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Investor Tim Draper Announces He Won Silk Road Bitcoin Auction

Unknown Lamer posted about a month and a half ago | from the plans-to-build-moon-fortress dept.

Bitcoin 115

After some speculation yesterday about the winner of the auction for the first block of bitcoins seized from the Silk Road, the winner went ahead and made his identity public. Tim Draper has won the U.S. Marshals bitcoin auction and is partnering with Vaurum to provide bitcoin liquidity in emerging markets. ... Tim offered this in a statement: “Bitcoin frees people from trying to operate in a modern market economy with weak currencies. With the help of Vaurum and this newly purchased bitcoin, we expect to be able to create new services that can provide liquidity and confidence to markets that have been hamstrung by weak currencies. Of course, no one is totally secure in holding their own country’s currency. We want to enable people to hold and trade bitcoin to secure themselves against weakening currencies.”

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wut (0)

Anonymous Coward | about a month and a half ago | (#47369317)

"...We want to enable people to hold and trade bitcoin to secure themselves against weakening currencies.” ...wut.

really? (1)

DisplacedJoshua (919071) | about a month and a half ago | (#47369349)

Providing bitcoin liquidity ..... If you have the interest to buy it. All those coins going somewhere to rot with the rest until more people adopt the idea, and mining is eventually rendered useless, so it becomes a "real" tradeable asset, like gold i guess. When will a candy bar cost .0001 bitcoins?

Re:really? (0)

Anonymous Coward | about a month and a half ago | (#47369427)

Well, he is partnering with a company that wants to provide Bitcoin payment services to businesses. It's not always easy to get Bitcoins, so he probably needs to provide a way for their customers to buy the Bitcoins in the first place, and to that end it helps if you have some that you can sell. There's probably a lot more money to be made from being a Bitcoin middleman than from just hoarding.

Re:really? (1)

mythosaz (572040) | about a month and a half ago | (#47369707)

While it's easier to, say, get stamps or buy a lottery ticket, it's not much harder to get BTC than it is to post comments on /.

Re:really? (2)

TheRaven64 (641858) | about a month and a half ago | (#47370861)

If you are planning on taking Bitcoins in payment for some real product then you want some assurance that you can sell the Bitcoins for more than the cost of that product. You get this implicitly with established currencies, because they have reasonably stable inflation rates and, most importantly, those inflation rates are usually tied to your local economy and so the value of the currency doesn't alter in terms of what you can buy with it in the short term (if you're hoarding significant amounts of currency, rather than investing it in your business, for example using it to pay your employees or buy stock then you're a currency speculator and so have different requirements). With an immature and volatile currency like Bitcoin, you effectively need to buy Bitcoin futures or have some other entity underwrite your Bitcoins.

If you want to be in the business of offering payment services that accept Bitcoins, then you want to be able to do this underwriting. People will be a lot more willing to accept Bitcoins if you can say 'the value of BTC fluctuates relative to USD, but we guarantee that we will always buy them at this exchange rate. If you use this exchange rate for setting your prices then you will never suffer from these fluctuations'. To be able to do this (and not make huge losses), you need to be able to influence the market price by buying and selling in large quantities and by avoiding selling when the price is too low. Having a large initial stash of Bitcoin helps with this.

inflation is not related to economy growth (1)

JcMorin (930466) | about a month and a half ago | (#47371539)

Inflation is the increase of the money supply, this lead to price increase. Bitcoin is great because it is a controlled inflation currency. We all know how many bitcoin are created every 10 minutes and that for the next 100 years. You have no clue how may trillions USD will be printed in the next 10 years.

Re:inflation is not related to economy growth (0)

Anonymous Coward | about a month and a half ago | (#47371717)

All that means is the money supply can't expand to match growth, which is why the gold standard was a primitive idea that was abandoned. Deflation is a hell of a lot worse than inflation.

Re:inflation is not related to economy growth (1)

myfacelaunchd50ships (3726569) | about a month and a half ago | (#47372397)

Liquidity will never be a problem with Bitcoin because its 21 million coins has 1,000 times more units of value than all the worlds currencies combined. As the world needs more bitcoin the decimal just moves to the right. Just one of the advantages of a mathematically created currency.

Re:inflation is not related to economy growth (0)

Anonymous Coward | about a month and a half ago | (#47372659)

I don't think you've thought this through very well...what do you think it's called when "As the world needs more bitcoin the decimal just moves to the right"? It's called deflation, and it's bad. Suppose instead of creating more dollars in the money supply as the economy expands the government just decodes to shift the decimal point to the right? This thing that used to cost a dollar now costs ten cents? Why would anybody invest money in creating a thing that costs dollar when it could be worth ten cents tomorrow? Why not just hold you money and wait for some other guy to make the thing for a dollar and then you get to buy it for ten cents? And then there is the issue of why is shifting the decimal to the right (deflation) ok to you but shifting the decimal to the left (inflation) is bad to you? Imagine the about scenario of dollar things and ten cent things with the decimal going the other way...now you had better build a factory to make dollar things because tommorow dollar things might be worth ten dollars and if you invest the money to make them your debt will still be owed in the old decimal money but your product will be sold in the new decimal money. Suddenly everyone has a reason to invest their money and be productive which is why the USA has the strongest economy on the planet despite its currency "losing 90% of it's value" or whatever the goldtards say...

