Slashdot Mirror
Major Bitcoin Exchange Ceases Operation
First time accepted submitter Sabbetus writes "On Monday the CEO of prominent Bitcoin exchange Tradehill announced that they are shutting down. Ars Technica ran a story on this stating that 'After Monday's news, the currency's value fell from $5.50 to $4.40, a decline of 20 percent.' Tradehill is returning all funds and meanwhile their competitors are fighting over who gets Tradehill's customers."
Not sure where that came from, didn't find it in the Ars article. At the end they mention Mt. Gox being the only other exchange ... so there's one competitor. They didn't mention anything about fighting over customers.
Furthermore the third sentence in the Ars article was suspiciously absent from the summary:
He has pledged to open a new site once these issues have been resolved.
As well as the explanation of why all this happened (lack of proper money transmission licensing). I've asked this many times before but how do you track illegal purchases on BitCoin when, by definition, it claims to be an anonymous payment solution?
Quite simply put, no BitCoin exchange -- neither Tradehill nor Mt. Gox -- is going to be able to comply with the Bank Secrecy Act.
My work here is dung.
And not a single fuck was given that day.
I thought that Bitcoin must have ceased operating when there stopped being a slashdot story about them every day.
Is 1563649 a prime number?
Who didn't see that coming?
/snark
Actually, you can do all but the beer. Several whitebox outfits take bitcoin. And there are vice e-bay clones for the drugs and smokes...
And nothing of value was lost.
Tradehill was never a major Bitcoin exchange.
MtGox is the only one anyone ever used. Tradehill was started by some guy who got mad that MtGox was raking in the cash. He started throwing out accusations about security holes, the owner (of MtGox) not actually having all of the BitCoins backing his market, etc. Then he threw up Tradehill and it was shit.
All Bitcoin exchanges are shit. They're for speculators. Bitcoin as a currency is fine, and it will be fine if every exchange dies off.
The loss of Tradehill and the security breaches of other exchanges disrupted the confidence in using Bitcoin, but the protocols remained intact. I see this as a testament to the design of the system, even though a fundamental quality for any currency is the confidence of its users.
As a Bitcoin lurker (I've never owned anything more than 2 BTC), I've been intensely fascinated in the potential of this "currency." Without belaboring the great qualities of a decentralized currency, it has attracted a speculative class of users that have rushed into centralized exchanges using nervous money transmission providers. The irony is not lost on me.
Tradehill's departure and what I believe will be an eventual international agreement hobbling Bitcoin's biggest exchange Mt. Gox in Japan (a la UBS in Switzerland), due to tax evasion, ought to serve as a cautionary note to Bitcoin users. Money transmission is a confiscatorially regulated practice. Bitcoin's best hope ought to be transactions as decentralized as the protocol it uses.
Lurkers such as I can only hope of an ecosystem or application so widespread, so diversified, secure enough, and easy to use before Bitcoin can be considered useful to most internet users. I dream of a decentralized Facebook knock-off (e.g. diaspora*, etc.) with a Bitcoin client built in, making currency transmission as simple as tossing a dollar to a friend to buy a cup of coffee. Perhaps even at a coffee shop with patrons casually swapping US$ and BTC as they play chess or read.
You're not that far off the mark.
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
Money is not fiction, it is a mechanism that governments and banks can use. Dollars not valuable simply because people believe they are valuable, they are valuable because the US government requires a large group of people to use dollars (i.e. to pay taxes and other debts). People believe dollars are valuable because all the tax-paying and otherwise indebted citizens around them demand dollars as payment, because they need those dollars if they do not want the government to take their property or freedom. As long as people agree to be governed by the US government, currency issued by the government will have value.
Nobody is required to use Bitcoin, which is why it is so volatile (its value is based entirely on speculation) and will ultimately fail (as people demand dollars and other currencies more than they demand Bitcoin).
Palm trees and 8
What you are really saying is "I don't believe in bitcoin". Other people do, however, to the tune of $40 million USD.
If you treat BitCoin as an experiment in electronic currency without a central bank, I would say it is worth it just to learn what works and does not work. Money has been getting ever more electronic over time, and we should have some idea how the fuck it works. Second Life is another experiment in electronic currency. It has a total money supply worth $27 million, convertibility back and forth to dollars, and a large market of goods people buy and sell. It may be a toy sized economy compared to the rest of the world, but it's better to experiment and make mistakes on one of those, than, say, Greece.
