Bitcoin is getting KILLED !!!!!!!!!!!!!!

[Mega]

http://www.theguardian.com/technolog...mours-of-theft

Ha, Ha..........i NEVER believed in it at all......i wonder what Max Keiser will say now?......everything Max touch turns to dust!

Mike

[Adeptus]

Re: Bitcoin is getting KILLED !!!!!!!!!!!!!!

For those wondering, here's a point by point of what happened last night:
http://www.reddit.com/r/Bitcoin/comm...ce=twitterfeed


This in particular is worth reading - A mtgox crisis strategy document that got leaked:
http://www.scribd.com/doc/209050732/...Strategy-Draft

How mtgox managed to lose some 750,000+ coins without noticing is beyond incompetence and likely some of their actions around the event, whether through negligence or on purpose, are criminal.

But don't worry, this is not the end of bitcoin. I see this like the Silkroad bust event. Afterwards the market surged, except this time lots of good people lost small to large sums of money. I see this as bitcoin transitioning from amateurs to professionals.

PS. Today might be a good day to buy some cheap bitcoins

[don]

Re: Bitcoin is getting KILLED !!!!!!!!!!!!!!

Max Keiser @maxkeiser:
What's happening to MtGox would have happened to JPM, GS, C, HSBC, RBS, BRK, in 2008 if we had free markets. This is Bitcoin's finest hour.

[dcarrigg]

Re: Bitcoin is getting KILLED !!!!!!!!!!!!!!

Max Keiser @maxkeiser:
What's happening to MtGox would have happened to JPM, GS, C, HSBC, RBS, BRK, in 2008 if we had free markets. This is Bitcoin's finest hour.

So far as I am concerned this is one more example of how unregulated finance leads to greed, crime, and the victimization of those who have no direct control/possession of capital.

The temptation to take without checks and balances is just too strong.

[Adeptus]

Re: Bitcoin is getting KILLED !!!!!!!!!!!!!!

So far as I am concerned this is one more example of how unregulated finance leads to greed, crime, and the victimization of those who have no direct control/possession of capital.
The temptation to take without checks and balances is just too strong.

Right, because thanks to regulation there's no room left in US prisons for all the wall street crooks that brought down the world economy in 2008. Sorry, but I strongly disagree. Regulation can help in some areas like providing businesses clarity on what the rules are around various aspects including taxation, but it isn't going to stop thieves and crooks, especially the smart ones. Further, regulation of bitcoin in one state or country that's overly aggressive, only pushes the innovation and business elsewhere.

[Southernguy]

Re: Bitcoin is getting KILLED !!!!!!!!!!!!!!

Right, because thanks to regulation there's no room left in US prisons for all the wall street crooks that brought down the world economy in 2008. Sorry, but I strongly disagree. Regulation can help in some areas like providing businesses clarity on what the rules are around various aspects including taxation, but it isn't going to stop thieves and crooks, especially the smart ones. Further, regulation of bitcoin in one state or country that's overly aggressive, only pushes the innovation and business elsewhere.

But there is a difference: bank depositors were made whole.
I have been thinking a lot about crypto currencies. In the case of bitcoin I think that, different from paper money, it has "value" in the classical sense: "the socially necessary amount of work needed to produce it"
That is, if it becomes socially useful (which at present it is doubtful) it shall have "use value". As a large amount of work in the form, mainly, of electricity is necessary to "mine" it you can say it's intrinsically valuable.
The problems, as a currency are: it's limited supply which makes it's value of exchange increase. If it were a currency it would be deflationary, as gold is.
Second, the wild variations in purchasing power which make it useless for comercial transactions.

[Adeptus]

Re: Bitcoin is getting KILLED !!!!!!!!!!!!!!

But there is a difference: bank depositors were made whole.
Second, the wild variations in purchasing power which make it useless for comercial transactions.

