Would like some more details on bitcoin and mining

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Re: Would like some more details on bitcoin and mining

Postposted on Tue Feb 25, 2014 6:48 am

http://news.yahoo.com/bitcoin-exchange- ... ector.html
http://news.yahoo.com/mtgox-website-dis ... 47764.html
http://news.yahoo.com/largest-bitcoin-e ... 21199.html
Mt. Gox CEO Mark Karpeles wrote: "If you buy bitcoins, you should buy keeping in mind that the value could be zero the day after."
More than 744,000 bitcoins were "missing due to malleability-related theft" that had gone unnoticed for years. The 744,000 stolen bitcoins total about 6 percent of the 12.4 million currently in circulation

I'm very angry," said Kolin Burges, a self-styled "crypto-currency trader" and former software engineer who came from London for answers after Mt. Gox failed to tell him what had happened to his bitcoins, which at one point were worth $300,000. "It looks like that's disappeared," said Burges, one of six protesters outside the Mt. Gox office, which was as deserted as a nearby cafe that had formerly accepted bitcoins as payment.

Bitcoin has had a rocky ride, its dollar value soaring and crashing more like a highly speculative investment than a store of value. And oddly for a tradable instrument, its value varies greatly depending on the exchange. The Mt. Gox bitcoin, which traded at $828.99 before February 7, when the exchange halted withdrawals, has since plunged 83.7 percent to $135. The price had topped $1,000 as recently as late January.
Last edited by JustAnEngineer on Tue Feb 25, 2014 7:01 am, edited 2 times in total.
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Re: Would like some more details on bitcoin and mining

Postposted on Tue Feb 25, 2014 6:55 am

Article wrote:And oddly for a tradable instrument, its value varies greatly depending on the exchange.


Heh. Oddly?

To say the least. :o

Here's the document they mention:

http://www.scribd.com/doc/209050732/MtG ... tegy-Draft

Might be fake, but the immediate release of the joint statement from all the other exchanges makes you wonder....

http://blog.blockchain.info/2014/02/25/joint-statement/

http://blog.coinbase.com/post/777668097 ... ding-mtgox
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Re: Would like some more details on bitcoin and mining

Postposted on Wed Feb 26, 2014 12:35 am

The sad part is that the strongest calls for poisonous regulation will likely come not from threatened government cronies but "misled" speculators who only wanted to turn a profit in USD. This sort of thing is why I don't really like dealing with people.
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Re: Would like some more details on bitcoin and mining

Postposted on Wed Feb 26, 2014 6:22 am

Regulation would only be poisonous for criminal activity. Of course, bitcoin has no reason to exist except for criminal money laundering, so perhaps that was the context in which you meant it.
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Re: Would like some more details on bitcoin and mining

Postposted on Wed Feb 26, 2014 6:51 am

JustAnEngineer wrote:Regulation would only be poisonous for criminal activity. Of course, bitcoin has no reason to exist except for criminal money laundering, so perhaps that was the context in which you meant it.

I don't know man, do you know of a better way to instantly send money across the world as a private person, without involving crummy companies like Paypal or Western Union?

I agree that it has a long way to go, but the principle of not having to trust any third party to transfer or store something of value is something quite revolutionary I think. The people who stored their BTC on MtGox either did not understand that, or they chose to trust that third party so that they could trade.
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Re: Would like some more details on bitcoin and mining

Postposted on Wed Feb 26, 2014 7:18 am

Firestarter wrote:I don't know man, do you know of a better way to instantly send money across the world as a private person, without involving crummy companies like Paypal or Western Union?


