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Bitcoin The Almighty Buck United States Politics

Bitcoin Hits $400 Ahead of Senate Hearing On Virtual Currency 276

Posted by timothy
from the and-I-used-to-regret-not-buying-domain-names dept.
An anonymous reader writes "The value of bitcoin has surged through the $400 barrier for the first time, as unprecedented growth sees the virtual currency's value quadruple in just three months. Meanwhile, on 18 November, a Senate subcommittee is scheduled to hold a hearing on virtual currencies like bitcoin and its lesser-known competitors litecoin and altcoin. The hearing comes after a unit of the Treasury Department earlier this year issued guidelines stating virtual currencies should be subject to the same anti-money-laundering laws as traditional currency-transfer businesses like Western Union."
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Bitcoin Hits $400 Ahead of Senate Hearing On Virtual Currency

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  • Posting (Score:2, Funny)

    by c00rdb (945666)
    Posting to undo accidental mod
  • Really? (Score:3, Insightful)

    by Redmancometh (2676319) on Thursday November 14, 2013 @03:04PM (#45424780)

    The value of bitcoins is up at the news of a hearing that is probably going to make it illegal to do 95% of what is done with BTC?
    That makes sense.

    • Re: (Score:2, Insightful)

      by Anonymous Coward
      Nothing about how the BTC market has behaved could be remotely construed as "logical," particularly in the last couple months. Nobody knows what's going on.
    • Re: (Score:2, Insightful)

      by Anonymous Coward

      .... BTC largely used for legitimate purposes. You live in fairy tale world with villains and no real data.

      • Re:Really? (Score:5, Insightful)

        by Anonymous Coward on Thursday November 14, 2013 @03:09PM (#45424848)

        BTC is largely used for speculation and you know it.

        • by jythie (914043)
          I would really love to see some statistics one way or the other. I suspect you are correct in that BTC is currently being driven by speculation and we are basicly looking at tulips, but I would be curious just how much volume is trading vs payment.
      • I don't see how any government can regulate the idea of "worth." People give items worth, not governments. Though it's probably too much to ask the poor leadership we see all around us to understand this.

        Congress can say, for instance, that a pound note can not be used on US soil and create all kinds of problems, but they can't say a pound note has no worth. I wonder if they even have an inkling that there is a difference.

        • Re:Really? (Score:5, Informative)

          by alexander_686 (957440) on Thursday November 14, 2013 @03:26PM (#45425066)

          That’s not exactly the issue.

          There have been various schemes to avoid taxation and/or for criminal use. I.O.U.s, scripts, payment-in-kind, coupons, assets swaps, forward contracts, loan forgiveness gifting techniques, etc. Each of these techniques have legitimate purposes but at times are just way to circumnavigate the law.

          If I swap my services for goods – US Dollars, BitCoins, an old car, credits towards baby-sitting – I have earned income that I need to declare at fair market value on my income tax. Now determining the fair market value for some of these goods are easier than others but the principal remains the same.

        • Goverenments are made up of people. They have been requlating worth for most of written history. They have set prices, imposed quotas, imposed caps, redistributed land and assets. In lawsuits Judges set the value of things. They have made some assets illegal. Look up the "Gold Reserve Act" and you see the US goverment taking everyones gold in exchange for paper currency. If they can make Gold illegal they can mess with Bitcoins as well.
        • Government does give items worth, just when they do so it turns out pretty badly. Wage floors and price controls are classic examples. In the 70's the US government said how much it thinks gas should be worth, and that led to a disaster.

          Venezuela is currently telling its citizens and the world how much it says the bolivar is worth with their official exchange rate, and just yesterday they began to see the fallout from that (we'll see how it actually turns out in the end, but I think it is basically going to

          • by geekoid (135745)

            Wage floors and price controls have worked. And some haven't.

            BTW 1% refers to the US, not the entire world. Fuck, apply the math correctly.

        • by geekoid (135745)

          I think the issue is yo don't know what worth is, or you can't apply that knowledge to context.
          Government are made up of people, btw.
          Are you saying corporation can assign worth?

    • by gandhi_2 (1108023)

      People are about to get a good lesson in how government can take something government-less and make it better.
      EVERYTHING is under control.
      https://www.youtube.com/watch?v=GUSUJHmamtQ [youtube.com]

    • Some brief points (Score:5, Insightful)

      by Okian Warrior (537106) on Thursday November 14, 2013 @03:25PM (#45425052) Homepage Journal

      The value of bitcoins is up at the news of a hearing that is probably going to make it illegal to do 95% of what is done with BTC? That makes sense.