There's already 10's of thousands of businesses accepting bitcoin for commercial reasons. The reason your statement is incorrect is because most of these businesses do not hold the bitcoin they receive for any lengthy amount of time. Most, within 15 minutes, have their bitcoins exchanged for cash through payment processors like bitpay, okpay and bips.me. Thus nearly all risk of accepting bitcoins disapears.

[dcarrigg]

Re: Bitcoin is getting KILLED !!!!!!!!!!!!!!

Right, because thanks to regulation there's no room left in US prisons for all the wall street crooks that brought down the world economy in 2008.

Do you really think that 2008 had nothing to do with deregulation through the CFMA and Gramm-Leach-Bliley? Do you think that these crooks aren't the very same crooks spending billions per year lobbying and buying off politicians to deregulate further? Are they not spending billions more on lawyers to try to halt the implementation of even what few protections were offered in Dodd-Frank, including position limits on swaps in commodities markets?

Further, regulation of bitcoin in one state or country that's overly aggressive, only pushes the innovation and business elsewhere.

That's the same argument the banks used to create TBTF. Just replace bitcoin with "financial industry." Race to the bottom. Make all crime legal because otherwise all the criminals will go to another country, and we couldn't have that, now could we? The truth is "innovation" in the financial industry consists only of theft of one form or another. The compound interest formula has been the same since antiquity.

[Adeptus]

Re: Bitcoin is getting KILLED !!!!!!!!!!!!!!

Do you really think that 2008 had nothing to do with deregulation through the CFMA and Gramm-Leach-Bliley? Do you think that these crooks aren't the very same crooks spending billions per year lobbying and buying off politicians to deregulate further? Are they not spending billions more on lawyers to try to halt the implementation of even what few protections were offered in Dodd-Frank, including position limits on swaps in commodities markets?

Ok, you make some very good points, I would even add glass-stegall to the list; however, I'm not convinced that quantity of regulation improves matters. The specifics obviously matter, it's a fine balance, and it's a balance that will be different for every country for bitcoin. Further, regulation IMHO only places a set of temporary hurdles for the wizards of finance. Before long, they figure out how to skirt all the rules, at which point regulation seems to primarily be a hinderance on the honest folks trying to run a business. Just look at the compliance for tax laws in the USA... it's a freggin' nightmare. No thanks.

Make all crime legal because otherwise all the criminals will go to another country, and we couldn't have that, now could we?

Sorry MTgox does not represent all bitcoin businesses. Ever since the Silkroad take down we learned that ~95% of bitcoin transactions had nothing to do with buying/selling drugs. Likewise, mtgox, whilst the biggest exchange for ~2 years, does not mean that all other bitcoin exchanges or all other businesses accepting bitcoins are crooks or incompetent. So you really do lose real business/commerce potential if you over regulate bitcoin.

Lastly, one has to question the value of "regulation" and laws when these are put in place by individuals that all too often got into their positions of authority through revolving doors, or make regulatory decisions based on which lobbyist gave them the most money. Or even if the individuals are altruistic, the congress & senate voters on these laws certainly are not! Overall, financial regulation seems to me to be about keeping the status quo... wherein the kings of finance remain kings, no matter how many bills pass or do not pass through the legislation. This is why I'd rather not see bitcoin regulated; granted I know it will be regardless... but at least bitcoin is not owned by any state, and it inherently attracts individuals to it that are tired of the old system. If we have another 2008-like scenario in the near future as EJ appears to be predicting, then I can only imagine even more people will adopt bitcoin or something like bitcoin, because I think we can all agree, the current system is beyond rigged, it is broken and will eventually blow up in everyone's faces, only a question of time.

Just replace bitcoin with "financial industry....The truth is "innovation" in the financial industry consists only of theft of one form or another. The compound interest formula has been the same since antiquity.

