But some market participants may certainly try! For example:

When I ordered my mining equipment from the maker, the difficulty factor
was less than 1 billion. now, 5 months later, its 6 Billion and I still have not
received the equipment. Thankfully, i split my order among two MFR's, and the
other guy did deliver recently (after 4 month wait).

As a result, the undelivered equipment has been "devalued" by 84% (1 -(1/6)). For example, a 1000 (gigahash) (GH)
order then, is now about the same as a 166 GH order would have done back then.

Is this huge shipment delay justifiable? I think not. by design? yes, i think so. Here is my rational....

Equipment makers are incentivized to not deliver equipment. How? Why? the longer
they wait, the more the equipment is devalued, and this causes miners to
"wish for " more mining power that has unfortunately been vaporized while they wait.
no doubt, some poor souls have blown their budget

Is there some evidence for the above? Certainly. Some equipment makers try to induce customers
to buy more mining equipment even before the original order is delivered. Believe me folks, when I
say, that is mighty close to what a ponzi scheme structure is all about....

Holding the original order hostage puts the miner at a disadvantage, causes stress,
and ruins originally anticipated mining results.

Thankfully, equipment makers face bankruptcy when the cost of mining exceeds the expected return from mining.
As the difficulty factor rises, more and more hard cost electricity is needed to mine the next bitcoin.
Are we near the parity point yet? Well,

given the current bitcoin price, we certainly are getting close.

So for all you people, new or experienced, i suggest you do like me:

A. Do not order equipment from any mining equipment maker that owes you equipment that is still undelivered.
B. Do not order any equipment from equipment makers that cannot deliver equipment within about 8 weeks of order date.

while equipment makers make excuses why the equipment is unavailable, I suspect
they are using customer equipment that they are withholding in bad faith, to mine the bitcoins
that their customers wanted to mine... in most places, that is called "Fraud".

Possible? Well, I think we have all seen enough criminal activity with Bitcoin to know its quite possible
that it extends into the mining equipment maker arena. You all think Mt. Gox and its problems sits on
an island? I certainly do not...

I do believe Bitcoin can be an excellent system and investment in the long run, if the greedy people don't
kill its reputation forever...

Just my two cents.... you all can do as you please and certainly will, I am sure. I just hate to see sleezy equipment
makers floating on good people's hard earned cash....

I read recently 5460 or so Satoshi are the minimum for transactions to be relayed and mined.
After a bit of testing that seems pretty close.

I would suggest 5460 is too high. 1 x 10 to the minus 6 is much better, 10^ -7 would be
even better. There is without doubt, a way to integrate these near nano
transactions into the flow so no excedrin is needed

people talk about these "dust" transactions just causing headaches, but then
why did Satoshi set the minimum to 10^-8? Was that just stupid on his part?

I guess not. He's just waiting till someone sees what he saw? Maybe.
I see many uses for near nano transactions that would
be very beneficial for bit coin and people too. I also see that 5460 satoshi
is probably about 100X too high.

unfortunately I feel this just falls on deaf ears. But its better to suggest a smart
change than remain silent. What I could also suggest is that Bitcoin should be capable
of processing 1500 billion transaction per day, at a minimum.

We have plenty of currencies in the world. One more currency that only does minimum
transactions around a penny, well…. so what good is that? Bitcoin could distinguish itself
from the others quite well if it wants to.


James

Here is a quote from my post of 12-20-13

"bitcoin has no stable purchasing power. What item to peg its value to?
Of course, you are right, everything tangible fluctuates in value so
clearly Bitcoin cannot be pegged to anything.

By implementing an ability, within the wallet, to buy or sell BTC, current or on
a forward basis, the BTC system could collect very small fees, far far lower
than the fees charged by the exchanges, and hold these fees, in BTC, as reserves,
in the system, in a decentralized manner.

then, BTC has backing. that leads to stability of value. Without backing BTC will
fluctuate wildly every time a reasonable rumor surfaces. As long as that is the
case, BTC will not attract material (e.g.. $Trillions) investment.

the problem remains until we all admit its there and develop a solution.

i'd like to see BTC become a global currency, or even just distributed on 5 billion cell phones, each with
$50 of BTC in them for small payment opportunities. But, lets face it, if 7-11 accepts bit coins you can
be sure they've been sold and converted to real currency before you've walked out the door with your
bottle of water or soda. That is the problem. BTC has no stable purchasing power. No one wants to hold
it. Perhaps this will just change in the future? That's wishful thinking to me."

in a later post, i proposed Bitcoin is not decentralized at all because it relies on centralized exchanges.
I suppose you would agree. Apparently, from what I am seeing, Bitcoin is also centralized more and more
because mining depends on centralized pools. More and more I see this as a weakness, and that decentralization
cannot only lower costs, but it can also lower security risks.


