If Bitinka works as stated, there is no transfer of ordinary currency across borders.  Remitting client X in Peru gives soles to Bitinka-Peru, Bitinka-Peru gives soles in Peru to bitcoin seller Y.  Eventually Y's bitcoins end up in the address of a bitcoin buyer Z, who gives pesos in Argentina to Bitinka-Argentina, which gives the pesos to the recipient client W in Argentina.

On the other hand, robustness against design and programming errors requires truly redundant data representations, taht is, storing each piece of data in many locations with independent design, implementation, and management.  Backups and multiple copies of a database do not count towards that either.  Thus it is actually good that the same data is kept by different players and by the government.  


A single design failure could render all the account information in the blockchain useless.  A government could break all bitcoin-dependent businesses at once by blocking access to the bitcoin network (by network hacking or by legal threats on users).

And it is undeniable that, for the amount of traffic that it processes, the bitcoin network is terribly more wasteful of computing resources than the existing financial system, by orders of magnitude.

Have you noticed also that the most popular thread in bitcointalk.org, by far, is this one: almost 3x as many posts as the next one. Congratulations, @adamstgBit!.

It may be a bad sign, however, that the next 5 threads, in number of posts, are about 4 altcoins (DRK, NXT, XCurrency and BlackCoin) and the KnC miners.

… but still 2/3 of the number in June 2011, and 1/2 the number in March 2013...



They look like spam accounts created by some spambot, to give exposure to the listed websites.

Could it be just out of boredom, or  to be polite, or for lack of something else to say?

I could not listen to the interview to the very end.  From the part that I heard, his project is a set of bitcoin exchanges, one in each country, that allow you to do two matched trades in one operation: e.g., buy N bitcoins in Peru, with soles, and sell them in Argentina, for pesos which will be deposited into someone else's account.

One can do that now, but it would involve two independent exchanges, and the first user would have to withdraw the bitcoins from one exchange ad deposit them into the other one.  The guy's company (Bitinka, I suppose). would remove those two extra steps so that the users would not need to "touch" the bitcoins.

As the guy points out, a nice feature of that schema is that it does not require users to exchange their national currency for dollars (as they would have to if they used Bitstamp, say), which could attract the unwelcome attention of the central banks.  

That core service, by itself, would have the merit of using bitcoin as it was intended to be -- a payment medium.  Remittances via Bitinka would not be free, of course, because Bitinka would have to charge fees or profit from BTC price spreads at both ends.

However, to the users, that service would look pretty much like any Western Union or any other classic remittance service.  Since the bitcoin transfers are done inside the system, they can be lumped and deferred.  If Jose and Juan send the equivalent of 10 BTC each from P(eru) to A(rgentina), and Manuel sends the equivalent of 15 BTC from A to P, the company needs to send only 5 BTC from P to A; and may do that later, if the Argentina branch has enough reserves.

They may even manipulate the exchange rates and fees to match the flow in both directions, so that they would not even have to move any bitcoins.  Or they may use banks to exchange the currencies and move them across borders -- if, for some reason, they find that option more convenient than buying and sending bitcoins.

But if the trades are not balanced -- say, there is more value sent from P to A than the other way around -- and they do not want to use banks, then the company would have to buy bitcoins in P and sell them in A.  What is the money flow in that process?

The two prmary parties in a money transfer from P to A can be lumped together as one "family", so the sending and receiving cancel out: the "family" does not lose or gain anything, except some fees, and can be excluded from the analysis.  The remaining net money flow is: someone in A gave his money (and got some bitcoin) to someone in P (who parted with some of his bitcoin).

Thus, apart from the implied change of currencies, the situation is the same as when someone buys BTC from someone else, with dollars or any other currency.  Any profit that the seller makes comes out of the buyer's pocket.  If the seller bought for 500$ and is selling for 200$, then he is keeping 300$ of his initial 500$ loss, and passing the other 200$ to the buyer.

In summary, the matched trades that Bitinka propose to do would be proper use of bitcoin, but by themselves they would not generate much demand:  the bitcoins would be kept by Bitinka only for a few days at most.  Bitinka will be "good for bitcoin" (i.e. help push the price up) mainly if it encourages people to buy bitcoins and hold them (like that guy in A who bought the bitcoins from the company).  And you already know what I think about investing in bitcoins...