1) The people who need to legitimately do that are very much in the minority. It is simply not a very common transaction.
2) The reason, at least partially, for why those existing services are "crummy" is because they are lightning rods for fraud/criminal activity.
3) The government is rightly concerned about "private persons" sending money abroad, because even when that uncommon event occurs it is usually in the facilitation of some sort of trade. Trade which, most likely, contravenes duties on imports or controls on FOREX. Random "private person" charity via BTC is unlikely to the point of absurd, and remittance via BTC is also extremely unlikely. "Private persons" are also unlikely to have merchant accounts, which (probably intentionally on your part) excludes Credit Card networks, which are approaching world-wide ubiquity.

Firestarter wrote:I agree that it has a long way to go, but the principle of not having to trust any third party to transfer or store something of value is something quite revolutionary I think. The people who stored their BTC on MtGox either did not understand that, or they chose to trust that third party so that they could trade.


I'm still at loss for why people think a market without trust is somehow desirable or even possible.
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Re: Would like some more details on bitcoin and mining

Postposted on Wed Feb 26, 2014 2:55 pm

Are you considering money transfers to and from family members in other countries in the same category as your "uncommon event"? With a large immigrant population in the US, it's not uncommon to send money back and forth across borders. Right now the only way to do it is wire transfers of some sort (can be from any bank, not just Paypal or Western Union), which can take 3-5 days (and usually the banks will try and arbitrage the transfer via exchange rates, in addition to wire transfer fees).

Just to be clear, I'm not supporting Bitcoin.. I think it's a fad. I'm annoyed at the "delay" in transferring bits between banks.. there is no reason why it can't be much faster..
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Re: Would like some more details on bitcoin and mining

Postposted on Wed Feb 26, 2014 3:44 pm

Glorious wrote:
Firestarter wrote:I agree that it has a long way to go, but the principle of not having to trust any third party to transfer or store something of value is something quite revolutionary I think. The people who stored their BTC on MtGox either did not understand that, or they chose to trust that third party so that they could trade.

I'm still at loss for why people think a market without trust is somehow desirable or even possible.

Well you actually don't want to leave the market to "trust." You want rules (laws) in place so that you can take action if someone abuses, manipulates, or breaks the market. Even if those third parties are crummy, you can take legal action against them if they just take your money. If the entire system is decentralized without government control, what are you going to do when thousands of cryto-coins go missing?

druidcent wrote:Are you considering money transfers to and from family members in other countries in the same category as your "uncommon event"? With a large immigrant population in the US, it's not uncommon to send money back and forth across borders. Right now the only way to do it is wire transfers of some sort (can be from any bank, not just Paypal or Western Union), which can take 3-5 days (and usually the banks will try and arbitrage the transfer via exchange rates, in addition to wire transfer fees).

Just to be clear, I'm not supporting Bitcoin.. I think it's a fad. I'm annoyed at the "delay" in transferring bits between banks.. there is no reason why it can't be much faster..

I think the solution here is the consolidation of currencies. As you mention, part of it has to do with exchange rates between currencies. Changing or losing printing powers might hurt in the short run, but I think the global economy will eventually demand simpler currency handling as opposed to dealing with exchange rates all the time. IIRC, that is why Europe adopted a common currency.
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Re: Would like some more details on bitcoin and mining

Postposted on Wed Feb 26, 2014 3:51 pm

The problem with sending funds is that the two institutions have to negotiate and actually send the funds. Within the US I have had wires go through the same day (either between two institutions or between a bank and an escrow). Now admittedtly I do not do this often, but when I have had to it has been fast and painless.

The problem with sending internationally is that you have two institutions governed by different sets of rules plus international regulations. That is why it can take days (the bits aren't the problem), they transfer almost instanteously once all the red tape is done.

The issue, of course, is a matter of trust. This doesn't go away with something like bitcoin or litecoin. You have to trust the other party or third party that the transaction goes through and there are not any shenigans. This may speed things up, but as with Mt. Gox it's not regulated so there are no guarantees.

Fees/exhange rates and such can be a problem. But there are many banks out there, if it's something that is done often shop for the best rate.
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Re: Would like some more details on bitcoin and mining

Postposted on Wed Feb 26, 2014 3:54 pm

druidcent wrote:Are you considering money transfers to and from family members in other countries in the same category as your "uncommon event"?


