# Bitcoin debacle: 850,000 bitcoins gone or half a billions dollars



## Kramodlog (Feb 28, 2014)

The trading site mtgox filled for bankruptcy. Apparently 850k bitcoins are gone. Maybe hackers are involved.

What do you think this means for cryptocurrencies? Is this a blow toward libertarian dreams of decentralized currencies? Did you own some bitcoins? At least for now the value of a bitcoin hasn't budged much.


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## Derren (Feb 28, 2014)

People who think Bitcoins are currency are deluded. They are speculation objects like stock options or even the "evil" mortages which caused the 2009 crash. Actually they are worse. Those mortages still, in some twisted way, represented some tangible value. Bitcoins do not. They are completely made up with no real world equivalent.


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## Umbran (Feb 28, 2014)

Well, there's a good argument that all currency is really based on little more than mutual belief.  It is simply that we tend to believe in currencies issued by nation states a whole lot more than others, both out of tradition, and out of the real resources nations have at their disposal.

Bitcoin had far too little backing to be an effective, dependable currency.  That left it a speculative investment.


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## Zombie_Babies (Feb 28, 2014)

Derren said:


> People who think Bitcoins are currency are deluded. They are speculation objects like stock options or even the "evil" mortages which caused the 2009 crash. Actually they are worse. Those mortages still, in some twisted way, represented some tangible value. Bitcoins do not. They are completely made up with no real world equivalent.




Are you aware that legitimate businesses started taking Bitcoins before all the hullabaloo?


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## Umbran (Feb 28, 2014)

Zombie_Babies said:


> Are you aware that legitimate businesses started taking Bitcoins before all the hullabaloo?




In theory, you can pay a legitimate business in anything they agree to take.  Dollars, euros, chickens, whatever.  That doesn't mean it was smart for them to do so.  Nor does their doing so mean that chickens are solid, dependable currency


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## Zombie_Babies (Feb 28, 2014)

Umbran said:


> In theory, you can pay a legitimate business in anything they agree to take.  Dollars, euros, chickens, whatever.  That doesn't mean it was smart for them to do so.  Nor does their doing so mean that chickens are solid, dependable currency




What it _does _mean is that Bitcoins 'represented some tangible value'.  Last I checked you could hold a cup of coffee in your hands.


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## Dannyalcatraz (Feb 28, 2014)

I actually had to study the history of currency.

To me, bitcoin and other cryptocurrenies look a lot like a hyper technological version of some of the pre-currency means of transporting wealth long distances without having to resort to shipping things like precious metals or gemstones.

Wile many of those are still around- promissory notes, cashier's checks, money orders, etc.- there are real reasons why they are no longer the **ahem** gold standard for doing business.  Problems like the question of what happens when someone refuses to pay or accept them in satisfaction of the debt.  What happens if the non-currency payment is fraudulent?

I think they'll find their niche- we know the black market loves them- but I don't forsee them overtaking government-issued & backed currency in my lifetime.


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## Umbran (Feb 28, 2014)

Zombie_Babies said:


> What it _does _mean is that Bitcoins 'represented some tangible value'.  Last I checked you could hold a cup of coffee in your hands.




Well, I think it might be an inaccurate statement.  

The coffee itself has tangible value (for a while, while it is still hot and fresh, at least - that tangible value is transient).  That does not mean that someone taking bitcoin to give you coffee means the bitcoin represents tangible value, any more than it means the coffee represents bitcoin.  There was an instance where I literally sang for my supper - I exchanged a song for a meal.  Does that song now represent tangible value?  Hardly.

Lacking something like a gold standard, forms of currency represent tangible value only insofar as we all agree they do.  Sure, maybe you can buy a coffee.  But can you buy all your groceries and pay your utility bills with it?  Then, I question how tangible a value they represent.  Their applicability was still too undependable, I'm afraid.

Of course, "currency" isn't actually solidly defined in the first place, so opinions will vary.


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## Kramodlog (Feb 28, 2014)

Derren said:


> They are completely made up with no real world equivalent.



