
I Bought a Bitcoin - benwoody
http://nymag.com/daily/intelligencer/2013/04/i-bought-a-bitcoin.html
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guard-of-terra
It's fun how hard it is for a layperson to buy a Bitcoin in USA. CCs do not
work, you need bank transfer, your funds can be frozen, you have to wait in
line, etc, etc.

I live in Russia and it's amazingly easy. First, everyone here owns a virtual
money account. It works like this: you put some money into it and then you can
pay your bills (especially internet and mobile phone), small purchases over
internet and you can donate it to other users of the system. It is denominated
in fiat money and that's what you put in. On every corner there is a device
with touchscreen that accepts cash.

And that's where it ends: you can buy bitcoins with virtual money at
metabank.ru. It probably talks to mtgox, buys some bitcoin there for you and
transfers is. There is no trading involved, you buy for whatever the price is.
You can actually buy BTC with CC attached to virtual money account, exactly
like PayPal works. The catch is 6% fee.

If you want to trade, you go to btc-e. It supports a plenty of ways to move
money into and out of the system. Fees are like 2%.

~~~
hackerboos
>It's fun how hard it is for a layperson to buy a Bitcoin in USA. CCs do not
work

Because it's too easy to claim fraud and have your CC provider initialise a
charge-back.

I don't know why you can't go to an ATM or a 7-Eleven and use your CC with
your PIN to make a purchase. The CC company will know it's probably you
because you entered your PIN and the merchant doesn't risk a charge-back.

~~~
Jabbles
In the UK this is called Chip and PIN.

<https://en.wikipedia.org/wiki/Chip_and_PIN>

~~~
Colliwinks
And I'm amazed that this hasn't caught on in the US yet. Last time I vistited,
I was horrified when they swiped the magnetic strip and asked me to sign for
it - felt like I'd jumped back in time.

~~~
nadinengland
After I got back from my last visit to the states I kept handing my card to
the staff when I was paying. They usually looked funny at me and put it in the
machine rather awkwardly.

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downandout
I'm surprised that no one has mentioned the issues that the author had with
Bitinstant. The API error indicated that the service - allegedly one of the
largest and most reputable Bitcoin sellers in the US - had a total of $16.48
in its possession at the time and could not deliver his order. His experience
is not unique - <https://bitcointalk.org/index.php?topic=128314.2660>

My guess is that the next big Bitcoin implosion story will be about
Bitinstant. Something is rotten over there.

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AlexDanger
Is there any evidence of nation states or three letter agencies dipping their
toes into Bitcoin? Its seems like a perfect solution for the CIA when they
need to move money quickly and discretely to 'difficult' regions or
individuals.

I know that Gavin Andresen (unofficial leader of Bitcoin movement) did a talk
for the CIA in 2011. But I dont know if their interest was about catching bad
guys, using it for themselves or seeking to control/manipulate bitcoin:
<http://www.bitcointrading.com/pdf/GavinAndresenCIATalk.pdf>

So I think an interesting question is whether these same agencies are
generating bitcoins or attempting to manipulate the market. The big news
recently for Bitcoin is the introduction of ASIC hardware dedicated to mining.
An ASIC miner the size of a PC can generate bitcoin hashes 100x faster than a
GPU at approximately the same power usage.

ASIC miners have taken a while to hit the market because making an ASIC is
hard and expensive for a small company. You can bet they didnt get funding
from a brick and mortar bank. There are only a couple of companies with a
shippable product.

But surely making this same hardware is a relatively trivial exercise for a
nation state, particularly the NSA who run their own fab and would be experts
at making silicon tuned for crypto algorithms.

Thoughts?

~~~
hp50g
NSA use FPGAs. Even they can't afford ASICs unless its a supercomputer CPU I.e
IBM power and they aren't all that quick compared to an FPGA.

~~~
cperciva
Are you sure about that? There have definitely been times in the past when the
NSA rented fab capacity from Intel.

~~~
AlexDanger
Wikipedia says they have their own fab at Ft Meade. Or is this just a super
secure division of an Intel fab?

~~~
hp50g
Intel run it. AFAIK it was used to produce rad hardened and analogue stuff
only. Nothing fancy.

------
nazgulnarsil
Bitcoin is a pyramid scheme in that everyone is counting on someone else to
want them.

However this is no different from any currency or monetary commodity with no
use value. With bitcoin, the "bag holders" at the end of the scheme have
something for their trouble: a global, secure, low fee transaction settlement
system. Given that such a network would be quite valuable, there's no reason
for it to crash to 0, barring threats of violence. Perhaps speculation value
will come out over time, but this is fine.

~~~
bumbledraven
_[bitcoin] is no different from any currency or monetary commodity with no use
value_

No, bitcoin is different insofar as there is no powerful entity that taxes
people and requires payment in bitcoin. This makes it even _less_ valuable
than currencies that DO have that feature.

