Google Engineer Releases Open Source Bitcoin Client

angry tapir writes "A Google engineer has released an open source Java client for the Bitcoin peer-to-peer currency system, simply called BitcoinJ. Bitcoin is an Internet currency that uses a P2P architecture for processing transactions, avoiding the need for a central bank or payment system. Cio.com.au also has an interview with Gavin Andresen, the technical lead of the Bitcoin virtual currency system." Update: 03/23 16:22 GMT by T : Confused? BitcoinJ author Mike Hearn points out this video explanation of how Bitcoin works.

Comments

Sounds risky

[Anonymous Coward]

I don't know who I should trust more. The big banks of today, or a strange person on the internet.

Re:Sounds risky

[Anonymous Coward]

Written by someone who has absolutely no clue on how it works. Thanks for your incredible insight.

Re:Sounds risky

[Anonymous Coward]

How it works is irrelevant if it's coming from the wrong party. Unless you think it's ok to take candy from strangers in vans, of course.

Re:Sounds risky

[Anonymous Coward]

I think you missed the point behind releasing it as open source.

It needs no central authority, a manager, owner or anything like this. So it does not depend on the party it comes from. Once it's in the wild it's completely independent.

The open source is a prerequisite for proof that the above is true - no hidden hooks, no backdoors and killswitches. Many eyes can prove this is legit.

Re:Sounds risky

[i-linux123]

Look how well it goes for RIAA to prevent copying and counterfeiting.

Re:Sounds risky

[eV64]

look at the source and let us know if you can copy/ counterfeit bitcoins without first cracking a cryptographic hash function (sha2) You don't have to trust anyone to use this if you read the source code and understand how it works.

Re:Sounds risky

[vegiVamp]

Agreed, many can. How many do ?

Re:Sounds risky

[e70838]

The big banks have proven to be evil. There is no such bad reputation about the trustworthiness of the strange person.

Re:Sounds risky

[Psion]

Anonymous Coward, why do I see this in every freaking article on Slashdot?! You're always arguing with yourself like a deranged meth addict in withdrawal. Get some help, man ... and stop talking to yourself. People are gonna think you're crazy!

Re:Sounds risky

[rgbatduke]

Do you mean a talking moose?

rgb

Re:Sounds risky

[this great guy]

That's the nice thing about Bitcoin: it is less dependent on trust than all other payment systems.

Most significantly, as a Bitcoin user, you do not have to trust a central authority or 3rd party (eg. Paypal or a bank) that may initiate chargebacks, or freeze your accounts, because there is no middleman in Bitcoin.

Of course you need to trust the Bitcoin design itself. But the system has proven its robustness so far, and will (hopefully) continue to do so. If you are curious you may find a list of attacks or flaws, that the Bitcoin network has successfully repelled so far here: https://en.bitcoin.it/wiki/Incidents Personally I have rarely found an open source community that was so full of smart people. And I say this with 13+ years of using and contributing to a lot of open source projects.

Re:Sounds risky

[DrXym]

Written by someone who has absolutely no clue on how it works. Thanks for your incredible insight.

I've used Bitcoin and I can tell how it works. It's an elegant system for producing cryptographically signed "currency" which can be exchanged over P2P. However elegant it may be, it's also quite naive and/or dishonest to overlook some of it's shortcomings.

Namely, it is the people who got in early and mined coins or bought them at a low exchange rate who have most to gain. Latecomers have little to gain and the most to lose. If the system collapses or is regulated out of legitimacy, it is the latecomers who will suffer the most. I would not go so far as calling it a pyramid scheme but it certainly shares some similarities in terms of who benefits and who does not.

How could it collapse? In numerous ways. Various governments might start auditing / taxing people who use it as a form of currency. They might legislate against it, deeming it to be bogus financial instrument. It might get a reputation for money laundering and all the popular exchanges get shutdown along with the accounts. A rival to bitcoin might appear which is easier to use or has other benefits.Someone might develop a crack / exploit which allows them to inject "poisoned" transactions over P2P where the database is corrupted, or worse compromises Bitcoin such that wallets are wiped or drained of funds. A popular exchange is hacked and all the money is stolen. There might be a run on bitcoins if the system shows sign of collapse / compromise and the exchanges refuse to exchange bitcoins into dollars.

All of these scenarios are feasible and I think it only a matter of time before the system is hit by one of them. I have no issue with bitcoin per se but I do not see the long term viability in the system.

Re:Sounds risky

[Anonymous Coward]

I think you'll have to look in your wallet to check if anyone has found anything wrong with the system. hehe.

After looking into it a bit closer I've noticed you'll eventually end up trusting arbitrary people in this inherently unreliable currency system, that can very easily cheat, and most likely are.

Re:Sounds risky

[SharpFang]

When it comes to risking real money - I'd say enough.

What I am potentially concerned with, is not that the code itself contains some nasty stuff, but more that the algorithm behind creating and using the "coins" - the mathematics involved in it - is sophisticated enough that while some people will understand the general rule and find it sound, the author may know of some little-known caveat, exception, some specific parameter value that may compromise the security.

Still, the concept is interesting enough that I'm pretty sure many mathematicians will take interest and scrutinize it for algorithmic vulnerablities just as well as coders will scrutinize it for implementation backdoors.

Like md5 implementation can be sound, but md5 hash collision can already be generated using far less effort than the 32 bytes of enthropy would suggest.

Re:Sounds risky

[LingNoi]

That's exactly how it works. You get all the information from people you don't know on the internet. It's money verification via an anonymous mob.

Re:Sounds risky

[unity100]

Namely, it is the people who got in early and mined coins or bought them at a low exchange rate who have most to gain. Latecomers have little to gain and the most to lose. If the system collapses or is regulated out of legitimacy, it is the latecomers who will suffer the most. I would not go so far as calling it a pyramid scheme but it certainly shares some similarities in terms of who benefits and who does not.

had you read anything about the idea behind this, you would know that that 'shortcoming' you speak of, was devised as a means to increase adoption rate of the system at the start - if you contributed to system early, you would get more coins. if you bought coins early, the would be worth more. this provided its fast adoption rate.

please dont talk out of your ass next time.

as for 'auditing/taxing' people, taxing is already a reality regardless of what means you use as money. tax is not relevant to money unit or coin that is used. that shows the extent of your naivete on the subject of taxes and accounting. what is taxed is not your money - your income. your income, may be in schamabazoos. and as soon as you convert this to property or merchandise, you get taxed.

as for legislating against it - that is not something that can be used as a shortcoming. the power holders already legislate against many things you take for granted in your life, because it is dangerous to them. are you stopping using them ? no.

im not even going to talk about your 'theory' about 'poisoning' transactions by injecting packets to erase wallets.

Re:Sounds risky

[nagnamer]

Well, if it's done by people who read Java, and understand the problem domain well enough use it, it's ok. If they share their insight with the less fortunate individuals, even better. But generally don't expect everyone to do their homework themselves. Think about it. Nobody (as in 'most of us') questions the authority of paper money despite the fact that paper money isn't what it used to be anymore. Nobody cares to look at how exactly paper money is generated (its value that is, because, obviously, it's just paper otherwise), and nobody cares that this process is in the hands of the banks and not even the governments like it used to be. And nowadays, people don't even trust their government in all cases (have they ever?). So, any kind of monetary system will be ultimately judged not by how easy or difficult it is to defeat the system, but how practical its real-life implementation is for most people, and how much stuff you can buy with it or sell for it (I say most people, because if it's not universally used as means of exchanging value, it has not value at all).

Re:Sounds risky

[DrXym]

Thanks for your condescending reply but I'm completely aware how it functions. I have the client, I've played with mining programs like poclbm chiefly to put OpenCL to some use. I've read the documentation, I've read the philosophy. I can see what it does, I understand the technology, what it aspires to do and how it's likely to be brought to it's knees. As such I've hilighted some very likely scenarios the system will fail.

I can only surmise that only fools would invest real money in this system. As I said it has the hallmarks of a pyramid scheme. People who "got in early", who set up the exchanges, who generated a reserve of bitcoins have most to gain. They're the people who'll sell their bitcoins for dollars at the first opportunity, probably already have. The remainder will be carrying the can when the system goes titsup, either through regulation, hacking, disinterest or because something better comes along.

Re:Sounds risky

[unity100]

you have provided reasons. they were not only invalid, but also off target. i dont even know what you are still discussing.

Re:Sounds risky

[tmosley]

Funny how you are so pissy about it being a pyramid scheme when you go on to describe a pyramid scheme to a T.

But then, that's about all any form of fiat currency is--a pyramid scheme. It goes from those with the printing press to the government to the corporations to the businesses to you. You pay the most to the inflation tax demons, while those higher up the pyramid gain purchasing power by getting quicker access to the freshly printed money.

This is why no fiat currency has ever lasted more than about 60 years (the Flying Money of the Yuan dynasty in China, though they had three different issues, all ended with hyperinflation, the longest lasting of their currency regimes was about 60 years), with the mean being about 20 years, and the average being about 30 years. The dollar has been full fiat for 41 years now.

Also, taxing is VERY relevant, considering that if there is a floating exchange rate, you will be taxed on any "gain" that comes from the increase in value of your currency relative to the dollar. Also taxed is any situation where the dollar loses value while your currency stays the same. They aren't taxing you on more, they are taxing you on the same, and now you can't even buy as much as you had to begin with. This is why gold doesn't circulate as currency alongside dollars. It is treated rather brutally by the tax code (taxed as a collectable--even worse than using foreign currency, which is taxes as capital gains).

Re:Sounds risky

[roman_mir]

I've used US Dollars and I can tell how it works.

It's an elegant system for producing paper "currency" which can be exchanged for products. However elegant it may be, it's also quite naive and/or dishonest to overlook some of it's shortcomings.

Namely, it is the people who got in early, when the purchasing power of those pieces of paper was higher and there were much fewer of them, or they got them at Fed discount window who have most to gain. Latecomers have little to gain and the most to lose. If the system collapses or is regulated out of legitimacy, it is the latecomers who will suffer the most. I would go as far as calling it a pyramid scheme.

How could it collapse? In numerous ways. Various governments might start auditing / taxing people who use it as a form of currency. They might legislate against it, deeming it to be bogus financial instrument. It might get a reputation for money laundering and all the popular exchanges get shutdown along with the accounts. A rival to US dollar might appear which is safer to use or has other benefits, like being an actual valuable asset. Someone (the Fed/Congress) might develop a crack / exploit which allows them to inject "poisoned" transactions into the monetary system in forms of 0% interest on borrowed money, bail outs, stimulus packages, gov't spending items, or worse, just prints so many dollars that wallets are wiped or drained of purchasing power. A large bank may become insolvent once the long term interest rates go above the US bond returns, and then all the balance sheet start bleeding red ink. There might be a run on banks if the system shows sign of collapse / compromise and the stores/merchants stop accepting dollars as money.

All of these scenarios are feasible and I think it only a matter of time before the system is hit by one of them. I have no issue with a paper currency that is fully backed by some form of reserve per se but I do not see the long term viability in the system, which allows politicians to meddle with the monetary and economic policy and print their own ticket.

Re:Sounds risky

[DrXym]

As you appear to be an apologist for liberty dollars and the like I wouldn't expect a better answer off you. Of course real money has its flaws but it is backed by governments and banks who put guarantees in place about it's value, the safety of your investment in banks, rules that govern trading, taxation, exchange rates etc. If you exchange real money for funny money you will be the one left holding the bag when the scheme collapses. And it will collapse.

It's also amusing how you're bleating how we should be paying in silver funny money and now you're leaping to defend bitcoin. A system which involves hash functions and cryptographic signatures. Computer bits. At least be consistent in your arguments.

Re:Sounds risky

[DrXym]

Actually they're quite valid and you've chosen to ignore them. It won't be my loss if the system goes titsup as it probably will in one way or another.

Re:Sounds risky

[marcello_dl]

> As you appear to be an apologist for liberty dollars...

That's not true for the GP post, anyway. So you've done an ad hominem. If he defends the liberty dollar, reply on that thread, it will look better.

I think that he simply said that "fiat money is fiat", not defending this or that.

Re:Sounds risky

[TheRaven64]

That's the nice thing about Bitcoin: it is less dependent on trust than all other payment systems.

That's the thing that makes Bitcoin pointless - that is misses the point of money completely. Money is not a store of value, it is a mechanism for adding elasticity to exchanges of value. It is a promise that you can acquire something with real value in the future. When I take money in payment for work, it is for the sole purpose of later exchanging that money for goods or services at a later date.

The value of money is not some intrinsic property of the money, it comes from the fact that someone is willing to accept it in exchange for something of value. This used to be some precious metal. For example, one pound sterling (British pound) could be exchanged for one pound of sterling silver. Now it's usually done by governments promising to accept currency in payment of taxes, guaranteeing that there will be people who need the currency and so who will accept it in payment for (at least some of) their goods or services. Bitcoin doesn't address this in any way.

It uses the same model as a currency backed by a precious metal, but, unlike the precious metals (which have real uses, so there are always people willing to give you some currency in exchange for them) it backs it with the result of some calculation that no one actually wants.

It may be an elegant solution, but it's a solution to entirely the wrong solution. If you want a better currency, then you want to create a system for tracking the transitive closure of reputation.

Re:Sounds risky

[roman_mir]

Apologist for Liberty dollars?

How about you are an apologist for fiat?

As to government guarantees, and guarantees of banks that are guaranteed by governments, keep them.

As to Bitcoin - it's a competitor to official garbage fiat, so it's good, as long as it works and cannot be faked.

--
Anyway, nice Ad Hominem there.

Re:Sounds risky

[this great guy]

You say that Bitcoin is elegant, but solves the wrong problem. I disagree. Read some of the introductory material that explains the flaws of the existing currency models that Bitcoin is trying to address:

• https://en.bitcoin.it/wiki/Introduction
• http://www.bitcoin.org/sites/default/files/bitcoin.pdf (just read the Introduction)

Re:Sounds risky

[Anonymous Coward]

Bullshit. With fiat currency, the value depends on whether or not you trust the emitter to maintain the number of circulating currency, but with non fiat currency you still have to trust that the emitter will actually pay back what is stipulated. Also, shit happened all the time with non-fiat currency too: great depression, tulip mania and yes, HIPERINFLATION in Spain in the XV century caused by -again, yes- gold.

Re:Sounds risky

[mijelh]

This is why no fiat currency has ever lasted more than about 60 years

The split tally lasted in Brittany about seven centuries (XII to XIX centuries, if I recall correctly). More recently, both the Canadian Dollar and the British Pound have been fiat since 1931 according to wikipedia and the bank of Canada, respectively, which makes them both exactly 80 years old so far.

Re:Sounds risky

[Wonko the Sane]

Money is not a store of value

I wish more people understood this. So many otherwise bright individuals end up tilting at the fiat vs metallic windmill instead of realizing that "value" isn't subject to storage in the first place. The value of currency comes from the ability and willingness of other people to produce goods and services.

Re:Sounds risky

[themusicgod1]

"A rival to bitcoin might appear...or has other benefits."

Like...Ripple. Ripple already is a bitcoin rival, although a smaller one but it definitely has other benefits.

Re:Sounds risky

[i-linux123]

The wealth accumulation is the most worrying part, for instance there's a transaction for 140k already, and add 8 zeros to that if the adoption trend goes viral. Then there are the mining pools, which effectively act as banks, only that you put your trust in some guy sitting on some couch. All kinds of strange things are happening in the pools, from roundings, opaque pool operation (You simply have to trust that the pool allocates you the right amount for your work, the pool operators even say this mockingly, ex. "But I'm goofing around for few week and I'm amazed with bitcoin idea, so I don't plan to steal anybody right now :-)." http://www.bitcoin.org/smf/index.php?topic=1976.0), etc.. A currency system based on trust? Meh, I don't see it happening (But then there are really bad actors on youtube that get really famous, sometimes even because that they're so bad, so you never know).

Let's not forget the large botnets, they can easily be focused on directly stealing the bitcoins, with no sort of security system your bank might have.

They also speak a-lot about the limit on inflation, since only 21 million can be generated (It's unlikely they all will get generated as the difficulty increases exponentially, good luck hitting a hash smaller than 0x000000000 ... 0000100000000, or whatever the difficulty), but this means that those with let's say 5 million each, they will effectively be able to control the bitcoins' value.

And ofcourse the points you mention, such as what if some professional people decide to put in serious effort and money into finding a more equal system, and it ends up replacing bitcoins where many people have invested so much.

Re:Sounds risky

[i-linux123]

Please refute with specific information.

I suspect you have an interest in making sure bitcoins succeed, or you're just like the 16 year old kids on forums that go and blindly defend potential scammers with ignorant comments; "Stop being paranoid, nobody will scam you without transparency, pffff, I know people I've seen on forums before would never do that since they're nice guys and you're a douche" etc..

will he go to jail?

[roman_mir]

So will he be treated same as this man?

Re:will he go to jail?

[Anonymous Coward]

Competing with the Federal Reserve Bank is as bad as genocide. Anyone who tries to offer and alternative is a shame to the human race!

(I still don't trust fully digital currency, but this is looking in the right direction in a big way)

Re:will he go to jail?

[Dynedain]

No, that guy was doing something that was borderline counterfeit. He was intentionally trying to pass his currency off as Federally-backed and issued tender.

There are plenty of alternate currencies about that are perfectly legal.

Re:will he go to jail?

[nedlohs]

There are plenty of alternate currencies about that are perfectly legal

Given that the exact currency that has seen the guy being referenced convicted is in that list, what makes you so certain all the other ones aren't also going to be treated the same way by the government?

Re:will he go to jail?

[ipquickly]

CBC Radio Spark, 139 has an interesting show about this. What the people in Kenya are doin is most interesting.

The amount of money they're transferring is huge.

We are really behind.

Re:will he go to jail?

[roman_mir]

Did you even read the wiki page you referred to?

# Barter clubs or corporate barter organizations are an example of alternative currency systems.
# BerkShares ........
# Liberty Dollar is a private currency backed by silver, designed to be a nationwide alternative currency in the United States.

The guy is releasing SILVER DOLLARS. By definition they are worth much more than whatever garbage the Fed is printing.