Re:inflation is not related to economy growth (0)

Anonymous Coward | about a month and a half ago | (#47371751)

What happens when people start doing fractional reserve banking with bitcoin like they did with gold backed currencies? The government doesn't control the money supply as much as the banks. Why do you think there was so much danger of deflation after the 2008 crisis? Because trillions of dollars of loans issued by banks went up in a puff of smoke which would have triggered a mega deflation event if the fed hadn't pushed to expand the money supply. As soon as some jew opens a bitcoin bank that gives out loans the supply of bitcoins will effectively be expanded.

Re:inflation is not related to economy growth (1)

A non moose cow (610391) | about a month and a half ago | (#47372315)

No, it is inherently NOT a "controlled inflation currency". It is by its very nature deflationary, which is not a bad thing, but it is not controlled the way an elastic currency could be if it were managed properly. It is designed to be permanently deflationary. It copes with this negative inflation by being able to be broken into smaller and smaller units as necessary. The inflation rate is determined purely by market demand and nothing else. There are no mechanisms built into Bitcoin for abating inflation.

Re:really? (2)

SpankiMonki (3493987) | about a month and a half ago | (#47371397)

...and mining is eventually rendered useless...

Huh? With bitcoin, the mining process is how transactions are validated. No mining, no transactions. How do you think it could ever be rendered useless?

When will a candy bar cost .0001 bitcoins?

Difficult to say. But you can get candy bars for around .0016BTC (+shipping) from here. [bitcoincandystore.com]

Weak Currencies (1)

invid (163714) | about a month and a half ago | (#47369361)

Hold on a sec ... is he trying to say that bitcoin can help rectify problems caused by weak currencies?

Re:Weak Currencies (0)

Anonymous Coward | about a month and a half ago | (#47369671)

Yep. Most "modern" currencies don't offer any consumer protection AT ALL against preferential treatment for banks. Why would anyone want a currency so unstable, that it lost over 90% of its value since its peak?

Re:Weak Currencies (0)

Anonymous Coward | about a month and a half ago | (#47371145)

I'd probably buy some again if they were under 20 dollars, I bought a lot back in the day before they were even 2 dollars and sold them at around 900 each. What really pisses me off is that I still have around 5000 stuck on Mega that I've already accepted as lost, but I'll probably bitch about it for the rest of my life. Goddamn thieving government and their Hollywood masters make me sick. It's my own damn fault for not making more backup wallets, but I did not expect my shit to be locked down by my own goddamn people.

Sorry about that, I get off track easy when it comes to bit anything.

Re:Weak Currencies (0)

Anonymous Coward | about a month and a half ago | (#47371235)

(I'm the AC to whom you responded)

On behalf of bitcoin users everywhere, thank you. I know this isn't much consolation but you've done us all a service.

"Lost coins only make everyone else’s coins worth slightly more. Think of it as a donation to everyone."

- Satoshi Nakamoto

Re:Weak Currencies (0)

Anonymous Coward | about a month and a half ago | (#47371705)

"Lost coins only make everyone else’s coins worth slightly more. Think of it as a donation to everyone."

Mmm...wouldn't that only hold true if the number of coins lost was made public by the individual who lost them? How would the market incorporate such information into the price of BTC? Any Tom, Dick, and/or Satoshi could announce that they lost coins, but how would the trustworthiness of such information be evaluated?

IOW, I call BS. The BTC market would have no way to rationally place a premium on any lost coins in the system. Me so solly Satoshi.

Re:Weak Currencies (0)

Anonymous Coward | about a month and a half ago | (#47371793)

Sorry, should have said "...rationally place a "lost coin" premium on the remaining BTC in the system." Please also disregard the Krusty the Clown reference.

Re:Weak Currencies (1)

myfacelaunchd50ships (3726569) | about a month and a half ago | (#47372621)

As time goes on lost coins start to stand out in the block chain. Large transaction outputs like Anonymous Cowards that have not been touched in 10 years or more will be good candidates for inclusion in the lost coin ledger.

Re:Weak Currencies (2)

myfacelaunchd50ships (3726569) | about a month and a half ago | (#47369705)

Having an alternative currency like Bitcoin in a country with rampant inflation 'couldn't hoit'. Especially if dollar purchases are restricted like in Venezuela where holders of the Bolivar lost 56% last year due to inflation. It simply gives the victim of an inept monetary policy a way to preserve the wealth value in an asset more stable than his own currency. Gold and dollars would be better but they are hard to obtain.

Quite the Contrary (0)

Anonymous Coward | about a month and a half ago | (#47370795)

Quite the contrary, what he plans to do is to exploit weak economies. This is a Soros-style attack on banks, with the clear intention of getting rich while destroying third world economies.

