Slashdot Mirror
Bitcoin Hits $400 Ahead of Senate Hearing On Virtual Currency
An anonymous reader writes "The value of bitcoin has surged through the $400 barrier for the first time, as unprecedented growth sees the virtual currency's value quadruple in just three months. Meanwhile, on 18 November, a Senate subcommittee is scheduled to hold a hearing on virtual currencies like bitcoin and its lesser-known competitors litecoin and altcoin. The hearing comes after a unit of the Treasury Department earlier this year issued guidelines stating virtual currencies should be subject to the same anti-money-laundering laws as traditional currency-transfer businesses like Western Union."
Yes altcoin is the best of the altcoins, there isnt an alternate bitcoin called altcoin, all alternatives are referred to as altcoins.
BTC is largely used for speculation and you know it.
The value of bitcoins is up at the news of a hearing that is probably going to make it illegal to do 95% of what is done with BTC? That makes sense.
1) It doesn't matter what the US government decides, if people want to use it it will be used. Reference: drugs, prostitution, illegal immigration, abortion, illegal guns, and other world countries.
2) People don't act because they have no alternatives. This is an alternative, but not many people know about it. High-profile senate hearings publicize BitCoin, so that more people will realize how useful it is, and this spurs demand.
3) There are no valid argument against BitCoin. There are economic "story telling" arguments, and predictive "doom and gloom by story telling" arguments, and false equivalences with closely related things (fraudulent exchanges, Silk Road, &c), and outright lies ("it's a Ponzi scheme!!!"), but no actually valid arguments.)
4) All the standard aphorisms apply: buggy-whip manufacturers, the invisible hand, liquidity, privacy and freedom.
BitCoin will become a game-changer (oh, that phrase!) simply because nothing can stop it.
That’s not exactly the issue.
There have been various schemes to avoid taxation and/or for criminal use. I.O.U.s, scripts, payment-in-kind, coupons, assets swaps, forward contracts, loan forgiveness gifting techniques, etc. Each of these techniques have legitimate purposes but at times are just way to circumnavigate the law.
If I swap my services for goods – US Dollars, BitCoins, an old car, credits towards baby-sitting – I have earned income that I need to declare at fair market value on my income tax. Now determining the fair market value for some of these goods are easier than others but the principal remains the same.
This kind of short-sighted answer is the problem with BitCoin backers.
Anti-money laundering laws and regulations are very important because they are what forces the systems that allow law enforcement to determine and sieze the proceeds of crime. Without such siezing, the incentivization of crime increases exponentially.
IE - say I rob a bank. If it is trivial for me to convert the money to bitcoin and transfer to a third party in an untraceable way, then my incentivization for robbing banks is now HUGE, because even if I get caught, I will still be able to keep my proceeds. Get caught robbing bank, go to jail for 10 years, get out, and buy your own island. Sounds like a good deal to me.
Bitcoins are NOT anonymous. Every transaction a particular coin is part of is irrevocably written to that coin for all eternity. So, it is only as anonymous as a person keeps their bitcoin wallet identity anonymous. Which is effectively impossible if you want anyone to say...send you bitcoins. Now tying a particular wallet address to a physical address or person is currently not inherently easy, though not impossible at any point where Bitcoins are turned into, or from, cash.
That is actually the crux of the Senate hearings. Essentially the FTC is asking congress to pass legislation that says that any service designed to exchange between Bitcoin and cash, be required to follow all the laws that other credit/cash exchanges (and a slew of other businesses) have to follow, a key part of which is properly identifying all the participants in the transaction.
So, MtGox,, etc. would be required to verify your name, address, credentials, etc. when you setup an account, so "You" can be tied to a specific wallet address when the Feds go snooping for illegal activities.
"Unheard of means only it's undreamed of yet,
Impossible means not yet done." ~~ Julia Ecklar
I've said this before, and no doubt I'll find the need to repeat it again in the future.
I'm very happy for you that you made some money from Bitcoin speculation. That's not sarcasm, I am genuinely happy that you made some money. The problem is that is really no way to judge whether it can be a viable alternative currency. People don't sit on their USD and hope to profit, they go out and buy stuff: that's what you're supposed to do with money. Right now all Bitcoin amounts to is a bunch of people sitting around hoping that they're on the right side of the greater fool theory.