That is a remittance, which I mentioned.

superjawes wrote:Well you actually don't want to leave the market to "trust." You want rules (laws) in place so that you can take action if someone abuses, manipulates, or breaks the market. Even if those third parties are crummy, you can take legal action against them if they just take your money. If the entire system is decentralized without government control, what are you going to do when thousands of cryto-coins go missing?


Heh. Yup.

What do you do? Clearly, complain about how the protocol is, like, totally still secure, just not any convenient way to actually use it. :lol:
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Re: Would like some more details on bitcoin and mining

Postposted on Wed Feb 26, 2014 4:05 pm

superjawes wrote:Well you actually don't want to leave the market to "trust." You want rules (laws) in place so that you can take action if someone abuses, manipulates, or breaks the market. Even if those third parties are crummy, you can take legal action against them if they just take your money. If the entire system is decentralized without government control, what are you going to do when thousands of cryto-coins go missing?

I think the point is that the laws governing how banks operate is what *enables* trust. You've still got to trust *someone*... in our case here in the US, we choose to trust our government. In some countries, the government can't be trusted at all (and to keep this out of the R&P zone I'll leave as an exercise for the reader to decide how *much* we really should trust the US government).

superjawes wrote:I think the solution here is the consolidation of currencies. As you mention, part of it has to do with exchange rates between currencies. Changing or losing printing powers might hurt in the short run, but I think the global economy will eventually demand simpler currency handling as opposed to dealing with exchange rates all the time. IIRC, that is why Europe adopted a common currency.

I disagree; the Euro experiment has not been going all that well. Different currencies and exchange rates exist for a reason. You can't unify currencies without also unifying economies. This is the trap the EU fell into with Greece -- Greece transitioned to the Euro, but their economy was never truly unified with the rest of the EU. The result has been chaos and economic collapse.
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Re: Would like some more details on bitcoin and mining

Postposted on Wed Feb 26, 2014 5:22 pm

Well, speaking day-job, I'm pretty sure that the collapse of Mt. Gox means that for crypto-currencies to ever be regulatorily accepted as media of exchange here in the US, the exchanges will be required to be run by the banking sector (for liquidity purposes) and fall under all of the BSA/AML rules including the rules for account opening that now exist for the banking world. IOW, using crypto-currencies in the US will probably require giving up your anonymity on that account. Pretty sure that was the regulatory intent all along.

FTR, I'm with Glorious. Anyone heavily using crypto-currencies is trying to hide something.
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Re: Would like some more details on bitcoin and mining

Postposted on Thu Feb 27, 2014 12:19 am

http://news.yahoo.com/collapse-exchange ... 52149.html
RAPHAEL SATTER and YURIKO NAGANO wrote: Since its creation in 2009, bitcoin has become popular among criminals because it allows people to make one-to-one transactions, buy goods and services and exchange money across borders without involving banks, credit card issuers or other third parties. Bitcoin has struggled to shake off its associations with criminality, particularly its role in powering the now-defunct online drug marketplace Silk Road. Only last month, another member of the Bitcoin Foundation, Vice Chairman Charlie Shrem, was arrested at New York's Kennedy Airport on charges of money laundering.
Campbell Harvey wrote: Mt. Gox "reminds us of the downside of decentralized, unregulated currencies," said Campbell Harvey, a professor at the Duke University Fuqua School of Business who specializes in financial markets and global risk management. "There is no Federal Reserve or IMF to come to the rescue. There is no deposit insurance."
Peter Leeds wrote: Peter Leeds, a publisher of newsletter focused on risky investments, doubts bitcoin will recover from the Mt. Gox collapse. He expects the currency to plunge below $300. "It's more likely that someone getting involved in bitcoin at this point of the game is going to lose," Leeds said. "There are all sorts of problems inherent with bitcoin that are just now coming to light."
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Re: Would like some more details on bitcoin and mining

