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Discussion Starter #1
Interesting to hear what has happened to one of the Bitcoin virtual currency exchanges in the news (MtGOX Japan?), where it mysteriously shut down it's website Yesterday, leaving
"investors" unable to get at their virtual currency.

"If you buy bitcoins, you should buy keeping in mind that the value could be zero the day after."

What do the traditional CMF members think of this new "monetary concept", where you could be a virtual millionaire one day, by investing your savings to buy this bit coins and
then a possibly a pauper next day?
 

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Not that new.... Dutch tulip bulbs, Confederate dollars, Pokemon cards... Folks have to keep rediscovering this stuff, I guess.

The real winners with Bitcoin were money launderers, from what I can see.
 

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Who knows? I am in the Buffet camp. I need to understand what I am investing in. For sure the folks first in and out by now have made their money.

Some folks where we live have been buying Iraqi dinars. It is affinity fraud. They have been promised huge returns when the currency gets revalued. So they are buying boxes of the stuff. They do not even know if it is real or counterfeit, let alone if and where they can sell it. I might make interesting wallpaper at some point when it yellows or fades.

I recently read an article that Egypt Pounds are the most recent scam-buy a boxcar load and reap the benefits when the currency is revalued. NOT!
 

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I have a different theory on the origins and purpose of bitcoins.

It is a little tinfoil, I know...........but that is where some digging around has lead me.

The theory behind a bitcoin-like currency was being discussed back in 1996 by the NSA. A white paper was produced that was suspiciously close in detail to the present bitcoin protocol.

http://realcurrencies.wordpress.com/2013/06/21/is-the-national-security-agency-behind-bitcoin/

White paper here...........http://groups.csail.mit.edu/mac/classes/6.805/articles/money/nsamint/nsamint.htm

I believe that Satoshi Nakamoto is a psuedo-name for a group of highly trained black box computer hackers and programmers who worked for the NSA.

The NSA has been trying to track terrorists, drug dealers, gun smugglers and money laundering for decades, often it seemed just one step behind them. Eric Snowden revealed the NSA has far more capability than previously thought, and the willingness to use it.

The criminals seeking anonymity have deployed various ways to transfer funds undetected. The domain name boom in the 90s and early 2000s provided one way.

A person would register a domain name in one country........and someone else in another country would "buy" the domain name using an third party escrow.

The buyer would sent their money to the escrow company to purchase the domain name and the seller would receive the money from the escrow company for the sale of the domain name.

The problem was that the domain names were worthless names..........jacked up in price to silly levels. After awhile people started to take notice of the sales of weak domain names for large amounts of money. Eventually the US government caught on and required all personal information from the escrow company regarding the sales. The sales suddenly stopped and the buyer disappeared.

Back to bitcoin.

Maybe someone at the NSA got the bright idea............instead of chasing them around.......why don't we bring the "bad guys" to us, by implementing a supposed anonymous system they will be attracted to use. They will believe they have complete anonymity, and all their transactions will be traceable if we know their private keys........and we will have a "back door" to the system providing us with all the information.

The NSA released the bitcoin protocol under the name Satoshi Nakomoto........promoted it on hacker forums and off it went.

The criminals just couldn't resist the temptation of moving funds secretly (they thought..........this is just too easy).

It has been highly successful.........given the Silk Road website arrests..............and the arrests that continue to follow.

Lots of information was gained from that one website alone..............and we don't know how much more information the NSA has gathered from other places.

The problem is............it was too successful.

Main stream people got caught up in it and invested money in it............and the NSA couldn't admit their involvement.

So, Satoshi Nakamoto keeps 1,000,000 bitcoins for himself, several million more among his closest allies, Silk Road gets hacked and 140,000 bitcoins are seized, Mt. Gox gets hacked and 740,000 bitcoins are lost...........and on and on........sweeping many of the bitcoins back into the nest from whence they came.

Eventually enough money will be lost, the public will lose trust in bitcoin, and people will move on to something else.

The theory isn't too far from a well publicized sting set up a few years ago. A bunch of gangsters were hiding out and the police wanted to round them up without getting involved in gun battles in neighborhoods, so they sent all the gangsters a letter that said they had won a big prize and had to appear at a certain place at a certain time to claim it. When the gangsters showed up..........they were arrested.

If my theory is true...............well played NSA............well played.
 

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Satoshi Nakamoto..........kind of like Kaiser Soze (The Usual Suspects).

The character Keyser Soze is a rarely seen, nearly mythical crime kingpin who is involved in drugs, murder, and possibly international terrorism.

Maybe the NSA group were Kevin Spacey fans.

In any event, this bitcoin saga could make a heck of a movie................
 

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Discussion Starter #8 (Edited)
I have a different theory on the origins and purpose of bitcoins.
If my theory is true...............well played NSA............well played.
Well explained, even if it may be a theory. Something is definitely not right with this "money laundering scheme". It's like dealing in an underground economy with cash only, nothing that can be
traced or taxed as the case may be. Just like those gold mining scams in South America, but a bit more subtle, because unsuspecting ordinary "investors", thinking
that if they get in on the front end of this thing, they can become millionaires because the bitcoin value keeps going up and up.
The real problem here is that they want real currency to buy these things..and if theyfall into the trap..sooner or later they will lose all the real money they "invested" buying into this scheme.

Once reality sinks in, people are going to suffer, not only because of their losses but also because of the dream. And there is a far greater issue here: Bitcoin’s failure will provide regulators with the ideal excuse to clamp down on free market units. The whole thing is starting to look so blatant, it’s probably not unfair to suggest this is just another problem-reaction-solution operation. Considering its shady designer, CIA involvement, recent news that the Government is already looking to get it under control and what is at stake, Bitcoin has become a major liability to free market monetary reform.
 

