22 AM on February 5


I'm a bit uncomfortable with the comments damning Bitcoin by its users. Seems a bit too much like the comments used by people opposing encryption. "What, you want to be able to securely encrypt your emails and web access? I guess you're on the side of TERRORISTS and PAEDOPHILES then!" That doesn't seem to far away from "So you want to be able to use a cryptocurrency? I guess you're on the side of CRAZY ANTI-GOVERMENT EXTREMISTS!"

I love the way that the cryptocurrencies are decentralized with no central authority. It makes them robust. I've never used one and have no plans to. But I think it adds a bit of useful redundancy to society that currencies like this can now exist separately from the existence of states. It's a bit like the way the existence of markets in heirloom vegetables adds some useful redundancy to our food networks.

I'm not that worried about cryptocurrency-based tax dodging bringing down governments either. It's not that many decades ago that most transactions were untraceable by the government, being based in cash or just too hard to keep track of: governments survived. In fact, I think the ability of governments to track electronic transactions may well have been regressive in tax terms: suddenly it became much easier to implement regressive sales taxes and VAT. It enabled governments to tax tiny transactions made by the poor: before computer networks the difficulty of doing that forced governments to get more of their taxes from the rich. In the long term, cryptocurrency tax evasion might even encourage goverments to implementing a land value tax or similar.
posted by TheophileEscargot at 8:34 AM on February 5 [5 favorites]


Do you have a link or a cite for this ?

I can't prove that it's how dogecoin itself was made, but it's a scrypt coin, which means it was almost certainly cloned from Litecoin. Here's step by step instructions on how to take an existing coin and make your own.


That's a software limit they can change any time by common consensus

Not without creating a fork.

True, but could be added by layering another service on top. Cash doesn't allow chargebacks either, but people use it to buy things.

Nobody will use that service, because it adds accountability, which bitcoin is specifically designed to defeat.


I love the way that the cryptocurrencies are decentralized with no central authority. It makes them robust.

Until somebody gets 51% (at which point the 51% can doublespend), or the frisbee on the roof attack (stick a bunch of power into the network for awhile to drive difficulty up, pull out abruptly to leave the network without enough power to process the new, absurdly higher difficulty) happens, or any of a number of things that can go catastrophically wrong with no way to undo it. Hell, the ghash.io mining pool controls somewhere in the neighborhood of 40-45% of all the power in the network- good luck once they add another 10% and decide that the reality of bitcoin is whatever they say it is.
posted by Pope Guilty at 8:43 AM on February 5 [6 favorites]


The Dogecoin folks on Reddit raised 26 million Dogecoin to send the Jamaican bobsled team to the Olympics. Awesome! Except you can't buy plane tickets with Dogecoin. The event was widely reported as "raised $30,000", but how did they convert the Dogecoin to dollars? The article I linked says they converted the Dogecoin to Bitcoin, which is at least a little more like a tradeable currency. But how feasible is it to turn $30,000 worth of Bitcoin into US dollars?
posted by Nelson at 8:51 AM on February 5


So basically he wasn't prepared to provide the ID docs (scan of passport and proof of address etc) that MtGox asks for - and (please note) _has_ to ask for to comply with money laundering regs. So he tries lots of other ways, and fails. Whats the story?

Anonymous currency is neither anonymous nor currency.
posted by Blazecock Pileon at 8:54 AM on February 5 [9 favorites]


I was skeptical about BTC & crypto currencies at first, but this Marc Andreessen article made me rethink a few things:

NYT

As speculative instruments, CCs seem at this point to still be a mug's game. But if what Marc says about the potential for CCs to radically reduce transaction costs for global currency exchange then that certainly would be an interesting development.

I still wonder about possible fees/gatekeeper effects at the points where CCs have to be converted/reconverted into regular currencies, but I guess as more players enter the marketplace competition will drive commissions down to a usable level.

Question for any actual BTC users: how much do conversions in & out of BTC/DC/LC/etc cost per transaction right now?
posted by faceattack at 8:54 AM on February 5


Not without creating a fork.

That's actually by design. Anyone can fork the blockchain, whichever one the majority of people choose to follow will end up being the 'real' one. It's just the breaks of running a distributed consensus system.

Nobody will use that service, because it adds accountability, which bitcoin is specifically designed to defeat.

People already use coinbase which can trivially do chargebacks during their fraud detection delay.

...frisbee on the roof attack...

The difficulty adjusts down as well so any difficulty-based attacks are going to be temporary.

There are real counterparty risks, real concentration of hashing power risks, real regulatory risks and a whole sled of not-really-bitcoin's-problem risks on securing your wallet.
posted by Skorgu at 8:56 AM on February 5


I dunno... The more I read about cryptocurrencies, the more I'm left with the feeling that this is not really an alternative to money and mostly a form of limited edition collectible randomized byte sequences being hoarded like superhero comics with foil embossed holographic covers.

Magic: The Economy. But it's about as fantasy based as the Laffer curve so you have that...
posted by ennui.bz at 8:57 AM on February 5


TheophileEscargot: "I love the way that the cryptocurrencies are decentralized with no central authority. It makes them robust."

More robust than what? It sure as hell isn't a volatile dollar that makes a BTC/USD chart look like a particularly challenging Excitebike course.

TheophileEscargot: "It enabled governments to tax tiny transactions made by the poor: before computer networks the difficulty of doing that forced governments to get more of their taxes from the rich. "

Sorry, but you're going to have to show your work on this one, too. There are a lot of obstacles to more progressive taxation policy throughout the world, but I've never seen a credible case that electronic transactions are the problem.
posted by tonycpsu at 8:57 AM on February 5 [3 favorites]


Auroracoin, a fork of Litecoin, just announced that in March they're giving the entire population of Iceland 31.8 coins each in order to jumpstart the currency. It'll be fascinating to see what happens in light of the collapse of the króna, the sky-high Internet penetration, the very infrequent use of cash, and way everyone here is about two degrees of separation apart.
posted by naturetron at 8:59 AM on February 5 [4 favorites]


In 2014, Bitcoin (BTC) has become established as increasingly "real" money

Relative to what? They've had wild fluctuations in value and are extraordinarily hard to convert into a currency that can be used in the real world, as opposed to in a very limited world of online transactions. Their value is entirely based on speculation. It's like a subprime mortgage market run by a bunch of computer nerds instead of investment bankers.
posted by Dasein at 9:02 AM on February 5 [4 favorites]


I think some people have a mad that cryptolibertarians and apolitical neoliberal hackers can be more effective on a lark than years and years of ineffective politicking. It's interesting to discuss coins with people from IRL, even leftists, who aren't invested in hating Internet libertarians enough to join the defense of credit card companies, money changers, and banks.

IRL though Bitcoin has drawn the interests of the money and business powers. The government power is figuring out how to take a cut. GG.
posted by save alive nothing that breatheth at 9:07 AM on February 5 [1 favorite]


Pope Guilty: Until somebody gets 51% (at which point the 51% can doublespend), or the frisbee on the roof attack (stick a bunch of power into the network for awhile to drive difficulty up, pull out abruptly to leave the network without enough power to process the new, absurdly higher difficulty) happens, or any of a number of things that can go catastrophically wrong with no way to undo it.

Well, if someone gets 51% of all the US dollars, they kind of have a problematic amount of power too.

Question. I might be wrong, but I thought you were a fairly classical Marxist. In the final stage of true Communism, when there is a totally decentralized economy based on the collective decisions of the workers, what kind of currency are you going to have? Because some kind of cryptocurrency would seem to fit the bill quite nicely. (Though possibly with Dogecoin-style built-in inflation to discourage Bitcoin-like hoarding.)
posted by TheophileEscargot at 9:12 AM on February 5


Blazecock Pileon: Anonymous currency is neither anonymous nor currency.

Bitcoin was not built to be anonymous. And we were talking about the (supposed) problem of cashing out, you've now switched the criticism to a completely different and invalid point.

This is about the sixth metafilter thread on bitcoin in the last six months where everyone just keeps saying the same things again and again. There are lots of real problems with bitcoin but most of you are just posting the same old one-liners repeatedly without getting or generating any new insight. The first bitcoin thread in 2011 reads pretty much like this one.

I suspect this is something to do with the "Bitcoin = Republican" idea which seems to have taken hold here.
posted by memebake at 9:12 AM on February 5 [3 favorites]


You don't have to be defending banks to think that Bitcoin is a poor currency.

As for me, I tried mining some Doge last year on my home computer. I read up on the process and mined a couple thousand coins when suddenly the pool I was a part of stopped cashing out and then just disappeared with everyone's coins.

It felt like a true crypto-currency experience. Wow, so caveat. Such emptor.
posted by jess at 9:14 AM on February 5 [24 favorites]


I love the way that the cryptocurrencies are decentralized with no central authority. It makes them robust. I've never used one and have no plans to. But I think it adds a bit of useful redundancy to society that currencies like this can now exist separately from the existence of states.
TheophileEscargot

It's stuff like this that makes Bitcoin so laughable. The idea that if modern states failed to the extent that the dollar, pound, Euro, yen, etc were useless then digital cryptocurrencies would be the rock people could cling to is absurd. If things were that bad people would be lucky to have those scraps of paper to use, let alone the national and global electrical and computing infrastructure necessary to use Bitcoin and the like. Robust these ain't; they're the most delicate of all.

I think some people have a mad that cryptolibertarians and apolitical neoliberal hackers can be more effective on a lark than years and years of ineffective politicking.
save alive nothing that breatheth

"U MAD BRO?" isn't an argument. Not to mention, effective at what? It's only the Internet Libertarians who think that anything is changing or that governments are quaking in their boots because of Bitcoin. Mostly it just makes buying drugs easier.

IRL though Bitcoin has drawn the interests of the money and business powers.

So have orange futures. Bitcoin is a commodity that can earn money, so people are drawn to it.

The government power is figuring out how to take a cut.

Fraud prevention and anti-money laundering enforcement: the government taking a cut. And you wonder why "Internet Libertarians" get mocked so much.
posted by Sangermaine at 9:18 AM on February 5 [18 favorites]


naturetron, the idea of any cryptocurrency being more stable than the Icelandic króna is hilarious. Admittedly things went bad for the ISK in 2008, losing about half its value. But BitCoin has had 50% swings in a single day, and 400% swings in a month. And the ISK has been pretty stable at 115-130 per dollar for the last five years, no?
posted by Nelson at 9:19 AM on February 5 [3 favorites]


Do editors have any idea how confusing those images are for people trying to grasp the concept of a virtual currency?

Maybe drop the "*coin" naming scheme, if the idea is to get people to think virtually? A coin is a decidedly physical object.
posted by Lentrohamsanin at 9:25 AM on February 5 [2 favorites]


Nelson: Expand that chart to 10Y and it doesn't look quite as rosy. Still not as volatile as btc of course but it's not clear to me that's not just an artifact of it being new vs it being bitcoin.
posted by Skorgu at 9:36 AM on February 5


Fraud prevention and anti-money laundering enforcement: the government taking a cut.

Personally I'm on the side where government interest in regulating and taxing crypto is a good sign for the phenomenon. If business likes it, people like it, finance likes it if it's not a direct competitor, and government is amenable, why is it going to go away?
posted by save alive nothing that breatheth at 9:37 AM on February 5


I'm sure if you have unexpectedly become a millionaire on bitcoin it is pretty hard to cash out, because all the exchanges have daily limits

If you're a Bitcoin "millionaire" it's not just the exchange limits that prevent you from cashing out, it's that plus the market depth/liquidity, plus the risk that a significant cashout would cause a panic.

Looking at some of the major exchanges, MtGox and BitStamp are really the only ones with any significant depth. And as others have pointed out, MtGox is terribly fucked; their USD/BTC is almost $920 compared to ~$800 at BitStamp and most of the minor markets. If they were in any way functional that would be a gigantic arbitrage opportunity. The suspiciously large bid/ask spread is also a warning.

Anyone with a significant amount of BTC needs to look at the market depth when figuring out the actual value of their holdings, rather than just (as many people seem to be doing) just taking the latest trade and multiplying it by the number of BTC they have. This is particularly important when figuring out the aggregate value of the Bitcoin market/ecosystem, which is not worth [(total bitcoins in existence) x (last Bitcoin trade value)]. That's a dumb valuation, but I see it get thrown around all the time.

Plus, I suspect most of the open orders on the bid side of the charts would disappear very rapidly if someone dumped a bunch of BTC on the exchange suddenly. As soon as you burned through the first few bids, enough so that the price would start visibly dropping, you'd have people pulling their orders. How far you'd be able to go would depend, I'd imagine, on the exchange's order execution speed.