The real counterfeit operation is what the Fed is involved in. This guy wants sound money back, and the Fed is destroying him for it.

Re:will he go to jail?

[metlin]

He used terms and images that are associated with the US dollar, and that is the problem.

If he had released the silver dollars and called them Johnny Cash, he'd not have had any problems.

Re:will he go to jail?

[roman_mir]

So then is this a case of copyright violation? Because if it is, then given what MPAA and RIAA are trying to charge people with, I understand that the punishment in this case (15 years + 250K fine + confiscation of $7,000,000 worth of silver) is even too small.

Obviously he should be charged with like $10000 fine per coin that he released, because clearly, just like Metallica is losing money from the copyright pirates, the Fed here is hurting, right?

(In case somebody has sarcasmometer broken, this is a warning.)

But no, this guy is charged with some weird shit, and AG is implying he is a "non-violent terrorist" no less.

So if some guy, minting SILVER coins, that are remotely resembling US coins (there is a word 'dollar' on it and some variation of 'god'), and they are round, oh my, if he is charged with something like 'terrorism' for THAT, than tell me, what should Bernanke and everybody in the Fed be charged with, for actually counterfeiting fiat currency?

Because you see, his dollars are actually BACKED by silver. They ARE silver. So they are clearly valuable, unlike the garbage that US gov't is flooding the world with.

Re:will he go to jail?

[metlin]

No, it is an attempt to defraud the users of a legitimate currency with one that so closely resembles the original currency that it could be mistaken for one -- it is the equivalent of currency counterfeiting, which can indeed have severe consequences.

Now, you are more than welcome to have bank notes -- you can issue your own promisory note, call it whatever the hell you want, and you can exchange it as legal tender (as long as you can back it up, of course). That's entirely your prerogative. But do not pretend that you can somehow magically use the symbols and terms of the state and get away with it just because.

I am sure if he had minted silver coins and called them "Long John's Silver" chunka (or whatever), he would have been fine. The value of the inherent metal is irrelevant to the issue at hand.

You may disagree with fiat currency, but that is the currency of this country. And you cannot magically go around creating something that closely resembles it and call it a dollar, because let's face it, it is not (philosophical arguments aside on which currency is "better"). The guy was a kook and got what he deserved.

Re:will he go to jail?

[diamondmagic]

Except (A) there have not yet been any injured parties who have actually claimed they've been defrauded, indeed the selling point is that it's not legal tender, and (B) Even if someone did mistake it for genuine US currency, the silver is worth quite a bit more than the face value of US coin.

Re:will he go to jail?

[roman_mir]

No, it is an attempt to defraud the users of a legitimate currency with one that so closely resembles the original currency that it could be mistaken for one -- it is the equivalent of currency counterfeiting, which can indeed have severe consequences.

- you just said 'counterfeiting', here is what

U.S. Attorney Tompkins said:

âoeAttempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism, while these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country,â she added. âoeWe are determined to meet these threats through infiltration, disruption, and dismantling of organizations which seek to challenge the legitimacy of our democratic form of government.â

So is this terrorism? Because while you are calling this 'counterfeiting', I don't see that. I know what a dollar looks like and this one has words 'dollar' on it, but it's not a US dollar. It's different, it looks different, it's made out of silver, it feels different.

There are other currencies that look like US dollars, they also have words 'dollar' and they are round, etc. So again, how is a currency, that names itself dollar, which is generic, because many countries name their currencies 'dollar', how is that coin, that is made out of silver, which makes it much MORE valuable than whatever crap the Mints of the world are minting, how is that counterfeiting or terrorism?

Now, one thing is true: IF there was no OBLIGATION of merchants by the power of the state to accept the legal tender (whatever crap the Fed is printing and the Mint is coining), then guess what, merchants would NOT accept those crappy fiat currencies, but they would instead accept valuable money.

This is called Gresham's law, which works this way when there is no government, that forces acceptance of 'legal tender'.

You see, I do NOT want to hold fiat currencies, haven't held them in years. I hold actual money and then I convert between that and fiat to buy whatever. So to me, this is the most logical thing in the first place - have money that is valuable, that cannot be printed, created out of thin air by a government.

Also on another note, this man with his 'Liberty Dollars' is now called a terrorist.

Imagine what the government will call Bitcoin if it gets popular enough?

How is government going to control what people use as money?

How are the middle men going to control what people use as money and how would they ever make money on the transactions?

I expect the governments of the world to start a war on any and all currencies, that compete with their own, because at the end, those who print money have the real power.

Printing money is the real power, and if the money you print is not accepted by people as money of any value, then you have no power.

This is the ultimate problem, the way gov't sees it, that's why it's calling this terrorism and not counterfeiting, because excuse me for bringing this up once again: the 'Liberty Dollars' are actually VALUABLE as opposed to fiat crap printed by the Fed.

Re:will he go to jail?

[Anonymous Coward]

No, those coins were imitations of the current currency of the US. That man was stupid.
This is quite literally a low-tier attempt of counterfeit, counterfeit that would get by hand-transactions pretty easily since most people rarely tend to check coinage at all.
The only people who notice are those who end up getting NOPED by money-scanning mechanisms, such as those in vending machines.

Re:will he go to jail?

[roman_mir]

Silver coins. Use you dumb ass brain for one second - SILVER COINS.

1 ounce of silver is over 36 US dollars now, dumb ass.

Re:will he go to jail?

[DrXym]

Did you even read the wiki page you referred to?

# Barter clubs or corporate barter organizations are an example of alternative currency systems. # BerkShares ........ # Liberty Dollar is a private currency backed by silver, designed to be a nationwide alternative currency in the United States.

The guy is releasing SILVER DOLLARS. By definition they are worth much more than whatever garbage the Fed is printing.

The real counterfeit operation is what the Fed is involved in. This guy wants sound money back, and the Fed is destroying him for it.

No they're not. If they were worth more than US dollars, why can you buy them with US dollars? Why is the value of the silver in a Liberty worth less than the face value on the coin? I bet the guy running this scam looks at his bank balance and laughs at all the idiots who fell for it.

If you absolutely had to purchase a precious metal as a form of security against currency fluctuations there are far more secure ways to go about it.

Re:will he go to jail?

[Alistair Hutton]

And yet the face value of the coins was marked as $50.

Hmmmmmmmmm.

Smells like fraud to me.

Re:will he go to jail?

[roman_mir]

Pro-government forces are strong at work on this site, as all my comments, whenever I speak about the economics, are being downmoded quickly, and also what's funny, is that they downmode all other comments I make for a good measure, they do it quickly, within 5 minutes and on multiple stories that have no connection between each other.

Re:will he go to jail?

[roman_mir]

It is in fact possible that his intention is to make money by selling silver coins over spot value with a high markup fee, however this is not what he is charged with or was convicted upon. Also nobody is complaining about the dollars, nobody has to buy them, and when exactly have you seen a $50 coin last time and actually accepted it?

He is charged with basically violating the law, that says that the Fed is setting value of money, and the US Attorney on the case is making statements implying that he is a terrorist.

A terrorist. Not a fraudster. Not a counterfeiter. A terrorist.

I have 2 words for Bitcoin developer - watch out.

Re:will he go to jail?

[Doc Ruby]

No, you don't understand copyright. It's closer to a case of trademark violation: the marks confuse the consumer into thinking the items are US Federal dollars, but they're not.

You also don't understand what "remotely" means. These "Liberty Dollars" are quite close to US Federal dollars, especially the famous "Liberty Dollars" circulated in the early 1900s, also made of silver.

You don't understand what "valuable" means. Silver is valuable because of convention, not utility (except for the rare dentist or metallurgist), just as US Federal dollars are.

But since you'll disagree, please send me all your "garbage" US Federal dollars. I'll pay for postage - in silver if you prefer. And go ahead and photocopy them all, front and back, before you send them to me - then pass them around in exchange for electronics equipment. I'll tip you some more silver for your act that "remotely" resembles counterfeiting.

Re:will he go to jail?

[Doc Ruby]

Criminal laws do no not require an injured party to claim damages. You are confusing them with civil laws and contracts.

We have a government to protect the people even without specific people claiming damages after the fact. Instead we elect representatives who make laws that protect us from well understood past damages, to prevent and interrupt them.

But you are a "libertarian": a corporate anarchist. You don't understand government; you want to eliminate it and take your chances with corporate powers. But we have a government, because we've seen how those autocratic orgs abuse the rights and property of the people.

You also don't understand the most basic economics: the ounce of silver in those "dollars" was worth $10-19, averaging about $14, through 1999, but was sold for $20 (legitimate dollars). If the fake dollar's silver were worth "quite a bit more than the face value of US coin", this crook would have been losing money on every sale. Which qualifies him to be a "libertarian".

Re:will he go to jail?

[Doc Ruby]

Yes, patriotic people who create governments to protect our rights are pretty strong in America and elsewhere that reads Websites. Bad arguments from anarchists tend to provoke that kind of patriotism even in ordinarily apathetic people who still can tell when our liberty is threatened.

Your paranoia is a good explanation for how these "forces" mysteriously downrate your posts that "have no connection between each other". Your paranoia, and the low quality of your posts that any moderator can recognize.

Re:will he go to jail?

[roman_mir]

So, the 'patriotic people' want their government to destroy their currency? Help me out here, how does weak currency protect your rights and threaten liberties?

But don't bother answering, you believe my comments are low quality, yet I don't see any value in your comments at all, 0. The only thing your comments do is display the low level of intelligence of some people, who would agree with them, that's all.

Re:will he go to jail?

[roman_mir]

We have a government to protect the people even without specific people claiming damages after the fact. Instead we elect representatives who make laws that protect us from well understood past damages, to prevent and interrupt them.

- the damage is done by the government, which destroys the value of the national currency and drives out savings and investment capital to other nations.

Your elected government officials have failed to protect your best interests, and the person in the story, who is now facing prison time and fines and confiscation is not a corporation, he is a guy, who believed his product has buyers (and it does have buyers) and those are also people.

You don't understand government; you want to eliminate it and take your chances with corporate powers. But we have a government, because we've seen how those autocratic orgs abuse the rights and property of the people.

- you fail at understanding of what America is about. It was build by people who wanted to keep their freedoms, and thus they limited the power of the federal gov't and have only ratified the Constitution of the nation after it was explicitly modified to underscore that the federal powers are in fact limited to very narrow definition.

Your 'elected officials' have usurped the power and subverted the constitution and have turned it into a meaningless document, that is no longer followed. And the States should feel cheated on the contract, that the Constitution was, and they should nullify it, because it has been broken over the last 100 years too much, it's invalid now.

You also don't understand the most basic economics: the ounce of silver in those "dollars" was worth $10-19, averaging about $14, through 1999, but was sold for $20 (legitimate dollars).

- yet they WERE sold, he did not steal anybody's money, though they could have made a more sound decision and bought silver bars with 5% markup instead.

He didn't cheat anybody, the weight of silver is on the coins.

You look like a shill for the government agenda.

Re:will he go to jail?

[roman_mir]

I don't own any fiat currencies, I only own precious metals. So I have in reality already 'sent' the dollars back where they belong, you have them, you will have them all, with all the consequences of hyper inflation.

As to trademark/copyright violations, etc., he wasn't charged with any of that, just like he wasn't charged with counterfeiting.

As to dollars being close to other US coins - when was the last time you actually held a silver dollar from the old or a 50 dollar coin precisely? People who bought the coins knew what they were getting (though I wouldn't go that way, I prefer spot price, thank you very much.)

The only real counterfeiters in USA are the US Fed, the Mint, and Treasury. The real crooks are in the White House, Senate and Congress.

The real threat to USA is not some guy with silver coins, they are in high positions of power, destroying US economy and currency.

Re:will he go to jail?

[smelch]

You look like a crazy person. The fact is lots of people can and do issue currency. They are not all in trouble. Just this one guy. I mean, you understand that silver and gold are traded just like currency already? You can buy silver and gold coins, they advertise them on television all the time. The problem is when you start passing it off as the government's money, which the government decided this was one of those cases. Agree or disagree, but don't make it in to a conspiracy against silver backed currency... made of silver. Thats just trading silver. I bet you can trade all the silver coins you want as long as they don't say $1 on them. Holy crap you're so stupid.

Re:will he go to jail?

[smelch]

Why is silver so valuable? Why is its value more real than the value of the currency that you have to pay your taxes in? Because a bunch of people think it looks nice? I understand you can't just pull a bunch of silver out of your ass, but it gets its value from the belief that it is valuable. Just like fiat currencies. Unless you mean you hold tractors and factory equipment and grain stores for your money with actual value?

The government controls what currency you use very simply. They collect taxes. In dollars. Use alternate currencies all you like, at some point you have to exchange them for dollars. And as long as that exchange is going on, bitcoins can be expressed in dollars through an exchange rate which will allow them to tax your income or sales of bitcoins. Just like when I get a new car from the Price Is Right and I have to pay taxes on it. You have a complete lack of knowledge of the philosophy of money. Somehow I don't believe you really don't hold dollars. You probably have a lot of stupid, shitty investments trying to stick it to the man though. Perhaps they busted the Liberty Dollars guy to protect idiots like you. Did you ever stop to think of that?

Re:will he go to jail?

[roman_mir]

No, the stupid ones are those, who believe that whatever crap the US Fed and Mint are releasing is actually money.

How about this:

The US Constitution dates back to 1787

From 1792, when the Mint Act was passed, the dollar was pegged to silver at 371.25 grains (24.056 g), or 24.75 grains (1.604 g) of gold.

How about the Fed and the Mint actually producing reserves, and exchanging all of the dollars that are in circulation already for silver/gold?

Unless they do that - they are the counterfeiters, not the guy who releases a silver dollar.

Re:will he go to jail?

[MoonBuggy]

He was intentionally trying to pass his currency off as Federally-backed and issued tender.

[citation needed]. As far as I can see, the guy went out of his way to say they were not legal tender.

In any case, it seems far more honest than most of the rather dubious dealings which go on in the financial sector, but what's truly amazing is the language used in the case: "a unique form of domestic terrorism", "conspiracy against the United States", "organizations which seek to challenge the legitimacy of our democratic form of government". What the fuck? Whether or not you agree with his right to sell pretty silver coins, there's no way in hell it was a terrorist conspiracy against the government.

Re:will he go to jail?

[smelch]

Why do you think silver is valuable? Thats my point. Silver has no intrinsic worth other than people believe it has worth. This is just like the US dollar. Silver has some useful properties, but not as useful as paying taxes which is the value that the US dollar has. You have no understanding of what money is.

Re:will he go to jail?

[metlin]

Far from it -- however, your comments have not discussed anything of substance on economics, other than how much fiat currency sucks and how a currency backed by precious metals would be great.

Anyone could be an armchair economist, spewing forth opinions, but it is difficult to put together something tangible with the historic and economic burden of centuries behind you. There is a reason we switched to fiat currency, and there is no going back. It simply is not feasible, nor realistic. While I disagree with some of the Fed's policies, I am neither so blind nor ignorant that I think that we could magically switch back to using gold and silver instead.

I mean, if it's any help, my comments -- where my opinions are diagonally opposite to yours, have also been down-modded. Make what you will out of that.

Re:will he go to jail?

[roman_mir]

Silver, not so much, but gold is money.

learn something while you are on /.

In any case, any commodity is actually more valuable than the dollar, and the dollar has been on a steady decline since the Fed was created in 1913, as well as the IRS (and the Constitution was subverted for both of those abominations to take place)

The US dollar gained 100% of value over 19 century. It lost 98% of value since 1913. If you think you know what money is, then tell me, what kind of money is that? I'll tell you what kind of money that is - that's the kind of money I do not own.

Re:will he go to jail?

[wisty]

18 U.S.C. 486:

"Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title or imprisoned not more than five years, or both."

OK, so it's not made from metal, or an alloy of metal. It's just data.

Unless they decide that the "coins" are made of bits of the hard drive, and the hard drive is an alloy of metal ... just a minute, there's someone at the door...

Re:will he go to jail?

[roman_mir]

There is a reason we switched to fiat currency, and there is no going back. It simply is not feasible, nor realistic.

- speak for yourself. I have switched and I am not going back.

JP Morgan also understands it now, they accept gold as collateral from their counterparties.

Central banks are buying gold, have been for a few years now.

So you do not understand what is happening - fiat is being deliberately destroyed, and in fact all central banks understand this perfectly, as they keep buying and holding US debt in desperate attempt to keep the value from dropping to 0 in 1 day.

Why am I saying this? Look at Japan - they hold about a trillion in gov't obligations in their Treasury, and now they have this terrible disaster. They need to buy so many things, oil, metal, food, materials, products, everything, yet they are printing Yen instead of selling US bonds. They are concerned that if they start selling, the value will plummet. Well of-course it will plummet. Because there is no value there at all. I am amused how people say: silver/gold have no value. And what, US bonds have value? Dollars have value? Dollars lost 98% of purchasing power since 1913. Even in the past decade, US dollar lost 4/5 of value.

You are telling me: there is no going back? I am telling you: there is no going forward. This game is over. The fiat is being manipulated by the government.

You are commenting on a story about a guy, who wrote software that basically provides competition to the official legal tender. People across the world are buying and holding physical gold and silver and other commodities just to get rid of dollars.

Deutsche Boerse got rid of a bunch of dollars and bought whatever it could put hands on - in this case NY Stock Exchange. There will be more and more people getting rid of dollars to get any assets they can from USA, and you are talking about not going back, away from fiat?

You are getting passed by on your left and on your right. There is a wall straight ahead, turn on the lights.

Re:will he go to jail?

[roman_mir]

Why is silver so valuable?

- because there is much less silver in the world than there is even of gold. But silver is not very good at being a monetary metal, the only real money is gold.

However silver is almost as good, but it has too many industrial applications, so that's the only problem.

Of-course this problem is completely non-existent for US fiat - nobody needs them, nobody can buy anything for them. Well, in non-trivial amounts anyway. When some Arabs from Dubai tried getting rid of their dollars to buy an asset in USA - some ports in US, Congress prevented the deal. You think it has nothing to do with the fact that US dollars have no value at all? Japanese, who are in this terrible shape now, printing yen and driving their purchasing power down when they need it most, instead of getting rid of their US debt, you think they don't know that the debt has no value and if they try to sell it, they'll get nothing for it?

