Announcement

**c1ue** · February 27, 2013, 09:20 PM

Re: Bitcoin soon to enter early adopter phase

Originally posted by T

For the curious, if you post your receiving address here, I will send you a (small) amount of bitcoin, as a demo.

Are you, in fact, in the business of bitcoin?

***T*** · February 28, 2013, 04:07 AM

Re: Bitcoin soon to enter early adopter phase

Originally posted by c1ue View Post

Are you, in fact, in the business of bitcoin?

No, and I stand nothing to gain from my offer.

Given our interests, I simply expected iTulipers would find it interesting: a new form of money. I think it's one of the most remarkable inventions in the last decade at least.

**mrm27** · February 28, 2013, 01:28 PM

Re: Bitcoin soon to enter early adopter phase

This is an interesting take on Bitcoin and how the stormclouds are gathering. I'd like to see Bitcoin work and grow, but I just don't think it will be allowed to by the authorities. The positive thing is that just by its existence it shows a market for an alternative medium of exchange, which should inspire copiers if they do get shut down just with more "controls".

**c1ue** · February 28, 2013, 01:42 PM

Re: Bitcoin soon to enter early adopter phase

Originally posted by mrm27

This is an interesting take on Bitcoin and how the stormclouds are gathering.

This is an interesting article. The MoMT - less interesting, but the basic point that bitcoin is fundamentally about evading control and thus conflicts directly with increasing US and European anti-money laundering, this is worth serious consideration.

I still hold that Bitcoin has plenty of value as a collectible - this is a different valuation dimension from the Hoarders vs. Traders paradigm the above author notes, but equally is incompatible with the view of Bitcoin as an alternative currency.

**radon** · February 28, 2013, 01:55 PM

Re: Bitcoin soon to enter early adopter phase

Originally posted by mrm27 View Post

This is an interesting take on Bitcoin and how the stormclouds are gathering. I'd like to see Bitcoin work and grow, but I just don't think it will be allowed to by the authorities. The positive thing is that just by its existence it shows a market for an alternative medium of exchange, which should inspire copiers if they do get shut down just with more "controls".

The scenario in the article would need to be the product of a concerted global effort by all governments. There are just too many exchanges everywhere for the US to be able to be effective unilaterally. That being said I've been watching bitcoin for years now and I can definitely see the DOJ making some high profile examples out of a few people in an effort to erode its legitimacy.

**mrm27** · February 28, 2013, 04:47 PM

Re: Bitcoin soon to enter early adopter phase

The writer that I linked to also has an older post on monetary restandardization, gold vs. silver and ends it with Bitcoin comments. Similar EJ's POV of gold being the winner because of its unique properties and use insetad of silver, I found this a long but fun read.

**verdo** · February 28, 2013, 06:28 PM

Re: Bitcoin soon to enter early adopter phase

Originally posted by *T* View Post

No, and I stand nothing to gain from my offer.

Given our interests, I simply expected iTulipers would find it interesting: a new form of money. I think it's one of the most remarkable inventions in the last decade at least.

I do find bitcoin interesting. I mean, i wouldn't call it a super remarkable invention, but its definitely something that I want to see expand.

**radon** · February 28, 2013, 08:45 PM

Re: Bitcoin soon to enter early adopter phase

Originally posted by verdo View Post

I do find bitcoin interesting. I mean, i wouldn't call it a super remarkable invention, but its definitely something that I want to see expand.

I've done some bitcoin mining. I thought it was a lot of fun, but not anything I took seriously. If it does catch on expect some serious resistance.

**Milton Kuo** · March 01, 2013, 12:36 AM

Re: Bitcoin soon to enter early adopter phase

Originally posted by mrm27 View Post

This is an interesting take on Bitcoin and how the stormclouds are gathering. I'd like to see Bitcoin work and grow, but I just don't think it will be allowed to by the authorities. The positive thing is that just by its existence it shows a market for an alternative medium of exchange, which should inspire copiers if they do get shut down just with more "controls".