Krugman compared it to gold. Basically it has the value we give it, just like gold. The problem with it is more that it has no backing by some central agency. The mtgox issue would be one if a central bank or say a big corporation with huge cash reserves *cough* Google *cough*. 

And some dude makes actual physical bitcoins. Well sort of, he has to use a loophole to make them now.


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## Derren (Feb 28, 2014)

goldomark said:


> Krugman compared it to gold.




Except that gold is real and also has industrial applications (including jewelry).
Bitcoins are a complete fantasy product.


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## Kramodlog (Feb 28, 2014)

Derren said:


> Except that gold is real and also has industrial applications (including jewelry).



Bitcoins are real. I also point to a guy who makes them physical if you wanna focus on that. 


> Bitcoins are a complete fantasy product.



No more than regular money. It has vey little value, it the value we attribute it that turns it into glorified toilet paper or cigar lither.


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## Derren (Feb 28, 2014)

goldomark said:


> Bitcoins are real. I also point to a guy who makes them physical if you wanna focus on that.
> No more than regular money. It has vey little value, it the value we attribute it that turns it into glorified toilet paper or cigar lither.




Wrong.
Bitcoins are a collection of magnetic or electrical signals. 1 and 0 with no real world presence, no matter if you put a plastic casing around them or not.

Real money has the backing of the country issuing them. So in a way it represents a small fraction of its industrial, diplomatic and military power.


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## Kramodlog (Feb 28, 2014)

Derren said:


> Wrong.
> Bitcoins are a collection of magnetic or electrical signals. 1 and 0 with no real world presence, no matter if you put a plastic casing around them or not.



It doesn't mean it is not real money.



> Real money has the backing of the country issuing them.



Yes, I mentioned this as a weakness of bitcoins, but it does make them less real money. 



> So in a way it represents a small fraction of its industrial, diplomatic and military power.



How is this relevent to it being real money?


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## Derren (Feb 28, 2014)

goldomark said:


> How is this relevent to it being real money?




Because this gives money value. It links them to physical objects. It also ensures that there is someone who stands behind the currency and vouches for it.
Bitcoins have nothing of that. They are the tulips of our time (only worse) only kept aloft by rampant speculation, some crime and anti government conspiracy theorist who have preached the imminent end of the economic system for decades.


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## Kramodlog (Mar 1, 2014)

Derren said:


> Because this gives money value.



You're talking about things that influence the perception people will have of the currency. Bitcoin is no different perception affects its value. It does affect whether it is a currency or not. 

[qute]It links them to physical objects.[/quote]Money doesn't need that to be a currency.



> It also ensures that there is someone who stands behind the currency and vouches for it.



That affect its value, but not the fact that its a currency or not. 



> They are the tulips of our time (only worse) only kept aloft by rampant speculation, some crime and anti government conspiracy theorist who have preached the imminent end of the economic system for decades.



Which doesn't mean it is not a currency. It means it is a currency for criminals cause they give it value.


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## bone_naga (Mar 1, 2014)

Our currency, our government, and our society all work on mutual agreement. A few dissidents here and there and it still tends to work out ok, but if enough people stop playing, it collapses. It doesn't matter if you're talking gold, paper currency, bitcoins, or chickens, it has the value we give it as a collective group and that value only lasts for as long as we choose to recognize it.


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## Kramodlog (Mar 1, 2014)

bone_naga said:


> Our currency, our government, and our society all work on mutual agreement. A few dissidents here and there and it still tends to work out ok, but if enough people stop playing, it collapses. It doesn't matter if you're talking gold, paper currency, bitcoins, or chickens, it has the value we give it as a collective group and that value only lasts for as long as we choose to recognize it.



Ours or how much an elite weights in?


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## Zombie_Babies (Mar 3, 2014)

Umbran said:


> Well, I think it might be an inaccurate statement.
> 
> The coffee itself has tangible value (for a while, while it is still hot and fresh, at least - that tangible value is transient).  That does not mean that someone taking bitcoin to give you coffee means the bitcoin represents tangible value, any more than it means the coffee represents bitcoin.  There was an instance where I literally sang for my supper - I exchanged a song for a meal.  Does that song now represent tangible value?  Hardly.
> 
> ...




