Bitcoin cracks US$100

[FlowerFarmer]

Pretty much how I see it.

If you are making a transaction you want to be anonymous, just using bitcoin alone isnt enough. You also need to use anonymous computers and hide your ass as necessary in the acquisition and all parts of the movement of bitcoins.


This is why you see people getting hacked/scammed left and right.. bitcoins gone. It is very easy to expose your true identity through the blockchain if you are not very careful in taking additional steps to prevent it.

If you don't route though Tor, your IP address will show up in blockchain.info.



With this new mania of bitcoin there are now startups opening the door to "hosted" wallets and similar apps, etc. <-- insane if you ask me. It's similar to having a stranger holding your wallet full of cash.

 

[PhenoMenal]

Pretty much how I see it.

FlowerFarmer, you actually just gave me negative rep and started your attack against me with "my comments are more mature then any of yours" ......... I don't even know how to respond to that sorry!

If you are making a transaction you want to be anonymous

Why??? It's just another currency, it's not purely Silk Road. The anonymity that Bitcoin provides is completely different. Many of us have invested in Bitcoins for legit reasons with nothing to worry about in regards to the tax man.

just using bitcoin alone isnt enough. You also need to use anonymous computers and hide your ass

...

This is why you see people getting hacked/scammed left and right.. bitcoins gone.

?????

One of Bitcoin's stumbling blocks is getting over people saying things and pretending to know what theyre talking about when they're just speculating or making assumptions, and that may prove Bitcoin's Achilles Heel over the coming months...

 

[unspoken]

The problem with btc is that it's not a store of value, it's just a medium of exchange. That's fine for some uses, but over I don't find it to be very useful at all, especially if it's so volatile. I saw people suggesting that exchanges should be used to mitigate volatility. Isn't that kind of the opposite of what btc is about in principle?

 

[bentom187]

like I want to learn cryptography just to spend my money when I could have just retained my FRNs, that are accepted everywhere.look what the face book guys are doing to keep theirs safe lol

Winklevoss Twins Revealed As Owning 1% Of All BitCoins
http://www.zerohedge.com/news/2013-04-11/winklevoss-twins-revealed-owning-1-all-bitcoins

Think the 75% plunge in BitCoin values in two days has crushed all former supporters of the virtual currency (which truth be told is only back to levels from a month ago)? Wrong. As the NYT reports, a very unexpected supporting genepool (split into two identical halves) has emerged in the shape of two names previously linked to yet another pre-bubble frenzy name, FaceBook: Cameron and Tyler Winklevoss (collectively, the "Winklevii"). Following stints as Olympic rowers, Simpsons characters, and antagonistic Facebook litigants, the two 31 year-old identical twins are now indirect investors in the latest "currency" craze, whose heyday may well have come and gone, courtesy of owning a whopping 1% stake in all of the entire outstanding supply of BitCoin which at last count was worth $1.3 billion (if maybe a little less now).

An array of speculators have now bid up the price of the bitcoin to the point where the outstanding supply of the digital money was worth $1.3 billion at last count. The Winklevii — as they are popularly known — say they own nearly 1 percent of that, or some $11 million.



The decision by the brothers to go public with their position signals a new stage for what has been an experimental alternative to national currencies. Created in 2009 by a programmer or programmers known only by a pseudonym, the bitcoin world has been dominated by anonymous programmers and traders.



...



The 6-foot-5 Winklevii were unfazed by the latest tumult. Indeed, the brothers said they used the low prices to buy more. They argue that bitcoin will have much further to soar once a broader audience sees its virtues: a unit of exchange that can be moved around the world at the click of a button without requiring any payments to Western Union or American Express.



“People say it’s a Ponzi scheme, it’s a bubble,” said Cameron Winklevoss. “People really don’t want to take it seriously. At some point that narrative will shift to ‘virtual currencies are here to stay.’ We’re in the early days.”



The brothers began dabbling in bitcoin last summer when the dollar value of a single coin was still in the single digits. In addition to the purchase of bitcoins, they also say they have invested in a bitcoin-related company, but declined to disclose which one. The currency itself exists as a string of letters and numbers. In order to keep their holdings secure from hackers, they have taken those codes off networked computers and saved them on small flash drives. They said they have put the drives in safe deposit boxes at banks in three different cities.

Nothing like having a string of letters and numbers in safes in flash drives in three cities as a store of value...

