Slashdot Mirror
Could Bitcoin Go Legit?
Velcroman1 writes "On May 15, the Department of Homeland Security seized a digital bank account used by 'MtGox,' the world's largest exchange, where people buy and sell bitcoins. DHS alleged, and a judge agreed, that there is 'probable cause' that MtGox is an 'unlicensed money service business.' If proven, the penalty for operating such a business is a fine and up to 5 years in jail. FoxNews.com caught up with several bitcoin exchanges, including CampBX, MtGox, CoinLab and more, to ask them how they've navigated the regulatory waters — and how to go legit." In other shady bitcoin news, it appears the demise of Liberty Reserve has caused hackers to find a new alternative. twoheadedboy writes "Despite suggestions Bitcoin might be the ideal currency for dealers on the dark web, it appears Perfect Money, a Panama-based operation, is proving the most popular alternative to the now-defunct Liberty Reserve. A source working the underground forums told TechWeekEurope that, for now, fraudsters are rapidly migrating to Perfect Money. Many vendors have started accepting it, having previously primarily used Liberty Reserve, which was shut down following the arrest of its founder and four other members this past week. Internet fraudsters might be interested in Perfect Money as it has distanced itself from the U.S., cutting off all new American registrations. However, one forum user said he was turned down by Perfect Money as their 'type of activity is not welcome.' Other currencies may yet win out."
Bitcoin, whether you are a believer in government funny money or not, is a legitimate currency, like any other currency that is used as a substitution or a value representation for goods and services.
Also, the economic impact of Bitcoin is huge. People are spending millions developing ASICs to mine what bitcoins remain, even though more than half of them have already been awarded and it endeavors to be a scarce new resource. And, it's still barely profitable to mine with GPUs, so that is also a thriving industry.
I, for one, am waiting for the Bitcoin GPU bust when the ASICs come out in volume and used GPUs flood the market for cheap as people scramble to buy ASICs.
Like it or not, there are people who accept BTC as payment for goods and services, and there is a somewhat thriving market for them. That is legitimacy.
http://forum.feathercoin.com/index.php?topic=1059.0
[IMMEDIATE ACTION NEEDED] Post some Feathercoin Love over at Slashdot
Looks like crypto-currencies are to be the new pyramid scheme/multi-level marketing. BitCoin has a chance because it was the first of it's kind, so people were all going to choice it. A million new crypto-currencies will never take off.
"Legit" is a meaningless qualifier. If a currency is legitimate when it can be exchanged for goods and services, then Bitcoin is already legit. If a currency is legitimate when it's approved of by your government of choice, then no, Bitcoin will never be "legitimate". If that's your definition, though, the real question is "why is legitimacy necessary?"
What will happen is probably what has already happened to other areas that have been persecuted by the US government at the behest of incumbent industries: they'll just move off-shore.
Just because you're paranoid doesn't mean there isn't an invisible demon about to eat your face
In fact I guess most virtual currency schemes are inherently less pyramidal and electricity wasting than bitcoin.
OTOH those things I perceive as shortcomings make bitcoin more popular (at present) for "opportunity driven" people.
---- MISSING MISCELLANEOUS DATA SEGMENT --- [sigdash] trolololol
The main reason is that laws will keep moving to outlaw all companies behind it at all cost. The ones that control the law don't want anything looking like a currency outside their control.
The key thing to understand about government-backed currency is this: You have to pay your taxes in them. If you don't, said government can and will force you to do so. The government may also force a creditor to accept your currency to pay whatever debt you may have. In other words, it's backed up by the long arm of the law, and has value because if you choose to ignore its value guys with guns will show up to help explain the situation to you.
By contrast, Bitcoin is backed by absolutely nothing. It has no inherent value, and unlike government-backed currencies there's no use of force to back it up. In Hyper-inflation World that many Bitcoin enthusiasts think is America's future, you still have the guys with guns to demand that you use dollars to pay for certain things. By contrast, if Bitcoin goes belly-up, you have nothing except a bunch of bits that are of no use to anyone.
I am officially gone from
I'm curious about something, maybe the community here can point out an answer.