It'd be very surprising to see Bitcoins see widespread usage before authorities accuse it as a channel for money-laundering and shut it down. The feds shut down the Liberty Dollar program even though no buyer of those things was ever swindled.

***T*** · March 01, 2013, 04:50 AM

Re: Bitcoin soon to enter early adopter phase

Originally posted by Milton Kuo View Post

It'd be very surprising to see Bitcoins see widespread usage before authorities accuse it as a channel for money-laundering and shut it down. The feds shut down the Liberty Dollar program even though no buyer of those things was ever swindled.

To shut down bitcoin completely you would have to monitor and control everybody's computer individually. Unlike liberty dollars etc, there is no central point of failure by design. Hell, you could even send bitcoins using smoke signals or by letter, in principle. Of course, they could make life very difficult for businesses wanting to accept bitcoin.

Mind you, if the US authorities managed to ban bitcoin it wouldn't really damage it much... it would still function as a medium of exchange for the rest of the world.

**c1ue** · March 01, 2013, 09:46 AM

Re: Bitcoin soon to enter early adopter phase

Originally posted by mrm27

The writer that I linked to also has an older post on monetary restandardization, gold vs. silver and ends it with Bitcoin comments. Similar EJ's POV of gold being the winner because of its unique properties and use insetad of silver, I found this a long but fun read.

This article clearly outlines the author's Austrian bent - as this quote shows:

Economists in the Austrian tradition (ie, legitimate economists)

Unfortunately, It is difficult to term Austrian economics as legitimate when no country in the world practices it.

I'd also note that Austrian economics has a number of glaring holes: the failure to look into the interaction between markets and regulation, for example. Austrians, as the author quoted previously clearly demonstrates, believe that all monetary behavior can be controlled/described at the macro level - that having no fiat means somehow the government must always behave. Ironically this is the polar opposite of MMT'ers - who believe that the government can do anything it wants with fiat - a belief which is equally false.

Unfortunately this is thoroughly disproven by history. Governments can shave gold/silver coins, they can arbitrarily revalue the worth of gold/silver, they can confiscate, they can even temporarily or permanently go off PM backing.

As for EJ - the reason iTulip/EJ focus on gold isn't so much because of some 'natural right' of gold so much as the following 2 reasons:

1) Central banks hold gold. If there is a more closely related entity to fiat than a central bank, I don't know what it is.
2) Gold is held by central banks as insurance. If/when faith in fiat fails, said gold can be used to restore faith in (a new) currency.

**don** · March 04, 2013, 12:36 PM

Bitcoin gets the MSM Treatment

Bitcoin has become the world's best performing currency, with its value spiking at 130%. Photograph: Zach Copley/Flickr/CC.

Dale doesn't exactly look like an international crypto-criminal. He's soft-spoken, baby-faced, and a senior at an Ivy League college. But every couple of weeks the political science major logs onto the Silk Road, an online black market that has been described as an "amazon.com of drugs" to buy wholesale quantities of "molly" (also known as MDMA, a particularly "pure" form of ecstasy), LSD and magic mushrooms. Some of these will be for his personal use, and the rest he'll flog to less tech-savvy classmates at a mark-up of up to 300%. On a good weekend, he can net a profit of around $2,500. It's a more lucrative sideline than waiting tables.

While Dale prices his party favours in dollars, he pays for them the only way you can pay for anything on the Silk Road: by using Bitcoins, an untraceable digital currency founded in 2008 by the pseudonymous "Satoshi Nakomoto". Despite persistent efforts to uncover his identity, little is known about Nakamoto: he's the Banksy of the internet. Or, rather, he was. Nakomoto disappeared without a trace in 2011, after telling a developer "he'd moved on to other things". Bitcoin itself, however, shows no signs of vanishing: in the past two months it more than doubled its value against the dollar and after reaching an all-time high last Wednesday, it has been trading at a above $32 a share.