They are stuck though, they'll have to cut their losses and just not throw credit at US anymore. And since 40% of US gov't spending comes out of bond sales, that would be fun to observe, how they will squirm in agony, trying desperately not to cut their own preferred subsidies/pay outs, etc.

As to taxes - hey, in all hyper inflationary situations the wheelbarrow that held the pile of cash was worth more than than that paper in it. It's the same freaking thing. US dollar lost 4/5 of value in less than 15 years. Paying taxes in it? For that somebody has to be stupid enough to save and invest in dollar denominated currencies. Nobody is doing it anymore, that's the reason the jobs are gone.

Re:will he go to jail?

[Hognoxious]

I don't own any fiat currencies, I only own precious metals.

So when you nip down the local 7-11 they whip the scales & assay kit out?

Don't think so, somehow.

Re:will he go to jail?

[metlin]

Policies of the Fed --> Economic policy.

Random guy trying to make "dollar-like" currency --> Criminal law, especially when that such counterfeiting could undermine the legitimacy of the existing currency and defraud people.

Both are completely unrelated.

If you do not believe counterfeiting could be endangering national security, you do not understand fundamental economics very well. Now calling it terrorism may be over the top, but remember that in countries engaged in conflict, it is very common for one country to counterfeit currencies of the other (e.g. Pakistan has been caught counterfeiting Indian currency time and again). This serves two purposes. One, it undermines the other nation's economy (and the credibility of the state). Another, you can exchange the counterfeit currency for real goods, and use that to sponsor activities in the other nation (including terrorism).

Re:will he go to jail?

[roman_mir]

Well that's the thing. Those who print money have real power.

If all of a sudden whatever it is they print is not recognized as actual money by actual people in real life, they do not have that power anymore.

They are fighting this with the biggest guns they have - terrorism accusations (that's because they can't stick child molestation to it yet) because they are afraid of losing power over what money is and over what they can do by printing it.

In reality they should be MUCH more scared of Bitcoin than of these Liberty Dollars, because while Liberty Dollars are nice (and I recommend people to own gold and silver bullion, just don't pay more than 5% spot price on your purchase,) the real threat comes from ability of people to exchange payments with complete disregard to any governmental body that wants to keep power over what money is, how it's created, how it's transacted, how it's taxed, etc., and in case of Bitcoin and other solutions like that - it's peer to peer, there is no transaction fee, there is no information that can be passed to the government, the money has fixed value, it cannot be inflated (AFAI understand for now) and this is scary stuff for governments.

Governments would have you believe that deflation is bad while they are inflating away. Well, it's bad for them, because they are the biggest debtors and they have no legitimate ways of repaying the debt.

But it's good for actual people, who have actually experienced deflation in 19 century in USA, when prices were steadily dropping over the century and dollar appreciated by a factor of 2.

Imagine your problem being not that prices are going up, but that they are going down, while quality and competition is increasing - just terrible.

So of-course anybody who wants that is a terrorist.

Re:will he go to jail?

[nedlohs]

That's not the only thing they charged him with though (I have no idea what things he actually got convicted of).

Re:will he go to jail?

[tmosley]

There is no such thing as a "corporate anarchist". Corporations are creations of the state. Without a state, there could be no corporations. A corporation is called a corporation rather than a company because the owners are shielded by government command from any and all liability for the actions of the corporation they own. This allows/FORCES the corporation to act in a sociopathic manner, extracting the absolute maximum amount of money for shareholders, whether in violation of the law or otherwise (the costs associated with violating the law are merely a variable on their balance sheet).

Further, your asinine assertion that those buying the liberty dollars is laughable in the face of a current spot price of $36+ for an ounce of silver. This was a much better investment than buying the DOW at any point up through 1999 (and most certainly after as well), given that we are about even with the 1999 value, even in the face of a 2-fold debasement in the dollar since then.

But hey, if you hate the principles that this nation was founded on so much, might I suggest you and your statist pals flee for your choice of socialist utopias around the world? You have destroyed our freedoms and our economy with your "good intentions".

Re:will he go to jail?

[tmosley]

Wrong again, bub. Gold and silver gains are taxed at the punitive "collectables" rate, not the light "capital gains" rate that FOREX is taxed at.

But hey, feel free to continue your campaign of disinformation. It's a "free" country, after all.

Re:will he go to jail?

[tmosley]

So I guess American silver eagles, released by the US Mint, are a scam too, since they have a face value of $1, while they are currently trading for about $40?

Shill more.

Re:will he go to jail?

[tmosley]

Coinflation.com

US dollar coins have 7 cents worth of metal in them. Does that mean they are fraudulent?

Also, there is this thing called "minting costs". There is this other thing called "numismatic value". Look them up. No one lost any money on buying a Liberty Dollar. Well, except those who didn't get their orders filled because the US government stole their silver.

Re:will he go to jail?

[roman_mir]

Random guy trying to make "dollar-like" currency --> Criminal law, especially when that such counterfeiting could undermine the legitimacy of the existing currency and defraud people.

- I don't understand the purpose of the arrows there, is that an implication or something else?

Anyway, the really counterfeiters of the US dollars are US Fed and Treasury.

The guy minting his own silver coins, and going out of his way to make sure everybody knows they are NOT in fact 'legal tender' is now deemed a terrorist, because the people who really counterfeit the US dollars are afraid that their worthless currency won't be staying in use too much longer.

Congratulations, by the way, on completely swallowing the party's line (whatever party you like) on this guy being a terrorist, you are now protecting them in saying that.

Have a bad day.

Re:will he go to jail?

[roman_mir]

By the way, if the US gov't wants to be paid in US dollars for whatever taxes it wants to collect, then it better not include any transactions that are NOT conducted in the US dollars in calculating the said taxes.

--
And really, this story we are in is exactly about that - people are transacting in some form of a currency in a way, that makes it impossible for the government to collect taxes upon.

Which is always a plus.

But that's why I am telling the Bitcoin developer - watch out.

Re:will he go to jail?

[metlin]

Anyway, the really counterfeiters of the US dollars are US Fed and Treasury.

Just because you disagree with their policies does not make them counterfeiters. I too disagree with some of their policies -- I just have a different set of solutions in mind.

The guy minting his own silver coins, and going out of his way to make sure everybody knows they are NOT in fact 'legal tender' is now deemed a terrorist, because the people who really counterfeit the US dollars are afraid that their worthless currency won't be staying in use too much longer.

No, he was deemed guilty of breaking the law. What part of that is not clear to you?

Dude, he could have minted his own currency and called it anything else he wanted but a dollar, and he could have used any other symbols/representations than that of the United States.

Congratulations, by the way, on completely swallowing the party's line (whatever party you like) on this guy being a terrorist, you are now protecting them in saying that.

Eh? I study governments and international relations, and I have also studied the role of economic manipulation in warfare. That is far from swallowing any party line -- they are just facts. You can look them up yourself, you know.

Have a bad day.

How mature.

Re:will he go to jail?

[conspirator57]

silver and gold are money because, writ large, society treats them as money, and particularly as a store of value. there is nothing mystical about them. however, one might argue that their industrial uses detract from their utility as currency. look at the design goals of bitcoin: an ideal currency would be hard to produce, durable, easy to verify, and not useful for other purposes. historically, gold and silver have been hard to produce, durable (they don't corrode nearly as easily as other metals people had access to for all those millennia [copper, bronze, iron, steel, zinc, nickel]), easy to verify (it is soft and gives when bitten unless alloyed excessively), and industrially useless (until recent times). In the interior of the US, native americans used seashells as currency. again, the seashells were hard to produce (had to collect and transport them to the interior), durable (relatively), easy to verify, and not useful for other purposes.

One could say similar things about aluminum, but we only recently (1800s) discovered how to refine it and it is extremely useful in industry and fairly common.

and moreover, gold and silver are less vulnerable to political dilution. nearly every other paper currency in the history of the world has fallen to political dilution. we can easily see that process at work in our own politics given how little either party cares to pay for its spending, even in times of plenty (early-mid 2000s). monetarization of government debt is also a tax, and a particularly regressive one, punishing those on low and fixed incomes like retirees living off of savings.

and regarding your scaremongering about the guy you're badgering being foolish to invest in gold, you may be correct now, but not at any time in the past 10 years. but who knows, gold could still go up. it all depends on how much QE (expansion of M1) is done and how the markets react to it.

http://www.kitco.com/charts/popup/au3650nyb.html
http://www.google.com/finance?client=ob&q=INDEXDJX:DJI

set the google chart of the DJIA to 10 years. then ask yourself which you'd rather have invested in during the last decade.

Re:will he go to jail?

[Thud457]

So I guess American silver eagles, released by the US Mint, are a scam too, since they have a face value of $1 , while they are currently trading for about $40?

That demonstrates a clear disjoint from reality.
Interestingly, you can't buy them directly from the Mint at face value, either.

Re:will he go to jail?

[DrXym]

Maybe you should read what I said, to wit - "If you absolutely had to purchase a precious metal as a form of security against currency fluctuations there are far more secure ways to go about it."

I am not saying that purchasing gold / silver is a bad thing. Just that if you do so through liberty dollars or some shady gold exchange in response to exhortations of Glen Beck then you are an idiot. There are far better ways to buy and sell precious metals. Liberty dollars were and are just a glorified MLM scam set up to appeal to paranoid libertarian types. As for silver eagles, well even those represent better value than a liberty dollar and likely command better resale value too.

My 5 year old son gets a new Britannia coin for his birthday. Maybe some day he can sell them, or just hold them as a keepsake. What he shouldn't do is demand to be paid in silver or trade them at face value when there is a perfectly functional national currency for that purpose.

Re:will he go to jail?

[smelch]

I'm not saying its foolish to invest in gold. I'm saying it doesn't have "real value" over fiat currency. Real value lies in the goods and services you would be exchanging your money for. If the money had "real value" it wouldn't be a good currency, as you've said. The guy I've been replying to is basically saying all fiat currency is not "real" because there is somebody that can make it. Just like the value in gold and silver relies on the trust that gold and silver have worth, value in fiat currency relies on the trust that so much won't be printed that it makes your cash on hand worthless. Furthermore, circulating silver that is marked with things that seem to indicate it can be used as USD is a crime. Thats all I've been saying. This guy is going off the deep end.

Re:will he go to jail?

[maxume]

He didn't exactly go out of his way to avoid confusion with the official currency of the U.S., you know, the dollar.

Re:will he go to jail?

[Anonymous Coward]

You look like a crazy person.

He is a libertarian, and he believe that Obama was born in Kenya.

Re:will he go to jail?

[Alistair Hutton]

The Liberty Dollar people said the coin had value because it was made of Silver not because it had a dollar value stamped on it. The Liberty dollar had less Silver in it than people paid for it and had waaaaaaaaaaaaaaaaaaaaaaaaaaaaay less silver in it than the face value of the coin which is what people tried to pass it off as. And their silver dollars were rebased from $20 to $50 (and if I remember correctly they rebased from $10 to $20 earlier). If the face value was not important then why were they restruck? Why did they have any face value at all, why couldn't they have just be discs of silver?

The US government says their money has value because they back it with the full faith and credit of the United States of America, i.e. it is worth one dollar because it is worth one dollar. Amazingly this works because they will accept one dollar for one dollar of debt. It's a circular definition but it doesn't rely on people thinking shiny metals are awesome.

Re:will he go to jail?

[truthsearch]

The guy is releasing SILVER DOLLARS. By definition they are worth much more than whatever garbage the Fed is printing.

You keep restating this in many comments, but it's inaccurate. Everything is worth whatever someone is willing to trade for it. You may consider silver worth more than any US currency. But many people trade in US currency because they believe it has value. Some trade in gold and silver because they believe they have value. If a lot of people someday believe seashells or bottle caps have value, then they'll exchange those for goods, too.

Re:will he go to jail?

[bmo]

Counterfeiting is an attack on the state. Why do you think Newton had counterfeiters executed?

You can make your own "currency" - there is no law against it. Casinos do it all the time. There used to be company script that you could only spend at the company store (song "16 Tons" for reference).

Just don't make it look like it can be mistaken for official currency in an "idiot in a hurry" kind of way. You'll bring the full wrath of the state upon your head.

Also

>Accusing the Fed of "counterfeiting" fiat currency

Oh, you're one of /those/. Okay.

--
BMO

Re:will he go to jail?

[conspirator57]

i think the concerns people have about fiat currencies are fair though. As historical evidence of fiat currencies shows, they are an extremely bad store of value given that the interests of those whose fiat decides the value of the currency are at odds with those trying to use it as a store of value (their life's retirement savings). Our policy makers are concerned with feeding the congress' deficit spending and "creating jobs" by encouraging people to spend (and spend recklessly if at all possible) to add demand for goods and services that theoretically creates jobs. They neglect the pressure all this debt puts on the currency. They neglect the needs of retirees, frequently explicitly. And they neglect the stability of the economy, stability that only savings can provide. Shortly, those denigrating fiat currencies are acting in their own rational interest and in favor of a more stable economy.

as to the illegality of passing silver in trade, it also used to be illegal to own more than $100 in gold. As I'm sure you know, passing a law does not make the law constitutional or advisable, nor does it prevent that law from harming citizens' interests.

Moreover, I'm not sure how one could mistake coins with Ron Paul's image on them for any silver US currency minted in the last 75 years or so. The collectible silver dollars and uncirculated silver dollar bullion all bear an image of Liberty personified (a woman in flowing robes, etc.) As to the guy collecting too much seigniorage, yeah, but i don't hear too many people complaining about the $6.3 billion in seigniorage the government collected from state quarters alone last decade.

http://en.wikipedia.org/wiki/Seigniorage

Re:will he go to jail?

[roman_mir]

Just because you disagree with their policies does not make them counterfeiters.

- true. It's not that. What does make them counterfeiters is printing money that is not backed by any reserves, by any production, by anything useful or valuable. THAT makes them counterfeiters, not my disagreement with policies.
--

Dude, he could have minted his own currency and called it anything else he wanted but a dollar, and he could have used any other symbols/representations than that of the United States.

- bullshit.

Many countries call their currencies dollars, dollar is NOT unique to America nor was it invented there.

The guy is from US, so he makes US dollars, he does everything possible on the coin to make sure it does not resemble US Minted coins to avoid this exact argument. His coins do not look like coins minted by US Mint, and they are silver, which is not what US Mint does anymore.

--

Eh? I study governments and international relations, and I have also studied the role of economic manipulation in warfare. That is far from swallowing any party line -- they are just facts. You can look them up yourself, you know.

- you are implicitly supporting the gov't calling this dude a terrorist, this way they can use different sets of laws on him probably, how about throwing him into Gitmo? Why not? Bitcoin developer should be careful, cause he can end up there.

Re:will he go to jail?

[roman_mir]

I am a libertarian, correct. I don't believe there is Obama, but that has nothing to do with my economic leanings.

Re:will he go to jail?

[roman_mir]

Dude, small amounts of money that I do spend I draw from my savings, which are metals. What is difficult about concept of conversion?

Also I have skipped the North American continent 2 years ago, it's not 7/11 for me anymore, it's more Asian/European stuff.

Re:will he go to jail?

[smelch]

Nice post, I agree entirely and am in fact a libertarian myself (not that you are, but libertarians are known for their love of getting rid of the fed). I just can't stand people who go to the max with their criticism of the current systems, like we've been scammed and lied to and money isn't money its a perversion. No, its just a different system possibly inferior to the one you want.

Re:will he go to jail?

[roman_mir]

Counterfeiting is an attack on the state. Why do you think Newton had counterfeiters executed?

So which president are you going to confuse for the likeness of Ron Paul on this gold coin, precisely?

Or maybe you are too daft to realize you are holding a piece of silver that has likeness of 'Lady Liberty' on the face, with a $20 face value on the back, and that you are asked to pay more than $20 to buy one from the guy, because he was making pretty good seigniorage?

Oh, you're one of /those/. Okay.

- I am happy that you and I are in different camps.

Re:will he go to jail?

[roman_mir]

I agree with you, and here is my personal belief on the worth of US dollar: 0. I have maybe $50 US in a wallet somewhere, rather than that I don't do fiat. I am one of people, so I also make small part of market. This is my take on the value of the US dollar.

When I say it's 0, what I mean is that it is approaching zero, it's a limit approaching zero, there is no reason to hold it, because I believe it will be in hyper inflation some time in not too distant future. Once it's there, it will be actual 0, so I don't want to get caught with pants down.

Re:will he go to jail?

[roman_mir]

You are full of shit.

Gold Liberty Dollar - it has RON PAUL on it. Which POTUS are you going to confuse that with?

And that's GOLD.

And it says: "RON PAUL for President 2008" and it says "GOLD STANDARD IN LEADERSHIP"

WHAT MORE DO YOU WANT?

Let's do silver - What? Do you normally see silver coins in your wallet that say: "LIBERTY, Trust in god, USA" with Lady Liberty on the face and this picture on the back?

There are plenty of different things that can remotely resemble US coins. Some of them are coins of other countries and some are from other times.

The guy in the story is facing 15 years in jail, 250K in fines and confiscation of $7,000,000 worth of silver/gold and finished coins.

He was selling them ABOVE the face value, obviously, it's called seigniorage.

You can say whatever you like, but his coins are nothing like US dollars in circulation, they are much more valuable than any other normal coin and they are not sold at face value. The guy went quite far out of his way to make sure they are not mistaken for US Mint coins.

Also 'DOLLAR' is not unique to USA.

Re:will he go to jail?

[icebraining]

- true. It's not that. What does make them counterfeiters is printing money that is not backed by any reserves, by any production, by anything useful or valuable. THAT makes them counterfeiters, not my disagreement with policies.

First, that doesn't fit the definition of counterfeiting. They aren't trying to pass them as anything else.

Many countries call their currencies dollars, dollar is NOT unique to America nor was it invented there.

