Bitcoin

[maxiev]

To me that's the beauty of bitcoin, that it's not centralized and no one has total control over it. Governments can't artificially inflate it as we've seen in the dollar, and banks can't embargo and freeze your assets. Your money belongs to you. period. It's amazing.

Governments and banks can control the price of bitcoins by buying up huge amounts then dumping these on the market, bringing down the value of the bitcoins.

 

Just another point of clarification. Are bitcoins supposed to replace the current monetary system we have in place today all around the world? Or are bitcoins merely going to complement regular currency? I would hazard a guess that those who will be most likely to use bitcoins are those involved in underworld activities such as money laundering, the drug trade, ill gotten wealth, etc.

 

Any activity wherein governments could potentially freeze/sequester/confiscate currencies would best be served by using the bitcoin technology.

[Larry]

What do you suppose will happen to the banking industry world-wide if bitcoin becomes the preferred mode of currency sometime down the line? Since banks and governments can't regulate it, and can't put liens on your bitcoins, what will happen to off-shore banking havens and Swiss bank accounts? Will the adoption of bitcoin technology spell the doom for these banking entities? And what about the mainstream banking system itself? How will this be affected if bitcoin technology becomes a success?

 

they will have to adapt or die much like what happened in the music industry. there will be some small banks that will accept an initial loss but take advantage of the situation and win in the end.

 

Banks I imagine will come up with different services, maybe some that we won't recognize, because with Bitcoin, you are your own bank.

 

if they're smart and realize what bitcoin is, they can adapt early and modify their model.

[Larry]

Unfortunately bitcoin values are dropping and central banks around the world are clamping down on it.

 

the current crash isn't because of the Bitcoin technology, it's largely due to Mt. Gox tanking, and given the volume that goes through that exchange it screws things up for everyone.

 

not all central banks are opposed or are clamping down on bitcoin, china, russia, iceland (i think), and some others are warning against the use of bitcoin but haven't really done any steps to stop it. france wants to regulate it via law and licensing, croatia has accepted it as a mainstream currency, and so on. So even some central banks are taking a wait and see attitude given the momentum that bitcoin has.

 

it's really very interesting times

[Larry]

Governments and banks can control the price of bitcoins by buying up huge amounts then dumping these on the market, bringing down the value of the bitcoins.

 

not really, it would take a singular entity a whole lot of money, literally ship loads of it

 

to effect a massive crash via pump and dump, you'd have to buy 5-10% of all bitcoin currently in existence, at currently 11 million bitcoins mined, that's a lot of bitcoin to buy.

 

everytime you buy bitcoin you'd be driving the price up, and if you were going for 5-10%, you'd be paying almost $100M easy for the last few bitcoins to reach that 5-10%, that's a lot of printed money.

 

in fact they might resort to their time-tested tactic of printing up more just to make up that amount. And the economic effect of that would be staggering.

 

Just another point of clarification. Are bitcoins supposed to replace the current monetary system we have in place today all around the world? Or are bitcoins merely going to complement regular currency? I would hazard a guess that those who will be most likely to use bitcoins are those involved in underworld activities such as money laundering, the drug trade, ill gotten wealth, etc.

 

I'd like to see bitcoin or another cryptocurrency reach that level, who knows really if it will replace or co-exist with traditional currencies, only time will tell, but bitcoin and cryptocurrency is here to stay.

 

well I can see how shady people can use bitcoin for illegal activity, but it's too much of a generalization to say that only those who are doing shady stuff would be dealing in bitcoin, especially now that there are over 21000 legit businesses operating with bitcoin.

 

Also, printed paper money has and will still be used for nefarious activity. Money is money, period. What you use it for isn't the money's fault. It's like fire, you can use it to cook you a meal or heat your house, but you can also burn other people's houses with it, now it's not fire's fault that it can be used destructively.

 

-----

 

now is bitcoin complicated, of course. Despite all I've read, I still don't really understand half of it, it's sophiticated and complex, but the main benefit is undeniable.