That's not a statement contradicting my assertion.  Rather, it's a statement of agreement with a caveat: degree.


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## Umbran (Mar 3, 2014)

goldomark said:


> It doesn't mean it is not real money.




Well, money is like the velveteen rabbit.  It has to be loved enough before it can be real.

Bitcoin, I think, hasn't reached that stage yet.  Too may (meaning, most of the planet) still question its validity, and won't accept it.

Plus, Bitcoin's target was to have a single bitcoin be worth tens of thousands of dollars.  This makes it an unreasonable choice as a currency for everyday use by individuals.


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## Derren (Mar 3, 2014)

Umbran said:


> This makes it an unreasonable choice as a currency for everyday use by individuals.




And thats not the only thing. How do you handle bitcoins in the physical world? We still need several decades until digital transactions and mobile phone wallets are the norm and so common that they replace hard currency for most people.


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## tomBitonti (Mar 3, 2014)

See, "fiat money" (which I've read more as "fiat currency"):

http://en.wikipedia.org/wiki/Fiat_money

And "representative money":

http://en.wikipedia.org/wiki/Representative_money

While folks are wedded, so it would seem, to the idea that money is, or should be, representative, the fact of the matter is that modern economies work on fiat money, and have done so for quite some time.

A key feature of fiat money is the process by which new money is created.  For example, debt is treated as an asset, and is involved in money creation:

http://en.wikipedia.org/wiki/Money_creation

What this all means is that money is rather a different thing than many people realize or understand.  Common notions of value are, as it seems, often are quite faulty, in particular, as relates to issues of valuation, and quite especially, as relates to the notion of intrinsic value.

While, removing control of money creation from the caprices of government officials, who may be corrupted, is an ideal, in practice, while the effect of corruption may be lessened, it is still there.  The boat on which rode the question whether to use Fiat money has long sailed.

Thx!

TomB


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## tomBitonti (Mar 3, 2014)

Note that gold _does_ have an intrinsic value: It's shiny, more or less indestructible, and quite rare.  Those properties are what makes it nice to use as a basis for representative money.  Although, it is true that you can't really do much with gold (for corrosion resistant parts; as a conductor), that is, relative to how much it is valued.

My (limited) understanding of why it fails is that there just isn't enough of it.  You end up using a fractional representation, and then back into a fiat case by allowing the fractional rate to be changed.  (This is what I've pieced together as a possible explanation, but am rather sketchy on the details.  This _seems_ to be a core problem.  Can anyone detail this with better information?)

Also, a representative money cannot be manipulated, which is perhaps just as as strong, or a stronger reason to have fiat money.

Thx!

TomB


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## Kramodlog (Mar 3, 2014)

Umbran said:


> Well, money is like the velveteen rabbit.  It has to be loved enough before it can be real.
> 
> Bitcoin, I think, hasn't reached that stage yet.  Too may (meaning, most of the planet) still question its validity, and won't accept it.
> 
> Plus, Bitcoin's target was to have a single bitcoin be worth tens of thousands of dollars.  This makes it an unreasonable choice as a currency for everyday use by individuals.



You can fracture bitcoins, so you can own one tenth of a BC that is worth... one tenth of a BC. This is done so you can use it in your everyday purchases. At least in theory.

Canadian Tire dollars are a real currency by all standards even if limited in scope and recognition. All something needs to be a currency is to be a medium of exchange. If two people use it as such it has enough love to be a currency. The love will only determine how much it is used. In the Apalachia, soda cases are used as currency cause you can't buy cigarette or booze with food stamps, but you can buy soda cases. So people use the cases to get cigs and booze.


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## Kramodlog (Mar 3, 2014)

tomBitonti said:


> Can anyone detail this with better information?



Why the gold standard isn't used anymore? Because it lacks flexibility when dealing with the economy. 

Printing money has its use and isn't necessarely the nightmare some think it is. hat happend to Greece recently is a good example. They could have printed money to pay their debts and lower the value of their money (cause there is more in circulation) to help them export more good (cause now it is cheap to buy them cause their money isn't worth a lot). The Europea Union didn't want to do that with the Euro, so it had to find a way to deal with Greece's debts in other ways. 

