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.
I thought that Bitcoin must have ceased operating when there stopped being a slashdot story about them every day.
Is 1563649 a prime number?
And not a single fuck was given that day.
If everyone actually stopped fucking for a day, that would be huge news. (To everyone other than you)
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.
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
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.
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
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"
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/
How can I short this currency?
Right over here: https://bitcoinica.com/
Be careful. Volatility cuts both ways.
There's no reason it can't exist as a niche currency
OK, I'll grant that -- Bitcoin might live on as an obscure, niche currency with extremely limited utility. Not even the black market users will stick with it in that case, and perhaps people will realize that there are more effective digital cash systems out there that could be deployed in a way that benefits society (not just the black market).
Palm trees and 8