Does anyone here use Bitcoins?

[Renegade]

Once you have an exchange account, you can buy BTC.

Now, there are some places that will let you buy BTC without an exchange account, however, that's a bad idea. Their spreads are massive, so it's a very expensive way to buy BTC. An exchange account will cost you far less. However, if you only want to buy a very small amount, the non-exhange way is ok.

Once you have your BTC, you can then send it from your exhange account to your bitcoin wallet. You get your bitcoin wallet at http://bitcoin.org. Just download it, let it update and sync (takes a while the first time around), then poof! Automagically you have your bitcoin wallet ready to use.

Click on the "Receive" button, copy an address, label it if you like, then give that address to your bitcoin exchange account to send to.

MAKE CERTAIN TO HAVE A BACKUP PLAN IN PLACE.

MAKE CERTAIN TO HAVE A BACKUP PLAN IN PLACE.

MAKE 100% TOTALLY FOR SURE AND ABSOLUTELY CERTAIN TO HAVE A VERY GOOD, RELIABLE, ROBUST, BACKUP PLAN FOR YOUR BACK PLAN AND THEN ANOTHER BACKUP PLAN FOR YOUR BACKUP PLANS.

If you lose your bitcoin wallet, it is GONE. Forever. Do not lose it. Guard it like nothing you have ever guarded before. Print it out on paper as well. (I think the name of the program that lets you do that is something like "armory wallet".)

Using BTC very easy. It's so simple that you'll wonder if you're doing something wrong.

All you need to do it type in an amount, enter the address that you are sending it to, and click. Done.

Mining is an easy way to get a small amount of BTC. It isn't economically feasible to do it on a typical desktop, but you can.

Well, that's not really true. RIGHT NOW it isn't economical, but, if you manage to mine a small amount, and BTC takes off, then you'll be glad that you did.

E.g. Say you manage to mine 0.01 BTC per day. That's about $0.75 or so today. If BTC hits the lower end of Falkvinge's target (won't be for years though), then you'll be sitting on 0.01 BTC worth $1,000.00. So, if you mined for a month, in 10 years or so you might have $10k.

For the BTC market, you can think of BTC the "gold" of the crypto-currency world and Litecoin (LTC) as the "silver".

I just started mining LTC and will be looking into it more in the near future. I have no idea about whether it will be worth anything, but there is a market for it and it is growing. I missed out on the very early days of BTC as I was just too damn lazy. I don't plan to let this potentially lucrative opportunity pass me by like I let the last one.

One other thing, if you read the MSM, you'll see numerous hit pieces on BTC. Tonnes of them. BTC is HATED there, which in "I'm not a complete moron"-speak means that there has to be something good about it.

The dominant theme in the hit pieces right now is "illegal drugs". And you can use USD or CAN or GBP or JPY or AUD to buy drugs too... Their point is total garbage. It's like saying that because someone was killed by some idiot with a hammer, hammers are bad. Pfft.

Got to run again...

[app103]

It was going to eventually happen...

US to regulate Bitcoin currency at its all-time high

LOOKS like Bitcoin has got too big to ignore. Virtual currencies are to be regulated by the US Treasury after the Financial Crimes Enforcement Network (FinCEN) moved to clarify their status under anti-money-laundering laws.

The move comes as Bitcoins doubled in value in just a few weeks to hit a record high of more than $70 each, possibly fuelled by the banking crisis in Cyprus and the rest of Europe.

FinCEN's new guidelines don't mention Bitcoin by name, but say that anyone involved in exchanges of decentralised virtual currency for real currency must register as a money services business and obey existing regulations. The same applies for centralised virtual currencies, such as Facebook credits.

I wonder if this will also apply to this site and our donation credits?

[app103]

A better explanation from Bitcoin Channel:

And you can read the document from FinCEN yourself:  https://docs.google.....pdf&chrome=true

[wraith808]

An interesting bit from that...

The same applies for centralised virtual currencies, such as Facebook credits.

So, though they say Facebook credits, does this apply to others also, such as XBox live points, Sony Points, etc?

[40hz]

So, though they say Facebook credits, does this apply to others also, such as XBox live points, Sony Points, etc?

-wraith808 (March 26, 2013, 12:32 PM)

I think they'll probably mostly restrict it to transactions not already locked into a single company's business like most of the gaming currencies seem to be. Anything that can act as a ready substitute for cash (i.e convertible to real cash - or - broadly accepted) will probably come under the rubric.

Look at it this way - if they're even slightly serious (and in the USA they certainly are) about all Internet transactions soon being subject to some form of state sales tax, you can bet they'll regulate things like bitcoins since you could potentially do an end run around the tax system using them. And that brings up a much more powerful way of going after non-cooperative alternative currencies and their users - TAX EVASION! (That's how they ultimately got Al Capone.)

