Bitcoin !! i dont get it !!

[Intrinsic]

Stewardess first to book $250k Virgin Galactic 'space trip' with BITCOINS
We'll now take the crypto-currency, beams beardy Brit billionaire Branson
By Jack Clark.

"Why not?" he said. "It's a new exciting currency. A lot of people who got into Bitcoin quite early on have made quite a lot of money and are already interested in going to space."

A bitcoin is currently trading for around $763, versus $10 at the start of the year. You'll need to pony up $250,000, or 327.7 BTC, to spend about 10 minutes weightless on the edge of space.

The first customer to have paid in Bitcoins is a stewardess in Hawaii "who made quite a lot of money by getting into Bitcoin early on," Branson said.

Branson has confidence that Bitcoin will go higher, as the systems controlling the crypto-currency limit the total amount of Bitcoins in circulation. This prevents the money printing (excuse us, "quantitative easing") that central banks indulge in to doom subsequent generations to crippling inflation ("stabilize markets").

"I think one day [Bitcoin] will settle at a price that will be higher than the prices it's at today," the beardie billionaire said. However, upon receiving the stewardess's funny money, Virgin Galactic did immediately transfer it into clammy, green US dollars, he said.

http://www.theregister.co.uk/2013/11/22 ... s_bitcoin/" onclick="window.open(this.href);return false;

[Intrinsic]

Some resources I’ve found in helping get a grip on bitcoins:

First the original white paper on bitcoin
Bitcoin: A Peer-to-Peer Electronic Cash System
Download the PDF:
http://bitcoin.org/bitcoin.pdf" onclick="window.open(this.href);return false;
By Satoshi Nakamoto, AKA Shinichi Mochizuki, A Japanese mathematician research professor of mathematics at Kyoto University. Has not taken credit for it tho,

Another less mathematical but technical analyses of bitcoins:
Bitter to Better —How to Make Bitcoin a Better Currency
http://crypto.stanford.edu/~xb/fc12/bitcoin.pdf" onclick="window.open(this.href);return false;


A layman synopsis of bitcoins:
http://thenextweb.com/insider/2013/04/0 ... -plunging/" onclick="window.open(this.href);return false;

And the bitcoin site itself:
http://bitcoin.org/en/how-it-works" onclick="window.open(this.href);return false;


Mining is a complete misnomer how bitcoins are generated and new links in the ledger are added. I’d suggest to Ignore the analogy.

Also note when they say the “Miners” have to solve a hard math problem to create (mine) a new bicoin and transaction node in the linked list (ledger), they mean a trivial math problem that requires a lot of numeric calculations to solve, it would need to be trivial or computers couldn’t number crunch it. Design to take about 10 minuets to solve, no matter how fast tech computing muscle evolves. Interesting point and NOT a trivial math problem to solve in intself, needed a human brain to figure that one out.

And for some reason I ain’t figured out yet, GPUs (graphical processing units) are more suited for this then a CPU (centralized processing unit). ??

[Intrinsic]

An real interesting site, fascinating, go check it out:

I Each trade results in a bitcoin being sent from the currency counter in red to the country on the map. The value in BTC is listed in green and plotted across the map. The last exchange rate for each currency is listed in @purple and updated for each trade.

http://fiatleak.com/" onclick="window.open(this.href);return false;


from this it is obvious china and the US are nearly the only palyers,

And more important china is outpacing buying bitcoins hands down.
Id like to hear any speculation Why China or groups in China are hoarding/buying bitcoins, What up with that?

[bentech]

Bitcoin Is Flawed, But It Will Still Take Over the World


Zambelich/WIRED

The Pink Cow is the first restaurant in Tokyo that lets you pay with Bitcoin, the world’s most popular digital currency. In some ways, this California-Mexican cafe — a hangout run by an American expatriate who believes in new ideas — sits at the center of the Bitcoin universe. The digital currency was created by an anonymous computer programmer who many assume is Japanese, and the first big Bitcoin exchange — the web service where so many people bought their first bitcoins — is operated out of a Tokyo office not far from this wonderfully quirky bar and restaurant in the city’s Roppongi district.

But when the Tokyo Bitcoin Meetup Group holds one of its weekly gatherings at the Pink Cow — bringing together Bitcoin enthusiasts from across the city and beyond — only about a third of them actually pay for dinner and drinks with bitcoins. People like Marco Crispini, an expatriate from Britain, and Aya Walraven, who moved to Tokyo from Canada, very much believe in the digital currency. And they own bitcoins. But they prefer not to spend them because their value just keeps going up.