Adopting the gold standard, that is backing your currency with gold reserves, has the same problems. You can't print more money unless you increase you gold reserves.


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## Derren (Mar 3, 2014)

goldomark said:


> Why the gold standard isn't used anymore? Because it lacks flexibility when dealing with the economy.




Also deflation becomes a real threat.
What do you do when you simply have not enough gold in circulation for your economy to function?


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## Umbran (Mar 3, 2014)

tomBitonti said:


> While, removing control of money creation from the caprices of government officials, who may be corrupted, is an ideal, in practice, while the effect of corruption may be lessened, it is still there.




May be lessened?  Why?  Somehow those who aren't government officials are somehow less prone to the draw of wealth?  That putting them in a space that's a degree of separation more distant from public oversight is somehow going to make it less likely?  Who thought this was an ideal?  





goldomark said:


> You can fracture bitcoins, so you can own one tenth of a BC that is worth... one tenth of a BC.




Yes, but if a bitcoin is $10,000, that means the typical working amount are on the order of ten-thousanths or thousanths of a bitcoin.  That's just awkward.  You want to balance your checkbook down in the fourth and fifth decimal places?


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## Kramodlog (Mar 3, 2014)

Derren said:


> Also deflation becomes a real threat.
> What do you do when you simply have not enough gold in circulation for your economy to function?



Alchemy!


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## Kramodlog (Mar 3, 2014)

Umbran said:


> Yes, but if a bitcoin is $10,000, that means the typical working amount are on the order of ten-thousanths or thousanths of a bitcoin.  That's just awkward.  You want to balance your checkbook down in the fourth and fifth decimal places?



Escaping fees, guberment taxes, supervision, and the constant threat of hyperinflation because of gubermental fiat is worth the time for some people. I guess. 

But not something to difficult to do with a smart phone anyway.


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## Zombie_Babies (Mar 3, 2014)

goldomark said:


> Escaping fees, guberment taxes, supervision, and the constant threat of hyperinflation because of gubermental fiat is worth the time for some people. I guess.
> 
> But not something to difficult to do with a smart phone anyway.




Not to mention that it's no different at all from a standard bank account - hell, all you're doing is moving the decimal point.  What's the real difference between taking $1 away from $10,000 and ... and taking $1 away from $10,000.


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## Umbran (Mar 3, 2014)

goldomark said:


> Escaping fees, guberment taxes, supervision, and the constant threat of hyperinflation because of gubermental fiat is worth the time for some people. I guess.




Okay, the guberment is baddy-bad-bad.  Got it.

And devaluation and losing a half-billion dollars of investor's cash, well, that's just an acceptable thing to avoid a few bucks in taxes and "supervision".  

Maybe want to question whether that lack of supervision is all that great.

And that's where I stop, 'cause politics.


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## ggroy (Mar 3, 2014)

goldomark said:


> Alchemy!




If gold was easily made by "alchemy" or some other way (ie. nuclear transmutation, etc ...), wouldn't increasing the supply of gold just end up driving down its monetary value?


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## Derren (Mar 3, 2014)

ggroy said:


> If gold was easily made by "alchemy" or some other way (ie. nuclear transmutation, etc ...), wouldn't increasing the supply of gold just end up driving down its monetary value?




It would basically become "fiat" money.


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## ggroy (Mar 3, 2014)

Derren said:


> It would basically become "fiat" money.




So in a "Star Trek" universe, just about every metal/commodity is "fiat", except for dilithium crystals and latinum?


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## Kaodi (Mar 3, 2014)

Cryptocurrencies are dumb. That said, I wonder how much electricity it costs to "mine" a bitcoin...


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## Derren (Mar 3, 2014)

Kaodi said:


> Cryptocurrencies are dumb. That said, I wonder how much electricity it costs to "mine" a bitcoin...