Your project has merit. I haves worked in the software business a long time. Typically, an application should start with
a very low or zero cost. This lets people adopt and experiment, with only their time at risk. Later, as the application matures
and users recognize the application has value, then fees can be added because users will be able to accurately compute
their own ROI even considering a zero cost basis. People are rational. They know nothing good is free, but they appreciate a free
window of time (several years) to explore, experiment and think…just my two cents.

Over 99.99% of the people on this blog do not have access to the facts regarding Mt. Gox. Including you. So all that speculation is based on hot air and is worthless. Even if someone states exactly what happened, no-one here can vouch it (its just a lucky hit) In science, everyone shares the so called facts and results, so speculation about what they mean works because some people already have the experience to know.

Am I Black or White? You have the same chance to determine this as a monkey. Same with people who don't have facts about Mt. Gox.

Please try not to speculate.
Its just a post.

the likelihood its a lie or misinformed is 50/50

the likelihood its the truth or misinformed is 50/50

Truth is perception, in the end. Unless you do
your homework.

I have substantial experience in court rooms and have authorized
millions of dollars of expenditures in various proceedings over
the decades.

Those of you contemplating being involved in a lawsuit should
consider this:

A. If the amount you have lost is less than $10 million, you'll
run an extremely great risk that the lawyer fees will result in you netting
absolutely $zero in return for your efforts, your time and your money.

B. See rule A.

C. Typically the only winners in a lawsuit are the lawyers.

D. Everything can be argued for nearly infinite time frames
when the people arguing can bill someone at $400 per hour.

When i first looked at Bitcoin 6 months ago, it was to determine if it was a system or a scheme.
I decided it was a system. In looking at Mt. Gox, I have an account there, I decided a system
where there were already plenty reports of hacking attempts etc. was not a place to
have an online wallet. So, while Mt. Gox failed, I lost nothing since I stored nothing
there or at any other exchange.

For those of you that did, tough luck. Expensive lesson. Next time, do your homework.

A Mt. Gox BK and any associated lawsuits simply enables the foes of Bitcoin to pour lots of bad publicity into
the media engine, who simply repeat what they hear, in most cases. That's not good for
Bitcoin, and I am sorry to see that.

I hope my wallet is safe. Sadly, I am too inept at this point to be really sure.  I encrypted it
with a long passphrase and stored a backup in two secure places, one a thumb drive. I would
consider a thumb drive the basic equivalent of a hardware wallet, but I am unsure, since I
don't know where the private key is stored or whether its stored securely. SO, I have some
homework to do. If I am lucky, some nice participant here will suggest how things work.
That does not remove my need to do homework. It just changes my to do list to vouch what
that person says, since I do not trust any word of anyone anywhere at anytime except the words
of my family. That's just me, skepticism is a good method to screen out the wackos :-)
You all can do what you please.

In the bigger picture, Mt. Gox is a failure of Bitcoin and its league of developers. You all knew of the
problem and didn't fix it. Now, I hope the developers have more motivation to fix it.

OR perhaps they should not. Perhaps online wallets and centralized exchanges simply are inappropriate
features that should die while Darwin smiles.  That's my contribution here.

Think before you act. The choices made now may reverberate for quite some time. It reminds me of the choice Gates made at MS. He chose
not to follow the existing security model of Unix available at that time for DOS 1.0. That was a bad choice
but obviously he overcame that flaw. Sort of, anyway :-)

someone has proven beyond a shadow of a doubt that bit coin is
capable of being manipulated.

someone would do that who has it in their interests to do that.
certainly many parties would fit that bill.

i agree with the writer who said now is not the time to point fingers.
Fix the present problem. No one will remember it in a month.

But the real problem is 20 million merchants just put Bitcoin on
the back burner for the next year. Not good for Bitcoin at all.

bad press == bad price. bad price == bad investment.

of course, a couple months ago, I suggested Bitcoin should build in the
exchange process into the wallets. Bitcoin touts its "decentralized" nature
but every exchange has an easy bulls-eye on its back for governments to
take aim at. In other words, since Bitcoin's exchanges are centralized,
so therefore is Bitcoin.