Postposted on Thu Feb 27, 2014 1:23 am

Deposit Insurance. We know how banks and credit unions work. They are regulated, for better or for worse. We can file lawsuits and hopefully get our money back when things go bad, in a perfect rosy world that I admit it doesn't exist. Yet it is something. With a crypto coin it is practically the wild west. Do you really think your crypto coins are safe when you will without a doubt see more exchange runs in the future? What happens if people started to cash their coins now? Will all those deposits be honored? What institution is backing them? These are hard questions that deserve answers before people start placing their trust. Caveat emptor does't cut it.

Theft. What happens when one of these exchanges are hacked, coins are stolen, databases are compromised? Ooops, sorry! Are you going to file suit against the exchange? How do you prove that those coins stolen were yours?

Taxes. Should these crypto coins be classified as currency? Investments? Commodities? It matters when the IRS is involved.

Money laundering. It is unfair to say that an individual that has a deep desire for privacy has something to hide. Yet, there are large amount of ill gotten gains that need to be cleaned.

There is still long ways before any of these exchanges or coins become reputable, trustworthy. Not that I am against them, but it is just a fad now. What matters is if they manage to turn this fad into something for good.
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Re: Would like some more details on bitcoin and mining

Postposted on Thu Feb 27, 2014 2:12 am

Glorious wrote:
Firestarter wrote:I don't know man, do you know of a better way to instantly send money across the world as a private person, without involving crummy companies like Paypal or Western Union?


1) The people who need to legitimately do that are very much in the minority. It is simply not a very common transaction.


That changes dramatically once we replace one side with "start-up business". Consider for example the new market for legal marijuana in Colorado: There were many new businesses opening up that could not setup any means of paying with anything else than cash because all the financial services just said no. Which goes hand in hand of course with your second point:
Glorious wrote:2) The reason, at least partially, for why those existing services are "crummy" is because they are lightning rods for fraud/criminal activity.


Glorious wrote:3) The government is rightly concerned about "private persons" sending money abroad, because even when that uncommon event occurs it is usually in the facilitation of some sort of trade. Trade which, most likely, contravenes duties on imports or controls on FOREX. Random "private person" charity via BTC is unlikely to the point of absurd, and remittance via BTC is also extremely unlikely. "Private persons" are also unlikely to have merchant accounts, which (probably intentionally on your part) excludes Credit Card networks, which are approaching world-wide ubiquity.

And what if you found out that you cannot trust your government anymore? Look what's happened in Ukraine the last few weeks, and what the banks' reactions were.

Glorious wrote:I'm still at loss for why people think a market without trust is somehow desirable or even possible.

A market cannot exists completely without trust. But what Bitcoin made pretty clear is that you *can* have *transactions* without trust. You don't have to trust me, or any bank or payment provider, you just have to tell me where to send my BTC and you can wait for the network to confirm that I've sent it. Once it does, you have proof that you have your BTC, and I have proof that I sent it to you. The only thing we have to trust is the effectiveness of the Bitcoin network itself, which is a peer to peer network built on the same principle of cryptographically verifying instead of trust, and their motivation to do it is pure greed (mining).

As to why this is desirable: Why don't you ask the countless of small businesses and individuals that got screwed by Paypal how they would like a system where they don't have to trust a third party OR the customer?
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Re: Would like some more details on bitcoin and mining

Postposted on Thu Feb 27, 2014 7:50 am

just brew it! wrote:I think the point is that the laws governing how banks operate is what *enables* trust. You've still got to trust *someone*... in our case here in the US, we choose to trust our government. In some countries, the government can't be trusted at all (and to keep this out of the R&P zone I'll leave as an exercise for the reader to decide how *much* we really should trust the US government).

