No even at free electricity it will be irrelevant before you make back the 0.19 you paid for it.

when asics first came out, I think it made sense to invest some portion of your bitcoins into mining if you held a large number of them, just to help secure the network. at this point, the network is a runaway train. I wonder how much it costs the mining gear companies to build their toys? at some point, I could see it costing more just to build a miner than it can create by mining coins. I suppose somebody with the knowledge of that industry could calculate the absolute maximum difficulty the network could reach, given current tech, assuming everybody behaves rationally.

I'd rather be a gold miner than a bitcoin miner. But in both cases, it is likely to be more worthwhile to just buy the actual gold or bitcoin.

also your parents are likely to kick you out of the basement for running up the utility bill.

It might be profitable to run a mining pool. I remember helping btcguild gain users by keeping it high on the forums. At that time deepbit had 1/2 the hashing power. BTC presently has 25% of the network. Assuming he finds 800 a day and gets to keep 5% of that, he is making 40 btc a day. $4000 a day.

There was also a mining stock called hydromining. Apparently there are a couple counties in Washington state that have very low electricity rates like $0.02 a kw-hr. So you could set-up a farm there and have a competitive advantage.

There are also a few coins infinitecoin, quarkcoin, ixcoin, and iocoin where the yearly inflation will go to zero. If they can gain users they could increase faster than bitcoin. However, they can collapse if no one uses or protects them.

I'm meeting Vince Cable in a few weeks to discuss Bitcoin. He's the UK business secretary and a very good politician. He's my local MP so have booked a surgey appointment with him. I approached him before about VAT problems for my business and he dealt with it swiftly and put me in touch with good people in the treasury who gave me solid answers in writing. So I'm excited about meeting with him again.

As a primer for the meeting I've submitted 3 freedom of information requests:

HMRC (UK tax authority)
https://www.whatdotheyknow.com/reque...or_bitcoin/new

Deparment for Business and Innovation
https://www.whatdotheyknow.com/request/bitcoin_minutes

Bank of England
https://www.whatdotheyknow.com/reque..._bitcoin_3/new

These should all come through in time for the meeting. Like my last meeting, I plan to leave him with a single sheet bullet pointing what Bitcoin is, why it's important to the UK and the current problems with it (and hopefully some information about where various government agencies stand on it from the FOI request).

From personal experience I think there's a fair amount of evidence to suggest that banks are abusing their dominant market positions to surpress new Bitcoin business, and it's stiffling new startup opportunities which could be highly beneficial to the UK. (I've complained to the office of fair trading but they appear to be ignoring me). This is probably going to be the main argument I'll bring to him as it's relevant to him and he may be able to act on it.

Does anyone have any suggestions or comments on what I should ask or tell him about?

I think it is reasonable for banks to shut down accounts being used for bitcoin exchange. Such accounts attract a disproportionate amount of fraud claims that cause a huge hassle. The banks aren't being hostile because they think it threatens their business, or they wouldn't give transferwise an account either, and transferwise costs the banks more money by undercutting fees than bitcoin does.

Have you seen these localbitcoins sellers in the UK who are doing thousands of trades for bank transfers? Examples:

https://localbitcoins.com/accounts/profile/Dmtrik/
https://localbitcoins.com/accounts/profile/Netizen/

I am curious to know if they do any AML, how/if they keep their bank accounts open, and how they prevent fraud. No one can accept bank transfers in the US due to easy chargebacks. This localbitcoins model is interesting because even if the exchanger gets his account shut down, he keeps his reputation and can probably just keep opening new accounts to trade with for quite a while before he gets blacklisted or runs out of new banks.

The issue with banks is that they provide a service that is required. THEY should be adapting to bitcoin, not simply shutting it down.

Also, we all know that banks are corrupt, and for the most part, paid off and can walk when busted carrying out highly illegal activity, it is a very hostile move for them to shut down BTC accounts because doing so could mean the beginning of the end for BTC providers.

What service is required? Why should they adapt to such a tiny market? Most of the world's population doesn't have a bank account, including 30m Americans. European banks are viewed more as services to the public, while American banks are more profit driven. For example, everyone is guaranteed a basic bank account in the UK and many EU countries, regardless of credit score etc. They can refuse to give you a debit card and disable online transfers, but they MUST give everyone a bank account by law. ATM usage is also free in the UK at any bank.

Banks are behaving in a hostile way towards bitcoin, but this is not because they perceive a threat. It just doesn't make any business sense to service a bitcoin exchange account unless it will have several million dollars parked in it and the regulatory and fraud risks are thought to be minimal.

A bank is required for almost everything in modern life.

It's one thing to adapt to BTC, but it's another thing to simply reject transfers/deposits etc from BTC providers or services.