~~~
etherael
That's hilarious, do you even realise what you're saying? You consider it a
feature of a currency that there is a violent extortionate power engaged in
parasitism of the monetary base.

~~~
contingencies
To be fair, it _is_ a historically significant motivator in the adoption of
new centralized currencies.

On the balance, however, we are shifting away from that with globalization and
the ridiculous logistical requirements of such an approach (eg. every new US
president doesn't de-circulate, debase and re-issue USD.)

These days, as long as you have liquidity that allows money to viably function
as one or more of a _medium of exchange_ ("settlement system"); a _unit of
account_ ("accountable asset"); and _a store of value_ ("somewhere to stash
accrued value"), then you're doing OK. Bitcoin has the former two properties
and seems to be doing OK in the latter category despite volatility, despite
relatively narrow acceptance.

Digital currencies and settlement systems as a whole will undoubtedly continue
the trend that Bitcoin has started; the genie is so far out of the bottle at
this point it's almost entering the third-stage of truth: _self-evidence_.

~~~
zanny
> To be fair, it is a historically significant motivator in the adoption of
> new centralized currencies.

Historically, a new monetary base needed significant printing infrastructure,
law enforcement to prevent its counterfeiting (if it is a paper and coin
currency, which is effectively every currency ever) and you needed to
artificially control its reproduction. That _requires_ a government. That
usually is associated with taxation.

I think you are looking at the causal relationship in the wrong way. Old paper
money required artificial limiters to prevent anyone from printing it and
using it. With bitcoin, the trust system of the block chain means to
"counterfeit" bitcoins you need as much computational power as a majority of
the swarm.

~~~
contingencies
> to "counterfeit" bitcoins you need as much computational power as a majority
> of the swarm.

Actually, to the same effect you could use a bug in _bitcoind_ , control of
the view-of-the-swarm (network access) by the processing merchant, an
implementation issue, or a careful double spend. Bitcoin is exceptionally hard
to implement well for merchants, particularly those with near real-time
requirements, and it's not getting any easier.

------
Mahn
I keep wondering whether I should be buying bitcoins now, but I have mixed
feelings about it. I'm pretty sure its value will continue going up for a
while, but I guess I'm still skeptical.

~~~
InclinedPlane
If you want to buy because you think the value will go up for no other reason
than that the value has been going up then you're just participating in a
speculative bubble. You might as well be gambling.

~~~
zanny
If stock markets and currency markets have taught us everything, to some
degree, human behavior is slightly less random than a shuffled deck or rolled
set of dice.

Just a bit, though. Not much.

------
31reasons
Bitcoins are just a right to participate in a digital crypto economy. They
don't have any value in themselves. Its like holding passes to a show in the
big theater. If the show doesn't start you passes are worthless. If there is
any meaningful possibility of a show in the theater, you might get lucky for
holding those passes. The main problem is that people who will participate in
the show also need to get the passes to actually act out the show but if
everyone just keep holding their passes for no good reason, well then there
may not be a show.

From many bitcoins forums, people are hoping that its USD rate climb to $1000
or even $1 million, which is pretty ridiculous. People who have thousands of
bitcoins, can probably keep holding on to them after selling 50% of them. But
people who gonna buy it for more than $100 , they gonna panic at a first sign
of decline. I suspect its not that far off.

~~~
etherael
Serious question, why does the price of a single bitcoin matter when they're
divisible to 8 decimal places? Beyond a psychological barrier people have
thinking about the 1:100 thing, it's really irrelevant if your cup of coffee
costs 10 bitcoins or 0.00001 bitcoins, especially if the calculation is made
at the time of purchase relative to an underlying stable value like a basket
of the largest fiat currencies in circulation or somesuch, or just the boring
plain old USD.

1 BTC = 1000000 USD To put it in a less psychologically alarming way is
exactly the same as saying 1 Satoshi = 0.01 USD.

~~~
T-hawk
It doesn't matter, mathematically. Psychologically, it absolutely does.
Bitcoin running to $150 is way more splashy and headline-grabby than $15. And
at Bitcoin's beginning, it looked more respectable in gaining followers when 1
BTC was somewhere near $1 than if it were $0.01 and looking like some penny-
stock scam.

Same goes for stock prices. Apple and Google have let the shares run to $400
and $700 instead of splitting to a more industry-standard two-digit number. Of
coures the per-share price is meaningless in itself, it'd be the same if ten
times as many shares existed at one-tenth the price. But it's a lot easier to
grab eyeballs with a stock shooting through $400, $500, $600 benchmarks than a
pedestrian $50.

------
account_taken
Not sure if Bitcoins are a good investment. All it takes is a western country
(say Switzerland) to create an online currency and Bitcoins will sink faster
than a Carnival ship.

