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Bitcoin is the future, Money2020 delegates told
Banking Technology ^ | 25 January 2014

Posted on 01/25/2014 6:25:34 AM PST by Errant

Bitcoin is here to stay and will continue to grow, according to experts speaking on separate panels at Money2020 in Las Vegas.

The recent prosecution of Silk Road, an underground online market for drugs that traded Bitcoins and the FBI’s confiscation of approximately $3.5 million in Bitcoins, looked like a severe blow to the virtual currency. But Carol Van Cleef, partner in Patton Boggs and moderator of a session on maths-based and virtual currencies, said the bust showed growing sophistication on the part of federal law enforcement agencies, reports Tom Groenfeldt.

“They decided to go not after the system itself, but after the parties who were using the system,” she said. Unfortunately federal prosecutors from the Southern District of New York, where the case was filed, were unable to travel to Las Vegas for the conference because of the budget shutdown in Washington.

“This is a great day for Bitcoin,” said Constance Choi, general counsel at Payward. “It was an opportunity to see how inconsequential their [Silk Road’s] criminal activity was to the protocol and to Bitcoin as a whole. They have done analysis on funds going through Bitcoin and determined that Silk Road represents a very small fraction of its use.”

(Excerpt) Read more at bankingtech.com ...


TOPICS:
KEYWORDS: banking; bitcoin; money; silkroad
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1 posted on 01/25/2014 6:25:34 AM PST by Errant
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To: Lurkina.n.Learnin; nascarnation; TsonicTsunami08; SgtHooper; Ghost of SVR4; Lee N. Field; DTA; ...

Click to be Added / Removed.
2 posted on 01/25/2014 6:26:43 AM PST by Errant (Surround yourself with intelligent and industrious people who help and support each other.)
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To: Errant
Can someone explain bitcoin in 25 words or less ?

I have the idea, like the old Superman movie, that Richard Prior "mined" the .16% of a penny and diverted it to his dummy account and became very wealthy and a target for Robert Vaughn.

Is bitcoin the same ?

Or is it an entirely NEW invention ?

If it can't be explained in 25 words or less ... I relegate it to the same vague category as lawyers .... people that learn a different, dead language (latin) that you must hire so they can speak to YOU in English, something that is very easily understood in English, but that is THEIR job security.

If I have to have a computer "miner" that operates without my participation, and it operates on an inhuman level ... I don't see where this is even a viable thought ...

unless we HAVE crossed over into another world and human life is no longer something to live, but to manipulate.

I scare me sometimes.

3 posted on 01/25/2014 6:33:23 AM PST by knarf (I say things that are true .. I have no proof .. but they're true.)
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To: knarf

It’s a digital form of S&H Greenstamps.


4 posted on 01/25/2014 6:37:20 AM PST by Lurkina.n.Learnin (This is not just stupid, we're talking Democrat stupid here.)
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To: Lurkina.n.Learnin
Thaaa-aaank YOU !

If others concur, that is a great help

And we all know where S&H is today ....

Right behind King Korn and Raliegh coupons.

(I hated those cigarettes, but it was what my mother smoked ... so the only ones we could steal .... )

5 posted on 01/25/2014 6:48:24 AM PST by knarf (I say things that are true .. I have no proof .. but they're true.)
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To: knarf
It is an entirely NEW invention... Think of mining as processing Bitcoin transactions (like verification) on thousands and thousands of distributed ledgers while sharing in a limited number of reward points (i.e., Bitcoins) for doing so.

http://www.coindesk.com/information/

6 posted on 01/25/2014 6:54:06 AM PST by Errant (Surround yourself with intelligent and industrious people who help and support each other.)
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To: knarf

I was being a little sarcastic but Greenstamps did have value at one time. You didn’t want to get between my mother and some greestamps. If Bitcoin gains wider acceptance it will be a success. Any currency’s value is based on peoples perception of it. Sea shells, beads, coins and fiat bills. The almighty Dollar reigns supreme for now but it’s doubtful that will last forever. Bitcoin has pluses and minuses but is off to a good start as an alternate currency.