The guy is from US, so he makes US dollars, he does everything possible on the coin to make sure it does not resemble US Minted coins to avoid this exact argument. His coins do not look like coins minted by US Mint, and they are silver, which is not what US Mint does anymore.

Other countries make dollars, but they call them "$country dollars".
And while the name dollar is not unique to the US, that doesn't mean the govt wasn't the first to use the name.
"Apple" is a common word used in many countries, but if I sell computers and call my company "Apple", I'm deliberately trying to cheat people.

Now, doesn't he call them Liberty dollars? I'd say that should be enough to distinguish them.

- you are implicitly supporting the gov't calling this dude a terrorist, this way they can use different sets of laws on him probably, how about throwing him into Gitmo? Why not? Bitcoin developer should be careful, cause he can end up there.

While they call the actions "domestic terrorism", I don't think they charged him with it, did they? From what I can tell, they charged him with existing laws that actually fit his case, even if they are abusive.

Minting any physical coins for the purpose of using them as money is illegal. Creating virtual coins isn't.

Re:will he go to jail?

[roman_mir]

First, that doesn't fit the definition of counterfeiting. They aren't trying to pass them as anything else.

- let's look at that claim, shall we?

here you can see prices for cotton, you can zoom out to 10 years time-line Note how it used to be around $50 in 2003.

So in 2003, it was possible to get a pound of cotton for 50 USD. OK. So if I am expecting AT MINIMUM to have dollars in my possession today, that are still printed by the Fed, shouldn't I expect those dollars to buy roughly the same amount of cotton as they bought in 2003?

But today the prices for cotton are over 200 USD / pound.

So from 2003 50 to 2011 200. Feels like counterfeit 'money' to me.

However let's now see what that means translated to what I call money.

In 2003 gold was roughly 350/ounce

For an ounce of gold you could buy 7 pounds of cotton in 2003.

Let's see, today gold is around 1430-1440. For an ounce of gold it is possible to buy... wait for it ..... 7 pounds of cotton.

--
I can do the same thing with coffee, sugar, copper, grains, etc.etc.etc.

Whatever you think the definition of 'counterfeit' is or should be, it clearly does not protect the value of the fiat against the hands on the printing presses.

This is the reflection of actual inflation. Not the BS that the gov't is feeding you with, this is real inflation, real money expansion. They also have redefined inflation to mean something else, not money expansion but end consumer prices rising.

However they are not being honest their either. They are measuring 'core inflation rate', which excludes things that really matter: food, energy, clothing, housing.

So aside from food, energy, clothing and housing, it's all peachy, their inflation levels are under 2% they say.

OK. What they do not tell you though is this: a country that does not produce much of anything, but lives off credit of producer nations does not need to buy much of raw materials.

Instead it prints dollars (which I call counterfeiting), which are backed by nothing, and then it pays with this fiat for the goods that are coming into the country from productive nations.

Productive nations OTOH have to take in those dollars, exchange them for their own currency, buy raw materials (commodities), add value (production) and then send the made goods to USA.

The real question of course is this: when are they going to come to their senses and stop this madness? When are they going to start enjoying fruits of their labor themselves and realize they do not need to destroy their own purchasing power so that US consumer does not see the levels of inflation his gov't causes around the world.

I think the time is very near now when the world wakes up from this nightmare.

Also Liberty Dollars are very different from US coins:
Gold with Ron Paul on it

Silver face

Silver back

Re:will he go to jail?

[Domini Canes]

Criminal laws do no not require an injured party to claim damages. You are confusing them with civil laws and contracts.

True. However if the law is unjust - punishes people who did not do any reasonable harm - it is a moral imperative to struggle against such law.

But you are a "libertarian": a corporate anarchist. You don't understand government; you want to eliminate it and take your chances with corporate powers. But we have a government, because we've seen how those autocratic orgs abuse the rights and property of the people.

Baseless ad-hominem attack; also prescribing qualities and wantings for the person from thin air - he has not said anything about eliminating government in his post.

You also don't understand the most basic economics: the ounce of silver in those "dollars" was worth $10-19, averaging about $14, through 1999, but was sold for $20 (legitimate dollars). If the fake dollar's silver were worth "quite a bit more than the face value of US coin", this crook would have been losing money on every sale. Which qualifies him to be a "libertarian".

It's you who does not understand the (economics of the) situation. Those (liberty) dollars were not stamped with face value of 20 Dollar, they were stamped with face value of 1 Dollar (if I am not mistaken here; if I am - see the end of the argument) - and your argument above unravels because of this simple fact.

Think about it. The basic premise of grand-grand-parent (metlin) was that the man tried to deceive the users by making his liberty dollars (LD henceforth) very similar by design to the fed dollars (USD henceforth). So the supposed issue here is that somebody will be confused and accept LD instead of USD.
There are two cases:
EITHER the confusion/deception occurs during the original maker X-->initial buyer Y transaction.
OR the confusion/deception occurs during the intermediate holder Y -->another person Z transaction.
In the first case there can be no confusion: Y pays X a sum of 20USD (form you post - I am not sure for what price LDs were sold) and receives a coin of 1LD. He can not be confused to believe 1USD == 1LD because he would then demand 20LDs for his 20USD.
In the second case confusion may occur - the receiver Z may confuse 1LD for 1USD, but in this case Z obtains 1LD coin, silver content of which is valued "10-19 USD, averaging about 14 USD" (according to your post) instead of 1USD.

The fact that 1LD was sold above the spot silver price is normal. Coins always command some seigniorage (http://en.wikipedia.org/wiki/Seigniorage) above spot bullion prices - to cover expenses of the minter.

PS In the unlikely case that LDs were stamped with the face value of 20 Dollar, there again can be no deception. AFAIK there are no official, government issued coins of 20USD denomination .

Re:will he go to jail?

[maxume]

Maybe relax a little.

By my opinion, if you want to avoid problems with the government, a real simple way of starting is to completely avoid confusion with their official currency. And they could have printed the weight of the precious metal embodied within the coin, rather than arbitrary units that might be confused with U.S. Dollars.

Those things don't make it any harder to sell them to people that want to own metals and they go a long ways towards making it clear that they aren't U.S. currency.

I'm not familiar enough with the situation to have strong opinions, but I don't think I would end up defending "50 Liberty Dollars" as a smart name for a non governmental currency that is intended to be advertised in the United States.

Re:will he go to jail?

[bmo]

The standard is "moron in a hurry" similar to trademark confusion.

If you don't understand this, then I don't know what else to say.

--
BMO

Re:will he go to jail?

[JTsyo]

hmm guess utter doesn't mean just what i thought it does.

Re:will he go to jail?

[roman_mir]

Dollar is used not just in US, just so that you are clear on this.

Dollar can be Canadian, it can be Zimbabwe. It can be from Hong Kong, Singapore, Belize, Taiwan, Australia, New Zealand....

The coin says: Liberty Dollar.

It could say: Canadian Dollar.

--

If somebody does not realize that the coin is gold and has Ron Paul on it and accepts it as payment for face value - good for them, they just made 400%.

If somebody takes the $20 silver to be real $20 US coin... I wonder what they are smoking, but again, they just made money, good for them.

Nobody is buying these dollars who does not understand what they are buying and if they are, so what?

Last thing: this is not about counterfeiting. Counterfeiting is what the Fed does. This is about competition to printing/minting currency and gov't can't have that. So how will they react to Bitcoin, once somebody explains that coins can be bits and can be sent around a series of tubes without gov't overseeing every transaction?

Won't they immediately say: this is a terrorist tool to avoid gov't oversight?

If I were Bitcoin developer, I'd watch out.

Re:will he go to jail?

[Anonymous Coward]

How do they pay to you in your job? or does your mom just give you $50 every now and then?

Re:will he go to jail?

[roman_mir]

Wow, you are so smart. Were you born that way, or did you train yourself through exhaustive mental exercises?

It's a small secret, but I am sure you can figure it out if you wanted to: spot price + 0.002% commission.

Re:will he go to jail?

[Savantissimo]

Liberty Dollars' face values were always substantially higher than the current market price of silver. The face values (and sale prices) on the silver coins went from $10 to $20 to $50 per troy ounce. Given the nice designs, pure silver and fine minting I don't think the markup was unreasonable. Old, non-numismatic bulk US coins were a much better buy in terms of silver content/USD, though, and had less risk.

The Liberty Dollar coins in silver, gold, platinum and copper were prominently marked "USA" "Liberty" and "Trust in God", "Dollars" and "$", so the feds do have a case, albeit not a good one since they had been consulted ahead of time and allowed the business to go on for over 10 years. Silver and gold certificates somewhat similar to US notes were also circulated, but were likely too different in design and color to be confused.

Re:will he go to jail?

[kmoser]

I think Johnny Cash's lawyers might have had a problem with that.

Re:will he go to jail?

[Anonymous Coward]

18 U.S.C. 486:

"Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title or imprisoned not more than five years, or both."

OK, so it's not made from metal, or an alloy of metal. It's just data.

Unless they decide that the "coins" are made of bits of the hard drive, and the hard drive is an alloy of metal ... just a minute, there's someone at the door...

So that means a casino chip is good to go?

Re:will he go to jail?

[Dynedain]

He was calling his coin a "liberty dollar" which happens to be the name of a specific design issued by the US Govt in WW2. He put "USA" and "Trust in God" on the coins (instead of "In God We Trust"), along with several other things. In short, he did everything he could to convince his customers that these were actual coins issued by the U.S. Federal Government. That is counterfeiting, even if he wasn't exactly duplicating a standard issue coin.

Re:will he go to jail?

[Doc Ruby]

Speeders break laws even before they hit someone.

Counterfeiters break laws even as they individually undermine the official currency only a little.

Ad-hominem attacks argue irrelevant personal characteristics rather than the proposition at hand. You "libertarians" are corporate anarchists, which is a central proposition in your arguments that you'd rather hide. Because you're bad arguers. Opposing the government's protection of the official currency because "no one has claimed damages" fundamentally misunderstands the government and criminal laws.

You're bad arguers. The comment to which I replied claimed the silver was worth more than "the face value of US coin", but that's irrelevant. The counterfeit coin says "$20", so "the face value of US coin" is irrelevant, because it doesn't counterfeit a specific US coin: just the status of the coin as "$20". Which contained silver that could be bought for less than $20 (of course). So the original poster was wrong. And now you're extending that bad argument into a pure straw man. Bad arguers.

Besides, it's false that "coins always command some seigniorage". US pennies cost over $0.01 to make. Because the coin is necessary to the economy. The value of the object is only loosely related to its value in exchange. You "libertarians" are always dropping words that you don't understand, a smokescreen to cover your misunderstandings of logic, government, economics, and anything else you're obsessed with.

Stick to Sim City. You don't hurt anyone by running that into the ground.

Re:will he go to jail?

[MoonBuggy]

I see it as reasonable to copy some of the common features that people think of when you say 'money', and I think that the fact that he didn't emulate the designs, sizes or weights of existing coins, as well as the fact that his company clearly and publicly stated "[t]he Liberty Dollar never has claimed to be, does not claim to be, is not, and does not purport to be, legal tender.", goes a good distance towards refuting allegations of counterfeiting, in my opinion.

That's really only half the issue, though - if it'd been a simple counterfeiting charge, and the court argued the technicalities to claim that the Liberty Dollar shares too many design features with the US dollar, I'd still be on his side, but I'd understand the government's angle. That's not what happened here: they threw the book at him, declared him a terrorist, and charged him with conspiracy against the US - that seems entirely untrue (the law considers intent, remember), a vast overreaction, and an almost childish gesture of panic from the government, who apparently decided to make an example of him. If anything, all they've done is lower my opinion of them still further, by showing how threatened they felt by a relatively small company (and showing malicious lengths they'll go to to stop him and destroy his reputation). That's what I have a much, much greater problem with.

Re:will he go to jail?

[WNight]

Just because you disagree with their policies does not make them counterfeiters.

Right, it's not a matter of opinion. It's how they print up billions of extra dollars all the time.

Had this guy tried his best, and actually been an economic terrorist, he could have hardly done the same harm that our "legitimate leaders" (Who I've never been offered a vote on) have done.

The guy minting his own silver coins, and going out of his way to make sure everybody knows they are NOT in fact 'legal tender' is now deemed a terrorist, because the people who really counterfeit the US dollars are afraid that their worthless currency won't be staying in use too much longer.

No, he was deemed guilty of breaking the law. What part of that is not clear to you?

Yeah, a law designed to force us to use the government currency so that they can inflate it whenever they want as an alternative to taxing.

They wouldn't be able to do that to a backed currency, so of course it's illegal.

Re:will he go to jail?

[WNight]

Far from it -- however, your comments have not discussed anything of substance on economics, other than how much fiat currency sucks and how a currency backed by precious metals would be great.

We're told (because there's no such thing as proof of economic theories) that it (backed currency) would cause horrible deflation, but our fiat currency not only causes horrible inflation, but allows easy manipulation.

Anyways, the problem isn't that you have different beliefs and want a fiat currency as that it's illegal to compete with the government, in providing what may be a better currency.

This is especially egregious where the other currency is worth more than ours and has inherent value. If he "went out of business" you'd still have your silver. If the US Gov went out of business (not as unreasonable now as 20 years ago) our paper would be worthless.

There is a reason we switched to fiat currency, and there is no going back. It simply is not feasible, nor realistic. While I disagree with some of the Fed's policies, I am neither so blind nor ignorant that I think that we could magically switch back to using gold and silver instead.

Switch, as in entirely? Maybe not. But we certainly could survive having other currencies as well. While there were some good reasons to centralize it's also pretty obviously a control play.

Re:will he go to jail?

[WNight]

It doesn't matter what money is redeemable for, specifically. It could be silver, or wheat, but it was redeemable for something and now it's the paper alone.

Yes, there are supposedly sound economic reasons why a backed currency would be subject to deflation, and more prone to runs on the backing goods, but that doesn't mean fiat currency isn't valueless paper.

Silver has some useful properties, but not as useful as paying taxes which is the value that the US dollar has.

You mean because it can be inflated at a whim which is roughly the same as collecting taxes, or what?

You have no understanding of what money is.

Please enlighten everyone then.

Re:will he go to jail?

[WNight]

How does that make him wrong?

Re:will he go to jail?

[WNight]

Perhaps they busted the Liberty Dollars guy to protect idiots like you. Did you ever stop to think of that?

Yeah right, the government that printed more money to alleviate our banking crisis is looking out for the little guy.

Why is silver so valuable? Why is its value more real than the value of the currency that you have to pay your taxes in? Because a bunch of people think it looks nice? I understand you can't just pull a bunch of silver out of your ass, but it gets its value from the belief that it is valuable. Just like fiat currencies.

Silver is backed with silver, fiat currencies are backed with wishes (and in the USA, prayer). Whatever the value of silver it's higher than that.

And yes, primarily because you can't just pull it out of your ass. Sure, our currency lets them plaster over the mortgage crisis, but only (even if successful) by ripping our money in half.

Re:will he go to jail?

[smelch]

Money is held by people not because they want that item, but because they want to be able to exchange it later for things they do want. Money can be backed or not backed, thats fine, but to say that silver has real value and paper has no value is ridiculous. I dont' know how to be more clear abuot this but silver's value is not because of its industrial uses, but because of convention. Paper money is not valueable because of its industrial uses, but because of its convention and also it is used to pay taxes to the government. Now, yes people (the Federal Reserve) can print more of it, just like people with large sums of money can make silver prices go up, or people with large amounts of silver can make silver prices go down. A backed currency has certain benefits but you have to get it through your retard mind that silver is not "real value" and neither is gold. Wheat has real value, computers have real value, underwear has real value. Money is a proxy for real value, thats what makes it money and not goods. God damn.

Re:will he go to jail?

[WNight]

You also don't understand what "remotely" means. These "Liberty Dollars" are quite close to US Federal dollars, especially the famous "Liberty Dollars" circulated in the early 1900s, also made of silver.

Not close enough for confusion. Want to guess how many liberty dollars I've seen in circulation.

Also, If Canadian money isn't causing fatal confusion I don't think it's a problem.

You don't understand what "valuable" means. Silver is valuable because of convention, not utility (except for the rare dentist or metallurgist), just as US Federal dollars are.

I don't think you understand value. Silver has some. Unbacked paper money has none, unless in large enough quantities to burn.

But since you'll disagree, please send me all your "garbage" US Federal dollars.

Nobody's saying you can't spend US dollars, just that they have no intrinsic value and the last person to accept them will get screwed.

Or, do you have a different take on the whole bailing out of the banking industry? Do you not think that printing a few hundred billion dollars is essentially mass counterfeiting?

Re:will he go to jail?

[WNight]

I am not saying that purchasing gold / silver is a bad thing. Just that if you do so through liberty dollars or some shady gold exchange in response to exhortations of Glen Beck then you are an idiot. There are far better ways to buy and sell precious metals. Liberty dollars were and are just a glorified MLM scam set up to appeal to paranoid libertarian types.

I think the people who bought them were trying a social experiment, in building a stable currency, more than trying to convert substantial amounts into "precious" metals. But yes, that would be a bad idea.

However I think it's hilarious that you think the government might have shut him down to protect the people. Have you heard of our recent banking collapse? Everyone in our country is half as rich as they were ten years ago. This was rewarded with more money, not jail sentences. If anything is economic terrorism it's destroying an entire nation's currency as AIG/etc did, but they're going essentially unpunished.

What he shouldn't do is demand to be paid in silver or trade them at face value when there is a perfectly functional national currency for that purpose.

There is? You wouldn't consider its value dropping crazily to disqualify it from that? Especially for someone who you'll likely be coaching to save money.

And how is it better for him? Why shouldn't he demand payment in the most favorable medium?

Re:will he go to jail?

[WNight]

Money can be backed or not backed, thats fine, but to say that silver has real value and paper has no value is ridiculous.

To ignore the value of gold, convention or otherwise, is intentional ignorance.

Sure though, there are many commodities, many of which are likely much better. Is that all you're saying though, that gold is silly because it's just shiny and you can't eat it or use it for much?

Money is a proxy for real value, thats what makes it money and not goods. God damn.

But you trade things of value for this proxy. If the music stops while you're holding it all you've got is a pretty token.