In other words: What they would have spent on a $20 Cal-Mex meal is now worth about $90 You can see their point. In the month since Crispini and Walraven declined to spend their bitcoins on burritos at a mid-October meetup, the value of the currency rose from about $160 on the Tokyo-based Mt. Gox exchange to well above $700. In other words: What they would have spent on a $20 Cal-Mex meal is now worth at least $90.

The trouble is that this sort of bitcoin hoarding leaves many questioning the future of the currency. If economic incentives encourage people to hoard their bitcoins rather than spend them, the thinking goes, the currency will never fulfill the extravagant promises laid down by the biggest believers, who say it will streamline monetary transactions, free the world from the financial manipulation of big government and big banks, breakdown the financial walls between nations, and, well, remake the worldwide economy.

The concerns are justified. Even some of Bitcoin’s most ardent supporters — like Fred Friis, one of the Tokyo Bitcoiners who regularly spends his digital currency at the Pink Cow — say that the consistent increase in the currency’s value is a “legitimate issue.”

But Friis also says — and rightly so — that the issue shouldn’t be exaggerated. According to many economists who have closely followed the progress of the digital money, Bitcoin’s recent ups — and downs — are to be expected from a currency so young, a currency that is just now attracting major attention from the mainstream population. The bottom could fall out of the market, but the currency could just as easily stabilize and reach a point where its value is consistent enough that people no longer hoard the stuff.

Yes, Bitcoin is what some call a deflationary currency. Because the system was designed to allow the creation of only a finite number of bitcoins (see our “Bitcoin Survival Guide“), there will come a point where, as demand rises, the value of the currency will only go up (making the price of goods and services fall, hence the term deflation). And that could lead to hoarding on an even larger scale.

But that moment is a long way off, and it won’t necessarily prevent the currency from flourishing, says Peter Rodriguez, a professor of economics and senior associate dean at the University of Virginia’s Darden School of Business. After all, many deflationary currencies have flourished in the past.

“The analogy is gold,” says Simon Johnson, a professor of entrepreneurship at the MIT Sloan School of Management and a senior fellow at the Peterson Institute for International Economics. “Gold is a finite resource, and until the big South African discoveries in the 1890s, there wasn’t that much gold. But people were happy to make payments with it. The whole idea that people won’t make payments with something that’s finite and held as a store of value is not correct.”

Bitcoin Deflated
Matthew Yglesias, an economics journalist and pundit who currently writes for the online magazine Slate, has long questioned whether Bitcoin can survive in the long term. “If you have persistent deflation, then simply holding the cash becomes a way of earning a return,” he tells WIRED. “If that’s the case, your economy will be starved of funds for investment and won’t be able to grow.”

‘I wish Bitcoin had more inflation built in, to encourage people to spend money and create a healthy economy’

— Adam SahThe main issue here is that the worldwide network of computers that controls the digital currency only creates a limited number of bitcoins every so often and will one day stop making bitcoins entirely. This will happen in about the year 2140, and as some people manage to lose their bitcoins — misplacing the digital keys that control them — the supply of the currency will actually drop.

In theory, this means that, if demand for the currency continues to grow, the value of bitcoins will necessarily continue to rise. The result, according to Yglesias and many others, is that people will have little incentive to spend their money — and the bitcoin economy will come crashing down.

This limited-supply issue is the most common argument against the viability of the new currency. You read it so often on the web. It comes up time and again at Bitcoin meetups like those at the Pink Cow. And it’s a very real concern for merchants who accept payments in the digital currency. “I dislike the pure deflation model,” says Adam Sah, the founder and CEO of Buyer’s Best Friend, which accepts the currency. “I wish bitcoin had more inflation built in, to encourage people to spend money and create a healthy economy.”

But this issue shouldn’t be confused with what is currently happening in the Bitcoin world. Yes, we’ve seen a steady climb in the value of the currency, and yes, this has slowed spending at some merchants. Michal Handerhan — the CEO and co-founder of BitcoinShop.US — says that his sales have dropped 20 percent in recent weeks. “People are holding their bitcoins,” he says, “and won’t let go.” But that has little to do with the limited-supply issue. It’s just that the currency is experiencing some very normal growing pains as more and more people jump on board.

