I am new to bitcoin and need some advice.

[joepistole]

All your bitcoin posts prior to post 77 switch of subject to hedging for profits by Wall Street firms were mostly false or at least ignorantly confused. I agreed with most of post 77 after you switched to speak of Wall Street firms that try to hedge for profits. Yes they can indeed end up "holding the bag" instead of making a profit. I clearly distinguished them from hedging firms that EARN a profit by providing a risk reduction service to other corportations. You try to make it not look that way by one of your standard DISHONNEST tricks - dropping an essential part of my sentences.

Here, now in red type, is what your dropped as it makes it completely clear that my statement that the hedging firms we were speaking of (prior to your post 77 switch to Wall Street hedging firms) do almost always make a profit for reason stated: Yes, IF they don't essentially immediately convert the bitcoin into the currency of their choice. I.e. if they speculate - hold the bitcoin for even only a few days, (not the less than three minutes, I say Branson could, with on-line exchange costing less than 0.5% vs the 2.5 to 3% lost hit he takes when customer buys plane ticket with his charge card, plus the days of delay before Branson actually gets paid by the credit card company). With quick conversion into local currency of the bitcoin it is almost exactly the same as if the customer had paid with cash. Actually bitcoin is better for Branson than if the customer paid cash for even a second reason! (Not just the 0.5% vs 2.5 to3% advantage) I. e. that cash will just sit in the cash register until some one can take it to the bank, but the bitcoin cash is available for immediate on-line transfer to an interest producing account in less than three minutes! No. "that hedging" by corporation with Fixed debt to pay IN THE FUTURE (40 days in my illustration example with Maxwell House importing Brazilian coffee - the other side of the hedge with the Brazilian car company), makes for STABILITY by removing the currency exchange risk for both sides via the service providing hedge company. - Why it EARNS and deserve a profit.(Unlike Wall Street Hedge firms trying to out quess some other investors to profit from their losses.) False. All countries encourage / facilitate / international trading companies to hedge away the exchange rate risk as doing that (or farmer selling his crop before it is even planted, etc.) are actions in the modern economy designed to reduce uncertainity / risk and promote more stable markets. The main reason why governments don't want to see bitcoin, replace a significant part of commerce that in the past has used their national currency is the profit they make by creating currency and the taxation of its use. For example, each green dollar that exist gave the government about 97 cents in profit. (only cost 3 cents or less to produce and place into general circulation by paying it to a government employee as part of his salary) Electronic, "thin air" dollars the Fed creates and for example buys mortgages with, are 99.99+ percent pure profit as producing them by the millions is only a few key strokes on the Fed's computers.

SUMMARY: Your post is typical of you. Misquote. (Intentional distort by omitting essential parts of sentences) Make unsupported false assertion. Switch subjects (From business hedging future debts that reduces uncertainty / risk & promotes stability to speak of Wall Street hedge firms try to be the one which guessed correctly and made a profit, instead of the Wall Street firm on the other side of the deal that lost money.) About the Wall Street hedger, yes, but completely correct about the firms providing hedging service to corporations, like Maxwell House, with fixed future debt obligations to pay. YOU ARE BASICLLY DISHONEST OR AT LEAST TOO CONFUSED AND IGNORANT TO FOLLOW MY CLEAR DISCUSSION, so distort it so as to stuff words with a twisted meaning (from their clear meaning with full quote of the sentence) in my mouth.

LOL, unfortunately Billy T this is just another post in which you engage in your usual host of illogical and counter factual statements. All the ad hominem in the world is no cover for the blatant flaws in not only your facts but your reason. In this thread alone there are links showing the actions China and others have taken to restrict and limit Bitcoin trading due to the risks it poses to the financial system. Yet you persist with your denial of fact and persistent use gobbledygook. It's reminiscent of your economic prognostications in which you and only you, a man with no formal economic or business training or experience, are predicting a run on the dollar in a few months. You have had your head into too much conspiracy nonsense.

 

[Billy T]

LOL, unfortunately Billy T this is just another post in which you engage in your usual host of illogical and counter factual statements. ...

more of your unsupported false assertions.

