Aug 17 Bitcoin = $108.25

[imoldernu]

For interest only:
While the bitcoin doesn't evoke much interest here, it seems worthwhile to have some basic understanding of the concept as there are currently 1.2 billion bitcoins in circulation.
This article is an overview.Decoding Bitcoin - Zachary Warmbrodt - POLITICO.com

Wikipedia has a more involved explanation as well as a history and some "expert" financial views of the concept/investment.
The coming days and weeks are expected to see a number of exploratory court cases that may determine the future (which is finite in the year 2140).

Brito, who next week will publish a Bitcoin primer for policymakers, estimates there are hundreds of thousands of people using the cryptocurrency and that they fall into three main groups: tech early adopters, entrepreneurs, venture capitalists and speculators, and politically motivated types who like the fact it is not controlled by a government.

“Like the Internet of the 1980s, the ecosystem is both young and highly technical,”said Charles Hoskinson, Director of the Bitcoin Education Project. “The users currently are mostly from Western European and North American countries and under 40. Most have college degrees or some university education. And most are fairly comfortable with using computers and the Internet. Over time we expect to see enormous growth in countries with unstable economies and poor financial services sectors such as Zimbabwe.”

The relative anonymity of the tranactions may have tax implications.

 

[RonBoyd]

Man buys $25 of Bitcoins in 2009, now worth $848,000 - AfterDawn

 

[calmloki]

According to MakeUseOf bitcoins are also used as ransom:

"CryptoLocker is a piece of malware targeting computers running the Microsoft Windows operating system. It is typically spread as an email attachment, often purporting to be from a legitimate source (including Intuit and Companies House). Some say it is also being spread through the ZeuS botnet.
Once installed on your computer, it systematically encrypts all documents that are stored on your local computer, as well as ones that are stored on mapped network drives and mounted removable storage.

The encryption used is strong, 2048 bit RSA, with the decryption key for your files being stored on a remote server. The odds of you being able to break this encryption is almost nonexistent. If you want to get your files back, CryptoLocker asks for you to fork over some cash; either two bitcoins (At the time of writing, worth almost USD $380) or $300 in either MonkeyPak or Ukash prepaid cards. If you donâ??t pay within three days, the decryption key is deleted and you lose access to your files forever.
I spoke to popular security expert and blogger Javvad Malik; this is what he had to say about CryptoLocker."

And on Silk Road as the exchange for drugs by mail.

 

[ERhoosier]

US gov't appears to be cracking down on bitcoin as at least a facilitator of criminal enterprise if not a growing economic threat as (potentially illegal) shadow currency. IMHO bitcoin holders face a real risk of their entire holdings becoming as worthless as a counterfeit $3 bill.

Silk Road busted by Feds; Ross Ulbricht arrested: Bad news for Tor and Bitcoin? | Computerworld Blogs

Federal prosecutors accuse a digital currency of money laundering; What does it mean for Bitcoin? - MarketWatch.com

Bitcoin account tied to Mt. Gox exchange seized by Department of Homeland Security: report - The Tell - MarketWatch

 

[sengsational]

Bitcoin is just another fiat currency, just like the US dollar. Both only have value because we expect that other people will continue to value it.

If you read the incident reports closely, it's not bitcoin that is being targeted, but rather the places where bitcoin is exchanged in or out. I don't remember which US government department reported on bitcoin, but they said it was perfectly legal. What people do with bitcoin can obviosly be illegal, though.

 

[grumpy]

My son, the techie, made a modest investment in bitcoins and urged me to do the same. I explained to him that I never invest in things I don't understand. He already has a substantial (paper) gain on his bitcoins and has decided to invest in the hardware needed to "mine" bitcoins.

I don't see any problem with him making a relatively small investment in something that interests him, that he understands, and which has the potential for a quite large profit. I'll stick with dividend paying stocks.

 

[Running_Man]

what is amazing is the bitcoin has nearly doubled in value since this thread was started

 

[ERhoosier]

Bitcoin is just another fiat currency, just like the US dollar. Both only have value because we expect that other people will continue to value it.

If you read the incident reports closely, it's not bitcoin that is being targeted, but rather the places where bitcoin is exchanged in or out. I don't remember which US government department reported on bitcoin, but they said it was perfectly legal. What people do with bitcoin can obviosly be illegal, though.

Basically agree, however the status of any non-securitized 'virtual currency' remains uncertain at best. IMHO bitcoin's lack of backing by any central banking authority, along with increasing actions of various gov'ts to control it (even potentially outlaw it), will eventually lead to people loose confidence in it.

From what I read, US Govt (FinCEN) simply chose to apply money laundering rules/reg's ("Money Servicing Business" status) to bitcoin transactions.
Bitcoin Virtual Cash Gets Money-Laundering Rule - WSJ.com

Reading the actual US Gov't (FinCEN) position most often quoted (link below), the document clearly states its opinion only relates to regulation under the Banking Secrecy Act and not about how vitrual currency activities "comport with other federal or state statutes, rules, regulations, or orders". FinCEN stated that, for purposes of BSA, "virtual currencies" (like bitcoin) presently do not "have all the attributes of real currency". However FinCEN also notes that "convertible virtual currencies" may serve as a "substitute for real currency", which certainly does not appear to exclude a future revisit of this issue.

http://fincen.gov/statutes_regs/guidance/pdf/FIN-2013-G001.pdf

 

[sengsational]

IMHO bitcoin's lack of backing by any central banking authority, along with increasing actions of various gov'ts to control it (even potentially outlaw it), will eventually lead to people loose confidence in it.

Confidence is what it's all about. Because of the way it works (no centralized anything), there's no easy way for a government to attack it except for the conversion points to real currency, goods, or services. Governments can clamp down on those, but apparently there are ATM's that spit out local currency in trade of bitcoin. Call me paranoid, but I think that at least some of the instability in bitcoin price came at the hand of governments that don't like the idea of not being in control of such things. I'm not really 'for' or 'against' it, I just think it's cool.

 

[samclem]

Bitcoin is just another fiat currency, just like the US dollar. Both only have value because we expect that other people will continue to value it.

Just like gold, which also has a very low intrinsic value.

 

[Chuckanut]

Anybody interested in BitCoin may also be interested in my collection of little bean bag dolls. It is predicted to quadruple in value, though it hasn't done it yet.