The limited-supply issue won’t really come into play for many, many years, and even if it does cause problems, there are good reasons to believe that these problems can be alleviated — reasons that go to the heart of the Bitcoin architecture.


At the Pink Cow, a patron pays for his meal in bitcoins. Photo: Ariel Zambelich/WIRED
Portrait of a Bitcoin as a Young Currency
Bitcoin is still so very young. It arrived little more than four years ago, when a programmer or group of programmers under the name Satoshi Nakamoto released an open source software platform onto the internet and others jumped on board, helping to develop the system and expand it to an ever-growing number of online machines. Driven by this distributed piece of software, the currency is just now beginning to reach the mainstream. The recent spike in value is only natural. It just means a large number of people are suddenly embracing the currency.

‘Theory would predict that, as the currency grows in value, people would tend to hold it rather than spend. But all the empirical evidence we have shows precisely the opposite’

— Jeffrey Tucker“In a strange way, this is a necessary moment to establish the validity of Bitcoin,” Rodriguez says.

Yes, the current price volatility could become a problem. “On the one hand, these huge price increases may lead people to buy bitcoins for speculative purposes and hang on to them to make capital gains,” says François Velde, a senior economist in the research department at the Federal Reserve Bank of Chicago who recently penned a widely-read public primer on bitcoin. “And then other people might see the volatility and think: ‘Whoa. If this is going up like that, it could come down just as quickly. I’m not gonna use this as a currency. The value is just too unstable.’”

But this won’t necessarily keep the currency from succeeding, and at the moment, it doesn’t seem to be a huge issue. Even though the value of a bitcoin is on such a steep climb, the number of worldwide bitcoin transactions continues to increase as well. People are not only willing to invest in bitcoins. They’re willing to trade them and, in some cases, spend them too. For Jeffery Tucker, an economist who writes about the intersection of economics and technology, this is proof that hoarding is not the problem many say it is.

“Theory would predict that, as the currency grows in value, people would tend to hold it rather than spend,” he says. “But all the empirical evidence we have shows precisely the opposite.”

Separately, the system may run into a problem when it stops producing new bitcoins — way off in the year 2140. But this is only really a problem if Bitcoin begins to replace federal monies — if it becomes what’s called “the unit of account” in countries like Japan and the U.S. This means that goods and services would actually be priced in bitcoins.

As it stands, our goods and services are still priced in currencies like yen and dollars. At merchants that accept bitcoins, like the Subway sandwich shop in Allentown, Pennsylvania, prices are merely converted from federal currencies into the digital money. But if bitcoin becomes the unit of account and then a depression hits, it could be difficult to turn the economy around.

“In a depressed economy, when there’s not growth in price levels, deflationary expectations do encourage a collective retreat of spending behavior, and in order to push out of that, you have to reverse those expectations,” Rodriguez says. “If you had no discretion to expand the currency, you couldn’t necessarily reverse those expectations.”

But it’s wrong to think that deflation will necessarily be a problem. Federal Reserve Bank of Chicago economist Volde cites what is called The Friedman Rule. Proposed by economist Milton Friedman, the rule essentially says that a certain amount of deflation is actually preferred. “This idea has been around for decades,” Volde says. “Deflation doesn’t mean that a currency won’t be used.”

Bitcoin Is More Than Bitcoin
But let’s say Bitcoin does take over the world. Let’s say that in some distant future it does become the unit of account in Japan and the U.S. and elsewhere. Let’s say deflation does become a problem. There are still ways around it.

The bitcoin system runs on open source software, and that means it can be changed. It’s just that the change must be approved by a majority of those participating the system.

‘Bitcoin is a software program. People can upgrade it’

— Joshua Kroll“Bitcoin is a software program,” says Joshua Kroll, a computer science researcher at Princeton University who has closely studied bitcoin alongside various Princeton academics who deal not only in technology but public policy. “People can upgrade it.”

Some have argued (in the pages of WIRED in fact) that bitcoin should be updated to include some form of central control, a means of manipulating the value of the currency. But this runs counter to one of the main ideas behind Bitcoin. For many, bitcoin is a way to remove money from the grips of big governments and big banks. “It is always the government paper fiat money that gets corrupted throughout history,” says Ken Shishido, who helps oversee the Tokyo Bitcoin Meetup Group. “Bitcoin is not just a new digital currency. It is actually about liberty.”