True. Basically you want to shift the trust somewhere where you feel most comfortable. It's probably more accurate to say you want the powers that be split up so that no one entity has it all, giving checks and balances to whatever market or system.

just brew it! wrote:
superjawes wrote:I think the solution here is the consolidation of currencies. As you mention, part of it has to do with exchange rates between currencies. Changing or losing printing powers might hurt in the short run, but I think the global economy will eventually demand simpler currency handling as opposed to dealing with exchange rates all the time. IIRC, that is why Europe adopted a common currency.

I disagree; the Euro experiment has not been going all that well. Different currencies and exchange rates exist for a reason. You can't unify currencies without also unifying economies. This is the trap the EU fell into with Greece -- Greece transitioned to the Euro, but their economy was never truly unified with the rest of the EU. The result has been chaos and economic collapse.

Well the "problem" we were discussing implied an economy across currencies. If economies are actually integrated, then economic turmoil is going to affect multiple countries whether or not they share a currency.

And Greece specifically is a hornet's nest of problems.
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Re: Would like some more details on bitcoin and mining

Postposted on Thu Feb 27, 2014 8:26 am

HEY GUYS!!! I HAVE COINS WITH DOGS ON THEM!! THEY'RE SUPER CUTE!!!
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Re: Would like some more details on bitcoin and mining

Postposted on Fri Feb 28, 2014 6:42 am

http://news.yahoo.com/mtgox-bitcoin-exc ... 04460.html
http://abcnews.go.com/Technology/wireSt ... d-22713601
http://www.salon.com/2014/02/28/japan_m ... _expected/
Japanese deputy prime minister and finance minister Taro Aso wrote: Japanese deputy prime minister and finance minister Taro Aso said earlier Friday he had always thought Bitcoin was suspect and said the country might take action following the MtGox debacle. Aso said he had foreseen difficulties for bitcoin.

"I was thinking that this sort of thing won't last long," said Aso. "I was thinking it would collapse sometime."

"No one recognizes them as a real currency," he told reporters. "I expected such a thing to collapse." Aso, known for his blunt language, said that a predictable outcome for bitcoin had come even sooner than he had expected.


Darren Hayes wrote: Mt. Gox's spectacular crash this week underscores the risk involved in trading in an unregulated, unbacked currency, said Darren Hayes, assistant professor at Pace University's Seidenberg School of Computer Science and Information Systems in New York. Even if an agency investigates, there's no paper trail and traders are mostly anonymous, making it nearly impossible to recover the money, he said.


Zhou Ming wrote: “For the bitcoin investors who started early like me, this does not matter too much as we’ve already made much money earlier.”
Ponzi schemes are great for the folks that get in early and take their profits before they collapse, too.


And a bit of googling turned up someone else drawing the same comparison (Hooray for the internet always finding some nutjob who supports whatever opinion you're trying to bolster):
http://theeconomiccollapseblog.com/arch ... of-bitcoin
Michael Snyder wrote: I just didn't have any faith in bitcoin. I considered it something of a Ponzi scheme. That is why I never recommended it to anyone. Those that got in early and got out at the peak of the market made a killing. Good for them. But most investors are going to end up taking a bath - especially those that got in at the very end.
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Re: Would like some more details on bitcoin and mining

Postposted on Fri Feb 28, 2014 10:45 am

Aso, known for his blunt language, said that a predictable outcome for bitcoin had come even sooner than he had expected.

If Taro Aso means to say that this was the predictable end of Bitcoin, then he is mistaken. The Bitcoin network and economy is doing just fine without MtGox, and was doing just fine before when MtGox was basically dead to the USA anyway due to not allowing USD withdrawals.

Mt. Gox's spectacular crash this week underscores the risk involved in trading in an unregulated, unbacked currency, said Darren Hayes, assistant professor at Pace University's Seidenberg School of Computer Science and Information Systems in New York. Even if an agency investigates, there's no paper trail and traders are mostly anonymous, making it nearly impossible to recover the money, he said.