If it was some instant process it wouldn't matter so much. But we get paid in it, encouraged to save in it, etc.

bitcoin-alt is a full client implementation

[phantomcircuit]

I've been working on a full client implementation in python https://github.com/phantomcircuit/bitcoin-alt

Just so people know BitcoinJ is not a full p2p node.

Re:bitcoin-alt is a full client implementation

[xtracto]

Hey, thanks for sharing this. One question, with the standard Bitcoin client I am not able to connect to the Bitcoin network behind an HTTP proxy (only port 80 open). Is there any way I can connect without using a virtual network?
Thanks!

Re:bitcoin-alt is a full client implementation

[phantomcircuit]

Not that I'm aware of, the protocol is more or less packets sent over TCP port 8333.

Re:bitcoin-alt is a full client implementation

[phantomcircuit]

If anybody is interested you can purchase bitcoins through https://mtgox.com/

Re:bitcoin-alt is a full client implementation

[Anonymous Coward]

Is there a way to purchase bitcoins using a different country's real currency? Yen, drachmas, krónur etc?

Re:bitcoin-alt is a full client implementation

[Anonymous Coward]

https://btcex.com/

Yen, Euros, Rubles, and a couple of others I don't recognize.

Re:bitcoin-alt is a full client implementation

[fastest fascist]

Mt. Gox accepts EUR as well via bank transfer in the EU, although they will be converted to USD at the current exchange rate. (don't remember which source they use for that, ask them if you're interested.)

Re:bitcoin-alt is a full client implementation

[kmdrtako]

Drachmas? You're a little behind the times. Greece switched to the Euro in 2002. If you've got Drachmas, I'll buy them from you at par with Zimbabwe Dollars.

And what's a krónur? No currency I've ever heard of. Are you thinking of the Danish, Swedish, and Norwegian currencies?

Re:bitcoin-alt is a full client implementation

[TheThiefMaster]

http://en.wikipedia.org/wiki/Icelandic_kr%C3%B3na

Re:bitcoin-alt is a full client implementation

[Anonymous Coward]

Can I exchange Flooz for them?

Re:bitcoin-alt is a full client implementation

[Just Some Guy]

I cloned the project but I can't get it to even minimally execute without a lot of changes. What versions of Python and SQLAlchemy are you using? I have Python 3.1.2 and SA 0.6.3 as shipped with Ubuntu 10.10.

Re:bitcoin-alt is a full client implementation

[phantomcircuit]

SQLAlchemy isn't actually being actively used. I'd appreciate issue reports on github though.

Re:bitcoin-alt is a full client implementation

[Just Some Guy]

How come, out of curiosity? You're going through the trouble of defining the tables with it, then using raw SQL. There are a bunch of problem in the current snapshot, though, like Storage.__init__ not defining self.db, then self.db being used in other methods. I didn't really want to pollute your bugtracker with a bunch of little problems that might all have the same root cause, like perhaps you not having commited a working version recently.

Re:bitcoin-alt is a full client implementation

[Anonymous Coward]

Ooops looks like i got some sqlalchemy in my master branch, that's not on purpose....

Re:bitcoin-alt is a full client implementation

[Just Some Guy]

That's OK. I added a whole lot back in to a fork. :-)

Re:bitcoin-alt is a full client implementation

[themusicgod1]

How many bitcoins would you need to make your client also compatible with ripple / trade Bitcoin with ripple nodes, give or take?

Already covered on Reddit

[seifried]

Extensive discussion already: http://www.reddit.com/r/programming/comments/g7zlw/google_engineer_releases_open_source_bitcoin/.

Re:Already covered on Reddit

[Anonymous Coward]

So did you learn anything from that worth adding to this discussion or not?

Just don't say you're minting - oops?

[Anonymous Coward]

This link no target.

Error in summary

[Asdanf]

Is it just me, or is "don't say you're minting" an "" without a "href"? I know the editors here aren't great, but I thought if they could do anything right it would be html.

Re:Error in summary

[m50d]

I thought if they could do anything right it would be html

Clearly you've never looked at the page source.

Uh yeah make your own currency

[Cable]

Emperor Norton the first, of the USA and Mexico would be proud.

              Not Peter Norton, he ran out of ideas and sold his company to pay for freezing himself in suspended animation until the economy of the world got better.

              So far Peter Norton is still frozen. Needs his girlfriend to dress up as a bounty hunter, and her brother the farmboy who wants to be a pilot/Jedi to rescue him with his Wookie first mate and two (not Google) androids and his old friend who sold him out and feels sorry for that.

Bitcoin is good, but problematic.

[no known priors]

I really like BitCoin, But the biggest problem is the "goldrush" is over. While new bitcoins can still be mined, it's expensive, and takes time. Oh, the other big problem is that not enough people accept them. But, meh.

More implementations of the software are always good. But, they don't actually matter. It's the blockchain that matters. So long as the various implementations use the same blockchain (which is the cryptographic chain that indicates which address has how many bitcoins), things will stay together.

The biggest potential problem is Google, or another big organisation, starting a new blockchain, and splintering the bitcoin community. Google actually probably has enough processing power to mine quite a lot of bitcoins from the current blockchain anyway.

Re:Bitcoin is good, but problematic.

[Gubbe]

When mining slows, scarcity increases and value of individual bitcoins goes up. Now would be a good time to offer goods and services in bitcoin, because the bigger slice of the pie you amass now, the more it will be worth when more people are sharing the rest of the pie.
Of course, when the value goes up enough, mining suddenly becomes profitable again and the pie grows.

Or at least this is how I understood it was supposed to work the last time I checked up on it...

Re:Bitcoin is good, but problematic.

[SharpFang]

Except if 10% of users (who joined early) accumulate 90% of the wealth, then the economy will not be able to...

oh wait...

Re:Bitcoin is good, but problematic.

[fastest fascist]

I really like BitCoin, But the biggest problem is the "goldrush" is over.

The biggest problem for you, you mean, since there's no "free money" any more. For Bitcoin as a currency, it's a good thing. There's little value in something that can be easily produced.

Re:Bitcoin is good, but problematic.

[myforwik]

Yep, people don't realise how bitcoin actually works. Anyone can fork it and fork the currency. If google get a majority of users on their new client they can simply update the client to accept whatever rate of inflation they want, and the currency will fork, which usually causes the minority to follow. Bitcoin is also fundamentally flawed because any government could crash it. Bitcoin cannot possibly be secure against attack unless more than 50% of the worlds available CPUs were all committed to non-colusion. At the moment its something like 0.0001%, even private companies would have the CPU power to take it down. Also bitcoin is becoming a liability. If you have bit coin its in your interest to keep the blockchain ticking over, but people who do the calcs get so little reward they are not going to bother anymore, so you will have to give up CPU power just to maintain your wealth! Bitcoin is certainly useful for short term online transactions, but anyone who stores wealth in it is insane.

Re:Bitcoin is good, but problematic.

[Anonymous Coward]

Yes and no...the biggest thing that Bitcoin or any other alternative currency needs is widespread adoption. If all the early adopters control the vast majority of the currency in circulation, there's no incentive for late adopters and you don't get the widespread adoption necessary for it to be anything more than a fringe currency traded among a very small community.

If you end the gold rush before you've got the necessary critical mass to create a thriving community that spends/accepts your currency, the project will wither and die. Judging from comments here, where you'd expect a higher adoption rate than average, it doesn't sound like Bitcoin has anywhere near that kind of adoption rate. So if all the wealth in that currency is amassed by the privileged few who got in early, they're essentially asking new adopters to give them free stuff and services.

Re:Bitcoin is good, but problematic.

[Yvanhoe]

I'll give you one BTC if you join.
I accept BTCs as payement for freelance development.
Mining is not the normal way of acquiring BTCs. Just like mining gold is not the usual way to get money when you have a money based on the gold standard.

Re:Bitcoin is good, but problematic.

[petermgreen]

More implementations of the software are always good. But, they don't actually matter. It's the blockchain that matters. So long as the various implementations use the same blockchain (which is the cryptographic chain that indicates which address has how many bitcoins), things will stay together.

I saw someone else say this was not a full P2P implementation. One concern I see is if too many user run "client only" implementations then the network may fall apart.

Bitcoin uses cryptography to verify who performed an action but it uses a P2P network of many cooperating nodes to track what transactions have happened so far and reject transactions that would conflict with previous ones (the "spending money you have already spent" scenario). Without this tracking the system would fall apart.

Re:Bitcoin is good, but problematic.

[Anonymous Coward]

The Bitcoin system adjusts the difficulty of mining based on how quickly the system is "solving" new "blocks" (basically, solving SHA-256 calculations). The difficulty is tuned so that a new block is solved every 10 minutes on average. Recently, the difficulty increased by 40% over night, which greatly reduced the profitability of bitcoin mining. So some people stopped mining.

It doesn't matter what the value of the bitcoin currency is relative to other currencies - block solving will continue to happen approximately every 10 minutes across the entire network as a result of the difficulty being constantly adjusted up and down. But, of course, the financial incentive to mine is based on three things:

1. The exchange rate (profit!)
2. The difficulty
3. The cost of computation (power, mostly)

Adjust any of these, and people will enter or leave the system accordingly.

Re:Bitcoin is good, but problematic.

[nhaehnle]

Actually, the biggest problem of Bitcoin is that there is no way it will gain traction. The thing is, fiat money like the US$ is viable because there is an entity that forces US$-denominated debt onto people - the government plays this role via taxation. This creates demand for the fiat money and therefore gives it value. Once this basic value is established, the circular reasoning of "you accept US$ in exchange for money because you can use US$ to pay at Walmart because US$ needs US$ to pay its suppliers because they need US$ to pay their employees, i.e. you" largely takes over, but it is only stable because there is a formidable entity behind it that creates demand for the money.

Since there is nobody around who can force Bitcoin-denominated debts onto people, Bitcoins will not gain traction outside of a few fringe nerds and extreme libertarians etc.

Another problem of Bitcoin is that, even if it were successfully adopted, it would introduce massive problems for the economy. Remember the formula MV = PQ of the Quantity Theory of Money that orthodox economists love so much? (The QTM is severely flawed, but of course you can still write down that formula.) M is eventually constant for Bitcoin, and while V jumps all over the place (this being the main reason that QTM is flawed), it does seem to have an upper bound as well. So this either forces the economy to contract (a reduction of real output, i.e. a reduction of Q, and thus a reduction of living standards) or it forces a deflation in the price level P. In any case, neither is a very happy scenario in a world where improvement of living standards has historically only been achieved via debt-powered growth combined with modest inflation.

Re:Bitcoin is good, but problematic.

[gox]

Yep, people don't realise how bitcoin actually works. Anyone can fork it and fork the currency. If google get a majority of users on their new client they can simply update the client to accept whatever rate of inflation they want, and the currency will fork, which usually causes the minority to follow.

Which I'm not sure why is a good idea and how harmful it is supposed to be to bitcoin.

Bitcoin is also fundamentally flawed because any government could crash it. Bitcoin cannot possibly be secure against attack unless more than 50% of the worlds available CPUs were all committed to non-colusion. At the moment its something like 0.0001%, even private companies would have the CPU power to take it down.

This might be true. Probably not 50% but we can at least say that we need a lot more. At least in reserve, to counter an attack. But you are saying that anything anyone does that governments might not like is fundamentally flawed, aren't you. It's a little hard to swallow for me. Also there is no apparent reason to assume that they will carry out such an attack, states don't work that way. I would be more worried about legal pressures.

Also bitcoin is becoming a liability. If you have bit coin its in your interest to keep the blockchain ticking over, but people who do the calcs get so little reward they are not going to bother anymore, so you will have to give up CPU power just to maintain your wealth!

Transaction fees. They are there to cover the costs of miners. It will only get fairer.

Bitcoin is certainly useful for short term online transactions, but anyone who stores wealth in it is insane.

Maybe, maybe not, like all investment. That statement has been proven wrong until now, one day it might change. Feel free to recommend people to diversify their portfolios but it's a bit of a stretch to call it insane.

Re:Bitcoin is good, but problematic.

[this great guy]

The goldrush is certainly not over.

It is at the moment still quite profitable to mine on AMD GPUs, assuming your electricity costs are about $0.10/kWh. You will easily recoup at the very least half the price of a high-end video card if you jump in right now. Also the network continuously self-adjusts itself to distribute coins over a long period of time, as this graph shows: https://en.bitcoin.it/wiki/File:Total_bitcoins_over_time_graph.png As you can see, we have only generated about 5 million coins so far, out of 21 million. Additionally, many expect the value of 1 Bitcoin to continue to rise, significantly, on the various exchanges over the next few years.

Re:Bitcoin is good, but problematic.

[gox]

AFAIK, it's not a full P2P implementation, in the sense that it's a library. For instance, you can build an android client on it, which is probably one of the reasons he programmed that lib. On the other hand, such a client can't be less P2P than, say, a bittorrent client can. Though, miners (which are also vital for the security of the network) are a whole other issue.

Re:Bitcoin is good, but problematic.

[Anonymous Coward]

Except if 10% of users (who joined early) accumulate 90% of the wealth,

Er, 90% of the wealth held as bitcoins, which is a tiny proportion of the total wealth in the world. Those 10% will sooner or later sell their bitcoins for cash - and I somehow don't think they will become millionaires doing so.

Re:Bitcoin is good, but problematic.

[Anonymous Coward]

Gold (or cowrie shells, etc) is used as a currency even in places with no taxation. Bitcoin is not truly 'fiat money' because there is nobody who can arbitrarily make more of it. You can mine more but only at a fixed rate.

In a world where Bitcoin becomes widely adopted, it's likely that banks would issue paper notes exchangeable for Bitcoins. Then one day because of a war or financial crisis the convertibility of these notes for Bitcoins would be 'suspended', and you are back to fiat money once more.

Re:Bitcoin is good, but problematic.

[Anonymous Coward]

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Re:Bitcoin is good, but problematic.

[metacell]

Also, the value of existing BitCoins rise as more people want to buy it (deflation).

Re:Bitcoin is good, but problematic.

[Doc Ruby]

Why is splintering bad? It provides alternative currencies, each with their own inflation rates and relative values. The currency market among them is easy to automate, also distributed without a controlling middleman, so holding multiple alternatives at once doesn't prevent liquidating any into another. The result is the purest free market for value possible, so long as the information used to value items in the market is freely available.

Multiple alternatives after "splintering" sounds like the logical extension of the bitcoin premise. It's the way to see whether the premise is really good.

Re:Bitcoin is good, but problematic.

[harks]

I really like BitCoin, But the biggest problem is the "goldrush" is over. While new bitcoins can still be mined, it's expensive, and takes time. Oh, the other big problem is that not enough people accept them.

Difficulty of generating new Bitcoins is a feature, not a bug. If it were easy, they would have no value. The purpose of Bitcoin is to function as a form of money for saving and exchange, not to get rich by using your processor to print money. But you're right on the second part, the biggest obstacle is the lack of businesses that accept them.

Re:Bitcoin is good, but problematic.

[Anonymous Coward]

Ain't that great, there's no central bank but Google, or some other company with a lot of processing power, can produce a lot of coins and, if they so choose, dump those into the market. Ya, great technology!

Re:Bitcoin is good, but problematic.

[Anonymous Coward]

Most mining is done by GPUs anyway... the average user with just a CPU won't bring much power compared to what is already out there, and the official client doesn't support GPU mining either. You have to use a separate miner program that connects to the official client. There is more than enough computational power now to handle 100x the traffic, and if the traffic goes up without more power being added to the network, the difficulty will scale down... right now the miners are doing much more work than is necessary to thoroughly secure the system.

Re:Bitcoin is good, but problematic.

[Anonymous Coward]

Recouping half the price of the card does not a profit make.

Re:Bitcoin is good, but problematic.

[ian_from_brisbane]

I've just installed and am trying to source my first BTC... I have LR to offer in exchange, however I haven't yet found an exchanger for LR-BTC.

Re:Bitcoin is good, but problematic.

[Anonymous Coward]

Is that offer open to anyone, or just the parent?

I do wonder if a minor "tweak" (at least in the early days) would be to have a "tax" applied to unspent mined bitcoins? Say 3.6% each year (~0.01% each day) of any mined and unspent bitcoins would be randomly distributed to peers that haven't mined in the same period. That would help to distribute "hoarded" bitcoins generated by miners to non-miners.

I've installed the "official" version, but I still can't quite see what the reason for an "average" user is to use bc. They will have to convert their local currency to bc, buy/sell/trade using bc, and then convert back to their local currency to pay taxes or buy things that are only offered in the "official" currency.

The other problem is if a large company (Google, a bank, government etc) decides to use bitcoin, but with a different chain - this could make the current chain pretty useless. There is also the problem that I've seen mentioned about "illegal" content that might get embedded in the chain - potentially then everyone running a client would then be in possession of this material.

Re:Bitcoin is good, but problematic.

[maxume]

The coins are issued by the system at a relatively constant rate that is adjusted to account for the amount of calculation being thrown at 'mining', so all a company like Google could do is capture most of the coins being issued over a given amount of time (and that's assuming that they have enough hardware (GPUs are apparently much faster than CPUs) and want to pay for the electricity to overwhelm all the other participants in the system).

Re:Bitcoin is good, but problematic.

[curril]

I really like BitCoin, But the biggest problem is the "goldrush" is over.

Yeah, BitCoins are something of a fad like Beany Babies where an artificially restricted supply allows early adopters to make money off of late comers who foolishly think that they can make money off of people coming after them. From an economic standpoint, BitCoins are simply collector's items. Collecting BitCoins isn't much different than, say, collecting 1973 pennies. There are a limited number of them and their value is primarily determined by the demand for them from other collectors.

The rigid nature of the BitCoin supply is very appealing in today's economy as people want to acquire assets that retain value. Unfortunately, most people have a hard time understanding that value is not determined just by supply, but by demand as well. The very fact that the cash value of BitCoins is going up right now is evidence of this. Most of this demand, however, is not from people who want to use BitCoins, but from people who see them as an investment. After a while the number of new investors will peak, demand will go down, early investors will cash out, supply will go up, and the market will crash.