The historic problem that monies have, says MIT Sloan economist Johnson, is that governments promise not to mint more of them, but then they do. The inevitable result: inflation. “The basic problem with money is not limited supply,” Johnson says. “The basic problem is that once you create it, it’s valuable, and if you’re the person who created it, you have an incentive to create more.” Bitcoin was designed as a way around this problem.

It’s more likely that the massive community that runs Bitcoin would upgrade the system so that it consistently expands the supply of bitcoins into the very distant future. That would alleviate the deflation problem without giving anyone central control.

Joshua Kroll believes that the system will have to be modified in some way. It’s not just that it needs a way of fighting deflation, he says. It needs a way of encouraging people to operate the machines that make up the worldwide bitcoin network.

Today, when the system creates new bitcoins, it automatically doles them out to people who run the hardware that drives the system. If you take this away, Kroll says, there will be no incentive for people to keep contributing processing power to the system through what are called bitcoin miners. “If the miner reward goes to zero, people will stop investing in miners,” he says. “And this is a problem.”

The system does allow bitcoin holders to include transaction fees when they send and receive money, and the idea is that these fees — which go to the miners — will provide the needed incentive. But Kroll says that isn’t enough. You have to enforce some sort of standard payment to the miners, he says. It follows, then, that if you change the system so that it keeps creating bitcoins, you solve not only the hardware problem but the deflation problem.

What Bitcoin Really Is
That may or may not happen. But the larger point is that the system will be what the people want it to be.

Bitcoin is a currency, like the dollar or the yen. And it’s a means of processing payments over internet, like PayPal. But it’s also a piece of technology controlled by the masses, like Linux, the increasingly popular open source computer operating system, or the internet itself. What history has shown is that, once they get going, things like Linux and the internet take on lives of their own.

It’s not just that people across the world use the internet. They also help run it — not because there’s an immediate monetary payoff but because the internet can help fuel so many other endeavors, many of which can generate money on their own. You could certainly argue that people will continue to run bitcoin miners even if they don’t get paid for doing so. They may run them just to keep the Bitcoin system going, knowing that the system will reward them in other ways.

But if the system needs change — if it can’t survive unless it continues to make new bitcoins — people will change it. Like the internet, Bitcoin has its limitations, but it’s something that anyone can modify. What that means is that any problem with the currency can be solved, including the limited-suppy problem. We could even see a “fork” of the Bitcoin system, where someone takes the open source code and creates a new system that then exceeds the popularity of Bitcoin.

This phenomenon has value in its own right. As Peter Rodriguez points out, Bitcoin can generate consumer confidence simply because it isn’t controlled by a single, central authority. People trust things that they have control over.

The point is not that Bitcoin is a deflationary currency. The point is that it can be anything.



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[bentech]

Bitcoin Survival Guide: Everything You Need to Know About the Future of Money



The price of a bitcoin topped $900 last week, an enormous surge in value that arrived amidst Congressional hearings where top U.S. financial regulators took a surprisingly rosy view of digital currency. Just 10 months ago, a bitcoin sold for a measly $13.

The spike was big news across the globe, from Washington to Tokyo to China, and it left many asking themselves: “What the hell is a bitcoin?” It’s a good question — not only for those with little understanding of the modern financial system and how it intersects with modern technology, but also for those steeped in the new internet-driven economy that has so quickly remade our world over the last 20 years.

The spike was big news across the globe, from Washington to Tokyo to China, and it left many asking themselves: ‘What the hell is a bitcoin?’Bitcoin is a digital currency, meaning it’s money controlled and stored entirely by computers spread across the internet, and this money is finding its way to more and more people and businesses around the world. But it’s much more than that, and many people — including the sharpest of internet pioneers as well as seasoned economists — are still struggling to come to terms with its many identities.

With that in mind, we give you this: an idiot’s guide to bitcoin. And there’s no shame in reading. Nowadays, as bitcoin is just beginning to show what it’s capable of, we’re all neophytes.

Bitcoin isn’t just a currency, like dollars or euros or yen. It’s a way of making payments, like PayPal or the Visa credit card network. It lets you hold money, but it also lets you spend it and trade it and move it from place to place, almost as cheaply and easily as you’d send an email.