As soon as it becomes easier to hold short positions in BTC, I expect we'll see a lot of shenanigans, basically people reinventing the more interesting bits of 19th century robber-baron financial manipulation as the tools become available.
posted by Kadin2048 at 9:41 AM on February 5 [16 favorites]


Basically, confident enough I'll take on all reputable comers for crypto / USD futures - a basket of BTC LTC PPC DOGE NMC at current prices in USD, 3 mos - 1 year out. Figure out details if any interest, in for about 300 USD total.
posted by save alive nothing that breatheth at 9:42 AM on February 5


I can't prove that it's how dogecoin itself was made

So you are talking out of your ass, then.
posted by Pogo_Fuzzybutt at 9:44 AM on February 5


It's stuff like this that makes Bitcoin so laughable. The idea that if modern states failed to the extent that the dollar, pound, Euro, yen, etc were useless then digital cryptocurrencies would be the rock people could cling to is absurd.

Hi, welcome to Cyprus.
posted by TheophileEscargot at 9:46 AM on February 5 [1 favorite]


Basically, confident enough I'll take on all reputable comers

[save alive nothing that breatheth, I get that this is a topic you're actively interested in but "let's bet cash money on this thing I made a Metafilter post about" is getting into sort of problematic territory and you need to back away from that here. Let the thread be the thread and do not make it about your feelings about the content of the post.]

posted by cortex at 9:50 AM on February 5


I can't prove that it's how dogecoin itself was made

So you are talking out of your ass, then.


It's how almost all altcoins are made, unless they're written from scratch. Bitcoin is open source; where better to start? Some people are working on completely novel cryptocurrencies, some are working on clever currencies that layer on top of a Bitcoin-type chain.

Coins like Doge and Coinye are basically just minor forks of Bitcoin or Litecoin. Just compare the Litecoin and Dogecoin clients- the Doge client is just the Litecoin client with Comic Sans as the only font. Doge is not srs bzns.
posted by BungaDunga at 9:50 AM on February 5 [2 favorites]


Bitcoin was not built to be anonymous.

By its proponents, it is often described as an anonymous currency. I realize this is not a uniform descriptor, but I think it is fair to say that supposed anonymity of transactions is a main selling point used by its proponents.

And we were talking about the (supposed) problem of cashing out, you've now switched the criticism to a completely different and invalid point.

Cashing out is probably the best metaphor I've seen so far, like cashing out chips in a rigged casino. Win big, and all of a sudden the house shrugs and says it can't pay you. Would you like a drink while you wait? So sorry. Maybe play a few card games to pass the time?
posted by Blazecock Pileon at 9:51 AM on February 5 [4 favorites]


Dogecoin is branched from Litecoin which is branched from Bitcoin

Its all open source and all three are on Github
posted by memebake at 9:55 AM on February 5 [5 favorites]


the wikipedia article on Dogecoin states: "Markus based Dogecoin on the existing currency Litecoin". the citation provided by wikipedia goes to this source, which states: "Dogecoin was created by Markus using the publically available bitcoin source code, altered so that the user-facing elements reflected the doge meme". so the original claim of somebody took Litecoin's source code, changed the names of a few variables, and boom, Dogecoin is not "talking out [Pope Guilty's] ass" but is actually literally how it was made. i learned this by reading.
posted by titus n. owl at 9:55 AM on February 5 [7 favorites]


Cashing out is probably the best metaphor I've seen so far

Cashing out was the term used by Koeselitz in his re-post of a much posted link which I've been arguing does not show what people think it shows.
posted by memebake at 10:02 AM on February 5


so the original claim of somebody took Litecoin's source code, changed the names of a few variables, and boom, Dogecoin is not "talking out [Pope Guilty's] ass" but is actually literally how it was made. i learned this by reading.

Seems like more than "just a few variables" got changed. And he wasn't able back up his claim with an analysis of the source for either project. If he meant something different than what he wrote, then maybe he could learn to writing.

And anyway, it's logically laughable. Anyone can create their own Linux in the same way and we all know what a joke of an OS that is.
posted by Pogo_Fuzzybutt at 10:04 AM on February 5


Hi, welcome to Cyprus.

So please point out where the euro became useless and people started clinging to cryptocurrencies? This is as absurd as saying that people would lose faith in the U.S. dollar if El Salvador instituted capital controls.
posted by one more dead town's last parade at 10:06 AM on February 5 [3 favorites]


it was requested that a link or cite for the claim be provided, not an in-depth professional analysis of the coding. the guy who made the damn thing acknowledges it's just a litecoin fork, i don't know why you're accusing people of talking out their asses for repeating something that is public knowledge.
posted by titus n. owl at 10:07 AM on February 5 [1 favorite]


My take on Bitcoin mostly corresponds to this Cracked article.
posted by ckape at 10:13 AM on February 5


Well, if someone gets 51% of all the US dollars, they kind of have a problematic amount of power too.

The 51% attack isn't based on having 51% of bitcoins, it's about controlling 51% of the computing power that Bitcoin runs on. And it's hardly a speculative question- the ghash.io mining pool alone controls 40-45% of power in the system.

Question. I might be wrong, but I thought you were a fairly classical Marxist. In the final stage of true Communism, when there is a totally decentralized economy based on the collective decisions of the workers, what kind of currency are you going to have? Because some kind of cryptocurrency would seem to fit the bill quite nicely. (Though possibly with Dogecoin-style built-in inflation to discourage Bitcoin-like hoarding.)

I'm actually not, but the notion of spending money and a truly communist state are pretty incompatible. Currency is meaningless in a post-scarcity society. There's a reason that most of the excitement over Bitcoin is from anarcho-capitalists and their fellow travellers and nearly none from the left.
posted by Pope Guilty at 10:15 AM on February 5


So please point out where the euro became useless and people started clinging to cryptocurrencies?

The currency controls introduced in Cyprus are generally believed to have contributed to the Bitcoin spike in April 2013
posted by memebake at 10:15 AM on February 5


A bit more on Cyprus. 2013 may have been a bit too early for cryptocurrencies to help, but in a modern state for two weeks there was not a fully functional state currency. It happens.
posted by TheophileEscargot at 10:18 AM on February 5 [1 favorite]


The thing is, Cyprus is a small state which is plugged into the global economy. While the breakdown of the banking system was awful for Cypriots, it's not like the Euro suddenly lost its value. If anything, Cyprus demonstrates that modern currencies are in fact robust, able to survive situations like that. There's no frisbee on the roof problem with actualmoney like there is with cryptocurrencies.
posted by Pope Guilty at 10:20 AM on February 5 [3 favorites]


A Left Defense of Bitcoin
posted by memebake at 10:27 AM on February 5


The flipside of the 51% attack is that any widely used cryptocurrency needs to consume a significant fraction of the world's processing power, just to make it difficult for bad actors to just rent a botnet and achieve that 51%. And, as most of them give diminishing returns for proof of work, there's diminishing incentive to crowd those bad actors out.

And of course the proliferation of altcoins doesn't help.
posted by ckape at 10:33 AM on February 5


How would you buy Bitcoin in a state with currency controls? If I have bitcoin, and want Euros, and you want Bitcoin but your Euros are in Cyprus, won't you need to smuggle Euros out of the country and into a bank that will let you transfer them to me? It's easier to get Bitcoins into the country than gold, and easier to convert to Euros since presumably there are other people who want bitcoin but don't want to smuggle Euros out.

And anyway, it's logically laughable. Anyone can create their own Linux in the same way and we all know what a joke of an OS that is.

Dogecoin is literally Litecoin, except designed to be easy to mine. That's the whole point. That's it. It's a joke currency that's designed to be fun. There would be no reason to change anything other than the name and a few parameters controlling the mining difficulty, rate of rewards, etc (a few variables). It's a reddit joke.

It's exactly like creating a forked Ubuntu called Dogebuntu where everything is a Shibe Inu, and the startup screen is "Wow, such kernel" to make fun of militant Linuxites.
posted by BungaDunga at 10:41 AM on February 5 [5 favorites]


The future of digital currencies is the Human Attention Unit, the basic unit of which is 1 minute of careful attention by 1 human.
posted by aramaic at 10:57 AM on February 5


just rent a botnet and achieve that 51%

It's a bit hard with Bitcoin, isn't it? How many CPUs would you need, running full tilt, to get 51%- when you're competing against ASICs?

The network has 18934 Terahash/s. Last May the best CPU miners were doing ~75Mhash/s. You'd need 128,000,000 CPUs going that fast to get 51% of the current hash rate. The ZeroAccess botnet- apparently considered a large one- supposedly had 1.9 million computers, about a fiftieth of what you'd need to perform a 51% attack if they're all dual-core machines and a negligible percent have GPUs.
posted by BungaDunga at 11:05 AM on February 5


Maybe someone should create MetaCoin. It could be a derivative currency created out of a basket of all significant crypto-currencies - like an ETF.
posted by Golden Eternity at 11:09 AM on February 5


While the breakdown of the banking system was awful for Cypriots, it's not like the Euro suddenly lost its value. If anything, Cyprus demonstrates that modern currencies are in fact robust, able to survive situations like that.

Ah, so the currency itself is robust, you just can't use it. I'm sure that's a great comfort to someone wanting to buy, sell or be paid.
posted by TheophileEscargot at 11:13 AM on February 5


Ah, so the currency itself is robust, you just can't use it. I'm sure that's a great comfort to someone wanting to buy, sell or be paid.

Are you under the impression that during the banking crisis everybody just closed up shop and stopped taking Euros or something?
posted by Pope Guilty at 11:15 AM on February 5 [3 favorites]


BungaDunga: Yes, and Bitcoin is currently using a significant fraction of the world's computing power. Which was my point.
posted by ckape at 11:18 AM on February 5


A Left Defense of Bitcoin

From your own link:
...For clients, Bitcoin offers a chance to pay securely and anonymously, making hiring the services of sex workers safer.

Anonymity helps people who are victimised by power, not just sex workers and clients. Any political resistance against an unjust government requires use of money and the economy, and as more and more of the world’s economic transactions are conducted online, that government can track that resistance as easily as if it had planted a bug on the resistance’s treasurer."
I'm not making a value judgement here, just quoting one of the commodity's supporters.
posted by Blazecock Pileon at 11:22 AM on February 5 [4 favorites]


...a forked Ubuntu called Dogebuntu where everything is a Shibe Inu, and the startup screen is "Wow, such kernel"...

Why does this not exist?

...or did this turn into one of those projects where it was decided that it's necessary to generalise it to all memes, to make it easier when suddenly I need an ubuntu fork that displays my allegiance to the Flattened Wallaby meme?
posted by frimble at 11:28 AM on February 5 [2 favorites]


The future of digital currencies is the Human Attention Unit, the basic unit of which is 1 minute of careful attention by 1 human.

This is actually not unreasonable and would give the currency some backing. Amazon could probably do it, if they wanted to, by letting you trade Mechanical Turk credits.
posted by Kadin2048 at 11:29 AM on February 5 [4 favorites]


Maybe someone should create MetaCoin. It could be a derivative currency created out of a basket of all significant crypto-currencies - like an ETF.

MetaCoin should be the official Metafilter cryptocurrency and always worth twenty bucks, same as in town.
posted by jason_steakums at 11:30 AM on February 5 [14 favorites]


Yes, and Bitcoin is currently using a significant fraction of the world's computing power. Which was my point.

I don't know if I'd lump the ASICs in with other types of computing power- they're more like purpose-built calculators. Without Bitcoin nobody would have built those ASICs at all. That side of the Bitcoin network isn't tying up otherwise useful computing resources. Certainly you have to tie up a lot of the world's potential hashing power, but if and when it stops being profitable to mine with GPUs, hashing power will be decoupled from generalized computing power.

Doesn't solve the fact that you're pouring cheap, dirty electricity into finding meaningless numbers, though.
posted by BungaDunga at 11:35 AM on February 5 [1 favorite]


memebake:
I think its to do with the decentralised running in an untrusted environment. See: Finally, [bitcoins] solution to the Byzantine Generals Problem can be repurposed to any domain where lack of trust on a distributed network is the core problem.
I strongly suspect the person who wrote that article doesn't understand a lot of computer science, or at least the history of it. His description of the problem is an obfuscated version of the BG problem which makes it appear that algorithms like Bitcoin have a novel solution. The BG problem is about synchronizing state. It has nothing to do with something like his "getting all ten seals on one message." Ten individual authenticated "go" messages are just as useful in the BG problem. If you have more bits of state to convey (like if you've added "attack time" to the go/no-go problem), that's just more bits to handle with the existing working BG problem solutions. He describes the rate-limiting of Bitcoin's proof-of-work as being a feature, when it's orthogonal to the BG problem!

Bitcoin appears to solve whatever this particular problem is (a authenticated single-message set of signatures), and maybe that's important, but 1. it's not the BG problem as computer science has always stated it and, less importantly, 2. it doesn't appear particularly difficult or novel given the technologies we had.
posted by introp at 11:42 AM on February 5 [1 favorite]


This is actually not unreasonable...