To some more cynically inclined observers, for the two brothers who lately have been desperate to get back into the public arena, this latest "investment" is nothing but a rather expensive PR campaign, and one which depending on their cost basis, may have already proven to be a huge loss. However, that will not step them. Or many others desperate to ride on the coattails of the next parabolic bubble:


Other Silicon Valley venture firms, while not holding bitcoins, are starting to show interest in the technology. Tim Draper of the firm Draper Fisher Jurvetson put money into CoinLab, which is doing bitcoin-related projects. Tribeca Venture Partners announced this week that it was putting money into Coinsetter, a start-up trading platform for the currency.

Sadly, a somewhat notable problem with BitCoin, the currency and not the bubblicious asset, is that one can't really use it for much other than to buy more bitcoin, or convert it into fiat currencies: the same fiat currencies that BitCoin is trying to replace:


So far, few real companies accept bitcoins as payment, and the primary place they can be used is an online bazaar, known as Silk Road, where narcotics are the main wares for sale. But the currency’s believers see a future in which Starbucks and Amazon take bitcoins. For their part, the Winklevoss twins have used some of their bitcoin to pay for the services of a Ukrainian computer programmer who has worked on the site of their venture capital firm.

But the drop dead punchline:


“We have elected to put our money and faith in a mathematical framework that is free of politics and human error,” Tyler Winklevoss said.

That's funny - it is more or less what the heads of the Federal Reserve and all other central banks have said for the past 100 years.

As for the future of BitCoin? Well, if its credibility can survive a collapse like this...

... maybe it just does have staying power. Unless, of course, the other sizable "investors" are none other than the central banks the currency hopes to supplant, just biding their time until they launch the next avalanche selloff...

 

[FlowerFarmer]

huh?

I'm not sure what you're refuting Pheno.


"If you are making a transaction you want to be anonymous, just using bitcoin alone isnt enough."


I think you read that wrong. I'm not saying you want nor need every transaction to be anonymous. I should have worded it differently (or you should have quoted my full sentence rather then half of it) ... I'm saying that if you DO want to make an anonymous transaction.. bitcoin is not necessarily the solution, at least not without proxy/anonymity in how you acquire and transact in bitcoins.

We bring this up because anonymity is one of the PROs that a lot of bitcoin pushers often claim. It is really not if one doesnt know of TOR and proxies.. they'll be exposing every one of their transactions on the blockchain, displaying their IP, which can then be used by hackers or whomever to locate their wallet and/or transaction history across many transactions. <- - which could further be used maliciously depending on the nature of the transactions. While bitcoin itself may be secure, there are still many getting bitcoins stolen out of seemingly secure wallets.

Many of us have invested in Bitcoins for legit reasons with nothing to worry about in regards to the tax man.

What is your reason for investing in Bitcoin if you don't mind me asking? Stumbling blocks as you call them, much related to speculators buying and hoarding as opposed to embracing such an alternative currency and SPENDING them.

How much spending have you done with your bitcoins as opposed to buying/holding/selling. Rather then a proxy to fiat/USD.... which inherently not good for the growth of bitcoin.


Do you believe in the concept of bitcoin? decentralized currency, freeing us from the evil banksters, or are you merely trying to get rich off of the mania?


^ note.. I'm not saying the later is necessarily bad. I'm all for buying low and selling high to make a quick buck from an investment standpoint, but unfortunately it does come at the expense of others as opposed to generating wealth from real work and creation.

Hopefully now that this bubble has popped we'll see continued steady growth out of such a world shattering concept that is bitcoin.


EDIT - Pheno. You commented me privately 1st regarding my supposed "immaturity" for disagreeing and feeling bad for those whom bought into your & Powers hype that bitcoin was "going up no mater what". I was just trying to protect others from taking that horrible advice and losing their ass. You were also calling us HATERS for trying to get those to think logically about the recent bitcoin boom and save their dollars.

 

[FlowerFarmer]

PS - Real money (the physical shiny stuff) is ON SALE today. Stock up.

 

[Gert Lush]

Hopefully now that this bubble has popped we'll see continued steady growth out of such a world shattering concept that is bitcoin.

Quite!

Funny how all the interest peaks when the issue is SPECULATION but dwindles when we just consider normal, boring, legit use as a medium of exchange.

I suppose that is in a way the curse of bitcoin. Any successful concept like that is bound to attract a whole load of sharks and wide-boys out for a quick buck. Aah, the price of success. We'd have a lot less of it if the system was more familiar, if there were perhaps three or four such currencies.