 

I would rather have a decentralized currency, than one where banks have direct control over the value of my money, have the power to print it out of thin air, and then lend it to me at interest and expect me to slave away and repay that fake debt they created when they printed it out of nothing.

[Larry]

What are the advantages of Bitcoin?

 

Payment freedom - It is possible to send and receive any amount of money instantly anywhere in the world at any time. No bank holidays. No borders. No imposed limits. Bitcoin allows its users to be in full control of their money.

 

Very low fees - Bitcoin payments are currently processed with either no fees or extremely small fees. Users may include fees with transactions to receive priority processing, which results in faster confirmation of transactions by the network. Additionally, merchant processors exist to assist merchants in processing transactions, converting bitcoins to fiat currency and depositing funds directly into merchants' bank accounts daily. As these services are based on Bitcoin, they can be offered for much lower fees than with PayPal or credit card networks.

 

Fewer risks for merchants - Bitcoin transactions are secure, irreversible, and do not contain customers’ sensitive or personal information. This protects merchants from losses caused by fraud or fraudulent chargebacks, and there is no need for PCI compliance. Merchants can easily expand to new markets where either credit cards are not available or fraud rates are unacceptably high. The net results are lower fees, larger markets, and fewer administrative costs.

 

Security and control - Bitcoin users are in full control of their transactions; it is impossible for merchants to force unwanted or unnoticed charges as can happen with other payment methods. Bitcoin payments can be made without personal information tied to the transaction. This offers strong protection against identity theft. Bitcoin users can also protect their money with backup and encryption.

 

Transparent and neutral - All information concerning the Bitcoin money supply itself is readily available on the block chain for anybody to verify and use in real-time. No individual or organization can control or manipulate the Bitcoin protocol because it is cryptographically secure. This allows the core of Bitcoin to be trusted for being completely neutral, transparent and predictable.

 

 

What are the disadvantages of Bitcoin?

 

Degree of acceptance - Many people are still unaware of Bitcoin. Every day, more businesses accept bitcoins because they want the advantages of doing so, but the list remains small and still needs to grow in order to benefit from network effects.

 

Volatility - The total value of bitcoins in circulation and the number of businesses using Bitcoin are still very small compared to what they could be. Therefore, relatively small events, trades, or business activities can significantly affect the price. In theory, this volatility will decrease as Bitcoin markets and the technology matures. Never before has the world seen a start-up currency, so it is truly difficult (and exciting) to imagine how it will play out.

 

Ongoing development - Bitcoin software is still in beta with many incomplete features in active development. New tools, features, and services are being developed to make Bitcoin more secure and accessible to the masses. Some of these are still not ready for everyone. Most Bitcoin businesses are new and still offer no insurance. In general, Bitcoin is still in the process of maturing.

 

https://bitcoin.org/en/faq#what-are-the-advantages-of-bitcoin

[maxiev]

What are the advantages of Bitcoin?

 

Payment freedom - It is possible to send and receive any amount of money instantly anywhere in the world at any time. No bank holidays. No borders. No imposed limits. Bitcoin allows its users to be in full control of their money.

 

Very low fees - Bitcoin payments are currently processed with either no fees or extremely small fees. Users may include fees with transactions to receive priority processing, which results in faster confirmation of transactions by the network. Additionally, merchant processors exist to assist merchants in processing transactions, converting bitcoins to fiat currency and depositing funds directly into merchants' bank accounts daily. As these services are based on Bitcoin, they can be offered for much lower fees than with PayPal or credit card networks.

 

Fewer risks for merchants - Bitcoin transactions are secure, irreversible, and do not contain customers’ sensitive or personal information. This protects merchants from losses caused by fraud or fraudulent chargebacks, and there is no need for PCI compliance. Merchants can easily expand to new markets where either credit cards are not available or fraud rates are unacceptably high. The net results are lower fees, larger markets, and fewer administrative costs.

