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195K Bitcoin Transaction

Unknown Lamer posted about 10 months ago | from the found-bitsmaug's-bitcave dept.

Bitcoin 167

First time accepted submitter saidi writes "The Washington Post reports that yesterday a truly massive Bitcoin transaction occurred, from the article: 'In this particular transaction, bitcoins from 15 different Bitcoin addresses were consolidated and sent to address 12sENwECeRSmTeDwyLNqwh47JistZqFmW8. The size of the transaction? 194,993 bitcoins. Given that one bitcoin is worth around $800 right now, the transaction is valued at more than $150 million.'" A researcher did a bit of digging, and it appears that this was the Bitstamp exchange moving their balance around (business appears brisk).

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First tits! (-1)

Anonymous Coward | about 10 months ago | (#45504925)

Fuck you

Re:First tits! (-1)

Anonymous Coward | about 10 months ago | (#45504997)

Fuck you

Post of the day!!

Ghost transactions (5, Insightful)

girlintraining (1395911) | about 10 months ago | (#45504931)

This is an excellent example of traffic analysis and how you can leak your identity based just on the nature of the transaction. It makes me wonder why bitcoin users do not routinely engage in 1:1 transactions simply to frustrate traffic analysis.

Re:Ghost transactions (3, Interesting)

Anonymous Coward | about 10 months ago | (#45504961)

Wouldn't traffic analysis easily cancel out normal 1:1 transactions? You gonna have to go the extra mile if you really want to stop traffic analysis. And why would you do that? Paper currency is still way better for anonymous transactions.

Re:Ghost transactions (4, Insightful)

Anonymous Coward | about 10 months ago | (#45505321)

Wouldn't traffic analysis easily cancel out normal 1:1 transactions? You gonna have to go the extra mile if you really want to stop traffic analysis. And why would you do that? Paper currency is still way better for anonymous transactions.

Paper?

In regards to the referenced transaction, $150 million in $100 bills weighs over 1.5 tons.

Hate to say it there Mr. Cash Anonymous, but that ain't gonna fit in your carry-on.

And you might raise a few questions as to why you're filling half the cargo hold. National headlines is hardly a way to keep the transaction anonymous.

In the meantime, this public-broadcasting test of the Bitcoin transcation network has been a success. Hardly anyone noticed.

Now is when the real money starts getting pushed through.

Re:Ghost transactions (5, Insightful)

Anonymous Coward | about 10 months ago | (#45505363)

What do you mean "hardly anyone" noticed? It made a Washington Post article, plus a front-page Slashdot story. I'm pretty sure that anyone who anyone might worry about noticing has noticed aplenty (obviously, this transaction was not trying to avoid notice).

For Big Cash transactions, there are of course monetary vehicles in larger than $100 denominations --- all sorts of bonds/cheques/etc. that are good for deposit by bearer at any of the major financial institutions for the convenience of their mafia customers. Cash money laundering, or electronic equivalents like the several billion dollars worth of South American narco-cartel money that Chase Bank assisted in moving around, is still an option in wide use.

Re:Ghost transactions (1)

the_Bionic_lemming (446569) | about 10 months ago | (#45505371)

there are 500 and 1000 dollar denominations as well.

heck, there are even bigger bills too...

http://en.wikipedia.org/wiki/Large_denominations_of_United_States_currency [wikipedia.org]

feel free to factor the weight...

Re:Ghost transactions (1)

femtobyte (710429) | about 10 months ago | (#45505419)

However, these were discontinued a long time ago, and are now collector's items (worth more than face value). From the page you linked, there are only 165k $1k bills known to exist --- so a transfer of this size in $1k bills would require cornering the market to collect basically every single $1k bill in existence (which would be rather difficult, I expect).

There are, however, various non-US-legal-tender bank certificates / bonds / etc. that can represent very large sums "payable to bearer" by big financial institutions that regularly do business with organized crime moguls. Consult your Swiss, Vatican, Citibank, or J.P. Morgan Chase bank representatives for the convenient options available for funneling organized crime cash (on multi billion dollar scales) around.

Re:Ghost transactions (3, Insightful)

Jeremy Erwin (2054) | about 10 months ago | (#45505519)

500 Euro banknotes are readily available.Wikipedia notes [wikipedia.org] "Approximately 580,593,400 €500 notes in circulation around the Eurozone.[61] That is approximately €290,296,675,500 worth of banknotes."

Interestingly, there only "Approximately 188,575,200 €200 notes in circulation around the Eurozone.[61] That makes it the least used banknote of the Eurozone. That is approximately €37,715,031,400 worth of banknotes.[61]"

My guess is that the 500 Euro note has special value among those who habitually exchange briefcases of currency.

Re:Ghost transactions (1)

Anonymous Coward | about 10 months ago | (#45505917)

> My guess is that the 500 Euro note has special value among those who habitually exchange briefcases of currency.

500 notes are like 2% of tie issued notes. And the quote above is the reason there's talk to abandon it: It's basically only used by people who exchange large amounts of money in cash, i.e. things you do not want tracked, money laundry etc. 500 bills play basically no role at all in daily life and all you can do with them you can also do with 200s. Apart from bringing massive amounts of cash from say some illicit business in italy to some front in germany which turns it legal.

Re:Ghost transactions (1)

imunfair (877689) | about 10 months ago | (#45505925)

A while ago they were trying to get rid of one of the large denominations - I think it was the 500 euro note - because it was used mostly for money laundering. I'm not sure what ever happened though since they apparently still exist.

Re:Ghost transactions (1)

auric_dude (610172) | about 10 months ago | (#45506209)

May well need a good reason to be in posession of any in UK as Organised crime fears cause ban on 500 euro note sales http://news.bbc.co.uk/1/hi/uk/8678886.stm [bbc.co.uk] . Often get odd looks when using a UK £50 note!

