Playing with Bitcoins [SI, 2013]

Macrobius

Macrobius

Megaphoron

Stumble Inn

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In the interests of turning the Circle of Crust into a gambling den, I've resurrected a couple of old accounts related to bitcoins (following an SB discussion on the topic of bitcoins).

If anyone wants to play with nominal sums of money (a bitcoin is worth about 13 USD bucks these days and they can be broken indefinitely, so by 'play' I mean with digital pennies and up) --

1. You need to download and install a bitcoin client --

https://en.bitcoin.it/wiki/Main_Page

or use an online wallet service, or sign up with a bitcoin exchange (which can be funded in and out by bitcoins -- but are the most complex and speculative option)

NOTE: I've never used an online wallet service, but if I did, I would read this first: https://en.bitcoin.it/wiki/Browser-based_wallet

2. To *get* bitcoins, or fractions thereof (down to millionths) you need to know someone with bitcoins -- 'Happy to oblige. Here's a nickel to get yourself a better currency.' ... or have an account at an exchange -- I use Mt Gox which has had its ups and downs. http://mtgox.com -- and ...

NOTE: for those who missed the memo: http://dilbert.com/strips/comic/1995-06-24/

3. You will have to have an e-currency. I use http://dwolla.com which seems to be doing reasonably well (though the competitors massively advertised by VISA and MasterCard seem to be winning the GenY crowd's itch for mobile mail -- you do know what POP Money is don't you?)

dwolla is basically a paypal competitor (paypal is owned by eBay).


Getting into bitcoins (medium): USD bank account -> Dwolla -> Bitcoin exchange
Getting out (hard): Bitcoin exchange -> Dwolla -> USD bank account
Bitcoin to Bitcoin transfers (easy): all clients interoperate -- online wallet, bitcoin exchanges, your personal wallet client on your PC.

Getting in is easy, getting out is hard
wink.png
You will pay transaction fees at every step
when you cross system boundaries.

NOTE and WARNING: Bitcoin is only *semi* anonymous. It is about as anonymous as your 'secret' online identity and fake email accounts -- but no more secure than that. If you do illegal shit with it, you probably can be hunted down, if The Man cares enough. Don't even try. Play money -- have fun.

Longest running thread on this topic at SI: http://stumbleinn.net/forum/showthread.php?t=25004 or see the tags for more.

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Quote
Originally Posted by python1340 View Post
Awesome!

Another note for newcomers to this site: the more you poast here, the more Texas Holdem Dollars you earn. You may redeem your virtual 'dollars' in the Gameroom, located at the top of the front page on the right hand side, You will find a variety of slot machine games, a poker table, and more, for your convenience.

If you want to do a fantasy bet on a sports event, or some other topic, post a thread in the 'Help' section and someone who can arrange it might see it in time. Then again, possibly not. Early bird gets the worm.

You will also find that you can *transfer* your Texas Holdem Dollars to each other. I originally bought the bitcoins I currently have because I thought it would be cool if 'Circle of Crust' Texas Holdem Dollars were backed by Bitcoins, at 1,000,000:1 ratio [idea made more sense when 3 sites used the same poker software, and inter site transfers would have been fun]. I might be willing to make a market in bitcoins (or Texas Holdem Dollars -- the the extent I hold any) at that rate. Drop me a PM. I lost too much money at Poker so I can only make a market in dwolla and bitcoin for now, unless my luck changes.
wink.png


Anyway, 1,000,000 THD = 1 bitcoin (current CofC peg) and screw fiat currencies.
 
Macrobius

Macrobius

Megaphoron
So, if I read that right, the Circle of Crust 'Texas Hold 'Em Poker' flash game craze was, sometime backed by 2551230 USD in YOG toilet paper bux.
 
Macrobius

Macrobius

Megaphoron
Moar from teh archives:

So, to see how easy this can be, I checked out an online bitcoin wallet --

http://walletbit.com

1. I took 30 seconds to give them an email and password, and create an account and got this:

walletbit.png


2. Then I went to http://mtgox.com and transfered 0.05 BTC to that wallet ID:


The transaction is under way, for your information, the transaction ID is:
3e587159897a1593d711298067f134a17169747c4a7256b483 417062999395cb
3. That transaction code can be used to search and find the account related to the transaction:

http://blockchain.info/address/192LW...kdnaxHfdetCrT7

(notice that you can see everything that is put into an account if you know the account number and you can learn the account numbers if you know the transaction ID! So, to be semi-anonymous, you have to create a new target account for every receipt using the handy button in the first picture....)

3. It may take an hour or two for your account to receive the funds -- blockchain.info will probably see it before you are credited:

walletbit2.png


Now, you can see that account has 0.05 BTC with a bit shaved off in transit (worth about 66 cents, but it would probably cost a quarter or more to turn that back to dollars).