Show, after quoting me*, my logical flaw. Then quote my "counter factual statement" and refute it by a reputable source stating the opposite.
You are demonstrated liar,** and fabricator of "facts" so your merely asserting I'm illogical or contra factual is worthless noise.

* in full context - don't omit essential parts my statement to change the meaning as you did more than once in your post 79, forcing me in my post 80 to repost my words in full with the critical parts you dropped in red text.

** for example relatedly claimed to be quoting Bloomberg yet even after 16 requests for the link, give none. (I'll give more examples of your lying if you request.)

 

[Captain Kremmen]

Latest Bubble.
Pot growing supplies. Greengro Technologies has gone up from 3 cents to 78 cents since Jan 1st.
http://www.bloomberg.com/quote/GRNH:US

 

[Syzygys]

Latest Bubble.
Pot growing supplies. Greengro Technologies has gone up from 3 cents to 78 cents since Jan 1st.
http://www.bloomberg.com/quote/GRNH:US

Actually, pot getting the green light in several US sates (CO sold out their supply in a few days since Jan 1st) it is fundamentally sound to invest in potgrowing companies...

 

[Captain Kremmen]

No company is worth 20 times what it was two weeks ago.
That's a Bubble.
They won't have the growth to themselves.
Companies better geared to expand may take all their business.

 

[Syzygys]

No company is worth 20 times what it was two weeks ago.

What do you think Jack Daniels stocks were traded at during the Prohibition and right after it? Sure a stock can jump huge when the government just OKs the product they sell....

 

[Captain Kremmen]

I don't know.
Have you got a graph showing the stock?

I agree that a viable stock may be worth double or treble because of favourable news,
for example a small drug company with a successful drug trial.
A bigger increase could be justifiable if an event pulled the company into decent profits from a position of bankruptcy.
So I withdraw my statement "No company is worth 20 times what it was two weeks ago."
On thinking further about it, that is possible.

In this case it is happening to pot-related companies across the board, and is unsustainable.


Greenngro are now down to 38 cents. 52% down today.
Money follows money.

 

[C C]

Related / breaking news: Malware on Yahoo ads turned user PCs into bitcoin miners

[...] With the Yahoo incident, a hacker group developed malware that infected user computers when their owner clicked on a certain ad, causing their computer to become part of a botnet (each doing a little bit of number crunching.) That botnet worked as a single entity (miner) to generate massive numbers of bitcoins, which all went to the originator of the malware.
[...]
Bitcoin is a peer-to-peer payment system—created as a means to allow for commerce on the Internet without the assistance of a governmentally backed monetary system. [...] In order for the system to grow, more bitcoins must be generated on a regular basis. But they're not printed by a central agency, bitcoins are instead created by "miners" which are computers running software designed to solve math problems—they get a certain number of bitcoins in exchange for their efforts. [...] In the beginning, a person using their own computer could use the software to create bitcoins, nowadays, it takes powerful dedicated computers or in this new effort, a botnet—which is where PCs were pooled together to solve the math problems.

 

[Billy T]

Which will be in demand, even exist, in 10 years? The "old timer" or the "new guy"

 

[Billy T]

... In my opinion, gold, is much better bet now than bitcoin. Gold has only gone up in 2014 - as I predicted it would - See: http://www.sciforums.com/showthread.php?134352-Gold-Bubble-goes-POP&p=3150435&viewfull=1#post3150435 and early posts that tell why (Comex vault lost 80+% of the deliverable gold it held in 2013, mainly to deliver to Asians real, not paper, gold paying 20+/- 5% premiums for the "real yellow stuff.") Even if there is no accelattion in the rate of people with long contracts climing physical gold rather than accepting dollars, Comex vault will be empty in about 85 days (assuming Comex does not start buying and paying what ever is demanded to avoid defaulting on delivery contracts.)

Of course there will be acceleration as now ~80 paper gold traders have a claim on the same ounce of gold. Some already are asking for their gold before one of the other 79 who can does. (Only a couple of months ago that claims to gold ratio was 50.) Most will get "German like" promises that they can get real gold in 2020.

I'll go further out on a limb and predict that on or before this Friday gold trades, in US, at $1248/oz. Note that is a non-convergent geometric series start. (It is already doing more than that in China!) Anyone with the guts to bet it does not? ...