As the press so often points out, Bitcoin lets you do all this without revealing your identity, a phenomenon that drove its use on The Silk Road, an online marketplace for illegal drugs. But at the same time, it’s a system that operates completely in the public view. All Bitcoin transactions are recorded online for anyone to see, lending a certain transparency to the system, a transparency that can drive a new trust in the economy and subvert the anonymity sought by those on The Silk Road, which the feds shut down last month.

Bitcoin is much more than a money service for illegal operations. It’s a re-imagining of international finance, something that breaks down barriers between countries and frees currency from the control of federal governments. Bitcoin is controlled by open source software that operates according to the laws of mathematics — and by the people who collectively oversee this software. The software runs on thousands of machines across the globe, but it can be changed. It’s just that a majority of those overseeing the software must agree to the change.

In short, Bitcoin is kind of like the internet, but for money.

Birth of the Bitcoin

Click to enlarge. Illustration: T.A. Gruneisen/WIRED

What does that mean, specifically?

About five years ago, using the pseudonym Satoshi Nakamoto, an anonymous computer programmer or group of programmers built the Bitcoin software system and released it onto the internet. This was something that was designed to run across a large network of machines — called bitcoin miners — and anyone on earth could operate one of these machines.

This distributed software seeded the new currency, creating a small number of bitcoins. Basically, bitcoins are just long digital addresses and balances, stored in an online ledger called the “blockchain.” But the system was also designed so that the currency would slowly expand, and so that people would be encouraged to operate bitcoin miners and keep the system itself growing.

When the system creates new bitcoins, you see, it gives them to the miners. Miners keep track of all the bitcoin transactions and add them to the blockchain ledger, and in exchange, they get the privilege of, every so often, awarding themselves a few extra bitcoins. Right now, 25 bitcoins are paid out to the world’s miners about six times per hour, but that rate changes over time.

Why do these bitcoins have value? It’s pretty simple. They’ve evolved into something that a lot of people want — like a dollar or a yen or the cowry shells swapped for goods on the coast of Africa over 3,000 years ago — and they’re in limited supply. Though the system continues to crank out bitcoins, this will stop when it reaches 21 million, which was designed to happen in about the year 2140.

The idea was to create a currency whose value couldn’t be watered down by some central authority, like the Federal Reserve.

When the system quits making new money, the value of each bitcoin will necessarily rise as demand rises — it’s what’s called a deflationary currency — but although the supply of coins will stop expanding, it will be still be relatively easy to spend. Bitcoins can be broken into tiny pieces. Each bitcoin can be divided into one hundred million units, called Satoshis, after the currency’s founder.

The Key to the System
How do you spend bitcoins? Trade them? Keep people from stealing them? Bitcoin is a math-based currency. That means that the rules that govern bitcoin’s accounting are controlled by cryptography. Basically, if you own some bitcoins, you own a private cryptography key that’s associated with an address on the internet that contains a balance in the public ledger. The address and the private key let you make transactions.

The internet address is something everyone can see. Think of it like a really complicated email address for online payments. Something like this: 1DTAXPKS1Sz7a5hL2Skp8bykwGaEL5JyrZ. If someone wants to send you bitcoins, they need your address.

If you own some bitcoins, what you really own is a private cryptography key that’s associated with an address on the internetIf you want to send your bitcoins to someone else, you need your address and their address — but you also need your private cryptography key. This is an even more complicated string that you use to authorize a payment.

Using the math associated with these keys and addresses, the system’s public network of peer-to-peer computers — the bitcoin miners — check every transaction that happens on the network. If the math doesn’t add up, the transaction is rejected.

Crypto systems like this do get cracked, and the software behind Bitcoin could have flaws in it. But at this point, Bitcoin has been tested pretty thoroughly, and it seems to be pretty darned secure.

For the ordinary people who use this network — the people who do the buying and the selling and the transferring — managing addresses and keys can be a bit of a hassle. But there are many different types of programs — called wallets — that keep track of these numbers for you. You can install a wallet on your computer or your mobile phone, or use one that sits on a website.

With these wallets, you can easily send and receive bitcoins via the net. You can, say, buy a pizza on a site that’s set up to take bitcoin payments. You can donate money to a church. You can even pay for plastic surgery. The number of online merchants accepting bitcoins grows with each passing day.

But you can also make transactions here in the real world. That’s what a mobile wallet is good for. The Pink Cow, a restaurant in Tokyo, plugs into the Bitcoin system via a tablet PC sitting beside its cash register. If you want to pay for your dinner in bitcoins, you hold up your phone and scan a QR code — a kind of bar code — that pops up on the tablet.