Also, those 30m Americans most likely do not deal with money on a daily basis, nor would they ever be involved with BTC.

A long time ago, Mtgox sued their French bank for closing their account, and their lawyer argued that this violated the French law which states that all French persons AND BUSINESSES are entitled to a bank account in France. I can't remember what happened with the case though. Matt, do you know what happened? That is probably relevant to you.

It makes sense for banks to start rejecting transfers to bitcoin exchanges due to friendly fraud. People send money to bitcoin exchanges, withdraw bitcoins, and then go to their bank and say "I was hacked/scammed" and the bank has to assign people to look into it. Most banks still send wires to exchanges though.

People do that now with credit cards. "My CC was stolen" is almost entirely bull****. I've dealt with ACH quite a bit, and I would throw out at least 95% the bank just simply takes our money and gives it back to the customer just off the customers word.

and yes that French case would be very interesting to see, and I agree with the ruling.

I think it's pretty clear that banks are abusing a dominant market position. Citing high levels of fraud is crappy, their sample size is single digits and it's all quite convenient for them as BTC directly threatens some of their most profitable arms of business. They happily accept gambling businesses on their books which I'm sure suffer high levels of fraud as well.

Banks have embedded themselves in society to the level where it's nearly impossible to run a business without a bank account. If they have these approval processes, they basically have a lot of control over the entire economy. It's rotten and it's time we all stopped being so sympathetic to the banks.

You are right that banks happily work with gambling and porn related merchants who have high fraud risk. This is because
1) there is an established regulatory framework for them
2) they pay outrageous fees upwards of 10% to compensate for the fraud

It doesn't seem possible to me for a traditional exchange to give a huge cut to the bank in order to make it +ev for them. Here is an idea to get around this:

Run a CFD brokerage (bucket shop) like the UK-based publicly traded plus500, but allow it to operate as an exchange by enabling bitcoin deposit and withdrawal. Pay for higher banking fees the same way plus500 does, by having a rollover requirement before customers can withdraw. They make money from spreads, plus they earn about 20% per year from someone holding a bitcoin position. You might be able to accept moneybookers this way too, even though they say merchants can't facilitate currency exchange. I'm not sure if this is why all the poker sites force withdrawals back to moneybookers if that is the way you deposited. I don't know if it is legal for a CFD broker to do this either, or what the requirements are for starting one. But if you tell the banks you are looking to open a CFD brokerage, that will fit into something they are familiar with.

Anyway, the point is that a bitcoin exchange must do SOMETHING to jack up its profit margin in order to make it +ev for banks, since bitcoin is going to continue to attract huge amounts of scammers, the regulatory risk is high, complying with subpoenas is expensive, etc. Forcing a certain amount of gambling or trading before bitcoins can be withdrawn seems like a good way to do that. There is no banking conspiracy to thwart bitcoin. It is just not +ev because people operating bitcoin businesses (besides coinbase) have no experience in combating fraud and bitcoin also facilitates fraud with its lack of chargebacks. If I were running a bank, I would refuse all bitcoin related business too if they didn't earn me a huge amount in fees or keep millions of dollars in the account.

btcquick is a good example of a company working with banks and combating fraud. They just pay the outrageous credit card processing fees and pass it on to customers. It is 7.5% for a $75 max first purchase, and you have to upload an ID. They have been operating for almost a year iirc.

So to summarize, here is my theory on successful bitcoin business in a hostile banking zone:
1) Open account classified as existing high-risk merchant area. Poker site, CFD, satoshidice/gambling, gold dealer, sportsbetting, etc. Don't try to pretend you deserve a low-risk account. You do not. Your account is going to cause the bank a lot of fraud trouble and you don't have experience preventing it.
2) Figure out how to hide the fees from customers while charging them anyway through rake, spreads, overnight swap rates, price manipulation to hit stop-losses, etc.
3) Market with "You can buy bitcoins for 0% fee with a fast bank transfer if you just play a little poker or trade a little or spin the wheel a few times before you withdraw." This would work especially well in the UK where free account transfers between any bank go through in under an hour.

Other thoughts:
Bitpay gave a talk targeting high-risk merchants here
http://www.coindesk.com/bitcoin-coul...isk-merchants/
http://plus500.com/Instruments/BTCUSD (site is blocked for most of the Americas due to bucket-shop illegality in the US, and fraud in latin america)
Russia-based LiteForex and Belize-based ForexMetal have been accepting bitcoin deposits for a while, but they force withdrawals in bitcoin too, making it useless for currency exchange. There are also tons of scam accusations against them, although this is true of most CFD brokers.
CFD broker Avatrade allows holding a leveraged bitcoin position for only about 6% per year.
Bit4x and 1broker are bitcoin-only forex brokers.
I recall that some large CFD houses keep 100m in their bank accounts since they don't hedge most positions. If you hold a 100m balance, your bank will put up with a lot of ****.
Coinbase's model seems to be to hire a bunch of ex-paypal employees who are experts in combating fraud, and put up millions of dollars to get a California MSB license.
I heard strikesapphire bitcoin casino was up for sale a few months ago. Their craps game is really sick, but it block americans.