I would disagree. These two (bitcoin & financial innovation by wallstreet) are not comparable here, at least not at this stage. Bitcoin is a young protocol, much like TCP/IP for the Internet. It's been around for 5 years. There is *MUCH* innovation that will occur in the next few years associated with bitcoin or new protocols that borrow from bitcoin's computer science break throughs. The innovations I speak of are improvements of the protocol, expanding its potential into other areas (i.e. decentralized autonomous organizations & contracts), as well as all kinds of new business uses for bitcoin that we can't even imagine yet... much like we couldn't imagine in 1993 a graphical Internet and it's countless thousands of varying service offerings. To give you a brief example thus far, the excessive regulatory environment in the USA has already pushed all bitcoin related exchanges outside the USA. These are multi-million dollar ventures that are just starting out and could grown much larger. If the USA had several large exchanges, Americans would highly likely not have been trading vast sums at MtGox in Japan.

[porter]

Re: Bitcoin is getting KILLED !!!!!!!!!!!!!!

This is growing pains of an early ecosystem. Mt Gox is being replaced with more trustworth US-based companies. Companies like Coinbase and Circle will take the lead. US-based, regulated exchanges are coming: http://finance.fortune.cnn.com/2014/...nge/?iid=HP_LN

Marc Andreesen (Coinbase investor) had some interesting tweets on the recent headlines.. https://twitter.com/pmarca/status/438410299972939776

"But the wonderful thing about a globally distributed financial network is that if one of the nodes goes down, it doesn’t take the system down. Bitcoin’s architecture is similar to the Internet’s architecture. There is no centralized control point. No single point of failure." (Fred Wilson - http://avc.com/a_vc/2014/02/mt-gox.html)

A major exchange goes down, yet Bitcoin still trades > $500? Isn't that a bullish, long-term sign?

[jpatter666]

Re: Bitcoin is getting KILLED !!!!!!!!!!!!!!

This is growing pains of an early ecosystem. Mt Gox is being replaced with more trustworth US-based companies. Companies like Coinbase and Circle will take the lead. US-based, regulated exchanges are coming: http://finance.fortune.cnn.com/2014/...nge/?iid=HP_LN

Marc Andreesen (Coinbase investor) had some interesting tweets on the recent headlines.. https://twitter.com/pmarca/status/438410299972939776

"But the wonderful thing about a globally distributed financial network is that if one of the nodes goes down, it doesn’t take the system down. Bitcoin’s architecture is similar to the Internet’s architecture. There is no centralized control point. No single point of failure." (Fred Wilson - http://avc.com/a_vc/2014/02/mt-gox.html)

A major exchange goes down, yet Bitcoin still trades > $500? Isn't that a bullish, long-term sign?

Or is it just the latest BTFD trend?

[Slimprofits]

Re: Bitcoin is getting KILLED !!!!!!!!!!!!!!

.

[Adeptus]

Re: Bitcoin is getting KILLED !!!!!!!!!!!!!!

Or is it just the latest BTFD trend?

Pretty much, but might be a little late for this one though: http://www.businessinsider.com/bitcoin-recovery-2014-2

If only trading forex could be this easy. The equivalent headlines we saw on the news today would be like:
"Bank robbed, US dollar is doomed!"

But relax, give it a couple of weeks, surely something else will blow up in bitcoin-land. Your buy signal will look like some kind of ignorant/ridiculous news remark like what we saw on TV today: http://i.imgur.com/2b8Fec3.jpg
Or keep an eye on the LA times: ZOMG!!! Bitcoin virtual currency is on the verge of collapse!

[Adeptus]

Re: Bitcoin is getting KILLED !!!!!!!!!!!!!!

This is what most of the bitcoin news on TV sound like to the average person who's actually bothered to study the bitcoin protocol for even a few weeks...

This is the funniest thing I have read all week, even funnier than watching MT (empty) Gox crash & burn....

Source: http://ledracapital.com/blog/2014/2/...-out-worldwide

Bizarre Shadowy Paper-Based Payment System Being Rolled Out Worldwide
New York, February 17, 2014
World governments announced a plan today to allow citizens to anonymously carry parts of their wealth on their person and exchange it with others using small pieces of colorful paper printed with nationalistic and Masonic imagery along with numbers that purportedly represent the amount of wealth each piece of paper represents (if the paper is not a counterfeit). These pieces of paper are formally a "note" from each nation's central bank, but they are also called "cash" by many - this is a technical matter that is too complex to cover in our basic primer; Suffice it to say, that it is representative of the complexity and user-unfriendliness of this new system.