But suppose you were a user that took an extended sleep and missed all the bubble brouhahah. What's changed for you? Not much. People looking to turn a quick buck will always be around. That doesn't mean there's something wrong with bitcoin, though there might be with the speculators.

And I'm not too sure about that either, fortunes are always made at the beginning of a gold rush. And why the hell not? If people see some intrinsic value in a system that gives them an alternative to the banksters, why on earth would that not be attractive?

If we are looking at a seed of a widespread future financial system here, are we not looking at "gold"? Conversely, would we not be completely stupid to expect any such transition to be 100% painless?

 

[bentom187]

PS - Real money (the physical shiny stuff) is ON SALE today. Stock up.

Kyle Bass: I'd Much Rather Own Gold Than Paper
[YOUTUBEIF]94OVi_lS2Xg[/YOUTUBEIF]

its cheap too I found it for 62 a gram on a certain website.

I might wait to see if it goes any lower.not long though.

 

[Harry Gypsna]

We bring this up because anonymity is one of the PROs that a lot of bitcoin pushers often claim. It is really not if one doesnt know of TOR and proxies..

Anyone using bitcoin to go shopping on the shady parts of the internet, knows about Tor and proxies. Nobody is using SR without Tor, you can't get on SR without Tor, and SR isn't the only onion site using bitcoin.
Anonymising your transactions isn't exactly rocket science. Into a tumbler, paying out to various wallets in random amounts. These wallets paying into other tumblers and so on. A lot of hassle though.

 

[GMT]

If you've got bitcoins you can see your money clearly here preev.com

 

[zeke99]

http://bitcoincharts.com/charts/mtgoxUSD#rg60ztgSzm1g10zm2g25zcv

Bottom line: If the purchasing value fluctuates this much from one day to the next, than it has dogshit value as a form of currency.

Many folks have been duped.

 

[SmokeyTheBear]

Someone somewhere is getting rich off of this scam.

 

[Gert Lush]

Someone somewhere is getting rich off of this scam.

Someone somewhere is a whining stoned paranoid, but that don't stop you from smoking... right?


PS. (Do try and find out what a scam IS, before deciding if something is one, you might even manage to avoid one that way)

 

[Gert Lush]

Bottom line: If the purchasing value fluctuates this much from one day to the next, than it has dogshit value as a form of currency.

Fair point (at the moment, anyway) but that doesn't affect its value as a medium of exchange - unless you can buy with cash on Silk Road, for instance.
Remember, this was meant to be a medium of exchange, not a get-rich-quick "gold-rush" scheme. If this upheaval in the exchange rate fucks over all the two-bit speculators that watched a video on Bloomberg or whatever, then is that not a good thing?

Many folks have been duped.

How have they been duped?

Were they promised something that didn't materialize?

 

[PhenoMenal]

lol @ "many folks have been duped". Like Gert asked... HOW???

Idiots maybe. The rest of us have made money, and legally.

It's probably the people that think Bitcoin is a "pyramid scheme" or "ponzi scheme" that have been burnt the most ... not burnt for their ignorance of what Bitcoin actually is, but for failing to invest, and now having no choice but to whinge about others making money when they could've, but chose not to.

 

[opiumo]

Allow me to go offtopic, i mean some people are just really off the charts hehe see what i did there?

If we gonna get down like that is there anyone with enough experience in his pocket that he can actually define money(?), we wanna get down to the fundamental and basic idea of what money really is.
Because some people seem not to really understand the fucking basics.

"Money 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. 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. Any kind of object or secure verifiable record that fulfills these functions can be considered money."

Store of value
To act as a store of value, a money must be able to be reliably saved, stored, and retrieved – and be predictably usable as a medium of exchange when it is retrieved. The value of the money must also remain stable over time. Some have argued that inflation, by reducing the value of money, diminishes the ability of the money to function as a store of value.

Source

Inflation that is what is happening to BTC right now, more people are starting to mine, and more coins appear. And ofc it is volatile, but when it is outmined and done it will begin deflation since there are no more coins beeing made. That is if people still are using BTC in safe transactions or whatever its use of field is at the time of event.

Happy speculating guys, if there is a market where people wanna make safe transactions there is a future for BTC simple as that. Me personally? Im a Frescho & Miz kind of guy.
http://www.youtube.com/watch?v=eziZZTKF0Ak

 

[c-ray]

 

[c-ray]

from http://www.reddit.com/r/Bitcoin/comments/1c8yb3/a_stepbystep_guide_to_creating_an_anonymous/

A Step-by-Step Guide to Creating an Anonymous Wallet for Covert Practices

With the recent Bitcoin “bubble” fiasco and the subsequent rise and fall of Bitcoin value, it seems that this subreddit has become obsessed with making money. But get-rich-quick schemes are not at the heart of Bitcoin. Instead BTC should be seen as a way to keep Big Governments and Big Businesses from knowing how much money you have and what you choose to spend that money on. As a currency, it doesn't matter how much the value fluctuates if you plan on spending your wealth on sites like the Silk Road and etc.