Sorry for breaking the discussion but Ive seen people referring to a trading thread for BTC. I have been looking for it but I cant find it, any help?

http://forumserver.twoplustwo.com/28...e-points-1529/

MasterCoin investment deadline: 12 hours. after the deadline you have to purchase from somebody who already has them.

https://bitcointalk.org/index.php?topic=265488.0
mastercoin info/media:
http://www.reddit.com/r/mastercoin/
http://letstalkbitcoin.com/e37-meeting-mastercoin/ (JR 34:08)
http://www.coindesk.com/mastercoin-t...s-block-chain/
https://docs.google.com/open?id=0B3n...3NqdkloLTZNOXM

JR Willett at 2013 San Jose conference (a few of them echo the idea that the future of bitcoin is likely protocol layers being built on top of bitcoin):
http://www.youtube.com/watch?v=_qdr_Z3hrqQ


the Exodus address getting some significant investment: http://blockchain.info/address/1EXoD...4UHEf77z6A5S4P

I still don't completely understand how it works, but its very intriguing. Also important to note that MasterCoin is not yet another altcoin.

Sounds like a scam version of colored coins IMO.

great video, fantastic panel and a fascinating topic (on building protocol layers on top of bitcoin). i think mastercoin would be an fun project to support if one feels like donating some money to a good cause - writing code for bitcoin. he needs money to pay for this to happen, so its basically a fundraiser. if i had >10k btc, i'd probably send him a few. also, well deserved shout out to namecoin twice, 42:20 is a nice anecdote from mike hearn.

i thought i would post an update on just-Dice.

the site has been running for 72 days:

bets: 98,632,197
wins:46,588,605
losses:52,043,592
wagered: 948,448.04539123
site is up:5,734.20214671
profit:0.6046%
invested:51,455.30220920

I looked even closer at it, and it looks even more like a scam, with the whole "send lots of Bitcoins, I give early reward!"

It may not intentionally be one, but it sure has the markings of one. I'll need to look closer to get a full opinion and really have it figured out for certain. A lot of these on top of the protocol ideas are interesting. I was surprised to see so many familiar faces in that panel video, though. I've met Chris a few times locally, he comes to a lot of the events here and is a really smart guy. Mike has been extremely helpful in helping me get started on the project I'm working on.

Right now there's a lot of interesting work being done in the Bitcoin world, it will be interesting to see what happens in the next decade.

Do people think this recent run up in prices mostly due to Gox being insolvent + arbing on other exchanges?

Hard to tell, but if it was gox being insolvent, people would have to buy btc on gox with their usd and sell them on other exchanges which would make the other exchanges drop. But the other exchanges are rising also.

I think right now it's just more buyers then sellers overall. I really like the looks of the chart. Wouldn't be surprised at all to see btc move to new highs in the next month or 2. If it does I think it will go parabolic just like it did before and 500+ is not out of the question. Maybe even 1000+ as all the speculators who thought it was a bubble before may now see that it's "not", creating even more buying frenzy. No telling what can happen when there is such a small supply of something people are going after.

I am confident the Mastercoin author is not intentionally scamming, and he is probably a good programmer, but he has a very flawed understanding of economics, and it appears that he is rushing to launch because other projects do everything that his project does, except way better and without this exodus address nonsense. I read his paper, and the only part of his project that no one else is doing is trying to peg to gold with Mastercoin backing. It is impossible to maintain a peg with his scheme, and he is too stupid to understand this despite me, Erik Voorhees, and several other people repeatedly trying to explain it to him in his thread about it. His response was basically "it might not work, but I think it will." He also has really weird priorities, where many parts of his project development will depend on what his wife thinks. Sorry, I should have announced my opinion in this thread earlier to make sure that none of my fellow 2p2ers flush money on this.

TL;DR Anyone who knows what they are talking about thinks Mastercoin will never work unless he radically revises his plan. Sending coins to him is dumb.

Basic math on gox's earnings say it is almost impossible for them to be insolvent, even with the millions in seized dwolla funds. Everyone is talking about Gox arbing. They are not the only ones arbing. I haven't seen a single report of anyone waiting longer than two months for a withdrawal. It is very high ROI to arb if you have cash sitting in a bank account right now.

O.k.. I have cash in my account.. how do I make cash off Gox?