Re:Ghost transactions (0)

Anonymous Coward | about 10 months ago | (#45505393)

Or five tons of rhodium...

Re:Ghost transactions (2)

mysidia (191772) | about 10 months ago | (#45505611)

In regards to the referenced transaction, $150 million in $100 bills weighs over 1.5 tons.

Hate to say it there Mr. Cash Anonymous, but that ain't gonna fit in your carry-on.

Perhaps. But a $150 million sealed physical Bitcoin token with a public key and private key printed on it, doesn't even weigh 1 ton.

And after the exchange.... the "traffic analysis" will probably ignore the following 1:1 transaction to move it to a newly generated sealed paper wallet... just like you said.

Re:Ghost transactions (0)

TheSeatOfMyPants (2645007) | about 10 months ago | (#45505735)

TFS is being a bit misleading, though: 195k BTC is *currently* valued at $US150M, but depending on how much each original transaction was worth in USD when it took place, the total value could be one hell of a lot less. Early on when a bitcoin wasn't worth much, each transaction could easily have involved anywhere from 'multiple' to 'several dozen' bitcoins, so those exchanges could add up to a pretty substantial percentage of the 195k without being worth anywhere near even one million US dollars.

Re:Ghost transactions (0)

Anonymous Coward | about 10 months ago | (#45505929)

Anyone who is willing to sync with the block chain can create a new wallet address. If you use a new wallet address for every transaction, analyzing the block chain would make possessing a fraction of a "marked" bitcoin than a USD with cocaine residue on it.

Re:Ghost transactions (5, Interesting)

Anonymous Coward | about 10 months ago | (#45504965)

Was this transaction really intended to be secret? "Leaking" the identity seems like a positive PR move for the exchange --- "look how much BTC we handle, and how hot bitcoin transactions are!". Normal sized transactions are already obfuscated by the traffic of normal sized transactions. How many users have $1e8 bitcoin balances to shuffle around just to provide "cover" for this size of transaction --- as though doing so would improve their ability to keep a low profile?

Re:Ghost transactions (4, Insightful)

philip.paradis (2580427) | about 10 months ago | (#45505161)

I don't understand why people keep assuming Bitcoin is designed to be anonymous. It isn't.

Re:Ghost transactions (5, Insightful)

Trepidity (597) | about 10 months ago | (#45505265)

Even more than not designed to be anonymous, it's specifically designed to have a global, completely public transaction ledger. That is more or less the core of the design. How do you have "accounts" without a central server keeping track of them? The Bitcoin solution is a public ledger that all clients agree on. This public ledger then has an update mechanism designed in a way that's intended to make it so you can add transactions to the public register iff you have the private key of the account the transaction is "from".

Of course, you can try to keep your RL identity from being associated with a particular account number, but Bitcoin's design makes no specific effort to help you do so: the transaction graph is public, for anyone to do any kind of analysis they want.

Re:Ghost transactions (4, Insightful)

philip.paradis (2580427) | about 10 months ago | (#45505291)

Indeed on all points, and I'm still trying to figure out why people keep making the assumption that identity protection or obfuscation measures of any sort are part of the protocol. Maybe it's the "crypto" part of "cryptocurrency" that causes some kind of automatic correlation, although if that were the case one would think that the widespread use of cryptographic mechanisms for identity verification might encourage the opposite assumption.

Re:Ghost transactions (0)

Anonymous Coward | about 10 months ago | (#45505401)

It's not that either position is wrong. Bitcoin can be used to launder. Your just looking at it from different perspectives. It's the assumption that the people who are using bitcoins and want anonymity are taking steps to get it and can get it. It's the difference between something like paypal where your never going to be anonymous, and bitcoin where you can be anonymous provided you take the proper steps.

Re:Ghost transactions (1)

Anonymous Coward | about 10 months ago | (#45505653)

Could Google or Apple theoretically use bitcoins to avoid taxes? Everyone knew how much they have, yet no government could tax it.

Re:Ghost transactions (0)

Anonymous Coward | about 10 months ago | (#45506187)

Tax laws (at least in the US) don't care if what your wealth is denominated in or even if it is in a currency at all. Anything that's not US$ but is income is simply equivalent (for tax purposes) to its value in US$. (*I am not an accountant, the way the laws are worded is probably somewhat more complicated than that.)

Re:Ghost transactions (1, Informative)

Anonymous Coward | about 10 months ago | (#45505589)

Indeed, fortunately a fix will soon be available.

http://zerocoin.org/

Re:Ghost transactions (1)

mysidia (191772) | about 10 months ago | (#45505627)

Even more than not designed to be anonymous, it's specifically designed to have a global, completely public transaction ledger.

However; if you have sealed physical Bitcoin payment tokens, from a trustworthy issuer, e.g. a "1 BTC token", AND you trade your tokens in person with people, without entering any transactions in the block chain ------- then in that case, the ledger will record nothing, because there are no BTC transactions on the network associated with physical trade of bitcoins.

Re:Ghost transactions (1)

Trepidity (597) | about 10 months ago | (#45505833)

That's true, but if you're trading physical tokens in person with people, you could just as well be exchanging USD.

Re:Ghost transactions (1)

mysidia (191772) | about 10 months ago | (#45506037)

That's true, but if you're trading physical tokens in person with people, you could just as well be exchanging USD.

Not unless you want to wire funds bank to bank; which will incur transaction fees, or write a check.

The US federal reserve has created barriers against exchanging USD currency; mainly by not providing large denominations. The highest denomination in circulation is the $100 bill.

There used to be a $1000 note, but it was removed from circulation, to help limit restrict/prevent people from exchanging cash.