Unless you're a major tech geek or a regular patron of the shadowy computer underworld known as the dark web, you've probably never heard of � let alone used � Bitcoins. But below the "real" economy of legal tender and federal reserves, Bitcoins fuel a shadow economy that connects students, drug dealers, gamblers, dictators and anyone else who wants to pay for something without being traced. It has found a niche as the currency of internet vice, digital "pieces of eight" for modern-day pirates.

Despite these unsavoury associations, Bitcoin is increasingly winning a place on the internet as a legitimate currency, albeit one that will probably never quite shake off its dodgy past. Bitcoin is part of a gradual, technological shift in the way we think about money. It poses a tangible threat to centralised banking and the guardians of fiat money. Bitcoin won't knock off the dollar any time soon; the euro can sleep easy. But it is clearly a force to be reckoned with. Bitcoin has become the world's best performing currency, with its value spiking 130% just this year.

Bitcoins, unlike the cash you have in your pocket, are finite. There are currently 10.8m Bitcoins in the system, and this will cap out at 21m coins by the year 2140, according to market research firm ConvergEx. Limiting supply has been a major plus for Bitcoins, and a major reason why prices have gone up.

If you want buy Bitcoins you simply go to an online exchange service such as Bitinstant and convert your local currency into the virtual money. These are then stored in a "wallet", which functions as a sort of online bank account. You can then go and spend these anywhere that takes Bitcoins to buy anything from socks to drugs.

The Bitcoin network is structured like a guerilla movement: it is decentralised, controlled by its users rather than governments. This means it is (theoretically, at least) anonymous, and that, unlike credit cards and PayPal, which block payments from a number of countries, it enables instant payments to anyone, from anywhere in the world. That's why criminals love it and why some online retailers do, too. It's money without any kind of safety net below it. There's no legislation to protect your investment and you can't protest fraud.

It's worth bearing in mind that while Bitcoin operates outside the parameters of governmental control and is often used to dubious ends, so too is a lot of the money we see around us. The US Treasury printed 3bn $100 bills in the 2012 fiscal year and, 80% of them go overseas, according to Federal Reserve estimates. As Nicholas Colas, ConvergEx Group chief market strategist, notes, "many of them simply facilitate the global drug and arms trade, not to mention tax evasion and human trafficking". Bitcoins fit into the world of real currency more than anyone would like to think.

While governments and legislators have long been waging wars on traditional funny money, they are only just starting to wake up to the effects alternative currencies may have on the financial landscape. In 2011, two Democratic senators, alerted to the thrills of the Silk Road by a Gawker article, wrote to the US attorney general demanding that something be done about Bitcoin. And in October last year, the European Central Bank published a paper that recommended that developments in virtual currencies be regularly examined to reassess the risks.

The association between Bitcoins and drugs is clearest on Silk Road. But Dale, the Ivy League student, says the currency makes the illicit trades safer, not more risky. "I think the website shows the fundamental power of well-moderated peer review on the internet. 98% of transactions on the website are completed to satisfaction of the buyer and seller, which is fairly impressive, considering the sellers are faceless and nameless individuals from around the world who sign up to be a vendor for a $200 fee."

Bitcoin isn't just for petty criminals, however: it has also made its debut in geopolitics. Last year, Iran was cut off from the European and US currency systems. High inflation caused the native currency, the rial, to plummet in value. With no dollars or euros available, Iranians used Bitcoin as a way to gain access to the international currency markets: they bought Bitcoins and later swapped them for dollars through an exchange site like Mt.Gox.

While Bitcoin has so far operated at the margins of the economy, there is some evidence that it is slowly entering the mainstream. Wordpress, Reddit, and Megaupload have just started to accept Bitcoins and you can now even buy pizza with them. In December, the currency took its biggest step towards legitimacy yet, after partnering with a payments service provider in France. They also had a booth at this year's Consumer Electronics Show (CES), which featured a picture of a wholesome looking woman holding an iPhone running a Bitcoin app.

