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Thread: BitCoins

  1. #1
    Unobtanium Shami-Amourae's Avatar
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    BitCoins

    I heard about this new virtual currency is done with the same technology as Bit Torrent, through P2P networks. I don't know if it's a ponzi scheme or a brilliant way for humanity to break from of the banking cartels, but it's worth looking into in my opinion. Many of the technology seems complex, but I've looked it over with my own technology specs and think its absolutely brilliant if something like this can successfully take off.

    It was briefly mentioned on Max Keisers show:
    http://www.youtube.com/watch?v=wwngKUVU85g

    Here's the official breakdown:
    http://www.youtube.com/watch?v=Um63OQz3bjo

    XtraNormal breakdown:
    http://www.youtube.com/watch?v=FTOhti7wxXk

    BookOfNick interview:
    http://www.youtube.com/watch?v=vJE9do_pUd4
    http://www.youtube.com/watch?v=mdr8HY8ygmk


    Potential Upsides:
    • Decentralized
    • Could destroy entire banking establishment
    • People who get in early could multiply their wealth
    • You cant shut it down without shutting down the entire Internet
    • Potential business opportunities


    Potential Downsides:
    • Possible Ponzi scheme
    • Could make identity theft worse
    • People might not 'buy into the idea'
    • Dangerous if the Internet goes out


    I really don't have a firm position if it's a good or bad idea yet. I'm still new to the concept and trying to understand. I'm not trying to insult people here since I know this is a precious metals forum. Max Keiser himself thinks this is a great thing to invest with alongside Silver to destroy the banksters, and that's enough to interest me. Just sharing the info, since I think its something that should be looked into.

    BitCoin website:
    http://www.bitcoin.org/

    Overview of the BitCoin market
    (Last updated May 13, 2011):

  2. #2
    Iridium Bigjon's Avatar
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    Well over 90 percent of the people Hitler locked up were Germans. Only 2 to 3 percent were Jews and most of those Jews were elevated to concentration camp kapos.

    http://www.controversyofzion.info/



  3. #3
    Iridium Bigjon's Avatar
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    Re: BitCoins

    Loosely Managed Digital Currency Could Be Avenue for Crime That's Hard to Block
    April 15, 2011
    By Colby Adams [Alert Global Media, publishers of MoneyLaundering.com]


    An emerging virtual currency intended to be used in lieu of cash could also be a vehicle for criminals seeking to make international transactions anonymously, according to investigators.

    Bitcoin, a loosely organized electronic payment system created in January 2009 by an otherwise anonymous computer programmer known by the possible pseudonym of Satoshi Nakamoto, allows users and merchants to make transactions through digital coins, with or without the aid of payment processors or other financial institutions.

    While the project remains relatively small, it has already drawn enthusiastic users, including international vendors and nonprofit organizations like the Electronic Frontier Foundation, which accept charitable donations of the currency. Google developers have received the green light to research the coins, which are valued at a total of $5 million, according to estimates by www.mtgox.com.

    The currency was "no doubt developed for altruistic purposes by conscientious people, and there are perfectly legitimate, legal and philosophical reasons for wanting the financial anonymity that [Bitcoin] gives, but the other reality is, if this type of currency takes off, it will be a dream for the bad guys," said Steve Santorelli, director of global outreach at Team Cymru, a Burr Ridge, IL-based Internet security firm.

    By using multiple e-mail addresses and anonymous proxies to disguise their locations, criminals can open a new Bitcoin account for each transaction and ensure that their money movements are "virtually bombproof and untraceable to an investigator," said Santorelli, a former Scotland Yard cybercrime detective and a former senior manager of investigations with Microsoft's Internet Crimes Investigation Team.

    Because Bitcoin users can disguise their locations while potentially transacting large sums of currency with the aid of offshore merchants and payment processors, "domestic court orders and subpoenas to pierce the transactions [are rendered] obsolete," he said.

    "The decentralized, international system means that, unlike a financial institution, there is no one to serve a court order on," said Santorelli. "If this system takes off it will be virtually impossible to police it, requiring a fundamental rethink in the investigative approach."

    Money from nothing

    At first blush, the origin and value behind bitcoins will likely seem strange to some. Few, if anyone, has met Nakamoto, organization principal Gavin Andresen said, during a March 15 interview with EconTalk. Control of the organization is decentralized and based on the premise that all users can have a say in monetary decisions.

    "The root problem with conventional currency is all the trust that's required to make it work," Nakamoto wrote in a February 2009 blog on P2P Foundation. "The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust."

    How bitcoins work is a "step beyond any payment system I have ever seen," said Santorelli.

    The currency, which is traded through software anyone can download, is not backed by precious metals or other commodities but relies on the fact that it is accepted by a group of consumers and merchants whose transactions are vetted by one another on a volunteer basis.