      1) It doesn't matter what the US government decides, if people want to use it it will be used. Reference: drugs, prostitution, illegal immigration, abortion, illegal guns, and other world countries.

      2) People don't act because they have no alternatives. This is an alternative, but not many people know about it. High-profile senate hearings publicize BitCoin, so that more people will realize how useful it is, and this spurs demand.

      3) There are no valid argument against BitCoin. There are economic "story telling" arguments, and predictive "doom and gloom by story telling" arguments, and false equivalences with closely related things (fraudulent exchanges, Silk Road, &c), and outright lies ("it's a Ponzi scheme!!!"), but no actually valid arguments.)

      4) All the standard aphorisms apply: buggy-whip manufacturers, the invisible hand, liquidity, privacy and freedom.

      BitCoin will become a game-changer (oh, that phrase!) simply because nothing can stop it.

      • by jythie (914043)
        Plenty of things can stop it, the most important one being lack of consumer interest. Right now there is a great deal of enthusiasm, but it remains to be seen how much long term usage there will be. BTC's sustained (as opposed to speculative) value comes from the ability to use it for things, which means ability to spend them. Long term niche or passing fad, we don't know yet.

        Either way, I suspect it will not be much of a game changer. It is easier to use then something like gold, but various places ha
      • by bobbied (2522392) on Thursday November 14, 2013 @04:27PM (#45425780)

        BitCoin will become a game-changer (oh, that phrase!) simply because nothing can stop it.

        Apparently it already IS a game changer. Why else would they be calling meeting about it in congress?

      • by CastrTroy (595695)
        I'm not saying it's a Ponzi scheme, but it does seem like there's a lot of money to be made by the people who got in early. It's still useful as currency, as long as it holds it's value, but the value has gone up so much since it was first founded that anybody who bought a significant amount of bitcoins near the beginning is likely to have gained a lot of money. The fact that BitCoin has built in deflation, meaning the value of the money will tend to rise assuming outside factors don't make it less valuab
      • "BitCoin will become a game-changer (oh, that phrase!) simply because nothing can stop it."

        Except a Tier1 ISP router edge firewall rule to block TCP port 8333.

        *POOF* all bitcoin transactions in USA go to ZERO, and price soon follows.

        • Except a Tier1 ISP router edge firewall rule to block TCP port 8333.

          *POOF* all bitcoin transactions in USA go to ZERO, and price soon follows.

          A workaround would be published within the hour. The protocol doesn't rely on any particular port. For that matter, you can already join the network via I2P or Tor.

    • Re:Really? (Score:5, Insightful)

      by JustAnotherIdiot (1980292) on Thursday November 14, 2013 @03:35PM (#45425166)
      Remember back in high school where all the cool kids wanted alcohol because they were told they weren't allowed to have it?
      It's the same thing. The US government is about to tell a bunch of nerds they can't have something, so they want it even more now.
      • by bobbied (2522392)

        It's the same thing. The US government is about to tell a bunch of nerds they can't have something, so they want it even more now.

        I don't agree that they will say you can't have BitCoin, but the net effect may be the same.

        What the government seems likely to do is regulate the exchange of currency in and out of BitCoin to make it reportable. This will mean that you will have the same reporting requirements of services like Western Union, Pay Pal and the like. They are not going to prevent you from buying and selling BitCoin. You will still be allowed to own them. You, and the exchanges who buy and sell BitCoin, will be legally requ

    • by TWiTfan (2887093)

      Anyone remember that South Park episode [wikipedia.org] where all the YouTube stars were bragging about how much they were worth in THEORETICAL dollars? That's what I think of every time I hear about bitcoin's supposed value. Yes, a bitcoin is now worth 400 theoretical dollars.

      • by jythie (914043)
        Thing is, right now there are speculators who will actually pay $400 per BTC.
    • by ultranova (717540)

      The value of bitcoins is up at the news of a hearing that is probably going to make it illegal to do 95% of what is done with BTC?
      That makes sense.

      If your hypothesis leads to predictions that disagree with observed reality, then the logical conclusion is that your hypothesis is wrong. Perhaps you should tell us where you got your "95%" statistic, so that we can analyze what, exactly speaking, went wrong?

    • by macraig (621737)

      No trading "makes sense". It's all about those irrational emotions, not logic. Would Vulcans have a stock market?

  • Repeal all the anti-money-laundering laws. Problem solved.

    • Re: (Score:2, Interesting)

      by ADRA (37398)

      Sure, which means getting rid of all income tax, capital gains, any form of 'service' as in no government, so buy a lot of guns, because the robber barons that were politely robbing you blind privately will be shooting you in your face for all those gold coins you have packed under your matress.