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It's only one Bitcoin exchange that has shut down. Re there are a couple more ...will be interesting to see how long they will last before the whole thing collapses.
 

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Mt.Gox was one more on a growing list of defunct exchanges.

Today, another one announced they are unable to trade in USD and will only trade in Euros, and a bitcoin trading platform announced they are very sorry but they can't reimburse losses to the traders when their software collapsed. They said the losses were too staggering for the company to compensate the investors.

It is all Mickey Mouse today.........and Mt.Gox changing ownership to other Mickey Mouse owners won't make any difference. New exchanges set up by others with no business experience, knowledge or money will also be Mickey Mouse operations.

To become credible.........bitcoin needs a "real" company to open an exchange...........a big financial institution for example.

But that would mean government oversight and regulation............and there wouldn't be anonymous transactions anymore.

Bitcoin enthusiasts are opposed to the very things they need to survive.

Unknown persons running a "company" from a computer in a small room in Bulgaria............just wont do it.
 

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I have a different theory on the origins and purpose of bitcoins ...

The theory isn't too far from a well publicized sting set up a few years ago. A bunch of gangsters were hiding out and the police wanted to round them up without getting involved in gun battles in neighborhoods, so they sent all the gangsters a letter that said they had won a big prize and had to appear at a certain place at a certain time to claim it. When the gangsters showed up..........they were arrested.

sags i was reading your post with interest until i came to the last paragraph lol.

somehow it's difficult to believe the police could send letters to mobsters inviting em to come claim a prize at a certain place at a certain time & just like that the mob would be dumb enough to show :biggrin:
 

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^ As I recall, they weren't "Gangsters", per se, but rather a bunch of individual petty crooks with outstanding warrants......but yes, they were dumb enough to fall for it.
 

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sags i was reading your post with interest until i came to the last paragraph lol.

somehow it's difficult to believe the police could send letters to mobsters inviting em to come claim a prize at a certain place at a certain time & just like that the mob would be dumb enough to show :biggrin:
Oh, it does happen. Maybe not mobsters, but dumb criminals with outstanding warrants:
http://www.youtube.com/watch?v=TiLX4bkKguA
 

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That's hilarious.........people are "registering" and then cheering as they go into the room for their "prize".

Nice to see the cops have a sense of humor too............

Maybe my memory fails me, but the one I seem to remember involved some street gang members and a free vacation trip or something.

I could be wrong and mixing up different events though.
 

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i guess it's different in montreal, apparently at the big mobster funerals lots of plainclothes detectives sit around the square outside that huge cathedral in Little Italy in unmarked cars, working their binoculars discreetly.

they are so going to l.o.v.e. google glass. Meanwhile the newspapers publish pictures of their furtive viewing activity.

but someone told me that spying on the funeral attendees is meaningless work on the part of the police because the real mafia leaders won't come out of hiding & they absolutely never go to the funerals ...
 

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Discussion Starter #17 (Edited)
Bitcoin..virtual money in a virtual exchange (no bricks and mortar banks that you can go to ... is ( or maybe I should say..WAS?) an attempt at a universal free market economy without any government regulation or backing.
No gov't is going to back bitcoin , because they all have their own form of currency traded on world exchanges.
So this monetary concept, in a way is an underground economy that is theperfect channel for money laundering and criminal activity as well.
What made it so attractive to the "investors" out there..is the high rate of valuation based on trading of these things...(like the price of gold and silver...

..some of us may still remember what happened to the price of gold and silver in the 80s when the prices soared for both during the "silver bullion boom", the price of silver that was trading normally at $6 a troy ounce increased in value 712% to nearly$50 an ounce towards the end of the boom. Speculators expecting to buy up as much as they could while prices were "still low", then sell at a later point rushed out, (some borrowing or using their life savings), to buy gold and silver bullion thinking that the bubble would continue..but....then disaster struck!

The Hunt Bros buying on leverage(to corner the market) instigated the collapse of the silver market and caused panic as prices of an ounce of silver
dropped in 4 days from 48.70 down to about $5 or $6 dollars before it finally stabilized. The Hunt Bros eventually went bankrupt and speculators that bought towards the tail end..lost their investments.

Bitcoin is just another modern version of a highly speculative attempt for those that came in early to reap their profits and bow out. The fact that you need real money to
buy bitcoins which then are valued in real money says it all. I saw a video clip of the first bitcoin "ATM" installed somewhere in Toronto and the camera shows somebody feeding
in real money into it.

How Bitcoin works:
http://www.youtube.com/watch?v=Lx9zgZCMqXE
 

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Despite it all............bitcoins are currently priced at $580 on the exchanges still open.

Some would say that shows the strength of the bitcoin protocol and movement.

Others would say the price is manipulated internally by the exchanges by "selling" from one wallet to another, creating the illusion of high prices and higher volumes.......to show strength and entice new money.

In time..........we will see which side is right.
 

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Discussion Starter #19 (Edited)
Bitcoin is CryptoCurrency and highly complex based on algorithms and transaction ordering..scary! One large security hole is the order of transactions (transaction security) going through the network.
If the transaction order is not sequential, one transaction can arrive before the correct one..and that could lead to fraud, if the ones that started this concept decide to "skim" from the transaction.
Fraudster "Alice" (does a double spend attack) sends a transaction to "Bob", who waits for confirmation and then ships the product to "Alice". If "Alice can replace the longer chain of transactions
she sent to Bob to someone else ..his bitcoin "money" will effectively get erased..but the math problems and hash tags on based on digital signatures and transactions.

"About 21 million coins will be created..Miners will get transaction fees;..insulation from gov't meddling...hopefully cheaper to send money over credit card fees"..many people join pools called "mining pools"...
 
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