    To obtain bitcoins, users can buy existing coins from a participating company—the currency has traded both above and below the value of a U.S. dollar—or try to win a batch of 50 newly-minted bitcoins by first solving a cryptographic puzzle with proof that other users can evaluate. The puzzles are generated by an algorithm designed to make the challenges solvable at a rate of once per 10 minutes, thus establishing a steady rate of coin “creation.”

    Among other methods, the coins can be redeemed for prepaid Visa cards, PayPal credit, cash shipped via mail, digital currency used in the online site Second Life and precious metals and coins, including in pounds of pennies, according to https://en.bitcoin.it/wiki/Trade , which is hyperlinked from the organization's Web site.

    The coins can also be traded between users or spent with the approximately 100 vendors currently accepting the digital money, including electronics dealers, clothing retailers and online bookstores. Among those accepting the currency are a handful of merchants purporting to sell psychoactive drugs, including heroin and LSD, and over a dozen online gambling Web sites, according to the Wiki page.

    A statement on Bitcoin's Web site contends that "sometimes you just want to send money from A to B without worrying about limits and policies."

    Like cash?

    Checks against misuse are already built into the system, which operates as a "pretty loosely organized open source project," said Andresen, in his interview with EconTalk.

    Because the software is open-source and money movements are made via a public platform that anyone can scrutinize, users have the ability, and the incentive, to check whether their peers have engaged in suspicious activity, or have tried to game the system, he said during the interview. Currently, between 5,000 and 10,000 individuals participate in the project, Andresen told EconTalk.

    "Like cash, Bitcoin can be used for good, and it can be used for evil," according to Jeff Garzik, a Bitcoin developer and creator of www.BitcoinWatch.com, a Web site that follows Bitcoin's financial trends. Since transactions are public, and thus traceable, the currency is "slightly less anonymous" than cash, he said.

    "In practice, this provides anonymity for the average transaction, but a government with subpoena power and the ability to perform statistical analysis may be able to track illicit bitcoin activity with a higher success rate than with hard cash U.S. dollar transactions," said Garzik.

    "Every bitcoin transaction ever made is public, and the life of every bitcoin is fully recorded in public for all to see," said Garzik, referring to http://www.blockexplorer.com , a Web site that tracks each transaction by unique number. Yet penetrating beyond the number to the initiator of the transaction "would be the difficult part" of an investigation, he said.

    Still, court orders may be served to bitcoin exchanges, users and other operators, ordering them to "ban" specific bitcoins if needed, he said.

    Nothing stopping them

    Even in instances when wrongdoing is discovered, the organization's decentralized nature would make it "extremely difficult for the government to regulate, and may require them to prosecute only individuals, rather than the system as a whole," according to Tom Kellerman, vice president of security awareness and government affairs for Core Security Technologies, a Boston-based data security firm.

    Although both cash and bitcoins offer a degree of anonymity, they differ in one key aspect: how quickly they can be transported, said Kellerman. Like remittances, bitcoins can be sent across borders rapidly and with little chance of retrieval, he said.

    "The speed difference is roughly that of e-mail versus conventional mail," he said.

    "It avoids every reporting requirement out there, which is scary, and it's open source software, meaning someone could start their own currency, which is also scary," said Arnie Scher, Director at the New York office of BDO consulting and a former compliance manager at JP Morgan Chase.

    "There's nothing preventing drug dealers from starting their own bitcoin currency - nothing," he said.

    Already regulated?

    In response to a request for determination for Bitcoin USA, an independent digital currency exchange company affiliated with the project, the U.S. Treasury Department referred the business to a January 2009 Financial Crimes Enforcement Network (FinCEN) ruling defining digital currencies as prepaid value providers.

    Bitcoin USA eventually closed, in part, because "identification requirements stopped people from completing the registration completely," according to an April 9 post on Bitcoin's main public forum. "I had a total of three people upload their documents out of all the registered people," according to the post, which cited FinCEN's ruling.

    Other bitcoin exchanges have been following the FinCEN ruling "in an ad hoc manner, in an attempt to proactively comply with AML regulations," said Garzik.

    Under U.S. regulations, digital currency companies are prohibited from selling or redeeming more than $1,000 per person per day without registering as a money services business (MSB) with FinCEN, and filing suspicious activity and currency transaction reports.

    Registering with FinCEN would bring Bitcoin-affiliated businesses under the Bank Secrecy Act examination authority of the Internal Revenue Service, which oversees 200,000 MSBs, according to a February 2009 report from the U.S. Government Accountability Office that also noted numerous logistical hurdles the agency faced in overseeing the companies.

    But even if bitcoin exchanges with high-value transactions register with FinCEN, the IRS' monitoring of Bitcoin's vendors would be "unworkable" in part because of confusion over "which part of the system to regulate" and because the IRS is already stretched thin with its current roster of MSBs, said Scher.

    Spokespersons for the IRS and FinCEN declined to comment on the organization. Nakamoto and Andreson did not respond to e-mails seeking comment by press time.

