Topic: Contribute to Bitcoin Confidence - page 2. (Read 20396 times)

Side note: Liberty Reserve is a scam. They are fractional reserve lending on a fractional reserve currency.

Lol! I find a lot of this laughable. (All in good taste, guys.)

If you want true anonymity on bitcoin, generate the coins yourself and spend them on digital goods (giving up shipping details would be counter-productive). If you don't have the CPU power, rent or buy more CPUs. When all of the coins are generated, buy coins from one of your friends in person with cash. Mow their lawn for bitcoins. Whatever.

The ideal way would be to have exchangers in jurisdictions where they could easily accept cash in and out of the postal system. The reasoning for this is: no fees (besides a stamp), no banks to deal with, no 3rd parties such as paypal, it's anonymous, they can't claim 'commerce', OR subject matter jurisdiction over you. The value from the received fiat could be re-patrioted by mailing it back out to bitcoin users, purchases of goods in foreign markets that are sold online again for bitcoins/cash in a different currency/paypal, etc. (Really depends on what you are trying to achieve).

Courage always beats fear. Hands down. That said, exchangers need to be courageous. They need to know the law. They need to understand jurisdiction and commercial law (possibly property law and extradition laws as well) inside-out and backwards. If they don't, they are doomed to fail. I am talking from experience here.

If any of you think for a second that you can simply deal paypal/moneybookers/etc for bitcoins and not attract attention from the law (or those who provide the money transmitting services including banks) -- you are MISTAKEN. You may be able to run it for a while without attention, but it will happen eventually. (Again, this comes from experience.)

They try all sorts of underhanded tactics to defend the banking system. They'll demand that you need a license to be a money transmitter. They'll demand that you need a permit to operate within a particular city. They'll claim that you accepted cash proceeds from a crime and try you with criminal charges.

I've seen and heard it all.

It all starts with knowing the law and being courageous.

I wish you all the best.

There is a large movement in the United States to end the federal reserve. I assure you that there are many many thousands of people who are willing to put up with more than a little inconvenience and risk if it's detrimental to the Federal Reserve.

PayPal has to be used for my personal exchange service. That has nothing to do with bitcoin. You or anyone else is more than welcome to run an exchange service without PayPal. In fact I've laid out exactly how to do it and have even given you permission to use my text as a template for your own.

Money laundering is only an issue if you knowingly accept or spend money which was obtained criminally. Cash can also be used for money laundering, but as long as you are not participating in criminal activity, there is no reason to fear using cash or bitcoins.

You don't have to non-anonymously buy or sell bitcoins. You can anonymously generate bitcoins and your can anonymously buy and sell bitcoins. If you want an anonymous exchange service, START ONE!!!

The base value of bitcoins is how much it costs to generate them. But that doesn't mean that it is profitless. You might be able to generate 500 bitcoins per day today but if in two months you can only generate 50 bitcoins per day then you have made a killer profit. Bitcoins are very cheap right now and the user base IS growing. The value will continue to increase because people have a genuine interest in bitcoins.

Bitcoins for the sake of investment is good enough by itself. That is essentially all that has fueled the current growth. And there is growth. But to add to that, the next version of Bitcoin is most likely going to have a command line interface and hopefully also a web interface which will make it much easier to use for automatic transactions and transactions from mobile phones.

Bitcoins are infinitely more anonymous than any other digital currency on the market. You can obtain and spend bitcoins completely anonymously. Just because I use bitcoins non-anonymously does not mean bitcoins are not anonymous. Bitcoins without the SOCKS proxy are for all practical purposes completely anonymous. Absolutely no one will be able to correlate your transactions with your IP address. Bitcoins with the SOCKS proxy over Tor is LITERALLY completely anonymous. No one can even begin to suspect you if your IP address never shows up in the swarm.

I repeat, bitcoins are in no way shape or form at all related to PayPal. One person who is investing a big $0.90 per day happens to use PayPal. That has absolutely nothing to do with bitcoin. Go ahead and create an anonymous exchange service and invest $1.80 per day and your exchange service will have twice the capital and thus twice the influence as mine. Really, please do! That's what my first post is all about. I really want you to run an exchange service. It doesn't cost much. All you have to invest is whatever is an inconsequential amount for you. Feel free to just invest $0.25 per day.