Re:Quite the Contrary (1)

myfacelaunchd50ships (3726569) | about a month and a half ago | (#47372419)

I'd sure like to know how that would work.

Re:Weak Currencies (0)

Anonymous Coward | about a month and a half ago | (#47371485)

This reminds me. I carry in my wallet a 100,000,000,000 dinar bill from a couple of decades ago when Serbia went through hyperinflation. You'd need a stack of 'em to buy a loaf of bread and a gallon of milk. That's a hundred billion dinars.

Re:Weak Currencies (0)

Anonymous Coward | about a month and a half ago | (#47369731)

Hold on a sec ... is he trying to say that bitcoin can help rectify problems caused by weak currencies?

I don't think you can infer that.

Re:Weak Currencies (1)

gstoddart (321705) | about a month and a half ago | (#47369839)

And markets.

So, as a currency, it is somehow magically not affected by markets or the chance of devaluation?

I must admit, I read that and thought "I have no idea what this man is saying".

Bitcoin is a currency, and it is subject to modern market economies. The entire summary sounds like Bitcoin is somehow magic.

hooray (-1)

Anonymous Coward | about a month and a half ago | (#47369377)

So he's going to set up an third world equivalent to a payday lending service.

Thank god for bitcoin!

How to make an opinion a fact (1, Insightful)

humphrm (18130) | about a month and a half ago | (#47369395)

"Of course, no one is totally secure in holding their own country’s currency"

Just put the words "Of course" in front of any opinion and people will accept it as fact.

Re:How to make an opinion a fact (2, Insightful)

Anonymous Coward | about a month and a half ago | (#47369747)

Of course, it helps that what he's saying is a fact; no one is totally secure against anything. It's just a meaningless fact.

Re:How to make an opinion a fact (0)

Anonymous Coward | about a month and a half ago | (#47370035)

Cyprus
Greece
Austerity
The US dollar has lost 98% of its value since creation.
2008
The penny for a pound scheme in Britain. It was supposed to be a fund for retirement, one day the government ended it , no fanfare, just took the cash.

History shows that no one is totally secure in holding their own country’s currency because eventually the government always over extends itself , prints or otherwise fucks with it.

Re:How to make an opinion a fact (1)

Megol (3135005) | about a month and a half ago | (#47370165)

In general: is it a truism -> just ignore it. And that is one.

Re:How to make an opinion a fact (1)

wbr1 (2538558) | about a month and a half ago | (#47370349)

Of course, you may be right.

No, I won the bitcoin auction! (0)

jbssm (961115) | about a month and a half ago | (#47369399)

Seriously, in this shady world of bitcoin, where people lie and deceit all the time how can anyone take someone word for granted?

There is zero evidence Tim Draper was the auction winner, except for is own statement, that's not backed up by absolutely anything.

Even more, I clearly remember the days where Mark Karpelles was a great guy, a visionary, an entrepreneur that embraced bitcoin... look at what the "bitcoin people" say about him now.

Re:No, I won the bitcoin auction! (1)

TheRealMindChild (743925) | about a month and a half ago | (#47369567)

There is zero evidence Tim Draper was the auction winner, except for is own statement, that's not backed up by absolutely anything.

Because if he was lying, the actual winner is extremely likely to issue a "nuh uh. *I* won the auction" statement

Re:No, I won the bitcoin auction! (1)

jbssm (961115) | about a month and a half ago | (#47369609)

Because if he was lying, the actual winner is extremely likely to issue a "nuh uh. *I* won the auction" statement

Which would have exactly the same weight.

Funny thing is that Tim Draper waited almost 5 days to come forward and tell that he won the auction... just when he saw anyone else was doing it. So, my statement remains: There is zero evidence he actually won the auction except for his word.

Re:No, I won the bitcoin auction! (4, Informative)

itzly (3699663) | about a month and a half ago | (#47370167)

He could prove it was him by signing a message with the bitcoin address' private key.

Re:No, I won the bitcoin auction! (0)

Anonymous Coward | about a month and a half ago | (#47369619)

Nuh, uh. I won the auction. Who is this Tim Draper?

Re:No, I won the bitcoin auction! (2)

AmiMoJo (196126) | about a month and a half ago | (#47369597)

It seems unwise to claim to the winner. A lot of people who lost money when those bitcoins were seized will be quite upset with this guy. Considering many of the dealt in drugs, weapons and other illegal material I wouldn't like to speculate what they might do to him.

Draper didn't do anything wrong (0)

Anonymous Coward | about a month and a half ago | (#47371331)

Draper was responsible for neither DPR's incompetence nor the FBI's theft.

Re:Draper didn't do anything wrong (1)

St.Creed (853824) | about a month and a half ago | (#47371593)

Yes, I'm sure that will deter the mafia when they come over to collect their assets: "it wasn't me! honest it wasn't! I just happened to find the bitcoins at an auction!" :)

Re:No, I won the bitcoin auction! (1)

dj245 (732906) | about a month and a half ago | (#47371613)

It seems unwise to claim to the winner. A lot of people who lost money when those bitcoins were seized will be quite upset with this guy. Considering many of the dealt in drugs, weapons and other illegal material I wouldn't like to speculate what they might do to him.

