Your scenario where "someone buys all or most of the bitcoins" simply is not possible. The vast majority of bitcoins are held by individuals and new bitcoins are being mined all the time (this is mathematically controlled, about 25 new bitcoins every 10 minutes). Because of the nature of bitcoins, a buyer would have to approach every holder individually and bid for their supply. Not every person would want to sell, based on Bitcoin's growth curve. This is an impossible scenario.
Bitcoins are being generated now but they converge to 21 million - less than double the amount in circulation now. If their value evens out where it is now, people will sell to anyone willing to buy, opening up the possibility of a majority ownership. Do you think the value is going to keep going up by another 10x, 100x? The latter would make the top ~50 owners billionaires.
What is "sensible regulation"? Who decides? Therein lies the problem. The Blockchain (public ledger) is the regulator... No individual should ever be entrusted with that power, which is the problem with politicized central banking authorities.
The developers of the bitcoin protocol are a form of regulation. These rules weren't decided peer-to-peer:
What I would call sensible regulation is the kind of regulation governing money used in illegal activity. Self-regulation is a pipe-dream, it works great until you put it into practise.
Finally, Bitcoin ISN'T anonymous! It's not easy to track and trace every person who owns bitcoins, but they are not invisible. In fact, in cases of theft and fraud, people have been blacklisting certain bitcoins. We have existing laws that protect individuals from theft and fraud, in fact, these laws are one of the reason government exists. Our court system exists because mob rule is not the way to do things. Good laws protect our individual constitutionally protected rights and in the case of bitcoins, we are talking about property rights.
How do you prove ownership if someone has stolen your bitcoins?
Say you have $5k in a wallet. You have piece of malware on your computer and a transaction was started without your consent sending your $5k to someone else, describe your interaction with law enforcement and what the outcome is.
Bitcoins are being generated now but they converge to 21 million - less than double the amount in circulation now. If their value evens out where it is now, people will sell to anyone willing to buy, opening up the possibility of a majority ownership. Do you think the value is going to keep going up by another 10x, 100x? The latter would make the top ~50 owners billionaires.
What I would call sensible regulation is the kind of regulation governing money used in illegal activity. Self-regulation is a pipe-dream, it works great until you put it into practise.
How do you prove ownership if someone has stolen your bitcoins?
Say you have $5k in a wallet. You have piece of malware on your computer and a transaction was started without your consent sending your $5k to someone else, describe your interaction with law enforcement and what the outcome is.
Marvin,
How many major drugs busts have you heard of that involve dollars and not bitcoins? I'd wager so-called "illegal drug activity" using bitcoins is easily dwarfed by the use of US dollars, and other denominations.
Prohibition was a failure. The "War on Drugs" has been a failure. There are a number of US states RIGHT NOW that have legalized pot. Are they wrong? Should they be invaded by the federal government? Legislating morality has never worked and it will never work.
Also, here's something to ponder... You keep insisting that "illegal" things are wrong. Is targeted murder wrong? Is violating the constitutionally guaranteed rights of Americans wrong? Is drug-running by the CIA wrong? Was Bill Clinton, George Bush or Barack Obama wrong because they used pot (and possibly even stronger illicit substances in the case of both Bush and Obama)? Because all of these things are happening now or have happened in the very recent past. You should consider who really benefits from laws that suppress trade and the exchange of money for things that harm no one but the person imbibing in said "thing"... then look at this again.
One more thing... I don't and never have used "illegal" drugs, but I have no problem with others who choose to do so.
How does one prove ownership of a bitcoin? You have a private key and the transaction is recorded on the Blockchain. That can be followed.
How many major drugs busts have you heard of that involve dollars and not bitcoins? I'd wager so-called "illegal drug activity" using bitcoins is easily dwarfed by the use of US dollars, and other denominations.
Prohibition was a failure. The "War on Drugs" has been a failure. There are a number of US states RIGHT NOW that have legalized pot. Are they wrong? Should they be invaded by the federal government? Legislating morality has never worked and it will never work.
Also, here's something to ponder... You keep insisting that "illegal" things are wrong. Is targeted murder wrong? Is violating the constitutionally guaranteed rights of Americans wrong? Is drug-running by the CIA wrong? Was Bill Clinton, George Bush or Barack Obama wrong because they used pot (and possibly even stronger illicit substances in the case of both Bush and Obama)? Because all of these things are happening now or have happened in the very recent past. You should consider who really benefits from laws that suppress trade and the exchange of money for things that harm no one but the person imbibing in said "thing"... then look at this again.
One more thing... I don't and never have used "illegal" drugs, but I have no problem with others who choose to do so.
How does one prove ownership of a bitcoin? You have a private key and the transaction is recorded on the Blockchain. That can be followed.
I won't get involved with your points about American politics, but I will make one comment:
you say that legislating morality has never worked, but that doesn't mean that you shouldn’t try. Murder will happen with or without laws, but we don't throw our hands up in the air, give up and say, "Despite our laws against murder, people are still murdering each other, so let's get rid of all the legislation against murder and leave people to murder in peace."
Or to put it another way: the issue of drugs is emotive and is very hard to debate without coming down on one side or the other. I don't have strong views; I imagine that Steve Jobs may have taken drugs--after all, it was all the culture those days. I vaguely heard that drugs were becoming less popular amongst the yufe of today. I've never imbibed, other than some snuff which made me sneeze.
Ok, I did get a bit involved, but I won't anymore.
