Article says Bitnex flash crash was reason for price drop and not XT or lack of buyers for 3600 coins.

Fixed link due to bit-fin-ex censorship (WHY?).

(Replace an i in the URL with %69)

Actually what that article says is there was a lack of buyers for 10k coins, thus causing the price to move down in a big way.

Regarding Augur-

I am not technical enough to understand the points made in this thread:

https://www.reddit.com/r/ethtrader/c...will_not_work/

Would love to hear what some of the smarter people on here think.

on a phone wallet? 100%

So here's an idea. Let's assume augur or some other prediction market succeeds in creating highly liquid low fee market. The obvious problem is most gamblers don't want to own bitcoins or other digital currency. They just want to bet $110 on the superbowl with a chance to win $200.

Would it be legal to open either an online or B&M store where your main service is as a bitcoin exchange but you also place bets for people. Is this legal as long as you're not technically taking a cut of their bet?

So for a B&M example you could open up a buffalo wild wings with all the current lines on the wall and TVs to watch all the games just like any Vegas casino's sportsbook. A customer comes up and says they want to bet $110 on the pats to win $200 on the superbowl. You take the $110, charge a $5 fee for converting their money to bitcoin. $105 at current $233 usd/btc that is 0.45 btc. You then you help them place their bet on Augur and offer them an option to buy back their winnings at the current exchange rate of $233 btc/usd when the superbowl is over if they win for a fee. So 50% of the time they win 0.44 btc for a total of 0.89 btc they need to convert back to usd. That's $207, say you take another $7 cut, and the net result is they are betting $110 to win $200 and you have taken a $12 fee, Augur has taken a $3 fee. The customer is happy because they don't have to know anything about bitcoin and got to place their sports bet. Is anything about this illegal?

Why not just act as a bitcoin exchange and have nothing to do with the placing of bets. You could put lines up on your wall sure, but dont facilitate the betting.

Of course that's illegal.

What's illegal about it specifically? It's clearly not illegal to say hey let me show you how to download Augur app to your phone. It may be illegal to place bets for people on your Augur account? But somewhere in between seems like a gray area where you could help facilitate the transaction with Augur's api.

The only service you would charge for is as a bitcoin exchange and options market. Is it illegal to sell an option to sell $200 worth of bitcoin for $233 usd/btc if the pats win the superbowl on Feb 1?

So I just read https://en.m.wikipedia.org/wiki/Federal_Wire_Act Seems it would be illegal to help facilitate the sports betting in any way. Probably why coinbase blocks gambling transactions if it's only one hop.

Any non sports bets may be fair game though. Can I legally open up an online fiat betting exchange that uses Augur as the backend as long as I don't accept wagers on sports? Where did I intrade go wrong in the legal department?

A lot of ETH being invested in Augur atm:

Compared to
a day ago.

I wonder if some larger agency is trying to get "control" over Augur. Buying early could scare away smaller investors and would make sense if you if you care less about ROI and more about influence over the market?

I mean seriously, has FTP/PS being shut down by the DOJ taught us nothing?

I found and read a bit of this paper http://papers.ssrn.com/sol3/papers.c...act_id=2423461 which has a lot of info. Gambling info starts on page 196:

So in other words the CFTC has a monopoly on options trading because they say so. I'm not sure about making a profit, but I see would see nothing illegal about writing some open source software that utilizes the APIs of

-coinbase or any other US facing exchange where someone could deposit usd and then hand over their credentials to your software
-the software would then use augur's api to allow the user to browse through the available bets showing values in USD
-once a bet is selected the software could automatically buy the equivalent btc, send to a private wallet, then place the bet on augur and finally hedge the volatility by buying an option on btcoracle
-if they win their bet, the software would then exercise the option if needed, send back the winnings to private wallet, then to coinbase and sell the btc for usd

Net result is USD based coinbase sports betting/prediction market account. No idea if anyone would ever go through the trouble of using this or if it's even cost effective rather than just bet in plain btc, but figured I'd share anyways.

Edit: It looks like this is a problem that could be solved with bitshares https://bitsharestalk.org/index.php?...1320#msg101320 if it ever comes to fruition, by simply buying bitUSD and betting using them on augur

How do you plan on handling the long confirmation times? Is that something that BTC advocates gloss over in these sort of uses or just a risk you're ignoring?

And what you're suggesting is obviously illegal.

Yes, they are the same bitcoins. XT is currently just another bitcoin client. If/when the fork happens, for a short while there are two "versions" of bitcoin but you will have coins on both. One version will capitulate because of economic incentives but whatever happens the coins you had before, you will have after. It only gets potentially risky when transferring BTC during a fork, but any fork won't happen until 2016 earliest. (The other monetary risk is the value of the coins themselves falling in value because of the uncertainty leading up to/during a fork.)

Tyvm for the reply SL

Yes, clearly Illegal. But an app that would plug into Coinbase's Oauth protocol wouldn't need to worry about confirmation times. It would be off chain.

You guys say its "obviously" and "clearly" illegal yet don't say exactly what part is illegal or cite any laws. It's not obvious at all. There's nothing illegal about writing software and uploading it to github or writing a dapp and running on ethereum. There's also nothing illegal about saying hey you should download silk road or augur. Anyways, I'm over it. Bitshares or a similar product will solve the problem with time in a much more elegant way than the hacked together solution I proposed.

Confirmation times are pretty much a non issue. Have you used bitcoin before? Most sites credit your account within seconds of sending them bitcoin. Long term the lightning network will reduce double spend risk of accepting instant transactions.

no one here has enough expertise in the relevant laws to make specific arguments about it.


I say its irrelevant. DOJ will rule after the fact, and it's possible for them to figure out a way to nerf it into the ground if it ever takes off.

If it really takes off and they can't stop it with the current laws then I expect it won't take long before congress passes a law to stop you anyway. You are also going to lose a lot of your profit defending yourself in court even if you think the law is on your side.

Legal costs will bury you quickly too even if you are in the right

It clearly violates the Wire Act. I'm not sure why you keep parroting confusion and misunderstanding as some sort of defense of your ridiculous stance.

Confirmation times are absorbed as a risk with most businesses. Do you use Bitcoin?

This is a common tactic. The Government has unlimited resources to drag things out in an incredibly expensive manner.

I have a question:
When mining no longer provides any substantial amount of bitcoins.
Wouldn't the number of miners drop down heavily and the network be susceptible to a majority attack?

The idea is transaction fees will replace miner subsidy.

Laws aren't exactly black&white. You can choose to interpret it they way you want but the reality is Coinbase would never let you plug into their API's with what you described. They won't even touch gambling in legal jurisdictions at the moment.

As far as sites crediting your bitcoin in seconds, as mentioned above most sites bare that risk. The risk is quite high on a gambling site for a double spend (freeroll!). I think the standard at the moment is to wait for 1 confirmation for deposits but they won't let you cash out until your deposit hits 4 confirmations. Eventually, if some reputation system takes off, the sites could accept 0 confirmation bets from certain players.