When it comes to monetary equivalents, governments generally take one of two approaches: (a) regulate it, or (b) outlaw it. Paypal learned about that the hard way early on and decided to play ball with the regulators by getting licensed as needed. But that was easy compared to what Bitcoin will be facing. Because Bitcoin can also be (and is) viewed as a speculative or investment vehicle. So that also will likely make them subject to securities regulations as well as money-transfer or banking rules. And good luck with that. Since there's no central authority or clearing center with a clear line of traceable responsibility, who exactly is going to sign on behalf of all bitcoin? Especially since its decentralized P2P structure is its biggest selling point...

I'll stand by my earlier comment: The reaction was inevitable. The outcome is predictable.

[app103]

An interesting bit from that...

The same applies for centralised virtual currencies, such as Facebook credits.

So, though they say Facebook credits, does this apply to others also, such as XBox live points, Sony Points, etc?

-wraith808 (March 26, 2013, 12:32 PM)

I think they'll probably mostly restrict it to transactions not locked into a single business like most of the gaming currencies. Anything that acts as a ready substitute for cash (i.e convertible to real cash - or - broadly accepted) will probably come under the rubric.

Look at it this way - if they're even slightly serious (and in the USA they certainly are) about all Internet transactions soon being subject to some form of state sales tax, you can bet they'll regulate things like bitcoins since you could potentially do an end run around the tax system using them. And that brings up a much more powerful way of going after non-cooperative alternative currencies - TAX EVASION! (That's how they ultimately got Al Capone.)

I stand by my earlier comment: The reaction was inevitable. The outcome is predictable.

-40hz (March 26, 2013, 02:10 PM)

Any service or business in the US, in which one can pay cash for a virtual currency and then convert that currency back to cash is covered by this and has to comply with their rules.

Bitcoins falls under that to some degree, at least those businesses that buy and sell bitcoins.

Facebook does, because you can buy Facebook credits and transfer them to someone else, and if you have enough facebook credits, turn them back into cash.

The government isn't so much looking to catch tax evaders (but that could be a bonus) as much as they are trying to stop money laundering, which supports the drug trade and terrorism.

What I'd still like to know is if this site will be affected by these new rules. Will this site's donation credits system cause it to have to register as an MSB?

[40hz]

The government isn't so much looking to catch tax evaders (but that could be a bonus) as much as they are trying to stop money laundering, which supports the drug trade and terrorism.

-app103 (March 26, 2013, 02:36 PM)

Oh, I don't think it's to catch evaders per se either. I think it's more to criminalize one more thing. With that in place, it allows the IRS (and laws with no statute of limitations on them) to be brought into play. Those are powerful "persuaders" when you want to convince somebody to see things the government's way.

What I'd still like to know is if this site will be affected by these new rules. Will this site's donation credits system cause it to have to register as an MSB?

I'd suspect if they can be cashed out for 'real' money the answer right now is: possibly probably maybe.  

However, long term, I think the answer to that question will very likely be: Yes.
 

[app103]

^I'd suspect if they can be cashed out for 'real' money the answer is: possibly probably maybe. 

-40hz (March 26, 2013, 03:23 PM)

Well, mouser is reading that pdf right now, so we'll soon know what he thinks.

[wraith808]

I wonder if there is a floor on the amount of money.  I mean, for my years here, I've really only made money to support hobby and entertainment stuff.  Not sure if anyone else has made more than that...

[app103]

I wonder if there is a floor on the amount of money.  I mean, for my years here, I've really only made money to support hobby and entertainment stuff.  Not sure if anyone else has made more than that...

-wraith808 (March 26, 2013, 04:56 PM)

There is nothing in the pdf about what the record keeping and reporting rules actually are, just who has to comply with them.

It is possible that it only applies to transactions over a certain amount. One wouldn't know unless they got a copy of those rules.

It might turn out that even if this site does have to register that the rules may not affect us at all, beyond the need to register, due to the smaller size of the donations and cashouts.

But this whole subject is something mouser does have to look into, very carefully, in order to not make any fatal mistakes that could get him or this site into trouble, which is why I brought it to his attention and gave him a link to that pdf, personally. I don't want to see anyone get into legal troubles, especially if it can be avoided with knowledge.

Give him some time to read & digest that pdf, and I am sure he will respond to this thread, or create a new one if he feels the response is that important.

[Renegade]

I wonder if there is a floor on the amount of money.  I mean, for my years here, I've really only made money to support hobby and entertainment stuff.  Not sure if anyone else has made more than that...

-wraith808 (March 26, 2013, 04:56 PM)

I'm not sure what you mean there.