I doubt that BitCoins will ever see much mainstream use for conducting transactions, primarily because of the complexity of using them and because their unregulated nature will prevent them from being a stable currency. The fact that all transactions are public will discourage shadier operations from using them. They might see some use in online games where BitCoins could be used as the in-game currency.

Re:Bitcoin is good, but problematic.

[this great guy]

Yes because after doing it, you can resell the card for more than half its original price. Profits are even easier if you buy used video cards. But most of all, recouping "half the price" is my own excessively conservative estimate. Personally, I have recouped the cost of multiple Radeon HD 5970 already, and think it is still possible (I continue to invest in more hardware).

Re:Bitcoin is good, but problematic.

[Savantissimo]

That's an excellent idea, and not just for the original money-producers. Charging a periodic amount to keep currency... current has several beneficial effects: the velocity of money increases, trade increases, long-term investment increases. Look up "demurrage", "Wörgl", "Silvio Gessel", "stamp script" and "negative-interest currency" for more on why.

Here's a good introduction : An Experiment in Wörgl

Re:Bitcoin is good, but problematic.

[Yvanhoe]

Is that offer open to anyone, or just the parent?

Just to the parent, I am not that rich :-) But someone does give 0.05 BTC to whoever asks for it : https://freebitcoins.appspot.com/

I do wonder if a minor "tweak" (at least in the early days) would be to have a "tax" applied to unspent mined bitcoins?

That could be implentable in a future release. It would require every node to agree on running that new software otherwise a fork would happen. It would be doable to destroy money, which would have the same effect as redistributing it.

I've installed the "official" version, but I still can't quite see what the reason for an "average" user is to use bc. They will have to convert their local currency to bc, buy/sell/trade using bc, and then convert back to their local currency to pay taxes or buy things that are only offered in the "official" currency.

The idea is that if there are things to sell for BTCs, there are things to buy too. I think it is an ideal currency for dematerialized goods : web assistance, software development, artistic creation, etc... An economy that we would like to see appear and that we stopped believing that it could come from the major "IP" law firms.

The other problem is if a large company (Google, a bank, government etc) decides to use bitcoin, but with a different chain - this could make the current chain pretty useless.

I think it will probably happen. But tell me, is slashdot useless since Digg and reddit appeared ? Is Gentoo unusable since the success of Ubuntu ? Several crypto-currencies can coexist.

There is also the problem that I've seen mentioned about "illegal" content that might get embedded in the chain - potentially then everyone running a client would then be in possession of this material.

The chain is made of numbers and informations. The last time a chain of numbers was declared illegal, hilarity ensued. But actually, that exactly with this kind of events that bitcoin was designed : you cannot shut it down easily as long as you authorize private encrypted networks in a country.

Re:Bitcoin is good, but problematic.

[lsatenstein]

In poor countries, there is an equivalent to bitcoins, where money is passed via cellphones. Some locations allow one to charge up a cell phone with an amount of local currency. You can pay for food, taxi's or whatever, as long as your cellphone based account has money. To redeem, you go to the pharmacy or store where you can exchange the amount for hard cash. There is, perhaps, a penny a transaction, for cellphone to cellphone transfers.

Re:Bitcoin is good, but problematic.

[RulerOf]

I accept BTCs as payement for freelance development.

Care to tell us where to contact you? I hang out in #bitcoin-otc on freenode several days a week. I'm interested in hiring a developer who'll accept BTC for a small web project. Some coding and consulting. [/offtopic :P]

Anybody can answer this one Bitcoin flaw?

[Anonymous Coward]

I don't see a problem with bitcoin in theory... but throughout history no currency has been stable without an army to enforce its existence. Disband the USA police/Army and the dollar would collapse. Gold and other universally liked-by-all-humans minerals retains its value for the new owners if someone steals it. Cant say the same about BC.

That's why this will never go anywhere... look at e-gold, it was doing millions of dollars a day in transactions and then as soon as the owners ran into legal trouble (which could happen in any country) and had no means to defend themselves it collapsed overnight.

Having said that it's a nice hobby and probably someone is enjoying programming it, just don't see it ever gaining traction anywhere. Maybe this would be proved wrong if they found an island somewhere, established their own DNS servers and farms/militia which could be paid in BC etc...

Re:Anybody can answer this one Bitcoin flaw?

[no known priors]

The thing with bitcoin is that there is no central authority to control it. New bitcoins come about by "mining", not by some central authority minting new coins, or printing new notes. Gold too has collapsed in value before.

What makes a currency worth something, is that people are willing to accept it in exchange for goods. Gold is only worth as much as it is now, because people are all like "ooh, shiny". It's intrinsic value (what it can be used for), is not anything like how much people are willing to pay for it.

Bitcoin is more like gold than traditional government issued currency. There is a fixed amount (there will never be more than 21 million bitcoins, though as that amount is divisible to eight decimal places, that's not a problem). It's value is not centrally decided.

E-gold collapsed because it was controlled by one company. Bitcoin isn't controlled by anyone. Anyone can download the "official" client, or one various mining software, and mine their own bitcoin. You could arrest everyone who has ever touched the bitcoin client source, and the blockchain would still exist.

Bitcoin, it's peer-to-peer, that's the advantage of it.

Re:Anybody can answer this one Bitcoin flaw?

[rolfwind]

I don't see a problem with bitcoin in theory... but throughout history no currency has been stable without an army to enforce its existence. Disband the USA police/Army and the dollar would collapse. Gold and other universally liked-by-all-humans minerals retains its value for the new owners if someone steals it. Cant say the same about BC.

Armies do not enforce currency or value. At best, they can create a stable environment for an economy to fluorish.

Let's say the local military forces the town's smith to accept their dollars. Well, the town's smith will eventually need to buy personal supplies as well as supplies to keep his business going and that won't be any good if the next guy doesn't accept dollars. Or the next guy after that in the chain.

The economy is like the internet, it routes around these problems, in this case one country's declining currency. Business will shift and adapt and change, perhaps go elsewhere. But it won't be dictated to from above for long.

So, in anything but a closed economy (ala the Soviet Union), the army/police just doesn't do any good. And even the Soviets needed outside goods, did they buy it with rubles? No, they basically exchanged it for commodities like oil or other natural resources which they had plenty of.

Currency derives its value from acceptance, but somewhere down the line, you have to be able to do something unique with it (or it has to be inherently unique) other than pass it off to the next guy.

Gold cannot be made (easily/cheaply). Maybe in the future with science like they do with diamonds now, except manipulating neutrons/electrons/protons. It derives its value from that. If alchemists had ever succeeded, the irony would have been that it would have lost much of its value over a short time due to inflation if nothing else.

About the only thing that you can do only with the US dollar is pay your tax bill to the US Govt. Since 1997, our inflation has been around 37%, but the Government's spending has increase 118%. (This year's deficit equal 1997's US Federal Budget).

There will be a rude awakening in the future. Even with the biggest ($$$-wise) military in the world. Unlike all other foes, our army will be completely helpless to stop the decline.

Re:Anybody can answer this one Bitcoin flaw?

[Anonymous Coward]

Go look up the petrodollar and rejoin this discussion.

Re:Anybody can answer this one Bitcoin flaw?

[advocate_one]

Bitcoin is more like gold than traditional government issued currency. There is a fixed amount (there will never be more than 21 million bitcoins, though as that amount is divisible to eight decimal places, that's not a problem). It's value is not centrally decided.

the exchange rate is ridiculous... (ATMIT 0.85001 dollars gets you 1 bitcoin) bitcoins are practically useless for payments because of the poor exchange rate and the stupid low limit on the total number ever...

not only that, but bitcoins are not proof against a determined government buying up the entire supply to render them useless as a mode of exchange... (can do that by making very high offers via proxies in the exchanges and hoovering up every bitcoin that is up for conversion to money)

Re:Anybody can answer this one Bitcoin flaw?

[JSlope]

Exchange rate for gold is even worse. Bitcoins are actually scarcer than gold. What will happen with gold if one government will start buying all of it? The price will skyrocket, it's one of reasons why modern economic systems switched away from gold based currencies.

Funny

[atari2600a]

With bit-mining screeching to a hault I wonder if *anyone* can be charged with minting a coin or three over the course of a few months...

As a money system, no. But maybe for email.

[Animats]

This might potentially be a solution for spam. To send an email, you need a bitcoin. Bitcoins are easy to get in small quantities, maybe even free, but hard to get in bulk.

As a payment system, I don't see it. DigiCash had more promise as a distributed payment system, but Chaum blew the negotiations repeatedly.

Re:As a money system, no. But maybe for email.

[eV64]

if you want to get them in bulk you can trade for them. mtgox.com allows you to trade usd for bitcoins and vice versa. Also, fractional bitcoins are allowed. the smallest amount you can trade right now is .01 bitcoins, but if people agree on being able to trade smaller amounts, the clients can be modified to accept that.

Re:As a money system, no. But maybe for email.

[no known priors]

Your post advocates a

(x) technical (x) legislative ( ) market-based ( ) vigilante

approach to fighting spam. Your idea will not work. Here is why it won't work. (One or more of the following may apply to your particular idea, and it may have other flaws which used to vary from state to state before a bad federal law was passed.)

( ) Spammers can easily use it to harvest email addresses
(x) Mailing lists and other legitimate email uses would be affected
(x) No one will be able to find the guy or collect the money
( ) It is defenseless against brute force attacks
( ) It will stop spam for two weeks and then we'll be stuck with it
(x) Users of email will not put up with it
( ) Microsoft will not put up with it
( ) The police will not put up with it
(x) Requires too much cooperation from spammers
(x) Requires immediate total cooperation from everybody at once
( ) Many email users cannot afford to lose business or alienate potential employers
( ) Spammers don't care about invalid addresses in their lists
( ) Anyone could anonymously destroy anyone else's career or business

Specifically, your plan fails to account for

( ) Laws expressly prohibiting it
(x) Lack of centrally controlling authority for email
(x) Open relays in foreign countries
( ) Ease of searching tiny alphanumeric address space of all email addresses
( ) Asshats
(x) Jurisdictional problems
( ) Unpopularity of weird new taxes
(x) Public reluctance to accept weird new forms of money
(x) Huge existing software investment in SMTP
( ) Susceptibility of protocols other than SMTP to attack
( ) Willingness of users to install OS patches received by email
(x) Armies of worm riddled broadband-connected Windows boxes
( ) Eternal arms race involved in all filtering approaches
(x) Extreme profitability of spam
( ) Joe jobs and/or identity theft
( ) Technically illiterate politicians
( ) Extreme stupidity on the part of people who do business with spammers
( ) Dishonesty on the part of spammers themselves
( ) Bandwidth costs that are unaffected by client filtering
( ) Outlook

and the following philosophical objections may also apply:

(x) Ideas similar to yours are easy to come up with, yet none have ever
been shown practical
( ) Any scheme based on opt-out is unacceptable
( ) SMTP headers should not be the subject of legislation
( ) Blacklists suck
( ) Whitelists suck
( ) We should be able to talk about Viagra without being censored
( ) Countermeasures should not involve wire fraud or credit card fraud
( ) Countermeasures should not involve sabotage of public networks
( ) Countermeasures must work if phased in gradually
(x) Sending email should be free
( ) Why should we have to trust you and your servers?
( ) Incompatiblity with open source or open source licenses
( ) Feel-good measures do nothing to solve the problem
( ) Temporary/one-time email addresses are cumbersome
( ) I don't want the government reading my email
( ) Killing them that way is not slow and painful enough

Furthermore, this is what I think about you:

(x) Sorry dude, but I don't think it would work.
( ) This is a stupid idea, and you're a stupid person for suggesting it.
( ) Nice try, assh0le! I'm going to find out where you live and burn your
house down!

(From http://craphound.com/spamsolutions.txt.)
----

Furthermore, I don't think you truly understand what Bitcoin is all about.

Re:As a money system, no. But maybe for email.

[fastest fascist]

That any negotiations were needed to get DigiCash to succeed suggests to me it was doomed from the start. Bitcoin has no central authority, and therefore no company to take the entire currency down with it when it inevitably goes under.

Re:As a money system, no. But maybe for email.

[mdm42]

Actually I've seen people offering trades in precision all the way down to .0001BC. I still question the point of limiting the total amount to 20million BC (or 2^11 fractional-units). Whilst I understand the intent behind placing an absolute limit on the number of BC in circulation, I don't believe the number chosen provides enough liquidity to sustain global-scale economics.

Re:As a money system, no. But maybe for email.

[fastest fascist]

As far as I can tell, 8 decimal places isn't a hard limit, but can be increased in the future if need be. Don't quote me on that, though.

Re:As a money system, no. But maybe for email.

[Anonymous Coward]

I thought that the base unit of 1 BitCoin is 10^8 (100 million) larger than the smallest trade-able amount so they are actually limited to 2 * 10^15 (a quadrillion) trade-able units. Being a naturally deflationary currency I can see this being problematic eventually but it isn't the biggest concern for me. No one I care to pay accepts Bitcoins so neither will I.

Re:As a money system, no. But maybe for email.

[Anonymous Coward]

Liquidity is about the speed with which the asset can be bought or sold, not quantity in circulation place. If you increased the number of bitcoins by 100x you'd decrease the value 100x, it would have no effect on liquidity. If no one wanted to sell you 1 bit coin for £1, then they still wouldn't be willing to sell you 100 (lower value) bit coins for the equivalent cost.

The intention of having a hard ceiling is, I expect, to make clear that this isn't intended to be an inflationary currency.

Re:As a money system, no. But maybe for email.

[gox]

I don't think it's suitable for fighting spam, but if it were, it would automatically make it successful as a micropayment system as well.

Also, Bitcoin does not suffer from the main weakness of DigiCash, mainly being centralized. There is no one person or group that can blow anything.

Re:As a money system, no. But maybe for email.

[metacell]

Without a hard limit, there's always the risk that some time in the future, processing power will take a sudden leap, and the market will be flooded with a huge number of BitCoins.

Re:As a money system, no. But maybe for email.

[Doc Ruby]

Your responses are wrong. They do not accurately describe the anti-spam system that was proposed.

The idea of "email stamps" to directly counter the essence of spam's advantage (bulk messaging is extremely cheap) is a solid one. Indeed it underlies the limits on junk postal mail, which are reversed to encourage junk that subsidizes individual items' postal delivery.

Your form response is a good example of the lack of imagination and abundance of inertia that leave us with a badly managed spam problem.

Re:As a money system, no. But maybe for email.

[thatwouldbeme]

A method of doing this effectively is discussed here, where the success of the system is not dependent on a particular value for bitcoins, but only that they have some value at all.

Re:As a money system, no. But maybe for email.

[ThosLives]

Being a naturally deflationary currency I can see this being problematic eventually

This is the fundamental aspect of bitcoin which I think will simply make it a curiosity. Deflationary currency encourages hoarding, because simply holding currency is better than spending it. It's also problematic because rational participants would never borrow a bitcoin (with interest) because it will likely cost more (in nominal terms) later. That doesn't even touch on the psychological effects related to nominal amounts that are always decreasing; this is one thing inflationary currency got right: people feel like they are doing better even with constant or decreasing standards of living because the numbers are increasing. You could have an increasing standard of living but with a falling salary people would feel slighted; this effect should not be underestimated.

The other problem with bitcoin - also a problem of most fiat currencies (for bitcoin is indeed fiat) - is that production of a bitcoin is not directly related to economic activity. That is, if I perform a wealth-generating activity, the only way I can get a bitcoin is if someone with a bitcoin gives it to me. Conversely, if I create ("mine") a bitcoin there's no guarantee that anyone will accept it from me - the only way to guarantee that is if I also produce some other goods and services for which I'd be willing to accept the bitcoin back in exchange.

That latter bit is really the key to any currency: when I give you some currency, you must have some confidence that you will be able to trade that currency back to me or others in exchange for goods and services. If that confidence does not exist, the currency will fail.

Re:As a money system, no. But maybe for email.

[geminidomino]

The idea of "email stamps" to directly counter the essence of spam's advantage (bulk messaging is extremely cheap) is a solid one

Actually, he's right, and it's not. The idea was beaten to death years ago, although he missed a few.

Re:As a money system, no. But maybe for email.

[Anonymous Coward]

I don't understand that. Surely deflationary currency simply extends interest into the negative? If a currency is deflating at 5% a year, than a proper loan would be at some small negative amount, like -3%, in order to give the lender a 2% profit. It's straightforward math.

Re:As a money system, no. But maybe for email.

[maxume]

The 'expense' of mining is adjusted as more cycles are thrown at it so that the number of coins created over larger periods of time is relatively constant.

Re:As a money system, no. But maybe for email.

[HeckRuler]

Damn straight you don't understand it.
Mr Banker can make 5% on his pile of money if he sits on it. OR, you say, he can lend out his money at a NEGATIVE interest rate, and make 2%.
Now just sit there and think about what you did.

Re:As a money system, no. But maybe for email.

[Anonymous Coward]

The bitcoin concept is based on Hashcash. Hashcash was originally designed for verifying legitimate emails.

Bitcoin is designed to be a completely decentralized and cryptographically currency. DigiCash (Chaumian blinded-tokens) is not decentralized at all. There is no reason you couldn't have Blinded-tokens that base their value on Bitcoin, but you'd lose the decentralization as some centralized entity would have to keep track of which tokens are valid and which are not.

Re:As a money system, no. But maybe for email.

[Archangel Michael]

The problem with a hard limit for maximum currency in existence is that it invariably leads to deflation. Not necessarily a bad thing, but something that is entirely uncommon in today's world. Deflation has interesting properties when compared to inflation. Generally speaking in High Inflation, consumers who purchase goods and hold onto real assets(property) benefit more than those who try to "save" money. In deflation, people who produce goods (consumables) which sell end up doing very well, while consumers have the bulk of the problems. Yes, this is over simplification macro view.

In Deflation it is cheaper to fix a broken car than it is to buy a new one. In Inflation, it is better to buy a car than fix a broken one.

BitCoin is, by definition, going to be highly deflationary if it is ever successful. And if that is the case, it would be better to get in early than late, because the bitcoin you buy now, will be able to buy more later than it does now. WHICH would make gaining and holding onto BitCoin better than spending it.