On the other hand, it seems wise to make a statement. Everybody can track those bitcoins anyway. One of the concerns I might have as a buyer of them would be that no exchange would deal with me and I couldn't cash them out. By making a statement which shows he is a "good guy" he might be able to escape the communities anger about the situation and deflect it back on the person who lost them and the government who took them, which is where the blame rightly belongs anyhow.

Re:No, I won the bitcoin auction! (1)

ShaunC (203807) | about a month and a half ago | (#47370653)

There is zero evidence Tim Draper was the auction winner, except for is own statement, that's not backed up by absolutely anything. Even more, I clearly remember the days where Mark Karpelles was a great guy, a visionary, an entrepreneur that embraced bitcoin... look at what the "bitcoin people" say about him now.

Mark Karpeles is a guy with a failed trading-card website who hired a few c0d3rZ to dabble in Bitcoin and wound up with a disaster. Tim Draper is a fairly well-known VC who's spent 30 years building both his reputation and a company worth billions of dollars. If you can't see the difference, I doubt anything I say will help, but Draper is incredibly unlikely to issue a statement like this if it isn't a) true, b) fully vetted by his legal team, and c) fully vetted by the other company's legal team.

Rehashed plot (2)

necro81 (917438) | about a month and a half ago | (#47369425)

Promoting a cryptocurrency to help the developing world avoid the pitfalls of its own weak currency? Wasn't that a plot element of Cryptonomicon. If I recall, however, they were going to back all of their cryptocurrency against a mountain of gold (Nazi and Japanese spoils of war).

Weak != Bad (4, Insightful)

sjbe (173966) | about a month and a half ago | (#47369461)

Bitcoin frees people from trying to operate in a modern market economy with weak currencies.

No it does not. A currency that is "weak" is a relative valuation of exchange compared with other currencies. Weak does not (necessarily) equal bad. A "weak" currency benefits exporters and hurts importers. China has purposely been keeping their currency weak for some time now to facilitate their manufacturing exports. Whether bitcoin is "strong" or "weak" depends entirely on what you are comparing it with. (Never mind the fact that bitcoin is ridiculously volatile which doesn't help either) Furthermore unless you plan to actually hold bitcoins instead of using them as a fancy money order spending little time holding them, the relative strength of bitcoin as a currency is irrelevant.

With the help of Vaurum and this newly purchased bitcoin, we expect to be able to create new services that can provide liquidity and confidence to markets that have been hamstrung by weak currencies.

What a load of malarkey. Bitcoin is no where near stable enough nor widely accepted enough to serve this function.

Of course, no one is totally secure in holding their own country’s currency.

I'll take my chances with the US dollar thanks. I trust it FAR more than I do bitcoin.

Re:Weak != Bad (1)

gatfirls (1315141) | about a month and a half ago | (#47369583)

Yea, this guy is proof that vulture capitalists are no better than the retards trading pink sheets and posting on the yahoo finance forums about how strong their portfolio is.

His quotes read like something from the onion.

Re:Weak != Bad (1)

kruach aum (1934852) | about a month and a half ago | (#47369633)

I think you mean to say his quotes read like something from the onion. That is, his quotes are like something from the onion. In other words, his quotes are similar to what you would find on the onion. The onion. Onion.

Tim Draper is engaging in powertalk, not fact talk (1)

mbkennel (97636) | about a month and a half ago | (#47370791)

People at that level talk with purpose, and the purpose is not always conveying well-justified facts or opinions.

Draper is far from stupid. He is already starting to talk his book by giving increased legitimacy to *bitcoin technology startups*, which is his actual investment.

The profits are in the fees in the payment systems.

From which he will cash out profits in cold dollars and euros, and a few bitcoins as a lark.

Bitcoin can't possibly be any kind of stable or useful general currency until there's a bond market in bitcoin. People imagine that transacting for bubblegum or downloads makes for good currency---but that's meaningless trivia. It's the existence and strength of *debt markets*, whether direct (loans) or capital markets (bonds) which truly signal strength, because these instruments are arbitrage through time. The dollar and euro aren't going anywhere because there are trillion $ bond and FX markets behind them.

Draper knows this, too.

When you start to get a bitcoin bond market with enforcable contracts, then it's time to take it seriously.

Re:Tim Draper is engaging in powertalk, not fact t (1)

gatfirls (1315141) | about a month and a half ago | (#47371011)

I wasn't speaking to his intelligence I was referencing his statements that are blatant sales pitch or mission statement type quotes. It's the same thing we have seen all over the internet about how this new idea is going to be great because...bitcoin.

I fully expect he will (has) make a profit off of his investment.