I'm actually quite pleased with the idea, to be honest. The name needs work, but intellectually I'm very fond of the premise -- ties in neatly to industrial/post-industrial shifts, valuation of mechanical vs. electrical vs. human efforts, the "value" of a person vs. the value of assets, power differentials arising from disparities in asset mobility (capital moves faster than people, privileging those who control capital over those who have nothing but themselves) etc.
posted by aramaic at 11:43 AM on February 5


I started following "market bubbles" when I was working for a financial firm dependent upon Junk Bonds in the late '80s. I saw that coming (and the ultimate collapse of my employer who overpaid me well), along with the DotCom Bubble and, to my horror, the Housing Bubble. (Sorry, no documentation to PROVE I predicted all that) If Bitcoin and the rest of the 'cryptocurrencies' aren't totally bubbled out in less than 4 years, I'll eat one of my hats (I have a fez, a fedora and a straw cowboy hat). Maybe a lot less, because I'm seeing many of the obvious damage-spreading defensive measures I've expected already happening.

The one thing that is so obviously NOT a bubble is "the dollar because of Government Deficits". Just a load of shit to sell gold (or just sell shit) and not even a good enough sell to make a serious Gold Bubble, sorry Glenn.
posted by oneswellfoop at 11:48 AM on February 5 [3 favorites]


Are you under the impression that during the banking crisis everybody just closed up shop and stopped taking Euros or something?

I'm the one who brought up Cyprus. I've posted two links already. Anyone who wants to know the details of exactly what was, and was not, working in that time can read them.

The point is, the thing that people said was impossible: a government not providing a fully functional state currency, while power and electricity remain on, actually happened.

I'm going to bow out now. You can call that a victory I guess. But what's happening is that we're entering the left-wing version of climate change denial: when reality doesn't suit your ideology, deny reality.
posted by TheophileEscargot at 11:55 AM on February 5 [2 favorites]


The name needs work, but intellectually I'm very fond of the premise -- ties in neatly to industrial/post-industrial shifts, valuation of mechanical vs. electrical vs. human efforts, the "value" of a person vs. the value of assets, power differentials arising from disparities in asset mobility (capital moves faster than people, privileging those who control capital over those who have nothing but themselves) etc.

It should be the called a Gibson, because examining these sorts of things is William Gibson's forte.
posted by Sangermaine at 11:58 AM on February 5


I'm actually not, but the notion of spending money and a truly communist state are pretty incompatible.

One thing to smash capitalism, but no matter how much a subset of leftists hate and fear math I don't know that you will get anywhere trying to smash quantification.

I run about 7 scrypt khash on solar powered Android. Pays more than my real bank account interest...
posted by save alive nothing that breatheth at 12:08 PM on February 5


TheophileEscargot: "when reality doesn't suit your ideology, deny reality."

Right, because if anyone refuses to accept your post hoc ergo propter hoc argument that the Bitcoin spike (one of many such spikes) was caused by Cyprus capital controls, it can't possibly be based on anything other than ideology.
posted by tonycpsu at 12:12 PM on February 5 [2 favorites]


me: “Call me when it isn't hideously painful to cash out into real money.”

memebake: “People constantly post that link. But everyone ignores the first parapraph ‘Mt Gox apparently wants an insane amount of personal information and even then he has to be added to a waiting list to even get any money out, and even then there is apparently some stupid low limit.’ So basically he wasn't prepared to provide the ID docs (scan of passport and proof of address etc) that MtGox asks for - and (please note) _has_ to ask for to comply with money laundering regs. So he tries lots of other ways, and fails. Whats the story?”

Uh – the story is that there's a ridiculously low limit and an aggravatingly long (open-ended) wait time before MtGox allows cashing out. You're picking and choosing from what he said – of course new users don't want to give all their details to shadowy foreign corporations – but that's not the story; the story is that, even if you do give them that information, it doesn't help in the slightest. And this is not a small or insignificant problem; it's very well-documented, and has been for a while.

“I'm sure if you have unexpectedly become a millionaire on bitcoin it is pretty hard to cash out, because all the exchanges have daily limits etc. But for day to day use plenty of people are converting bitcoins back into real money.”

The severe issues concerning withdrawal limits and delays on every single major Bitcoin hub are well-known. It's sort of surprising you'd talk as though they don't exist. BitCoinTalk is basically full of complaints about MtGox. It's a mess.
posted by koeselitz at 12:12 PM on February 5 [3 favorites]


But what's happening is that we're entering the left-wing version of climate change denial: when reality doesn't suit your ideology, deny reality.

No one is denying that the Cypriot crisis happened, nor has anyone ever said such a thing couldn't occur. What's being disputed is your framing of what happened. It was not "a government not providing a fully functional state currency", it was a government imposing banking and capital flight restrictions. As Pope Guilty said, the Euro did not simply stop being accepted in Cyprus during the crisis, nor did Bitcoin become the currency used to purchase "power and electricity" and other day-to-day expenses. That was still done in Euro. The articles you yourself post describe this. This was not a breakdown in the functionality of the Euro.

This is you trying to force what actually happened into a narrative you've already decided on, that this shows the breakdown of a currency and the robustness of Bitcoins when it was nothing of the sort. It's not even clear, and certainly not established in any of your links, how the spike in Bitcoin prices at that time was tied to Cyprus, or if it was tied at all. It certainly wasn't being used to buy bread there.
posted by Sangermaine at 12:14 PM on February 5 [12 favorites]


Which would be like people printing up Alfred E. Neuman dollars except that people are using Dogecoin to buy and sell things. That's like people accepting Monopoly money for their goods and services. It's something that only happens when the "real" currency is itself a joke.

Man, wait til people find out that this is how real money works too.
posted by stratastar at 1:10 PM on February 5 [3 favorites]


stratastar: Man, wait til people find out that this is how real money works too.

The US Dollar is backed up by the government of the most powerful country in the world, which is debatably the most powerful organization in human history. That is not insignificant.
posted by Mitrovarr at 1:18 PM on February 5 [5 favorites]


Man, wait til people find out that this is how real money works too.

That's not how real money works.
posted by one more dead town's last parade at 1:19 PM on February 5 [4 favorites]


Man, wait til people find out that this is how real money works too.
Real money survives fires, and attempts at government debasement because you can't just transmute more of the stuff into existence cheaply.
posted by MikeWarot at 1:20 PM on February 5


Has anybody called their cryptocurrency the Amero yet? That seems like it would be a fun way to drive certain people into a frenzy.
posted by ckape at 1:23 PM on February 5


OK, I know I said I was bowing out, but one more reply to these bits:

Tonycpsu: Right, because if anyone refuses to accept your post hoc ergo propter hoc argument that the Bitcoin spike (one of many such spikes) was caused by Cyprus capital controls, it can't possibly be based on anything other than ideology.

Sangermaine: nor did Bitcoin become the currency used to purchase "power and electricity" and other day-to-day expenses... This is you trying to force what actually happened into a narrative you've already decided on, that this shows the breakdown of a currency and the robustness of Bitcoins when it was nothing of the sort. It's not even clear, and certainly not established in any of your links, how the spike in Bitcoin prices at that time was tied to Cyprus, or if it was tied at all.

Note that I never said anything about Bitcoin spikes, nor about Bitcoin successfully substituting for a state currency. My actual comment said the opposite: "2013 may have been a bit too early for cryptocurrencies to help". As I said, reality has been abandoned in this thread: I'm now being castigated for the opposite of what I actually said.
posted by TheophileEscargot at 1:26 PM on February 5 [1 favorite]


You've been othered. Run while you still can.
posted by NiceKitty at 1:31 PM on February 5


As I said, reality has been abandoned in this thread: I'm now being castigated for the opposite of what I actually said.

Oh, please.

You said:
I love the way that the cryptocurrencies are decentralized with no central authority. It makes them robust.
And:
in a modern state for two weeks there was not a fully functional state currency
And:
Ah, so the currency itself is robust, you just can't use it. I'm sure that's a great comfort to someone wanting to buy, sell or be paid.

There was no point under Cyprus's capital controls at which the euro was not legal tender for buying, selling, and being paid. Now, if you're complaining that a currency isn't robust or fully functional because it's illiquid and difficult to trade for goods and services, that's been more true of Bitcoin from its inception than it ever has been anywhere in the eurozone.
posted by one more dead town's last parade at 1:38 PM on February 5 [3 favorites]


The future of digital currencies is the Human Attention Unit, the basic unit of which is 1 minute of careful attention by 1 human.
posted by aramaic at 10:57 AM on February 5 [+] [!]


In a sense this already exists, and has for some time, in the form of advertising, well of course except for the 'careful attention' aspect. Otoh, iirc there were a bunch of different internet 'services' that advertised themselves as paying you to spend time on the internet, basically filling in consumer information data, watching ads, etc. I don't think the going rate was very high, and haven't heard of anyone pushing that particular scheme for the last 5ish years.
posted by Hello, I'm David McGahan at 1:38 PM on February 5


MetaCoin should be the official Metafilter cryptocurrency and always worth twenty bucks, same as in town.

Wait, did we raise the rates?
posted by eriko at 1:39 PM on February 5


The US Dollar is backed up by the government of the most powerful country in the world, which is debatably the most powerful organization in human history. That is not insignificant.

There are other currencies in the world besides the dollar. Why does everyone assume that bitcoin has to dethrone the dollar to be successful or relevant?
posted by Skorgu at 1:39 PM on February 5


TheophileEscargot: "My actual comment said the opposite:"

Yes, but that was a significant walk-back of your other actual comment where you held up Cyprus as an example that fit Sangermaine's description of a scenario where...
...modern states failed to the extent that the dollar, pound, Euro, yen, etc were useless then digital cryptocurrencies would be the rock people could cling to...
The clear implication of your first comment is that Cyprus was such an example, a statement that assumes many facts not in evidence. To your credit, you did later add an additional link with more context, but you can't change your argument on a dime like that and then blame others for being confused about what your actual beliefs are.
posted by tonycpsu at 1:46 PM on February 5 [1 favorite]


I think most people interested in BTC would agree that Mt. Gox is shit.
So the only people left there have funds trapped or are trying that arbitrage...
posted by save alive nothing that breatheth at 1:48 PM on February 5


The name needs work, but intellectually I'm very fond of the premise

The only problem that I see with a human-work-based currency as opposed to a machine-based-work one is that if you want to make the human work actually valuable, I don't think it can be decentralized like Bitcoin is.

E.g., the idea I mentioned earlier about trading around Amazon Mechanical Turk points would work, but it effectively makes Amazon the central bank. But the benefit is that you can either trade your points to other people on the external market, or you can use them for Mechanical Turk tasks on the internal market, having someone spend X minutes doing whatever task you assign to them, which presumably is a task that has value to you (and thus gives the currency some intrinsic value, and also allows you to 'earn' currency by doing useful work for others).

I don't think that's compatible with a decentralized network like Bitcoin. Bitcoin "mining" tasks are meaningless hash computations because they happen to be easier to verify than they are to compute. I.e. my computer spends N minutes working on a problem, but your computer can verify that I actually did the work in much, much less than N minutes. I'm not sure how you'd do that with human labor that's actually useful. You could do it with meaningless tasks like CAPTCHAs... since the answer is already known, you can just test to see if the human got it correct, so the verification is faster than the computation. But that would be pretty horrific: it's true end-stage capitalism in the most cynical sense, tons of people sitting around doing completely meaningless tasks which are then verified by a machine for the sole purpose of accruing economic trading points.

I'm trying to think of a class of human tasks that is actually useful (not total makework) but is also possible to rapidly verify by third parties to prevent someone from gaming the system by not actually doing the work. I'm not entirely sure what would qualify. Things like transcription might work (you could have a Project Gutenberg currency where you have to transcribe a few lines from an old book), particularly if you took the same work item and gave it to several people and then compared the results, so that there'd be a prisoners dilemma about faking (although that would allow for DOSing with garbage answers)... it's an interesting problem.

Man, wait til people find out that this is how real money works too.

No, it's not. There's a key difference between Monopoly money and greenbacks: the Federal Reserve is backed up by a powerful government with a (lower-case-m) monopoly on violence and a willingness to use it to preserve the economic system. Including making it obligatory to accept it as payment for debts, court judgements, taxes, etc. This creates a demand for dollars that would not otherwise exist, and is akin to the intrinsic industrial value of gold or silver. Like the intrinsic value of gold, it's only a small part of the day-to-day currency value most of the time, but it's what backstops it in extremis. As was demonstrated in the 30s with gold confiscation, the US Government has a wide range of powers that it can use to protect the currency. Milton Bradley does not.

There is a reason that fiat currencies are closely tied to nation-states with armies and police powers, and it's because they're symbiotic.

As a fun experiment, you can test any currency by seeing how it responds to a "unilateral money-supply expansion activity", conducted by running a few thousand units of currency off on a good color printer and placing them into circulation. You can then grade the currency based on how long it takes you to end up in jail.
posted by Kadin2048 at 2:02 PM on February 5 [7 favorites]


MetaCoin should be the official Metafilter cryptocurrency and always worth twenty bucks, same as in town.

You could create new MetaCoins through some arcane processing of favorites and Grar.
posted by GenjiandProust at 2:10 PM on February 5 [4 favorites]


Why does everyone assume that bitcoin has to dethrone the dollar to be successful or relevant?

