Funny, 30-40 years ago you could replace "bitcoin" above with "the internet".

A nice concise introduction to Bitcoin by the experts explaining wtf a Bitcoin is and why you might care about them. Includes helpful links, common misconceptions, faq, etc, etc for those interested. Not too late to become an early adopter...

https://bitcointalk.org/index.php?topic=7269.0

Thank you, that was very helpful.

ah, ok.

it's true, the idea of a virtual cryptocurrency will never die, but bitcoin is very capable of doing so.

i didn't write this, but i think it answers your question quite well:

http://www.reddit.com/r/Bitcoin/comm...tcoins/c7l3ww6

Ya, but it's possible Bitcoin is the idea (the manifestation of it). Maybe there's some technical hole with Bitcoin that could be improved with a different system, and then that would win out. But presumably it'd be something we don't know about yet, since right now Bitcoin has all the value and the other chains have very little. So as far as we know now, Bitcoin and the idea are basically the same thing.

Blogging more than responding to you at this point:

If the government was able to successfully attack the Bitcoin network, it wouldn't have to actually do it. Make sense? Just the knowledge that they could do it would mean nobody would want it and it'd cease to function.

For all we know it was elements of the government (like, not your stooge congressman) who were behind the development of Bitcoin in the first place, knowing full well it would happen at some point anyways and they might as well get a bunch of them and have some influence over the mood around them. Government typically takes the "can't beat them, join them" strategy through history.

Again, I believe a good analogy is Online poker in the US. For 5 years we knew it could get shut down at any minute. That sure as hell didn't prevent the poker boom from continuing until BF.

Medical Marijuana is another good analogy. At any minute the DOJ could decide to enforce federal law and shut it all down. Is that preventing the industry from exploding right now? (Hint: No)

Those aren't good analogies at all, save your hints until you conceptualize it correctly.

When you play poker or use medical marijuana, you aren't invested in a "share" of that activity. You could 100% know it will be shutdown in a month, but it still makes perfect sense to consume it for the month, so the activity happens until it's shutdown. If you knew 100% that bitcoins would be shutdown in a month, you want to sell your bitcoins before the month is up, and so does everyone else who knows what you know, so really you want to sell your bitcoins like they're on fire and you stop the activity immediately.

LOL LOL LOL

Someone seizing upon some mechanism like, BitCoin, is not the first, nor will it be the last attempt to pretend a loophole is available:

Bitcoin and gaming are not the same thing. The legality of the underlying activity is not likely to slip thru some loophole, just because some poker site says it will.

"Infinity Poker acting as an IWTS or currency exchange would bring the UIGEA back into the picture by qualifying as a financial institution, plus all the relevant MSB statutes and regulations.

That's not to say it couldn't be done legally, it's not a crime to be a financial institution, they would need under UIGEA regulations a legal opinion that online poker is lawful in States they accept players from, they would need to register with FinCEN, file an anti-money laundering plan, get MSB licensed, file SARS reports etc, etc.

It could be done, but the headline idea that they have found some magical loophole to stay under the US government's gambling radar couldn't be more misleading, what they are doing is painting a target on their backs."

Remember PICClub ? (If not, there is a lawyer fond of posting on 2+2 who could fill you in.)

Remember eGold (I think that was the name) ?

Remember that PStars obtained a legal opinion from the firm of a former US Attorney General, written by a well-known former prosecutor of online gaming sites, to the effect that processing poker deposits/cahout was not illegal in and of itself.

Remember FTP kiting player deposits because it could not deposit the ACH transactions ?

Look, I think Bitcoins is a fascinating idea, as, I m sure tulip futures appeared to the Dutch. that does NOT mean it provides a safe, liquid, convertible medium of exchange OR immunize the underlying activity from prosecution or disruption. (I would shudder at the difficulty or even the thought of having to convert rake or revenue in the form of Bitcoins into a local currncy to pay ongoing operating expenses.)

Remember PokerSpot ?

Liquidity.. One of the first things i became aware of while reading was a distinct lack of liquidity.
There is a awful lot of hype surrounding bitcoin, and it's not just overzealous promotion of an attractive idea.
My guess is some are positioned to make money off it. Can't say how. Trading commissions are obvious enough.
Perhaps some people are stuck holding a lot of bitcoin, and would profit by getting rid of it..

Do Peope speak English in this thread , Jesus H Christ .

how much liquidity do you need? right now you can buy or sell 1% of all outstanding bitcoins ($140k worth) instantly and only move the price +- 4%

micon made a video on the bitcoin video poker site

ok.. and 140K is around 270 shares of APPL (Apple Inc), the selling of which would not affect the price of apple at all.

Compare bitcoin's liquidity to... gold... or crude oil.. or hundreds of other commodities. $140K is nothing, while a 4% price flux is positively huge.

1) Buy $140k worth
2) Sell $140k worth
3) Profit $5,600
4) Rinse/Repeat

My only question is, how many times a day could this be repeated?

Also 4% is huge and your choice of the word only is pretty lol.