How to Get a Bitcoin
If all that makes sense and you wanna give it try, the first thing you do is get a wallet. We like blockchain.info, which offers an app that you can download to your phone. Then, once you have a wallet, you need some bitcoins.

In the U.S., the easiest way to buy and sell bitcoins is via a website called Coinbase. For a one percent fee, Coinbase links to your bank account and then acts as a proxy for you, buying and selling bitcoins on an exchange. Coinbase also offers an easy-to-use wallet. You can also make much larger bitcoin purchases on big exchanges like Mt. Gox or Bitstamp, but to trade on these exchanges, you need to first send them cash using costly and time-consuming international wire transfers.

Ironically, the best way to keep bitcoin purchases anonymous is to meet up with someone here in the real world and make a trade.Yes, you can keep your purchases anonymous — or at least mostly anonymous. If you use a service like Coinbase or Mt. Gox, you’ll have to provide a bank account and identification. But other services, such as LocalBitcoins, let you buy bitcoins without providing personal information. Ironically, the best way to do this is to meet up with someone here in the real world and make the trade in-person.

LocalBitcoins will facilitate such meetups, where one person provides cash and the other then sends bitcoins over the net. Or you can attend a regular Bitcoin meetup in your part the world. Because credit card and bank transactions are reversible and bitcoin transactions are not, you need to be very careful if you’re ever selling bitcoins to an individual. That’s one reason why many sellers like to trade bitcoins for cash.

The old-school way of getting new bitcoins is mining. That means turning your computer into a bitcoin miner, one of those nodes on Bitcoin’s peer-to-peer network. Your machine would run the open source Bitcoin software.

Back in the day, you could do bitcoin mining on your home PC. But as the price of bitcoins has shot up, the mining game has morphed into a bit of a space-race — with professional players, custom-designed hardware, and rapidly expanding processing power.

Today, all of the computers vying for those 25 bitcoins perform 5 quintillion mathematical calculations per second. To put it in perspective, that’s about 150 times as many mathematical operations as the world’s most powerful supercomputer.

And mining can be pretty risky. Companies that build these custom machines typically charge you for the hardware upfront, and every day you wait for delivery is a day when it becomes harder to mine bitcoins. That reduces the amount of money you can earn.

This spring, WIRED tested out a custom-designed system built by a Kansas City, Missouri company called Butterfly Labs. We were lucky enough to receive one of the first 50 units of a $275 machine built by the company.

We hooked it up to a network of mining computers that pool together computing resources and share bitcoin profits. And in six months, it has earned more than 13 bitcoins. That’s more than $10,000 at today’s bitcoin prices. But people who got the machine later than we did (and there were plenty of them) didn’t make quite so much money.

Online Thievery
Once you get your hands on some bitcoins, be careful. If somebody gets access to your Bitcoin wallet or that private key, they can take your money. And in the Bitcoin world, when money is gone, it’s gone for good.

This can be a problem whether you’re running a wallet on your own machine or on a website run by a third party. Recently, hackers busted into a site called inputs.io — which stores bitcoins in digital wallets for people across the globe — and they made off with about $1.2 million in bitcoins.

In the bitcoin world, when money is gone, it’s pretty much gone for good.So, as their bitcoins start to add up, many pros move their wallets off of their computers. For instance, they’ll save them on a thumb drive that’s not connected to the internet.

Some people will even move their bitcoins into a real physical wallet or onto something else that’s completely separate from the computer world. How is that possible? Basically, they’ll write their private key on a piece of paper. Others will engrave their crypto key on a ring or even on a metal coin.

Sure, you could lose this. But the same goes for a $100 bill.

The good news is that the public nature of the bitcoin ledger may make it theoretically possible to figure out who has stolen your bitcoins. You can always see the address that they were shipped off to, and if you ever link that address to a specific person, then you’ve found your thief.

But don’t count on it. This is an extremely complex process, and researchers are only just beginning to explore the possibilities.

Bitcoin vs. the U.S.A.
Bitcoin is starting to work as a currency, but because of the way it’s built, it also operates as an extremely low-cost money-moving platform. In theory, it could be a threat to PayPal, to Western Union, even to Visa and Mastercard. With Bitcoin, you can move money anywhere in the world without paying the fees.

The process isn’t instant. The miners bundle up those transactions every 10 minutes or so. But today, payment processors like BitPay have stepped in to smooth things out and speed them up.