There's a sizeable audience of slashdot readers that are interested in the technical aspects of digital currency, the economic aspects of using such currency, the legal aspects of such currency, the social effects of using such currency, and it's importance in combating tyrrany (the political aspects of such currency).
It would appear that some techies realized that currency control is a tool to unjustly oppress people, and decided to do something about it. The engineering (ie math) seem to be solid, the economic rationale is logically sound (more so than standard economic mantras such as "a little inflation is good"), and the potential to protect human rights is enormous.
What we have here is a rare example of people recognizing a problem and doing something about it.
Despite this, all early posts are negative. Paraphrasing, "Oh, look, it's the weekly Bitcoin post", "Bitcoins will never rise to the status of a real currency", "it'll never work because you will never be able to pay US taxes in bitcoins", "it's a joke", "it's a scam", and so on.
So far (relatively early) there are about a dozen dismissive articles, all by anonymous coward.
What's with BitCoin? Why all the negative press? I've seen no named commenter put forth a rational argument as to why it won't work - that can stand up to logical scrutiny. All arguments so far have been handily shot down by subsequent responses. (You're welcome to try, though.)
Does the government hire astroturfers to guide discussions on this site for selected topics or something? (I'm not saying that there is - I'm asking if this is a well-known fact and I missed it.)
Why all the unfounded dismissive posts about BitCoin?
Pretty much :) It remains to be seen whether litecoin will turn out to be more secure than bitcoin in the long run, but at least scrypt vs sha256 is a significant difference. Feathercoin is just like BBQcoin and all the other pump-and-dump alt coins. They seem like a joke to me (some of them actually started out as a joke), but there are idiots out there that still mine them and trade them. It makes no sense.
You do realize Litecoin wasn't the first scrypt coin right? Could you please explain AC your pump-and-dump theory when Feathercoin has one of the most active alt coin communities?
Idiots
Pump-and-dump
Joke this, joke that
It's no wonder the 'hardcore' crypto community is often seen as kids just hitting puberty. Come spend a few minutes in our forums and form an opinion.
That is exactly the biggest weakness of these things. The goal of an electronic currency isn't to "make money mining"; it's to create a medium of exchange.
Only criminals and terrorists have any need for an alternative, secure, somewhat anonymous, non-government-controlled
"Need" has nothing to do with it.
I count as neither a criminal[*] nor a terrorist, but recognize the ongoing dilution of US currency by (currently) 83 billion dollars a month (and that just from a single source!). I recognize that the government acts only in slightly better faith than the likes of Paypal, randomly seizing the assets of anyone it deems big enough to bother but weak enough not to fight back. I recognize that today's donations to a group of brave "freedom fighters" (c.1980, Taliban-vs-Soviets) becomes tomorrow's financial support for a "terrorist organization" (c.Now, half the planet including PETA).
People have a million and one reason to use an anonymous non-nationally-controlled currency. They have only corporatocratic protectionist laws against doing exactly that as a reason not to do so. And if that makes me a tinfoil-hat wearer, well, hand me my complimentary beanie, because GS' pet Geithner has the Aluminum-foil market cowering in Detroit begging for mercy.
* Insomuch as any of us can make that claim, given that we have a legal structure designed such that any of us, at any given time, have committed some crime TPTB can use to make us disappear for a very, very long time.
Valid question. I find it interesting that Litecoin gets a pass on this exact question. Litecoin's "innovation" was adding scrypt, however, there were coins before it that used scrypt. If you follow Coblee's original launch post, Litecoin's biggest difference was the number of coins and the fair launch. Somehow a new crop of alt currency enthusiasts missed that transition.
Aside from our 504 block retarget (max of 41.4% difficulty change), we have a strong network of miners/developers available on the official forums. We're completely revamping the client, adding in new protections and are community driven. We have 11 different leads running groups ranging from development to merchant services. We have a development group that's putting together test coins for us to experiment. It's a different feel, we're heading in a different direction than BTC/LTC.
While I'm looking forward to the new client features, I'm more excited about the direction we're taking involving musicians and gamers.