‘Bills’ – A complex construct

These pieces of papers (also known as “bills”, "dollar bills", "George Washingtons" or "Dead Presidents" among the shadowy community of anti-banking libertarians who have been the primary users of cash to date) will differ from country to country and are not redeemable outside national borders.
In what will come as a surprise to generations who have grown up with calculators and computers, ‘bills’ only come in fixed denominations, requiring users to maintain a large number of these pieces of paper that must be aggregated to execute a transaction and then re-aggregated to ‘make change,’ a complex process of returning to the payee the excess of the payment using yet other bills. (Don’t worry if this sounds complex, we had trouble understanding it ourselves at first and it is certainly not ready for the average consumer in its current form.)
Mike Smith, VP of Employee Training at Sears has said: “I cannot imagine training tens of thousands of our employees to use cash, verify that it is genuine and learn to ‘make change’ without making errors. This is going to require a wholesale installation of special change-making hardware – the so-called ‘cash registers’ – and millions of dollars of employee training, while creating long lines and delays for consumers. Furthermore, we would need to adopt new security procedures and armed guards to avoid theft of the physical bills while in the store or during transport to our bank. We can’t see ourselves adopting cash under these conditions.”

Perfect for Criminals
The launch of cash has provoked an immediate reaction from law-enforcement agencies worldwide that universally condemned the development.
“Cash is a 100% anonymous and untraceable payments technology. It is like a weapon of mass destruction launched against law enforcement,” said Mike Smith, the recently confirmed FBI Director. “It is the perfect payment mechanism for criminals, drug cartels, terrorists, prostitution rings and money launderers. We don’t know how we will be able to combat such a technology and fully expect that a new generation of super-criminals will emerge, working in the shadows of a world where they can conduct their illicit affairs without leaving a trace.”

Banking Superintendent of New York State, Mike Smith had the following to say: “I can’t think of any reason that a law-abiding individual would want to use cash. At a bare minimum, we believe there should be a licensing procedure for individuals or businesses that plan to use cash, a ‘Cash-License’ as it were. This license will limit ‘cash’ to trust-worthy individuals who keep detailed auditable records of all their cash transactions in order to keep New York safe from criminals.”

Others have concerns about forgery and counterfeiting. “Ultimately, even with all the fancy inks, cash is just a piece of paper. We fully expect criminal groups and rogue nation states to print fake cash in order to profit or to disrupt the economies of their enemies,” said Mike Smith, an analyst at Stratfor. “In the interim, we are certain that cash will trade a discount in the real-world, given the risk to a counterparty of accepting a forged piece of paper; no doubt cash is a huge step back from the modern cryptography in place throughout our current financial system.”

No Consumer Protection
Though hard to imagine, cash operates with no consumer protection at all. If your ‘bills’ are stolen or lost, they are gone forever.
“I just don’t understand why there is nobody that I can call to reinstate my cash if I lose it,” says Mike Smith, a businessman from Toledo. “What type of idiotic wealth and payment system doesn’t maintain transaction and ownership records?”
Moreover, there appears to be no authentication mechanism associated with cash payments or transfers, let alone one that matches modern security standards. Once someone has gained physical control of your ‘bills’, they are free to spend or use them as they wish and there is no way to reverse the transaction, stop them or even identify who has stolen them.

Even simple destruction of the bill, which, as you recall, is just a piece of paper, could result in losses. According to the Director of the newly founded “Bureau of Engraving and Printing,” mutilated ‘bills’ that are more than 51% destroyed must be mailed in for a special investigation that will determine if they will be replaced or not.