I won't get involved with your points about American politics, but I will make one comment:
you say that legislating morality has never worked, but that doesn't mean that you shouldn’t try. Murder will happen with or without laws, but we don't throw our hands up in the air, give up and say, "Despite our laws against murder, people are still murdering each other, so let's get rid of all the legislation against murder and leave people to murder in peace."
Or to put it another way: the issue of drugs is emotive and is very hard to debate without coming down on one side or the other. I don't have strong views; I imagine that Steve Jobs may have taken drugs--after all, it was all the culture those days. I vaguely heard that drugs were becoming less popular amongst the yufe of today. I've never imbibed, other than some snuff which made me sneeze.
Ok, I did get a bit involved, but I won't anymore.
The case against murder is clearly defined in our Constitution and generally understood worldwide...Life, liberty and the pursuit of happiness.
How many major drugs busts have you heard of that involve dollars and not bitcoins? I'd wager so-called "illegal drug activity" using bitcoins is easily dwarfed by the use of US dollars, and other denominations.
What's the ratio of transactions for legitimate and illegal purposes in each currency? The reason people are calling for bans is that there's so few legitimate uses for crypto currency. It's the same reason authorities tackle other parts of the network running silk road as they host all kinds of illegal material: illegal pornography, weapons, stolen credit cards, assassination contracts. There was one called Freedom Hosting taken down late last year:
"The illicit empire of the Silk Road came crashing down on Wednesday after its founder Ross Ulbricht, aka Dread Pirate Roberts , was arrested and charged with narcotics trafficking, money laundering, computer-hacking and attempted murder."
You can't use cash for the things these services are used for nearly as easily. There are some legitimate needs for anonymous currency like support for human rights groups, for maintaining privacy when paying for adult services but it opens the door for everything else that crosses a line that most people would accept as the limit of acceptable activity and violates the freedoms of people trying to pursue life, liberty and happiness - if you are the victim of a credit card theft, of physical abuse or the target in a murder then these services help promote this activity. Where we choose to draw the line is for the best outcome.
Legislating morality has never worked and it will never work.
Of course it has worked, what you mean to say is it hasn't always worked. Smoking bans for example work and make people realise that it's for their own good. Gambling regulations promote self-regulation as do alcohol regulation. Absolute freedom doesn't work, it's been tried and that system failed to regulate itself so over time people have developed a balance between freedom and control.
You should consider who really benefits from laws that suppress trade and the exchange of money for things that harm no one but the person imbibing in said "thing"... then look at this again.
It's not true that the only harm is to the person consuming the product. If something facilitates the use of hard drugs, it promotes the addiction leading to further promotion (users becoming dealers to fund their habit) and all sorts of other crimes spawn from that. Taking away the supply can in many cases take away or at least diminish the demand.
How does one prove ownership of a bitcoin? You have a private key and the transaction is recorded on the Blockchain. That can be followed.
So they'll have no problem tracking down the $350m+ taken from Mt. Gox or the $2.7m from Silk Road 2 or $220k from 85 wallets via botnet or $1m from inputs.io or $40k from coinbase or the $10k stolen from the Reddit guy via malware or the $19k stolen from the blockchain wallet. You should tell them because I don't think they know how easy it is.
How do you prove you were the original owner and that the transaction was unauthorised? If you experience a cash theft, there's the possibility of witnesses, CCTV and a physical event had to take place and there's damage limitation due to the amount you can carry.
What's the ratio of transactions for legitimate and illegal purposes in each currency? The reason people are calling for bans is that there's so few legitimate uses for crypto currency. It's the same reason authorities tackle other parts of the network running silk road as they host all kinds of illegal material: illegal pornography, weapons, stolen credit cards, assassination contracts. There was one called Freedom Hosting taken down late last year:
"The illicit empire of the Silk Road came crashing down on Wednesday after its founder Ross Ulbricht, aka Dread Pirate Roberts , was arrested and charged with narcotics trafficking, money laundering, computer-hacking and attempted murder."
You can't use cash for the things these services are used for nearly as easily. There are some legitimate needs for anonymous currency like support for human rights groups, for maintaining privacy when paying for adult services but it opens the door for everything else that crosses a line that most people would accept as the limit of acceptable activity and violates the freedoms of people trying to pursue life, liberty and happiness - if you are the victim of a credit card theft, of physical abuse or the target in a murder then these services help promote this activity. Where we choose to draw the line is for the best outcome.
Of course it has worked, what you mean to say is it hasn't always worked. Smoking bans for example work and make people realise that it's for their own good. Gambling regulations promote self-regulation as do alcohol regulation. Absolute freedom doesn't work, it's been tried and that system failed to regulate itself so over time people have developed a balance between freedom and control.
It's not true that the only harm is to the person consuming the product. If something facilitates the use of hard drugs, it promotes the addiction leading to further promotion (users becoming dealers to fund their habit) and all sorts of other crimes spawn from that. Taking away the supply can in many cases take away or at least diminish the demand.
So they'll have no problem tracking down the $350m+ taken from Mt. Gox or the $2.7m from Silk Road 2 or $220k from 85 wallets via botnet or $1m from inputs.io or $40k from coinbase or the $10k stolen from the Reddit guy via malware or the $19k stolen from the blockchain wallet. You should tell them because I don't think they know how easy it is.
How do you prove you were the original owner and that the transaction was unauthorised? If you experience a cash theft, there's the possibility of witnesses, CCTV and a physical event had to take place and there's damage limitation due to the amount you can carry.