Re:Ghost transactions (1)

Dr. Evil (3501) | about 10 months ago | (#45505737)

The "accounts" analogy doesn't go very far when you can create and empty a bitcoin wallet with no cost and no penalty. There are "mixing" services which take the bitcoins from multiple sources and redistribute them.

Although the mixing service seems to be analogous to going to a back alley and meeting with a dozen shady guys, all with suitcases full of money and traced serial numbers on their bills, dropping your $100k into a trash bin with all the other guys's $100k, where some guy then takes the bin into a room in the back, shuffles the money around and hopefully gives it back to you.

Tracing back these kinds of laundered coins could be very difficult, but it only seems to mask the person hiding the transaction in plausible deniability. It seems clear they're hiding something, but the law doesn't (fortunately) permit *that* to be enough to prosecute them for anything.

But with anti money laundering measures, pure mixing services are risky, transactions could be traced back through the blockchain until the police ask "so... where *did* this $200 worth of BTC come from if you didn't get it from selling crack on the Silk Road?" which I think would force you to admit to using a mixing service, which may be, or very soon be illegal.

So what plausibly legitimate business takes money from thousands of people and spreads money to thousands of others, while taking a cut for the house? https://bitcointalk.org/index.php?topic=162807.msg1713104#msg1713104 [bitcointalk.org]

Re:Ghost transactions (1)

gl4ss (559668) | about 10 months ago | (#45505293)

well, you don't need to register your name anywhere to have them.

in that way it's anonymous.
transactions however are public.

Re:Ghost transactions (1)

martin-boundary (547041) | about 10 months ago | (#45505823)

What most people don't understand about privacy is that your privacy is affected by the actions of others, especially if they like to do things out in the open for all to see and record.

Now that we know the nature and value of this particular transaction, it can be used as an anchor to help identify and trace other more questionable transactions by others. It's like a sudoku puzzle. There are many events in the life of bitcoin that are effectively known, and so the problem of identifying some other unknown events becomes much easier.

You can bet the NSA, and other similar agencies, have a list of all such known anchorpoints, to help the massive surveillance of bitcoin that they do already.

Re:Ghost transactions (1)

reanjr (588767) | about 10 months ago | (#45505491)

That's one approach. I think most people who are actually concerned use a mixing service.

https://en.bitcoin.it/wiki/Mixing_service [bitcoin.it]

Re:Ghost transactions (1)

jonbryce (703250) | about 10 months ago | (#45505989)

I think that would only make things worse.

They know that you have taken money out of a mixing service. They know that you have put money into a mixing service. They know where that money came from, and they know that you must want to hide something.

Re:Ghost transactions (0)

Anonymous Coward | about 10 months ago | (#45505631)

Here's the thing; you spend large sums of money, people are going to know. I don't know why this isn't obvious to the Slashdot crowd.

Giving any entity; public or private, government or individual; a complete picture of cash transaction data gives them a competitive advantage which will enable economic domination of any given market. Competition, effectively, is about the lack of information more than it is about having information.

Now if you collected the transaction data and released it publicly on an hourly basis then that would definitely improve the lives of everyone because it would remove horrendous economic inefficiencies present and shysters by exposing them for what they are. Problem is, presently there are a lot of voting shysters in the world.

Re:Ghost transactions (1)

Yvanhoe (564877) | about 10 months ago | (#45505677)

They do. There are services (which require quite a lot of trust) who propose you to take a bitcoin payement, and will give you back this amount at a later time (a few days) on the address you desire or splitted in several addresses

If done correctly, this can effectively "launder" bitcoins. However, the likelihood of some of these services being traps is quite hard.

I think that people who believe that bitcoin is great for tax evasion of criminal transactions are there for a surprise. It is but one brick in the platonic society of ideas that idealistic cryptoanarchists try to build. First, there were cryptotools, and identities and pseudo identities could be verified, communication could be kept private. Then there were darknets, and ideas could be exchanged anonymously. Now with bitcoins, money can be exchanged. So right now, what you can do totally anonymously is buying dematerialized service or data. It is not a good tool for buying a yacht without the IRS knowing it, and it is not about that.

More bricks will come: people are currently making schemes to create pseudonymous companies, to make some kind of contracts enforceable, to manage trust between entities with no history, etc... It is an interesting subject to follow.

I think I will stop reading slashdot....... (0, Interesting)

Anonymous Coward | about 10 months ago | (#45504933)

To be honest, Slashdot and http://phys.org/ are by far, my favorite websites for interesting stories news.
However, I am getting tired of fucking bitcoin stories. Enough is enough.

Re:I think I will stop reading slashdot....... (5, Insightful)

Anonymous Coward | about 10 months ago | (#45504943)

To be honest, Slashdot and http://phys.org/ [phys.org] are by far, my favorite websites for interesting stories news.
However, I am getting tired of fucking bitcoin stories. Enough is enough.

You don't have to read the summary. You don't have to click on the links. You don't have to post annoying comments. In fact, I think slashdot will be better if you do stop "reading" it.

But, yeah, I'll give you that there are way too many bitcoin stories...

Re:I think I will stop reading slashdot....... (0)

Anonymous Coward | about 10 months ago | (#45505835)

Perhaps one of the editors here has some bitcoins and is especially enthusiastic these days with the recent rally. I'd argue that the US Senate story was maybe worth publishing but the rest are really only suitable for bitcoin enthusiasts and should not have appeared here.

Re:I think I will stop reading slashdot....... (5, Funny)

Pseudonym Authority (1591027) | about 10 months ago | (#45504963)

No, I cannot allow that. Even if you leave Slashdot for whatever shitty site that is, I will come to your house, put a gun to your head, and force you to read Bitcoin stories much like Unknown Lamer does here. You must read them. This is not an option. If you had a choice, there would be some sort of summary on the front page with a link instead of how it is now where every bitcoin story locks your browser and won't let you navigate away unless you post.