Recommended 'Hardware Wallets' Found To Have Security Flaws
Proponents of cash have dismissed these concerns saying that various hardware manufacturers such as “Coach” and “Gucci” will shortly be releasing “hardware wallets” in leather and suede. These wallets are meant to hold the bills and fit into a pants pocket or purse.
“Once your bills are safely ensconced in your Gucci wallet and securely placed in your pants pocket [the front pocket is recommended as a ‘best practice’ for security], it is almost impossible for them to be stolen, lost or destroyed” said Mike Smith, VP of Communications for Gucci NA.
But some early adopters have reported that the hardware wallets have security flaws. “I was out in Bangkok two weeks ago at a bar and I forgot my Gucci wallet there,” said Mike Smith, a visiting tourist. “When I returned the next morning, my wallet was there but my cash was gone!” We contacted Gucci regarding this hacking attack, but a spokesperson would not comment “about confidential customer financial matters.”
Even criminals have not been immune to the risks of cash. The notorious “Silk Road” drug-dealing marketplace, where vendors and customers left envelopes full of cash (on which they had very clearly written their names) in an anonymous drop-box that managed the exchange, mysteriously closed last week, citing ‘theft of the cash due to a bug in the envelope sealing process.’ While technical experts believe that might be possible that the glue on the envelope was not correctly applied, they also warn that a ‘bill’ is basically a private and public key at the same time and note that there might be dangers involved in letting anonymous criminals hold the private keys to your wealth.

Requires Physical Presence
In what might be most unusual limitation on cash, it only works for payments within 36 inches or less (or the so-called “arm’s length transaction” as hackers in the community have colorfully titled it) as it has to be handed from one (human) party to another to execute the transaction.
This requirement is widely thought to be a fatal flaw of cash by traditionalists.
Mike Smith, VP of Retail Banking at Chase said: “A form of payment that cannot be used at a distance, cannot be used for e-commerce, cannot be used by mobile devices, cannot be used for machine based transactions, cannot be scripted or programmed, cannot be thought of as a payment system. I will admit, as a form of performance art, cash transactions are an amusing experiment, but this has no applicability in the real world of banking, finance or commerce.

Furthermore, given cash’s association with criminal activities, we will be refusing to offer banking services and terminating the accounts of any customer that uses ‘cash’ in a business or personal capacity. It is the only way we can ensure we remain compliant with our regulatory obligations.”
Remarkably, if you attempt to use cash in a different country from the one that issued it, it will categorically be rejected. In order to use cash abroad, you will have to go to designated points, usually in airports or certain banks, with limited hours of operation, that will “exchange” your bills for bills of the country that you are visiting. These exchanges have high fees – usually 2-3% for each exchange, meaning that tourist will lose 5% of their cash or more on a typical trip just in these ‘exchange’ costs, which seems extraordinarily high for what is, ultimately, an exercise in multiplication or division.

A Step Backward For Economics
Economists are flabbergasted that lawmakers have allowed cash to be adopted, despite their strong objections. A key policy tool of Central Banks has been the use of positive and negative interest rates to manage economic growth. It appears that this will not be possible with cash.
Mike Smith, a leading economics blogger for the NY Times said “This is a sad day for macro-economics. If cash ever catches on in any meaningful sense, it will reduce our control over the levers of the economy significantly by providing a mechanism for depositors to opt out of negative interest rates. Given the fact that it might keep us from preventing the next depression and will definitely reduce tax collections, one could even consider it ‘evil.’”
Environment and Health Impacts
Environmentalists expressed concerns about the impact of cash on the environment. “You would have thought that in 2014, we would have moved beyond pesticide and water intensive cotton farming [retracted: cutting down trees], treating the cotton with dangerous inks and transporting it with fossil fuels, only to represent a value like “20” that can be represented electronically at effectively no cost. When will we ever learn?” said Mike Smith, recently appointed Executive Director of the Sierra Club.

Public health officials also warned that cash could be an excellent vector for disease transmission. “We tested several ‘bills’ in our labs recently and discovered that the average bill has 20x more bacteria than a toilet seat,” said Mike Smith, a VP of Research at the Mayo Clinic. “Our advice is that people should avoid cash in general and only handle it if absolutely necessary. Children, the elderly and immuno-compromised individuals should not handle cash under any circumstances.”

