I think this is right, people thought about "wait, maybe my money isn't safe in a bank, this could happen here next!"

It's still a big market, and only a small percentage of it. Bitcoin has the biggest advantages in transactions from a long distance that cannot be purchased with traditional means. Gambling is another big potential.

The payment processor business is almost entirely a different way of cashing out and avoiding exchanges. Think about it this way. You invested a small amount of money getting Bitcoins very early on. Maybe you mined, maybe you bought a few when they were super cheap. There are a decent number of people who have a reasonable amount of holdings from when the price was <$10. Many of these people are not rich by any means, but all of a sudden have a huge portion of their net worth tied up in Bitcoins. They need (or want) to buy something. Rather than cashing out Bitcoins, then buying, just buy direct with Bitcoins! Plus most of these enthusiasts are excited to just use them for something. The price went so high they were fabulously wealthy, so it only made sense to divest some of their holdings for any major purchases they are making. I don't have the numbers, but it has to be a large portion of the merchants are simply taking the cash immediately (which I presume Bitpay will just sell on the open market). So it's a useful way to reach customers with zero risk and get attention. But it's not really much different than someone selling on Mt. Gox first, then buying with a credit card. It's not increasing demand for the coins, but rather putting more of them on the market.

Silk Road is a bit different in that you have people who *need* to buy Bitcoins to participate. Even if they buy, do the transaction, then the merchant sells, you have a time period where they are being held, which will decrease velocity and raise the value.

Gambling will be a much bigger effect because you will have people cashing in and out much less. The amount of profits made from gambling is much less than the amounts gambling sites keep "stored" away on their sites. This effectively makes Bitcoins more scarce and raises the price. For example, someone depositing $1000 in BTC on a poker site will raise the value of BTC much, much more than someone buying $1000 worth of drugs on Silk Road.

Obviously the community has a big interest in getting regular retailers to take Bitcoins, as it would allow it to be harder to present it as "only for drugs". But the market for "get some bitcoins to buy stuff" really is limited to countries or people who do not have access to credit cards. You will see some smaller merchants accept it as payment as a way to lower fees and possibly order a discount, but I doubt this would be significant enough to have people acquire bitcoins just to spend them to save 1-2%.

Famed security researched Dan Kaminsky with a new article on the security of Bitcoin code:

http://www.businessinsider.com/dan-k...bitcoin-2013-4

The actual article title "I tried to hack BitCoin and failed" is amusing next to the link URL.

Pretty incredible seeing 415,000 BTC volume in last 24 hrs on Mt.Gox. I'm looking forward to this thread getting back to normal soon.

better version

http://www.presstokill.com/coins/?mode=cosby

what's the maximum jail time you can get for stealing money? say btc becomes widely used. some bank employee, while facilitating a $10m transfer, decides to just ninja the money. ok, so he goes to jail, but his family will be able to live high off the money and it'll be pretty much impossible to prove that the money they're spending came from the theft, much less get it back.

Well if they can't prove the money they are spending is the money stolen..how will they ever know that HE was the one who stole it?

i'm not even talking "perfect crime" situations, although i'm sure you can think of more. even just blatant theft right while your boss is watching over your shoulder. how do you solve this problem?

also, kidnapping and extortion will be that much easier.

hell, BTC doesn't even need to be widely used. it can happen today. kidnap a billionaire's kid, demand that he pay you in BTC. you might get caught, but your money never will unless you voluntarily surrender it.

How are less experienced traders/investors/bit-coiners feeling about this drop?

My Gox and Dwolla acounts are now verified.

How fast can I buy coins and receive them using this process?

Deposit with bank account now and you can probably have bitcoins next friday at the earliest.

Christ, coinbase is faster than that.

I thought I had achieved something meaningful by getting these accounts verified, lol.

yep. it is unfortunate.

What's the fastest place to buy coins?

I'd like to play a little poker tonight on Seals, but I sold almost all my coins before the crash.

I don't know why, but I figured buying coins off Gox would be instant.

It mostly is for small amounts and if your Gox acct isn't locked. The wait is for your Dwolla deposit ACH to fully clear (you also need history there for Gox transfers). Dwolla to Gox takes a few hours last I heard. Gox to Seals should be about 10 min.

i think bitfloor is probably the fastest way to get stuff

It's because 'merica has a first past the post system.
Let these animals explain it for you.

Bitinstant.

Select Cash Deposit and chose a store near you, and select "Bitcoin address" Fill out the info below, print the form and go to the store. Pick up the money gram phone, get the tranfer approved and pay the cashier. You should have the coins within an hour or so.

Just did it before this second crash and it worked flawlessly.

But you can trace the money and see where it is spend. On the other hand, with dollars you can have a bank account in some corrupt country, like Switzerland, and spend your billionaire kid cash anonymously.

you need to live near a bank of america during banking hours. then use bitfloor. or maybe if you have a friend near one in a different city.

i would not trust bitinstant right now. tons of reports of botched transactions and money in limbo.

be careful with this.

https://bitcointalk.org/index.php?topic=128314.5000

make sure you document your quote id and event id and all that info that comes up during the 2nd screen i think.

Yeah I read all of the complaints prior to actually doing this. I'll admit I was a little sketched out, but that is why I recommend doing small amounts. Going to do a MoneyGram with $400 is never a good idea even with bitinstant out of the equation.

But, even with all the complains, It went smoothly for me, and it was very quick.

One thing to look for and not freak out is when you get the link from Coinapault. Their system actually runs faster than they can, so you will get an email from them with a link to your coins, and you will notice there are no coins. If you wait about an hour or so, and go back to the link, the coins will be there, it just takes a little bit for their system to catch up.

but how do you get those dollars in the first place without having to pick it up at some point, is the point i'm making about bitcoins facilitating these activities.

You think that the ability to trace USD somehow has stopped crimes from taking place or being recovered? What argument are you trying to make? Criminals that are not morons try to get paid in ways that are difficult to trace. Bitcoin doesn't give them something new.