What is it good for? Once the currency is in circulation, you can pass it around and settle up entirely on the web, using stuff you can set up in a few minutes. There are widgets and such you can put on your website to accept donations or payments in this form.

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Convertibility of CofC poker dollars to bitcoin is temporarily suspended, due to (yet another) bitcoin mania:

http://www.zerohedge.com/news/2013-0...-about-bitcoin
http://www.zerohedge.com/news/2013-0...doubles-cyprus

Due to this instability (which reminds me of similar instability in the price of gold, for similar reasons) the above .66 cents would be closer to 5 bucks. Unclear where the exchange rate BTCUSD is going, but either way is bad for someone.

And of course there is always this:
http://stumbleinn.net/forum/showthread.php?t=25004 ‘We are 100% certain that governments will start banning bitcoins in the next 12 to 18 months.’

More geeky discussion here: https://news.ycombinator.com/item?id=5473128

Related DDOS attacks? http://siliconangle.com/blog/2013/03...olla-sendgrid/


MtGox Bitcoin Exchange and Dwolla

Bitcoin has seen a lot of popularity recently and, as a result, processors for the cryptocurrency and exchanges have been the target of DDoS attacks. Payment processor Dwolla became the first to notice a cyberattack under way and then Bitcoin exchange MtGox also came under fire—it’s currently unknown who was attacking the sites or why, but it’s not an uncommon event for Bitcoin exchanges and processors. Niche spaces that involve money making are especially susceptible to DDoS and it could be used to camouflage fraudulent activity—although it’s harder to get away with that sort of thing with bitcoins themselves, it might be possible to wound an exchange or processor.

MtGox saw a dip in the value of BTC lagging along the peak of the DDoS but the value quickly sprang back up again. Current talk amid the market is that a 5,000 BTC sale happened during that time and this is what caused the value dip.

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Zero Hedge continues to go all out on this topic:

http://www.zerohedge.com/news/2013-0...ption-standard (infographic)

http://www.zerohedge.com/news/2013-0...-ness-bitcoins

Even Truthout (the liberal pub) is jumping on the Bank Deposit Scare bandwagon:

http://www.truth-out.org/opinion/ite...ic-think-again

Bitcoins went up to 140 USD and bounced around a bit -- falling continuously now into the 130s.
Click to expand...
 
Macrobius

Macrobius

Megaphoron
Me:
Your 25902 poker points would have been worth 36.26 USD at current BTC market prices using the now suspended conversion ratio of CofC poker dollars to BTC.

The richest poaker player, Intrepid, could have cashed out at 208.91 USD.

However, no one cashed out.
Click to expand...
 
Macrobius

Macrobius

Megaphoron
The bubble continues:

http://www.zerohedge.com/news/2013-0...oin-passes-200

200 was my best guess for the peak. Who knows what happens next -- so much for my guess.

Having locked in at 105 USD, my experiment is now facing the question of how to move from MtGox based USD to 'actual' USD. Early on, I decided to avoid the Dwolla exit path -- Mt Gox now requires you fax them a copy of your drivers licence and utility bill, to comply with Dwolla's ALM (anti money laundering) regulations. Dwolla is probably ahead of the curve, and being regulated to death.

I eventually decided to exit by going back into BTC (risky), then moving to http://coinbase.com -- which is more 'paypal' like and seems to be one way 'out' still. I'll start with a small amount and let you know how it goes.
Click to expand...


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AAAIIIEEEEE!
Needless to say, the crash came -- here's a bevy of articles at Zero Hedge starting with the latest:

http://www.zerohedge.com/news/2013-0...es-after-hours


Think the great BitCoin drama is over? After plunging by over 60% intraday, touching $100 from an all time high of $265 earlier, BitCoin was just getting started, posting a just as epic rebound to $200 in mere hours... before tumbling once more to $125... before rebounding again to $180... before sliding to $140... and so on. As the vomit-inducing sequence above hints, merely following every twist and turn of the real time tragicomedy that is the minute chart of BTC is a full-time job. And with the bulk of assorted BTC price charts DDoSed into oblivion, or merely down due to record traffic, the only remaining real-time chart may be the following from Clark Moody: we suggest using 1 Minute resolution. Perhaps what is most fascinating, is that unlike regular stock, FX or commodity charts which are largely dominated by robots, algos and other electronic traders, the trading in BTC is purely carbon-form based. So for those who enjoy some seriously hypnotic after hours undulations, this chart's for you.
BTC%20AH%204.10_0.jpg