By later edit: at 2:50PM NYC time, Bloomberg gold was up only a dollar at $1239.60 continuing the pattern I have notice on most (all ?) 2014 days. I.e. the peak of the day is just after normal bed time in East coast cities of China and then falls down some. - May be a diurnal change in Chinese demand, doing this?

No one bet against my $1248/oz (Lacked the guts or just smart?). The peak very briefly on Friday was $1249.20 but even the graph below show it was above my $1248/ oz.
For the green curve to record the actual peaks or lows, they must hold for five or so minutes. Kitco price at CoB of NYC market on Friday 10 dec 13 was:
high/low: Bid/Ask 1246.60/1247.60 ... Low/High 1227.00 / 1249.20 Also between 7:30PM qnd 8PM price was $1248.60/ oz (see graph below):

The yellow metal had enough power to edge slightly above the old high for the week, peaking at $1,248.50 shortly before the Comex pit closed.

I'll go out on another limb, even higher but not much as $1250/ oz is a very strong resistance point. So I just say that on or before next Friday, 17 Dec13 gold will at least push above $1250/ oz. but the paper gold traders probably will be able to short sell (what they don't have) it back down below $1250. They are IMO, clearly losing control - the law of supply and demand is taking over despite all the big firms, and "experts" still telling gold is headed for $1100 or below soon.

 

[Billy T]

I'm not sure how Bitcoin works, but think distributed computing is used to allow it to be spent. (Validate transfers - screen out frauds) This is a large overhead cost of bitcoin and the very high powered computer nets (upwards of $100,000 in cost each and even new chips specially designed for the task) doing this are rewarded for their service by being allowed to "mine bitcoin." What happens when there are no more bitcoin to mine? How will this huge and growing overhead cost of the "clearing / validating transfers" be paid?

Perhaps a much more serious problem looms, not just for bitcoin but the entire banking system or any user of 256 bit cryptography data:

... the state of the art these days is a custom designed ASIC - a Swedish company called KnCMiner sent out a considerably more powerful, 550-gigahash-per-second rig in October. KnCMiner has been reported as having sold $8 million’s worth of those rigs in just the first 24 hours of sales. ... These custom ASICs, they’re optimised to perform 256 bit hashes. Wouldn’t that also make them good candidates for the brute force cracking of 256 bit encryption? Would the two uses be close enough together that they could be so used? Or if not, would the work on building these ASICs be a precursor to building ASICs that could be used on 256 bit encryption?

Today, all of the machines dedicated to mining Bitcoin have a computing power about 4,500 times the capacity of the United States government’s mightiest supercomputer, the IBM Sequoia, according to calculations done by Michael B. Taylor, a professor at the University of California, San Diego. The computing capacity of the Bitcoin network has grown by around 30,000 percent since the beginning of the year. {during most of 2013, only See graph below.}

“This whole new kind of machine has come into existence in the last 12 months,” said Professor Taylor, who is studying mining hardware. In the chase for the lucky code that will unlock new Bitcoins, mining computers are also verifying and assigning unique identifying tags to each Bitcoin transaction, acting as accountants for the virtual currency world.

“The network is providing the infrastructure for making sure the currency is being transferred between people according to the rules,” Professor Taylor said, “and making sure people aren’t creating currency illegally.”

Even before Mr. Abiodun’s machines in Kansas City were up and running, it was clear that they wouldn’t be enough. So he ordered about 100 machines from a start-up in Sweden and, in October, had them moved to the facility in Iceland. In just a few months, that installation has generated more than $4 million worth of Bitcoins, at the current value, according to the company’s account on the public Bitcoin network.

Mr. Abiodun chose Iceland, where geothermal and hydroelectric energy are plentiful and cheap. And the arctic air is free and piped in to cool the machines, which often overheat when they are pushed to the outer limits of their computing capacity.

I don't understand much of this, but wonder if these new 256 bit code cracker in the wrong "Geek Hands" could bring down the world's banking and other systems based on what was assumed to be secure 256 bit encryption? When these machines have no more bitcoin to mine - why not mine the bond market records, which is many times larger than all the stocks in total value?