Re:I think I will stop reading slashdot....... (-1)

Anonymous Coward | about 10 months ago | (#45505145)

Humor. But any sentence that include "I will come to your house, put a gun to your head" is not funny.
I'd say it is indicative of a malaise in American society, though can't say it isn't bad manners on your part.

Re:I think I will stop reading slashdot....... (0)

Anonymous Coward | about 10 months ago | (#45505209)

But any sentence that include "I will come to your house, put a gun to your head" is not funny.

GP should APOLOGIZE to Slashdot readers and victims of gun violence everywhere! And home owners!

Re:I think I will stop reading slashdot....... (0)

Anonymous Coward | about 10 months ago | (#45505341)

But any sentence that include "I will come to your house, put a gun to your head" is not funny.

GP should APOLOGIZE to Slashdot readers and victims of gun violence everywhere! And home owners!

And high school English teachers.

Re:I think I will stop reading slashdot....... (1)

Garridan (597129) | about 10 months ago | (#45505681)

Naw, I'm pretty sure that parody has received strong [theblaze.com] legal recognition [clutchmagonline.com] as funny, and completely harmless. America says "don't be such a pantywaist!"

Re:I think I will stop reading slashdot....... (1)

Garridan (597129) | about 10 months ago | (#45505703)

Oops, wrong links. Or... maybe the US isn't the country I was brought up to believe in. Like being taught to believe in Santa Claus [popehat.com] but having your dad come into your room on Christmas eve to smash all your shit up. And ground you for being such a pantywaist, based on the assumption that you were going to cry.

Re:I think I will stop reading slashdot....... (1)

VortexCortex (1117377) | about 10 months ago | (#45505227)

I will come to your house, put a gun to your head, and force you to read Bitcoin stories much like Unknown Lamer does here. You must read them. This is not an option.

Oh yeah? We'll I'll send their mother a case of Tentacle Grape Soda [indiegogo.com]
with their name on it unless A.C. makes posts on every article they don't like.

Re:I think I will stop reading slashdot....... (0)

Anonymous Coward | about 10 months ago | (#45505615)

Even better, send Tim Landers over and let him rape every little boy in the house!

Re:I think I will stop reading slashdot....... (3, Informative)

sumdumass (711423) | about 10 months ago | (#45505019)

If you create an account, go to options under your username after logging in, you can set terms to ignore and those stories should not appear on your front page. Setting a term Bitcoin should stop stories about bitcoin from entering your front page.

If you insist on posting anonymously, then simply log out after seeing what stories interest you and opening them in another tab.

I'm personally at a loss to why people think so highly of bitcoin. There are about 80 or so other virtual currency exchanges out there and it seems that none of them are stable in the sense of real currencies. I understand the concept of it being like a credit card with the limitations of a wallet (Ie if you lose your wallet, you lose only the funds in it where if you lose your credit card, it can be charged until it is shut off), but beyond that, I just don't get it.

Re:I think I will stop reading slashdot....... (0)

Anonymous Coward | about 10 months ago | (#45505053)

No one gives a shit. If you're too stupid to not read stories you don't care about you're certainly far too stupid to make a useful contribution to any discussions. Good riddance.

We Wuv Bitcoin (0)

Anonymous Coward | about 10 months ago | (#45505055)

O noes

Bitcoin is the new thang and if you cannot be with the one you want honey love the one you are with. We wuv bitcoin and all that is bitcoin. If the world were to end right now we have solace knowing that bitcoin will survive like the cockaroach to carry on in mankind's absence.

If you are down and confused
And you do not remember who you are talking to
Concentration slips away
Because your baby is so far away

Well there is a rose in a fisted glove
And the eagle flies with the dove
And if you cannot be with the one you love honey
Love the one you are with
You gotta love the one you are with

Do not be angry do not be sad
Do not sit crying over good times you have had
Well there is a girl sitting right next to you
And she is just waiting for something to do

Turn your heartache right into joy
She is a girl and you are a boy
Did you get it together and make it nice
When you aint gonna need anymore advice

Re:I think I will stop reading slashdot....... (0)

Anonymous Coward | about 10 months ago | (#45505101)

However, I am getting tired of fucking bitcoin stories. Enough is enough.

When is Slashdot going to wake up and cover the technology emerging under the editors' noses, like Raspberry Pi and 3D printing?

Re:I think I will stop reading slashdot....... (1, Insightful)

Anonymous Coward | about 10 months ago | (#45505199)

It is the first new currency since the Euro that actually matters worldwide. Its value only is going to go up as China moves into it, so it will be touching part of everyone's life eventually in one way or another. Plus, it can only go up in value as people pour real value into the coins, and there are fewer and fewer coins being minted.

Expect it to hit $10,000 soon per coin.

Re:I think I will stop reading slashdot....... (-1)

Anonymous Coward | about 10 months ago | (#45505427)

I expect to hit you up the ass with my hard cock before that happens.

Um, this isn't as amazing as some might think... (5, Interesting)

JohnA (131062) | about 10 months ago | (#45505015)

This is simply good stewardship. One of the largest exchanges (actually not, Bitstamp, rather another ahem Magic: The Gathering Online Exchange site) had a rush of buy orders, so they decided to redeem an address they kept in cold, offline storage to meet demand.

This is a good thing(tm), as it means that there isn't any fractional deposit factoring going on.

Re:Um, this isn't as amazing as some might think.. (0)

Anonymous Coward | about 10 months ago | (#45505511)

This is a good thing(tm), as it means that there isn't any fractional deposit factoring going on.

you cannot have fractional deposits with bit coin because you cannot get more bitcoins. So there is no interest. So there is no inflation. The "currency" of ultimate deflationary spiral - that's bitcoin.