      • No, it means getting rid of stuff like mandatory reporting of transactions over $10,000. Meanwhile your employer would still be required to report your income; you'd still be required to file taxes; etc. It's just that suddenly "suspicious transactions" don't need to go to the Fed, suddenly you're not going to be detained for having $10,000 in cash on hand, etc.

      • Sure, which means getting rid of all income tax, capital gains, any form of 'service' as in no government, so buy a lot of guns, because the robber barons that were politely robbing you blind privately will be shooting you in your face for all those gold coins you have packed under your matress.

        Really dude?

        Is this the sort of argument that rates "+4 interesting" on slashdot nowadays?

        Stop story-telling! We're nerds - we're better than that.

    • Shortsighted (Score:5, Insightful)

      by brunes69 (86786) <slashdot@nOsPAm.keirstead.org> on Thursday November 14, 2013 @03:28PM (#45425088) Homepage

      This kind of short-sighted answer is the problem with BitCoin backers.

      Anti-money laundering laws and regulations are very important because they are what forces the systems that allow law enforcement to determine and sieze the proceeds of crime. Without such siezing, the incentivization of crime increases exponentially.

      IE - say I rob a bank. If it is trivial for me to convert the money to bitcoin and transfer to a third party in an untraceable way, then my incentivization for robbing banks is now HUGE, because even if I get caught, I will still be able to keep my proceeds. Get caught robbing bank, go to jail for 10 years, get out, and buy your own island. Sounds like a good deal to me.

      • Uh, no. If you are guilty of robbing a bank, you are guilty of robbing a bank. If you are guilty of selling drugs, you are guilty of selling drugs. If the money is traceable, it's traceable.

        Money laundering laws make it a separate crime to, say, allow someone to deposit $10,000 in a bank, or $5000 and $5000, or $9950 but "it looks like they're trying to come just under the mandatory reporting limit", without reporting it. It makes it illegal and/or difficult to carry around thousands of dollars of ca

        • by brunes69 (86786)

          You seem to be missing the connection that the money laundering laws are what contain the regulations forcing reporting limit in the first place. Without money laundering laws these regulations would not exist, because companies will not incurr the overhead cost for no reason. "If the money is traceable, it's traceable" - but without anti-money laundering laws, it would all be untraceable. That is the whole point of the laws.

      • The average _successful_ bank robber in the USA gets less then 10K$.

        Very bad risk/reward ratio.

  • by Anonymous Coward on Thursday November 14, 2013 @03:08PM (#45424828)

    Yes altcoin is the best of the altcoins, there isnt an alternate bitcoin called altcoin, all alternatives are referred to as altcoins.

  • Any rise in the value of BitCoins is probably because it's the only way to keep anonymous funds now that the Swiss banks are no longer keeping records confidential.

    • by CreatureComfort (741652) on Thursday November 14, 2013 @03:31PM (#45425128)
      Bitcoins are NOT anonymous. Every transaction a particular coin is part of is irrevocably written to that coin for all eternity. So, it is only as anonymous as a person keeps their bitcoin wallet identity anonymous. Which is effectively impossible if you want anyone to say...send you bitcoins. Now tying a particular wallet address to a physical address or person is currently not inherently easy, though not impossible at any point where Bitcoins are turned into, or from, cash.

      That is actually the crux of the Senate hearings. Essentially the FTC is asking congress to pass legislation that says that any service designed to exchange between Bitcoin and cash, be required to follow all the laws that other credit/cash exchanges (and a slew of other businesses) have to follow, a key part of which is properly identifying all the participants in the transaction.

      So, MtGox,, etc. would be required to verify your name, address, credentials, etc. when you setup an account, so "You" can be tied to a specific wallet address when the Feds go snooping for illegal activities.
    • by HornWumpus (783565) on Thursday November 14, 2013 @03:35PM (#45425180)

      The Swiss are continuing to keep the numbered accounts opened prior to 1950 secret.

      The Kennedy, Rockefeller and DuPont accounts are safe.

    • Any rise in the value of BitCoins is probably because it's the only way to keep anonymous funds now that the Swiss banks are no longer keeping records confidential.

      The flaw in your argument is that the government doesn't have to track every BitCoin. They only have to worm their way into the far less numerous exchanges where you turn your BC to fully usable currencies and demand that they require full identification and keep records of every transaction. Tax problem solved --- and you know that what they're working on exactly that step by step.

      • They only have to worm their way into the far less numerous exchanges where you turn your BC to fully usable currencies

        But who cares about that part? What if I just want somewhere to stuff a ton of money, and then some much later day when I want to access it all, I just take it out in cash and disappear. Then I don't care if it was tracked...