 

Security and control - Bitcoin users are in full control of their transactions; it is impossible for merchants to force unwanted or unnoticed charges as can happen with other payment methods. Bitcoin payments can be made without personal information tied to the transaction. This offers strong protection against identity theft. Bitcoin users can also protect their money with backup and encryption.

 

Transparent and neutral - All information concerning the Bitcoin money supply itself is readily available on the block chain for anybody to verify and use in real-time. No individual or organization can control or manipulate the Bitcoin protocol because it is cryptographically secure. This allows the core of Bitcoin to be trusted for being completely neutral, transparent and predictable.

 

 

What are the disadvantages of Bitcoin?

 

Degree of acceptance - Many people are still unaware of Bitcoin. Every day, more businesses accept bitcoins because they want the advantages of doing so, but the list remains small and still needs to grow in order to benefit from network effects.

 

Volatility - The total value of bitcoins in circulation and the number of businesses using Bitcoin are still very small compared to what they could be. Therefore, relatively small events, trades, or business activities can significantly affect the price. In theory, this volatility will decrease as Bitcoin markets and the technology matures. Never before has the world seen a start-up currency, so it is truly difficult (and exciting) to imagine how it will play out.

 

Ongoing development - Bitcoin software is still in beta with many incomplete features in active development. New tools, features, and services are being developed to make Bitcoin more secure and accessible to the masses. Some of these are still not ready for everyone. Most Bitcoin businesses are new and still offer no insurance. In general, Bitcoin is still in the process of maturing.

 

https://bitcoin.org/en/faq#what-are-the-advantages-of-bitcoin

Very interesting article. Although I doubt if any of our honorable senators and congressmen will have the brain power to enact legislation that would help ensure that bitcoin technology isn't abused by would-be criminals wanting to take advantage of a technology than many people still don't understand.

 

Would you know of any local company that accepts bitcoins at this time as payment?

[Larry]

well here's the thing

 

bitcoin like traditional paper money can used and abused by anyone.

 

criminals can use bitcoin to launder their money, that's true

 

but

 

criminals can also use traditional paper currency to launder their money too, with the exact same ease that they would have when doing it with bitcoin.

 

it's exactly the same thing

 

like I said, what it's going to be used for isn't the point. It can be used for anything, in the same way that regular paper money can be used for anything.

 

so I don't see the point of regulating bitcoin for fear of people abusing it. If you regulate it, it would defeat the purpose.

[sonnyt111]

well here's the thing

 

bitcoin like traditional paper money can used and abused by anyone.

 

criminals can use bitcoin to launder their money, that's true

 

but

 

criminals can also use traditional paper currency to launder their money too, with the exact same ease that they would have when doing it with bitcoin.

 

it's exactly the same thing

 

like I said, what it's going to be used for isn't the point. It can be used for anything, in the same way that regular paper money can be used for anything.

 

so I don't see the point of regulating bitcoin for fear of people abusing it. If you regulate it, it would defeat the purpose.

Many American criminals have stashed away huge sums into Swiss bank accounts to prevent the US government from touching/freezing these funds. Lately, I understand, the US government has enacted new laws requiring Swiss banks to disclose the names of Americans who have accounts in their banks.

 

Given the powerful clout of the US government, the Swiss banks have no choice but to comply. So now, even Swiss bank accounts aren't a completely safe haven for American criminals.

 

Will the US government be able put a lien/freeze accounts of Americans who own bitcoins? If not, then this will be very attractive to US criminals.

 

 

 

 

[sonnyt111]

http://money.cnn.com/2014/02/19/technology/security/bitcoin-black-market/index.html

 

 

 

 

Silk Road heist could doom Bitcoin black markets

 

The heart of the issue is that Bitcoin -- by design -- doesn't work well with shady middlemen. Anyone with access to your digital wallet can empty it forever. And all transactions are irreversible.

 

That's why it's not smart to fork over bitcoins to an underground website like Silk Road, which stands between buyers and sellers and holds on to money during a deal.