(OK, maybe it does matter a little bit if the money you spent yesterday is worth twice as much today; but this guide is for spenders, not hoarders. Or at least for hoarders who also like to spend.)

Let's discuss my favorite attribute of the Bitcoin protocol: anonymity.

Many noobs getting into the Bitcoin game fail to realize that anonymity is an important key to understanding the importance of Bitcoin. In places where your wealth can easily be taking away from you (see Cyprus, Russia, China, the USA and others), Bitcoin can function like a store of cash buried in a dessert in the middle of nowhere – buried so deep that nobody can find it, not even the most powerful men and women on Earth.

POINT: If you are purchasing your Bitcoins through services like Coinbase or Mt. Gox, and if you've ever given your real name and bank account information to a Bitcoin Exchange, then you are NOT anonymous. Your Bitcoins can be traced back to you. Your purchases are recorded in the blockchain, and although it's difficult, it's certainly not impossible for those with the knowhow to find you and prosecute you. See this link before continuing.

Bitcoin is not inherently anonymous. You must take steps to protect yourself in order to keep your identity a secret. And even still, if you don't know what you are doing, you run the risk of being caught. So if you care about hiding yourself and your money, I offer this guide as a way to accomplish secret purchases and covert trades. Of course I cannot guarantee you won't end up in jail. At the end of the day, nobody knows how closely governments are tracking BTC purchases over the TOR network. Some people even believe that the TOR network was created by nefarious forces. I doubt it, but you never really know.

STEP ONE: Anonymous Hardware
Because you cannot really know whether or not you are being watched, your first step in creating an anonymous wallet is to protect yourself by buying a cheap laptop computer and removing the hard-drive. Really, who needs a hard-drive anyway? Toss it in the garbage.

STEP TWO: Anonymous Software
If you don't know how to download a Linux LiveCD, then stop reading now. You are probably not skilled enough to protect yourself anyway. If you don't know how to download a Linux LiveCD, then proceed with extreme caution; downloading an ISO file and burning it to a DVD is pretty damned easy. Easier than anonymity. Those who refuse to learn are at risk.

It's arguable which software you should use, but I recommend connecting to the TOR network using TAILS, a live DVD or live USB that aims at preserving your privacy and anonymity. TAILS helps you to use the Internet anonymously, leave no trace on the computer you're using, and to use state-of-the-art cryptographic tools to encrypt your files, email and instant messaging.

ProTip: For an extra layer of protection, download the ISO from your local library's computer. Or while you're sipping a mocha at Starbuck's. Then burn it to a DVD and take it home. Place it in your crap computer (the one without a hard-drive) and turn it on. Enter the BIOS menu and boot from CD if your computer doesn't do it automatically.

DO NOT CONNECT TO THE NETWORK FROM YOUR HOME.

I repeat, for an extra layer of security, DO NOT CONNECT TO YOUR HOME WIFI USING TAILS IF YOU WANT TO DO SHADY THINGS. That's just common sense. TAILS itself isn't illegal. But if you're the type to do shady things, you don't want to practice on your home Wifi, which you probably pay for with a bank account or credit card.

After you've spent a day or two using TAILS and familiarizing yourself with the LinuxOS, and once you feel comfortable enough to continue, then head back to your local Starbucks, boot up the LiveCD, and connect. Browse the TOR network and triple-check that you are protected. You can do this by checking your IP address for DNS LEAKS. Only if you feel comfortably hidden from prying eyes will you want to continue.

STEP THREE: Creating an Anonymous Wallet
There are several different ways to to this, but the easiest way is to use the code at bitadress.org. Thanks to /u/SpenserHanson for creating this thread which describes the process in detail:

1. Save bitaddress.org.html to your computer
2. Close browser.
3. Disable computer Wi-Fi.
4. Open bitaddress.org.html in browser.
5. Generate an address and record the private keys.
6. Close the browser window.
7. Go home. Think about what you are about to do.

STEP FOUR: Funding the Anonymous Wallet
Funding your wallet will be the most difficult part of this process. Obviously you don't want to go to a site like Coinbase or Mt. Gox and link up you bank account, then start sending coins to your anonymous address. That would be stupid. Very stupid.