MtGox may not have had any paper trail, but Bitcoin most definitely has. In fact, it's "paper" trail is the foundation of the whole network. Also, it's not nearly impossible to recover BTC when it has changed hands, it's absolutely impossible. IMO Darren Hayes is very much right with his comments on MtGox, but they don't necessarily apply to Bitcoin as a whole.
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Re: Would like some more details on bitcoin and mining

Postposted on Fri Feb 28, 2014 11:42 am

Firestarter wrote:That changes dramatically once we replace one side with "start-up business". Consider for example the new market for legal marijuana in Colorado: There were many new businesses opening up that could not setup any means of paying with anything else than cash because all the financial services just said no. Which goes hand in hand of course with your second point:


It's still illegal federally, not-withstanding the current administration's recently published guidelines that say "we won't do anything, promise (unless it is 'Bad'TM, in which event you should have known better, and you are still in trouble)" The statutes are still on the books...

Firestarter wrote:And what if you found out that you cannot trust your government anymore? Look what's happened in Ukraine the last few weeks, and what the banks' reactions were.


How is BTC going to help me in that scenario?

Firestarter wrote:A market cannot exists completely without trust. But what Bitcoin made pretty clear is that you *can* have *transactions* without trust.


False. It only makes clear that transmission of payment can be verifiable and irrevocable.

I'm not sure what problem that is intended to solve. The problem with anonymous transactions, or transactions with untrusted parties, has never been that you cannot verifiably and irreversibly put money in their hands.

Rather, the problem is what they do after that. Namely, nothing. You can stream money into the void just as efficiently using Western Union.

In other words, how do you trust them to actually send you whatever it is you've bought? You've guaranteed and assured payment, not receipt.

FireStarter wrote:You don't have to trust me, or any bank or payment provider, you just have to tell me where to send my BTC and you can wait for the network to confirm that I've sent it. Once it does, you have proof that you have your BTC, and I have proof that I sent it to you.


Yes. I have proof that I've spammed money into the void, which I could just as easily have done with Western Union. Yes, I have to "trust" Western Union, but why am I so insanely concerned about their (proven) ability to deliver as opposed to the person I've actually transacted with? :-?

FireStarter wrote:As to why this is desirable: Why don't you ask the countless of small businesses and individuals that got screwed by Paypal how they would like a system where they don't have to trust a third party OR the customer?


By substituting a system where the person who actually sends money bears all the liability? :o

That's not a good idea.

You see, people getting goods and then reneging on payment is not only a very inefficient kind of fraud (because goods are definitionally less liquid than money), but it also incorporates a certain level of traceability: there is a real-world address.

Thus, you WANT to a have system where the person sending goods bears the majority of the liability. In fact, that's why we have it. It's not a situation that exists for want of technology, it is a situation that exists because of the needs of society.

[quote=="superjawes"]Well the "problem" we were discussing implied an economy across currencies. If economies are actually integrated, then economic turmoil is going to affect multiple countries whether or not they share a currency.[/quote]

I'm with JBI. In fact:

JBI wrote:Different currencies and exchange rates exist for a reason. You can't unify currencies without also unifying economies. This is the trap the EU fell into with Greece -- Greece transitioned to the Euro, but their economy was never truly unified with the rest of the EU. The result has been chaos and economic collapse.


QFT!

A currency union is problematic because we tune the economy through monetary policy. If everyone has the same currency, everyone must have the same monetary policy. This causes issues even here in the US, but a (mostly) common socio-culture and relatively high-levels of intra-national migration help mitigate it to a certain extent.

FireStarter wrote:If Taro Aso means to say that this was the predictable end of Bitcoin, then he is mistaken. The Bitcoin network and economy is doing just fine without MtGox, and was doing just fine before when MtGox was basically dead to the USA anyway due to not allowing USD withdrawals.