 

"When you introduce a third party holding on to people's funds, it's absolutely antithetical to the idea of Bitcoin," said Evan Rose, CEO of Bitcoin ATM maker Genesis. "You're giving someone cash over the Internet that you'll never be able to get back."

 

Silk Road's new administrators said hackers exploited a Bitcoin glitch to steal funds. But in the days since the attack, it's become painfully clear that the Bitcoin system isn't to blame. Only two scenarios exist, says Andreas Antonopoulos an engineer at Bitcoin wallet service Blockchain: Silk Road's leaders were fooled into emptying all their accounts willingly, or they simply swindled their customers themselves.

 

Related: Bitcoin regulation coming this year

 

Those who currently use bitcoins to buy drugs, weapons or hire assassins also have something else to worry about. All transactions leave a permanent record that's traceable to specific wallets. Even though Bitcoins are technically anonymous, if they ever pull that money out in their name at a legitimate Bitcoin bank or exchange, law enforcement has a direct connection to a real identity.

 

That's why Weaver says bitcoins are essentially "prosecution futures."

 

Bitcoin tracing experts are already cropping up -- and they're teaming up with law enforcement too. Sarah Meiklejohn is a computer scientist and graduate student at the University of California in San Diego, where she explores how people are spending their bitcoins.

 

She said people spending bitcoins in black markets don't realize "every bitcoin is by nature a marked bill." And it's not as forgiving as actual cash. If police catch you buying something illegal in person, you get criminal charges for that single act. Bitcoin's permanent, public ledger gives prosecutors a much longer memory.

 

"if you get caught buying drugs with bitcoins and they look at your transaction history, you get caught on every transaction you've ever made," she said. "It's much more serious." http://i.cdn.turner.com/money/images/bug.gif

 

NEW YORK (CNNMoney)

 

 

The jig may be up for online drug bazaars that accept bitcoins.

Black markets on the Deep Web offer everything: money laundering and a one-stop-shop for illegal drugs and guns. But a recent series of heists, busts and fraud have shown why these bazaars can't be trusted. In October, the FBI shut down Silk Road, the biggest online black market, seizing $3.5 million of bitcoins in the process. In November, a similar site called Sheep Marketplace was labeled a scam after it lost $6 million in users' bitcoins in an alleged hack. And last week, administrators of a revived Silk Road claimed cyber attackers sucked out all the bitcoins it held in escrow -- valued at $2.7 million.

 

This latest episode "may mark the death knell for the dark markets," according to Nicholas Weaver, a security researcher at the International Computer Science Institute.

 

"Between busts, scam-markets, and now mass theft, it is a task that they clearly are incapable of doing," Weaver said.

 

 

 

 

 

[sonnyt111]

http://news.yahoo.com/inside-great-bitcoin-heist-104500305--politics.html;_ylt=A0SO8xiOngxTPV4AwZlXNyoA;_ylu=X3oDMTExMzRwNWZ0BHNlYwNzcgRwb3MDMgRjb2xvA2dxMQR2dGlkA1VJQzFfMQ--

 

 

 

 

 

Inside the Great Bitcoin Heist

By Michael Daly February 18, 2014 5:45 AM The Daily Beast 0 shares Inside the Great Bitcoin Heist

Two major bitcoin heists worth millions of dollars have struck in the cyber world beyond the reach of Google into what is known as the “deep web.”This vast realm of cyberspace comprises some 90 percent of the internet and allows users to travel and communicate in an untraceable anonymity that even the NSA has difficulty compromising. Users are accorded freedom from big menaces such as censorship and political oppression, as well smaller ones such as privacy-invading marketers.

 

But there are also those who take advantage of the freedom to sell drugs, steal— or maybe both in the case of these two big heists. One of the heists may have exceeded the $6 million Lufthansa heist of Goodfellas fame in 1978, by as much as eight-fold in actual dollars, still double when adjusted for inflation.