Tradehill was probably the best-run Bitcoin exchange. They didn't steal customer funds, like some of the other defunct Bitcoin services. They didn't go down much. They didn't have a monthly crisis like Mt. Gox. (formerly Magic, the Gathering Online Exchange. Really.) If Tradehill does in fact return all customer funds, at least they shut down honestly.
A basic problem with Bitcoin is that the ability to irrevocably transfer funds to anonymous parties is the scammer's dream. Bitcoin is thus a scammer magnet. Just about every known financial scam was replicated in the tiny Bitcoin world, from fake banks to fake stock exchanges to Ponzi schemes.
Weed? Give me a break, the biggest political attack on Bitcoin so far is because you *can* buy weed with it.
Buying most of these online might not work for you, but for what it's worth, one of my friends buys beer online with the coins he mines. Belgian Flavours shop accepts Bitcoin AFAIK. You can buy PCs and all kinds of electronics for sure. Not sure how competitive the prices are though, at the worst case you can buy vouchers for more popular sites. Smokes, yes, there are a multitude of shops for tobacco products, including e-cigarettes. Prices for these sort of products are really competitive.
All Bitcoin exchanges are shit. They're for speculators. Bitcoin as a currency is fine, and it will be fine if every exchange dies off.
Without speculation, Bitcoin is worthless. The only reason anyone has ever accepted Bitcoin as payment for anything is because they believe they can redeem Bitcoin for some other currency later on -- something which there is never any guarantee of (compare to private currencies that are backed by national currencies). This is in stark contrast to national currencies like dollars, which people must have if they intend to pay their taxes (which they must do if they intend to legally own property, hold a job, etc.). Nobody actually needs to use Bitcoin, no governments accept Bitcoin for tax purposes, no banks accept Bitcoin as a repayment on debt, and its technical advantages as a digital cash system are neither unique nor anything close to a justification for its value.
When Bitcoin exchanges die, Bitcoin will die too. If people cannot buy into the system or cash out, the system will come grinding to a halt.
Palm trees and 8
Many of them. The US dollar is traded on all international currency markets and for a small scale, any bank will convert them. If it weren't, it wouldn't be very useful. If I pay someone in Europe in US dollars they are ok with that because they can convert them to Euros, which is what they need to do their business. If they couldn't, if US dollars were non-convertible, they'd be non-useful.
Also you have the problem that next to nobody accepts and deals in bitcoins directly. It isn't a functional currency. The US Dollar, the Euro, the Yen, these are all functional currencies because a lot of people will accept them as such. You can buy goods with them, pay taxes with them, etc. I cannot name a single thing I'd want to buy, a single place I shop at, that takes bitcoins. As such if they aren't convertible, they are worthless.
Useful digital cash systems involve a central issuing authority like a bank or government, that can accept old tokens and produce "fresh" tokens of equal value. Having such a central authority is not a bad thing:
It is a good thing that nobody is obligated to use BItcoin to pay their debts, because:
So there you have it.
Palm trees and 8
I figured it would have imploded months ago.
That's my bet. One (or maybe more) of the Slashdot staff was in to bitcoins. They mined them, bought them, whatever. So they had an interest in getting people in to them so the value would go up and they could make money. Now they are out of it so they don't give a shit, no reason to pimp it anymore.
Plus it was a fad, and its time has come and gone. While it isn't dead, the days of "big money" are gone. It lost a shit ton of value, the miners aren't making much, etc, etc. The virtual gold rush is over, so it is a non story. It'll just slowly fade in to obscurity as time goes on.
It takes about 1-3 days to take money from the legacy currency system and put it into one of these exchanges...so even if the price suddenly drops those who know it's a good deal have a bit of a delay, hence a lot of the 20% bounces.
GENERATION 26: The first time you see this, copy it into your sig on any forum and add 1 to the generation.
Even if it wasn't a pump and dump scheme it was doomed to failure as a currency for one simple reason: Built in deflation.
The total number of bitcoins that can ever exist is finite, and as time goes on they get harder and harder to "mine". So as such, deflation is just built in to the currency, if it were ever adopted on a wide scale.