Start mining now, start acquiring bitcoins now, and if/when it takes off, you'll be rich.

Re:As a money system, no. But maybe for email.

[Anonymous Coward]

http://witcoin.com

Re:As a money system, no. But maybe for email.

[JTsyo]

...
WHICH would make gaining and holding onto BitCoin better than spending it.

Start mining now, start acquiring bitcoins now, and if/when it takes off, you'll be rich.

Holding it would further lead to deflation, I see what you're doing.

Re:As a money system, no. But maybe for email.

[Anonymous Coward]

DigiCash had more promise as a distributed payment system, but Chaum blew the negotiations repeatedly.

The DigiCash patents should be close to expired by now. If it's so great, then go ahead and build it (or someone will in any case).

Re:As a money system, no. But maybe for email.

[JSlope]

Actually he will make 5%+2%

Answer:

[Burz]

Its enforced by cryptography.

The reason why police/soldiers don't have to guard transactions carried over SSL is the same reason why they're not required by a currency like Bitcoin.

poluting to mine money ...

[georgesdev]

so, to get that bitcoin money, you let a program run in the background on your system. My question is, how much electricity will be spoiled to "create" the 21 million bitcoins?
It's bad enough that thousands are spoiling electricity to run seti@home
Or maybe the whole thing is just a spambot (after all, you have lots of machines around the world pretending to be creating money, but they may just as well be sending spam).

Re:poluting to mine money ...

[Jeremi]

My question is, how much electricity will be spoiled to "create" the 21 million bitcoins?

Let me answer your question with a question:

How much electricity will be spoiled to create the next 21 million actual/physical coins?

Mining, milling, and transporting actual silver (or zinc or whatever the government mints are making coins out of these days) isn't exactly an environmentally friendly operation, either. At least once the 21-million bit-coin market is established, the virtual coins will last indefinitely, which is more than one can say for their real-life counterparts.

Re:poluting to mine money ...

[glwtta]

It's bad enough that thousands are spoiling electricity to run seti@home

Just so we're clear, to "spoil" electricity means to use it for something you personally don't approve of?

How much electricity are you spoiling by posting here?

after all, you have lots of machines around the world pretending to be creating money, but they may just as well be sending spam

Ah, ok, you think computers are magic, don't you?

Re:poluting to mine money ...

[Anonymous Coward]

Mining, milling, and transporting actual silver (or zinc or whatever the government mints are making coins out of these days) isn't exactly an environmentally friendly operation, either. At least once the 21-million bit-coin market is established, the virtual coins will last indefinitely, which is more than one can say for their real-life counterparts.

Yes but those real-life counterparts have near universal acceptance. It'd be a stretch to say even a .0001% of entities accept bitcoins.

Re:poluting to mine money ...

[Anonymous Coward]

My question is, how much electricity will be spoiled to "create" the 21 million bitcoins?

My question is: how much electricity is being spoiled to run your flat screen TV's, your air conditioners, your hot water systems and all the lamp posts and commercial signage in your city?

Re:poluting to mine money ...

[gox]

Yes but those real-life counterparts have near universal acceptance. It'd be a stretch to say even a .0001% of entities accept bitcoins.

But that's not about the environmental impact, is it?

Re:poluting to mine money ...

[gox]

As others have already stated, most of what we use as money, be it banknotes, coins or bank accounts, consume a lot of energy. I think Bitcoin's system is much more favorable, though my belief is based on back-of-the-envelope calculations.

Plus, my god, chill out, it's a protocol, not a software. And it's an open protocol. And all clients are open-source. And what miners are doing is pretty basic (sha256summing like mad), you can even check it out yourself.

Re:poluting to mine money ...

[georgesdev]

I would argue that it is about the environmental impact.
I am one of those who thinks this bitcoin thing is not going to be really used, on the other hand the environmental impact is going to be very real.
If and when countries produce less physical coins because people switch to bitcoin, then we can revisit the subject.

Re:poluting to mine money ...

[gox]

Well I am, and many others have been using it for some time. But if the majority is generating coins and merely selling to hoarders and doing nothing else, which is a possibility, then you may be right. However, my counter argument is that, that kind of behavior would lead to the collapse of Bitcoin economy before it could be considerably harmful to the environment. Something that has no use can't have value. Let me remind you that the real purpose of the computation being done is to make network resilient to attacks.

A fool and his money...

[Anonymous Coward]

...are soon parted. A few douche-nozzles, presumably swimming in money already, will make a killing suckering people into buying these "bitcoins". When this program eventually falls flat on its face, and it will, you'll be out a few bucks (either by the increased electric bill running their stupid program or by stupidly opening your wallet to buy these so called bitcoins) and they'll be off on some tropical island surrounded by naked women drinking margiratas and further darkening their douche-tastical tan lines. No thanks! I thought Google was supposed to be hiring SMART people?

Snow Crash?

[GetAJorb]

Isn't this concept similar to the peer to peer digital currency outlined in Snow Crash? I have to admit that I didn't read too much in the original post, but the idea that something even remotely close is being worked on is fascinating.

If I remember correctly from the book, a decentralized currency exchange system accepted by all was also unable to be reliably taxed by governments, despite attempted legal ramifications. This lead to the downfall of regular nation states due to complete fiscal insolvency essentially overnight.

I understand it was just a work of fiction, but would such an outcome be possible, or even desirable? Would we ever accept such a system as a replacement for the traditional banking conglomerates? Even worse, who do you trust more in this day and age, the bankers or the software nerds? :)

Given the current state of things, I won't be moving my Sealy Posturepedic retirement fund into the Bank-O-Bits, but the potential is somewhat mind blowing for the future.

...and yes, I stopped lurking for the last 10 years to post this :)

Re:Snow Crash?

[petermgreen]

Reliably enforcing taxation is pretty much impossible regardless of the currency. The main way western countries (at least the USA the UK) have got arround this is by collecting most of the tax from larger entites, the more transactions an entity is involved in the greater the chance of getting caught cheating and the more thay have to lose when they do cheat. While it is nominally the employee being taxed the taxes are required to be calculated and collected by their employer. Similarly sales tax/vat is collected by the retailer as part of the purchase.

Re:Snow Crash?

[LordLucless]

I think you might be conflating two books; in Snow Crash, there was still definitely physical currency. A memo was forwarded around the US Government, instructing not to use US Currency as toilet paper, and YT pays drug dealers for Snow Crash in physical Kong Bucks.

Re:Snow Crash?

[gox]

I have to admit that I didn't read too much in the original post, but the idea that something even remotely close is being worked on is fascinating.

FYI (a highly compact presentation): http://www.weusecoins.com/

I understand it was just a work of fiction, but would such an outcome be possible, or even desirable? Would we ever accept such a system as a replacement for the traditional banking conglomerates? Even worse, who do you trust more in this day and age, the bankers or the software nerds? :)

Nerds.

But seriously, who knows? I think it's hinting to a better future, but the real outcome might not be what we would like it to be. Freedom is also good but a lot of people die for it. I don't think Bitcoin has the potential to lead to the downfall of states directly though, like how WWW didn't, and might lead to a healthier economy.

Given the current state of things, I won't be moving my Sealy Posturepedic retirement fund into the Bank-O-Bits, but the potential is somewhat mind blowing for the future.

You have to admit, burning your savings on a disc and putting it in a safe is pretty appealing.

Corruption technology - safe and secure

[Anonymous Coward]

Now unstoppable and uncontrollable P2P corruption technology for everybody.

Deal

[Anonymous Coward]

Just don't say you're minting anything.

Well, alright... but only if you don't link to anything.

Power of Taxation

[nhaehnle]

I don't see a problem with bitcoin in theory... but throughout history no currency has been stable without an army to enforce its existence. Disband the USA police/Army and the dollar would collapse.

You almost hit Bitcoin's problem spot on. The reason that fiat money like the US$ is viable is that there is an entity - the US government - that can force a US$-denominated debt on you via taxation. This taxation creates demand for the money, which is what ultimately underpins the money's value, once you go beyond all the circular reasoning of "You work for US$ because Walmart accepts US$ in payment for goods because Walmart needs US$ to pay its suppliers because the suppliers need US$ to pay their employees, i.e. you".

Historically, no monetary system could remain stable and useful for significant amount of time unless it was backed by an appropriate power of taxation to jumpstart the value of the currency. No power exists that is able to force Bitcoin-denominated debt onto people, and so Bitcoin will never be widely used outside of the fringe of curious geeks and gold-nutters.

And this is just the problem of how Bitcoin could gain traction. If Bitcoin ever gained traction, then G** help us. Recessions like this one would be inevitable and prolonged, because nobody has the power to jump-start the economy out of a recession by unilateral stimulus spending. (Of course, given how the political debate is going these days, we might as well use Bitcoins, since governments refuse to use the tools at their disposal with which they could get us out of it.)

By the way, if you really want to learn more about how monetary system works, I recommend billy blog as a good source by a modern monetary theory economist. The entry A simple business card economy is probably a good starting point.

Re:Power of Taxation

[marco.antonio.costa]

because nobody has the power to jump-start the economy out of a recession by unilateral stimulus spending.

And when has 'unilateral stimulus spending' ever 'jump-started any economy out of a recession'?

Re:Power of Taxation

[Doc Ruby]

One example that is difficult to disagree with is the unilateral government spending in the late 1930s that ended the Great Depression.

There are plenty of other good examples, but some people find them easier to disagree with.

Re:Power of Taxation

[Attila Dimedici]

There is good reason to disagree with your example as well. The biggest problem with your argument is that unilateral government spending started immediately and yet the economy did not recover until the late 1930s. There had been other depressions which were significantly shorter with no unilateral government spending. Ultimately, it is very hard to make a good argument about causes and solutions to the Great Depression because the various economic factors were so complicated. You had the stock market crash of 1929, the effects of which were almost recovered from when the drought hit the U.S. midwest in the spring of 1930, exacerbated by various bad polciy decisions by various governments throughout the world (such as Great Britain's decision to return to the Gold Standard at pre-WWI parities).
Overall, it is not clear what actually caused the Great Depression, nor what lead to its end. I do, however, think that our current economic situation lends weight to the Austrian School of Economics theory about the cause of the Great Depression (the Federal Reserve overinflating the money supply throughout the 1920s). I think determining what to do about such an economic downturn once it happens is much more complicated. While I think the correct solution is the exact opposite of what you think it is, I think it is much too complicated to effectively argue either side in a forum such as this.

Re:Power of Taxation

[Anonymous Coward]

The spending in the 1930s merely held us over until WWII started and we became arms dealers.

Re:Power of Taxation

[Anonymous Coward]

Huh? Where is the Ayn Rand squad? Sleeping in today, are they?

Anyway, the baby-sitting coupons had a fixed rate of one hour per coupon, which is reminiscent of the gold standard. This is exactly the sort of currency that the Rand-buffs want.

Bitcoins are different in that they aren't exchangeable for real-life goods at any particular rate. Bitcoins can also be divided into infinitesimally small parts (it currently supports payments as small as 10^-8 coins, but my understanding is that this could be decreased if necessary). If the parents had used bitcoins they could simply offer to babysit 1 hour for less than the previous going rate. It seems that at some market rate people would start to exchange bitcoins for babysitting.

Re:Power of Taxation

[Anonymous Coward]

There are more than 100 countries in the world who keep accurate records of their economies. They've been doing this for a long time, in fact some have been keeping records for centuries. Each of those countries has experienced dozens of recessions and some have experienced depressions. For each recorded recession, each country implemented some kind of economic response, or did nothing, and that response is part of the record, as is the subsequent strength and speed of the recovery.

Economists gather all this data together and get a database of thousands of recessions, the government response to those recessions, and the resulting economic recovery. Government responses range widely, from restricting the money supply, to wild over-spending.

From this database it can easily be determined for any particular recession what level of government stimulus is appropriate.

For the recent U.S. Great Recession economists told G.W. and Obama that it would take $2.5 trillion to get the economy back on its feet. Between the (fairly minor) Bush stimulus plans, the TARP, the Obama stimulus and the Fed's Quantitative Easing I, II and possibly III (Q.E. = the Fed prints more money), we are approaching $2 trillion in stimulus and the economy is finally beginning to respond.

The sad part is most voters have no idea how an economy works, so Congress and the President are artificially constrained by public opinion and the best choices aren't always politically available. That's why the Fed had to step in last year and just started printing money. It was clear that the new Congress wasn't planning to do anything helpful so they had to do something.

Re:Power of Taxation

[nhaehnle]

If the parents had used bitcoins they could simply offer to babysit 1 hour for less than the previous going rate. It seems that at some market rate people would start to exchange bitcoins for babysitting.

That used to be (and still is, for many people) the theory. In practice, deflation is a bad way to fix recessions. It might have worked in that baby-sitting economy where prices could have been changed by decree (though I wouldn't be sure of it), but in the real world, it runs against a number of barriers. One of them is that people and businesses are much more prepared to raise nominal prices than to reduce them, so the adaptation of the price level is slower, which forces the recovery to take longer. This is partly psychological and partly because of nominal obligations such as paying rent or mortgages and utilities. Since such nominal obligations are fixed, it is for the majority of people preferable to take a cut in real income via inflation rather than via a cut in nominal income.

The calculation is simple (numbers are pulled out of thin air to illustrate the point): suppose you used to earn 1000# per week and had 500# per week in nominal obligation, so you had 500# disposable income for other things like food, education, entertainment. Now suppose you need to take a 5% cut in real income. If you take that cut in nominal terms, you will only earn 950# per week, of which 500# will still have to go to your nominal obligations, so your disposable income drops to 450#, which is in fact a cut of 10% in real disposable income. However, if you take the cut in real terms via 5% inflation, then you still earn 1000# a week, of which after nominal obligations, 500# will be left as disposable income. Those are worth 5% less, so your purchasing power drops to 475# in real terms. The point is that your real disposal income only drops by 5% instead of 10%. This is why inflation is preferable over nominal cuts in income for anybody who isn't living off interest.

So nominal cuts are resisted very strongly, which brings me back to the point that getting out of a recession via deflation is a very slow process, and in the meantime a lot of opportunity for wealth creation has been lost because the recession is "fixed" by a continued economic contraction. The problem of Bitcoin is that it would basically force the economy to take this painful path to recovery whenever a demand shock causes it to go into recession. That's not a world I want to live in.

Re:Power of Taxation

[marco.antonio.costa]

You have no idea how an economy works. Here's a tip: it does not run on paper.

Re:Power of Taxation

[marco.antonio.costa]

Almost two decades of depression as 'jump starting an economy out of recession' is the most difficult example to disagree with?

I'm impressed.

Re:Power of Taxation

[Savantissimo]

The crucial factor in adoption of a currency is whether the government accepts the currency to pay taxes. Other large sectors of the economy could achieve nearly the same effect: landlords, utilities, banks, insurance, or energy - but there are usually no more than four layers of government for any given district, so the impact of one of those layers accepting a currency is greater than the adoption of the currency by any one provider in a market with many competing players. The experiment in Wörgl, in which the depression-era mayor of an Austrian town issued a stamp-script (negative-interest) currency which was good for paying taxes illustrates this:

On July 31, 1932 the town administrator purchased the first lot of Bills from the Welfare Committee for a total face value of 1,800 Schillings and used it to pay wages. These first wages paid out were returned to the community on almost the same day as tax payments. By the third day it was thought that the Bills had been counterfeited because the 1000 Schillings issued had already accounted for 5,100 Schillings in unpaid taxes. Michael Unterguggenberger knew better, the velocity of money had increased and his Worgl money was working.

(From:An Experiment in Worgl

The initial stimulus was far less than the economic activity from paying taxes. This was compounded by the backlog of unpaid public and private bills.

The other crucial factor was the way that the currency was negative interest - stamps had to be bought and affixed periodically to keep a note valid. This discouraged hoarding and increased the velocity of money as people wanted to avoid paying for stamps themselves by instead paying the money to sellers and creditors. This negative interest also made the net present value (NPV) of sustainable but low-return long-term investments greater than holding cash. An investment that merely returned the invested principal after 20-years could still be a good investment compared to paying for the stamps needed to hold cash, whereas in conventional positive interest-bearing currencies the NPV of such an investment would be less than 55% of what was invested, even at 3% annual interest.

Re:Power of Taxation

[nhaehnle]

Good point and a nice story. The fundamental problem in the Great Depression and today is the same: people are saving money, which causes a gap in demand, which causes unemployment.

The Wörgl solution to the problem was a negative-interest currency, which strongly discourages saving. The problem can also be solved by a monetary sovereign government filling the gap in demand.

It's a pity that this experiment did not run longer. There are certainly issues with having a system in which people cannot effectively save in currency. For example, a privatized pension system would likely be even more unworkable than it is with current institutional arrangements. However, one cannot say for certain whether the Wörgl system would have been viable in the long run or not, since the experiment did not run long enough to collect sufficient data. The consequences of a lack of saving possibilities would likely manifest only after several years.

Re:Power of Taxation

[Doc Ruby]

Show the evidence of "almost two decades of depression" starting in the late 1930s.

Re:Power of Taxation

[marco.antonio.costa]

Why don't you show your evidence of 'jump starting the economy out of recession' so we can all have a good laugh. :-)

Re:Power of Taxation

[Doc Ruby]

Because it's completely well known that the Great Depression ended with unilateral government spending in the late 1930s, followed by decades of expansion with a few brief exceptions.

Your assertion is the extraordinary claim that requires extraordinary evidence. Your glib failure to do so at all just makes you look obnoxious.

Re:Power of Taxation

[marco.antonio.costa]

Maybe we would believe that the earth was flat, or that it revolved around the Sun if we lived in the middle ages and the renaissance, it was completely well known, and it was still utter bullshit. See how that's not an argument?

You should Google it up instead of calling me names or trying to argue from a place of authority, which is what you are trying to accomplish with saying my assertion is the extraordinary one.

Re:Power of Taxation

[Doc Ruby]

People stopped believing that the Earth was flat when they were shown evidence to the contrary.

You "libertarians" are the most ridiculous suckers of all time. Er, I meant Teabaggers. Oh, OK - Republicans. You want to stop looking like a clown, post the evidence that there were "almost two decades of depression" after the late 1930s.