It might have something to do with the stridency with which it is promoted as such an alternative by its backers.
posted by Blazecock Pileon at 2:18 PM on February 5 [2 favorites]


Sounds like a bunch of bullshit to me.
posted by turbid dahlia at 2:27 PM on February 5


Auroracoin, a fork of Litecoin, just announced that in March they're giving the entire population of Iceland 31.8 coins each in order to jumpstart the currency

Oh man. I'm starting Tassiecoin.
posted by Jimbob at 2:39 PM on February 5


Wait, did we raise the rates?

Nah that's just what happens when I try to post in one window while working with numbers in another and my brain is a jerk
posted by jason_steakums at 3:51 PM on February 5


koeselitz: The severe issues concerning withdrawal limits and delays on every single major Bitcoin hub are well-known. It's sort of surprising you'd talk as though they don't exist. BitCoinTalk is basically full of complaints about MtGox. It's a mess.

MtGox is certainly a mess at the moment but I still dont agree that it in general it is 'hideously painful' to convert Bitcoin to real money. In fact your original comment was "Call me when it isn't hideously painful to cash out into real money."

Well, this is memebake calling koeselitz with a message: Its fairly easy to convert reasonable amounts of bitcoin to USD if you use a decent exchange. Top of the pile at the moment is Bitstamp. I personally know people who've got money out of there quickly and easily with minimal fees.

I'm not saying there aren't loads of horror stories out there - with any exchange, if you go looking for people complaining about problems and delays you will find them. But your initial comment was an exaggeration that I don't agree with.
posted by memebake at 3:56 PM on February 5


memebake: “Well, this is memebake calling koeselitz with a message: Its fairly easy to convert reasonable amounts of bitcoin to USD if you use a decent exchange. Top of the pile at the moment is Bitstamp. I personally know people who've got money out of there quickly and easily with minimal fees.”

This is not a challenge – I'm mostly just wondering: what is a "reasonable amount," what constitutes "minimal fees," and how quickly is "quickly"? That seems to be the essential question.
posted by koeselitz at 4:10 PM on February 5 [1 favorite]


I think part of the reason everyone seems to be shouting past each other in these threads is that some people see bitcoin as a political dividing line and so instinctively distrust what people on the other side are saying.

I think its possible to make a pretty strong left-wing (or centrist?) argument for Bitcoin, based on the idea that Bitcoin does for money what the Internet did for communications - opens it up, makes it more efficient, and lowers the barriers to entry for people wanting to send/receive money. This has some really good plus sides for developing countries.

Viewed from this angle the lack of regulation is just a side effect of the decentralisation, not a core value. If you allow for the idea that regulation and cryptocurrencies are not completely incompatible, some intersting possibilities occur, like taxation schemes that calculate from the public blockchain.

We are in a rather ugly growing stage at the moment with lots of speculation and scams. But if adoption continues and volatility reduces, Bitcoin could become more stable and thereby used predominately for transactions rather than speculation.

The various other details people don't like - deflation, chargebacks etc could be fixed via altcoins or services layered on top.

I think the basic idea of decentralised cryptocurrencies has a lot to offer. Now that the idea has been established, there are lots of interesting things that could be tried.

If nothing else, its made a lot of people think about money and finance in new ways.

A post scarcity enonomy would of course be much nicer but we're not quite there yet.
posted by memebake at 5:04 PM on February 5 [2 favorites]


I don't at all see how a deflationary currency could have the stability necessary for long-term and every-day use. It does make a great volatile instrument for fearless or foolish investors, though.

I don't think there's any way to build chargebacks into the currency that would make it difficult to abuse. With dollars it's not, so we let third-party payment systems and escrow services address the issue, which works sort-of okay. However, dispute arbitration is hard so it increases the transaction cost.
posted by aubilenon at 5:39 PM on February 5 [1 favorite]


MetaCoin should be the official Metafilter cryptocurrency and always worth twenty bucks, same as in town.

Presumably the quarter-MetaCoin would be called the Sockpuppet.
posted by rifflesby at 5:40 PM on February 5 [1 favorite]


Can a progressive or centrist case be made for a technology or set of technologies that makes it easier for micropayments in developing countries? Yes. Does that technology have to be a cryptocurrency? No. Could it be a cryptocurrency and solve those problems while not creating more problems? I'm skeptical, but I'm quite sure it couldn't be done successfully on top of Bitcoin-with-a-capital-B.
posted by tonycpsu at 5:56 PM on February 5 [1 favorite]


I still really don't see how Bitcoin opens money up, makes it more efficient, and lowers the barrier to entry. Say what you want about capitalist systems, but one thing they're very good at is making certain things efficient, and the first thing they work on is money. Money exchanges were digitized en masse long before even information exchanges; a computerized credit exchange was built into many major department stores in my country (the US) before most Americans had even seen a computer they could identify. If there is any way to make the exchange of money efficient, it is found and utilized as quickly as possible, mostly because cash is close to the transaction so money is there to be made if you can make things work smoother. It seems doubtful that any cryptocurrency can improve on that model.
posted by koeselitz at 6:03 PM on February 5 [2 favorites]


jhc: "So far [the dogecoin tipbot] only seems to be used in doge-related subreddits"

I avoid the doge meme like the plague but have seen this tipbot several times in various unrelated subreddits.
posted by exogenous at 6:04 PM on February 5


(Looking into it, though, it does seem that exchanges Bitcoins has gotten a lot easier, at least if you're only doing one or two.)
posted by koeselitz at 6:07 PM on February 5


Aside from the libertarian dippiness, I think the most damning aspect of bitcoin et al is that the work needed to generate new coins is useless. In that respect, it's a perfect distillation of everything wrong with capitalism as a whole, like micro-trading and similar activities which do nothing but rob society of resources to pad the bottom line of an already wealthy elite.

I mean, if it all worked by churning through one of the many distributed computing projects, that would at least be useful. But just rooms full of machines calculating meaningless numbers? It's like they've taken all their complaints about the imagined "valueless" aspects of government, regulation, etc. and created a simulation of it, which powers the currency.
posted by maxwelton at 6:12 PM on February 5 [11 favorites]


If there is any way to make the exchange of money efficient, it is found and utilized as quickly as possible, mostly because cash is close to the transaction so money is there to be made if you can make things work smoother.

Which explains why ATM, wire transfer, and credit card interchange fees have been steadily declining over the years, right?
posted by RobotVoodooPower at 6:29 PM on February 5


Guys, hey guys, go look at MtGox today.
posted by Jimbob at 6:44 PM on February 5 [2 favorites]


The fact that fees have tracked the market doesn't mean that transfers haven't become more efficient - on the contrary, I'm sure banks will charge as much as their consortiums and confederations deem they're able to charge, and band together in order to do so, but rest assured they're still squeezing every penny out of each transaction they can.
posted by koeselitz at 6:46 PM on February 5 [2 favorites]


I'm not sure what you're arguing here? Getting a merchant account to accept credit cards online is non-trivial, subjects you to a significant security burden, and has fees on top of that that make small (<$1) transactions uneconomical. In contrast, accepting bitcoins is absurdly simple and open to anyone (as is giving bitcoins), has basically no transaction fees, and has no risk of leaking customers' credit card numbers. I mean, yes, blah blah libertarians blah blah drug trade blah blah volatility, but the zero-barrier-to-entry zero-transaction-fees nature of crypto currencies make them appealing for reasons unrelated to anonymity or tearing down the state.
posted by Pyry at 7:11 PM on February 5 [4 favorites]


Yeah, like I was saying, the reason Mt Gox was high was that the exchange is fucked. Now that people can't get bitcoins out, the thing is going to collapse.

Bitstamp crashed a bit when bitcoin started to go south, but recovered pretty quickly.
posted by empath at 7:20 PM on February 5




if it all worked by churning through one of the many distributed computing projects, that would at least be useful

There are two properties to the "meaningless" computation that make it impractical to do other computation.

One: The computation needs to be trivial to verify but hard to compute. There is not a computationally easy way to prove whether someone actually did the math on folding@home or just skipped parts.

Two: The computation needs to be inextricably tied to a particular claim that is being made about the state of the cryptocurrency universe. If you could just save up a bunch of math and use it all at once, it would enable cheating, such as letting people spend the same money twice. Because mining bitcoins isn't just doing random math and throwing away the results. It's using your proof of work to sign other people's transactions, and verifying that nobody's spending the same money twice.
posted by aubilenon at 7:34 PM on February 5 [2 favorites]


I mean, yes, blah blah libertarians blah blah drug trade blah blah volatility, but the zero-barrier-to-entry zero-transaction-fees nature of crypto currencies make them appealing for reasons unrelated to anonymity or tearing down the state.

Honest question here - you say zero barrier to entry. I assume, therefore, there's a simple, secure product/service you can point me to that enables me to automatically receive BTC payments on my website and offer digital downloads for the payment? With zero transaction fees or upfront incurred by either me or the purchaser? It's a thing I'd like to try, but the maze of Bitcoin derp and blatantly untrustworthy-looking providers out there leave me confused. Even better if it can accept multiple crypto-currencies.
posted by Jimbob at 7:39 PM on February 5


jimbob: Coinbase.
posted by empath at 7:58 PM on February 5 [2 favorites]


if it all worked by churning through one of the many distributed computing projects, that would at least be useful

It is doing a useful thing. It's creating a decentralized payment-processing network.
posted by empath at 8:00 PM on February 5 [2 favorites]


There's no reason we couldn't just dispense with all the pointless mining and instead have a central authority ('government') issue crypto-coins on some schedule and distribute them in some sensible way (universal basic income), thereby turning the libertarian crypto-dream into a liberal one.
posted by Pyry at 8:06 PM on February 5


You won't find pure zero transaction fees, as you need to at least pay the tiny bit to the network, and in general crypto service providers do still need to pay for power/bandwidth/developers/lawyers so it's just cheap, not free, but here are the reputable BTC merchant services off the top of my head. Check for details like if they instantly convert to USD or if you are exposed to currency risk, etc., etc.:
  • Coinbase - perhaps the gold standard? Lots of VC money they use to ride out volatility. 1% fee for fiat withdrawals, .15 ACH fee, consumer bank transfers take 4 days w/ locked in price at confirmation time, first million free, volume discounts. Reputable: Reddit, OKCupid, Crowdtilt, I think Overstock.com...
  • BitPay - $0/mo. 1% fee or $30/mo. 0% fee. Reputable: Wordpress
  • BitWall - BTC paywall. Temp. free for publishers. Reputable: Chicago Sun-Times
For DOGE it is not quite as established, but Moolah and DogeAPI seem legit though I don't think they do USD. You can also use Stuffcoins (higher fees) or another DOGE/BTC buy/sell site for small scale stuff manually.

Keep in mind DOGE/BTC is very liquid.
posted by save alive nothing that breatheth at 8:23 PM on February 5 [2 favorites]


There's no reason we couldn't just dispense with all the pointless mining and instead have a central authority ('government') issue crypto-coins ...

I'm pretty sure you're not serious, but:

A big population of diverse people "mining" is actually necessary for bitcoin transactions to be secure and reliable. By secure and reliable I mean, when someone gives you money, you and only you get that money. That's true for all the crypto-currencies; they all use the same cryptographic principles. If you have a centralized bank that you trust there is no need for all the cryptography. You can just rely on that bank to keep track of who has your money. And in fact, that is how fiat currency mostly works - not with physical dollars, but with trusted banks adding a payment to one balance and subtracting it from another, electronically.

It's long, but this explains it pretty well.
posted by aubilenon at 10:15 PM on February 5 [1 favorite]


Pope Guilty wrote: Hell, the ghash.io mining pool controls somewhere in the neighborhood of 40-45% of all the power in the network- good luck once they add another 10% and decide that the reality of bitcoin is whatever they say it is.

Isn't there an attack that only requires about 25% of the computational power? I read a PDF about it a while ago. The ghash.io crowd could be attacking other people right now, undetectably.
posted by Joe in Australia at 12:39 AM on February 6


maxwelton: I think the most damning aspect of bitcoin et al is that the work needed to generate new coins is useless.

The miners actually make up the distributed transaction engine that makes the whole thing work. The coins they 'mine' and the transaction fees are the reward they get for helping the network run. The combined power (hashrate) is what gives the network security - the difficulty of the calculations is like an anchor that secures the integrity of the blockchain. Its all designed to be a way of keeping track of who-has-spent-what in a secure way without any central authority.

Because of the way the incentives are set up, the bitcoin network is tending to amass a lot more hashrate than it appears to need, so could be considered wasteful in that respect, but the mining activity is not completely 'useless' - its the engine of the whole thing.

There are some altcoins that work from more potentially useful calculations, eg Primecoin, mentioned in the fpp.
posted by memebake at 1:18 AM on February 6 [1 favorite]


Isn't there an attack that only requires about 25% of the computational power? I read a PDF about it a while ago. The ghash.io crowd could be attacking other people right now, undetectably.