Moreover, if Bitinka is successful, it would be "stealing" remittance service customers from the local banks, by undercutting their fees.  Good luck getting bank accounts and the necessary approvals from the local governments...

SilkRoad was busted in early Oct/2013.  Some (not me) claim that the bust actually helped the price, because it dispelled the perception of "currency of drug users and criminals".

But SilkRoad may have been responsible for the famous Mar/2011 bubble.  I gather that SR started operating on Jan/2011, so the timing seems compatible.  

If that was the case, it would be useful to understand why that bubble deflated almost completely through the rest of 2011.  Understanding that decay could perhaps help us understand the downtrend of 2014, which is often compared to it.

Indeed no one has a clue, but it would help to admit that China still sets the price.

The Nov/2013 rally (and perhaps also the Apr/2013 one) were created by Chinese demand, and the Chinese exchanges have set the price since then.  Although many of Chinese who bought coins at that time appear to have sold them, Chinese day-traders are still in control.

Since the big rally, the price has reacted almost exclusively to events that are relevant to the Chinese traders, and has completely ignored events that are relevant only to the West -- such as Dell and Microsoft "accepting bitcoin", Bitstamp being hacked, the USMS auction, Bill Gates saying that bitcoin will not succeed, and the the 70 trillion dollars that banks just invested in Coinbase.

Now, one would expect the Bitcoin media to start from that fact, and get some staff or correspondents in China to report on the state of the Chinese market so that Western traders can use that as a basis for their predictions. 

But they will never do that, obviously.  Bitcoin sites do not get a penny from investors or day traders, so they don't care about their fortunes at all.  Their revenue comes entirely from advertising and subsidies from bitcoin enterprises, so they must suppress any news that could hurt them. 

And those enterprises would hate if their prospective clients were aware about the role of China.  "If you invest in our fund, rest assured that the future of your money will rest entirely on the mood of ten thousand amateur commodity traders in China, who prefer bitcoin to garlic because its price is much more volatile."  "Our ETF shares are expected to yield 1000% ROI in a couple of years, as soon as we find a new market for bitcoin that is 10x the size of China's".  "We are quite certain than the price of bitcoin will not drop to double digits tomorrow, because we cannot believe that the PBoC would be so mean as to further tighten the restrictions on Chinese exchanges."

So, all news and articles in the bitcoin media start from the premise that "China is irrelevant", and are careful to cultivate that misconception in the readers.  Just as they will try to hide (or not even look for) the unpleasant facts about user adoption, security, miner influence, and more.  Instead, they will fill the space with useless technical analysis, bogus theories like "Willy was responsible for the 2013 bubble", interviews of bitcoiners about its wonderful future, and thinly disguised addvertisements and press releases.

Perhaps there will be universities stupid enough to accept those terms. 

These conditions are so poorly drafted, the company seems to have no business experience.  It surely does read like a scam.

There are no specs, not even photos of the ATMs, only computer graphics renderings.

Note that the university must send money to BitExchange first, to pay for the shipping.  What could possibly happen after that?

So mom and pop will be able to put their 401k money into the Gemini exchange and day-trade bitcoin with it?

Can they deposit it with a broker and day-trade penny stocks with it?

Actually there is such a thing; but, indeed, why call it a hard fork, if there is no such thing as a hard spoon?

Hmm... FDIC only insures bank deposits against bank failures, isn't that so? 

If the clients' dollar deposits are stored in a single bank account, in the name of Gemini (as most exchanges do), the FDIC will not insure the clients against Genesis screwing it up (as MtGOX did).  Isn't that so?

Would that be a fitting name for a hard fork, which Gavin is calling for?

Well, only idiots invest in currencies for the long term. 

A Gavin Event, perhaps? 

Well, it seems that we had an unplanned experiment that should allow us to answer the question: "What is the effect of this thread on the prce of bitcoin". 

Conclusions?

Quoting before it disappears?

I could even believe that the owners of the exchanges refrain from using inside information when trading at their exchanges.  But the exchange itself could do unfair trading and arbitraging against their clients, automated of course.  It would be profitable, undetectable, unprovable, and fully legal; why shouldn't they do it? 

Browsing through the presumed Bitpay wallet suggests that some miners like KnC do sell their coins through BitPay at Bitstamp and other exchanges.