        The tax agents want to see how much you are storing away, and if you have a bit coin mining farm purchased with black funds and keep your own wallet they can see noth

  • The press from silkroad going back online mixed with it actually doing so is making people but BTC more than sell and a lot of ASIC miners have sold off enough BTC to pay for their new hardware by now and are now not selling. Those are the 2 actual factors driving up the price in reality. All other speculation is incorrect.
  • In the truest sense BitCoin is commodity, not a currency. You can create, or buy, title to ownership of a piece of information that others have agreed to both recognize your ownership rights, and value it as well. It also, unlike every other currency today, is the ultimate Hard Currency because there is a hard upper limit on its creation. You can mine more gold for your gold backed currency, but the total number of BitCoins under the current rules (a most important distinction) has a hard cap.

    It's also the

    • by jythie (914043)
      This seems to be less creating new tax sources and more looking into people dodging existing taxes. Not quite the same thing.
  • by mathimus1863 (1120437) on Thursday November 14, 2013 @03:40PM (#45425254)
    We should all like this Bitcoin *concept* even if we don't all like Bitcoin itself or the culture that has evolved around it. Yeah, I know it's the "fad" to bash Bitcoin. But it's disappointing, because Bitcoin represents everything that us nerds reading slashdot should like: It's a mix of cryptography, freedom of speech, computing, networking, finance, economics, and even politics. Most of us here dig that stuff.

    Get over the hype and take Bitcoin for what it really is: a fascinating experiment that has, so far, withstood the amazing barrage of publicity, hacking attempts, legal uncertainties, and remains valuable for reasons completely contrary to everyone that says it's worthless. It may become worthless one day, but consider the possibility that Bitcoin is disproving all your wildly oversimplified assumptions about what makes something valuable. It is completely different than anything else we know, and there's plenty of reasons to believe that it could succeed as much as it could fail.

    Why does gold have value? Nothing is backing gold (and if it was valued only for its material properties, it would have a value only a fraction of $1,400/oz). Yet it has high value, mainly because of its properties to behave as a transferable store of value: scarcity, fungibility, density, identifiability, etc. Bitcoin is really quite similar but with some different properties. Ease of transfer over the internet, fungibility, scarcity, storage efficiency, near-anonymity and built-in escrow. I don't think it's any more ludicrous for Bitcoin to have value than it is for gold to have value. And in the end, when I want to sell WoW weapons, buy webserver space, or play a few games of poker online, why would I use credit cards or paypal, which all require me to remember log-in creditials, give away personal information to be [improperly] protected by a third-party and/or pay a bunch of fees. There's plenty of value in being able to pay people across the world, instantaneously, without sacrificing your privacy, and without paying any fees. Why is that not valuable?
    • Anonynimity (Score:5, Interesting)

      by brunes69 (86786) <slashdot@nOsPAm.keirstead.org> on Thursday November 14, 2013 @04:41PM (#45425922) Homepage

      The problem with BitCoin is it is nowhere near as anonymous as people think it is. In fact, it is even less anonymous than current currencies.

      Consider the dollar. If I take a dollar in cash and deposit it in the bank, and transfer it to you, and you take it out of the bank - that dollar is now different. Those two dollars have different serial numbers. This is because in the eyes of the government, the law, and everyone under the sun, all individual dollars are the same and interchangeable - my dollar is as good as your dollar. This is what makes money laundering possible and why governments have a hard time battling it - it is pretty easy to funnel money from crime into another medium / person and "wash" the money in a way that makes it totally impossible to tie it to a specific crime, because all dollars are the same.

      BitCoin is not like this. A bitcoin is a unique value and as it is passed from one wallet to another, that transaction is logged throughout the network. For any given bitcoin, you can trace the path of THAT SPECIFIC COIN from the time it was created to where it was today - seeing all of the wallets it passed through and what IP address owned that wallet at the time. All law enforcement needs to do to tie a specific bitcoin to a specific individual, for the purposes of an investigation, is to tie a wallet ID to an individual. Thus, any bitcoins used during the process of ANY CRIME are subject to seizure! I have never had anyone explain to me how to get around this problem with BitCoin. People have weird pseudo-anonymous hacks like "use ToR" or "Use a VPN", but all these things do is make it HARDER to tie an individual to a wallet, it is not impossible. In fact with the proper warrants and wire-taps it is trivial to tie a wallet to an individual.

      • by Xylantiel (177496)

        any bitcoins used during the process of ANY CRIME are subject to seizure!