 

They both, however, follow the aftermath of Operation Marco Polo, in which the FBI shut down the deep web rug bazaar Silk Road and arrested its alleged founder, Ross Ulbricht, in October. Users who then went to the site were greeted by the words:

 

‘THIS HIDDEN SITE HAS BEEN SEIZED”

 

When the FBI arrested Ulbricht in a San Francisco Public library, an agent managed to snatch his laptop from him before the could snap it shut and trigger its password protections. Ulbricht—who goes by the online alias “Dread Pirate Robert” or just “DPR”—denies all charges against him, despite allegedly having 173,991 bit coins in his “wallet.” That was added to 29,655 bitcoins the FBI seized when it shut down Silk Road. The total came to 173.991, estimated to be worth some $34.6 million at the time, but rising to over $175 million at the height of the bitcoin roller coaster.

 

In the aftermath of the Silk Road takedown, an online character known as MettaDPR popped up in the deep web, and seems to have perpetrated a small theft scam that preceded the big heists soon to come.

 

“Metta,” which is the Pali word for “goodwill”, was melded with DPR to befit the administrator of a new market place called Project Black Flag in the immediate aftermath of the Silk Road takedown.

 

But the moniker turned ironic just three weeks later, when the new pirate of the deep web posted an announcement that he was shutting down and taking his customers’ money with him.

 

“Well mates, I am saddened to say goodbye. When I created P: BF, my intent was pure and I wanted to help the community. Several days ago I begin implementing code changes to freeze funds and dump them to myself. I was unable to cope with the stress and constant demand, so I panicked. I am sorry for my actions, but with the funds I gathered from the site, I will be able to keep myself from being homeless for the next several months. I will always remember those that made this possible.”

 

As a departing gesture, MettaDPR said he would leave up a forum for people to curse him for taking down Black Flag itself and making off with what is estimated to be a few thousand dollars in bitcoins.

 

“I take no offense at truth,” he wrote. “I understand the depth of my failure.”

 

The more charitable commenters wondered if MettaDPR was just a bumbler who had panicked after getting in over his head. Others figured it was just a scam from the outset. One poster named Pablo offered a 50 bitcoin reward for “real info” identifying the MettaDPR.

 

“Friend in Mexico want to talk to Metta,” Pablo wrote.

 

That may well have been some online role playing, but lest you think no actual danger lurks in the deep web, consider that the charges against Ulbricht include multiple murder conspiracies.

 

Those who wanted to take advantage of deep web anonymity to buy illegal drugs, as well other items such as firearms and forged drivers licenses, could still go to Sheep Marketplace, which had been founded earlier in 2013.

 

Then, in late November, Sheep Marketplace announced that it had been looted of all its bitcoins, including the ones customers had lodged with the site pending the completion of deals:

 

“We are sorry to say, but we were robbed on Saturday 11/21/2013 by vendor EBOOK101. This vendor found bug in system and stole 5400 BTC—your money, our provisions, all was stolen. We were trying to resolve this problem, but we were not successful.”

 

This came just as the value of a bitcoin was spiking up past $1,000, which would put the theft reported by the Sheep Marketplace administrators at more than $5.4 million. The website Blockchain, which records the movement of bitcoins, recently indicated that the 39,918 bitcoins received by Sheep Marketplace had subsequently just vanished, leaving a balance of just 0.01 bitcoins.

 

That would put the actual theft in excess of more than $40 million, whereas the Lufthansa heist was under $22 million n present dollars.

 

A website called sheepmarketplacescam.com sprang up and noted that in the days before the crime a number of vendors who were apparently close to the Sheep Marketplace administrators suddenly began offering much bigger loads of drugs at discount prices and demanding that the money be paid upfront. The suggestion was that it was not a robbery but a scam, a repeat of MettaDPR’s hustle on a huge scale.

 

In the meantime, a revived Silk Road, or at least a good facsimile, materialized. Users were greeted with an altered version of the notice the FBI had posted, the words “BEEN SEIZED” now replaced.

 

“THIS HIDDEN SITE HAS RISEN AGAIN.”