Mt Gox is not solvent so they wont get anything (more debt than assets).
Thats what you get when you deal with shadowy people.
And some of you wanted Apple to get involved in this? Guess who the people who lost money at Mt Gox would chase if Apple was involved? you guessed it right, they would go after Apple.
I don't know how many times it must be said, but I'll say it again...
MtGox is not Bitcoin. Bitcoin is not MtGox. MtGox's problems have been well known for more than a year to anyone who was paying attention.
Additionally, only if you are adventurous and willing to bear very high risk do you get into bitcoins at this stage. It's still the frontier. For first-adopters and those actually seeking high-risk, high-reward investments crypto-currencies might be for you.
If you are unwilling to learn ALL of the pitfalls associated with your choice of investments, then you really have no business getting into this stuff.
They claimed the problem arose from bitcoin though and not the one operator. Flaws in the protocol were exploited by hackers:
"At this point, 744,408 BTC are missing due to malleability-related theft which went unnoticed for several years. The cold storage has been wiped out due to a leak in the hot wallet."
MtGox's problems have been well known for more than a year to anyone who was paying attention.
You know what people are like though, if they see low prices, they jump on them. This is how unregulated free markets exploit people. The above note says they had 550,000 verified customers.
No matter how many victims there are, people would still say to let the free market sort itself out. That's not a good enough strategy and why people turn away from it.
Additionally, only if you are adventurous and willing to bear very high risk do you get into bitcoins at this stage. It's still the frontier. For first-adopters and those actually seeking high-risk, high-reward investments crypto-currencies might be for you.
If you are unwilling to learn ALL of the pitfalls associated with your choice of investments, then you really have no business getting into this stuff.
People have to get involved for it to grow. On the one hand, you try to allay concerns about it and then call it high risk. People are averse to risk in general so that risk needs to be lowered for people to be more willing to adopt it. Stories like these don't help:
That's over $100k from one person. It's not that big of a loss in reality as these values are hyperinflated because of the rapid growth. People who mined the coins years ago won't have paid anything so they have zero principle to lose. But it puts off people who would be using cash and having a large principle from buying them.
So now the largest Bitcoin exchange is bankrupt and all those investors are out of their money.
$425,000,000 just disappeared. Gone. Forever.
What a scam. Do you think Apple wants anything to do with that? Like I said before Bitcoin has to raise their game to Apple's level. Bitcoin is in the sewer right now and Apple is at the penthouse. There is absolutely no reason for Apple to extend an invitation to these sewer dwellers. Get your crap together bitcoin and then we will talk.
All this talk that Mt Gox was showing signs of failure months ago is BS. Then why didn't the Bitcoin powers that be (Mr Satoshi and Co) face Mt Gox and tell them to get their sheet together? What utter mess.
Literally every statement made in that post illustrates that (A) you do not know what you are writing about, and (B) given the opportunity to learn facts, you resist.
If, for whatever reason, one's personal disposition is to fear, distrust or dislike something, nothing can be done to change such superstitious beliefs until one decides to be curious, rather than prejudicial.
I've nothing further to add to this particular thread, at least a number of factual, non-histrionic links have been posted for anyone interested.
Using LocalBitcoins.com one can find in-person buyers and sellers of Bitcoin anywhere in the world.
That was true weeks ago and isn't true now. Besides, what good is it if it's possible to find an in-person buyer if it's not a simple, guaranteed to be quick process from the time you decide you want it, and then you have to worry if you have gotten correct advice about that country's version of what's legal and what isn't?
It's possible to find a date on craigslist too. Doesn't mean it's a great idea to call that # and meet them at the pier.
Additionally, only if you are adventurous and willing to bear very high risk do you get into bitcoins at this stage. It's still the frontier. For first-adopters and those actually seeking high-risk, high-reward investments crypto-currencies might be for you.
If you are unwilling to learn ALL of the pitfalls associated with your choice of investments, then you really have no business getting into this stuff.
Possibly, remotely. But bitcoins are being pushed as currency as well. It isn't possible for it to ever work at both sides as a non-regulated item of value. If it is acknowledged as a failure as currency then it may have a slim chance as a speculator's high risk investment. But as for now, it's more people who feel the need to stick it to their government with a casino player's mentality than anything else.
That was true weeks ago and isn't true now. Besides, what good is it if it's possible to find an in-person buyer if it's not a simple, guaranteed to be quick process from the time you decide you want it, and then you have to worry if you have gotten correct advice about that country's version of what's legal and what isn't?
The whole process of acquiring coins could do with being overhauled. BTC-e has all Cyrillic text and broken English:
but you can see it's a properly registered company and compliant with money laundering regulations. All you do is enter your email, your bitcoin address, the amount and they'll give details to pay by bank transfer. They then act as the middle man to the sellers and you never have to deal with the sellers directly. To get a Bitcoin address, you'd just setup a client program and make a wallet.
When you deal one to one, you'd never know what they'd try and pull off. They'd take your money via an electronic transfer first and might start a transfer but reverse it or not even bother starting it. Like this sort of thing:
"Will Phillips is £5,300 out of pocket after falling victim to a very 21st-century financial scam involving hacked PayPal accounts and the digital currency bitcoin.
What seems to have happened is, in the space of one night, fraudsters hacked into legitimate PayPal accounts and, posing as these people, bought his bitcoins on eBay and made off with them. This type of scam is not new, and usually PayPal comes down in favour of the individuals whose accounts were hacked. In this case, the account holders have had their money refunded. However, Phillips is now being pursued for more than £1,300 that PayPal says he owes them.