        I am actually a bitcoin doubter, but I don't think this is a flaw. You are claiming that if law enforcement finds that Criminal Z had a particular bitcoin, and the block-chain says that bitcoin is currently in my wallet, that they can compel me (say by court order) to transfer that bitcoin to the state, despite the fact that the block-chain says that coin was transferred from Criminal Z to person A, then B, then C, then D, then ... then to me. I have a tough time believing that would work in court. Thoug

        • by brunes69 (86786)

          You say "I have a tough time believing that would work in court", when in fact IT WOULD, GUARENTEED, because that is how the proceeds of crime works in common law. If I steal your watch, and sell it on eBay, and the police can track down the guy that bought the watch - that watch can be siezed, and the guy who bought it is not entitled to anything in return from the police. If he wants anything back, he has to SUE the criminal in civil court. I see absolutely no reason exact same thing would happen with bit

      • by crtreece (59298)

        This is what makes money laundering possible...BitCoin is not like this

        It can be. Services [bitcoin.it] exist that allow you to put your bitcoins in, have them mixed repeatedly with other users bitcoins, and get back different bitcoins. Silk Road had this feature built in, the user didn't have to ask for or configure it.

        what IP address owned that wallet at the time

        What is the IP address of a piece of paper? [blockchain.info]

      • by Nkwe (604125)

        Thus, any bitcoins used during the process of ANY CRIME are subject to seizure! I have never had anyone explain to me how to get around this problem with BitCoin.

        In order to "seize" someone else's Bitcoin, you would have to know the private key of the wallet that currently holds the coin. This would be difficult because coins can be moved from wallet to wallet at any time (that is what a Bitcoin transaction does.) Granted a coin could be flagged as "tainted" and governmental controls could potentially prevent tainted coins for being exchanged for government backed currency at major exchanges, but it would not be practical to prevent "flagged" coins from moving aroun

  • I find it fascinating that as the cost of minting BCs in terms of compute cycles goes up, so does their value relative to the dollar. Is that behavior by design?

    • by bobbied (2522392)

      I don't think so. I think the intent was that by allowing mining and then making it harder and harder over time you would enhance the currency's stability. Remember that the miners are really just doing a lot of hard house keeping and then getting paid for their efforts in BitCoin. The point was to get a lot of people processing the transactions to keep the ratio of honest brokers to fraudsters high enough so no one entity could possibly take over and "fake" transactions. I don't think the intent was to s

      • by TeknoHog (164938)

        I don't think so. I think the intent was that by allowing mining and then making it harder and harder over time you would enhance the currency's stability. Remember that the miners are really just doing a lot of hard house keeping and then getting paid for their efforts in BitCoin. The point was to get a lot of people processing the transactions to keep the ratio of honest brokers to fraudsters high enough so no one entity could possibly take over and "fake" transactions. I don't think the intent was to somehow create or control value, even though it does seem interesting.

        This is pretty much it. It takes resources to run the network and this is a way to reward the volunteers willing to do that. At the same time, it is a somewhat fair way to distribute the initial coins into circulation.

        It will be interesting to see what happens when the last coin is issued and mining comes to an abrupt end. I have a feeling that if BitCoin is still viable, they will revise their final count and issue more coins to keep the mining industry in business.

        There isn't really one last coin, because the fixed reward is halved periodically. However, there are also transaction fees which won't go away -- they are really the long-term point of rewarding people who bother to keep up the network. (Generally, you can send payments without the fee, but t

  • Money [wikipedia.org] is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given socio-economic context or country.[1][2][3] The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past, a standard of deferred payment.[4][5] Any kind of object or secure verifiable record that fulfills these functions can be considered money.

    Money is historically an emergent market phenomenon establishing a commodity money, but nearly all contemporary money systems are based on fiat money.[4] Fiat money, like any check or note of debt, is without intrinsic use value as a physical commodity. It derives its value by being declared by a government to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private"[citation needed]. Such laws in practice cause fiat money to acquire the value of any of the goods and services that it may be traded for within the nation that issues it.

    The money supply of a country consists of currency (banknotes and coins) and bank money (the balance held in checking accounts and savings accounts). Bank money, which consists only of records (mostly computerized in modern banking), forms by far the largest part of the money supply in developed nations.

    Money acts as a standard measure and common denomination of trade. It is thus a basis for quoting and bargaining of prices. It is necessary for developing efficient accounting systems. But its most important usage is as a method for comparing the values of dissimilar objects.

    Wikipedia

    Bitcoin may be money in nearly every sense of the word but it lacks stability to act as a standard measure and common denomination of trade. Just as money in unstable countries lack the same attributes. It's a medium of speculation and not being tied to a stable market place perhaps overseen by a stable government it will likely never be more than a means of speculation.

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