I guess I can be proven wrong if someone explains to me how "no one is totally secure in holding their own country’s currency". I mean I have never really met anyone who isn't totally secure in the dollar.....well except a couple of the nuts who hoard guns because Obama is setting up fema camps.

Re:Weak != Bad (1)

UnanimousCoward (9841) | about a month and a half ago | (#47370831)

Okay, I'll bite. Do you really think he has amassed all his wealth through dumb fucking luck? Or all VCs for that matter?

Re:Weak != Bad (1)

QilessQi (2044624) | about a month and a half ago | (#47371301)

Okay, I'll bite. Do you really think he has amassed all his wealth through dumb fucking luck? Or all VCs for that matter?

From Wikipedia ( http://en.wikipedia.org/wiki/T... [wikipedia.org] ):

He is the third in a line of venture capitalists. His father, William Henry Draper III, founded the Draper & Johnson Investment Company in 1962 and his grandfather William Henry Draper Jr. founded Draper, Gaither and Anderson in 1958. His father also was chairman and president of the Export-Import Bank of the United States.[2] Tim Draper received a Bachelor of Science from Stanford University with a major in electrical engineering and a Master of Business Administration from the Harvard Business School.

So no, not through dumb luck alone. He also amassed his wealth by being born into a family with it -- and, I would guess, by having business connections through that family (and through HBS, no doubt). He may certainly be a smart investor, but don't discount all that other stuff, which gives him a bit more room to take bold chances and make big mistakes without going bankrupt. It's a little easier to hit a home run if you're born on third base.

Re:Weak != Bad (1)

gatfirls (1315141) | about a month and a half ago | (#47371901)

See here: http://slashdot.org/comments.p... [slashdot.org]

I take issue with the statements not the man.

Strong currencies defend privilege (2)

Xaedalus (1192463) | about a month and a half ago | (#47369613)

If one has a strong currency, then one commands the privilege of the market. That means one would get first pick of new opportunities, new investments, and everyone wants to do business because of that strong currency. What you pointed out is the adverse consequence of having a strong currency--lots of buying power, but limited ability to actually generate new income. Strong currencies benefit the investor class and continues to give them privilege in the market--and to a degree, at the expense of everyone else.

Re:Weak != Bad (1)

radarskiy (2874255) | about a month and a half ago | (#47369681)

His understanding of macroeconomics is on par for a typical bitcoin evangelist.

Re:Weak != Bad (0)

Anonymous Coward | about a month and a half ago | (#47370881)

and yours is on par with someone who should be on redit, not slashdot.

Re:Weak != Bad (1, Funny)

Wonko the Sane (25252) | about a month and a half ago | (#47369763)

I'll take my chances with the US dollar thanks. I trust it FAR more than I do bitcoin.

Excellent news.

Seriously, I love hearing that. Not everybody deserves to be a Bitcoin early adopter.

Gambling with exchange rates (1)

sjbe (173966) | about a month and a half ago | (#47371223)

Seriously, I love hearing that. Not everybody deserves to be a Bitcoin early adopter.

"Deserves"? How precious that you think yourself so clever. You go ahead and put your money on the bitcoin roulette wheel. I'm going to put mine in investments that actually do something productive and are a lot more predictable as well. Maybe you'll get lucky and exchange rates will move in your favor... but I doubt it. Your odds are better in Vegas frankly.

Re:Gambling with exchange rates (1, Insightful)

Wonko the Sane (25252) | about a month and a half ago | (#47371459)

I expect exchange rates to move in my favor, but that's just a side benefit. The real advantage of abandoning the Dollar for Bitcoin is that my liquidity and savings are no longer tied up in murder-based blood money.

Bitcoin is a human rights movement.

Re:Gambling with exchange rates (1)

St.Creed (853824) | about a month and a half ago | (#47371621)

I expect exchange rates to move in my favor, but that's just a side benefit. The real advantage of abandoning the Dollar for Bitcoin is that my liquidity and savings are no longer tied up in murder-based blood money.

Bitcoin is a human rights movement.

Are we talking about the bitcoin that was used on Silk Road? Because i'm pretty sure it wasn't the Red Cross and the Salvation Army trading their stuff there.

Re:Gambling with exchange rates (1)

Wonko the Sane (25252) | about a month and a half ago | (#47371803)

Are we talking about the bitcoin that was used on Silk Road?

Absolutely. [wired.com]

Re: Gambling with exchange rates (0)

Anonymous Coward | about a month and a half ago | (#47372229)

Money any government took by force is blood money. Whether us law doesn't agree with some of the items traded for that money has no ability to change that.

Re:Weak != Bad (2)

jbmartin6 (1232050) | about a month and a half ago | (#47369769)

I'll take my chances with the US dollar thanks. I trust it FAR more than I do bitcoin.

I know a couple folks who don't have the option of using US dollars thanks to their governments. They are doing a substantial amount of business in bitcoin instead.

Illegal activities (1)

sjbe (173966) | about a month and a half ago | (#47371175)

I know a couple folks who don't have the option of using US dollars thanks to their governments. They are doing a substantial amount of business in bitcoin instead.