Hell, I'd rather use gold as currency and I view gold as useless.

Re:Um, this isn't as amazing as some might think.. (4, Interesting)

DamnStupidElf (649844) | about 10 months ago | (#45505579)

Financial markets like MtGox could easily maintain fractional reserves because many account-holders don't withdraw their entire balance of bitcoins every night. There is plenty of opportunity for the exchange to do whatever they want with a portion of the deposits. In essence "mtgox bitcoins" are already a fiat currency that are payable in real bitcoins upon request. They just haven't started paying out at less than 1 bitcoin per mtgox bitcoin yet, like half of the other bitcoin exchanges/banks/whatever have when they got hacked.

Re:Um, this isn't as amazing as some might think.. (1)

mysidia (191772) | about 10 months ago | (#45505651)

you cannot have fractional deposits with bit coin because you cannot get more bitcoins. So there is no interest.

You can. Essentially; your deposit of Bitcoins to mt.gox your bitcoin balance would be a debt on their books.

Mtgox does not necessarily have as many bitcoins as the sum of users' deposits.

The only way you could prove that would be with audited financials, or if everyone cashed out theit BTC successfully. They would likely greatly increase fees, long before that could happen.

Neither form of evidence is likely to be available any time soon.

Re:Um, this isn't as amazing as some might think.. (0)

Anonymous Coward | about 10 months ago | (#45505671)

Hell, I'd rather use gold as currency and I view gold as useless.

Gold is a great material with lots of uses. You're just boring.
Watch this [youtube.com]

Re:Um, this isn't as amazing as some might think.. (0)

gl4ss (559668) | about 10 months ago | (#45505719)

I thought you could fraction it up to 1 million fractions.

so mister ac are you just full of shit?

(I don't own any bc, but that's as much as I've gathered from slashdot)

Iran/Contra 2.0 (0, Interesting)

Anonymous Coward | about 10 months ago | (#45505041)

So, the FBI busts the Silk Road and confiscates a few million USD bit coins. But a most of them are missing. Or are they? Chances are, the NSA got to them before the FBI did. They have the computing power, the skill, and the viruses. And there's on controlling legal authority, either. How many bit coins have they stolen? But why stop there? Chances are they've hacked into the federal reserve computers, too. Sequestration? Government shutdown? Not when the Ben Bernanke's printing press leads straight into your wallet.

Re:Iran/Contra 2.0 (0)

TheRealDevTrash (2849653) | about 10 months ago | (#45505071)

How do you streal something that disappears after a magnet is passed over it?

Re:Iran/Contra 2.0 (0)

Anonymous Coward | about 10 months ago | (#45505137)

How do you streal something that disappears after a magnet is passed over it?

I'm sorry, and those magical numbers we call "stocks" are different exactly how?

And you still carry around all of your money, in physical form?

Even your cash is nothing but ones and zeros at the bank. You act like they have the greenbacks on hand to doll out to everyone. Not even fucking close.

Stop with your whining about the "new" tender, as if your current one is any different. Greedy fucks can vaporize that too.

Re:Iran/Contra 2.0 (2)

ArbitraryName (3391191) | about 10 months ago | (#45505213)

How do you steal cash that disappears when held too close to a match?

Re:Iran/Contra 2.0 (1)

Anonymous Coward | about 10 months ago | (#45505337)

I'm sure in the desert you'd be rather annoyed if someone stole your water. However, that can simply evaporate in the sun!

heh, captcha: liquids

Re:Iran/Contra 2.0 (3, Funny)

M. Baranczak (726671) | about 10 months ago | (#45505365)

How do you streal something that disappears after a magnet is passed over it?

Are we talking about Bitcoins, or music?

Kind of annoyed that I never jumped in. (0)

Anonymous Coward | about 10 months ago | (#45505067)

Sort of annoyed I never jumped in on that recent nosedive it took there.
I was hoping it'd crash harder down to maybe $200-300-ish.

Oh well, LTC->BTC->sweet moolah it is.

Hypothetical Question (1)

Anonymous Coward | about 10 months ago | (#45505121)

What if I had bought $100 worth of Bitcoins in early 2010 (when the price was something like 5,000 BTC for $25 USD) and held onto them until it peaked at $800/BTC? I know what would happen to my bank account, but would that have thrown the entire system into chaos if I cashed in that many at once?

Basically, should I be kicking myself for NOT doing just that, or would it have flooded the market and crashed the price before I could have gotten the full value out of the transaction?

Re:Hypothetical Question (1)

Opportunist (166417) | about 10 months ago | (#45505255)

That mainly depends on whether you would have found someone willing to buy that many bitcoins. As far as I know, something like this never happened, that someone wanted to get out of the market big time.

As soon as someone actually wants to, we'll see whether it's a stable market.

Re:Hypothetical Question (4, Informative)

mysidia (191772) | about 10 months ago | (#45505659)

I know what would happen to my bank account, but would that have thrown the entire system into chaos if I cashed in that many at once?

There is a liquidity problem with BTC. You probably would have great trouble trying to cash in that many, AND get actual US dollars for them.

Sure... you could switch from a BTC balance to a USD balance at Mtgox... do you think they will be sending you your check anytime soon?

I'm cool too guys (0)

Anonymous Coward | about 10 months ago | (#45505159)

You know what's really cool? One billion bitcoin transactions

Can someone explain bitcoin banks to me? (1)

PhrostyMcByte (589271) | about 10 months ago | (#45505163)

You have your own wallet in bitcoin right? It can be as secure as you make it. Why are people trusting their coins to a bank?