 

What seems to have been a new Dread Pirate Robert, DPR2, greeted users with a “welcome back to Freedom” note. The site was back in business, with a page offering a menu of illegal drugs in categories ranging from “opiods” to “cannabis” to “stimulants.”

 

Then, last week, a site administrator calling himself Defcon announced in a lengthy post that the new Silk Road had been hacked and cleaned out of the 4,4474 bitcoins worth $2.7 million.

 

“I am sweating as I write this,” Defcon’s post began.

 

He went on, “I must utter words all too familiar to this scarred community: We have been hacked.”

 

He quickly added, “Nobody is in danger, no information has been leaked, and server access was never obtained by the attacker. Our initial investigations indicate that a vendor exploited a recently discovered vulnerability in the bitcoin protocol known as ‘transaction malleability’ to repeatedly withdraw coins from our system until it was completely empty.”

 

In other words, the money was gone. He went on to say that “this attack hit us at the worst possible time,” just when the site had placed all available bitcoins in accessible “hot storage” to cover projected orders.

 

“In retrospect this was incredibly foolish, and I take full responsibility for this decision,” Defcon said. “I have failed you as a leader, and am completely devastated by today’s discoveries.”

 

He seemed to be either sincere or a pretty good scamster when he lamented, “It is a crushing blow. I cannot find the words to express how deeply I want this movement to be safe from the very threats I just watched materialize during my watch.”

 

He beseeched the thieves, “Whoever you are, you still have a chance to act in the interest of helping this community. Keep a percentage, return the rest. Don’t walk away with your fellow freedom fighters’ coins.”

 

As if this were Occupy Deep Web, he continued, “It takes an entire community committing to integrity—and though this crushing blow will not stop us, it sure is a testament to how greedy some bastards truly are. Being a part of this movement might be the most defining thing you do with your entire life. Don’t trade that for greed, comrades.”

 

One could almost forget Silk Road is a bazaar for drug dealers as Defcon said, “The only way to reverse a community’s greed is through generosity. Our true character is revealed during trying times.”

 

He even offered, “If this financial hardship places you at risk of physical harm, contact me directly and I will do my best to help you with my remaining personal funds.”

 

He then announced new security measures and financial procedures with a spirit we could have only wished the big banks had shown after the near collapse of the economy:

 

“We do not want to be a centralized point of failure, but we also do not want to lead our buyers into dangerous waters.”

 

He added, "From this point forward DO NOT trust markets with centralized escrow. Use multi-signature transactions whenever possible, with trusted third parties as escrow providers.”

 

The message took an ironic twist when Defcon offered reassurances that in raiding the site the crooks had not compromised user anonymity so as to leave dealers and buyers open to being identified by law enforcement. Silk Road users would otherwise face being busted as a result of being robbed.

 

“This was not a worst-case scenario: nobody will be getting arrested from this,” Defcon said. “Financial loss is terrible, but will not put all of us behind bars.”

 

In another twist, the site that pledges “anonymous market” at the upper left of its merchandise listings was posting info that could help track down the thieves.

 

“I’ve included transaction logs at the bottom of this message. Review the vendor’s dishonest actions and use whatever means you deem necessary to bring this person to justice,” Defcon wrote. "More details will emerge as we continue to investigate. Given the right flavor of influence from our community, we can only hope that he will decide to return the coins with integrity as opposed to hiding like a coward.”

 

Defcon closed by saying, “The details we have on the hacker are below. Stop at nothing to bring this person to your own definition of justice.”

 

The info rundown was headed “Attacker Intel as of 2014-02-13 18:00:00 UTC” and was preceded with the message, “We normally do not doxx anyone, and hold user information sacred…”

 

Doxx meaning to reveal someone’s actual identify.

 

“…But this is an extreme situation affecting our entire community, and all three users who have exploited this vulnerability are very much at risk until they approach us directly to assist with any information.”

 

The main attacker, “responsible for 95% of theft,” was “suspected French” and supposedly used six vendor accounts “to order from each other, to find and exploit the vulnerability aggressively.” The usernames were narco93,ketama, riccola, germancoke, napolicoke, and smokinglife.

