http://www.forbes.com/sites/steveforbes/2015/04/02/how-bitcoin-will-end-world-poverty/
  

What?  Is that something people get out of World of Warcraft?


*You* keep saying that there are "good tools" and "bad tools". Not me.


Good example! As we know, the copyright laws have been repealed, the RIAA and MIAA have been disbanded, and anyone can now share songs and movies for free without interference from the copyright industry.  You can put up any movie or song you like on YouTube, and download songs from iTunes for the storage and bandwidth cost.

Yes, a "free and open" internet would be great.  When it came out of academia, for a while it was hoped that it would be so.  That was promptly fixed, and the remaining holes are being plugged. 

In the early days, WWW servers were fully decentralized and anyone could set one up.  Email was relayed by an uncoordinated SMTP nework.  Then those functions got moved to ISPs, which could be forced by judicial orders to censor content and block users.  Then they got centralized even further into global corporation services like Wordpress, Twitter, Facebook, Google, GMail, and YouTube; which essentially own any contents that people can produce, and can censor it instantaneously without bothering with laws.   

So now, instead of discussing the next revolution with your friends in the back room of a tavern, you do it on Facebook or bitcontalk, where "the 1%" can spy on you from the comfort of their desks. 


Because the counter-arguments always end like "That is possible but I am 100% sure that that it will not happen"...

It its bizarre to see libertarians and anarchists fight for a system that is supposed to kill cash and independent banks, and  force *everybody* to put *all* their money and *all* their money transactions -- from buying a coffee to buying Apple -- in a *global* public ledger, that can be effectively controlled by 4-5 large corporations...

Then you are not one of those who claim that bitcoin will be the solution to poverty, corruption, fraud, bank abuse, oppression, censorship, etc., etc..

Right?

Ask that to all activists that were jailed, tortured, killed after being identified by cameras...

(Isn't it illegal just to film the police in action, in some places of the US?)

Technology indeed can only provide tools, not solutions.  Tools to make things easier, not to make things right.  Tools that can always be used by the good guys and by the bad guys.

It is naive to expect a technological solution to a social/political/economic problem.  The bad guys -- "powers that be", criminals, corrupt politicians and officers, cartels, etc. -- will either ban it, neutralize it, or twist it to serve their purposes. (You can see it happening with bitcoin already.) Such problems can be addressed only by substantial, sustained, and clear-thinking political effort.

Hm, sorry about that.  I will consider replacing my avatar by something less scary or disgusting... 

The gist of this argument seems to be that "big money" does not want to invest now in raw bitcoins for fear of future regulations, but it would invest now in bitcoin fund shares because future regulations will not affect them.

I do not quite see what regulatory risks could apply to companies investing in raw bitcoins, that would not apply also to companies investing in bitcoin fund shares, and on the funds temselves.

Suppose, for example, that some future regulation essentially forces Coinbase and all other "clean" exchanges to shut down, so that it becomes nearly impossible to trade raw bitcoins in an open market.  Presumably the "bubble-packaged" bitcoins (fund shares) will remain tradeable on OTCQX, NASDAQ, and the like.  But then the bitcoin funds themselves will no longer be able to trade their bitcoins in an open market.  Whatever channel the funds will retain to do that (e.g. OTC trading), the large long-term investors should be able to use too.  In that eventuality, raw bitcoins then would become low-liquidity assets like real estate or industrial installations.  How could raw bitcoins lose value because of those restrictions, without the fund shares losing value too?

So I would think that "big money" presently does not want to invest in raw bitcoins or in bitcoin fund shares, because it sees both as bad investments, with considerable risk (including, but not only, the risk of both being hit by future regulatory changes), and without any solid fundamentals or potential market that could justify an expectation of rising prices.  On the contrary, this expectation is entirely based on the hope that 'big money' will start investing in bitcoin; but, if such a "circular" demand could lift the price of bitcoin, it could lift the price of any penny stock.


I would not say that all big investors are explicitly aiming to make money out of "greater fools", but they are generally indifferent to that possibility, provided that the profits are reasonably likely.  

For example, if some 'big money' had predicted the evolution of gold prices 15 years ago, it would surely buy a lot just before the bubble, and sell everything at the peak, with no moral scruples -- while knowing well that its profit would come entirely from the loss of the "greater fools" who bought at the peak.

That said, I did not get your point in the above paragraph.  Do you mean that there is 'big money' that would invest in BTC for the long run, hoping for its lasting success, rather than for sort-term speculation -- if there was no risk?  I can believe there is such money, but I cannot see how it could see bitcoin as "too risky" without seeing bitcoin funds in the same way.