In other words that is a backhanded way of saying they are doing something illegal. I've been all over the world including to places where they don't allow free exchange of the local currency into dollars (like China). It is NEVER a problem to do business in dollars. In fact in places where the local currency is a bit shaky (like Vietnam) they actually generally prefer to do business in dollars.

Re:Weak != Bad (1)

Anonymous Coward | about a month and a half ago | (#47369773)

You do? Dude, I have more trust in there being a sunrise tomorrow than I do the dollar. I have more trust in spilling a glass of water leading to a puddle and not a cloud, than I do the dollar.
At this moment in time, the dollar is literally less than worthless.
You are trading in bad debt every single day.
And now China is making a move on the US markets and is going to turn the US in to what the US turned China in to. Enjoy your awful future.

At least with Bitcoin you will be able to make money off it if you have an IQ higher than a rock. (or the countless other even more volatile crypto-currencies in the mid-tier range in regards to value)

Re:Weak != Bad (1)

istartedi (132515) | about a month and a half ago | (#47370411)

Yep, it's not the relative strength of the currency that causes problems. It's the stability of the currency that causes problems. Having 1 Yen == $0.0098 is not be a problem even though the Yen is weak relative to the dollar.

Having 1 Yen == $0.01 today, $0.001 tomorrow and then $0.005 the next day would be a problem. It's an obvious problem for people with Yen in their bank accounts because they lost a lot of purchasing power. It's also a problem for anybody trying to write a contract that involves payment, since you don't know what the payment will be worth when the contract is complete.

So. While people may be worried about the USD exhibiting that kind of instability, it hasn't. Bitcoin, OTOH...

Re:Weak != Bad (1)

Anon-Admin (443764) | about a month and a half ago | (#47371769)

Bitcoin Instability?

Several years ago I bought $150 of bitcoin @ $0.50 a coin. Figured I would get some for the novelty.

Last year I sold a few off and bought 12.5 acres of land, right now I could sell some more and pay off my house.

Sure they have gone up and down, but in the long run they have gone up.

Re:Weak != Bad (0)

myfacelaunchd50ships (3726569) | about a month and a half ago | (#47372693)

Psst. Don't post success stories. You'll just make the bitcoin skeptics hate it more .

Re:Weak != Bad (1)

ultranova (717540) | about a month and a half ago | (#47371625)

Bitcoin frees people from trying to operate in a modern market economy with weak currencies.

No it does not.

Does not what, exactly speaking? The literal meaning of the sentence is that you're trying to use several different weak foreign currencies to pay your way. Since this is finance, it's impossible to say if we're seeing bad grammar or the beginnings of yet another terribly clever instrument of economic mass destruction.

Re:Weak != Bad (0)

Anonymous Coward | about a month and a half ago | (#47372261)

Not saying that the idea isn't hairbrained, but perhaps you judged his statements too generally. Imagine you were a Chinese citizen; you could sell your things in Bitcoin so that you receive money in a stronger currency, meaning you bypass the government's currency manipulation.

The problem with Bitcoin (4, Interesting)

Zeio (325157) | about a month and a half ago | (#47369515)

Bitcoin is deflationary in a world with increasing population. Also BTC has made land grabbers and early adopters rich - it doesnt look like the currency of the future to me.

The other issue is that it cannot be recovered when stolen - this makes the identity theft issue utterly lethal.

If something similar to BTC came about that was convertable to energy or bullion that would be of interest - then the whole digital-only nature of the currency would be alleviated to some degree (a computer/HDD crash can wipe you out is a valid fear).

The other thing that needs to come about is transaction escrow. Some mutually agreed on non-governmental third party should provide escrow for large transactions.

I think that Amazon and others love BTC simply because they dont have to pay a tithe to credit card companies, but credit card companies help us deal with fraud, bad products, identity theft, etc. If you pay your credit cards off in time you get a company that can be helpful in dealing with fraud and identity theft vs nothing.

BTC is like walking around with krugerrands and bearer bonds without security.

Re:The problem with Bitcoin (2)

mythosaz (572040) | about a month and a half ago | (#47369675)

Amazon and others pay a "tithe" to their BTC processor, exactly the same was they fees to their other merchant processing services.

Strictly speaking, nobody accepts anything other than the cold hard cash their payment processor transfers to their account at the end of the day. "MasterCard" doesn't put money in their bank account -- XYZ Merchant Services LLC does. As long as XYZ will accept BTC and give Amazon "real" money, great. The same goes for Visa, MasterCard, or truckloads of Dutch tulips.

Re:The problem with Bitcoin (1)

itzly (3699663) | about a month and a half ago | (#47369683)

Right now bitcoin is still inflationary, and it will remain that way for a while to come.

Re:The problem with Bitcoin (1)

Anonymous Coward | about a month and a half ago | (#47371003)

it is both inflationary and deflationary right now. or maybe just one, or niether? Its schrodingerCoin.