Re:Can someone explain bitcoin banks to me? (1)

Ksevio (865461) | about 10 months ago | (#45505197)

So they can exchange them for other currancies

Re:Can someone explain bitcoin banks to me? (2)

Dan East (318230) | about 10 months ago | (#45505205)

This isn't a bank but an exchange, which I presume buys bitcoins with real currency. Thus they may build up large amounts of bitcoins that they sell for cash when they think the market timing is right. So they would own those bitcoins, since they bought them with money. In other words, that is their own giant private wallet and someone noticed the bitcoins (a lot of them) had been moved around or consolidated in some way.

Re:Can someone explain bitcoin banks to me? (5, Insightful)

tftp (111690) | about 10 months ago | (#45505211)

Why are people trusting their coins to a bank?

Well, here are the reasons that we have to keep national currencies in the bank:

1) Because it's hard to guard your cash all day and all night.
2) Because the bank pays you interest.
3) Because the bank gives you the ability to send and receive money using checks, transfers, money orders, cards.

All these reasons (except #2) are valid in case of BTC. The more backups of your wallet you make, the more likely it is that one of them gets exposed to a thief. The fewer backups you make, the more likely it is that you will lose your wallet forever. A bank does not keep your money in a wallet, though they have deposit boxes for other items. If you deposit your BTC into an account, the record states that the bank owes you so many BTC. You have a copy of all transfers of that money, in or out. Loss of wallet is immaterial. Theft of wallet is immaterial. If the paper says you have 10 BTC in your account, that's what you will get. If someone sends you 20 BTC, you do not need to fiddle with blockchain and confirmations - as soon as your bank says you have the money, you have the money. The bank isolates the customer from the technicalities of running BTC clients. Add credit cards and checkbooks, and you can pay with BTC just as you pay with USD or GBP. Credit cards will be swept instantly (and not in 15 minutes.) The latter is, actually, very important because the raw BTC is ill-suited for small, numerous transactions that have to complete within seconds.

Re:Can someone explain bitcoin banks to me? (1)

reanjr (588767) | about 10 months ago | (#45505649)

In theory, BTC quantity will cap at some point and the expected increase in economic activity combined with the very gradual loss of coins to things like hard drive failure will make BTC act like a slowly deflating currency. This amounts to approximately the same thing as interest.

Re:Can someone explain bitcoin banks to me? (1)

Anonymous Coward | about 10 months ago | (#45505995)

No. Interest is something the bank pays you for keeping your money at the bank. Deflation happens regardless of where your money is.

Re:Can someone explain bitcoin banks to me? (2)

ADRA (37398) | about 10 months ago | (#45505745)

Premise #1 relies on a bank that is better at security than you are a target. Since these outfits are 0% legislated at this point, I wouldn't put credence on their assurance that your money is safe there. Remeber, if one bank gets ripped off and stolen, there is literally nothing that they can do to get your money back. Hope you're enjoying the ride.

Re:Can someone explain bitcoin banks to me? (2, Insightful)

tftp (111690) | about 10 months ago | (#45506189)

Remeber, if one bank gets ripped off and stolen, there is literally nothing that they can do to get your money back. Hope you're enjoying the ride.

I personally don't own BTC, and consequently don't store them in banks. But as the OP indicates, quite a few people do both. I believe they will be eventually separated from their money - in part because these "banks" are not regulated, and in part because extremely fast deflation of BTC (currently caused by speculation) makes BTC useless as a stable coin. IMO BTC should be compared to tulip bulbs [wikipedia.org] .

Bitcoin can suck my dick (-1)

Anonymous Coward | about 10 months ago | (#45505167)

Bitcoin ain't worth shit. It is about as worthless as a nigger. When the grid goes down, so do your bitcoins. Only the jews who have converted their bitcoins to gold will prosper. All the losers and "miners" will be taking it up the ass like Jeremy Hammond. Hey Jeremy, hope you brought 10 years worth of lube with you, smart guy.

Stay the Course (-1)

Anonymous Coward | about 10 months ago | (#45505219)

The emerging market countries have been sold a bill of goods thinking at BTC will keep rising.
Meanwhile, we're slowing cashing it out, careful to not flood the exit. By the time it's all over, it'll be back to 10 cents.
It's becoming the ultimate grift. Folks, this one's going down in the history books.
Straight from their threadbare pockets to our bank accounts.

How do we do it? ... Volume.

a skeptic says "wow bitcoin is serious ". Hope thi (3, Interesting)

raymorris (2726007) | about 10 months ago | (#45505253)

I've poo-pooed Bitcoin before. If it's now at the point where there are $150 million transactions, that's significant. I sure hope the operators of that exchange don't disappear with the money, get hacked, or any of the other nastiness that seems to happen every couple of weeks. A $150 million heist would be a big deal, and damn few internet-connected systems are secure enough to thwart even moderately skilled crackers. For example, a certain national agency I'm familiar with that does cyber-security training is wide open to SQL injection and other attacks. I sure hope these bitcoin exchanges have better security than the agencies that set security standards have. If not, somebody's going to steal $150 million in bitcoins any day now, and that'll be a big deal.

Re: a skeptic says "wow bitcoin is serious ". Hope (1)

O('_')O_Bush (1162487) | about 10 months ago | (#45505325)

Anyone with a clear head can see that BTC is in a massive speculative bubble, just like the housing market in '06, and .COM companies in '00.

The market will correct itself, and all this nonsense volatility will leave a handful of people wealthy, but 99% of every other speculator losing their hides.

Plenty of time and reason to poo-pooh

Especially now that it has become ineffective as a currency and it isn't being backed by cost of production (vast amounts are produced by botnets, effectively for free to the producers).

Yes, a bubble for sure. Don't laugh it off (2)

raymorris (2726007) | about 10 months ago | (#45505791)

I don't disagree, it sure looks like a major bubble, so on that point I still think it's very risky to get involved in. Where my perception has changed is that it looked like a toy, something tin-foil-hat people play with. I laughed it off. It seems it's now big enough that one shouldn't laugh it off. As an example, with over $150 million in a single exchange, an unlicensed bank, it probably makes sense to seriously look at appropriate consumer protections.