 

“Finding Attacker 1 is top priority,” the posting advised.

 

The other two attackers were together responsible for only about 5 percent of the thefts, though both seem to know the major suspected thief.

 

Among some of the more suspicious denizens of the deep web are mutterings that maybe the revival of Silk Road is just one big scam; that Defcon is just a con.

 

Meanwhile, the U.S. government finds itself with 173,000 bitcoins, or by one reckoning 1.5 percent of all bitcoins.

 

In one ultimate twist to the tale, access to the deep web was developed via the U.S. Navy Research Laboratory, and conceived as an “onion router,” meaning a system that adds successive layers of encryption to an online identity as it randomly caroms around a volunteer network of relays. The result was The Onion Router, or TOR, which then became Tor.

 

As it so happens, the Tor Project is subsidized by the U.S. government, Sweden and private donations. The software is available to everyone for free—not so much as a bitcoin.

 

 

 

[Larry]

The first article is particularly interesting, and shows how Bitcoin changes the way law enforcement operates.

 

because of its open nature, anyone can look into it, you don't need any legal machinery to look at a bitcoin transaction, it's right there. Everyone can know which bitcoin belongs to whom, what it was used for, and where it goes. They can't freeze a bank that holds your bitcoin, but they can certainly go after you directly when that bitcoin leads to you. Laundering money was definitely easier when bitcoin was more underground about 2 years ago (which was why Silk Road was so successful) but now with Bitcoin coming to the fore, law enforcement is starting to see its benefits.

 

The second article is a whole different matter entirely.

 

A lot of people have been speculating that it was US agencies that were stealing money from SR2, keeping bitcoins for later use. What use that is exactly, no one knows, people are saying that they're going to crash Bitcoin, but that looks too far fetched at this point.

 

The Deep Web is probably the most fascinating place online that I've ever been to.

[sonnyt111]

The first article is particularly interesting, and shows how Bitcoin changes the way law enforcement operates.

 

because of its open nature, anyone can look into it, you don't need any legal machinery to look at a bitcoin transaction, it's right there. Everyone can know which bitcoin belongs to whom, what it was used for, and where it goes. They can't freeze a bank that holds your bitcoin, but they can certainly go after you directly when that bitcoin leads to you. Laundering money was definitely easier when bitcoin was more underground about 2 years ago (which was why Silk Road was so successful) but now with Bitcoin coming to the fore, law enforcement is starting to see its benefits.

 

The second article is a whole different matter entirely.

 

A lot of people have been speculating that it was US agencies that were stealing money from SR2, keeping bitcoins for later use. What use that is exactly, no one knows, people are saying that they're going to crash Bitcoin, but that looks too far fetched at this point.

 

The Deep Web is probably the most fascinating place online that I've ever been to.

So from all the information gathered so far, the advantages and disadvantages, how do you see bitcoins and other virtual currencies in the short, medium, and long term? Who stands the most to gain by using bitcoins rather than conventional currencies?

[Larry]

a lot of these cryptocurrencies will die down, and favor those that are already being heavily traded, such as Bitcoin, Dogecoin, and Litecoin.

 

in the short term bitcoin has taken a big hit because of the Mt. Gox meltdown, but already it has rebounded, from being down to almost 200, and now back up by 40%, it's manipulative but it's going in the right direction. I think bitcoin will blow up in the next few weeks.

 

in the medium term I guess we'll see a lot of highs and lows out of cryptocurrencies in general. A lot of people are quick to invest because given the behavior, it's a sound get rich quick scheme. Get in now while the getting's good, and then get the f#&k on out of there, seems to be the main attitude of most bitcoin players. A lot of average joes are buying and holding, waiting for that time bitcoin stabilizes or hits it's peak which a lot of people speculate to be at $1500 = 1 BTC.