~~~
throwawayG9
Do you even Bitcoin? One of the main features of Bitcoin is that it can't be
manipulated by a central authority like a bank or government (ie: they can't
steal from the people by printing money).

~~~
rdtsc
> Do you even Bitcoin?

No but I lift, .... mostly functions, sometimes they have multiple variables
;-)

> One of the main features of Bitcoin is that it can't be manipulated by a
> central authority

Q: What can a central authority with power to imprison and/or garnish your
wage manipulate? A: anything it damn wants.

Yes the Fed Gov. can't print more bitcoin it sure can come after you with a
rubber hose expecting to get some sales, or money exchange tax some rather-
made-up-new-law-tax. A few high profile case about bitcoin used for terrorism,
drug, illegal porn, money laundering and these new laws won't be hard to make.

~~~
icebraining
By themselves, laws don't prevent actions (see copyright infringement), you
need enforcement, and if a very large fraction of the population starts using
Bitcoins, it can be very hard to stop, at least without taking some very
drastic measures.

My guess is that the US government would just get enough computing power to
control the network and prevent it from working well.

~~~
zanny
The latter seems very likely if btc every became _really_ popular. It would
probably send the United States into a radical depression and destroy its
economy, but by then the ~500 Americans that own the world would have flown
the coop anyway, and all that USD they had would still be worth something.

------
ErrantX
I've recently just sold all my BTC, whilst the hype is still there :) A few
friends said I was mad and they would be keeping theirs, but frankly I don't
have time to keep an eye on the market and wait for the true peak.

Which made me think of a problem; BTC's are really a speculative market at the
moment, rather than a currency (i.e. most people are buying them to trade, not
to purchase items). I feel like that defeats the object.

But, hey, it was a tidy profit.

------
drawkbox
I wonder if online gambling and gambling in games would be legal with
bitcoins? Or less of a hurdle? This could be a huge boon for bitcoins if so to
becoming the web currency/virtual wallet.

~~~
Liongadev
Legal is unclear but a lot easier for sure. Google SatoshiDice

------
James_Duval
These on-topic comments are all well and good, but what we really want to know
is what Objectivists think of the government~

------
IheartApplesDix
~or~ how to bring in new investors to your bubble.

~~~
lwat
The next crash is gonna be painful. My popcorn drawer is well stocked.

------
michaelochurch
I bought BitCoin and I liked it Hope my wallet don't mind it... It felt so
wrong, it felt so right, let's transact tonight

~~~
reaclmbs
Hey, I know you hate Bitcoin and think it's a pyramid scheme and everything,
but isn't it good for smart people, and wouldn't its success create fricture
among the elites (like you are always advocating)?

~~~
michaelochurch
It's a simplification to say that I hate it. The work is impressive. If there
were a Bitcoin course on Coursera on how the thing works, I'd sign up and take
it.

I don't like the forced deflation. Deflation encourages hoarding and protects
elites.

With Magic: the Gathering (Mt. Gox has me connecting the two) the hoarding
behavior is actually good because it keeps unbalanced cards out of play. With
BitCoin, it's going to lock a lot of the stuff up with hoarders. That could
destroy it, insofar as if no one's using it, the market becomes illiquid,
compromising value and possibly causing panic sales. The thing certainly isn't
ready for prime time as a currency.

Also, there's a pretty easy (and legal) way one could destroy BitCoin. Right
now, there are no reserve requirements, because it's not a real currency.
Start a bank. Make sure it's a limited liability corporation, because this is
a bit risky (bank runs). Let people deposit BTC and then lend them out. Now
you've put a money multiplier on BTC, and without the reserve requirement,
that's unbounded. Goodbye, scarcity. Goodbye, $147 BTC.

At that point, it's unclear that BitCoin has any value, until regulations come
in regarding reserve requirements.

~~~
dasmoth
A fractional-reserve BitBank will only be noticeably inflationary if it can
take a substantial amount in deposits, then find some people to borrow them.
Since most of the "convenience" arguments for keeping traditional currencies
in a bank rather than under your mattress don't seem to apply here, the only
reason anyone's going to make a deposit is if the interest on offer appears to
justify the risk. Without the backing of a government deposit insurance
scheme, I reckon that translates to both a high interest rate AND probably
some degree of transparency to convince depositors it's not a complete scam.

Could be an interesting project, but hard to see it causing a major shift in
BTC values.