Re:a skeptic says "wow bitcoin is serious ". Hope (2, Insightful)

myowntrueself (607117) | about 10 months ago | (#45505379)

I've poo-pooed Bitcoin before.

I'll keep poo-pooing it.

How can anyone set prices in bitcoins? You might offer to sell some good or service for 1 bitcoin. Then, a week later, your potential customers are laughing at you saying "one bitcoin for THAT? WOW talk about over priced, thats ridiculous!" and then they will buy from someone else.

Bitcoins simply cannot be used as a medium of exchange for goods and services.

If you look at how much a good or service costs in bitcoins you are probably and reasonably going to make a mental conversion into 'real' currency. Each week those goods and services effectively cost more and more.

The seller has a choice; post a stable price in bitcoins or post a (constantly adjusted) realistic price in bitcoins.

Ie in order to sell things in bitcoins and maintain a realistic price you have to keep charging less and less of a bitcoin. If you post a price in bitcoins and don't continually adjust it downward anyone who wants to buy and doesn't already have 'old' bitcoins is going to look at how much they now have to spend on bitcoins just to pay for your goods/services and, probably, think twice about it and probably go somewhere else.

How big a proportion of people who use bitcoins mined them themselves? How big a proportion got those bitcoins through selling goods/services for them? How big a proportion bought the bitcoins with 'real' currency? My guess is that most bitcoin users pay for them with another currency and these people are not going to use them to buy and sell; they are going to hoard them.

Therefore, bitcoins are useless for anything other than speculation which was not the original intention of the system; it was intended to be used to buy and sell services. Therefore bitcoins are now useless for their intended purpose.

WTF happened here? Has the bitcoin been deliberately sabotaged? Or is this just an unintended consequence? Do we need a new virtual currency that won't devolve into this and stay useful?

Re:a skeptic says "wow bitcoin is serious ". Hope (0)

Anonymous Coward | about 10 months ago | (#45505449)

Perhaps we should start exchanging goods and services with the exchange of WELL FUCK I DONNO goods and services?

Re:a skeptic says "wow bitcoin is serious ". Hope (0)

Anonymous Coward | about 10 months ago | (#45505469)

Hoarding means lack of liquidity. Lack of liquidity is a risk. Therefore, hoarding will be self-limiting and bitcoin could theoretically reach a stable equilibrium.

That doesn't mean there won't be deflation, but it doesn't preclude bitcoin being used as a medium of exchange in the long-term. It's not an ideal medium of exchange, but because there exists no ideal currency, and because people find value in using bitcoin to get around government-imposed barriers--both legal and practical--it doesn't have to be perfect. It's imperfections (e.g. risk) merely need to be less than the relative benefit in any particular transaction.

You also seem to assume that once the bitcoin bubble pops that *poof* it'll disappear. But I can't think of any bubble market that simply disappeared after devaluation. Certainly people didn't stop buying and selling mortgages after the housing bubble popped.

And while bitcoin itself would over the long-term continue to experience deflation, which _diminishes_ (but doesn't eliminate) incentive to use it as a medium of exchange, there's no reason to think that other similar currencies won't become popular. I could imagine a "meta"-currency system where people exchanged an aggregate sum composed of multiple electronic currencies. That partially solves the inflation problem.

Re:a skeptic says "wow bitcoin is serious ". Hope (2)

roman_mir (125474) | about 10 months ago | (#45505547)

are you asking this for real? Bitcoins have no intrinsic value, their prices are always pure speculation, nothing else. You can only redeem anything for BTCs as long as somebody else is willing to take them, while speculating that somebody else will also take them off their hands. You can't make anything out of BTCs of any material use, you can't make a bracelet that anybody would want, you can't redeem them into anything unless there is a 'greater fool' out there. Now, I am NOT saying that BTCs will not go up higher, again, they may as well be 1,000,000,000 USD per BTC in some not so distant future. However eventually, without a doubt, the value of BTC will be 0, that's because there is no value except perception, and you are correct in one thing: there WILL be other electronic currencies.

Once there is one that is similar to BTC but where you can actually steadily redeem it for something (for example, 1Electronic Coin for 1 gram of gold), then that Electronic Coin in fact becomes a real currency.

As is, BTC is not a currency, it's MONEY, there is nothing standing behind it, but there is no store of value attribute present in it. Without store of value it's pure speculation, and now with the higher and higher relative prices, it's not even good as a unit of account, just as you mentioned yourself.

Nobody sabotaged it, it is the inherent property of an electronic file that has no real life backing. It can be used as a medium of exchange even now, as long as you can trade into and out of it very quickly and so the value of that is bypassing the traditional banking transfer systems. However once an electronic currency comes into play with a real redeemable quality behind it, then it can also have the same medium of exchange attribute and then BTC falls through the floor.

American dollar (1)

basecastula (2556196) | about 10 months ago | (#45505919)

You are talking about the dollar right?

Re:American dollar (0)

Anonymous Coward | about 10 months ago | (#45506081)

The Dollar is backed by a combination of bond prices (effectively) and the Federal reserve. Bonds are backed by the US Government via the Treasury. When the Fed or the US Gov starts to be unreliable (that's what's happening) the dollar starts to look like bitcoin, not the other way around.

There must be stability of value, liquidity, and a general public that has intrinsic confidence that these qualities exist for a currency to be effective. It must be artificially forced, for a currency to be adopted. There is still too much resistance to bitcoin adoption for it to be effective.