Given around a million degen poker players / gamblers selling (to minimize exposure) and buying (to fund a daily bankroll), my guess is many times per day.

bitcoin is still small compared to AAPL you can't compare in terms of $ value you have to use % of shares. If you tried to buy/sell 1M shares of AAPL you don't think the price would move +-4% just to fill the order?

or compare to a company with a similar market cap to bitcoin 100M-200M and see how far $140k would move the price.

Going back to the headline/question "Bitcoin: Making Online Gambling Legal in the U.S.?"

As we saw with the BF aftermath, FullTilt had all kinds of lawyers telling them that UIGEA, didn't pertain to them because poker was a game of skill. I'm pretty sure the DoJ let FT/PS know that they considered them breaking the law well in advance of BF.

I think it's fair to say that "no", bitcoins doen't make ipoker 'legal' - but there have been no opinions or statements from the government saying it's "illegal" either. Someone mentioned earlier in the thread that exchanging currency between individuals doesn't make either one of the parties a "financial institution", and it could be argued that they would not fall under the UIGEA either because no financial institution is making these transactions [using proceeds from gambling].

We just haven't had an opinion from the DoJ or any legal authority on whether bitcoin transactions fall under UIGEA or not.

Sure it's a question of semantics and whether it has any legal mustard. The huge difference being that since bitcoins are anonymous, the ability to prove/trace or have any evidence of where the money is going to or coming from will make it an extremely hard case to prove.

This sounds really shady, and a very bad idea to 'invest' in.

The easy way to compare bitcoin liquidity to any stock liquidity is with the bid-ask spread.

For a fairly liquid stock it is gonna be near 1/2%.

A $10 stock bid might ask $10.05.
At 4%, $10 in bitcoin will ask $10.40.

And stock is not all that liquid to begin with. The post about a dozen posts behind us that got this conversation started, tried to directly associate bitcoin liquidity to that of gold.

You are off by a factor of 10 on the value of bitcoins currently in existence. The current bitcoin "market cap" is about 150m USD. The daily trade volume between BTC and USD (like forex) seems to average about $400,000/day ... discounting the spikes a typical day appears to be in the $200,000 - $300,000 range. Total bitcoin denominated transactions are about 200,000 - 300,000 BTC on a typical day which equates to about $3.5m. [source: http://blockchain.info/charts]

I don't know whether or not that represents sufficient liquidity ... obv depends upon the size of your business.


Does it also NOT mean it DOES NOT provides safe, liquid, convertible medium of exchange?

I wondered when someone would mention those tulip bulbs. Bitcoin could easily become worthless if people stop using it but it isn't analogous to the Tulip Bubble. To the extent bitcoins have value it is because people (some anyway) think they fulfill a financial need that is not otherwise met ... e.g., fast, irreversible transactions with extremely low cost. That doesn't mean bitcoin will succeed, but tulips were a commodity bubble and it's such an awful analogy.

As for as the difficulty of converting revenue from BTC into hard currency, that's an interesting question. The mechanics aren't all that difficult on the surface:
- transfer BTC to an exchange account (e.g., Mt Gox)
- use exchange to swapt BTC for Euros, USD, etc
- wire money to bank accounts

In fact, the fees for doing this are incredibly small. The largest exchanges, however, have a $10,000/month withdrawal cap for unverified accounts to comply with OFAC, etc. Is it possible to convert BTC into a hard currency in any significant volume without running afoul of money laundering laws?

The real question is whether or not the DOJ can interrupt the flow of funds to a bitcoin exchange or a poker site accepting bitcoins? The legality of online poker in the US is not settled and the last case decision was in favor of legality under federal law IGBA, but not decisive since it did not cover the UIGEA.

However, Black Friday was about the seizure and closing of the last institution to move money for FTP and PS. The civil cases against FTP and PS were secondary. IMO, without the criminal case, the civil cases would have been ignored.

Can the DOJ seize a US bank account of an ewallet, like Dwolla, that permits US citizens to use their checking accounts to buy bitcoins to deposit on poker site like seals with clubs or to access cash from the sale of bitcoins received from such poker site after sale on a bitcoin exchange? I don't think so, but federal courts will sometimes permit the DOJ to do anything with a hint of legality.

Since fighting the DOJ over assets seized is expensive and difficult, most companies, and all the ewallets and institutions that used to serve online poker site, have not litigated any seizures of their accounts to a judicial decision.

And to think that most US citizens believe the US is still the land of the free.

wow, a 9/6 machine. A bitcoin site could probably get away with 8/5, due to lack of competition.

Actually it is quite easy to convert it to your local currency. I'm using Coinbase swap funds back and forth between btc and my bank account. http://www.bitcoinpokerblog.com/index.php?p=32

in the middle:
"Within 8 hours or so, the coins will be in your wallet."
and at the bottom..
"It will take about 5 days for the cash to show up in your bank account."

That stuff relates to (lack of) liquidity, per the other discussion above, but I wanted to ask you..

How much does it cost you, in total dollars or whatever currency, to convert back and forth?