You have a very strange definition of "fine." There isn't any BTC economy to speak of, even it's minimal forays in this country are immediately translated into USD (and as I said earlier in this thread, that might all be at the direct expense of foolish VCs).

FireStarter wrote:MtGox may not have had any paper trail, but Bitcoin most definitely has. In fact, it's "paper" trail is the foundation of the whole network. Also, it's not nearly impossible to recover BTC when it has changed hands, it's absolutely impossible. IMO Darren Hayes is very much right with his comments on MtGox, but they don't necessarily apply to Bitcoin as a whole.


A paper trail that is so easy to follow that the biggest exchange wasn't doing it correctly for months while getting robbed blind.

Currencies are more than systems of accounting. They must be current in the marketplace, that is, they must in commercial circulation. A currency that is not current is merely a chit.

Saying the system of chits is secure shouldn't reassure anyone very much...
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Re: Would like some more details on bitcoin and mining

Postposted on Fri Feb 28, 2014 7:59 pm

Bitcoin itself is far from a Ponzi scheme, but a lot of "investors" certainly took the pump-and-dump approach. If they were actually wanting to do something with their stash they wouldn't have left it with Gox in the first place.
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Re: Would like some more details on bitcoin and mining

Postposted on Fri Feb 28, 2014 8:03 pm

Firestarter wrote:
Aso, known for his blunt language, said that a predictable outcome for bitcoin had come even sooner than he had expected.
If Taro Aso means to say that this was the predictable end of bitcoin, then he is mistaken.
To be fair, one of the articles that I read attributed Aso's comments to mean that he was certain that several of the exchanges would fail, while another one worded it to say that he was certain that bitcoin would fail. I respect a finance minister who's not afraid to say "I told you so."
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Re: Would like some more details on bitcoin and mining

Postposted on Tue Mar 04, 2014 2:22 pm

http://news.yahoo.com/uk-lawyer-says-hu ... ector.html
Mt. Gox said it may have lost 750,000 of its customers' bitcoins and 100,000 of its own, equal to about 7 percent of bitcoins worldwide. "There are lots of unanswered questions," said Selachii's Howlett. "Some people have had their life savings disappear."


http://nypost.com/2014/02/15/welcome-to ... e-bitcoin/
http://nypost.com/2014/02/27/mt-gox-bit ... t-of-luck/
http://www.marketoracle.co.uk/Article44647.html
Nadeem_Walayat wrote: Bitcoin ultimately has a destiny with extinction.
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JustAnEngineer
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Re: Would like some more details on bitcoin and mining

Postposted on Tue Mar 04, 2014 3:04 pm

Arvald
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Re: Would like some more details on bitcoin and mining

Postposted on Tue Mar 04, 2014 3:23 pm

Arvald wrote:And another exchange falls
http://yro.slashdot.org/story/14/03/04/ ... t-by-theft


I wouldn't trust the words of these "exchanges" more than I can throw a midget, which isn't very far.

I expect other "exchanges" to be "hacked" too, lol.

Watch the same people that were quite happy to be free from government regulation, and quite happy with the "libertarian" streak whine and clamor now for government regulation. And I mean "libertarian" because the allure of government deregulation is met harshly with reality that you got robbed and you have no recourse.Yeah, I guess everyone is a "libertarian" until they decide they need help from the government for recourse. My point is to have a healthy balance between government regulation to a point where it is not detrimental to society's overall benefit, and that of an individual's freedoms.

Just my opinion.

Edit 1: Redundant phrase out.

