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September 2, 2011 / twobitcents

The FBI Catch 22

Everyone is abuzz about the news that the FBI is engaged in terrorizing currencies “competing” to the USD. That’s not too concerning in the sense that Bitcoin is decentralized,and they will have a hard time fighting the anonymous, but we’re now in a catch 22 with evaluating the credibility of new Bitcoin service providers.

In that same article the writer points out “we should expect any Bitcoin exchange or major retailer to have security systems strong enough to withstand a domestic terrorist attack by a US Federal agency”, but eventually concedes that all “exchanges, wallet sites, and retail outlets should be presumed to be compromised.”

I probably don’t need to allude to the massive power the FBI can affect, but I think I just did. This organization could craft up fake documents that say “Super Legit Bitcoin, Inc.” exists and is a valid business. Your average Joe checks the validity of a business and is operators (here is where Bruce Wagner should have been spotted) and everything is in the green. Later the service provider screws him over, and he takes away from the experience that Bitcoin is a scam/fraud. *dusts hands* Done deal, right?

Am I spelling out the demise of Bitcoin? Not at all. If the FBI ultimately ends up creating fake companies to tarnish Bitcoin, they will probably destroy any credibility remaining in the governments role of registering businesses. Meanwhile fostering the environment for a private market to perform the function of what the government currently does. Even with the FBI’s super powers, with the Internet and ability to easily share information,  they will likely just waste their time as the market repeatedly selects them out.

Bitcoin supporter or not, we are on the path away from centralized government-issues/controlled currency. Even rewinding the clock 50 years to credit a similar scenario existed. The difference is that unlike credit, Bitcoin or it’s successor will have nobody to target.

June 27, 2011 / twobitcents

Why Bitcoin Should Not be Federally Regulated



John William Nelson wrote a great article about Bitcoin and how current federal securities laws do not apply to it.

There are questions as to whether Bitcoin falls under the regulations of federal securities law. Federal securities law is a complex area of law that grants courts and the SEC great leeway in classifying investment products as securities. Nevertheless, a Bitcoin in-and-of-itself is not a security that can be regulated under federal securities la.

June 24, 2011 / twobitcents

Peter Schiff Bitcoin Interview

June 24, 2011 / twobitcents

MtGox Will Reduce Transaction Fee for Two Weeks

Over the last day the currently defunct MtGox exchange has released two statements. Overall they claim they will be back online June 24 and that they will be lowering the transaction fee to 0.3% (from 0.65%) for the first two weeks after opening the exchange.

June 22, 2011 / twobitcents

The Bitcoin Show: Episode #7

June 22, 2011 / twobitcents

BTC Escrow Countdown for MtGox

The Bitcoin News Network is running a story following the “Kevin vs MtGox” scandal. At the heart is 643 BTC that was acquired from the “hacked” sell order at $0.01. Most of this is following a post by Kevin Day himself.

Too long, didn’t read? About 643 BTC sitting in a ClearCoin escrow account. Who gets it depends on what MtGox does.

June 22, 2011 / twobitcents

How Bitcoin is Open Source

Recently I watched a video that, if serious, calls to question if/how Bitcoin is open-source. The guy is rather attacking in his inability to find or understand the various files in the source code he downloaded. It appears as if he is not a developer at all, and while I admire his attempts to decode and understand a C program – it’s probably not going to happen for a while.

But his question is perfectly valid: How do you know that Bitcoin is open source? I can hear many just groaning and turning in disinterest. Remember, if BTC is to be accepted and used it’s going to have to be adapted to many types of people.

He has the source code already, so the simplest way to verify would be to build from source and run that. He probably doesn’t know how to do that. If he is running Ubuntu (or was to do so in a VM) he could grab the source and build:

apt-get source bitcoin
apt-get build-dep bitcoin
cd bitcoin*
dpkg-buildpackage -us -uc -nc

This would get the source from the repository and build it into an unsigned .deb you could install and verify. However, the potential for someone to introduce malicious code is prevalent in open-source, although handled very well using free association. What open source sometimes lacks in terms of quality is contrasted with it’s ability to adapt quickly. If malicious code does make it in, chances are it will be caught through the vast amount of people looking at the code. That’s the theory at least.