Edward Castronova, a professor of telecommunications at Indiana University Bloomington, who has who pioneered the economic study of virtual worlds, doubts that Bitcoins will ever become a mainstream currency, however. Castronova's scepticism stems from the way that Bitcoin is structured as a currency with a fixed size. "It just isn't very fun. We've learned from game currencies that people like a little inflation in their economies. But Bitcoin is built to deflate. And we've just seen, culturally, people don't like deflation."

While it seems unlikely that Bitcoins will ever represent a full-scale challenge to regular money, they point to the rise of virtual currencies and changing definition of currency. Alternative currencies continue to slowly creep in around the edges of the economy: in February, Amazon announced that it is introducing its own custom currency called, rather imaginatively, Coins.

Starting in May, US customers will be able to use Coins to buy apps, games and in-app items on the Kindle Fire, with Amazon giving out "tens of millions of dollars worth of Coins" as a preliminary stimulus package.

And calculations by the Economist in January 2005 suggested that the total stock of unredeemed frequent flyer miles was worth more than all the dollar bills in circulation.

Castronova notes that among young people, the mental accounting on different sorts of "money" is already very fuzzy. "Twenty-year-olds don't see any difference at all between dollars, gold coins, GPAs," said Castronova. "They're all just digital score sheets".

The future of money may or may not include a Federal Reserve Bank of Amazon, but it probably does involve the gradual decentralisation and democratisation of currency. Virtual currencies aren't just a new-fangled sort of Monopoly money. Rather, they may just be the thing that ends the monopoly on money.

http://www.guardian.co.uk/business/2...rrency-of-vice

**cobben** · March 05, 2013, 06:37 AM

Re: Bitcoin gets the MSM Treatment

Originally posted by don View Post

But Bitcoin is built to deflate. And we've just seen, culturally, people don't like deflation."

I've been thinking that this could easily be "fixed" by just cloning bitcoin, as many times as necessary to make the original uninteresting as a long-term "investment" and thus increasing the "velocity" sufficently to create "inflation".

There you have it, now, do I qualify as the world's first bitcoin(s) central banker?

Speak of the devil, a quick search "bitcoin clone" gave:

How to clone Bitcoin to create your own crypto currency or crypto shares system

Clones of bitcoin already exist (devcoin, litecoin) and an exchange platform too (https://vircurex.com/). However, we need to make it as easy as possible to create a clone. Anyone should be able to do it by just defining the parameters, perhaps forking the code and releasing it under a new name.

How exactly is Rucoin different than Bitcoin?

this is merely a poorly designed pump and dump (?)

What is ripple?

Simple, global, open, and practically free. ripple is an open source person to person payment network

The Ripple payment system also contains a virtual currency called ripples (XRP). These are the internal currency used by the system to protect the network from abuse. By requiring a fraction of a ripple for every transaction, the network prevents an attacker from creating too many transactions and overloading the system.

All ripples were made at the network’s inception (100 billion). No more will ever be created. The founders donated 80 billion to OpenCoin, Inc., the maintainers of this site. OpenCoin, Inc. plans to give away the majority of these for free.

Learn a little more about how Ripple works.

**Adeptus** · March 07, 2013, 04:36 PM

Re: Bitcoin gets the MSM Treatment

I've been thinking that this could easily be "fixed" by just cloning bitcoin, as many times as necessary to make the original uninteresting as a long-term "investment" and thus increasing the "velocity" sufficently to create "inflation".

You could make the same arguement for Facebook, or Groupon, or Twitter, or LinkedIn, or Amazon, or (etc etc) but in the Internet-land, the first to market remains king for a LONG time. You have to screw up many, many times before you are dethroned.

In other news, Bitcoin has now gone up 40% in the past few days alone! I am kicking myself for not having invested in large quantities a while back. Looking at this chart however, it is your typical blow-off top if commodity chart history is of any relevance here. I learned my lesson in Silver, but unlike silver, there's no CME's and other entities manipulating price (I think). So will there be one more major crash, before it takes off to even higher levels? Comments???