Re:The problem with Bitcoin (0)

Anonymous Coward | about a month and a half ago | (#47369701)

Once you use bitcoin you feel so stupid using a card. Imagine telling some website or person over the phone your private key... the current system is horrible.

Re:The problem with Bitcoin (0)

Anonymous Coward | about a month and a half ago | (#47369963)

Let me guesss: as stupid as people using MtGox felt about when using bitcoins?

Re:The problem with Bitcoin (1)

mythosaz (572040) | about a month and a half ago | (#47369995)

The people "using MtGox" weren't using BTC, they were "using MtGox."

If they were using BTC, coins would still be in their wallet. Complaining about the Magic The Gathering Online Exchange having anything to do with BTC is like complaining about paper currency that you stored in someone else's badly guarded safe.

Re:The problem with Bitcoin (1)

Zeio (325157) | about a month and a half ago | (#47372121)

Looks like the Joseph Smith's Kirtland Bank three dollar bill all over again. Mixing religious devotion to monetary policy.

I dislike central banking myself, but to invent another unbacked currency to replace another seems a step backwards.

Re:The problem with Bitcoin (0)

Anonymous Coward | about a month and a half ago | (#47370259)

I've been burned by exchanges too. This does not outweigh the benefits.

Re:The problem with Bitcoin (0)

Anonymous Coward | about a month and a half ago | (#47372003)

Yes it does.

Re:The problem with Bitcoin (1)

Zeio (325157) | about a month and a half ago | (#47372097)

Interesting to see Anonymous supporting bitcoin here. I have a feeling there is a campaign which is subverted trying to push this stuff. Its not backed, and it has severe implications when stolen. The currency of the future has ridiculous flaws out the starting gate. And if Jeff Bezos, a big time oligarchical collectivist is in love with it, I am wary.

Re:The problem with Bitcoin (1)

DerekLyons (302214) | about a month and a half ago | (#47370159)

I think that Amazon and others love BTC simply because they dont have to pay a tithe to credit card companies

That's only true if they operate their own exchange - otherwise they're paying exchange fees. (Which admittedly are likely far lower than what they pay the credit card companies.)
 

but credit card companies help us deal with fraud, bad products, identity theft, etc. If you pay your credit cards off in time you get a company that can be helpful in dealing with fraud and identity theft vs nothing.

BTC is like walking around with krugerrands and bearer bonds without security.

This. And also the reason I refer to BTC as "casino tokens" rather than "cash money".

Re:The problem with Bitcoin (1)

myfacelaunchd50ships (3726569) | about a month and a half ago | (#47372803)

We pay the card companies a lot of money for using their network, maintaining a secure ledger of accounts and combating fraud and identity theft, merchants pay 3% of their gross revenue through the transaction fee and the card providers also extract some of this cost from the consumer through high fees and interest. These are costs that suddenly vanish when the merchant accepts Bitcoin (or actually shrink to .1%) since the network is free, the ledger (blockchain) is free and identity fraud is impossible since a Bitcoin wallet cannot be duplicated like a credit card. You can see how merchants who are operating on very thin profit margins (10% or less) see lower transaction costs as a way to substantially make a difference in their bottom line. As a matter of fact, Wall Street sees it too which is why they are investing in Bitcoin infrastructure. My advice to you slashdot holdouts is don't wait too long before you start getting it.

Re:The problem with Bitcoin (1)

IamTheRealMike (537420) | about a month and a half ago | (#47370431)

Bitcoin is deflationary in a world with increasing population. Also BTC has made land grabbers and early adopters rich - it doesnt look like the currency of the future to me.

No - if you're talking about money supply then Bitcoin is inflationary until it stabilises. What happens to prices in the meantime is anyone's guess. So far the price has gone up, it's gone down. Over the long run it's got a lot more valuable, but that's a temporary artifact caused by the novelty of an actually working e-cash system. Nobody really knows where the value will end up, but one day Bitcoin will be boring and all the issues it raises will have been resolved. At that point the price should be stable unless the Bitcoin economy is growing, in which case falling prices is the behaviour you would intuitively expect had you not been propagandised by central bankers into believing that as a society gets wealthier everything is supposed to get more expensive.

With respect to "land grabbers and early adopters", yes, it has made some of them rich. It could also make them poor again if the price collapses. If it doesn't, then it's no different than the internet which also minted an entire generation of nouveau riche, but that's OK, we can tolerate a temporary increase in inequality in return for something like the internet. It gets balanced out eventually anyway, as none of those new millionaires fancy the idea of establishing a dynasty.

The problem with Bitcoin (1)

Anonymous Coward | about a month and a half ago | (#47370971)

counter-party capability is available, multi-sig transactions ... give it a few months ..third party escrows will pop up ..and you will be able to choose them via free market.

deflationary with an increasing population is a good thing. I think you have deflation and inflation backwards.

identity theft, that is certainly a problem that needs to be solved, but it will be, and I think it will be solved via hardware rather than software. off OS signature devices built into phones/PCs ... probably.