7 posted on 01/25/2014 6:59:22 AM PST by Lurkina.n.Learnin (This is not just stupid, we're talking Democrat stupid here.)
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To: knarf

“(I hated those cigarettes, but it was what my mother smoked ... so the only ones we could steal .... )”

My mom smoked Salems. Menthol, Bleck!


8 posted on 01/25/2014 7:08:53 AM PST by Lurkina.n.Learnin (This is not just stupid, we're talking Democrat stupid here.)
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To: Errant
I think this is what I meant by another or new lnguage ...

"Think of mining as processing Bitcoin transactions (like verification) on thousands and thousands of distributed ledgers while sharing in a limited number of reward points (i.e., Bitcoins) for doing so."

When I go to buy a chicken, I do not think in terms of a verified, processed transaction that is part of thousands and thousands of shared reward points.

When I go to work, I do not think in terms of my labor is a nanoparticle of a universal erwector set ...

All I do is trade ... and I argue, that is all ANYone does.

Except those that love to play with monkey wrenches ....

and I don't like monkey wrench throwers.

9 posted on 01/25/2014 7:09:04 AM PST by knarf (I say things that are true .. I have no proof .. but they're true.)
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To: Lurkina.n.Learnin

You don’t know bleck! until you’ve smoked a Raleigh plain end.


10 posted on 01/25/2014 7:10:22 AM PST by knarf (I say things that are true .. I have no proof .. but they're true.)
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To: knarf
P.S. ... somewhere around age 15, Bobby Ferguson introduced me to Marlboro's and THAT was the beginning of my death by emphasema

(Oh sure ... you can say that NOW ... but why were you so stupid back then ?)

Answer;

Television "doctors" advertised how cool and satisfying KOOLS were .. and a ton of et cetera's until 'habit' was ingrained.

11 posted on 01/25/2014 7:14:04 AM PST by knarf (I say things that are true .. I have no proof .. but they're true.)
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To: knarf
and I don't like monkey wrench throwers

Sorry for wrecking your works. Think S&H Green Stamps then... lol

12 posted on 01/25/2014 7:16:44 AM PST by Errant (Surround yourself with intelligent and industrious people who help and support each other.)
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To: Errant
That's OK ... I recognize and accept my pedestrian position

Just to analyze (and throw one of MY wrenches ... /8^) ... )
do YOU trade your labor (think hours of your life, NEVER to be reclaimed ) for currency ?

13 posted on 01/25/2014 7:21:48 AM PST by knarf (I say things that are true .. I have no proof .. but they're true.)
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To: Errant
Good morning.

Please forgive my ignorance, but I have a two part question:
Reference Bitcoin mining: What types of mathematical equations are solved during mining, and who benefits from the solution of the equation (other than the miner)?

Thanks in advance.

5.56mm

14 posted on 01/25/2014 7:34:47 AM PST by M Kehoe
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To: knarf
do YOU trade your labor (think hours of your life, NEVER to be reclaimed ) for currency ?

Not anymore. Not in over four years. Sometimes "currency" is the result of some of my labors of love (i.e., tinkering).

We tend to forget that "currency" is really only a medium of exchange. Hence many spend their entire lives trying acquire it and then looking for something they think will give them some measure of please to spend it on.

Governments and the elite have learned to control us by controlling the medium of exchange. Its not nearly as messy as outright slavery, though we are slaves to the system now. What's needed is for the medium of exchange to rightfully be controlled by the people, IMO.

But we shouldn't ever put love of money ahead of our love for life...

15 posted on 01/25/2014 7:48:00 AM PST by Errant (Surround yourself with intelligent and industrious people who help and support each other.)
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To: M Kehoe
Good questions. I'm not sure how much detail you are looking for on the mining question, but here is a link that describes the general process of mining: How bitcoin mining works. The actual code is open source, so you could go find it on the net and examine it for yourself if you or anyone else are so inclined.

Who benefits, is everyone who uses Bitcoin or is involved in making its use possible. Instead of 3+% transactions fees charged by CC companies and etc., the charges become minimal to practically free if you aren't in a hurry to have your transaction processed.