By now (or rather since several months/a year) it is not economical any more to mine bitcoins with consumer hardware and specialized mining hardware has a negative ROI (you will never mine enough coins to break even unless they surge to another new height).


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## ggroy (Mar 3, 2014)

Derren said:


> Also deflation becomes a real threat.
> What do you do when you simply have not enough gold in circulation for your economy to function?




On a gold standard, could deflation also be caused by shenanigans like somebody "cornering" the market for gold (or silver)?


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## Kramodlog (Mar 3, 2014)

Umbran said:


> Okay, the guberment is baddy-bad-bad.  Got it.
> 
> And devaluation and losing a half-billion dollars of investor's cash, well, that's just an acceptable thing to avoid a few bucks in taxes and "supervision".
> 
> Maybe want to question whether that lack of supervision is all that great.



Some people believe that. They are wrong. That has no bearings on bitcoins being a currency.


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## Kramodlog (Mar 3, 2014)

ggroy said:


> If gold was easily made by "alchemy" or some other way (ie. nuclear transmutation, etc ...), wouldn't increasing the supply of gold just end up driving down its monetary value?



In theory, but when magic is involved, anything can happen!


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## Derren (Mar 3, 2014)

ggroy said:


> On a gold standard, could deflation also be caused by shenanigans like somebody "cornering" the market for gold (or silver)?




Highly unlikely because of the mass of gold and the price increase when you get close to "cornering" the market. Also the increased gold price when the market is getting close to being cornered would negate any economic advantage someone would get from attempting it.

The danger is more that the the circulation is not completely balanced so that the gold slowly accumulates on one side of the circle which, because gold is finite, automatically reduces the available gold on the other side.

An example, the British mainly switched to the gold standard away from silver because they simply did not have enough silver any more. In that time the majority of global silver reserves ended up in China as they sold products for silver, but never bough anything which would have allowed the silver to flow back to the rest of the world.
The same would happen today on a global scale with exporting nations (China, Germany,...) accumulating more and more gold over time while importing nations are slowly drained of their reserves (including the US). Of course that is not only limited to the global scale and can also happen on local markets.


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## Janx (Mar 4, 2014)

Kaodi said:


> Cryptocurrencies are dumb. That said, I wonder how much electricity it costs to "mine" a bitcoin...




They're so dumb that JP Morgan filed a patent recently on their own crypto-currency.

Sometimes, in situations like this, the only dumb thing is making broad judgement statements about complex things.

Crypto-currency is a technology about securing and managing money transactions.

BitCoin is an implementation.

I already only carry a debit card in my pocket.  Anything I buy is paid for by transferring ones and zeroes via transactions that are no doubt encrypted from one account to another.

Once banks offer their own form of money called "credits" that happens to be their version of crypto-currency, it's the same thing but different.

Mt. Gox got hacked to death.  The key failing of BitCoin is that the servers involved weren't secure.  Apparently less secure than the banks anyway.

I don't know what it'll take for a new currency to take hold.  But security is probably the top order of business.

When that day comes, it'll probably be some form of crypto-currency, perhaps an e-translation of our mighty dollar.

At least I won't be on record as saying "crypto-currencies are dumb"

Or that 640K is all the memory a user would ever need.


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## Kramodlog (Mar 4, 2014)

Janx said:


> Crypto-currency is a technology about securing and managing money transactions.



Not really. It is about anonymity from guberment and circumventing traditional financial institutions. So basically criminals and people who want to avoid paying taxes.It is a very subversive tech. Maybe be more than intellectual elites think it is. 







> I already only carry a debit card in my pocket.  Anything I buy is paid for by transferring ones and zeroes via transactions that are no doubt encrypted from one account to another.Once banks offer their own form of money called "credits" that happens to be their version of crypto-currency, it's the same thing but different.



So why the need for cryto-currencies if you have a credit card and/or debit card?Assuming you exclusively deal in legal maters. And even then, buying pot with cash will do the trick. 







> I don't know what it'll take for a new currency to take hold.  But security is probably the top order of business.



A central institution to back t might help too. But why have bitcoins and US dollars?