The feds have stopped short of trying to kill Bitcoin, but they’ve created an atmosphere where anybody who wants to link the U.S. financial system to Bitcoin is going to have to proceed with extreme caution The trouble is that federal regulators still haven’t quite figured out how to deal with Bitcoin.

The currency is doing OK in China, Japan, parts of Europe, and Canada, but it’s getting its bumpiest ride in the U.S., where authorities are worried about the very features that make Bitcoin so exciting to merchants and entrepreneurs. Here, the feds have stopped short of trying to kill Bitcoin, but they’ve created an atmosphere where anybody who wants to link the U.S. financial system to Bitcoin is going to have to proceed with extreme caution.

Earlier this year, the U.S. Department of Homeland Security closed the U.S. bank accounts belonging to Mt. Gox, which has generally been the world’s largest Bitcoin exchange. Mt. Gox, based in Japan, let U.S. residents trade bitcoins for cash, but it hadn’t registered with the federal government as a money transmitter, and it hadn’t registered in the nearly 50 U.S. states that also require this.

The Homeland Security action against Mt. Gox had an immediate chilling effect in the U.S. Soon, American Bitcoin companies started reporting that their banks were dropping them, but not because they had done anything illegal. The banks simply don’t want the risk.

Now, other Bitcoin companies that have moved fast to operate within the U.S. are facing the possibility of being shut down if they’re not following state and federal guidelines.

Even if the feds were interested in shutting down Bitcoin, they probably couldn’t if they tried, and now, they seem to understand its promise. In testimony on Capitol hill earlier this week, Jennifer Shasky Calvery, the director of the Treasury Department’s Financial Crimes Enforcement Network, said that Bitcoin poses problems, but she also said that it’s a bit like the internet in its earliest days.

“So often, when there is a new type of financial service or a new player in the financial industry, the first reaction by those of us who are concerned about money laundering or terrorist finance is to think about the gaps and the vulnerabilities that it creates in the financial system,” she said. “But it’s also important that we step back and recognize that innovation is a very important part of our economy.”

It is. And Bitcoin richly provides that innovation. It just may take a while for the world to completely catch on.



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[Intrinsic]

Thanks for the reads,

I’m still wrapping my head around why the Fed seem to be cozying up to it. Tho not exactly scientist or tech haves or logic boffins. Maybe power greedy Ignorance?

Anyhoo

But if the system needs change — if it can’t survive unless it continues to make new bitcoins — people will change it. Like the internet,

Hmmm I disagree. Not about change per se but the surviving part of need to change it so bitcoins are an infinite resource.

I think the author fails to grasps the finite limit is bitcoins strong point for long term survival. Despite what wreakomist think, the planet’s resources are finite. Bitcoins acknowledges that fact in its model. Thus it would kill the deflation control built in. it should represent the real world. Not as some fake wealth scheme such as wall street misrepresents.

If unlimited bitcoin production then it is just like any other system of being able to print infinite money regardless of finite phiysical resources, as the Fed do. Dumb Dumb Dumb.

[Intrinsic]

Bitcoin enables Beijing to perpetrate some mischief of its own. Already, one Iranian store, back-ally Persian Shoes, evades financial sanctions on Iran by accepting Bitcoins. Bitcoin payments would also be perfect for Beijing to surreptitiously undercut American financial sanctions on, say, payments made through Iranian financial institutions. Bitcoin gives Beijing one more avenue to support regimes and groups that the rest of the world shuns.

A China Triangle: Bitcoin, Baidu And Beijing
http://www.forbes.com/sites/gordonchang ... d-beijing/" onclick="window.open(this.href);return false;

[bentech]

you cannot make a currency finite when labor and production are infinate


thats why currences linked to resources like the gold standard are a scam.
theres no more frontier,
we live on a globe,

the understanding of that is what forced fiats into dominance and thus what propelled humanity into civilization

[Intrinsic]

no labor is finite, sinice finite beings and/or finite energy,
production is finite since raw materials aree finite. else not production but recyling.

In realty it is a in a closed system, as a planet with the only viable input in the suns energy. there is no formtier economically in the real world (not the wreakonimist idea of economy)

[bentech]

labor is infinate compared to ANYTHING a detractor of fiat currency would suggest money be associated to

labor is infinate ANYWHERE money has a chance of being concidered of value