, but recognize the ongoing dilution of US currency by (currently) 83 billion dollars a month
And yet you do not recognize this as the feature that it is.
http://www.usinflationcalculator.com/inflation/current-inflation-rates/
Despite the (virtual) printing of ~83 billion dollars a month the dollar is not magically dropping. Liquidity trap and all that. The ability to print more money as needed is a *feature* of the system. Any currency where you cannot do this is seriously lacking in long term sustainability and is essentially only a pyramid scheme for early 'investors' and currency manipulators.
People have a million and one reason to use an anonymous non-nationally-controlled currency
Sure, move the ability to manipulate to an unregulated self interest rather than a fiscal and monetary based system balanced by elected officials and shareholders. Brilliant.
But yes, there are millions of reasons to use a currency other than your own governments, and mostly that boils down to various iterations on 1: business in that country. 2: to avoid tax. 3: to evade tax or 4: illegal sale of goods.
I recognize that today's donations to a group of brave "freedom fighters" (c.1980, Taliban-vs-Soviets) becomes tomorrow's financial support for a "terrorist organization" (c.Now, half the planet including PETA).
This doesn't really change anything. Paying taxes to the US government while it was invading Iraq and torturing people was supporting terrorism too. Whether you had to pay in bars of gold, gold certificates, a fiat currency or something else you still had to pay it. Whether you have a bitcoin being donated or a slab of US dollars you anonymity is not impacted particularly. You only know who controls the value of one of those though.
I want to make sure I understand your thought process.
1. Create new crypto mining scheme
2. Mine lots of early, practicially free coins
3. Increase mining complexity
4. Convince everyone this is the next big thing
5. Watch dollar value soar
6. Cash out your free coin for real money
7. Leave suckers with worthless bits nobody wants for anything
Or in short, why be a peon in BitCoin when you can be king of a new currency?
Live today, because you never know what tomorrow brings
"Magically", so everybody please pay attention. The poster I am replying to believes in magic, because that's the only way he thinks the dollar would be 'dropping' in case of printing - just by magic.
Tell me, oh the wizzardly one, why does the government even bother with counterfeiting laws at this point?
I'll tell you: they don't like the competition.
Printing 85 Billion a month is inflation by definition, what you don't see is WHERE it's going, where the inflation is causing the bubbles to appear, but just because YOU don't see, it doesn't mean there is no inflation.
There is inflation, MASSIVE inflation in the gov't bond market, in the stock market, some inflation is spilling into the housing market again, plenty of it is going into the 'education' market. Plenty of it is going into the various commodities markets and the foreign markets that are providing USA with its consumer goods are absorbing that inflation by responding with money printing of their own and buying up all the extra supply of the dollars.
But it's already collapsing, even before you realise that there is inflation, it's already collapsing. The interest rates in the bond market are going up, the Chinese are buying up USA properties and companies, dumping the collected dollars back INTO USA, and of-course just like with the last bubble that burst and then all these people on TV and in government said: nobody could see this coming, same thing is going to play out this time.
It's going to be a much more spectacular collapse this time, you are going to notice it when it really implodes, but until that, just like Ben Bernanke, the Federator, you think that dumping dollars from the helicopters actually achieves anything BUT inflation.
are millions of reasons to use a currency other than your own governments
- yes, being a free individual, free person that's the main reason.
Of-course people trade currencies for gain all the time, and it has nothing even to do with 'evading taxes', not that taxes shouldn't be avoided and evaded in the first place, anybody paying taxes is destroying the economy, not helping it.
The government wants to fund something? Let it cut the spending it already has.
You can't handle the truth.
Exactly. It's like pyramid schemes. Why join at the bottom when mathematically you're bound to be a loser when you could kick off a new pyramid scheme, populate the top 3 layers with phony / shill names and then cash out with enormous fortunes long before the thing collapses.
MLMs and pyramid schemes also have active communities behind them too, all VERY enthusiastic to recruit new "investors". Doesn't mean it's a sound idea to invest in such things. Same for bitcoin et al. Their communities comprise miners who cheaply mined out coins and now want to see the value of those coins increase. Can't trust a damned word they say on the subject.