While this is something that plenty of Internet 'tards who have no understanding of economics think is great "The money I have will be worth more!" anyone who knows economics knows that deflation is an economic killer. Money has to be spent to be useful and deflation encourages hoarding. It creates a vicious cycle.
Hence the reason why all it will ever be used for is pump n' dump or the like because it cannot be used as a useful currency.
Willfully or not, bitcoin is just another variant of pump'n'dump.
When it hasn't gotten any media attention for a while, and it suddenly gets some attention, the price goes up for a small time, and then it drops like a stone again.
Just stop acknowledging bitcoin's existence. Stop giving that silly hate crime any attention.
Please. It really hurts to see so many people get scammed.
but it's better to experiment and make mistakes on one of those, than, say, Greece.
True that working small is a good way to test. But the Greece analogy isn't very good. That wasn't about the form/format of money or the exchange thereof. That was about spending than you can afford and don't have the will to produce ... which is just as bad when you're on a barter system as when you're on a currency system. Entitlement mentality killed the Greek economy, not the ebb and flow around currency mechanisms.
Don't disappoint your bird dog. Go to the range.
If Bitcoins were a national currency its population would be protesting... a 20% overnight drop would be business news if this currency had enough people caring it existed. These money-like substances always seem to fail resulting in no payout to those holding the bag. Nothing left to see here, move along.
Sure. But Bitcoin isn't a major reserve currency. It's current size is like a tiny stock, and volatility is expected at that scale.
Unlike the corporate micro-currencies (Beenz, Flooz, whatever), Bitcoin doesn't suddenly go under and not pay out. Bitcoin is volatile, but it's still liquid - if you want to trade back to dollars, you can do so at market rate on any of several dozen markets.
Bitcoin's not for you if you don't want to deal with volatility, but it has very different properties than any other currency which does make it appealing to some people for legitimate reasons.
Actually, I used to really like bitcoin and never thought most of the arguments against it held much water, since they mostly ignore that all the fiction in bitcoin is the same fiction in other currency. All currency is fake, because its all an abstraction. Nothing wrong with that.
However, the more I learned about it and dove into it...the more convinced I came of this simple fact... a currency wants deflation because currency isn't intended to be a savings instrument. People hoard gold. People hoarded bitcoins. Hell, I gave in to that temptation, even as I started to see the reall folly in it.
Inflation serves a purpose though...I am very much with the bitcoiners still in not trusting governments to be the arbiters. Worst though, allowing a few private hands to do it. I don't trust the fed as far as I can afford to pay someone to throw them
I still ove bitcoin for trying. It was a good attempt, just like some of the good attempts before it...I hope there will be more...and the community will keep trying until something wins out.
"I opened my eyes, and everything went dark again"
Sorry.... inflation.... not deflation. Inflation is good (up to a point).
"I opened my eyes, and everything went dark again"
Bitcoin is a decentralised computer currency designed by self-righteous Ayn Rand-reading nerds who despise looters and parasites like, er, you. It is used to purchase Internet services, illegal drugs and pictures of naked women holding video cards.
Bitcoin works by an emergent synergy of cryptography, peer-to-peer, anonymity, anarchism, libertarianism, wasting stupendous quantities of electricity, the marketing department at NVidia, the enduring exchange value of tulip bulbs and doing all of this instead of Folding@Home.
Bitcoin successfully harnesses a hitherto-unexploited Internet resource: the vast reserves of unexamined privilege amongst computer programmers. Coins are “mined” by stealing them from people who are able to comprehend this level of computer science but still keep their Bitcoin wallet in plain text on a Windows machine.
The Bitcoin system is robustly designed to continue past the inevitable collapse of the US dollar and the world economy, as the Internet, fast computers and reliable electricity are all expected to be readily available when barbarian hordes are wandering the burnt-out post-apocalyptic remnants of civilisation.
It is completely incorrect to describe Bitcoin as a “pyramid scheme.” Technically, it’s a “pump-and-dump.”
Many common products are still inexplicably not purchasable with Bitcoins. “It’s like they don’t understand the revolutionary wonder of Bitcoin,” says Debian developer Hiram Nerdboy, 17. “I can’t get chicks with Bitcoins either. Even with my slickest Pick-Up Artist techniques! It’s as if my knowledge of economics, game theory and Bayesian epistemology didn’t substitute for understanding anything about people. But that’s impossible, of course. They’re probably just theists. Hold on, I just gotta post to Slashdot about this.”