Just my two cents. Hope it helps. I would like to see Bitcoin thrive. It can become
the electric car of the monetary system,…. a valuable addition.

I was a CPA for over 10 years working in an International Firm
and an NYSE listed bank. I am also a miner. I've been a corporate
CFO and COO over 20 years since then….

For buying on an exchange, the price you pay for a bit coin is your cost.
the price you sell it at is your proceeds. the difference is your gain or loss.
If you hold it over a year, use schedule D, long term capital gain. Else,
use short term capital gain. This is a very reasonable approach. If you do
this offshore, you can probably do it without being found out, but the US policy
is to tax its citizens no matter where they make income. I don't agree with that
but it is what it is. Proceed as you see fit.

If you mine, its less clear. To me, my cost of mining equals
Cost of mining equipment / estimated coins to be mined = $cost per coin mined.
There are some details, but I will leave those to you to ponder...

sales proceeds are realized when sold. Ordinary income rates would apply.

However, if no sale occurs, no dollars go into your bank account. That implies
no gross income (as defined by the IRS). At the same time, your costs associated
with mining those coins probably should not be deducted before they are sold, instead
capitalized…(e.g. not deducted)  some of you may want to deduct the costs before the proceeds arrive,
but the IRS would probably want to ding you on that… Can't say I'd blame you, but
its not what I would do. on the other hand, if its not a lot of exposure, go for it…see what happens :-)

the interesting side is if you buy and sell bit coin for alt coins or something else.
in this case, there is no US dollar realized as cost or proceeds. Take your own approach on that :-)

Barter transactions (bitcoin for bicycles, etc) -- i Think it only matters if its not a one-off transaction.
The IRS really is not in the business of going after a $1000 here or there… just not enough meat on the bone...

JD

Zynga is a dog. Their announcement, Its just a means for them to hook into the bit coin fever.
That said, it is good news, although bit coin activity from Zynga will not
matter in the long run. They realize there is little risk in relation to the possible marketing
benefit associated with associating their stupid games with the
present fashionable chatter about Bitcoin.

Gaming is not the future of Bitcoin. The future of bit coin should be the buying
and selling of dozens of tankers full of oil or automobiles per year or dozens of Boeing 777's.
But that's not here yet. In fact, there is really no reason to bother with Bitcoin in
multi-billion dollar transaction tranche. So there, Bitcoin is already a niche, a curio in
the shop. Perhaps this will change someday.

However, the Bitcoin can be a tremendous means for smaller transactions which
do represent very material amounts of the world economy. I certainly hope that's
where it goes.

on the other hand, a windfall profit tax of 70% of all Bitcoin revenue put forth by the
US Government would render Bitcoin to a life in the weeds. I hope that does not happen
either, but you all should remember, that is not what JP Morgan or Bank of America
are thinking, and neither are their lobbyists.

mpex.co  - yep I could just go there. Who are they? How long will they exist? why
should I line their pockets? Its a brush off answer on the replier's part, but
the fact remains. Using mpex.co requires I trust them. I'd rather not go down
that road as the BTC is not about trusting some institution.

bitcoin has no stable purchasing power. What item to peg its value to?
Of course, you are right, everything tangible fluctuates in value so
clearly Bitcoin cannot be pegged to anything.

By implementing an ability, within the wallet, to buy or sell BTC, current or on
a forward basis, the BTC system could collect very small fees, far far lower
than the fees charged by the exchanges, and hold these fees, in BTC, as reserves,
in the system, in a decentralized manner.

then, BTC has backing. that leads to stability of value. Without backing BTC will
fluctuate wildly every time a reasonable rumor surfaces. As long as that is the
case, BTC will not attract material (e.g.. $Trillions) investment.

the problem remains until we all admit its there and develop a solution.

i'd like to see BTC become a global currency, or even just distributed on 5 billion cell phones, each with
$50 of BTC in them for small payment opportunities. But, lets face it, if 7-11 accepts bit coins you can
be sure they've been sold and converted to real currency before you've walked out the door with your
bottle of water or soda. That is the problem. BTC has no stable purchasing power. No one wants to hold
it. Perhaps this will just change in the future? That's wishful thinking to me.

