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

[Southernguy]

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

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.

Adeptus: you are right from a vendor pov. But someone has to hold Bitcoins. For example: If I had most of my cash in bitcoins I would not now how much my purchasing power tomorrow would be.
Well, if bitcoin goes on given it's limited availability the ceiling of it's value is very high.
Did not make the numbers, but if a significant (let's say on the order of 10% or even less) part of all cash in the world was turned into bitcoins it is not absurd to foresee bitcoins trading at 100.000 dollars each.
That would be severely deflationary: why buy something today if you can wait a week and buy the same thing 20% cheaper next week?
That's the reason why CBs and governments hate deflation...and quite a good one.
Maybe the limitation shall be overcome by the surge of competing and unlimited in quantity or less limited cryptocurrencies.
Just thinking...

[lektrode]

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

just noted one of kroger's (supermarket) units is offering their own branded creditcard (in an industry that touts 1-2% profit margins, they've decided to go all-in and go cashless with some sort of cash-back scheme?)

considering what else has been happnin - it doesnt seem all that farfetched - or delusional, as ritholtz put it yest - does it?

[Mn_Mark]

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

MTGOX FILES FOR BANKRUPTCY — CUSTOMER BITCOINS ALMOST ALL GONE


The troubled MtGox Bitcoin exchange filed for bankruptcy protection in Japan Friday, saying it had lost nearly half a billion dollars worth of the digital currency in a possible theft.Mark Karpeles, who has not been seen in public for several days, re-emerged to tell a press conference that his firm's digital vaults had been almost completely emptied.
"We have lost Bitcoins due to weaknesses in the system," the France-born Karpeles said in Japanese.
"We are really sorry for causing trouble to all the people concerned," he said, before bowing deeply.
The company's lawyer said 750,000 Bitcoins belonging to customers had gone, along with MtGox's own store of the currency, which she said was around 100,000 units.

As I understand it, every transaction of Bitcoin is recorded forever in some sort of technical format that is an integral part of the Bitcoin universe. I'm not sure what "stealing" Bitcoins involves, exactly, but I remember reading back a couple years when some unfortunate fellow had a large number of Bitcoins stolen from him by someone who hacked his computer that while he could see that his Bitcoins were now owned by someone else, he had no way of knowing who it was because of the perfect anonymity of the records.

But I have a question for someone who understands Bitcoin: if this is true, then why couldn't you identify the thief when they try to exchange a stolen Bitcoin for fiat at one of these exchanges? The only way to get actual cash for a Bitcoin is to sell it on an exchange, right? Why shouldn't the person who had their Bitcoins stolen be able to post the list of stolen Bitcoin numbers, and when someone tries to sell one of them on an exchange, they are going to have to give their actual identity or bank information or something to the exchange in order to get cash for them (I assume) so why not catch them there?

[Thailandnotes]

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

http://www.theverge.com/2013/12/19/5...ree-easy-steps

[seobook]

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

As I understand it, every transaction of Bitcoin is recorded forever in some sort of technical format that is an integral part of the Bitcoin universe. I'm not sure what "stealing" Bitcoins involves, exactly, but I remember reading back a couple years when some unfortunate fellow had a large number of Bitcoins stolen from him by someone who hacked his computer that while he could see that his Bitcoins were now owned by someone else, he had no way of knowing who it was because of the perfect anonymity of the records.

But I have a question for someone who understands Bitcoin: if this is true, then why couldn't you identify the thief when they try to exchange a stolen Bitcoin for fiat at one of these exchanges? The only way to get actual cash for a Bitcoin is to sell it on an exchange, right? Why shouldn't the person who had their Bitcoins stolen be able to post the list of stolen Bitcoin numbers, and when someone tries to sell one of them on an exchange, they are going to have to give their actual identity or bank information or something to the exchange in order to get cash for them (I assume) so why not catch them there?

Currently isn't there a lack of reward mechanism in place for catching them? Even if there was a reward mechanism, if they moved quickly enough it would be hard to catch them before they did a transaction and/or if they were willing to exchange at below the going rate online via a tumbler (from above linked article) or in person they could likely find someone who would exchange it and pass it on yet again until it was generally mixed back in. Or they could just sit on it for a long time & then wait for the development of that zerocoin layer that was mentioned in another Bitcoin thread on here.

Another issue would be even if all the above was somehow sorted out, the lists of stolen bitcoins would have to be authenticated somehow AND kept up to date.

Imagine someone selling you some bitcoins and then after getting their money claiming they were stolen. Then the abstraction would become even more abstract.

Or whoever hacked into MtGox or such could hack the official stolen Bitcoin list (if it's centralized it is a point of attack, if it is decentralized it needs to be regularly updated & will have some time lag in it for confirmation of state changes) to claim that x and y coins were recovered ok.

Ultimately there's cost and friction with all that sort of stuff.