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## Kaodi (Mar 4, 2014)

You must be talking about a different JP Morgan than the one I am used to. The JP Morgan I know was totally all up in that credit default swap or whatever stupidity that led to 2008. That they have their own cryptocurrency does not mean cryptocurrencies are not dumb. It just means they think some of their clients are dumber.


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## Derren (Mar 4, 2014)

Janx said:


> They're so dumb that JP Morgan filed a patent recently on their own crypto-currency.




As Bitcoins have shown, they are the perfect snowball system.

You can create something from nothing and sell it to speculates who take all the risks who in turn sell them to conspiracy nuts who buy into the "not government accountable" and "limited" advertisement.
There is quite a lot of profit in Bitcoins, etc. as long as you do not have any when people realize that they aren't worth anything.


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## Janx (Mar 4, 2014)

Derren said:


> As Bitcoins have shown, they are the perfect snowball system.
> 
> You can create something from nothing and sell it to speculates who take all the risks who in turn sell them to conspiracy nuts who buy into the "not government accountable" and "limited" advertisement.
> There is quite a lot of profit in Bitcoins, etc. as long as you do not have any when people realize that they aren't worth anything.




I think you guys are fixating on BitCoin and it's particular problems a bit too much to see the big picture.

Crypto-Currencies aren't just about making a new brand of money.  They are about making a new way of transferring money beyond 2 banks saying subtract 100 dollars from Janx's account and put it into Derren's account.

Because that's all banks have right now is lines on a spreadsheet.

Which means, the only thing keeping banks honest about how much money is in the supply is some auditing.

It would be very trivial to add $1,000 to my account, just by changing a value in a database.

Crypto-currency changes that mechanism from changing a value in a row in a database to something that is allegedly harder to forge and includes its own auditing.

So instead of 2 banks agreeing to subtract one one side if the other bank adds, the data itself enforces that.

That might be useful to making better online banking/debit card systems.


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## Kramodlog (Mar 4, 2014)

Do you need to resort to crypto-currencies to resolve this rather dubious problem? Seems legislations on operating system would prevent banks from adding money your account.


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## Janx (Mar 4, 2014)

goldomark said:


> Do you need to resort to crypto-currencies to resolve this rather dubious problem? Seems legislations on operating system would prevent banks from adding money your account.




Laws don't stop criminals.

Admittedly, BitCoin is trying to solve the technical problem AND become the new Euro (which until recently also didn't exist until some people made it up)

But the problem remains that there's a thin wall keeping your money at the number it is supposed to be at.

If each dollar you have carried the accounting validation inside of it, as its own atomic data element, then potentially they are self auditing.  You have $1,000 because you have 1000 vDollar files, and each vDolllar file has its own history and validation of how it got into your account.  So if somebody steals it or copies it, it won't work for them because it won't contain the transfer record entry to their account.

I don't own a single BitCoin or other crypto-currency.  It ain't ready yet.

But it is interesting, and it has potential to solve some problems.

It is possible that the product called BitCoin will not make it.  It is also possible that the future's version of electronic money will be called BitCoin (it's just a trademark), and work differently than today, maybe even backed by all the worlds governments.

Who knows.


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## Kramodlog (Mar 4, 2014)

Janx said:


> Laws don't stop criminals.



Yeah, that is shinny talking point of the NRA against gun control, but reality is, as always, more complex. Laws are a guide and a deterent, because if you violate them you risk facing consequences. 

In our fictitious example, if banks, registered and well known entities, could be seized if they did not adopt the program you say it is needed to keep them in check, they would be... seized. Not something they want to happen. 



> Admittedly, BitCoin is trying to solve the technical problem



Bitcoin is not trying to do that. It wants to substract money from guberment oversight and control. That is different boatload of issues that it creates more than solves. The mtgox debacle shows the consequences of not having oversight and a central agency to help people who lost money.



> But the problem remains that there's a thin wall keeping your money at the number it is supposed to be at.
> 
> If each dollar you have carried the accounting validation inside of it, as its own atomic data element, then potentially they are self auditing.  You have $1,000 because you have 1000 vDollar files, and each vDolllar file has its own history and validation of how it got into your account.  So if somebody steals it or copies it, it won't work for them because it won't contain the transfer record entry to their account.