He listed his bitcoins on eBay and had no problems finding buyers. A man in Hounslow, Middlesex, bought half a coin for £520. Phillips waited until the money was in his PayPal account, then sent the currency to the wallet address provided. Hours later, the man reversed the payment.
However, the way bitcoin works means that while you can't see who owns a wallet, anyone can view bitcoin transactions via websites such as Blockchain.info – so it was easy to establish his bitcoins had gone into the man's wallet.
It was a similar story with other eBay buyers that night. One bought two bitcoins (4 x 0.5) for just over £2,000. Phillips was reassured by the fact she had a decent eBay rating. As soon as the money hit his account, he transferred the bitcoins to the wallet address, and she emailed back saying she would be interested in buying more.
But in the morning all the money from her in his PayPal account had been put "on hold". PayPal, he was told, suspected her account had been hacked. It said it needed more information about the woman before it could release the funds, and suggested Phillips email her to speed things up. She pinged back a pithy two-word response: "F*ck off!"
By this point Phillips was "panicking a bit – something was very wrong and I realised I may have lost my bitcoins and the money". He told Guardian Money: "These people quickly had their money refunded by PayPal, and I lost all mine. Neither eBay nor PayPal has provided me with any sort of explanation or even leniency, instead focusing on chasing me for money I now owe them."
After doing some detective work, he believes all the bitcoin buyers were fraudsters who hacked into legitimate accounts, and that every fraudulent transaction made against him that night can be linked. "It looks like it is just one person, or one group," he says, adding: "I'm not looking for sympathy or a sob story but some accountability from PayPal, and also for this to serve as a warning to others. PayPal's only response was that they don't cover selling digital goods, since they can't prove the goods were sent/delivered. I can prove this, have told them and have sent them the proof, but they will not accept it."
He adds: "Why should I be liable for eBay and PayPal accounts being hacked to fraudulently buy from me? Under their terms and conditions I am not offered any seller protection – I was unaware of this at the time – but as a consumer, surely I must have some rights?"
Phillips says he has also been told the Financial Ombudsman Service won't be able to help, while the police "don't seem interested".
Money tracked down the man who supposedly bought £520-worth of bitcoin from Phillips. He told us: "Someone hacked into my eBay and PayPal accounts – I didn't buy anything from Mr Phillips." He says the money went out of his PayPal account but was later paid back. He adds: "I was more concerned with my PayPal account. I thought this was the safest on the planet but obviously not."
Last month, eBay's UK arm banned sales of bitcoin and other virtual currencies from its auction and "buy it now" formats. As a result, people can only sell via its classified advertising.
A PayPal spokesman told us he could not comment on individual cases but said: "Bitcoin transactions aren't covered by our seller protection programme because they are regarded as intangible goods."
In January, the UK's Financial Services Compensation Scheme (FSCS) warned that virtual currencies are not regulated. That means the FSCS will not step in if a consumer suffers a loss as a result of a website that exchanges or holds bitcoins goes out of business.
This followed a similar warning in December from the European Banking Authority (EBA), which said consumers needed to be aware of the various risks. It added that the digital wallets used to store virtual currencies "are not impervious to hackers". And consumers are not protected by any refund rights under EU law when using bitcoins and the like to pay for items. Just for good measure, the EBA added the virtual currencies "may be misused for criminal activities," and that there can also be tax implications for people."
Then there's the issue with the client software. The official apps for it try to download the blockchain, which grows in size for every transaction:
the 1mb block size (per 10 minutes) calculates as a maximum capacity of 52gb a year. so far in the last near on 5 years blockchain has only accumulated 14.5gb of the nearly 260GB (5 years)of possible space.
so this shows that the blocks are not anywhere near getting filled to even be close to the 52gb a year capacity. and even after 10 years IF every block was filled from now on. that is only half a terrabyte of disk space.
now thats 10 years of full to capacity usage.. so chances are the blockchain may be less.
now i want you to cast your mind back to 10 years ago, where ADSL was only just poping up, and 120gb hard drives were concidered extreme..
nowadays internet speeds are 10meg on average and upto 100meg.. as oppose to the 512k-2mb 10 years ago.
so imagine what would be classed as "standard" in the next decade. we would not think half a terrabyte was very much and the download speed would not be a problem for noobs to get hold of the whole blockchain."
That's the problem with not having a central ledger because they get multiple parties to verify transactions peer-to-peer and they need a transaction history to do that and it can be corrupted:
"Just opened my laptop and started Bitcoin QT and received the message blockchain corrupt, I clicked OK and now it appears "Reindexing blocks - 204 weeks.
Again, let me say that I think an universal independent currency will exist in our lifetime and will likely be based off the design and codebase of bitcoin but, as it stands now, the current implementation isn't going to work when there is no accountability or protection, and there is large anonymous theft of the [I]nuevo[/I] currency taking place. This simply isn't sustainable without safe guards for both customers and institutions.
Perhaps it needs a hold timer put in place that would prevent a transfer or trade from happening instantly. Consider that when you sell stocks it takes 3 days for that sale to become available in your account. What if there was a 3 day hold between initiating a transfer and the transfer going through, with the bitcoin otherwise being invalidated? This would require a new set of protocols to be set up that includes a proper atomic timestamp from the exchange or an independent party that gets embedded into the hash but perhaps this would allow enough time that these nearly instant, internet thefts to be seen before they occur thus allowing the exchange to react accordingly.