You can't. You're a clown.

Goodbye.

Re:Power of Taxation

[marco.antonio.costa]

u mad bro?

Distributed transaction processing...

[Anonymous Coward]

Distributed transaction processing... what could possibly go wrong there?

What's the exchange rate...

[rgbatduke]

...between bitcoins and WoW gp?

Why bother creating a new electronic currency when there is a perfectly viable one already in existence...

rgb

Re:What's the exchange rate...

[gox]

Why bother creating a new electronic currency when there is a perfectly viable one already in existence...

LOL!

Seriously? There has never been a decentralized international currency before and it is almost as revolutionary as money itself? If it works though... :-)

Re:What's the exchange rate...

[metacell]

Actually, I think using World of Warcraft gold as currency should work very well in the short term for those who want to trade real-world goods of lesser value, but it has a number of drawbacks:

1. It's dependent on a centralised server, so can be easily tracked or disrupted.
2. It's controlled by a single company, so it may lose its value the day Blizzard decides to discontinue the game.
3. The supply isn't fixed, but may be changed at a whim when the rules of the World of Warcraft game are changed. This could cause the value to fluctuate wildly.

BitCoins solve all three of these problems, by being 1) P2P-based, 2) defined by math and convention instead of being controlled by an organisation, and 3) having a mathematically defined limited supply.

Re:What's the exchange rate...

[thatwouldbeme]

80,000 WOW gold = 65 BTC as of March 16

Re:What's the exchange rate...

[Beyond_GoodandEvil]

A better question what is the exchange rate between Bitcoins and a schrute buck?

Re:What's the exchange rate...

[rgbatduke]

Now if we can only get Azeroth vendors to accept BTC directly... rgb

Re:What's the exchange rate...

[Toze]

Because we don't want Blizzard to own the wallet and the cash? Because Blizzard is concerned with game balance and profit from players, not arbitrating an international currency? Because we don't want to pay an extra $15 a month to participate in the digital economy? Because we don't like currencies with inflation rates of over 1000%? Take your pick.

Re:What's the exchange rate...

[rgbatduke]

Oh, wait, you thought I was serious, didn't you?

Hell, I'm not even serious about BTC. I think a bunch of people above have already remarked on what money really is. Money isn't gold, it isn't paper, it isn't an exchange medium. Money is a promise, a fantasy, a collective collaborative agreement. It is as imaginary as "human rights" and "satan".

The only thing that makes money money is having a powerful and persistent institution that can be trusted underwrite, guarantee, secure it. Otherwise anybody can take paper and draw a picture on it and say "this is money" and try to get you to accept it in exchange for things of actual value. In some cases -- such as WoW GP or Magic cards or Pokeman cards -- they succeed, and a new "currency" is introduced, at least until the underwriting institution fails or individuals lose confidence in it. The latter will usually happen rather quickly if anyone defaults on the value issue and the underwriter has no means of enforcement. I can tell Harris Teeter that I bought 1000 GP for $50 real dollars and try to use them to pay for food, but they'll laugh at me, and neither I nor Blizzard can compel them to accept them. In fact, I can't even be certain that BLIZZARD will accept them outside of game context, and at any time they can more or less confiscate them in game context.

Part of my confidence in real money is the fact that it isn't terribly easy to forge, there are heavy penalties for forgery, there are armed men who actively pursue forgers, and it says right on the notes that you have to take them if I try to by food with them (or armed men will come and punish you). Even with this not particularly veiled threat of naked violence, forgery is common, fraud even more common, and there are hundreds of ways one can lose one's money without recourse. If bitcoins are ever accepted as currency and then defrauded, who will enforce their value? What recourse will you have? Pretty much only the recourse a powerful, permanent institution like the U.S. Government chooses to give you, unless there are open-source strong men who will come to your house and beat you up or jail you for forging them or defrauding people in to thinking that you are transferring them.

rgb

Re:What's the exchange rate...

[fastest fascist]

I'm not aware of a permanent exchange for WoW gp - BTC, but someone recently sold 80,000 gp for 65 BTC. I don't know what WoW gold generally goes for, but I'd expect the exchange rate to be about the same as if you bought with USD, taking into account the BTC/USD rate. As for WoW gold's viability... I'd rather not take a currency run by a private company, thank you very much. The moment Blizzard either go under or decide to shut down WoW, that gold is worthless, or at least will plummet in value. Also AFAIK they can make as much as they like.

Re:What's the exchange rate...

[fastest fascist]

actually, scratch "plummet in value", since the gp doesn't exist outside WoW AFAIK.

Yes I can answer

[this great guy]

Bitcoin's existence is essentially technically insuppressible at this moment: it is fully peer-to-peer, there is no central server or company that can be shut down.

The only risk is social: in other words people could simply lose interest in it. But its network strength (hash rate) has demonstrated a remarkable exponential growth recently. It has doubled every 27 days, continuously, in the last 15 months: http://blog.zorinaq.com/?e=49 This implies, of course, popularity. So I would say it is very improbable for Bitcoin to just disappear tomorrow.

Re:Yes I can answer

[i-linux123]

I think it implies curiosity and early speculation. They're claiming free money here, after all ...

What is bitcoin [video]

[this great guy]

Here is a video, for non-technical persons, to help understand Bitcoin:

http://www.weusecoins.com/

It was just made very recently (today!)

Re:What is bitcoin [video]

[thatwouldbeme]

Mod parent up--this is a seriously professional production, and it was funded through an online Bitcoin bounty to boot. Digital currency in action!

Re:What is bitcoin [video]

[bemymonkey]

I still don't get it.

1. What is a coin worth when you can "grow your own"? Absolutely nothing.
2. The video makes it seem like the bitcoin generating process is some kind of decoding process... does this mean that more powerful hardware is capable of generating bitcoins more quickly?

Re:What is bitcoin [video]

[this great guy]

1. Bitcoins are so hard to generate that 1 BTC is worth about 0.80 USD currently. http://bitcoincharts.com/markets/
2. Correct. More powerful hardware (GPUs) generate more Bitcoins. Serious miners have farms of Radeon HD 5970.

Re:What is bitcoin [video]

[compro01]

1. It operates via proof of work. Finding a valid block requires a lot of processing time and having found a block is proof that you did that processing. Mining doesn't just generate coins, it processes transactions, which makes the whole thing work. The rewards for finding blocks is currently just to bootstrap the system. Over time, the rate coins are created at will fall (the number of coins awarded per block (called a subsidy) found halves every 210,000 blocks, which should occur about every 4 years. It will happen for the first time about 2 years from now, at which point new blocks found will award 25 BTC, rather than the current 50. 4 years after that, they will award 12.5 BTC, and so on) and then eventually stop with just under 21 million coins in circulation, about 22 years from now. Leading up to and past that point, miners will be rewarded for mining primarily and then exclusively via transaction fees rather than subsidies. The first miner to find the next block will earn the transaction fees for all the transactions in that block as a reward for helping to operate the network, much the same as a credit card company charges a small fee for processing a transaction, though the person performing the transaction controls the fee and can offer a higher fee to get their transaction processed sooner.

The worth of bitcoin is established the same way as with any currency, by being accepted as a medium of trade.

2. It's a hashing process. Basically, it takes the previous block's hash, a hash of the recent transactions, the current time, the current difficulty, and a nonce value, and finds the hash value of it, then checks if it is less than the target value. if it is, you just found the next block in the chain, and are rewarded if you were the first one to find it, and if you weren't first, you just confirmed that result. if not, it increments the nonce and tries it again until it is less than the target value (this process of hash-increment-check happens hundreds of billions of times per second throughout the network), then the process repeats itself with the newly found block and another set of transactions. This whole process occurs, ideally, once every 10 minutes.

As for the second bit, short answer, yes, long answer, yes, but. The more processing power you have, the faster you can do the above process, and the better your chances of finding the next block before someone else does. But the system automatically adjusts for the total network processing power via the difficulty (which is derived from the target value. the lower the target, the higher the difficulty). It tries to maintain a rate of 2016 blocks every 2 weeks (which is 1 block per the previously mentioned 10 minutes). If a bunch of processing power is thrown into the network (like what happened the last time bitcoin got mentioned on /. earlier this month and as is probably happening now), at the next 2016 block mark, the target value will be reduced and the difficulty rises to maintain that rate. If a bunch of people leave (as they lose interest or whatever), the target will be raised and difficulty will fall.

Re:What is bitcoin [video]

[bemymonkey]

"Mining doesn't just generate coins, it processes transactions, which makes the whole thing work."

So the processing power is actually put to use in the underlying system, and not just wasted? Or is it as useful as a WoW nerd grinding to the highest possible level?

Re:What is bitcoin [video]

[compro01]

"Mining doesn't just generate coins, it processes transactions, which makes the whole thing work."

So the processing power is actually put to use in the underlying system, and not just wasted?

Correct. The subsidy (then later, the transaction fees) received for generating a block is a reward for providing the processing power to operate the system. As I said, the subsidy that everyone current mines for is just there to bootstrap the system by gradually introducing the full quantity of bitcoins.

Generating a valid block and adding it to the block chain basically adds all the transactions in that block to a permanent record of every transaction that has ever occurred, like a massive accounting ledger. You can peer at this conveniently via the block explorer site (http://www.blockexplorer.com).

Bitcoin already bootstrapped itself

[this great guy]

You are correct that bootstrapping a currency is the most difficult step. However it appears to have done just that: it went from zero to hundreds of merchants in a little over a year: https://en.bitcoin.it/wiki/Trade

Of course, there is still a long way to go (most of them are individuals or very small shops), but the very fact it has already grown so quickly and so fast is very encouraging. It was possible because of its truly unique and revolutionary features that really no other currency provide, notably the combination of: absence of middlemen, anonymity, cryptographically irreversible money transfers.

I like to tell people that when they first hear about Bitcoin, they will either instantly dismiss it as something that could never work, or they will immediately understand its large potential :)

Enriching the early adopters, transaction fees...

[Anonymous Coward]

Call me a man with a grudge, but I don't want the first group to succeed.

As for the second part of the subject line, this is one problem with how the system will eventually be supported. Another would be the delays involved in verification. Yet another would be wallet destruction/hijacking. Both of the latter can be solved by someone acting as "bank", but at that point, I'd rather keep using the USD.

Hey, though; I guess the CP rings need their own currency.

Re:Enriching the early adopters, transaction fees.

[unity100]

i would call you a man with no brains - early adopters had basically 'made' the bitcoin network. they are the ones who helped it gain traction, while you were sitting on your ass. if you are jealous, you should have adopted bitcoin at the start like them. they deserve the coins they got, because they contributed to the system at the most critical moment.

BitCoin on Security Now

[Anonymous Coward]

Security Now podcast episode #287 was entirely on the BitCoin system, and how well designed it is.

Re:Enriching the early adopters, transaction fees.

[Lehk228]

Regardless of whether or not early adopters "deserve" to be rewarded, the fact that they got bitcoins easier than newer entrants provides a strong disincentive for people to join the bitcoin network.

Re:Enriching the early adopters, transaction fees.

[unity100]

the point of network is to provide an exchange currency. not a means for making money. the people who adopt the network, should be adopting it for the exchange currency already. you are not supposed to make any coins out of thin air, unless the network is small and needs help.

If I had a dollar

[degeneratemonkey]

If I had a virtual dollar for everyone in this thread who has no idea how BitCoin actually works...

Privacy concerns?

[Solandri]

From the FAQ at the bitcoin site:

A: Bitcoin utilises public-key cryptography. A coin contains the owner's public key. When a coin is transferred from user A to user B, A adds B's public key to the coin, and the coin is signed using A's private key. B now owns the coin and can transfer it further. A is prevented from transferring the already spent coin to other users because a public list of all previous transactions is collectively maintained by the network . Before each transaction the coin's validity will be checked.

Re:Privacy concerns?

[MikeyO]

Yes, there is a public list of all transactions. But it is transactions between bitcoin addresses. You don't have to make public that you are the owner of a bitcoin address. You can create new bitcoin addresses at will.

Re:Privacy concerns?

[compro01]

The public transaction list is "address A sent X BTC to address B". Addresses are not necessarily linked to any one actual person, as you can generate new addresses whenever you like and shuffle your bitcoins between them. Some people generate new addresses for each transaction, making it very difficult for an outside observer to figure out who actually sent money to who.

How to 'mine' bitcoins

[lucifron]

Thought I'd write up a quick 'getting started' guide for anyone that wants to give bitcoin mining a go:

#1 - Download the bitcoin application from bitcoin.org, install and fire it up. It will connect and sync with the p2p network, downloading approximately 114700 blocks.

#2 - Download and install the OpenCL driver for your graphics card / OS.
You might also need the full SDK, my drivers were supposed to include OpenCL support, but the GPU miner still didn't work. For AMD/ATI cards, this link should work:
http://developer.amd.com/gpu/AMDAPPSDK/downloads/Pages/default.aspx

#3 - Download and unpack "PyOpenCL bitcoin miner" somewhere. You'll find windows binaries here (7zip-compressed):
https://github.com/m0mchil/poclbm/downloads

#4 - Using the bitcoin client, create a new 'receiving address' which you call 'mining income' to track payments.

#5 - Sign up for a mining pool. You'd rather have a few cents an hour than wait months for a random shot at 50 BTC. I'd go with:
http://www.bitcoinpool.com/newuser.php
as they're free, while the others charge a fee of 2-3%. Wallet ID is the thing you created in step 4.

You'll find the other pools here:
http://www.bitcoin.org/smf/index.php?board=14.0

#6 - Stuff the following into a .bat file and run it. Might want to try from the console first, to make sure all is ok.

start /DD:\bin\bitcoin\poclbm poclbm.exe -f 60 --host=bitcoinpool.com --port=8334 --user=username --pass=password -d0 -v -w 128

This of course assumes you're on windows, and installed to a directory named d:\bin\bitcoin\poclbm..

Setting the f options to a higher value will cause less stress on your system. 30 is the default, shoot for 120 if your screen is lagging too much.

The d option is the device id of your graphics card. Mine's device 0, it could also be 1, 2 or whatever.

If the above worked, you should see a console window containing output like this:

23/03/2011 17:18:55, long poll: new block
23/03/2011 17:19:27, b15bbc4d, accepted
23/03/2011 17:19:47, 97f98213, accepted
23/03/2011 17:20:04, 2a8d658f, accepted
23/03/2011 17:20:15, 96fd6e6e, accepted
160772 khash/s

Re:How to 'mine' bitcoins

[compro01]

Even simpler, there's a GUI version of that miner, though I can't link to it as the forum is slashdotted.

Though an additional note, your GPU will need to support GPGPU processing. That means at least an 8-series nvidia card or equivalent ATI/AMD (not sure on exact model)

Re:How to 'mine' bitcoins

[Anonymous Coward]

The GUI version can be found here:

http://www.bitcoin.org/smf/index.php?topic=3878.0

You'll still need OpenCL drivers such as these for AMD/ATI:

http://developer.amd.com/gpu/AMDAPPSDK/downloads/Pages/default.aspx [amd.com]

Good good.

[Anonymous Coward]

Now all I need to do is convince my peers I am a millionaire.

Check BitcoinPool.com is you want in on the action

[Anonymous Coward]

BitcoinPool.com is the newest pool for the bitcoin network. It's not like the traditional pools that penalize you for leaving them if you don't like it. You can join hundreds of others in the effort to mine (digitally) for bitcoins, and it's nice because it's free to start using. I've made about 30 bitcoins so far. Not a bad deal at all.

Re:Check BitcoinPool.com is you want in on the act

[golden0669]

be careful which pool you choose to participate in. some of these pools may look good, but delay their stats and have been suspected of ripping off those who participate. it seems that the bitcoinpool.com is the only one that has fully transparent statistics for every user and doesn't delay their stats pages, which keeps everyone honest. Another important point is that you should start mining today before the value of bitcoins drops from 50 to 25. This will happen in about another year or so, which means the gold rush is still on!! Start mining if you haven't before it's too late.

Botnet master's wet dream?

[Anonymous Coward]

It should be called Botnetcoin.

Transaction insurance, NOT FEES

[Baldrson]

The idiots who want transaction fees don't get it: The whole point of a peer-to-peer system is to eliminate middle man rent-seeking. There is, however, a reasonable service that some might confuse with a "transaction fee" and that is transaction insurance. Transaction insurance is just a scaled down form of title insurance everyone is familiar with who has ever purchased a house. The transaction insurer is simply someone who underwrites the risk for one of the parties that a transaction will go bad. There is no need for the transaction to go through the transaction insurer, nor is there always a need for transaction insurance. Get rid of the bozos who are blithering about transaction fees NOW.

Re:Transaction insurance, NOT FEES

[Baldrson]

Look around at the confusion about "transaction fees" I noticed that some people actually are, as I expected, offering transaction insurance (reducing the risks of a transaction for a fee) and not bothering to differentiate it from a catch-all "transaction fee". That is, at best, bad advertising.

But looking elsewhere there appears to be a built-in real, physical, cost to transactions that is a result of the computation work (ie: energy, eg joules... kWh... ftlbs... etc. as well as machine time) that must be invested. This is an engineering problem -- meaning that a better-engineered system would accomplish the same level of secured functionality at lower real costs. The real financials here aren't mapped out clearly enough in terms of computational complexity but it seems clear that the rhetoric around "transaction fees" is trending toward favoring large scale computing, which would subvert one of the main virtues.

Bitcoin is for Robots, Time is for Humans

[Anonymous Coward]

Bitcoin is dependant on processing power of a comp as I understand.

People operate with time, Why not starting a distributed Time Bank ?
Units of time could be used as a currency too !
Denomination is easy and everybody can relate to it.

Example:
1 Liter of Milk costs 0,1 Hours.
I will pay 3 hours from my time account per 1 hour of your work for programing this Time Bank.

The records of Time accounts need to be decentralized in the cloud that is similar to bitcoin.

~Best Regards epSos.de

I will attain an erection

[Anonymous Coward]

When this currency fails.

Goldbugs

[Anonymous Coward]

It appears to be a bunch of lolbertarian goldbugs