Do you have examples of banks doing this?



> It is possible that the product called BitCoin will not make it.  It is also possible that the future's version of electronic money will be called BitCoin (it's just a trademark), and work differently than today, maybe even backed by all the worlds governments.
> 
> Who knows.



Crypto-currencies have a future, Bitcoin probably not because of its finite amount and the inevitable upstart that will out perform it.

Even if crypto-currencies fluctuate so much, represent security risk and aren't worth the trouble to use instead of traditional currencies, they will stay a marginal phenomenon useful to criminals and people who fear guberment. The cat is out of the bag now, but a marginale cat. Unless for some reason a lot of people decide to use them to avoid sell taxes and enough employers adopt them to pay their employees. 

There is a very subversive element to crypto-currencies that elites who label them as useless gimmicks do not understand. If governments are not capable of collecting revenues they can't function and that creates another boatload of problems.


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## Mustrum_Ridcully (Mar 5, 2014)

Maybe some people _now_ can use BitCoin to circumvent taxes - that doesn't have to mean that this will always be the case. I suppose if BitCoin could inherently make this impossible or extremely difficult, but turns into a commonly used currency, then it might actually be ruled illegal, but could be replaced by something else that shares several concepts, but would allow at least the government to trace money transactions. 

Example:
A three-way transaction system. You can only perform a bitcoin transaction if you use a transaction provider. The transaction provider creates the type of digital record that is needed for tax reporting, cryptologically safe so that only the "guberment" can read the data... Or whatever.


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## Kramodlog (Mar 5, 2014)

Mustrum_Ridcully said:


> Maybe some people _now_ can use BitCoin to circumvent taxes - that doesn't have to mean that this will always be the case. I suppose if BitCoin could inherently make this impossible or extremely difficult, but turns into a commonly used currency, then *it might actually be ruled illegal*, but could be replaced by something else that shares several concepts, but would allow at least the government to trace money transactions.



It will/is or will be regulated. The Russian authorities have already said it is illegal, Chinese authorities prohibited banks from dealing bitcoins, Japan wants to regulate and tax them and a US senator is calling for it. 

This will be difficult to implement with the nature of the beast. Of course, as I said, it only becomes an major problem, and not just a marginale phenomenon, if enough people ignore the laws.


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## Janx (Mar 5, 2014)

goldomark said:


> Yeah, that is shinny talking point of the NRA against gun control, but reality is, as always, more complex. Laws are a guide and a deterent, because if you violate them you risk facing consequences.
> 
> In our fictitious example, if banks, registered and well known entities, could be seized if they did not adopt the program you say it is needed to keep them in check, they would be... seized. Not something they want to happen.




Why do you assume it's the banks that need to be kept in check in this case (not talking about all the other shenanigans they may be up to)?

It's cyber-criminals.

Mt. Gox fell because of hackers attacking it.

The only thing keeping your bank balance safe is the IT staff of your bank.  Heck, even the goverment would be happy to have a security system that means they don't have to actually insure your money because nobody could steal it.

I'm simply saying, there are potentially useful components to this crypto-currency stuff that somebody (a government/bank) looking to stop printing paper might be interested in.

Otherwise, it is a matter of time before an attack occurs at a bank that involves changing balances in the records, instead of stealing paper or DoS.  The mess might be just complicated enough that it will be less about stealing money, more about damaging money.  And it will be hard to prove how much was in each account.

I supposed I could just ask the guy on my team who worked reasonably high up at one of those banks...


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## Kramodlog (Mar 5, 2014)

Janx said:


> Why do you assume it's the banks that need to be kept in check in this case (not talking about all the other shenanigans they may be up to)?
> 
> It's cyber-criminals.
> 
> ...



Damaging currency is already thanks to the markets. Soros and the bank of England comes to mind. No one seems to care about that.


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## Kramodlog (Mar 5, 2014)

Some want to launch the Goxcoin. Bet on the possibility that people who lots bitcoins on mtgox will get them back somehow.