If you're going to buy from an exchange, you kind of need to buy enough to lower your transaction costs (bank wiring fees) unless the offer some method that reduces your costs that you can take advantage of. So, depending on just how greedy your bank is, and how the collude with other banks to rip you off (the often send through intermediary banks that gouge you in addition to the sending and receiving banks gouging you), your wiring fees could be higher or lower. Also, remember that banks are allowed to abuse "float time", which is criminal for you or me and would land any of us in prison. By abusing float time they are able to skim interest off you. Some banks are worse than others. The practical upshot for people that don't care about banks stealing from them is that the worse your bank is, the longer it takes for the money to land in the receiving bank. Typically this is 2 to 5 days. (Electrons travel very slowly in banks when it suits them... Which just goes to show how powerful the banksters are when they can bend fundamental laws of physics. )

So, assume that you're going to get gouged for around $20~50 or so in wiring fees, but it should probably sit around $25. Again, how deeply the banks cut into you all depends on your bank and the receiving bank.

This makes it impractical for anyone that wants to buy 1 BTC or so unless they are confident that BTC will rise well above its current levels to cover their transaction costs. How long that will take is anyone's guess.

Of course the lower the percentage you pay in transaction fees, the better. So if you're comfortable with around 5% or so, then sending around USD $500 or so begins to make sense.

It's also possible to pool money with friends then buy BTC with a single wire transfer and then send everyone their BTC. If you have 5 or 10 friends that want to try it out, the transaction fees suddenly become far less important.

[wraith808]

What I mean is a minimum amount in transactions before you have to register.

[Renegade]

What I mean is a minimum amount in transactions before you have to register.

-wraith808 (March 26, 2013, 06:32 PM)

Is that about FinCEN? I'm still confused. 

[app103]

What I mean is a minimum amount in transactions before you have to register.

-wraith808 (March 26, 2013, 06:32 PM)

Is that about FinCEN? I'm still confused. 

-Renegade (March 26, 2013, 06:48 PM)

Yes, it is about the FinCEN rules, and in particular, how they may relate to this site and the donation credits system we have in place here.

[40hz]

^Bear in mind theres a big difference between transferring funds as part of a sale, and a simple money transfer. One is ordinary commerce. They already have governing laws in place for commercial transactions.

Monetary transfers are "a whole 'nother smoke." That's what the current flap is about - is bitcoin acting as a monetary transfer agent; or engaging in activities currently restricted to licensed banking institutions; and (now) also serving as a financial investment that is subject to securities regulations? All of those require registration to be conducted legally in the US.

As things stand, I think bitcoin is on fairly shaky legal ground. (In the US at least.)

[app103]

And what about Facebook and their virtual currency, which according to that article, they will have to comply and register as a MSB?

Anything which has the potential to be used for money laundering, whether or not it actually is being used that way, will most likely have to register.

[40hz]

Well...in the end it will be for the courts to decide. I'm guessing the question will at least attempt to come before the Supreme Court someday - although the court would have plenty of ground for refusing to hear it since the proposed new rules basically are only specifically adding "virtual currencies" to the formal list of electronic transfers already covered by existing laws. So it's really only clarifying rather than extending wire transfer regulations.

[Renegade]

Time to call a spade a spade... 

This attempt to regulate is a 2-pronged attack on people.

1) The kleptocrats trying to get into your pockets and steal more from you.
2) The authoritarians trying to exert complete control over all transactions between people.

That's the short version. Here's the almost-ranty version.

1) The Kleptocrats

The kleptocracy in charge does nothing but look for new ways to steal from people. This is pretty obvious when you hear about attempts to tax breathing. (No... that isn't made up... It is horrifyingly real.)

The US has no legal jurisdiction over any currency other than its own. It is neither their responsibility nor duty to address any other currency outside of their own borders. BTC is a P2P crypto-currency that has no relationship to the US whatsoever. Their attempt to regulate that which does not concern them only further illustrates the kleptocratic nature of the beast.

2) The Authoritarians

The control freaks still don't get it. The cat is out of the bag. It's loose. It ran away and they'll never catch it.

The power is in the network and out of their hands.

However, their attempt to try and regain control only further exposes their insatiable greed for power & control.

John and Fred are drinking then head out to a bar. They have a few more when John realizes that he forgot his wallet at Fred's place. Fred spots him a few bucks, and John happily pays for a beer then pays back Fred when they get back to Fred's place for another round or 10.

How many transactions are there there? How many more could be scrutinized and taxed if the authoritarian control freaks had their way?