And haven't people in the past bought antiques or such & then sat on them until the statue of limitations runs out (sort of like how the DOJ or SEC or such talks a hard game to banks right after 5 years and 1 day after the associated criminal activity)?

There likely are solutions, but they are not without cost. And as costs get layered in, won't those costs begin to melt away the religious ideology underpinning Bitcoin.

[jpatter666]

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

Currently isn't there a lack of reward mechanism in place for catching them? Even if there was a reward mechanism, if they moved quickly enough it would be hard to catch them before they did a transaction and/or if they were willing to exchange at below the going rate online via a tumbler (from above linked article) or in person they could likely find someone who would exchange it and pass it on yet again until it was generally mixed back in. Or they could just sit on it for a long time & then wait for the development of that zerocoin layer that was mentioned in another Bitcoin thread on here.

Another issue would be even if all the above was somehow sorted out, the lists of stolen bitcoins would have to be authenticated somehow AND kept up to date.

Imagine someone selling you some bitcoins and then after getting their money claiming they were stolen. Then the abstraction would become even more abstract.

Or whoever hacked into MtGox or such could hack the official stolen Bitcoin list (if it's centralized it is a point of attack, if it is decentralized it needs to be regularly updated & will have some time lag in it for confirmation of state changes) to claim that x and y coins were recovered ok.

Ultimately there's cost and friction with all that sort of stuff.

And haven't people in the past bought antiques or such & then sat on them until the statue of limitations runs out (sort of like how the DOJ or SEC or such talks a hard game to banks right after 5 years and 1 day after the associated criminal activity)?

There likely are solutions, but they are not without cost. And as costs get layered in, won't those costs begin to melt away the religious ideology underpinning Bitcoin.

My understanding is that the stolen bitcoins were "tumbled" to try and launder them with a new id. In a way this makes sense -- after all, bitcoins can be broken apart. A price can be .00045 BTC for example. So the thief broke apart the stolen bitcoins, reassembled them partially with "valid (non-stolen)" BTC and attempted to generate a "new" whole coin.

Apparently members of Silk Road 2.0 were following the thief and "tagging" the new BTC chains with an identifier so they could continue tracking the thief. Whether this is still going on is unknown to me.

[charliebrown]

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

This just made me laugh today from Bloomberg News.

A class action suit has been named in a suit in a court in Chicago. Plaintiff Gregory Greene:

"This catastrophic loss has not only revealed the instability of a burgeoning new industry, it has also uncovered a massive scheme to defraud millions
of consumers into providing a private company with real, paper money in exchange for virtual currency"

BTW unless I mail Mt. Gox an envelope filled with benjamin's, I think i am using e-dollars to pay mt. gox.
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One thing I don't understand about the virtual currencies is even though bit coin is limited in number, who is to say that we can't have ecoin, lite coin, bob's coin
etc. Can't a whole host of different virtual currencies pop up. Who is to say that bitcoin will win. Remember AOL, netscape, alta-vista. It's kind of early to pick a winner. Will national gvts allow these coins to really compete with the approved currency? What if JP Morgan, Credit Suisse, Deutche bank etc set up their own currency, tied to checking accounts, with a visa card etc.

[seobook]

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

One thing I don't understand about the virtual currencies is even though bit coin is limited in number, who is to say that we can't have ecoin, lite coin, bob's coin etc. Can't a whole host of different virtual currencies pop up. Who is to say that bitcoin will win. Remember AOL, netscape, alta-vista. It's kind of early to pick a winner.

The function on the perceived value is not just the limits of one coin's total volume (and fractional divisibility of it) but also the network effects of investments that go around it (from awareness, to end users buying & holding them, to merchants accepting it, to VC funded startups around the ecosystem, etc.)

The switching costs in the above network effects are far greater today than the switching costs were in search a decade or so ago.

The switching costs in search today are far greater than they were back then. Look at how much Google has done in regards to lockin of late. You can't create a gmail account or similar unless you also sign up for Google+. YouTube accounts & Google accounts are being merged & then YouTube comments are Google+ comments. Then there's Google sponsoring ad blocking extensions which block competing ad networks but allow Google ads to show in their search results, Google doing bundling integration on Adobe Flash security updates to make Chrome the most popular web browser, buying default position in other web browsers like Firefox, requiring Chrome extensions be single purpose and installed from the official Chrome store, all the forced bundling in the (recently leaked by Ben Edelman) secret contracts with mobile phone manufacturers requiring them to set Google as the default search engine and so on.

Will national gvts allow these coins to really compete with the approved currency? What if JP Morgan, Credit Suisse, Deutche bank etc set up their own currency, tied to checking accounts, with a visa card etc.

There was an article in the Financial Times about 3 or 4 months ago where the head of BBVA talked about how in the future they expected Google & Amazon to be their competition on a forward basis.

[Adeptus]

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

I just posted a couple of humour videos titled "S**t Bitcoin Fanatics Say" over in the video section. Enjoy!

http://www.itulip.com/forums/showthr...451#post277451