Re: American dollar (0)

Anonymous Coward | about 10 months ago | (#45506213)

No matter what, you need to pay US federal taxes in USD. This is fundamentally what gives the USD value. Now, many people and companies will have no direct US tax liability; however, they likely do business with someone or a company that does have such a liability. This is what makes it (and the Euro and Japanese Yen) valuable -- no matter what, you can easily find some who wants to buy or trade for them. If China were to open up transfers of RMB from the mainland to outside, its currency would be the same.

This is not the case with Bitcoins. There is nothing that you can inherently buy with them, and unlike gold, there is little to prevent a replacement currency to take its place.

Re:a skeptic says "wow bitcoin is serious ". Hope (1)

DamnStupidElf (649844) | about 10 months ago | (#45505607)

The seller has a choice; post a stable price in bitcoins or post a (constantly adjusted) realistic price in bitcoins.

And it's basically a no-brainer; set the prices in dollars or other local currency and do real-time conversion to bitcoin prices using the recent exchange history. It's almost certainly going to be converted to another currency at that exchange fairly quickly anyway. Bitcoin will be a payment method and not a stable currency for, in my guess, quite a long time to come. If not because of the speculation but because of its tiny market cap compared to global markets. As such, bitcoin will never become useless until its market cap is smaller than the smallest purchase one might want to make, or if all the exchanges die. In fact, the lack of exchanges would tend to stabilize the currency value so it could still be used to send a few dollars worth of value across the Internet.

Re:a skeptic says "wow bitcoin is serious ". Hope (3, Insightful)

myowntrueself (607117) | about 10 months ago | (#45505647)

Thats kind of what I mean; you can't set prices in bitcoins. That impacts the bitcoins utility as a practical unit of currency.

Re:a skeptic says "wow bitcoin is serious ". Hope (1)

Anonymous Coward | about 10 months ago | (#45505847)

In your mind, are gold or silver money? I mean, they change price all the time, so I guess they're kind of worthless.

Re:a skeptic says "wow bitcoin is serious ". Hope (2)

Sycraft-fu (314770) | about 10 months ago | (#45505669)

It is also quite obviously in the middle of a massive bubble. If you look at the movement of the price, the shape of the curve, it is moving just like any other commodity that is being thinly traded and having massive speculation. That sort of thing might be good if you like to play the market and try to make a quick buck, but it's really really bad for anything trying to be a currency. It also is almost inevitably followed by a crash. Hence why bubbles are called that because they pop.

I suppose it is there radically possible that Bitcoin is some kind of exception and its value will continue to rise forever, but it would be the first time that is been true for anything that moved like this. Massive, volatile price changes are not the sort of thing that signal real growth, but rather a speculation bubble that is doomed to collapse sooner or later.

Re:a skeptic says "wow bitcoin is serious ". Hope (3, Insightful)

myowntrueself (607117) | about 10 months ago | (#45506191)

Right, which is what I'm getting at; the bitcoin is useless as a 'coin' that you can buy and sell goods and services for. Its only use at the moment is speculation.

You can't set prices of goods and services in terms of 'thinly traded commodities subject to massive speculation'.

You can't put bit coin price tags on things, this would be completely impossible. Yet I see this often online.

Re:a skeptic says "wow bitcoin is serious ". Hope (1)

BlueMonk (101716) | about 10 months ago | (#45506197)

How can anyone set prices in bitcoins?

Like this: https://www.bitcoinshop.us/ [bitcoinshop.us]

Yes, the price is different every time I visit.

And, although I admit I have not bought anything from that site, I can tell you that I *have* used bitcoins to buy Humble Bundles [humblebundle.com] , which are another thing you can buy directly for bitcoins (optionally). There's just less overhead (complexity, time, effort, security, fees) in my perception of a bitcoin transaction over, for example, a paypal or credit card transaction... at least if you have a mobile device containing bitcoins that can scan QR codes easily.

I get your point that it's not really wise to spend bitcoins because 1) it's not wise to keep the majority of your wealth in bitcoins due to volatility and 2) it's not wise to spend bitcoins if you have other currencies because bitcoins are most likely to increase in value if you hold on to them. But for micro-transactions where I don't feel like I'm giving up a significant portion of my bitcoin investment, I do like making use of my bitcoins for convenience. It's also possible that if and when enough people are using bitcoins, their value will become less volatile. It might be an interesting path to get there, but barring some catastrophe, I don't see them going away completely, and I don't imagine that they can stick around for decades more without more people getting involved.

Number of Beast Coins (1)

deviated_prevert (1146403) | about 10 months ago | (#45505377)

31531.5315315... is the number of Bitcoins that must only be held in the wallet of the beast. Why, simple, because there are only 21 million to go around. Naturally if it is decided that a greater number of Bitcoins is necessary then this wallet will increase proportionally. Call this a sin tax but because of this. Here [googleusercontent.com] is what happens to those who send money to the beast's public key.

Re:Number of Beast Coins (1)

gl4ss (559668) | about 10 months ago | (#45505867)

21 million times a million fractions to go around...

We need a totally anonymous monetary system (0)

Anonymous Coward | about 10 months ago | (#45505561)

Bitcoin was a good first step, but the fact that it is not completely anonymous makes it less than idea as a "real" alternative monetary system. It's only a matter of time till various governments want to dig their fingers into that cookie jar. We need a financial system which is a true alternative to today highly tracked and taxed systems. Starve the beast of socialism - imagine how much cheaper things would be, and how easier it would be to move your assets around without borders. We have the technology.

nothing (1)

shentino (1139071) | about 10 months ago | (#45505739)

Nothing is truly anonymous if you have a big enough wrench.

$150 million (1)

MrHm (242418) | about 10 months ago | (#45505837)

194,993 * $800 is roughly $150 million, indeed.
But try to throw (to sell) these 194993 BTC at MtGox (or elsewhere) at once.
Such a volume would move the BTC price to hell.
Hence the Bitcoin valuation is't real...

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