re: Goxpocalypse Part Deux

Assuming you're correct about "Satoshi" being a disciple, it proves their theories don't work in the real world of international economics.

It does no such thing, just because something doesn't work doesn't mean it can't work.

And the bitcoin economy is still in its infancy, it will take time to develop as has been said ad nauseam

Bitcoin is a currency, I can buy things with it right now.

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Bitcoin is a currency, I can buy things with it right now.

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I don't have hard numbers, but it seems like more bitcoins change hands for investment/speculative purposes than they do for the purchase of goods and services. I could be wrong but that's what it seems like.

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but it seems like more bitcoins change hands for investment/speculative purposes than they do for the purchase of goods and services.

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I've put a lot of time into trying to determine how much btc has been used as a currency. I have not been able to find any consolidated numbers but I've seen estimates for the two largest "merchants" who accept btc as payment, Silk Road and another one whose name escapes me right now. Those two merchants were identified as being the two largest btc merchants by a couple of articles I was able to find via Google.

From what I could find, those two merchants had combined btc sales between $15 million and $25 million in 2012. The numbers were squishy and I had to go to several articles which tried to guess their sales. Silk Road's sales are especially difficult to analyze because much of their business is from selling illegal drugs.

So, the two largest merchants had total combined annual sales last year less than that of a typical Wal-Mart Super Store.

And before anyone assumes their btc sales grew and are growing annually, it's not necessarily true. One publication said merchant sales actually declined in 2011 from 2010 because btc had one of their more dramatic crashes in 2011 which discouraged merchants from accepting btc for a significant portion of the year.

We will have to see how the last week's 75% decline in btc value will affect merchants' desire to accept btc going forward.

So, comparing the sales estimates of those two merchants to just today's dollar equivalent exchange volume of MtGox, $33 million as of now, and you are correct: bitcoin's use as a currency is nil compared to its trading volume as a commodity/investment.

ETA: I just remembered the other business reported to be the second largest btc merchant. It is an online gambling site called satoshidice.com.

I Tried Hacking Bitcoin And I Failed

The talking heads just said a discussion on bitcoin is coming up on CNBC.

ETA: A synopsis of what they said on CNBC about btc.

1- spoke to a bar owner in Manhattan who accepts btc. He said he advertises it as a way for persons who don't want anyone to know they went out drinking to be able to go to his bar and it remain a secret. hinted at persons having affairs like it. (I kept waiting for the reporter to ask couldn't the customer accomplish the same thing just by using cash, but she didn't. )

2- talked about the volatility over the past week. explained that btc has lost over 70% of its value from its high this week. referenced a business traveler who planned on using btc to pay for his trip and the drop in value left him short of funds to pay.

3- briefly covered the history of btc and who the concept appeals to, especially illegal drug peddlers and porn aficionados.

4- didn't mention wiki or josh......

Interesting. Thanks for the link. I'll follow them to see if they develop.

Also interesting is this quote from your link:

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Due to the ever-increasing value of bitcoins exchanges, online wallets, and other sites that traffic in the cryptocurrency have found themselves in the sights of highly sophisticated hackers looking to steal their wallets. As a newcomer on the scene, Coinsetter would also be putting itself and its customers in that crosshairs.

In the past few months hackers have made ever increasingly guileless maneuvers to capture bitcoins including a particularly daring DNS-hijack attack against BitInstant that netted ?999 BTC. Later in March, MtGox and Dowalla were hit by DDoS attacks with the intent to help hackers manipulate the valuable currency.

“Coinsetter will be a huge target for hackers,” says Lukasiewicz, agreeing with this sentiment and the dangers posed to Bitcoin exchanges.

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I'm pretty sure the business traveler was a more interesting story than Wiki or Josh, and their combined 1.3 bitcoins, for the CNBC audience.

Josh has said he bought a whole bitcoin last week for $116 so you're saying wiki only has a fraction of a btc? I'd find that hard to believe. Has he posted that?