Again, let me say that I think an universal independent currency will exist in our lifetime and will likely be based off the design and codebase of bitcoin but, as it stands now, the current implementation isn't going to work when there is no accountability or protection, and there is large anonymous theft of the nuevo currency taking place. This simply isn't sustainable without safe guards for both customers and institutions.
Perhaps it needs a hold timer put in place that would prevent a transfer or trade from happening instantly. Consider that when you sell stocks it takes 3 days for that sale to become available in your account. What if there was a 3 day hold between initiating a transfer and the transfer going through, with the bitcoin otherwise being invalidated? This would require a new set of protocols to be set up that includes a proper atomic timestamp from the exchange or an independent party that gets embedded into the hash but perhaps this would allow enough time that these nearly instant, internet thefts to be seen before they occur thus allowing the exchange to react accordingly.
I had read that last week, but I'm not sure what you want me to take from that.
I see…
Enforceable contractual law is necessary for free markets to flourish, and I know we will see more sophisticated agreements form from out of this disaster, either insurance offers, multisignature bonds being held, or some other scheme.
I just don't see this current iteration gaining the proper traction and respect without more safeguards in place. I don't have to worry that my bank will collapse or that it will get robbed because my money is insured by the FDIC. Now, if the US falls in some Red Dawn scenario with Cubans attacking from Canada then I would be screwed until Patrick Swayze leads the resistance to fight off the Commies, but until such time I don't feel like I'm taking a risk with my bank.
Comments
Bitcoins are being generated now but they converge to 21 million - less than double the amount in circulation now. If their value evens out where it is now, people will sell to anyone willing to buy, opening up the possibility of a majority ownership. Do you think the value is going to keep going up by another 10x, 100x? The latter would make the top ~50 owners billionaires.
What is driving the price up?
http://arstechnica.com/business/2013/08/firm-says-online-gambling-accounts-for-almost-half-of-all-bitcoin-transactions/
Here's more drug activity - Silk Road was taken down by the FBI, it relaunched and this happened:
http://money.cnn.com/2014/02/14/technology/security/silk-road-bitcoin/?iid=EL
"The revived online black market Silk Road says hackers took advantage of an ongoing Bitcoin glitch to steal $2.7 million from its customers."
http://www.businessinsider.com/senator-calls-for-bitcoin-ban-2014-2
The developers of the bitcoin protocol are a form of regulation. These rules weren't decided peer-to-peer:
https://en.bitcoin.it/wiki/Protocol_rules
What I would call sensible regulation is the kind of regulation governing money used in illegal activity. Self-regulation is a pipe-dream, it works great until you put it into practise.
How do you prove ownership if someone has stolen your bitcoins?
Say you have $5k in a wallet. You have piece of malware on your computer and a transaction was started without your consent sending your $5k to someone else, describe your interaction with law enforcement and what the outcome is.
Bitcoins are being generated now but they converge to 21 million - less than double the amount in circulation now. If their value evens out where it is now, people will sell to anyone willing to buy, opening up the possibility of a majority ownership. Do you think the value is going to keep going up by another 10x, 100x? The latter would make the top ~50 owners billionaires.
What is driving the price up?
http://arstechnica.com/business/2013/08/firm-says-online-gambling-accounts-for-almost-half-of-all-bitcoin-transactions/
Here's more drug activity - Silk Road was taken down by the FBI, it relaunched and this happened:
http://money.cnn.com/2014/02/14/technology/security/silk-road-bitcoin/?iid=EL
"The revived online black market Silk Road says hackers took advantage of an ongoing Bitcoin glitch to steal $2.7 million from its customers."
http://www.businessinsider.com/senator-calls-for-bitcoin-ban-2014-2
The developers of the bitcoin protocol are a form of regulation. These rules weren't decided peer-to-peer:
https://en.bitcoin.it/wiki/Protocol_rules
What I would call sensible regulation is the kind of regulation governing money used in illegal activity. Self-regulation is a pipe-dream, it works great until you put it into practise.
How do you prove ownership if someone has stolen your bitcoins?
Say you have $5k in a wallet. You have piece of malware on your computer and a transaction was started without your consent sending your $5k to someone else, describe your interaction with law enforcement and what the outcome is.
Marvin,
How many major drugs busts have you heard of that involve dollars and not bitcoins? I'd wager so-called "illegal drug activity" using bitcoins is easily dwarfed by the use of US dollars, and other denominations.
Prohibition was a failure. The "War on Drugs" has been a failure. There are a number of US states RIGHT NOW that have legalized pot. Are they wrong? Should they be invaded by the federal government? Legislating morality has never worked and it will never work.
Also, here's something to ponder... You keep insisting that "illegal" things are wrong. Is targeted murder wrong? Is violating the constitutionally guaranteed rights of Americans wrong? Is drug-running by the CIA wrong? Was Bill Clinton, George Bush or Barack Obama wrong because they used pot (and possibly even stronger illicit substances in the case of both Bush and Obama)? Because all of these things are happening now or have happened in the very recent past. You should consider who really benefits from laws that suppress trade and the exchange of money for things that harm no one but the person imbibing in said "thing"... then look at this again.
One more thing... I don't and never have used "illegal" drugs, but I have no problem with others who choose to do so.
How does one prove ownership of a bitcoin? You have a private key and the transaction is recorded on the Blockchain. That can be followed.