Edit 2: Grammar.
uni-mitation
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Re: Would like some more details on bitcoin and mining

Postposted on Tue Mar 04, 2014 4:00 pm

I've been trading bitcoins for years now and i never heard of flexcoin. Why anyone would store bitcoins in a shady place like that is beyond me, when there are so many better alternatives. Flexcoin didn't use a cold storage system, their servers were poorly protected, and everything was in their hot wallet. mt gox had similar issues, and thats why i never stored any coins there.
CB5000
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Re: Would like some more details on bitcoin and mining

Postposted on Tue Mar 04, 2014 4:29 pm

if you read the article they did have coins in cold wallet and they say they are contacting people whose coins they are for transfer.
From the looks you had to choose cold wallet storage.
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Re: Would like some more details on bitcoin and mining

Postposted on Wed Mar 05, 2014 5:41 am

http://news.yahoo.com/japan-not-conside ... ector.html
Bitcoin, a digital currency that is traded on a peer-to-peer network independent of central control, has engendered a wave of creative criminality - from bitcoin theft by hacking online platforms to potentially using the crypto-currency in money laundering, bribery and buying illicit products.

Hiroshi Mikitani, a prominent Japanese e-commerce billionaire and CEO of Rakuten Inc, expressed caution about trying to regulate the virtual currency. "They should not act hastily," he said, according to Kyodo News. "As for whether we need regulations, they should first examine the situation a bit more and discuss it in depth."


http://news.yahoo.com/bitcoin-bank-flex ... ector.html
http://news.yahoo.com/another-bitcoin-g ... 33294.html
Flexcoin later posted an update on its site saying that the attack exploited a flaw in its code on transfers between users and involved inundating the system with simultaneous requests to move coins between accounts. "Flexcoin has made every attempt to keep our servers as secure as possible, including regular testing," it said, adding it had repelled thousands of attacks over the past few years. "But in the end, this was simply not enough."

According to Flexcoin's terms of service, Flexcoin users aren't owed anything: "We have taken every precaution to defend your bitcoins from hackers and/or intruders.," the terms clearly state. "However, Flexcoin Inc is not responsible for insuring any bitcoins stored in the Flexcoin system. You are entering into this agreement with Flexcoin Inc. You agree to not hold Flexcoin Inc, or Flexcoin Inc's stakeholders, or Flexcoin Inc's shareholders liable for any lost bitcoins."


http://www.huffingtonpost.com/2014/02/2 ... lp00000592
The Mt. Gox debacle has justified the worst fears anybody might have had about jumping into Bitcoins -- namely, that your digital money can be hacked and stolen just like your identity or any other digital property. As Quartz noted, this would not be the first time Bitcoins have been stolen.
Last edited by JustAnEngineer on Wed Mar 05, 2014 5:49 am, edited 1 time in total.
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JustAnEngineer
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Re: Would like some more details on bitcoin and mining

Postposted on Wed Mar 05, 2014 5:48 am

"It works great if you've implemented it correctly! You don't have trust anyone and your money is entirely safe!"

"How do I know if someone implemented it correctly?"

"You have to tru.... Oh. I see what you did there."

:D
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Re: Would like some more details on bitcoin and mining

Postposted on Wed Mar 05, 2014 6:52 am

http://hackingdistributed.com/2014/03/0 ... -at-mtgox/
Emin Gün Sirer wrote:“Human history is full of people who were entrusted with valuables, who then absconded with them.” “Whenever anyone is in a position of trust, whenever the illegal gains to be obtained from breaking that trust exceed the value of one’s reputation, there will be a temptation to steal. Jail is not quite a deterrent in this case, where the jurisdiction is Japan and the technology is too new for the justice system. Chances are that this is a simple case of theft, involving at least one insider.”


What Nigerian scams are to your grandfather, Bitcoin exchanges are to the 20-30 semi-tech-savvy libertarian demographic. The exchanges are based on layers upon layers of bad software, run by shady characters.

A normal person is incapable of running their own wallet. And it's not even good advice: your Macbook or Android phone is not a secure device. This demographic uses their laptops for viewing highly questionable content and their phones for installing flapping bird software from Jimmy Bob's Software Inc. These are the same people who grant permissions to make phone calls, activate cameras and send SMSs to phone apps whose sole function is to act as a flashlight. Running a wallet is the last thing they should be trusted with.
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