End of fiat money? Only precious metals & jewels hold value, not bits?

 

[Billy T]

My Friday prediction (now in bold text below) came true in 1.5 hours into the new trading week on Monday.

Post 90, in part ... I'll go out on another limb, even higher but not much as $1250/ oz is a very strong resistance point. So I just say that:
on or before next Friday, 17 Dec13 gold will at least push above $1250/ oz. ...
but the paper gold traders probably will be able to short sell (what they don't have) it back down below $1250. They are IMO, clearly losing control - the law of supply and demand is taking over despite all the big firms, and "experts" still telling gold is headed for $1100 or below soon.

the graph of post 90 seems to be live - still self updating and shows gold at $1250.90 / oz now. If it closes day above $1253.50, I think we are off the races - I.e. the paper gold shorts, who tried to repeal the law of supply and demand, will start buying to limit their loses. BY edit: at 2PM NYC time: gold was at $1253.70 up $6.80 and rising. At NYC close gold was $1254.10/oz , but gave up the $0.10 in first minute of "after hours trading."- not too late to get your bet down on the race to higher value this week. Up $20.80 on Friday & $7.20 today, while stocks are down, yet again (down 1% in 2014 now.)*

The S&P 500 has dropped 1 percent so far in 2014, despite last week’s 0.6 percent advance.

It does my heart good to see Goldman Sucks appearing to be caught short on gold and today, still trying to talk it down, but to be even slightly creditable they have raised the target from $1100 to $1150 / oz

In the case of gold, Goldman said it sees further downside with an end-of-year target of $1,050 an ounce. However, the bank added, “we believe the path will be more of a slow grind lower over the course of the year,...

Perhaps others are starting to realize than not only bitcoin may be come worthless, but so may all fiat currencies for reasons I described in post 91 (the new fast 256 bit encryption code craking chips, which bitcoin has created) put bank records and even the bond market at risk. I.e. only precious metals and jewels are surely safe now.
* Gold closed out 2013 at $1204/ oz thus at $1253/oz the gain is 4% Anyone have data on percent change in bitcoin thus far in 2014?

 

[Stryder]

256-bit isn't as high as encryption can go, it's really dependent on who the banks hired to write their software (most of the recent problems in electronic banking has been down to attempted large scale re-writes of old system which themselves were poorly designed in their hayday.)

As for Bitmining, from what I can gather it's only of use during the "Seeding" of bitcoins, when it reaches the limit that no more bitcoins can be produced, all of the specialised hardware will be useless, unless turned to other electronic currencies (Litecoins etc). This itself suggests that once Bitcoin reaches that point, interest in it will be pulled (shifting to the other currencies) causing a collapse. Bitcoin is about Greed not Need, it could be questioned as to if it's actually an elaborate ploy to get the world richest and greediest men and women to invest, just to collapse the "pyramid".

 

[Billy T]

256-bit isn't as high as encryption can go, it's really dependent on who the banks hired to write their software (most of the recent problems in electronic banking has been down to attempted large scale re-writes of old system which themselves were poorly designed in their hayday.)

As for Bitmining, from what I can gather it's only of use during the "Seeding" of bitcoins, when it reaches the limit that no more bitcoins can be produced, all of the specialised hardware will be useless, unless turned to other electronic currencies (Litecoins etc). This itself suggests that once Bitcoin reaches that point, interest in it will be pulled (shifting to the other currencies) causing a collapse. Bitcoin is about Greed not Need, it could be questioned as to if it's actually an elaborate ploy to get the world richest and greediest men and women to invest, just to collapse the "pyramid".

You know much more than I do about computers. I can recall back when computers were less capable and running installed software, not special designed quasi-hard wired to rapidly test 256 bit guesses, that we were told 256 bit encryption was "unbreakable" as it would take computer 100s of years to break the encriptions. Now it seems that for guessing bitcoin keys, a few 100 hours may on average be all that is required.

The article I quoted did not, as you agree, say that these new 256 chips designed for quickly guessing bitcoin keys may surely have great use in more general breaking of 256 bit encryption, BUT, did say that the skill / knowledge about how to design chips that greatly accelerate these "guessing solutions" is now a "genie out of the bottle."