Marvin,
How many major drugs busts have you heard of that involve dollars and not bitcoins? I'd wager so-called "illegal drug activity" using bitcoins is easily dwarfed by the use of US dollars, and other denominations.
Prohibition was a failure. The "War on Drugs" has been a failure. There are a number of US states RIGHT NOW that have legalized pot. Are they wrong? Should they be invaded by the federal government? Legislating morality has never worked and it will never work.
Also, here's something to ponder... You keep insisting that "illegal" things are wrong. Is targeted murder wrong? Is violating the constitutionally guaranteed rights of Americans wrong? Is drug-running by the CIA wrong? Was Bill Clinton, George Bush or Barack Obama wrong because they used pot (and possibly even stronger illicit substances in the case of both Bush and Obama)? Because all of these things are happening now or have happened in the very recent past. You should consider who really benefits from laws that suppress trade and the exchange of money for things that harm no one but the person imbibing in said "thing"... then look at this again.
One more thing... I don't and never have used "illegal" drugs, but I have no problem with others who choose to do so.
How does one prove ownership of a bitcoin? You have a private key and the transaction is recorded on the Blockchain. That can be followed.
I won't get involved with your points about American politics, but I will make one comment:
you say that legislating morality has never worked, but that doesn't mean that you shouldn’t try. Murder will happen with or without laws, but we don't throw our hands up in the air, give up and say, "Despite our laws against murder, people are still murdering each other, so let's get rid of all the legislation against murder and leave people to murder in peace."
Or to put it another way: the issue of drugs is emotive and is very hard to debate without coming down on one side or the other. I don't have strong views; I imagine that Steve Jobs may have taken drugs--after all, it was all the culture those days. I vaguely heard that drugs were becoming less popular amongst the yufe of today. I've never imbibed, other than some snuff which made me sneeze.
Ok, I did get a bit involved, but I won't anymore.
The case against murder is clearly defined in our Constitution and generally understood worldwide...Life, liberty and the pursuit of happiness.
What's the ratio of transactions for legitimate and illegal purposes in each currency? The reason people are calling for bans is that there's so few legitimate uses for crypto currency. It's the same reason authorities tackle other parts of the network running silk road as they host all kinds of illegal material: illegal pornography, weapons, stolen credit cards, assassination contracts. There was one called Freedom Hosting taken down late last year:
http://www.wired.com/threatlevel/2013/09/freedom-hosting-fbi/
http://www.newscientist.com/article/dn24345-silk-road-bust-hints-at-fbis-new-cybercrime-powers.html
All bitcoins for transactions.
"The illicit empire of the Silk Road came crashing down on Wednesday after its founder Ross Ulbricht, aka Dread Pirate Roberts , was arrested and charged with narcotics trafficking, money laundering, computer-hacking and attempted murder."
You can't use cash for the things these services are used for nearly as easily. There are some legitimate needs for anonymous currency like support for human rights groups, for maintaining privacy when paying for adult services but it opens the door for everything else that crosses a line that most people would accept as the limit of acceptable activity and violates the freedoms of people trying to pursue life, liberty and happiness - if you are the victim of a credit card theft, of physical abuse or the target in a murder then these services help promote this activity. Where we choose to draw the line is for the best outcome.
Of course it has worked, what you mean to say is it hasn't always worked. Smoking bans for example work and make people realise that it's for their own good. Gambling regulations promote self-regulation as do alcohol regulation. Absolute freedom doesn't work, it's been tried and that system failed to regulate itself so over time people have developed a balance between freedom and control.
It's not true that the only harm is to the person consuming the product. If something facilitates the use of hard drugs, it promotes the addiction leading to further promotion (users becoming dealers to fund their habit) and all sorts of other crimes spawn from that. Taking away the supply can in many cases take away or at least diminish the demand.
So they'll have no problem tracking down the $350m+ taken from Mt. Gox or the $2.7m from Silk Road 2 or $220k from 85 wallets via botnet or $1m from inputs.io or $40k from coinbase or the $10k stolen from the Reddit guy via malware or the $19k stolen from the blockchain wallet. You should tell them because I don't think they know how easy it is.
How do you prove you were the original owner and that the transaction was unauthorised? If you experience a cash theft, there's the possibility of witnesses, CCTV and a physical event had to take place and there's damage limitation due to the amount you can carry.
http://www.coindesk.com/hold-ukraine-protestors-turn-bitcoin-fundraising/
https://bitpay.com/directory#/
https://en.bitcoin.it/wiki/Trade
There are no "illegal" businesses above. Your continued insistence that Bitcoin is only used by criminals is absurd and you know it.
Looks like Mt Gox customers are out of luck.
http://www.reuters.com/article/2014/02/27/us-bitcoin-legal-idUSBREA1Q07U20140227
Mt Gox is not solvent so they wont get anything (more debt than assets).
Thats what you get when you deal with shadowy people.
And some of you wanted Apple to get involved in this? Guess who the people who lost money at Mt Gox would chase if Apple was involved? you guessed it right, they would go after Apple.
I don't know how many times it must be said, but I'll say it again...
MtGox is not Bitcoin. Bitcoin is not MtGox. MtGox's problems have been well known for more than a year to anyone who was paying attention.
Additionally, only if you are adventurous and willing to bear very high risk do you get into bitcoins at this stage. It's still the frontier. For first-adopters and those actually seeking high-risk, high-reward investments crypto-currencies might be for you.
If you are unwilling to learn ALL of the pitfalls associated with your choice of investments, then you really have no business getting into this stuff.