All that being said, I don't think most people grasp what bitcoin will really become ... It is going to become the backbone of the global financial system, side chains, and off chain transactions will make up general commerce and transactions between individuals...those will reconcile on longer timeframes in bigger batches on the main bitcoin block chain.

Think outside the box man, its going to look totally different in 5 years.

ALso ponder Proof of resource based chains. with those (they are being worked on) decentralized mesh networking will finally be possible. imagine the possibilities. Goodbye cable/dsl companies.

BTC is like walking around with krugerrands and bearer bonds in a safe back home and knowing the combination in your head, and or needing your fingerprint for biometrics.
If someone knows you have it, and they want it, and are willing to use violence, extortion what have you ... then what really is the difference?

Re:The problem with Bitcoin (1)

Zeio (325157) | about a month and a half ago | (#47372083)

If that's true - if its so great, back it.

A hedge against hyperinflation (1)

Bill, Shooter of Bul (629286) | about a month and a half ago | (#47369579)

It might work against hyper inflation. But other than, that its kind of worthless. And when you have hyper inflation, governments usually crack down on any kind of currency movement out of the weak currency to try and prop up the local currency.

So this is great, if you think that your currency is going hyper inflationary in a short period of time. I don't think there are many cases in which that would be useful.

Otherwise, if Bitcoin can be called a currency, then its also suceptible to variance in value as we've seen over its lifetime. Teh Mahts don't protect against it losing value.

Re:A hedge against hyperinflation (1)

itzly (3699663) | about a month and a half ago | (#47369719)

But it's easier to hide from the government that you're dealing in bitcoin, so there it could offer an advantage over strong foreign currencies.

Related News... (4, Informative)

mythosaz (572040) | about a month and a half ago | (#47369611)

In related news, a Sinaloa Cartel spokesperson was quoted as saying, "Thanks, we were wondering who had our money."

Biggest Douche in the Universe (5, Interesting)

Anonymous Coward | about a month and a half ago | (#47369617)

This is nothing more than a ploy to advertise the company (which I'm not naming on purpose).
That is also how he was able to win. He did NOT bid "X times Y" where X is the price of BC and
Y is the number of coins. He bid "X times Y plus advertising-factor". That's how he was able
to beat everyone else.

WATCH. They will sell these BC within the next 30 days. I know it's a bit outside /. attention-span but that's how it is going to work.

Fortunus dominus

Moron (-1)

Anonymous Coward | about a month and a half ago | (#47369635)

Another faggot with more money than brains

So that's where they went (1)

Anonymous Coward | about a month and a half ago | (#47369807)

Dear Tim,

Can I have my bitcoin back please. I think you have a few that belong to me.

thanks,
AC

Re:So that's where they went (1)

Ralph Wiggam (22354) | about a month and a half ago | (#47371847)

They ceased to belong to you when the FBI confiscated them.

Re:So that's where they went (1)

david_thornley (598059) | about a month and a half ago | (#47372165)

The FBI is not officially trying to confiscate any legitimate property. If AC has evidence that some of the BTC belong to him, and he wasn't using them for illegal purposes, AC could file a claim. AIUI, nobody has filed a claim for any of the BTC, so the FBI is treating them like any other confiscated property and selling them off.

Re:So that's where they went (1)

TechyImmigrant (175943) | about a month and a half ago | (#47372279)

Shouldn't they convict the guy before assuming that the property they confiscated from him can be sold off?

Re:So that's where they went (1)

Ralph Wiggam (22354) | about a month and a half ago | (#47372741)

It wasn't his property. It was property he was holding for others- thus the reclamation process that the root poster didn't take advantage of.

Source (0)

Anonymous Coward | about a month and a half ago | (#47369897)

The source of this news is Medium.com, which is a blog publishing platform [wikipedia.org] that allows literally anyone to write anything they like.
This news is very unreliably sourced, to say the least.

Wrong Draper.... (1)

tekrat (242117) | about a month and a half ago | (#47370413)

It would have been so much more interesting if Captain Crunch was a Bitcoin zillionaire. Yeah, that wouldn't lead to anything *bad*.

Re:Wrong Draper.... (0)

Anonymous Coward | about a month and a half ago | (#47370665)

Energy massages for everyone!

Thanks for giving the DEA money (0)

Anonymous Coward | about a month and a half ago | (#47370687)

You jerk. Guh.

Must be 'every minute'... (0)

Anonymous Coward | about a month and a half ago | (#47371309)

as yet another sucker is born.

Public and private motivations (1)

Chas (5144) | about a month and a half ago | (#47372323)

Public: We believe! We believe! Pump pump pump!
Private: Sell! Sell that shit! Dump dump dump!

what exactly is a bitcoin (1)

slothman32 (629113) | about a month and a half ago | (#47372861)

Is a bitcoin a number?
Perhaps a bunch of other site that agree you "own" them. ??
Is it a pyramid scheme - earlier mining gets more coins?

If I started my own eCoin what kind of thing would the algorithm or whatever do?
No I am not going to, I have moe constructive things to do.

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