 

[Syzygys]

As for Bitmining, from what I can gather it's only of use during the "Seeding" of bitcoins, when it reaches the limit that no more bitcoins can be produced, all of the specialised hardware will be useless,

It isn't going to happen in our lifetime, so you shouldn't worry about that. But otherwise I agree with you...

The protocol has serious issues, currently the 51% attack that causes disturbance in the bitcoin force....

 

[Billy T]

Quest means business (in Brazil) just announce as Flash news that bitcoin is closed - too many inconsistencies in the complex open computer exchange checking of transfers. I just checked the value - sharp drop of $50.

 

[Billy T]

If the drug lord didn’t legitimately own the Bitcoins in question because he got them via crime, then he can’t legitimately give them to you. You must give them up even if you’re not at fault. The same principle is at play when certain unwitting art buyers are forced to surrender works that were seized by the Nazis.

Alex Daley, a Microsoft (MSFT) veteran and chief technology strategist at Casey Research, covered nemo dat* in a wide-ranging recent essay, which attacked a boosterish piece by Bitcoin investor Marc Andreessen that appeared in the New York Times last month. “What’s to stop the government from attempting to seize all those ill-gotten coins, even multiple stages down the line?” Daley wrote.

* nemo dat quod non habet being Latin for an old principle of English common law: “No one gives what he does not have."
As I edit (47minute after the hour): A Bitcoin = 628.74 US Dollars

 

[Stryder]

I'm not actually tempted to join a Mining Pool and this is why:

I've been trying to get my head around what mining actually accomplishes and I can't see anything useful other than the potential for using it as a shady way to hide up cracking encrypted classified documents or banking information. Technically from what I can gather a hash serves no actual purpose than to tax your CPU for a duration of time. It's not a combined effort to map the human genome, it's not a system develop to solve world problems like world hunger, it literally is something that wastes time and most importantly "Energy".

One thing that the more prosperous miners have looked at is their kWh's (kilowatt hours) to H/h (Hash hours) value, if the value of the hashes profit stoops lower than the cost of the energy consumed then they won't actually be making money, instead they will actually be losing money.

That's not the actual problem, the actual problem is the increasing popularity of the mining method of accumulating wealth, what the average miner (perhaps blinded by greed) doesn't take into consideration is that the more of them wasting time processing hashes, the more energy is consumed. The more demand there is for energy, the higher the costs rise for the available energy. In essence the greed of coining could become like a DDoS attack in regards to our energy infrastructure, where demand outweighs supply.

(The costs would rise because every time the supply is outweighed, the energy companies would have to invest in upgrading which doesn't get pushed on increased costs on just the heavy users, but palmed off on all people that are supplied by those energy firms.)

It could lead to brownouts/blackouts and people of a impoverish nature only being about to have power for a certain number of hours a day because they can't afford to have power all the time.
It could also lead to regulation similar to how ISP can throttle heavy downloaders, some extreme miners might find that they start having blackouts at specific times of day just so they don't undermine the service that provides energy to everyone else. (If you are mining without Uninterrupted Power Supplies [UPS], now would be a good time to get them.)
(Obviously I'm embellishing a worst case scenario)

This does mean however that Energy companies Shares will climb through people pushing demand for energy up while trying to make money.

The only miners that will actually make money by that point would not be apart of this problem by using Renewable Energy supplies, which in turn would push the shares up on those companies that deal in Renewable Energy equipment.

 

[Syzygys]

Miners keep the system alive. Without mining the system doesn't survive. It is an incredibly expensive system right now, the cost of one new coin's creation is about $50 in electricity and hardware...

 

[Billy T]

Worse still:

Trustwave said on Monday that it has found evidence that the operators of a cybercrime ring known as the Pony botnet have stolen some 85 virtual "wallets" that contained bitcoins and other types of digital currencies. The firm said it did not know how much digital currency was contained in the wallets.

"It is the first time we saw such a widespread presence of this type of malware. It was on hundreds of thousands of machines," said Ziv Mador, security research director with Chicago-based Trustwave. Trustwave said it believes the crime ring is still operating, though it does not know who is running the group.