re: Bitcoin Casinos Release 2012 Earnings

quote:

---

It's on his hard drive. It isn't currency until he cashes it in.

---

I'm sure a judge could persuade him to make it into currency.

Tangible goods are placed for sheriff's sale. Currency is garnished (seized). I'm just wondering out loud here.

quote:

---

Understand. There's no laws or regulations concerning Bitcoins currently. That's why they are so attractive to the online gambling industry. The argument is that you're gambling with play money.

---

I see the attraction there. The ban on internet gambling is kind of laughable. I understand the US gov't wasn't getting their cut, but I can't imagine the online casinos would shy away from working with the gov't to stay legal.

Land casino lobbies are > *.

quote:

---

The issue is proving the assets are "controlled" by the person in question.

Unless the person freely admits the control of $5k of bitcoins, how will the government know? Can they prove that person A has control of $5k in bitcoins? It would be an extremely difficult task to do so.

And as I stated earlier, anonymity is possible if a person chooses to take the steps required.


Remember, there are no "bitcoin accounts." There is no need for personal information to be used when controlling bitcoins. Even if you can be identified at the point of exchange, there is nothing to prevent a person from sending those bitcoins to other addresses they control. That can make financial forensics very difficult.

---

Very interesting set of issues bitcoins present from a legal standpoint. I don't know that I'd want to base any contracts off of bitcoin payment.

quote:

---

So, you don't even really need to trust the gambling sites that much except with what you are planning to gamble with that day.

---

Because gambling sites don't ever cheat, right?

The beauty-or pros-of Bitcoin are accompanied by spectacular risks-or cons-themselves. If you get your hard-drive fried and are in a foreign country where they drop the firewall, your precious bitcoins are not accessible and in the here and now that you'd be in at that moment, they're absolutely useless.

They can't be used in any real sense because they can't be controlled. They are the ultimate double-edged sword.

Their usefulness is derived from their uselessness, and that's what will keep them fenced in on the periphery for a long, long time to come.

quote:

---

Bitcoin is a decentralized peer-to-peer digital currency.

There will only ever be 21 million bitcoins mined. A little over half of them have already been mined.

The inflation rate is cut in half every 4 years until it reaches zero.

There are no bitcoin "accounts." Bitcoin is basically just a large transaction ledger that everyone has a copy of. Your total bitcoins are calculated from that transactions ledger.

Bitcoins utilize public key cryptography. Bitcoin uses the same cryptography as banks. If you are concerned about bitcoin security, then you should also be concerned with your banks security.

Bitcoin addresses can be generated with ease. No personal information is required.

Bitcoin value is based on the basic concept of supply and demand.

Bitcoins cannot be seized or frozen by governments.

Bitcoin transactions take place with extreme quickness.

Bitcoin transaction fees are currently zero or near zero. And will likely become fractions of a US penny as time goes on.

Bitcoin transactions can be sent anywhere in the world with extreme ease.

Bitcoin has the potential to be used anonymous if the user chooses.

---

You must know some fricking brilliant 5 year olds.


Another question:

-The whole 'finite amount will ever be made' kind of blows my mind. I'm trying to compare bitcoins to dollars in my head and that just doesn't even sound plausible. Let's say you have some bitcoins and buy something and now you're out. Are you just forever out of bitcoins unless you sell something, since no more will be made?

quote:

---

The whole 'finite amount will ever be made' kind of blows my mind.

---

My bad. An important part that I failed to mention is that bitcoins are infinitely divisible. Right now, the protocol is set to 8 decimals, but it can be easily extended by the community if necessary.

Here's the answer from the bitcoin Myths page:

quote:

---

21 million coins isn't enough; doesn't scale
One Bitcoin is divisible down to eight decimal places. There are really 2,099,999,997,690,000 (just over 2 quadrillion) maximum possible atomic units in the bitcoin design. The value of "1 BTC" represents 100,000,000 of these. In other words, each is divisible by up to 10^8. As the value of the unit of 1 BTC grows too large to be useful for day to day transactions, people can start dealing in smaller units, such as milli-bitcoins (mBTC) or micro-bitcoins (µBTC).

---

quote:

---

Let's say you have some bitcoins and buy something and now you're out. Are you just forever out of bitcoins unless you sell something, since no more will be made?

---

Well, it's just all about exchange of value. You could sell something to earn more bitcoins, or provide a service. Or you could just go to one of the exchanges to trade fiat currency for bitcoin. The 21 million limitation is there to ensure that the currency is deflationary in nature.

Now, I acknowledge that there are a lot of smart people out there that will say a deflationary currency will fail. I guess we'll just have to wait and see.


The thing is though, even if bitcoin fails, the "digital currency" cat is out of the bag. Bitcoin may fail, but something else will just learn from its mistakes and take its place. There is already a few other forms of digital currency out there, most notably Litecoin, but Bitcoin is the king right now.

Actually a quick search shows that Bitcoins potential for money laundering and terrorist finance is already on the governments radar.

FBI Report


Sorry, I blame my question on my day job.

I'll answer both your and mstant's question tomorrow.

quote:

---

Exactly how do you 'mine' for a digitized currency

---

Miners use expensive hardware (currently GPU's/FPGA's, soon to be ASIC's) and special software to essentially crack codes. This process is very electricity intensive and requires a lot of energy and technical skill. It is not cheap to do.

from the FAQ:

quote:

---

How are new bitcoins created?
New bitcoins are generated by the network through the process of "mining". In a process that is similar to a continuous raffle draw, mining nodes on the network are awarded bitcoins each time they find the solution to a certain mathematical problem (and thereby create a new block). Creating a block is a proof of work with a difficulty that varies with the overall strength of the network. The reward for solving a block is automatically adjusted so that in roughly the first four years of operation of the Bitcoin network, 10,500,000 BTC will be created. This amount is halved each four years, so it will be 5,250,000 over years 4-8, 2,625,000 over years 8-12, and so on. Thus the total number of bitcoins in existence will not exceed 21,000,000. See Controlled Currency Supply. Blocks are mined every 10 minutes, on average and for the first four years (210,000 blocks) each block includes 50 new bitcoins. As the amount of processing power directed at mining changes, the difficulty of creating new bitcoins changes. This difficulty factor is calculated every 2016 blocks and is based upon the time taken to generate the previous 2016 blocks. See Mining.

---

https://en.bitcoin.it/wiki/Mining

quote:

---

how was it determined/decided/discovered that only 21,000,000 will ever be 'mined'

---

That number was chosen by the original creator(s). I don't know why. It is a limitation that is coded into the protocol. It can't be changed.

quote:

---

and that currently a little over 50% of the 21,000,000 have been 'mined'?

---

Blocks are created every 10 minutes. After 210,000 blocks, the inflation rate cuts in half. That happens about approximately every four years. Bitcoin started in 2009. In late 2012, the first "halving" day occurred. For the first four years, every ten minutes, 50 new bitcoins were created. Now, it's 25.

The first 4 years resulted in a creation of 10,500,000 bitcoins.

Inflation rate graph:

quote:

---

Also, who determined or calculated the rates of inflation of the bit coin?

---

That was written into the protocol by the creator(s).

quote:

---

i'm going to make sure i add bitcoins to my judgment debtor rules now

---

"But your honor, I don't have any bitcoins."