Anyways, I'm considering Liberty Reserve as one option for the exchange service I'm building. Credit card processing companies don't seem too eager to deal with an e-currency exchanger.

And btw, the existing exchange services aren't run by Satoshi 

Yes, the exchange of money from your bank account for Bitcoins will not be anonymous as long as your bank account isn't. That goes with any digital currency. The idea is to make Bitcoin a commonly accepted currency so that you can use them in many places instead of always needing to convert them to euros or dollars.

Noone, or very few people, would trade their convenience and/or risk their money for these ideological reasons.

There's the paypal (or whatever you'll be using to move the money in and out) transaction fee. Paypal must also approve the transaction. If bitcoin started getting known and was used by a lot of people, paypal can and will cause Satoshi legal headaches. He will not be left alone; governments don't like this sort of activity. Paypal (along with moneybookers etc) will be more than happy to provide the government with transaction logs which will end up with Satoshi or anyone utilizing their services in trouble. I can imagine the headlines now:
Inventor of a new money laundering technique used in fraud; purchasing child porn; and funding terrorism arrested.
Thanks to the cooperation of paypal with the FBI, the founders of "Bitcoin" have been brought to justice. Bitcoin is a new money laundering technique which was used by criminals to... etc

Under the current system, with very few brokers who are also using non-anonymous "converters" (methods to convert BTC to cash & vice-versa), transactions are practically known: If I buy $150 worth of BTC from Satoshi today and tommorow someone sells $147 worth, paypal will know (if they want) that I was sending $147 to that person. Granted, technically they can't "prove" it, but they couldn't also prove Al-Capone was the Mafia's head; that didn't stop them from getting him because they knew.

It also costs electricity. Sooner or later it will hit the equilibrium so that it's virtually profitless.

That might make some people stash bitcoin, but not use it in transactions. Not good enough.

And we are trying to make the experiment successful here . This is impossible without anonymity.

Especially those type of people will not be very happy using BTC if the only way to put and pull money from it was paypal!

Here's a partial answer from a discussion on my website.

I think we should direct our thinking towards *why* would consumers and producers want to use bitcoin in the first place. Currently, for example, almost everyone accepts paypal, while almost noone accepts bitcoin. How would you get a paypal user, or a user not subscribed to any system yet, to prefer bitcoin?

As suggested before, Satoshi needs to focus on sudo-anonymous services for transactions rather than paypal. I argue that >95% of bitcoin users will be only using it because it's private and non-traceable. Once one can exchange BTC for these services (eg. eGold/LibertyReserve etc) then it will become practical to use BTC. This way, we will have someone offering a service which he would like to stay anonymous to third parties when providing, and on the other side someone willing to buy this service and would like to stay anonymous to third parties as well. The solution? Bitcoin of course!

But under the current system, money only goes in-and-out through nonprivate services (paypal, moneybookers, paypay, etc). And even worse: Only 1 or 2 exchangers exist, making any money going in and out of the system easily monitored (I tackled this in my suggestion thread also). So why would anyone bother to pay with, or accept bitcoin under these conditions?

A currency is only as strong as people's confidence in that currency. I don't have enough funds to create the same level of confidence as a government which can draw funds from millions of people. But if many people unite together, we can create confidence in the bitcoin currency.

My theory is that if a dozen or more different people each run a personal currency exchange and invest an inconsequential amount of another currency to their available balance each day while while saving the same value worth of bitcoins, then two important things will happen.

First, consumers and merchants will have enough confidence to use the currency because there will always be sufficient funds available.

Second, exchangers will have more confidence because each exchanger will have the same value worth of bitcoins saved as he has invested and the other exchangers will collectively have enough funds available in other currencies to recoup his investment.

You are welcome to use my exchange service as a template and customize it as little or as much as you'd like. I use a Google docs spreadsheet to keep track of my exchange rate. The columns that I use are essentially A-Date, B-Daily Number of Bitcoins Generated, C-Daily Cost, D-Exchange Rate =AVERAGE(B#:B#)/AVERAGE(C#:C#) where # is the first and last rows, E-Reverse Exchange Rate =50/D# where # is the first row.