It's also possible that the boss of ghash.io is also secretly the boss of another pool that brings his control over 51%, but I would think that people would notice the attack being made.
posted by Pope Guilty at 3:50 AM on February 6


Re: useless efforts - Real miners have ore at the end of their efforts. They have a thing.

The reason they chose the mining metaphor is to mimic the idea that they have a real thing at the end.
posted by Pirate-Bartender-Zombie-Monkey at 8:52 AM on February 6 [2 favorites]


Yesterday Apple pulled the last bitcoin wallet app from the iOS App Store (Apple Insider story).
posted by ODiV at 9:08 AM on February 6


ODiV: "Yesterday Apple pulled the last bitcoin wallet app from the iOS App Store (Apple Insider story)."

Long Live Cryptic Urgencies
posted by tonycpsu at 10:47 AM on February 6 [3 favorites]


It's also possible that the boss of ghash.io is also secretly the boss of another pool that brings his control over 51%.

Is that really such a magic number? It seems to me anyone who is hording a significant amount of bitcoin (20% or something) has a large enough impact on price to essentially act as a central bank of sorts - if trade volume is low enough they can act to keep prices stable.
posted by Golden Eternity at 11:22 AM on February 6


Actually he's talking about a "51% (computing power) attack", Golden Eternity, meaning he controls over half the miner CPU cycles, allowing him to print himself bitcoins, etc. Researchers have shown this attack only requires around 25%, but I forget the specifics.

Now Bitcoin already has a central bank too though : Shamir, et al. showed that BTC were concentrated amongst a couple early adopters.
posted by jeffburdges at 11:30 AM on February 6 [2 favorites]


Long Live Cryptic Urgencies

Okay, that's fucking hilarious.
posted by Blazecock Pileon at 11:30 AM on February 6 [2 favorites]


The reason they chose the mining metaphor is to mimic the idea that they have a real thing at the end.

Well that just depends on your philosophy of mathematics doesn't it?

I think one possible future is coins tied to useful services - DataCoin doesn't seem to have any growing market cap but is functional and backs the coin by storing data in the blockchain. NameCoin seems to be doing well. It's a hard to use gimmick right now, but this has the potential to supplant cloud messaging and small file storage services - you can just pay the network, or transmit a payment / crypto signature to someone else who will store your file. That leads us to interesting places. There are certainly ways to be more energy efficient, especially with arbitrary difficulties, whether it's DOGE avoiding some of the ASIC arms race or PPC basing control/creation more on coins held than CPU power.
posted by save alive nothing that breatheth at 12:13 PM on February 6


The attack I (and jeffburdges, possibly) am thinking of isn't a printing one: it's an attack on other people's ability to mine profitably. If you have enough processing power you can mine secretly and only release the results of your computations when other people have already obtained the same result. When there's a conflict like this the longer block-chain wins (I'm not very clear on this) but you, with your lead-time and many associates, can win any such competition. Other miners find themselves mining less successfully, giving you a competitive advantage.

You don't even have to wait until your competitor actually publishes: just delaying the results of your computation will, in many cases, make their calculations useless - and you're insured against the possibility of them pre-empting you by the same logic as before.
posted by Joe in Australia at 12:56 PM on February 6 [1 favorite]


TheophileEscargot : I would love it if they were decentralized, but they're not, really. The network might be distributed but everyone must log on to a single IRC channel to get a list of peers. Take control of that channel and you can theoretically take control of all newcomers to the network (including people that have just rebooted.) At least this is my understanding of what some of them work like; if any altcoin has a different peer discovery mechanism I'd love to hear it.

Also I wonder what it is going to be like 100 years from now, when you have to download a century's worth of blockchain info just to join the network..
posted by 3mendo at 1:10 PM on February 6


Blazecock Pileon: "Okay, that's fucking hilarious."

The article doesn't mention it directly, but for anyone who didn't spot it in the comments, at one point there was a poster on r/bitcoin promising a Nexus 5 to anyone who posted a video of themselves smashing their iPhone.

Also, r/actualmoney's response is great.
posted by emmtee at 3:10 PM on February 6 [3 favorites]


Also, r/actualmoney's response is great.

Perfect.
posted by Blazecock Pileon at 6:25 PM on February 6


Yesterday Apple pulled the last bitcoin wallet app from the iOS App Store (Apple Insider story)

I'm pretty sure you can access most online wallets through Safari... geez.
posted by Jimbob at 6:49 PM on February 6






The more I read about this stuff, the more it seems like electronic tulips.
posted by Pirate-Bartender-Zombie-Monkey at 9:38 PM on February 6


A newly sentient (but under-powered) distributed AI cannot yet manufacture its own hardware--but it is able to manipulate humans into building it the specialized machines it needs to become autonomous.

Posing as a mysterious Japanese programmer who refuses to reveal their true identity, it launches a campaign targeting the group most likely to bring the needed processing power online quickly in their pursuit of power and wealth.

Cunningly, this group will be dismissed as "nutters doing nutter things" by the people and agencies whose attention the AI wishes to avoid.

Until it's too late.
posted by maxwelton at 10:46 PM on February 6 [12 favorites]


but it is able to manipulate humans into building it the specialized machines it needs to become autonomous.

Add a few creepy details to make it more like an electronic version of cordyceps, and you've got a winning screenplay. No lie.
posted by aramaic at 6:08 AM on February 7


Russia bans bitcoin as "suspicious" surrogate currency.
posted by Brian B. at 7:03 AM on February 7 [1 favorite]


much doge in grauniad today

    such internet moneys evangelist

think is about them

                wow
posted by emmtee at 7:17 AM on February 7


Problems with Coinbase?

TL;DR: not exactly -- don't use the API key unless you really need to, and beware targeted attacks. If you're deemed to have been "hacked" you may not qualify for refunds from Coinbase.
posted by aramaic at 8:12 AM on February 7


Alternate tl;dr: of the Coinbase article: Bitcoin is only sufficient for toys and criminals and Coinbase is incompetent.

The exploit described is a nice demonstration of how Bitcoin is way more risky than traditional payment processing systems like bank accounts or credit cards. It's cash; once it's transferred, it's gone. Bye! Grown-up payment systems have ways to handle thefts of things like API keys, ways to unwind fraudulent transactions.

And Coinbase is apparently designed by people who seemingly have no ideas about risk management. "The right API key will let any program move bitcoins in and out of a given accounts. Once the key is compromised, attackers can even access linked bank accounts to purchase more bitcoins". That goes way beyond the inherent risks of Bitcoin. It's just astounding. It also should include financial liability for Coinbase themselves, but I wouldn't be surprised if their terms of service try to indemnify themselves even in cases of gross negligence.
posted by Nelson at 8:25 AM on February 7 [2 favorites]


Once the key is compromised, attackers can even access linked bank accounts to purchase more bitcoins

This part should be given additional emphasis, I think.
posted by aramaic at 8:38 AM on February 7




My protest at MtGox Offices - 5 to 7th February 2014, Tokyo, Japan. "After repeated and failed attempts to withdraw my BTC from MtGox, I decided to jump on a plane and pay them a visit in Tokyo. ... After a 16 hr. flight from Australia ...". Contains many details on what's going on at Mt. Gox, although it could all be made up. Who knows, it's cryptoanarchy!

I'm confused about one thing; why do people even have BTC stored at a place like Mt. Gox? The whole point of a decentralized currency is you hold the coins yourself. Is most of the money sitting in Mt. Gox futilely waiting for exchange to filthy fiat currency? Or is there some other reason to trust a company with a long history of technical incompetence to hold what you believe to be money?
posted by Nelson at 8:59 AM on February 7 [1 favorite]


Wow, more volatility today as Mt. Gox suspends withdrawals for a few days, at least.
posted by malocchio at 9:01 AM on February 7


You have to have coins in the market to trade them.

The volatility hasn't been that bad if you're on bitstamp.
posted by empath at 9:26 AM on February 7


You only need coins in Mt Gox if you want to trade them for real currencies. You can trade Bitcoins directly between people, that's the whole point of Bitcoin. I remain confused why people let Mt. Gox hold their Bitcoins. Maybe just suckers?

Bitstamp graph: from $780 to $650 and back to $740 in about a day. 15% intraday volatility is a strange definition of "not that bad" for a store of value.
posted by Nelson at 10:12 AM on February 7


Looking at Bitstamp, a daily range of $619.00 - $766.45 isn't that bad? :) We'd be freaking out in the equities market if we saw another flash crash like that.
posted by malocchio at 10:13 AM on February 7




You have the money in a market so you can day trade, basically. Local bitcoins works but it's a big pain in the ass. I personally just bought from coinbase, but I'm just buying and holding.
posted by empath at 4:20 AM on February 8 [1 favorite]


twitter.com/dogeparty much success very occupied
posted by save alive nothing that breatheth at 11:38 AM on February 8


Oh my god. You think you know what's at the page I'm about to link. You're reluctant to click it, and well you might be, since not clicking it is like rule #1 of the internet. But trust me. No amount of staring into distended anuses will help you guess what is behind this link:

Goatse.cx
posted by Pope Guilty at 11:52 AM on February 8 [4 favorites]


Yesterday Apple pulled the last bitcoin wallet app from the iOS App Store (Apple Insider story).

Here's a piece from the Chief Security Officer of Blockchain: Apple yanks last remaining bitcoin wallet
posted by homunculus at 12:22 PM on February 8


What's hilarious and tragic is that all those libertarian dummies shooting their iPhones are basically doing Apple's work for them. These gun-toting nutballs come off as the fools they are and they make other Bitcoin users look similarly crazy, even though there's a legitimate point to be made about anticompetitive behavior in leading up to Apple's own electronic payment system. What a waste.
posted by Blazecock Pileon at 2:44 PM on February 8


You only need coins in Mt Gox if you want to trade them for real currencies. You can trade Bitcoins directly between people, that's the whole point of Bitcoin. I remain confused why people let Mt. Gox hold their Bitcoins. Maybe just suckers?

Some people leave their bitcoins in MtGox because they are dumb I guess. But apart from that, I think what empath meant is that if you want to try and exploit bitcoins volatility and trade between USD/BTC, you need to keep some BTC's on the exchanges, because sometimes getting it in and out of the exchanges takes too long. So some people leave bitcoins in MtGox because they might want to exchange in a hurry. I'm not saying thats a good idea (it definitely isn't) but I'm just trying to answer your question.

Another reason is that the imminent demise of MtGox is quite regularly predicted, and so maybe people have been desensitized to the risk. Does look pretty bad this time though.
posted by memebake at 3:24 PM on February 9




So we should be hearing from mtgox fairly soon, right?
posted by ODiV at 7:39 PM on February 9


Yeah, so basically Mt Gox got hit with a double spend attack, which is their own fault and not the fault of the bitcoin protocol.

Here's the scam in a nutshell.

You withdraw BTC from MtGox.

Mt Gox sends the money.

You wait to see the transaction go out.

You copy the transaction, and change a few bits of superfluous information and send it out.

If you're lucky, your transaction gets accepted by the block chain and the original transaction fails.

So far, so good. There's no duplicated money, just the same transaction, but with a different id, basically.

This part is the scam:

You tell Mt Gox that your withdrawal failed. Mt Gox looks for their transaction id, sees that it failed and credits you the money in your Mt Gox account. Now you've duplicated the bitcoins, but only on Mt Gox's ledger. Then you can try withdrawing the money again, and run the scam as many times as you can until Mt Gox catches on.

If Mt Gox had checked the block chain, they would have seen a transaction from their wallet to your wallet, but they weren't doing that, they were checking for a transaction id.

So now they have to fix their trading engine to account for malleable transaction ids. Other exchanges are probably also vulnerable to this.

So, now the question is how bad are Mt Gox's books? Did they duplicate a few hundred BTC or a few thousand -- or more? If the latter, that's going to have a real distorting effect on the market, in that millions of dollars worth of BTC are going to essentially disappear when Mt Gox fixes their books -- and a run on the exchange of Mt Gox is insolvent.

You basically had the economic equivalent of a counterfeiting ring passing fake money to Mt Gox.
posted by empath at 7:23 AM on February 10 [7 favorites]


That's a great explanation, empath, thanks. Not sure I agree with the "not the fault of the bitcoin protocol" assessment though. The underlying problem is transaction malleability: basically a Bitcoin transaction is not completely signed, there's a few "superfluous" bits that can be tampered with, allowing the attack. This weakness in the protocol is well known, so it's Mt. Gox's fault for not working around it, but it is also a flaw in the Bitcoin protocol.