16 posted on 01/25/2014 8:05:22 AM PST by Errant (Surround yourself with intelligent and industrious people who help and support each other.)
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To: All
Could litecoin follow?

When asked whether TigerDirect would seek out more alternative currencies, Leeds didn’t shy away from his answer stating that the company “wants to make it as easy as possible to shop” at its store, and that bitcoin and litecoin fans are the kind of passionate customers it goes after.

Video Cards Drive First-Day Sales Surge For TigerDirect

17 posted on 01/25/2014 8:16:44 AM PST by Errant (Surround yourself with intelligent and industrious people who help and support each other.)
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To: Errant
Thanks. The link answered both questions.

5.56mm

18 posted on 01/25/2014 8:17:21 AM PST by M Kehoe
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To: knarf

It is a peer to peer system where value is transferred between two parties without and intermediary. The transactions are posted to a public ledger so there can be no double spending or counterfeiting. There are a limited number of coins, which can be freely mined by anyone. That limit cannot be expanded by anyone, so hyperinflation is impossible. Finally, the entire system is open sourced, so changes cannot be made and applications can be built on top of it.

So, in 25 words: Open sourced, peer to peer system of secure, low cost transactions with no intermediary sucking fees that cannot be inflated.

Of course others will comeback with all of their tedious attacks disguised as questions. There are plenty of places to read about this.


19 posted on 01/25/2014 9:30:14 AM PST by Vermont Lt (If you want to keep your dignity, you can keep it. Period........ Just kidding, you can't keep it.)
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To: Errant
Very good points and the links are quite helpful.
Events like the HSBC surprise limits on withdrawals, which can cause deals to fail to close and big, big lawsuits, are going to help bitcoin over the initial resistance.
You put your money in their bank, then it becomes their money that they owe you if you can catch them.
If a US bank starts confiscating deposits, the investment/savings function of bitcoin will skyrocket.
How does the ‘fractions of a bitcoin’ system work??
TWB
20 posted on 01/25/2014 10:30:02 AM PST by TWhiteBear (Sarah Palin, the Flame of the North)
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To: Vermont Lt
Peer to peer ... THANX ... that says a lot.

I hope you don't consider my questions as cloaking some other motive, but ...

There HAD to be a beginning and SOMEone had to begin it and (assuming from your reply) that beginning was fixed, it would seem the more people "get in", the more diluted the beginning becomes.

I would happily follow a link for the neophyte, but I think FR is a great place to expound on a subject that (apparently) not many know.

21 posted on 01/25/2014 10:48:06 AM PST by knarf (I say things that are true .. I have no proof .. but they're true.)
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To: TWhiteBear
Very good points yourself and thanks for the nice compliment.

How does the ‘fractions of a bitcoin’ system work??

It's really a none issue and seamless. While the dollar is able to be divided into hundreds, Bitcoin is divided by 100 millionths. You simply enter the amount to the appropriate decimal digit (up to eight). Other than extra decimal places if needed, you won't notice it. I would suspect most items will be priced in fractions of Bitcoin, perhaps even automobiles one day... ;)

22 posted on 01/25/2014 11:00:22 AM PST by Errant (Surround yourself with intelligent and industrious people who help and support each other.)
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To: knarf

That is a legit question...

It was started by a “consortium” who have kept themselves secret. Hence a lot of conspiracy stuff abounds.

It was “launched” with a fixed amount among a group of the people who started it. However, that amount was relatively small.

The “mining” process is where the bulk of the coins have come from. The name is stupid—I agree that it is “data mining” but I tried explaining that to my wife and I got “doll eyes.”

Anyway, the coins are mined when computers that are logged in as miners on the network complete proofs that maintain the accuracy of the public ledger. The process takes a lot of computing time and power—but it keeps the system working and the bitcoins “clean” on the ledger. This public ledger system allows anyone to track coin transactions. The system is secure, and there are ways to keep yourself anonymous, but the transactions are all public. Try doing THAT with fiat!

The BIG deal is the peer to peer transactions. Consider buying something from Amazon with a credit card. You “buy” the product when you swipe your card, Amazon sends that to a bank via the Visa network, your bank approves it, sends a message back over the Visa network to Amazon. The bank then sends an Automatic Clearing House message to Amazons bank and the debit hits your bank account, and the credit hits amazon.