Yes, exactly my point. Current currencies, like the dollar, euro, yen, etc. continuously change value.
I have a feeling "We" (the global community) are all pretty tired of that. So I would propose that
Bitcoin should have attributes to protect the value of people's holdings denominated in bit coin


The beauty of bit coin is that it can have whatever attributes we all agree upon. We can
make statements like "I don't like the fact that my favorite currency fluctuates so
much in value and I cannot control that so lets do something in Bitcoin to eliminate that flaw"

With BitCoin, we can decide, if we like, that it has a starting value (the "floor") and that
it has a current value. This would result in Bitcoin layers (layer 1 at $1 a BTC, layer 2 at $2, and so on).

I think we'd all like to see our bit coin wallet show its guaranteed value as well as its current value.

As part of this BIP I would also recommend adding two new transaction types in every wallet. These
would be "Buy" and "Sell". In a full implementation, this would eliminate the need for centralized exchanges
for moving BTC to or from some currency X. As we have seen in China, the fact that BTC exchanges are
centralized actually makes BTC a centralized currency. How so? The People's Bank of China has issued
a ruling stating Chinese banks cannot conduct business in BTC. As a result, BTC is affected negatively by
reducing its liquidity and exchangeability. Therefore, it is currently a myth that BTC is a decentralized currency.
If BTC were truly decentralized, actions by central banks would have no effect on BTC pricing, value, liquidity or exchangeability.


Also as part of this BIP, I'd recommend the BTC software can enable the forward sale of BTC on a decentralized basis.
This would allow merchants who can forecast they will collect X BTC over the next six months, to sell it in the immediate present, thereby hedging out any downside risks. This can be done. There would certainly be people to buy these contracts because they know that Y months down the road they will need to spend X bit coin in some purchase. But I emphasize this all needs to be decentralized else BTC is really just fooling itself by claiming its decentralized when a critical KEY element of BTC (exchanges) can and are regulated by central bankers.

Thats my feeling

    A. Floor value for Bitcoin
    B. Current value for Bitcoin
    C. Buy capability decentralized and inherent in the BTC system
    D. Sell capability decentralized and inherent in the BTC system
    E. C and D on a current and forward basis.

These are not trivial changes but it is not trivial that one day in the future, the US FDIC can issue an edict forcing
all US banks to not allow deposits into US BTC exchanges. The chinese have already done this.

Right now, BTC is a sitting duck. BTC relies up centralized exchanges for money inflows and outflows
that are easily influenced by central bank policies and/or can simply be shut down shortly after
bank sponsored state or federal laws make BTC exchanges illegal.

I apologize for the length of the response! I only hope to see BTC grow and prosper.

How to gain a "large following" if you have no stable purchasing power?

intrinsic values would include:

Bitcoins can not be counterfeited
Bitcoins require no financial intermediaries
Bitcoins can evolve because it is all software
Bitcoins are easily stored and backed up and secured

and more.

No one would sell their home for bit coins unless they are confident
they could repurchase a similar home for the same number
of bit coins several years later. At this point in time, no one can
reliably predict the value of bit coins next week, let alone in a
few years.

Until BTC has trustworthy,stable, purchasing power it will
be of little relevance to the vast majority of people.

As we have all seen, the price of BTC fluctuates like
the wind. Just this past few days, I've seen swings from under
$400 to over $700 per coin. That, my friends, is not trustworthy,
stable purchasing power.

I would be interested in submitting a BIP. The BIP would propose that
if I mine, trade for or buy a bit coin at a moment in time (lets say UTC 12:00:00am on 12-21-xx)
that coin will always have the market value at that time, or more.

This would boost confidence and trust in the bit coin by establishing a floor value
for any coin held. That's the desire of my idea for a BIP. The above is one
possible implementation and I hope some of you will grab hold of this idea and
help me pursue it. Without stable purchasing power, the bit coin is doomed.

James

my initial comment on AMT is that after reviewing 2 months of chatter, I see no-one
has received a product. on that basis, sending money to AMT appears quite a bit
more risky than sending funds to BFL or Cointerra. etc

Just because AMT says they work with Technobit means nothing. If I call
Technobit and they say yes, we work with AMT, this means nothing.

AMT mentioned they received venture funding. From who? If I call the VC
and he says yes, we put $x into them, this means nothing. What matters
is not the pretty website....If I put the VC on the witness stand and ask
if he's put $x into the AMT venture, and he says yes, this means nothing.

Credibility is impossible to establish with words and pretty websites.

I've seen nothing in two+ months of posting except words from AMT. I can't say
they are credible. You all have been warned.

I am located in San Diego CA if anyone want to call.
james danforth
858-217-3121