If I understand all this right, Mt. Gox should have caught this early on when its own internal balance was different from the blockchain's belief in Mt. Gox's balance. Maybe they weren't doing that kind of verification?
posted by Nelson at 7:40 AM on February 10


I woke up and saw the flash crash this morning and was going to buy more, but in the time it took me to read about Mt Gox's problem and realize that it wasn't that big of a deal, it already bounced back :(
posted by empath at 7:43 AM on February 10


mtgox was what everyone recommended for an exchange. If they are this incompetent (taking your word on this, empath), then how can you trust any exchange? It's not like there are any regulations, auditors, etc. Doesn't this make cashing out that much harder?
posted by ODiV at 7:59 AM on February 10


People have been telling people to stay away from gox for almost a year. Bit stamp is a larger exchange now.
posted by empath at 8:04 AM on February 10


I wonder why I thought of them as the biggest and most recommended then? You even said as much even upthread, so I guess it just didn't sink in. Inertia is a powerful thing. It's not like I keep on-top of this that much as well, honestly.

I hope not too many people are going to get screwed here, but I'm not optimistic.

So is Bitstamp trustworthy and competent? Or if you have any $/bitcoins with them, you should keep your ears open and switch to another exchange if things start to look iffy? And how does everything not look at least a little shady?
posted by ODiV at 8:46 AM on February 10


You should use an exchange to buy or sell bitcoins, not as a bank. If you want to buy bitcoins, buy them and withdraw them immediately. If you want to sell bitcoins, sell them and withdraw your money immediately. The reason people have been telling people to stay away from Gox is that they have had problems with withdrawals for months. If you can't get your money in and out immediately, then don't use them.
posted by empath at 9:25 AM on February 10


Not using them if I can't get my money in and out immediately sound kind of chicken and egg.

Essentially someone has to be getting screwed in order for the word to get out?
posted by ODiV at 10:27 AM on February 10


It's like how Libertarianism rejects regulation in favor of relying on everybody to boycott products that cause piles of corpses.
posted by Pope Guilty at 11:15 AM on February 10 [2 favorites]


I think they should regulate the shit out of the exchanges and I'm laughing at all the libertarians getting hosed by con artists.

Bitcoin is a really neat technology that's getting crippled by its early adopters, but once they're all washed out, it'll be better for everyone.
posted by empath at 11:30 AM on February 10 [1 favorite]


The SA thread on bitcoin is pretty funny- not a week goes by that somebody doesn't post another successful ponzi scheme. My favorite recent story from /r/bitcoin was the guy who got an offer where the scammer would send him "physical bitcoins" in exchange for every bitcoin the guy sent him. Only later did it seem weird that the guy wasn't asking for anything in return...
posted by Pope Guilty at 11:37 AM on February 10 [2 favorites]


Did someone say Ponzi scheme? Bitcoin Ponzi: "Send BTC. Get 120% back when the next person sends.". No longer operating, but claims some $200,000 worth of BTC cycled through it.

We'll know the altcoins have truly arrived when there's this level of scams and incompetence for Litecoin, Dogecoin, et al.
posted by Nelson at 1:06 PM on February 10 [2 favorites]


Did anyone mention that Blockchain.info's app was removed for cheating the app review process? The site is a comedy spin-off from SA, but it does document the posts you can find on BitcoinTalk where the devs discuss figuring out how to sneak the app in.

Notice that BoingBoing let a rep from the company write the article.
posted by mccarty.tim at 4:06 PM on February 10 [1 favorite]


Did anyone mention that Blockchain.info's app was removed for cheating the app review process?

Well, yeah, it was the only way they could get it in the store. I don't really think that's a 'gotcha', just kind of a 'no shit'.
posted by empath at 4:10 PM on February 10


I hate to put this comment at the bottom of the usual Bitcoin-lolfest, but one more altcoin that didn't make the original post's excellent list.

GridCoin: compensating the coin miners for participating in BOINC projects that may lead to advances in medicine, biology, mathematics, science, climatology, and astrophysics. Ie: replace the time wasting proof-of-work most altcoins use with useful computation.
posted by Nelson at 4:34 PM on February 10 [3 favorites]


I can't figure out for the life of me why I as a private individual am supposed to give two shits about Apple Law when I barely give a shit about Gov't Law.
posted by save alive nothing that breatheth at 5:48 PM on February 10


Yeah, like I said about the early adopters.
posted by empath at 6:40 PM on February 10


I'm not anti-jailbreaking, but I also don't see buying an iPhone anytime soon because jailbreaking is an annoying step to go through just to run software outside of one software store. I have a Moto X I am very happy with.

Still, the fact remains that Apple wasn't really acting inconsistently with past behavior, so I still don't get why people are freaking out.
posted by mccarty.tim at 7:10 PM on February 10


Still, the fact remains that Apple wasn't really acting inconsistently with past behavior, so I still don't get why people are freaking out.

I'm guess it's because they didn't really pay attention to what Apple was doing because it didn't affect them in the least, until now, when it does.
posted by aubilenon at 7:15 PM on February 10


The point is that bitcoiners are freaking out and talking like Apple is removing the app to suppress bitcoin, but the reality is that the app developers broke the rules and suffered the consequence that had from the start been presented as the result of rulebreaking.

It's also funny to watch the overwhelmingly libertarian cryptocoin scene get angry at a company for not acting the way they want them to. Watching /r/bitcoin realize that hey, maybe they DID want the government to force companies to behave a certain way has been good entertainment.
posted by Pope Guilty at 8:26 PM on February 10 [1 favorite]


The point is that bitcoiners are freaking out and talking like Apple is removing the app to suppress bitcoin, but the reality is that the app developers broke the rules and suffered the consequence that had from the start been presented as the result of rulebreaking.

Well, Apple is trying to keep bitcoin out of the app store. They don't want any payment processing system besides their own in any apps.

I also don't think the idiots on /r/bitcoin really matter that much. I've been reading it for a while and it's a bunch of zealots and terrible day traders who think they know how to do technical analysis of a market which is almost totally irrational, and who think that every story no matter how small has important repercussions on the market. From what I can tell, there are a bunch of very big players with millions of dollars who are moving (and manipulating) the markets, and they aren't trading on good or bad news, and they sure as shit aren't posting on public bitcoin forums.
posted by empath at 9:04 PM on February 10 [1 favorite]


Yeah Bitcoin Internet Libertarians are definitely the marks in this situation for the professional users and actual finance guys.The rumor is that r/bitcoin mods are whales and try to manipulate the subreddit a bit towards increasing their holdings.

It also might be difficult for some here to recognize the actions of a successful, or at least not immediately self-defeating, social movement - publishing software over the objections of Apple Law, then complaining on its removal, is one of these. (Similarly for the drugs stuff - news is like "So many people use it to buy drugs, not real money," I talk to business guys and I'm like "so many people use it to buy drugs, so it's basically as good as money." "They're moving weed money!" is not a good damning argument for the youths today.)

I also haven't seen any claims that the government should be forcing to Apple to sell their app, just Libertarian enforcement with boycotts and 2nd Amendment Hardware Solutions. Don't think "likes everything every corp. does" is part of the requirements for L. But somewhat the market works here, I think - Apple is probably being held at its niche marketshare to some extent by the feeling I get, v. common among technical people but also from many regular people, that they don't want a device Apple tells them what to do with.
posted by save alive nothing that breatheth at 3:57 AM on February 11


2nd Amendment Hardware Solutions

Come on dude, seriously.
posted by empath at 4:02 AM on February 11


??? I can't joke on them firing off guns into their Iphones?
posted by save alive nothing that breatheth at 4:05 AM on February 11 [1 favorite]


> Come on dude, seriously.

There are a lot of videos of people destroying their expensive cellphones out of spite*. I haven't seen any that involve guns but my level of surprise at finding one would be about this low: __

So, yeah, attention-grabbing phrase. Not inappropriate.

*(Inasmuch as Apple could possibly care, the phone's already paid for, so they wouldn't. It's such a childish self-harming demonstration of anger it demeans the word "protest".)
posted by ardgedee at 4:30 AM on February 11


Appears we ideally want a coin that combines the smarter uncapped economy, and cute fuzzy meme, of Dogecoin with the energy usefulness of Gridecoin, anonymity of Zerocoin, maybe "next generation" features of Mastercoin or NXT, and maybe the added features of NameCoin or even DataCoin. Ain't clear if that's even doable, probably should read about Zerocoin more carefully.

Interesting plausible future features :

ActualMoney, etc. contracts embedded in the blockchain to provide an internal exchange rate. As an example, coin range x with $100 promised by Joe-probably-honest-and-solvent was just bought for y coins, suggesting an exchange rate of z.

Apply a negative interest rate to coin holdings, i.e. if an account with x coins engages in a transaction, the account's balance is first reduced by multiplying by exp( - r t ) where t is the time since the account last engaged in a transaction. In this way, all account balances obey an exponentially decay curve that simulates a fixed permanent inflation, while keeping prices more fixed.

I just love the idea of simulating inflation by reducing balances while not increasing prices, mostly because that promises to be more fair to workers paid in the coin than inflation.
posted by jeffburdges at 6:19 AM on February 11 [1 favorite]


Second amendment hardware solutions. Takes him 5+ shots. Maybe it's the balaclava, maybe it's the gorilla glass, but probably it's because he's shooting from 300 yards. Stay to the end for the snazzy urban camo pants.
posted by Nelson at 7:01 AM on February 11


I wonder what kind of real-world activity could replace computation in a currency like this - like, mining coins by having volunteer hours verified by a partner nonprofit organization, maybe.
posted by jason_steakums at 9:39 AM on February 11 [1 favorite]


Yes, there is nothing preventing a mixed fiat and proof-of-work currency, maybe with the proof-of-work system voting on the charities, or whatever. And check out Mile High Hours.
posted by jeffburdges at 11:05 AM on February 11


There's a ddos going on right now exploiting the malleability thing. All the exchanges have halted trading while some of the wallet software is patched.
posted by empath at 12:09 PM on February 11


I wonder what kind of real-world activity could replace computation in a currency like this [...]

Well, the result of Bitcoin mining is standard units of value that are preserved in the block chain (which is durable, because it exists in multiple copies) and which are easily verifiable. A real-world equivalent would need to also produce standardised units of something durable and easily verifiable. How about blocks of some uncommon substance that is laborious to produce, but easily tested?

I think it's obvious where I'm going with this. Attractive, durable, easily tested, hard to produce: it has to be uranium-235. Miners would produce standardised U-coins (I thought of calling them "curies" but I think we should stick with the "coin" nomenclature). They can be readily tested with home-built equipment and there is no easy way to forge them.

This currency would have social benefits, too: U-coins have an intrinsic loss of value over time, which encourages rapid circulation; and it would be hazardous to store too many in close proximity, which discourages accumulation. Speculators and currency hoarders would be recognised by their bald heads, lesions, and (in extreme cases), a lambent glow. Plutocrats' houses would be marked by radioactive craters as a sort of object lesson about greed. In any case they would have no natural heirs (in any sense of the word) and their wealth would re-enter society as soon as their former homes could be safely entered.

I recognise that the introduction of a new form of valuta may give techno-Luddites pause, but a new era demands new economics. There was once a time when Bitcoins themselves were seen as freakish toys! I have no doubt that we will come to appreciate the virtues of a physical currency, and we may even come to embrace the U-coin. Just not too closely, please, and not anywhere near my children.
posted by Joe in Australia at 2:38 PM on February 11 [8 favorites]


all kinds of stuff kicking off now - the transaction malleability problem that cuased mtgox to grind to a halt is now being exploited in a large scale DDOS attack - essentially it seems that someone is mounting an attack whereby “as transactions are being created, malformed/parallel transactions are also being created so as to create a fog of confusion over the entire network, which then affects almost every single implementation out there,”

According to Coindesk "An industry-wide coordinated response has been put into action, with exchanges and core developers collaborating actively to attack the problem from multiple angles." - This includes Bitstamp.net (generally credited in this thread as being the most reliable exchange) also suspending bitcoin withdrawals until the issue is resolved.

Bitcoin developer Jeff Garzik: "we will likely issue an update fixing two edge cases exposed by this attack.”

These are the kinds of things that happen when a currency is natively-digital - its open to attacks. And people can profit from those attacks - DDOS the currency down to a value that suits them. But being under constant attack also (hopefully) makes bitcoin stronger over time.

Well, I'm paging all snark-peddlers back to the thread, I guess. As someone said on Hacker News 'Starting a new financial system is proving to be very difficult. Who would have thought.'
posted by memebake at 3:11 PM on February 11 [2 favorites]


Interesting how the exchanges always seem to suspend withdrawals before they suspend deposits. If someone's double-spending, and you have a sincere interest in stopping the attack, wouldn't you want to stop both?
posted by tonycpsu at 3:20 PM on February 11 [1 favorite]


So was this a great time to have a bitcoin/cryptocurrency thread or is it always like this?
posted by ODiV at 3:44 PM on February 11 [1 favorite]


It's not constant, but there's something to point and laugh at at least weekly. If you've got a Something Awful account, the thread "Bitcoin: the Katamari Dumbacy" in GBS is pretty good ongoing reading.
posted by Pope Guilty at 3:47 PM on February 11


Yeah, I poke my head in there every once and a while. They seem to predict bitcoin's imminent demise almost daily though, so it's hard to get a read on how severe and damaging any particular incident actually is.
posted by ODiV at 3:49 PM on February 11


Seems to be relatively minor compared to the coin duping bug early on. None of this is actually affecting the bitcoin network itself, which is working as designed. The problems are all with the services built on top of it.
posted by empath at 4:19 PM on February 11


This attack helps MtGox in a way, because they were like "We're stopping until this is fixed" and then everyone was all "lol, MtGox, no way this is old bug" and now suddenly everyone is "oh yes we need to fix this"

Which is not to say MtGox are behind this, but perhaps someone who has a ton of coins stuck in MtGox is.
posted by memebake at 4:27 PM on February 11 [1 favorite]


So was this a great time to have a bitcoin/cryptocurrency thread or is it always like this?