Probably the best way to get coins is to know someone who is willing to send you a few, but even then you lead a trail back to your friend.

My suggestion is to make cash deposits through ZipZap or Bitinstant, and give them false information (for example, use the new email you created, over the TOR network, from a site like Hotmail or Yahoo, which doesn't require a phone number to sign up – I'm looking at you Gmail. Make sure your new account forwards your email to yet another account, perhaps Tormail or a temp address. You probably won't need to use the email more than once anyway, for confirmation, if you need it. And you might want to create a new address with every deposit, just to be safe). There are other options of course. Some companies will sell you Bitcoins anonymously through Bank of America cash deposits. But remember that the moment you walk into a Big Bank and give them money, you are caught on camera. Maybe offer a homeless man some money to make the deposit for you. And hope he doesn't just pocket your money. Regardless, you want to stay away from Big Banks if you can. It really isn't that hard.

If you absolutely must make deposits from your bank account, you could send your coins to an anonymous online wallet first and then to cold storage, but make sure to use several mixing services over a period of several days. And then have trouble sleeping at night.

Another great idea is to use the localbitcoins website; meet with a seller locally; pay cash and GTFO.

STEP FIVE: Spending from the Anonymous Wallet
If you are looking to CASH OUT, there aren't many anonymous options besides meeting with somebody and selling face to face. You could always sign up for your own account at localbitcoins, then hope a buyer contacts you. But this guide isn't about making money, it's about spending your coins.

To buy things, you'll want to go to back to the library, connect through TAILS, download a lite client like Electrum and access your account. Every time you want to spend, you will have to re-download, but it should not take more than a few minutes. And though you are probably safe enough to spend directly from the client, if you really want to be safe you should send the funds to a second wallet though a mixing service, then to a third or fourth or fifth wallet, also through mixing services. These “Mixing Wallets” should NOT be created using the TOR network because the TOR exit node may be monitored. I've never had a problem myself, but it's theoretically possible that an attacker could record the password/private keys for the hosted wallet and steal your coins. Which is why you should NEVER USE THE SAME ACCOUNT TWICE. And never access your cold storage wallet through the net. That would be very very bad.

To created the mixing wallets you will also need a way to hide your identify without using TOR. The best way to do this is to sign up for a VPN service though a public WiFi hotspot and then pay in Bitcoin. The best service I have found is called Private Internet Access. You can access their service through a public computer, connect to the VPN, and voila, you now can safely create mixing wallets without exposing your password to the open network. Make sure that after you mix the coins you send them all to a safe, final address, which will be your Spending Wallet.

Remaining anonymous will cost your some time and money. With each transaction you're going to have to pay for mixing, and also the transaction fee. And setting up a new email and a new account with every transaction (so that you can spread the coins across multiple fake accounts) will be bothersome but worth it in the long run. You can't put a price on piece of mind when it comes to your safety.

REMEMBER Your Spending Wallet should not contain all of your funds. The bulk of your coins should be address you created using bitaddress. Never trust an online service to hold the bulk of your funds. The recent hacks have shown that the best place to store your private key is in your head.

Final Notes:
The Bitcoin protocol itself is not anonymous. And theoretically it's possible to trace every transaction back to you. This is why you need to use fake emails, many multiple addresses, and a VPN service with heavy encryption. Even with the knowledge and the technology to map the blockchain, the FEDS will have a hell of a time tracking multiple address though VPN tunneling back to a cold storage wallet that you created offline and only use to send coins over TOR. There are just too many roadblocks. Of course nothing is impossible. But I sleep very good at night knowing that my door is not going to be kicked in by the Men in Black. And even if you're not doing anything illegal, this sort of behavior is certainly suspicious.

If you were lucky enough to receive a tip from Reddit's own /u/bitcoinbillionaire (I myself was not) and you haven't cashed out. Create a VPN-tunneled throwaway account and tip yourself before claiming your coins. Then send them through a mixing service and to your cold storage address. Now you're on your way to being an anonymous spender.

I hope this guide helps. I really do. The purpose of Bitcoin isn't to make money. It's to protect the money that you already have, and to protect your identity in places where your identity is compromised. Everybody in the world wants your money, especially the richest of the rich. You ought to do everything you can to keep yourself safe. Especially if you live in a compromised geography.

 

[sith44]

Interesting.....we'll see how it pans out in the future.

 

[c-ray]