Well, Fred lent John a few bucks, so why shouldn't they take their cut there? With a digital, centrally controlled currency this is very possible. With BTC, it is not. Then there's the transaction where John pays Fred back. And why shouldn't the authoritarian control freaks at a minimum at least KNOW about that? With a centrally controlled digital currency that is possible. With BTC, it isn't that simple, nor is it realistic. With BTC, control has been taken from the authoritarians, and they don't like it one little bit.




BTC robs the authoritarians of the possibility of knowing what people have, and further robs the kleptocrats of the possibility of stealing people's money. (Oh certainly they create laws to call their theft "legal", but it's still theft.)

THIS is why BTC is such a threat to the establishment. It puts POWER back in the hands of the people. It RETURNS the rightful power of commerce to the participants in commerce, and prevents the establishment from meddling where it has no legitimate right and doesn't belong.

They will fight tooth and nail on this issue.

BTC is antithetical to current system. And that is why it will flourish as it returns the power to the people.

[Tinman57]

Well...in the end it will be for the courts to decide. I'm guessing the question will at least attempt to come before the Supreme Court someday - although the court would have plenty of ground for refusing to hear it since the proposed new rules basically are only specifically adding "virtual currencies" to the formal list of electronic transfers already covered by existing laws. So it's really only clarifying rather than extending wire transfer regulations.

-40hz (March 26, 2013, 07:40 PM)

  I'm sure it has something to do with the world bank.  They've got to get theirs, if you know what I mean.  Regulating Bitcoins will bring more transactions back to the banks along with their little "fee's".

[40hz]

@Ren - stop shouting. We're all in the same room even if everybody isn't on the same page.

THIS is why BTC is such a threat to the establishment. It puts POWER back in the hands of the people. It RETURNS the rightful power of commerce to the participants in commerce, and prevents the establishment from meddling where it has no legitimate right and doesn't belong.

They will fight tooth and nail on this issue.

-Renegade (March 26, 2013, 08:41 PM)

I'm sure they will.


 

However, they might want to take a page from the civil rights and antiwar movements back in the 50s and 60/70s and stop letting "The Establishment" frame the debate and marginalize them in the mind of the public if they hope to succeed. They're falling for all the same old tricks and set-ups those in power traditionally have used against those pushing for major changes.

Good lord! Doesn't anybody teach headgames (i.e. psycho-political warfare) and agitprop in the radical coffee shops anymore?

[wraith808]

Time to call a spade a spade...  

-Renegade (March 26, 2013, 08:41 PM)

And press the express elevator button... down?

And here we survived for 4 pages! LOL

[40hz]

And here we survived for 4 pages! LOL

-wraith808 (March 26, 2013, 09:33 PM)

Nah! There's nothing that can possibly be considered offensive here. It's all just politics and economics. Dirty words to be sure - but hardly offensive.

[40hz]

The control freaks still don't get it. The cat is out of the bag. It's loose. It ran away and they'll never catch it.

The power is in the network and out of their hands.

-Renegade (March 26, 2013, 08:41 PM)

Minor point - "the networks" so beloved by today's would-be cyber-revolutionaries are all built, paid for, owned, operated, and monitored by governments, big telcos, and major corporations. You can't use the Internet without going through a router under the direct control of one of the above 'establishment' players.

I work with networks and network technologies for a living. And believe me when I say the power is not out of the hands of the network managers. You may have the occasional talented rogue user find an open exploit to take advantage of for however long it remains unpatched and undetected. But you can't fight a protracted cyber-battle using such loopholes as your main weapons. And now, with Big Brother in the Desert monitoring all US electronic communications, there is little that can't be dealt with once it reaches sufficient "noise level" that somebody in a position of authority decides it needs attending to.

20 years ago it might have been technically possible to do an end run. That's not really the case any more. Today, the main reason people get away with things online is because there isn't sufficient economic justification to pursue them. Most federal police agencies won't even open an investigation unless they can either cost justify it, or show it somehow has direct bearing on "national security." It's much along the lines of what George Lucas envisioned at the end of THX-1138 when the person the police are chasing is allowed to get away because project cost for his pursuit and arrest has gone over budget by 6%.

But even so, short of establishing a totally separate and independent global data network that's totally isolated from the existing one, you've already lost 99% of the cyber-battle. And now that even the most clueless of bureaucrats understands the power inherent with a global data network, do you really think such an alternate network will ever be allowed to be built?

[Renegade]

@40hz - How could it be shut down? Shut down all encrypted traffic? I don't get how it's possible to shut down like that.

[Renegade]

Time to call a spade a spade... 

-Renegade (March 26, 2013, 08:41 PM)

And press the express elevator button... down?

And here we survived for 4 pages! LOL

-wraith808 (March 26, 2013, 09:33 PM)

Hey, I didn't bring up the... ummm... I'll leave it at that.