Pretty complicated. And for every step, someone charges a fee. In fact, the Visa network takes a percentage, the bank charges a transaction fee, and the ACH folks take a bite too. These fees, for the small business (not Amazon) probably amount anywhere from 3-5%. For a company doing a million a year in sales, that is about half of their profit margin.

Now, do the same transaction with bitcoin: You buy the product in dollars. The merchant converts that amount requested into bitcoin. Your transfer your bitcoin to the provider (using a unique encrypted code.) The bitcoin goes out on the network—saying Vt Lt just sent Amazon $100 (for example.) The network node that verifies gets 1/10 of a percent, or about 10 cents. The bitcoin arrive at Amazon within seconds. Sometimes the system takes longer—which can be problamatic. But I have never had one take more than 30 seconds or so.

Amazon can then choose to retain the bitcoin as bitcoin. Or they can immediately convert to dollars—so minimal market volatility comes into play. That would cost about 1/2% in todays merchant world.

So a $100 transaction today with a credit card would cost a small merchant about $3-$5 in fees. With bitcoin, about $0.75. And the bitcoin transaction is more secure because they are dealing with peer to peer encryption—not the lowest common denominator encryption the credit card networks are dealing with.

Bitcoin Wallets (where folks leave their software open or poorly passworded) have been hacked, but the bitcoin transactions have not, to date, been hacked because the encryption is so much stronger—and with fewer players touching the transaction.

And here is the beauty of bitcoin for the merchants. There are no chargebacks. Certainly, refunds happen all of the time and are just as secure. Chargebacks with credit cards can hit you months after a transaction—and without notice and without much recourse.

Finally, for international transactions you can move money from a part of Africa where there are few reliable banks in much of the continent to get goods and services with hardly any fees.

Think of being able to walk onto an airplane, fly out of your oppressive, third world dung heap, and come to America with your assets on a usb card, which is encrypted so no one can steal, confiscate, or otherwise interfere with your ability to maintain your asset base. Try to do that with cash or gold. The only way THAT is going to happen is with diamonds, smuggled inside your body. And this is much cleaner than that!

So, it has small beginnings. Its been out there for years now. Its just now catching on to the mainstream.

Is there a lot to buy and sell now? Not really. At least I haven’t found it. But we are in the very early stages of adoption.

I guess the thing I like about it is that it is clean, no credit card BS, and you can convert it fast. I can convert it to dollars today, and its in my checking account in two days. Try doing that with a lot of gold—not just one or two ounces.

Of course, you have to deal with it like any asset. The IRS will know if you do transactions over $10K and have them sent to your checking account, so its like cash that way.

I believe the days of $100-$500 swings are over. I think it will climb up as the dollar is depreciated with more QE—just like gold. It is volatile. And it is international. Since starting this I know more about how the financial system in China works, and they are ferocious gamblers. But I think it will calm down.

Is it worth investing your retirement money into? Hell No. Is it worth putting a little in because it might be the next big thing? Yes.


23 posted on 01/25/2014 11:41:20 AM PST by Vermont Lt (If you want to keep your dignity, you can keep it. Period........ Just kidding, you can't keep it.)
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To: Errant

There is a big Bitcoin conference in Miami this weekend, it will be interesting hear what comes out of it.

Shame I just found out about it, it is only 50 miles from me.


24 posted on 01/25/2014 2:16:55 PM PST by PoloSec ( Believe the Gospel: how that Christ died for our sins, was buried and rose again)
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To: knarf


bitcoins have value for all the same reasons gold has value as a transfer of wealth, with the added benefit of being weightless.

23/25 words.


25 posted on 01/25/2014 2:23:52 PM PST by sten (fighting tyranny never goes out of style)
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To: knarf

Both currency and trading system, BC is the Napster of global finance. There is a disruption in the USD Force, and BC is it.


26 posted on 01/25/2014 2:47:26 PM PST by pingman (In the Land of the Perpetually Outraged, truth is the enemy.)
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