    Room to grow

    Currently, most bitcoin users keep their transactions below the $1,000 threshold because they would prefer to avoid reporting requirements, said Garzik. "Once Bitcoin grows larger, and can profitably support MSB-registered exchanges, those will flourish," he said.

    The fact that the digital currency remains relatively small is also a sign that whatever potential problems Bitcoin may face, it's still too early to worry about large-scale money laundering, said Scott Dueweke, a senior associate at Booz Allen Hamilton who studies alternative payment systems.

    "When you're talking about laundering drug profits, you're talking about millions - even billions - of dollars, and that's too big of a fish for a model like Bitcoin to fry at this point," said Dueweke. A laundering scheme involving Bitcoin would still need a "complicit or willfully ignorant financial institution to move anything in useful amounts," he said.

    Other digital currency businesses have met with skepticism from federal regulators.

    In July 2008, the three principal directors of E-Gold, a digital currency backed by gold, pled guilty to money laundering and charges of running an unlicensed money transmitting business. The Treasury Department fined the business nearly $3 million in October 2009 for helping others evade Iran and Cuba economic sanctions.

    In February 2006, New York indicted three Western Express International executives for exchanging up to $25 million in international criminal proceeds for digital currencies, including digital gold acquired from the purchase of goods with stolen credit card numbers.

    "We are concerned that mechanisms such as the Internet increasingly can be used to conduct business within the United States from a foreign jurisdiction," wrote FinCEN, in a May 2009 ruling. "Use of such mechanisms may avoid both our regulations and the regulations of the foreign jurisdiction," the ruling said.
    Well over 90 percent of the people Hitler locked up were Germans. Only 2 to 3 percent were Jews and most of those Jews were elevated to concentration camp kapos.

    http://www.controversyofzion.info/



  4. #4
    .999 Unobtanium Horn's Avatar
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    Re: BitCoins

    Hopefully it'll turn into the new rage...
    Donald J. Trump IS our very first Black U.S. President

  5. #5
    Unobtanium Shami-Amourae's Avatar
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    Re: BitCoins

    Just bought my first BitCoins last night. Here's how I did it:

    1.) Setup a Dwolla account.
    2.) Linked my bank account to my Dwolla account
    3.) Sent money over to the Dwolla account from bank.
    4.) Setup a Mt Gox account.
    5.) Transferred funded to Mt Gox account.
    6.) Purchased BitCoins on my Mt Gox account.
    7.) Withdrew BitCoins to be sent to my BitCoin address.
    8.) Once I got 6 confirmations, it was successfully added to my wallet.


    The wallet a heavily encrypted file file called wallet.dat. You can move this file to other computers and this acts as the "Physical" BitCoins. The network needs confirmations to know whats going on, so if you have your wallet on other computers, it syncs them all as the same thing, rather than being duplicate copies.

    I'd like to point out at I purchased these BitCoins @$6.80 per BitCoin. Last time I looked at the price a week ago, it was $3.60, so this should give you some perspective how fast the price is rising. As I post this message, a half a day after my purchase, BitCoins are @$8.02 (so I could sell now for a 18%+ profit) , so this shows you the relative volatility of the market, but the general trend is upwards.


  6. #6
    .999 Unobtanium Horn's Avatar
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    Re: BitCoins

    So what will 14.45 bitcoins get you?
    Donald J. Trump IS our very first Black U.S. President

  7. #7
    Unobtanium Shami-Amourae's Avatar
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    Re: BitCoins

    It was basically about $100 when I bought it. I left a little in my Mt Gox account for the Hell of it.

  8. #8
    Unobtanium Shami-Amourae's Avatar
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    Re: BitCoins

    You can also get free BitCoins here, to try the system out yourself:

    http://freebitcoins.appspot.com/

    That's what the 0.02 BitCoin transaction is on my screenshot.

  9. #9
    .999 Unobtanium Horn's Avatar
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    Re: BitCoins

    So is anyone accepting them as payment yet. Or is it a scheme to prop up dollar velocity?
    Donald J. Trump IS our very first Black U.S. President

  10. #10
    Unobtanium Shami-Amourae's Avatar
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    Re: BitCoins

    There is a list here or here of businesses that use it, but it's fairly small. I've noticed some eCommerce sites that use BitCoin, some BitCoin with PayPal and the rest. Most people are using it for a gimmick for donations. It definitely is something that's viewed more as a commodity that keeps going up in value, rather than a currency people want to get rid of (like the Federal Reserve Note.) This is the same dilemma precious metals face: Since they keep going up in value no one wants to part with them yet. If we start seeing more businesses use this thing, like for more REAL things, I think then it will shoot up to the moon in popularity. I'm still unsure myself if this will take off, but it can't hurt me to get in early, and see what happens. I definitely am considering this as a possible avenue for a second business that deals with virtual currency.

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