http://www.zerohedge.com/news/2013-0...40-and-dumping

http://www.zerohedge.com/news/2013-0...mbles-25-hours

http://www.zerohedge.com/news/2013-0...itcoin-crashes

Also (brief): http://www.businessinsider.com/bitcoin-plunges-2013-4

So, I stepped out of bitcoin around 105, assuming it would go to 200 and bust -- I was a bit off. It popped to 260 but only for a few hours. I actually used the plateau at 200 to get back into BTC, move to http://coinbase.com which I have available to convert -- not to 'exchange funds denominated in USD' but actual USD, and did so. My concern is that MtGox would sink and the paper USD at the exchange be unavailable. Exchanges are a bit like uninsured banks, and just because you have 'dollars on deposit' doesn't mean you can get them. The easiest/fastest way out of Mt Gox is get into BTC and let some other place do the dollar conversion -- Mt Gox requires you fax them your driver's license and a utility bill -- fuck that. Thus BTC proved its utlimate worth -- it's a damn fine vehicle for getting money out of Mt Gox.

My 'betting the farm against BTC' at 105 was a bet that the current level won't hold, and the peak wasn't worth chasing (I misjudged the peak -- a gut feel for human psychology as to when the game would end) by a bit, but not too much. The pop was 15% higher than my estimate, and lasted only a few hours. My 'put' to USD is still out of the money, but I expect it won't be in a week (my estimate of time when I made the play was 1-2 weeks, with my regret increasing after that).

Anyway, my exit from MtGox was on the leading edge of the final updraft, and gained a bit in the hour or two I was vulnerable (I did a test transaction before committing to the full). I exited the full amount a second time at 230 USD (30 below peak) and my primary risk now is the committed ACH transaction by Coinbase won't go through because they will discover they are insolvent tomorrow or Friday -- in which case all my 'winnings' are paper and bust. I'll let y'all known on Monday how I did.
wink.png


The lesson here is that BTC can be very useful for moving USD (in and out in about an hour) *if* the exchanges remain liquid and you can tolerate a few hours of 'exchange rate' risk -- this was naturally the riskiest night of the year to do so. However it does take longer than the bitcoin clearning time ( 1 hour) for a 'crash' to get going, so if you look at the charts it's not all that risky. The 'ringing time constant' in ZH's chart is evidence of how *fast* bitcoin is relative to other currencies ('highly underdamped oscilator') -- it also explains part of the volatility, aside from the HYIP psychology plainly driving speculation, together with the hacker's ability to manipulate the price via DDOSing the exchanges -- forcing a learning curve on users, and exchange diversity.

Besides the DDOS, today was the last day to exit Mt Gox and still get funds credited in coinbase via ACH on or before 4/15 -- a magic date. In retrospect, a 'downdraft' of profit taking should have been expected, though none of the commentators have noticed that feature, only participants.
wink.png
Click to expand...
 
Macrobius

Macrobius

Megaphoron
To anyone who happens to have surmised the DDOS attacks and price manipulation, breaking the currency through its weakpoint, the exchanges, are THEM -- no shit, Sherlock.

Technology has lots of surprises -- but human behaviour and politics are very much what they always were, and not changing anytime soon. THAT, you can count on.

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Bitcoins or a Nigger -- which should you buy?

figure2.jpg


http://www.measuringworth.com/slavery.php

Bitcoins:

chart.png


Source: http://bitcoincharts.com/charts/

At peak, a bitcoin was worth about 1/4 of a Peak Nigger. Now, somewhere around a decinigger or a bit less. Both assets seem to have been overrated, and declined in value back towards historical norms.
 
Macrobius

Macrobius

Megaphoron
Dirty Sanchez writes

Some random drunken thoughts upon returning from my regular Sun. drinking binge:

1) The problem with your first chart is that it is too old. The value of a nigger is less than zero and has been for some time. Negative value has always been a tricky subject for economists.

2) My problem with bitcoins is the way that they are created and the fact that nobody knows who owns what. ZOG has access to almost unlimited amounts of computing power, and I would not be at all surprised if they mined a bunch of them and were behind the recent manipulations in value.

3) Opera works for me now without the need for spoofing. Did you update the browser sniffer?
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#3 No changes on our side. Weird. Glad it started working again.

#1 Sorry about the Niggers.

#2 There are a buzillion versions of 'alternative bitcoin' these days, some with substantial market share, some not. Like anything 'open source' -- it forked.
 
Macrobius

Macrobius

Megaphoron

Stumble Inn

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WF Hermans writes:
That's why I now think Bitcoin won't go higher than $60K. I should add I never thought Bitcoin could ever get higher than $6K just one year ago.
Click to expand...

LOL Hermans at 6k USD. Trade like a sticknigger.
 
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