Flexcoin, another exchange site, closes because of 600,000$ bitcoin theft.

Amazingly, the price has risen by 100$ since yesterday.


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## ggroy (Mar 5, 2014)

goldomark said:


> Bet on the possibility that people who lots bitcoins on mtgox will get them back somehow.




Sounds similar to the people who invest in already defaulted debt securities.  IIRC, they're better known as "vulture investors".


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## Kramodlog (Mar 5, 2014)

ggroy said:


> Sounds similar to the people who invest in already defaulted debt securities.  IIRC, they're better known as "vulture investors".



Putting it all on black seems a better investment.


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## ggroy (Mar 5, 2014)

goldomark said:


> Putting it all on black seems a better investment.




Or buying put options on the bitcoin/USD (or bitcoin/EU) exchange rate.  (Assuming somebody is willing to write such put options).


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## Kramodlog (Mar 5, 2014)

Just wait.


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## Arduin's (Mar 14, 2014)

Derren said:


> Except that gold is real and also has industrial applications (including jewelry).
> Bitcoins are a complete fantasy product.




Yep.  And Krugman is an idiot.  99% of what he spews is nothing but econ practice that has been empirically proven to be tripe.


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## Kramodlog (Mar 14, 2014)

Philipjones866 said:


> This best explains that bitcoin’s third party services aren’t safe nowadays. The bitcoin hacking buzz pushes more bitcoiners to stash crypto coin in bitcoin casino like betcoin.tm. I never tried it, but my friend’s experiences seem that it looks promising. You can even double your bitcoins in a single spin. Or hit the jackpot when you get a value closer to 21 points in Blackjack. I guess bitcoin gambling is one great avenue to generate more bitcoins. Not merely for profit, but for entertainment as well.



Is this spam?


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## Kramodlog (Mar 14, 2014)

Arduin's said:


> Yep.  And Krugman is an idiot.  99% of what he spews is nothing but econ practice that has been empirically proven to be tripe.



Interesting. How many economic Nobel prizes have you won?


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## Janx (Mar 14, 2014)

goldomark said:


> Is this spam?




It kind of feels that way.  One of the better attempts.  The post is actually about the topic.  The link is buried in the middle.

I don't see how a BitCoin Casino web site is any safer than a BitCoin bank.  They both have servers and IT guys and firewalls.  The methods to secure either are the same from an IT perspective as the threats are virtually identical.

additional foolishness is that a casino is somehow a good place to keep your money.  Las Vegas isn't called Lost Wages for nothing.

Any chance you have to win money implies a chance to lose money (usually at inverse odds).

If you put money in and win, that money came from somewhere, presumably the guy who lost.  Which means, at some point, it'll be your turn in the barrel.


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## Kramodlog (Mar 14, 2014)

Janx said:


> It kind of feels that way.  One of the better attempts.  The post is actually about the topic.  The link is buried in the middle.
> 
> I don't see how a BitCoin Casino web site is any safer than a BitCoin bank.  They both have servers and IT guys and firewalls.  The methods to secure either are the same from an IT perspective as the threats are virtually identical.
> 
> ...



I do a lot of my banking on the interwebz. I trust their security a lot more than start ups of guys who made trade sites from their basement. I trust some organisation to make secure sites, even casinos. Loto-Québec as a gambling website and I'm sure it is trust worthy (which doesn't mean infaliable).


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## seanwilliam1988 (Mar 21, 2014)

The value of bitcoin declined a lot because of the issue, but it eventually went up after it recovered. It means bitcoin is a strong virtual currency that can alternate real cash. As of now, bitcoin is still used by many online gambling sites and other businesses around the globe.


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## Kramodlog (Mar 21, 2014)

200,000 bitcoins found between sofa cushions.


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## Scott DeWar (Mar 22, 2014)

Goldomark, A good sign to see if a post is spam or not is it is a low post count. 
also look for hidden links such as depicted here: 



Spoiler



funky link here


 Then report it. If it is not, it gets worked out eventually by the mods.

this is how they do the funky link dance:
[spoiler]funky link dance[/spoiler]


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