They claimed the problem arose from bitcoin though and not the one operator. Flaws in the protocol were exploited by hackers:
"At this point, 744,408 BTC are missing due to malleability-related theft which went unnoticed for several years. The cold storage has been wiped out due to a leak in the hot wallet."
Same bug responsible for Silk Road 2 apparently.
http://www.scribd.com/doc/209050732/MtGox-Situation-Crisis-Strategy-Draft
You know what people are like though, if they see low prices, they jump on them. This is how unregulated free markets exploit people. The above note says they had 550,000 verified customers.
No matter how many victims there are, people would still say to let the free market sort itself out. That's not a good enough strategy and why people turn away from it.
People have to get involved for it to grow. On the one hand, you try to allay concerns about it and then call it high risk. People are averse to risk in general so that risk needs to be lowered for people to be more willing to adopt it. Stories like these don't help:
http://www.reddit.com/r/Bitcoin/comments/1czrua/
That's over $100k from one person. It's not that big of a loss in reality as these values are hyperinflated because of the rapid growth. People who mined the coins years ago won't have paid anything so they have zero principle to lose. But it puts off people who would be using cash and having a large principle from buying them.
Literally every statement made in that post illustrates that (A) you do not know what you are writing about, and (B) given the opportunity to learn facts, you resist.
If, for whatever reason, one's personal disposition is to fear, distrust or dislike something, nothing can be done to change such superstitious beliefs until one decides to be curious, rather than prejudicial.
I've nothing further to add to this particular thread, at least a number of factual, non-histrionic links have been posted for anyone interested.
Using LocalBitcoins.com one can find in-person buyers and sellers of Bitcoin anywhere in the world.
That was true weeks ago and isn't true now. Besides, what good is it if it's possible to find an in-person buyer if it's not a simple, guaranteed to be quick process from the time you decide you want it, and then you have to worry if you have gotten correct advice about that country's version of what's legal and what isn't?
It's possible to find a date on craigslist too. Doesn't mean it's a great idea to call that # and meet them at the pier.
Additionally, only if you are adventurous and willing to bear very high risk do you get into bitcoins at this stage. It's still the frontier. For first-adopters and those actually seeking high-risk, high-reward investments crypto-currencies might be for you.
If you are unwilling to learn ALL of the pitfalls associated with your choice of investments, then you really have no business getting into this stuff.
Possibly, remotely. But bitcoins are being pushed as currency as well. It isn't possible for it to ever work at both sides as a non-regulated item of value. If it is acknowledged as a failure as currency then it may have a slim chance as a speculator's high risk investment. But as for now, it's more people who feel the need to stick it to their government with a casino player's mentality than anything else.
The whole process of acquiring coins could do with being overhauled. BTC-e has all Cyrillic text and broken English:
https://support.btc-e.com
They say things like:
"Dear users! Due to unplanned work in DC may be problems with ?rediting and withdrawal of coins. Promise to solve the problem soon."
The site Bittylicious looks nice (possibly UK only):
https://bittylicious.com
but you can see it's a properly registered company and compliant with money laundering regulations. All you do is enter your email, your bitcoin address, the amount and they'll give details to pay by bank transfer. They then act as the middle man to the sellers and you never have to deal with the sellers directly. To get a Bitcoin address, you'd just setup a client program and make a wallet.
When you deal one to one, you'd never know what they'd try and pull off. They'd take your money via an electronic transfer first and might start a transfer but reverse it or not even bother starting it. Like this sort of thing:
http://www.theguardian.com/money/2014/mar/01/paypal-bitcoin-scam-ebay
"Will Phillips is £5,300 out of pocket after falling victim to a very 21st-century financial scam involving hacked PayPal accounts and the digital currency bitcoin.
What seems to have happened is, in the space of one night, fraudsters hacked into legitimate PayPal accounts and, posing as these people, bought his bitcoins on eBay and made off with them. This type of scam is not new, and usually PayPal comes down in favour of the individuals whose accounts were hacked. In this case, the account holders have had their money refunded. However, Phillips is now being pursued for more than £1,300 that PayPal says he owes them.
He listed his bitcoins on eBay and had no problems finding buyers. A man in Hounslow, Middlesex, bought half a coin for £520. Phillips waited until the money was in his PayPal account, then sent the currency to the wallet address provided. Hours later, the man reversed the payment.
However, the way bitcoin works means that while you can't see who owns a wallet, anyone can view bitcoin transactions via websites such as Blockchain.info – so it was easy to establish his bitcoins had gone into the man's wallet.
It was a similar story with other eBay buyers that night. One bought two bitcoins (4 x 0.5) for just over £2,000. Phillips was reassured by the fact she had a decent eBay rating. As soon as the money hit his account, he transferred the bitcoins to the wallet address, and she emailed back saying she would be interested in buying more.
But in the morning all the money from her in his PayPal account had been put "on hold". PayPal, he was told, suspected her account had been hacked. It said it needed more information about the woman before it could release the funds, and suggested Phillips email her to speed things up. She pinged back a pithy two-word response: "F*ck off!"
By this point Phillips was "panicking a bit – something was very wrong and I realised I may have lost my bitcoins and the money". He told Guardian Money: "These people quickly had their money refunded by PayPal, and I lost all mine. Neither eBay nor PayPal has provided me with any sort of explanation or even leniency, instead focusing on chasing me for money I now owe them."