Is 1563649 a prime number?
Remember back in high school where all the cool kids wanted alcohol because they were told they weren't allowed to have it?
It's the same thing. The US government is about to tell a bunch of nerds they can't have something, so they want it even more now.
What do I know, I'm just an idiot, right?
We should all like this Bitcoin *concept* even if we don't all like Bitcoin itself or the culture that has evolved around it. Yeah, I know it's the "fad" to bash Bitcoin. But it's disappointing, because Bitcoin represents everything that us nerds reading slashdot should like: It's a mix of cryptography, freedom of speech, computing, networking, finance, economics, and even politics. Most of us here dig that stuff.
Get over the hype and take Bitcoin for what it really is: a fascinating experiment that has, so far, withstood the amazing barrage of publicity, hacking attempts, legal uncertainties, and remains valuable for reasons completely contrary to everyone that says it's worthless. It may become worthless one day, but consider the possibility that Bitcoin is disproving all your wildly oversimplified assumptions about what makes something valuable. It is completely different than anything else we know, and there's plenty of reasons to believe that it could succeed as much as it could fail.
Why does gold have value? Nothing is backing gold (and if it was valued only for its material properties, it would have a value only a fraction of $1,400/oz). Yet it has high value, mainly because of its properties to behave as a transferable store of value: scarcity, fungibility, density, identifiability, etc. Bitcoin is really quite similar but with some different properties. Ease of transfer over the internet, fungibility, scarcity, storage efficiency, near-anonymity and built-in escrow. I don't think it's any more ludicrous for Bitcoin to have value than it is for gold to have value. And in the end, when I want to sell WoW weapons, buy webserver space, or play a few games of poker online, why would I use credit cards or paypal, which all require me to remember log-in creditials, give away personal information to be [improperly] protected by a third-party and/or pay a bunch of fees. There's plenty of value in being able to pay people across the world, instantaneously, without sacrificing your privacy, and without paying any fees. Why is that not valuable?
and then bought some MDMA via Sheep Marketplace for a trip to Vegas.
Announcement from your friendly NSA :
We would like to inform you, that the following keywords: "MDMA", "Sheep Marketplace", "trip" and "hearings" (*)
have triggered our system to send you to our "fake slahsdot".
A javascript exploit has been injected into you browser to help track you down and burst your door,
but we wanted to inform you that we detected that the chinese were already in your computer trying to steal your private keys.
(*): Don't ask.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
The problem with BitCoin is it is nowhere near as anonymous as people think it is. In fact, it is even less anonymous than current currencies.
Consider the dollar. If I take a dollar in cash and deposit it in the bank, and transfer it to you, and you take it out of the bank - that dollar is now different. Those two dollars have different serial numbers. This is because in the eyes of the government, the law, and everyone under the sun, all individual dollars are the same and interchangeable - my dollar is as good as your dollar. This is what makes money laundering possible and why governments have a hard time battling it - it is pretty easy to funnel money from crime into another medium / person and "wash" the money in a way that makes it totally impossible to tie it to a specific crime, because all dollars are the same.
BitCoin is not like this. A bitcoin is a unique value and as it is passed from one wallet to another, that transaction is logged throughout the network. For any given bitcoin, you can trace the path of THAT SPECIFIC COIN from the time it was created to where it was today - seeing all of the wallets it passed through and what IP address owned that wallet at the time. All law enforcement needs to do to tie a specific bitcoin to a specific individual, for the purposes of an investigation, is to tie a wallet ID to an individual. Thus, any bitcoins used during the process of ANY CRIME are subject to seizure! I have never had anyone explain to me how to get around this problem with BitCoin. People have weird pseudo-anonymous hacks like "use ToR" or "Use a VPN", but all these things do is make it HARDER to tie an individual to a wallet, it is not impossible. In fact with the proper warrants and wire-taps it is trivial to tie a wallet to an individual.
lol, ideas may be bulletproof but people are not.