Bitcoin was invented by Internet libertarians, in the spirit of freely-chosen individual interpersonal interactions that will bring about the utter collapse of the oppressive taint of the dead hand of government, in order to make money at your expense.
from http://newstechnica.com/2011/06/18/bitcoin-to-revolutionise-the-economy/
Sounds interesting, but I don't find anything about it on the wikipedia pages related to Dwolla and Bitcoin that I googled for.
Hey don't blame me, IANAB
> the marketing department at NVidia
At AMD, not NVidia. Unless someone wrote a miner that works on NVidia GPU recently ?
Zimbabwe should switch to Bitcoin. A 20% overnight drop in their national currency would be a cause for astonished celebration.
-- Using the preview button since 2005
Bitcoin is a perfectly good idea.. I use it regularly to exchange currencies, someone in one country buys bitcoins with his local currency and sends them to me, i then convert them to local currency. Doing this with bank transfers or paypal has massively higher fees for me.
http://spamdecoy.net - free throwaway anonymous email - avoid spam!
"Entitlement", as in "investors are entitled to have their gambling losses covered by taxpayer money"? Because that entitlement absolutely dwarfs any and all entitlements the common people in Greece received. And it's the same problem everywhere, including the US.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
And especially the creators. They have long since turned their fake bitcoins into real spendable dollars. Those of you that enabled them are tools.
Are you referring to things like the GM bailout? Investors lost pretty much everything, the government got a big chunk of the company, and the labor unions were given the rest as a huge political reward for supporting the administration doing the giving. Yeah, that's quite corrupt. But the reason GM needed bailing out in the first place wasn't the investors, it was the unions.
Don't disappoint your bird dog. Go to the range.
Which is funny, because it's the second largest exchange now after MtGox, the second longest after gox, and the only major exchange with no security compromises. Does no one know about them? Bitcoins biggest secret.
http://my.telegraph.co.uk/dublinclontarf
Consumer Electronics keep getting cheaper and cheaper. According to your deflation argument, no one would ever buy CE products.
The world economy currently relies on inflation. How's that working out, really?
it's in my head
A real exchange (e.g. like the CME) has the following important property: all participants have the exchange as an economic counterparty, not each other. That is you take on the credit risk of the exchange, which is presumably better than any individual participant.
This means that if X trades with Y on the CME, and X (as a broker) goes bankrupt before the money settles, the CME will pay Y, and then attempt to get money back from X. This actually matters sometime (cf MF Global). The exchange then has standards and capital requirements for its primary members.
This is the difference between an exchange and a price-matching OTC market, which facilitates individual point to point contracts.
Do the bitcoin exchanges have that property?
I don't know who approves all the stories (you could look at who posted them all since it's displayed on every one of them).
I can't really tell if you're being sarcastic, since *EVERYTHING* you listed is available for purchase using bitcoins. Bitcoin sites do tend to call the "new pc" a "mining rig" instead, but some places can even be seen selling them as pc's.
I think Zimbabwe switched to US dollars instead, which is much more stable.
Who the hell keeps approving all these bitcoin storys around here.
Someone near the head of the pyramid scheme who works for slashdot and got in early, I would imagine.
To have a right to do a thing is not at all the same as to be right in doing it
But the reason GM needed bailing out in the first place wasn't the investors, it was the unions.
Yes, because the unions both owned and managed GM, so obviously they called all the shots there.
You appear to live in some fantasy world where there was a socialist revolution in the US and the workers seized control of the means of production.
To have a right to do a thing is not at all the same as to be right in doing it
because the unions both owned and managed GM
You do understand, right, that you're completely incorrect on the facts? Private investors that used to own GM (some of which may have been employees or even union pension funds) LOST their investments in the bankruptcy. The unions were then given, by executive order, the gift of a large share of the company. The people who had money invested got no such consideration (mostly because they didn't organize to give the executive issuing such orders large amounts of political support during the campaign season).
Don't disappoint your bird dog. Go to the range.
I still say Gold and maybe Pelt are the way to go! Off course when the shit really end up hitting the proverbial fan clean water. paper toilet, and fuel for your Mad Max death squad will be all you really need!