And there's nearly always a running bitcoin thread on metafilter. I think we get about one a month.
posted by memebake at 4:38 PM on February 11


And there's nearly always a running bitcoin thread on metafilter. I think we get about one a month.

Actually, over time, it gets more and more difficult to start new bitcoin threads. Early adopters were able to easily get their posts onto the blue--I understand new threads were sometimes discovered hourly--but now it takes a lot of specialized links (a complex and time-intensive process) to even make it into the thread chain (nb, this thread).

This is by design, but I'm fairly put-out mathowie kept 5% of the threads for himself.
posted by maxwelton at 5:22 PM on February 11 [5 favorites]


DOGE value continues moonward.

I tend to think BTC will actually fail in the sense that Napster failed... probably be kept minimally active symbolically as the first crypto...
posted by save alive nothing that breatheth at 6:10 PM on February 11


DOGE is safer than bitcoin?
posted by Golden Eternity at 6:42 PM on February 11


Only the dead know safety, but I'm longer DOGE than I am BTC.
posted by save alive nothing that breatheth at 6:46 PM on February 11


Joe in Australia: " Attractive, durable, easily tested, hard to produce: it has to be uranium-235."

Larry Niven beat you to this joke 30 years ago.
posted by Chrysostom at 8:17 PM on February 11




All the exchanges have halted trading

Robust!
posted by one more dead town's last parade at 1:24 PM on February 12 [2 favorites]


No see this is actually a good thing because
posted by Pope Guilty at 1:34 PM on February 12 [3 favorites]


it gives us time to sit back and think about the robust!ness of the system.
posted by one more dead town's last parade at 1:36 PM on February 12 [2 favorites]


This attack is interesting because it points to a more general class of attack on Bitcoin: denial of service. Just flood the Bitcoin network with bogus transactions, or transactions that appear legitimate but aren't, or for that matter completely legitimate transactions ping-ponging tiny slivers of Bitcoins meaninglessly between addresses. I haven't thought much about how vulnerable Bitcoin is to this kind of threat, but I'm guessing there's some risk. I know the protocol has built into it incentives for people to sign transactions and maintain the block chain (basically, mining) and there's also a way to include a "tip" to speed along transaction confirmation. I'm just ignorant of how that's worked out in practice.

Of course traditional financial networks are vulnerable to DOS attacks too, from malicious transactions injected into EFT networks to high frequency trading to bringing a giant bag of pennies to the bank and demanding they be counted on deposit. But somehow that's never been a significant risk. Bitcoin may have to grow some defenses.
posted by Nelson at 1:47 PM on February 12 [1 favorite]


No see this is actually a good thing because

Haha, I accept that challenge.

The internet is robust because various parts of it are constantly under attack
Your immune system is robust because it is constantly under attack
Any purely-digital currency would be subject to many and varied attacks, even a centralised one sponsored by a state or corporation.
What you're seeing in this particular crisis is open-source engineering in action (many eyes on the bugs, collaboration) rather than anything to do with libertarians.

e.g. Firefox and Chrome will have become safer browsers through this sort of process - by being attacked.
posted by memebake at 2:16 PM on February 12 [1 favorite]


I received some BTC spam the other day, unconfirmed transactions from addresses beginning 1Sochi and 1Enjoy. (BTC addresses usually start with a 1 though apparently that will change as the protocol is used in more complex ways... you can't select addresses, but you can generate them until you find sequences of interest.) Blockchain.info didn't have them and I didn't look into it too much, but apparently they would have been 1 Satoshi (10 ** -8, minimal amount of BTC) transactions and a possible goal was to reduce anonymity if people forwarded the satoshi from an old disused address to a more current one. You were advised to drop the suspect coin to the miners or cycle it through an exchange.

While I don't think there's been a nationwide halt in a few years, the "real" exchanges aren't super-reliable either. NYSE market status. BTC exchanges are probably running better code in some ways.
posted by save alive nothing that breatheth at 2:43 PM on February 12


the "real" exchanges aren't super-reliable either. NYSE market status

That's something of an overstatement. The outages reported on that site are really minor; I'm not sure what the equivalent would be with Bitcoin, because the network isn't even monitored with such granularity—it would be weird behavior with individual addresses or network nodes, probably.

The current BTC exchange halt would be analogous to the NYSE and all the other major exchanges suddenly deciding to halt trading in response to an attack, something that I can only think of one example of. (Though in fairness, Wikipedia says it's happened three times, the other two in 1933 and 1945.)

Something like Black Monday or the Flash Crash aren't really comparable, because in those instances the exchanges operated correctly. The trading curbs as a result are actually more to prevent the exchanges from outpacing the human ability to react to them than to repair any technical flaw.

BTC exchanges are probably running better code in some ways.

Judging by the track record of Bitcoin exchanges I cannot think of any metric by which this could possibly be true. They show every sign of being hacked-together piles of off-the-shelf code assembled by web programmers with little or no background in finance or transaction processing. MtGox reads like a case study of Engineer's Disease.

Admittedly the current malleability attack seems to be a fundamental problem in Bitcoin rather than purely on the exchanges at the moment, although it does not inspire confidence that they seem to have noticed it only when it bit them in the ass and started to chew.
posted by Kadin2048 at 12:01 AM on February 13 [4 favorites]


It was known about in 2011 and Mt Gox was asked to fix their software then.
posted by empath at 12:22 AM on February 13


There was a NASDAQ outage last August for a few hours, but I've never seen a massive failure across the settlement process, which seems to be more analagous.
posted by malocchio at 6:20 AM on February 13


I wrote a site to convert altcoins to store credit: (http://bitk.in). Wasn't too hard. Going to add more coin support. Probably doge! Can't think of another that I like as much. I like the way the merkle-trees work. Makes coins easy to deal in, swap, transfer, etc. I think the biggest barrier to mass adoption in understanding.... not any technical or regulatory issue. Only countries like Russia, China, Iran, etc. will oppose free commerce.
posted by simulx at 9:33 AM on February 13 [3 favorites]


BTC exchanges have had less downtime than NASDAQ last year.

And although they do less volume, they have a lot more exposure since they have lower margins, operate with less capital, and don't have the protections of governments.

I'm impressed at how well they (coinbase, btc-e, bitstamp, et al) work.

This is a pretty minor setback. A couple sites need to fix their code... then it's done.
posted by simulx at 10:03 AM on February 13 [1 favorite]


BTC exchanges have had less downtime than NASDAQ last year.

How about unscheduled downtime?
posted by Nelson at 10:24 AM on February 13


I think the biggest barrier to mass adoption in understanding

Sooo, it's going to be a success on par with PGP then?
posted by aramaic at 10:26 AM on February 13 [2 favorites]




The linked Silk Road 2 explanation states
Our initial investigations indicate that a vendor exploited a recently discovered vulnerability in the Bitcoin protocol known as “transaction malleability” to repeatedly withdraw coins from our system until it was completely empty.
Reddit is full of people saying that story makes no sense and the Silk Road 2 admins just stole the money. With digital cash, who can be sure?

I was wondering what fool would have their Bitcoins on deposit with a website whose very purpose is to be an illegal market, but apparently the site provided an escrow service. With roughly $2.7M worth of Bitcoin on deposit. Nice risk-free haul for someone.
posted by Nelson at 3:46 PM on February 13


Again, this is good, because
posted by Pope Guilty at 3:51 PM on February 13


Of course it's not good, but people steal money all the time. It's like 4000 bitcoins.
posted by empath at 4:55 PM on February 13


empath: "It's like 4000 bitcoins."

Yes, or, as some might put it, $2.5 million.

No, wait. $2.4 million.

Actually, make that $2.3 million.


posted by tonycpsu at 5:00 PM on February 13 [2 favorites]




Ocean's 1011
posted by zombieflanders at 5:06 PM on February 13 [2 favorites]


Incumbent Corporation Stops Providing Services To Competitor Quasi-Corporation
posted by save alive nothing that breatheth at 8:45 PM on February 13


Again, this is good, because

I accept the challenge.

When Silk Road 1 closed, bitcoin value increased? Therefore the more Silk Roads get closed, the better bitcoin does?

More seriously: Silk Road 1 and 2 are criminal enterprises, where criminals sell stuff to other criminals. If the guy running it, criminal by defn, commits a criminal act by stealing money from other criminals, who cares? (apart from the criminals). Or I suppose wider society cares somewhat; in the same way we care about crime between organised crime gangs. But the overall effect on Bitcoin is neutral I would have thought.
posted by memebake at 8:33 AM on February 14


But the overall effect on Bitcoin is neutral I would have thought.

Demand for Bitcoins is demand for Bitcoins; if you can't safely use Bitcoins for transactions on Silkroad (or whatever pops up to replace it), it's that many fewer people trying to buy Bitcoins, which means Bitcoins are going to be worth less as a result.

Whether that demand -- or the absolute values of Bitcoins at all -- is important to the health of the Bitcoin ecosystem is an arguable point, I think. Eliminating their use in a real-world-goods market might push them further and further towards existing solely as a speculative instrument and make them more volatile (having physical goods, even illegal ones, priced in Bitcoins probably stabilized the value slightly), but I'm not sure how significant the change could be.
posted by Kadin2048 at 9:56 PM on February 16


Eliminating their use in a real-world-goods market

The thing is pretty soon someone will probably just code up a silkroadgen and there will be barely any disruption in service.
posted by save alive nothing that breatheth at 9:59 PM on February 16


Eliminating their use in a real-world-goods market might push them further and further towards existing solely as a speculative instrument and make them more volatile (having physical goods, even illegal ones, priced in Bitcoins probably stabilized the value slightly), but I'm not sure how significant the change could be.

Overstock.com does over $100k in sales a day in bitcoins and they're holding them. Silkroad was a drop in the bucket. The main use of bitcoins is still transferring money in and out of controlled economies, though, it seems.
posted by empath at 10:12 AM on February 17 [1 favorite]


Silkroad vows to work for free until all stolen funds repaid. What standup criminals!
posted by save alive nothing that breatheth at 5:56 AM on February 18


Overstock doesn't take bitcoins. Bitpay takes coins and gives Overstock (among other vendors) money.
posted by Pope Guilty at 7:22 AM on February 18 [4 favorites]


No, overstock is taking bit coins directly and holding them. The CEO warned investors as much.
posted by empath at 1:36 PM on February 18


If only there were some sort of way to link to a source for a factual claim you make on Metafilter. Some sort of hyper comment. Sadly, all we can do is waste everyone's time making shit up. Oh wait, look at this marvelous invention I just discovered!

Coinbase processes Overstock payments. Overstock is effectively paid in dollars: "Coinbase sets an exchange rate, immediately converts the buyer’s bitcoin into dollars, and transfers the dollars to Overstock. The retailer never holds any bitcoin." Coinbase is interesting, btw, and worth a look if you're curious how actual professional people might use something like Bitcoin.

Bonus hyper radio citation: Planet Money: A Bet Over Bitcoin, an entertaining program between Ben Horowitz (Coinbase investor) and Felix Simons (finance blogger) about whether Bitcoin will be a real payment phenomenon or not.
posted by Nelson at 2:15 PM on February 18 [2 favorites]


At some point recently Huntercoin launched, variable (~20%) of coins go to miners, rest spawn on the map of a vidya. Players' gold penalty for respawn goes to the miners, game state is recorded in the blockchain.
posted by save alive nothing that breatheth at 7:11 PM on February 18




So I'm just gonna throw this out here.

I started mining some doge a few days ago and I think it's totally a fun thing to play around with and the subreddits are full of fun, excited people. I added a payment address to my MeFi profile in case anyone wants to tip me a few doge next time I write a cracker of a comment. I encourage anyone else who's interested to do the same and I'll tip you some dogecoin! :D

I'm no expert but I have been successfully mining a couple days now and if any of you have any questions about getting started with dogecoins please feel free to MeFiMail me. You don't have to mine. The main thing is to get a wallet so people can start sending you doge. In fact, I will send any new shibe who send me a payment address some dogecoin to get them started on our moon voyage!