I gave above a couple examples showing that "big money" did in fact buy bitcoins, and therefore could buy; but then did not buy more, even though it had the opportunity to do so.  Not for regulation problems, but just because "big money" does not like to lose money.

Big money did not have to interact with the exchanges directly.  Intermediaries could easily buy 200'000 bitcoins for them, on or off the exchanges, for a modest fee to compensate for their risk. Second Market bought at least 120'000 over 8 months, and surely what made them stop was not lack of bitcoins, but lack of investors.

Bitcoin ownership is not easily identifiable. Even if you could identify my 660'000 BTC in the blockchain, if you saw them being moved to another address, can you tell whether I sold them, or they are still mine?

On the other hand, although ownership and trades of fund shares are not public, they are known to the brokers and are recorded in a centralized share registry.  ("Bearer bonds" have been outlawed decades ago.)

If you have the private keys, you know that you have the bitcoins.  I you own BIT or COIN shares, you have to trust that the fund management company did not lose their coins by hacking, embezzlement, accident, or incompetence.  (Yes, they are audited -- like Enron was.  No, they are not insured against those things.) 

That is not exactly true.  Big money has always been able to get coins easily, even withoit any ETF.  For example, back in late 2013, the Fortress investment group (>60 billion USD in managed assets, >300 million USD/year of revenue) bought 13 million USD worth of bitcoins (which they later disposed of).  Basically anyone with a fair income and a million dollars in hand could buy BIT shares, since Sep/2013.  The last USMS auction got no big buyers, not even Tim Draper.

Obviously, "big money" is not buying bitcoins because they are not interested.  

What the ETF and the OTCQX listing are expected to do is to allow more small money to invest -- namely, retirement and savings accounts, less sophisticated investors, etc..

BIT has 138'000 BTC in deposit, but the corresponding shares are all sold,.  The Winkle personally own another ~200'000 that presumably they expect to sell to the fund to satisfy the first ETF clients.  

It seems hard to predict what will happen when the Bit shares start trading at OTCQX, and if and when the Winkle ETF gets approved.  There has been practically no demand for BIT shares since May 2014.  Both are not "new" coins, but just part of the same 14 million coins out there.  They come with a nice-looking and sanitary wrapping, but on the other hand they have less liquidity and less utility than raw bitcoins (you cannot spend them, or split them in less than 1-share amounts, or use them to hide money, etc.) In the medium and long term, the coins represented by those fund shares can be seen as taking part in the same market as the raw bitcoins, with the same volatility and liquidity problems.  

There is efficient arbitrage, so you cannot consider just one exchange; you should merge the order books of all exchanges, including the Chinese ones.

And, moreover, a large drop or rise will bring in money or bitcoins that traders are keeping off-exchange for safety.

On the other hand, a sudden large move may scare traders into lowering their bids or raising their asks.

Conclusion, you cannot conclude anything... 

I see a few other possibilities:

* He is an employee of some government, so those million bitcoins are not his but his government's.

* He knows that if he sold or spent those coins now, he would be taking money from other people who believe in bitcoin, some of them in financial distress; and he does not want to do that for religious or moral reasons.

* He has plenty of other coins, that he has been selling gradually, and will get to those million in due time.

* He cannot sell those coins, in the open market or OTC, without revealing his identity to someone else; and he would rather see his fortune shrink than to do that.

It occurred to me another possible reason why Satoshi was so careful to preserve his anonymity, and has not cashed those million BTC that are known to belong to him.

Suppose bitcoin were to crash relatively quickly, leaving thousands of late investors with a couple billion dollars of losses.

Those losers would then see themselves, rightly or wrongly, as the victims of a giant pyramid scheme, that moved those billions from their pockets to the pockets of miners, early investors, and a smattering of thieves, scammers, and assorted middlemen.  

Those losers would probably want to sue the culprits to recover their losses. Prosecutors would want to charge them with the crime of running a pyramid scheme.  Whom would they target?

The early adopters and miners can excuse themselves by saying that they just believed the whitepaper and acted openly and honestly according to it.  

So it would all fall on the guy who conceived the schema, wrote and distributed the software, set the network running, recruited the first members --- and made the most profit from it...

(Only half  "")

Oops sorry, that was a wholly unintended hit.    By "above" I meant "in my paragraph above", namely the hypothetical trader who buys contrary to the market in an attempt to stabilize it.  Not "in the post above this one" (which I had not even seen at the time).