 

 

in the long term, it's small businesses that will benefit the most from bitcoin, given it's a low cost solution, and does away with "old" payment models such as Paypal or online credit cards, it definitely levels the playing field in terms of finance.

 

To a certain extent the ordinary person will benefit from crypto, it might not become the official world currency, but to a certain extent it will be a good alternative for people who really want to control their finances.

[sonnyt111]

a lot of these cryptocurrencies will die down, and favor those that are already being heavily traded, such as Bitcoin, Dogecoin, and Litecoin.

 

in the short term bitcoin has taken a big hit because of the Mt. Gox meltdown, but already it has rebounded, from being down to almost 200, and now back up by 40%, it's manipulative but it's going in the right direction. I think bitcoin will blow up in the next few weeks.

 

in the medium term I guess we'll see a lot of highs and lows out of cryptocurrencies in general. A lot of people are quick to invest because given the behavior, it's a sound get rich quick scheme. Get in now while the getting's good, and then get the f#&k on out of there, seems to be the main attitude of most bitcoin players. A lot of average joes are buying and holding, waiting for that time bitcoin stabilizes or hits it's peak which a lot of people speculate to be at $1500 = 1 BTC.

 

 

in the long term, it's small businesses that will benefit the most from bitcoin, given it's a low cost solution, and does away with "old" payment models such as Paypal or online credit cards, it definitely levels the playing field in terms of finance.

 

To a certain extent the ordinary person will benefit from crypto, it might not become the official world currency, but to a certain extent it will be a good alternative for people who really want to control their finances.

 

A very in-depth analysis of the questions I enumerated earlier. Thanks for the reply bro Larry. Have a great weekend.

[juanito1ingles2]

Interesting concept! I hope I don't stray too far off topic as I try to present another perspective. It's not technical but more conceptual.

 

May I just point out that just like anything conceptualized, it can be re conceptualized & even de conceptualized. Except that in this case, since there is no central regulatory agency, there is also no central accountability for any shenanigans.

 

Peer to peer accountability is a nice concept but only really works in a personal community. When the community is impersonal, as when the population runs past the hundreds, political economics rules, & by that I mean including all the shenanigans that come with it. There's really no such thing as pure economics with a level playing field for everyone. Even when playing monopoly with 6 players, non economic issues can arise between alliances hehehe.

 

Take the $, which is no longer backed by gold, & is supposedly regulated by whatever US authority.

 

Now compare that with the bitcoin, also not backed by gold, but who regulates the limits of its so called mining? Nobody? But who set the limit in the first place? & how was it set? Nobody is accountable.

 

& if it was initially set by someone, then it can always be reset. Particularly since nobody is accountable.

 

Of course, if there is a central regulatory agency, all my comments are moot. In fact, though, there must be a de facto central regulatory agency, even if they don't call & market themselves as such, calling & marketing the system instead as peer to peer. But I believe the next evolution of this system is to establish some form of regulatory agency, whatever it will called, decentralized, federal, etc., much like the open source community, but where there is some accountability. But then I think this

will eventually lead back to the current system, with the same shenanigans.

 

Personally, any global currency system, backed by no real standard, such as gold, is the real root of the exponentially increasing economic inequality in the world. Sure, this inequality was initially set by historical realities, such as natural resources & climate conditions in various localities, but this could still be & have been relatively easily offset by personal, community, national, & maybe even regional initiatives, when there were still real standards, like gold.

 

Without real standards, like gold, the system is subject to manipulation, & much more so when there is no central regulatory agency. & I'm not even going into the inequality between those who have bit access & the overwhelming majority who don't.

 

I think bitcoins may really be lucrative for the haves, much like trading, & even derivative trading. Or like pyramid multi level marketing systems. Those who get in first, make the most, & when the structure inevitably crumbles, or is restructured or reorganized or what have you, those who come in later have no recourse.

 

Personally, I'd like to take a good hard look back at the primitive barter system & see how it's good points can be integrated into global cyber economy hehehe.

 

Lastly, I'm not really particularly a gold standard advocate but it makes a clear historical example.