After doing some detective work, he believes all the bitcoin buyers were fraudsters who hacked into legitimate accounts, and that every fraudulent transaction made against him that night can be linked. "It looks like it is just one person, or one group," he says, adding: "I'm not looking for sympathy or a sob story but some accountability from PayPal, and also for this to serve as a warning to others. PayPal's only response was that they don't cover selling digital goods, since they can't prove the goods were sent/delivered. I can prove this, have told them and have sent them the proof, but they will not accept it."
He adds: "Why should I be liable for eBay and PayPal accounts being hacked to fraudulently buy from me? Under their terms and conditions I am not offered any seller protection – I was unaware of this at the time – but as a consumer, surely I must have some rights?"
Phillips says he has also been told the Financial Ombudsman Service won't be able to help, while the police "don't seem interested".
Money tracked down the man who supposedly bought £520-worth of bitcoin from Phillips. He told us: "Someone hacked into my eBay and PayPal accounts – I didn't buy anything from Mr Phillips." He says the money went out of his PayPal account but was later paid back. He adds: "I was more concerned with my PayPal account. I thought this was the safest on the planet but obviously not."
Last month, eBay's UK arm banned sales of bitcoin and other virtual currencies from its auction and "buy it now" formats. As a result, people can only sell via its classified advertising.
A PayPal spokesman told us he could not comment on individual cases but said: "Bitcoin transactions aren't covered by our seller protection programme because they are regarded as intangible goods."
In January, the UK's Financial Services Compensation Scheme (FSCS) warned that virtual currencies are not regulated. That means the FSCS will not step in if a consumer suffers a loss as a result of a website that exchanges or holds bitcoins goes out of business.
This followed a similar warning in December from the European Banking Authority (EBA), which said consumers needed to be aware of the various risks. It added that the digital wallets used to store virtual currencies "are not impervious to hackers". And consumers are not protected by any refund rights under EU law when using bitcoins and the like to pay for items. Just for good measure, the EBA added the virtual currencies "may be misused for criminal activities," and that there can also be tax implications for people."
Then there's the issue with the client software. The official apps for it try to download the blockchain, which grows in size for every transaction:
http://www.reddit.com/r/Bitcoin/comments/1pssvp/blockchain_taking_years_to_download/
Some lighter clients won't download it but those aren't from the main code base. The blockchain for Bitcoin right now is over 14GB:
https://blockchain.info/charts/blocks-size
https://bitcointalk.org/index.php?topic=382739.0
"the solution is clear.. there is no problem..
the 1mb block size (per 10 minutes) calculates as a maximum capacity of 52gb a year. so far in the last near on 5 years blockchain has only accumulated 14.5gb of the nearly 260GB (5 years)of possible space.
so this shows that the blocks are not anywhere near getting filled to even be close to the 52gb a year capacity. and even after 10 years IF every block was filled from now on. that is only half a terrabyte of disk space.
now thats 10 years of full to capacity usage.. so chances are the blockchain may be less.
now i want you to cast your mind back to 10 years ago, where ADSL was only just poping up, and 120gb hard drives were concidered extreme..
nowadays internet speeds are 10meg on average and upto 100meg.. as oppose to the 512k-2mb 10 years ago.
so imagine what would be classed as "standard" in the next decade. we would not think half a terrabyte was very much and the download speed would not be a problem for noobs to get hold of the whole blockchain."
That's the problem with not having a central ledger because they get multiple parties to verify transactions peer-to-peer and they need a transaction history to do that and it can be corrupted:
https://bitcointalk.org/index.php?topic=290878.0
"Just opened my laptop and started Bitcoin QT and received the message blockchain corrupt, I clicked OK and now it appears "Reindexing blocks - 204 weeks.
Also, my Bitcoins are Unconfirmed."
https://bitcointalk.org/index.php?topic=256965.0
These systems need to just work for mass adoption.
Here is another theft of bitcoins.
[LIST]
[*] http://www.theverge.com/2014/3/4/5469924/after-620000-theft-another-bitcoin-service-shuts-down
[/LIST]
Again, let me say that I think an universal independent currency will exist in our lifetime and will likely be based off the design and codebase of bitcoin but, as it stands now, the current implementation isn't going to work when there is no accountability or protection, and there is large anonymous theft of the [I]nuevo[/I] currency taking place. This simply isn't sustainable without safe guards for both customers and institutions.
Perhaps it needs a hold timer put in place that would prevent a transfer or trade from happening instantly. Consider that when you sell stocks it takes 3 days for that sale to become available in your account. What if there was a 3 day hold between initiating a transfer and the transfer going through, with the bitcoin otherwise being invalidated? This would require a new set of protocols to be set up that includes a proper atomic timestamp from the exchange or an independent party that gets embedded into the hash but perhaps this would allow enough time that these nearly instant, internet thefts to be seen before they occur thus allowing the exchange to react accordingly.
Out of respect, I submit this link as a response: http://www.fee.org/the_freeman/detail/watching-mt-gox-collapse-from-the-inside#axzz2smJgYLg6
I had read that last week, but I'm not sure what you want me to take from that.
I see…
I just don't see this current iteration gaining the proper traction and respect without more safeguards in place. I don't have to worry that my bank will collapse or that it will get robbed because my money is insured by the FDIC. Now, if the US falls in some Red Dawn scenario with Cubans attacking from Canada then I would be screwed until Patrick Swayze leads the resistance to fight off the Commies, but until such time I don't feel like I'm taking a risk with my bank.