Woof!
posted by laconic skeuomorph at 12:09 PM on February 19 [2 favorites]








I suspect that gox and insiders are buying gox coins at steeply discounted prices and unloading them on other exchanges which is depressing the price.
posted by empath at 11:35 AM on February 20 [1 favorite]


Why would they need to "buy" bitcoins that they already have?
posted by ODiV at 11:36 AM on February 20


Because it gets BTC owed to customers off their ledger. If they really screwed up on the transaction malleability thing they owe more BTC than they actually have. So you give them cash instead at 1/3rd the cost it would have been to buy the bitcoins.

Let's say they had 80 bitcoins and owed 100 to customers and BTC was worth $500. There's a run on BTC withdrawals. They freeze withdrawals. The BTC price on mt gox tanks to $100 but stays at $500 elsewhere.

Gox buys 20 bitcoins from customers at $2000, sells on bit stamp for $10000

Now they have 60 bitcoins and owe people 80.

Now they use 6000 dollars to buy another 60 bitcoins and sell them for 30000, leaving them with $34000 0 bitcoins and owing people 20. Take 10000 of that and buy back 20 bitcoins from bitstamp, and they've eliminated their BTC deficit and have extra cash left over. Not to mention trading fees, and making money from shorts in advance of bad announcements and so on and they're making money coming and going.

They're going to end up with basically all the money from the market on their personal books and owe their customers nothing. They're not a real market, they're just emptying the till at this point.
posted by empath at 11:52 AM on February 20 [2 favorites]


I guess I don't understand why they would do that. Is that much more legitimate than just saying, "Fuck you, we're keeping your money?" Isn't it illegal and unethical either way, but this way they're giving people thousands of dollars?

I suppose that on the flip side it's not like mtgox has given anyone real money for any of this yet? If they are buying people's mtgox bitcoins they're paying them in mtgox dollars, both of which are probably worth about the same amount.

I would bet that right now they're still accepting deposits by true believers to buy mtgox bitcoins, don't intend to let anyone get either dollars or bitcoins, and are looking for a way to disappear with all of it.
posted by ODiV at 11:59 AM on February 20


You can still get paid in magic cards though, right?
posted by aubilenon at 12:03 PM on February 20


Well yeah, but it makes it easier to plausibly walk away with all the money if the ledgers match the assets.
posted by empath at 12:06 PM on February 20


I suspect that gox and insiders are buying gox coins at steeply discounted prices

Do you have any evidence for this particular allegation? It's a pretty strong charge, IIRC Gox is still not officially allowing Bitcoin withdrawals. So that'd be a pretty massive fraud.
posted by Nelson at 12:17 PM on February 20 [1 favorite]


Graph of Mt. Gox trading just before the latest announcement, showing a massive sell-off about four hours before the announcement went public. Not a smoking gun, but it could be tipped-off insiders were selling. (Found via Reddit.)

Is it illegal insider trading if it's an unregulated digital currency?
posted by Nelson at 1:24 PM on February 20


Am I correct in my understanding that you can still trade between existing accounts on Mt Gox, but you can't withdraw cash or get Bitcoins released so you can use them elsewhere?
posted by Joe in Australia at 1:55 PM on February 20


Yes.
posted by empath at 2:10 PM on February 20


Hah. So Mt Gox really might be able to pay off all its depositors and come out of this with a profit.

Mt Gox's deposits are conceptually similar to bonds: they are a promise to pay the depositor a certain amount of money or a certain amount of Bitcoins. One of the main reasons we have financial regulators is to discourage bond issuers from doing something like this: you sell bonds, then depress their price by creating an imaginary crisis. Your agents go around buying up the "junk" bonds and you get to keep the money.

Incidentally, if this really is what's happening and you trust Mt Gox to not disappear with the final balances, you could probably make a lot of money by buying Mt Gox accounts at some discount to the value of their balance and then using the cash in those accounts to buy Bitcoins on the exchange. Assuming a 50% discount on each side, you'd quadruple your money.
posted by Joe in Australia at 2:47 PM on February 20 [2 favorites]


and you trust Mt Gox to not disappear

The fact that Bitcoins trapped inside Mt. Gox are valued by the market at 20% of Bitcoins being traded elsewhere gives you an exact price on the risk of that bet. About 5:1 right now, and those odds have been widening. Given that this whole latest crisis started with Mt. Gox saying "we are worried some coins we are holding disappeared", even at 5:1 it might be a risky bet.

There's just all sorts of potential avenues for fraud here. Maybe it's a fake panic, maybe it's a real panic and Gox insiders are selling ahead of more bad news, maybe it's a simple outside theft, maybe it's an inside job. But honestly very little of what's going on this week has to do with cryptographic protocols; what's playing out now is just the risk of storing something of value with an unregulated, amateur-run deposit holder. The Bitcoin protocol just provides enough complexity to confuse the suckers.
posted by Nelson at 3:08 PM on February 20


The fact that Bitcoins trapped inside Mt. Gox are valued by the market at 20% of Bitcoins being traded elsewhere gives you an exact price on the risk of that bet. About 5:1 right now, and those odds have been widening.

It's even worse than that because no one can get money out. People buying mtgox bitcoins are using mtgox dollars, so you need to take the perceived value of those dollars into account as well. There's no way a mtgox dollar is 1:1 with a literal dollar.
posted by ODiV at 3:10 PM on February 20 [1 favorite]


Oh, that's a good point! Help me puzzle this out then.. If both GoxBTC and GoxUSD are at equal risk of never being returned by Mt. Gox, then shouldn't the exchange rate of GoxBTC and GoxUSD be roughly the same as real BTC and real USD? If the primary risk is Gox just never returning anything, why would you favor holding GoxUSD instead of GoxBTC?

I guess GoxUSD might be favored if there were a better chance of getting dollars back from a court after a hypothetical lawsuit and settlement. Also the primary threat to Gox is still the potential that some chunk of the BTC they were holding was stolen, so maybe the GoxBTC is riskier than the GoxUSD. Although if stuff was stolen from Gox, it's not clear what preferences they'd return the remaining assets to their depositors. The fun thing about Altcoins is you get to make up the entire world of financial regulation again!
posted by Nelson at 3:22 PM on February 20


If the primary risk is Gox just never returning anything, why would you favor holding GoxUSD instead of GoxBTC?

Because GoxBTC is falling! Sell sell sell!

That's my guess.
posted by ODiV at 3:29 PM on February 20


Because USD have more legal protection than BTC? There must be some way to go afer MtGox for stealing USD out of your account, maybe not so much with BTC?
posted by Golden Eternity at 3:33 PM on February 20


It's an interesting question. It also indicates that no purchaser knows whether Mt Gox is planning to absquatulate, or they'd buy all the Bitcoins and drive the price up. In other words, Mt Gox itself is probably not the one purchasing the Bitcoins.
posted by Joe in Australia at 6:09 PM on February 20


I wonder how feasible a mighty fuck you to Gox would be - if there's enough info in the blockchain to try to reconstruct somewhat verifiable account balances or at least the goddamn deposit records, then do a hard client update s.t. all of a sudden users have their BTC back and Gox has their dick in their hands?
posted by save alive nothing that breatheth at 6:34 PM on February 20 [1 favorite]


Can't be done and if it could be, the bitcoin would be worthless.

I think the drop in prices can be explained by the assumption that in bankruptcy proceedings, one would prefer to tell the judge that they owe you dollars, not bitcoins.
posted by empath at 7:06 PM on February 20 [2 favorites]


I mean a real serious hard fork that's hardcoded for fuck Gox. Maybe it's technically Bitcoin2. I doubt you'd get Bitcoin to do it, but I could imagine Dogecoin doing it...
posted by save alive nothing that breatheth at 7:29 PM on February 20


Bitcoin being worthless? That'd be a real change.
posted by Pope Guilty at 7:45 PM on February 20


It could also be an indication of the risk (volatility) premium on BTC itself and possible backwardation, since if anyone ever gets anything out of Gox it probably won't be for a long time, and that means in addition to Gox "liquidity" risk, GoxBTC is like a BTC futures contract.
posted by Golden Eternity at 7:59 PM on February 20 [1 favorite]


Bitcoin Builder is offering a GoxBTC to real BTC conversion. Or maybe it's all a scam, who knows? In theory you can transfer GoxBTC into Bitcoin Builder, then transfer the BTC out to your own private wallet that you actually own. The announcement says transactions are processed manually once a day (by the DreamHost founder, no less) "for SAFETY". This Reddit guy claims it worked for him.

The Bitcoin Builder order book right now has offers to buy a total of about 100 GoxBTC at a rate of 3:1, plus offers for another 200 or so at an exchange rate of 4:1. That's still better than the 5:1 rate implied by the USD market, plus you manage to get money out of Mt. Gox. The whole book together is worth maybe $50,000, if I did the arithmetic right.

Transactions taking days or weeks to process, spreads of 300% in various markets, protocol design flaws crippling the transaction network, fraud lurking at every corner. Bitcoin is hilarious.
posted by Nelson at 8:30 PM on February 20 [1 favorite]


Bitcoin Builder is offering a GoxBTC to real BTC conversion. Or maybe it's all a scam, who knows? In theory you can transfer GoxBTC into Bitcoin Builder, then transfer the BTC out to your own private wallet that you actually own. The announcement says transactions are processed manually once a day (by the DreamHost founder, no less) "for SAFETY". This Reddit guy claims it worked for him.

Wow, it really is grifters all the way down.
posted by tonycpsu at 8:38 PM on February 20 [1 favorite]


I have purchased several hundred dollars DOGE and sold $112 on r/dogemarket for Google Wallet / Venmo with no difficulties.

You know you can trust people because there is a bot that says so. A bot can't lie!
posted by save alive nothing that breatheth at 5:14 AM on February 21 [1 favorite]


MIT Technology Review: Marginally Useful - "Bitcoin itself may not flourish as a currency, but the underlying technology is beginning to suggest valuable new applications."
posted by the man of twists and turns at 8:42 AM on February 21 [1 favorite]


The Bitcoin Builder is interesting, but you already have to have a verified Mt. Gox account to transfer coins out, and apparently they already had a several month long backlog in verifying accounts.
posted by malocchio at 9:49 AM on February 21




I have no idea if that's real or not, by the way. Just passing it along.
posted by ODiV at 6:38 PM on February 24


744,408 coins might be the largest theft in history. That's almost a billion dollars on its high mark, when the theft was ongoing.
posted by Brian B. at 6:43 PM on February 24


My guess is that document is a fake, but who knows? It's definitely a hilarious missive from the Brave New Currency.

Has anyone seen a credible number of how many BTC Mt. Gox is actually holding? Is there any plausibility to that 744,000 number?
posted by Nelson at 7:05 PM on February 24




I really wonder if this Karpeles dude and his buddies realized what they're bringing on themselves - it's like they think cause it's internet money they're safe or something. Dead pool anyone?
posted by save alive nothing that breatheth at 8:57 PM on February 24


So does this mean that it was a pyramid scheme after all?
posted by humanfont at 8:58 PM on February 24


A pyramid scheme is one which works by attracting exponentially-greater numbers of people to reward earlier adopters. The pyramid can be explicit, like the Airplane Game, or secret, like a Ponzi scheme, but the common factor is that (a) the rewards being offered are an inducement to join; (b) they come from the members, and not from any external investment; and (c) in fact they typically could only come from the members, because they are much higher than any alternative investment.

This doesn't describe Mt Gox, as far as I know: it was marketed as an exchange, not as a way of multiplying your investment. I suppose it's arguable that Bitcoins generally are a sort of distributed pyramid scheme, but it's not a very precise use of the term and, in any event, it wouldn't be Mt Gox's fault.
posted by Joe in Australia at 9:10 PM on February 24


The tech looks goddamn legit, I'll tell you that much, whether or not BTC ends up establishing itself as a crypto for marks and conmen.

Let me tell you my new business venture intends to service all main cryptos but the world of difference between dealing with BTC people and DOGE people is amazing. I got this one guy, we have the same idea at similar times, so when I tell him mine, he says he's already on it. I'm basically like "great, we need an ecosystem of several firms providing this service independently, that will encourage use overall," more interested in being one part of a healthy market than a monopoly on chickenshit, want to work on having standards serviced by multiple providers... Meanwhile this guy ends up being, oblivious to himself, more interested in playing hardball THERE CAN BE ONLY ONE businessman than getting rich - a used car salesman's fantasy of a moneybusiness power player. (Believe you me the real dudes will cooperate to make a buck.) I offered to sign over all of BTC to him in this matter and only operate in DOGE but nothing is good enough to get any sort of cooperation.

Meanwhile DOGE people are generally realizing we're all in the moon rocket together. At this point things are so wide open there's barely any need to compete - when I find myself bumping up against something someone else is doing it's just like, OK, let's integrate w/ APIs.
posted by save alive nothing that breatheth at 9:16 PM on February 24 [2 favorites]


MtGox deleted all their tweets.
posted by laconic skeuomorph at 9:36 PM on February 24 [1 favorite]


GUYS IT WILL ONLY MAKE THINGS WORSE
posted by Joe in Australia at 9:40 PM on February 24




New thread
posted by exogenous at 7:27 AM on February 25


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