What’s Comes Next?
Proponents of ‘cash’ think it will ultimately be a widely adopted technology that will spread around the world, enabling in-person mid-tier transactions (not micro-payments, but not mega-payments either) in a manner that is invulnerable to electric or internet outages and that will usher in a new era of more ‘human’ commerce.
We try to keep an open mind at this publication toward new technology, but, to date, we have a hard time seeing the positive case for cash. Certainly criminal groups will take advantage of cash’s perfect anonymity to wreak havoc on law enforcement and tax collection, something that is deeply undesirable. Among law-abiding citizens, we can envision some possible adoption in dense urban hipster communities like Williamsburg where ‘wallets’, ‘cash’ and ‘making change’ could be yet another reflection of their tongue-in-cheek view of modern societal systems.

Other than that, it would be hard to recommend that the average consumer or merchant becomes involved in what is still today a very buggy system, filled with risk, inconvenience, high transaction costs, and possible disease transmission. Even if handled perfectly, cash will certainly tar your business and personal life with the seedy reputation of the drug dealers, terrorists, money launderers and anti-establishment anarchists who use it today, threatening business and banking relationships and raising eyebrows among law enforcement and your community.

[bill]

Re: Bitcoin is getting KILLED !!!!!!!!!!!!!!

If only trading forex could be this easy.

http://www.billingworld.com/blogs/li...g-straigh.aspx

MOBILE WORLD CONGRESS — Just as the mobile phone transformed the communications industry, it seems clear that mobile financial services are poised to transform the financial sector. Speaking on the second day of Mobile World Congress 2014 here in Barcelona, Michael Corbat, chief executive officer of U.S. multinational financial services company Citigroup, made the point that while more than 3 billion people have a mobile phone, only 2 billion people have a bank account.And just as a decade ago when people who’d never had a landline telephone jumped straight into the world of mobile phones, the same is going to happen in the financial sector: People without a bank account are going to start using mobile financial services without having ever stepped foot inside a bank.Giving the example of Transfer, Citigroup’s joint mobile banking venture with America Móvil in Mexico, Corbat said that of the scheme’s 1.2 million active customers, 60 percent were new to banking.
Mobile financial services, of course, aren’t just about serving the unbanked. According to Corbat, in the developed world, mobile financial services are “better, faster and cheaper for most transactions" and lead to a higher level of customer satisfaction than traditional banking activities. At the beginning of the decade, Citigroup launched its CitiDirect BE Mobile service for executing secure business transactions on mobile devices. In the space of two years, it has grown from powering the flow of $1 billion in 2011 to $115 billion last year. “Digital solutions simply drive the growth of digital money flows," explained Corbat.
The next test in the developed world will be the acceptance of the mobile wallet as an integral part of our daily lives. Isis, the joint venture between AT&T, T-Mobile US and Verizon Wireless to provide an NFC-based mobile wallet service, was launched last November and Isis CEO Michael Abbott said he was optimistic for the future.
The proof? His mother had been able to take her grandchildren to McDonald’s and pay for the meal with Isis. And if his mother could use it, then anybody could, Abbott joked. The wallet works by consumers loading their credit, debit and store loyalty cards into a virtual wallet app running on their NFC-enabled smartphones, and then paying for their purchase by tapping the phone against a specially-designed payment terminal.
With a recent research study that showed two-thirds of American consumers would prefer a mobile wallet to using a chip and PIN system, Abbott said there were four core principles that were essential to the success of the mobile wallet:

• Consumers should always remain in control of their wallet
• The wallet should respect the privacy of its tenants (i.e., the payment cards it holds)
• It must be secure
• It needs to be simple and consumer-centric

Now that 24 of the top 100 U.S. merchants are using Isis payment terminals and new users are tapping six to seven times a month and growing in size by 50 percent a month, Abbott predicted the days of the magnetic strip credit cards and its 40-year-old technology were numbered — just like our old landline phones.