AFAIK there are no such funds for ordinary stocks.  I suppose that any such fund would quickly be exausted by traders.  It would act as a dumb trader who keeps buying when the market wants to go down, and starts selling as soon as it wants to go up.  Once it runs out of money, the price would again swing as before.

Central bankers can in principle stabilize the purchasing power of their currency because they don't have to buy or sell it, they can create it or sequester it by fiat.  But when they try to stabilize its exchange rate against foreign currencies, they too will be acting like the dumb trader above, and they too often go bankrupt in the process -- for no lasting result.

I am not a lawyer, but I don't think that such a disclaimer dispenses the seller from KYC/AML requirements, or protects him fully in case the buyer uses the bitcoins for illegal purposes.  The seller may have to convince the jury that he did not know and had no reasonable way of knowing.


I bet that such disclaimer is worth less than nothing, if law enforcement decides, based on the amount and number of transactinos, that the seller is in fact doing "commerce" or " professional business or corporate activity", rather than just "private party, personal use, hobbyist exchange".  The buyer is not able or entitled to vouch for that.  Such disclaimer would only show that the seller was aware of the need of registration in order to engage in commercial activity, and of the special needs for interstate and international commerce.


He would also have to comply with whatever KYC/AML requirements come with that license.  

Although his charges mention oly 1 count of unlicensed MTB, that count incldues three items, the third one being transmitting money that was "dirty" and destined for illegal uses.  depending on what that means, simply being licensed may not have been enough.

IIRC, that is explained in the SEC filing posted earler in this thread.  

IIRC, the nswer is "yes", but you'd better check.

EDIT: However, that holds for new shares issued by Greyscale to the high-level brokers.  As I understood, those shares will be tradeable immediately, they only cannot be returned to Greyscale.  So the individual investors who bought shares from brokers will not have to worry about that.  It affects only those individuals who bought directly from SecondMarket in the past

Yes, they must be feeling pretty stupid now.

Speaking of which, are there any news about @FriedCat, the Chinese owner of AMHash/ASICminer who disappeared a few weeks ago?

EDIT: However, the Chinese paid CNY for the coins in 2013, and it is not clear whether the sellers were able to get those CNY out of the country and convert them to dollars.  My estimate is that the Chinese traders and investors must have bought a couple million BTC from the West in 2013, including the coins stolen by Willy from MtGOX clients.  If the average price they paid was 500 $/BTC, that meant 6 billion CNY (1 billion USD) trying to leave the country, in exchange for the (unauthorized) import of that bunch of nothings.  No wonder the PBoC got so upset.

Indeed, the lack of reliable data about the bitcoin economy must be one thing holding back serious investors.

There is only one publicly traded bitcoin company that I know of: DigitalBTC from Australia.  They are the only company whose finances can be examined and trusted, because it has to publish audited financial reports at least once a year.  All the others -- such as Coinbase, Bitpay, Cirle, Blockchain.info, and all the exchanges and miners -- are privately funded, and so they don't have to release any figures (or can release misleading figures, if not outright lies).  

BitPay claims to have over 100'000 merchants, and you say that Coinbase claims 39'000.  Those numbers may well be nominally correct, although there seem to be many merchants that sign up with those companies but do not actually use them because of lack of PoS equipment or untrained cashiers.  Moreover, some of Coinbase's merchants may be former BitPay clients.

But the really important numbers are the volume of e-payments that those companies process, and how much of that is real e-commerce (as opposed to miners paying bills, or other "overhead" traffic.  The companies have refused to reveal those numbers with the excuse that they are "strategic trade secrets" or whatever.  I have seen some evidence that BitPay's processing volume has been nearly constant for most of 2014, and some of it may have been stolen by Coinbase and other new processors.

Well, there is a simple explanation: the price is still largely set by the Chinese day-traders, and they don't care for PayPal, Dell, Coinbase, GBTC, Rakuten, the Bitcoin Bowl, ...  They only care about PBoC and other local stuff. 

Sometimes, some overblown rumors in the West manage to lift the price by 50$ or so.  That happened with the "Microsoft will accept bitcoin" rumor, and the Coinbase  "to the moon" pre-opening drama.  But that is it.

So it is not that "good news are bad for the price", but the price is simply dropping, ignoring those news.

Folks, again, sorry for the above off-topic and incomprehensible post, but this @fonsie guy has been stalking me for months. He seems to be obssessed with my person, I don't know why.  He parodies my signature and even used a photo of myself as avatar for a while.  I wonder if he knows that I am married already?

It would work, I suppose.