Online Gambling Site Bets On Bitcoin To Avoid U.S. Laws 347
SomePgmr writes with a story about an online gambling site planning to use Bitcoin to sidestep U.S. regulations that effectively ban online gambling. From the article: "Michael Hajduk had sunk one year and about $20,000 into developing his online poker site, Infiniti Poker, when the U.S. online gambling market imploded. On April 15, 2011, a day now known in the industry as Black Friday, the U.S. Department of Justice shut down the three biggest poker sites accessible to players in the U.S., indicting 11 people on charges of bank fraud, money laundering, and illegal gambling. ... Infiniti Poker ... plans to accept Bitcoin when it launches later this month. The online currency may allow American gamblers to avoid running afoul of complex U.S. laws that prevent businesses from knowingly accepting money transfers for Internet gambling purposes. 'Because we're using Bitcoin, we're not using U.S. banks — it's all peer-to-peer,' Hajduk says. 'I don't believe we'll be doing anything wrong.'"
Another idiot buying into the bitcoin scam. (Score:1, Insightful)
Yep! This'll stop the government from coming after you!
Not!
And good job. Base your business off a virtual currency with ZERO backing and no control whatsoever.
Comment removed (Score:1, Insightful)
Re:Unrelated, but still (Score:5, Insightful)
Re:Another idiot buying into the bitcoin scam. (Score:3, Insightful)
So I pay for a product - someone signs over a certain amount of Bitcoin to my private key - and I receive the product (the ability to do the same to someone else). So I'm sorry, what's the scam, again? It's all there, in black and white mathematics.
Re:Rulers, not rules (Score:5, Insightful)
-I'm just sayin'
Re:Another idiot buying into the bitcoin scam. (Score:5, Insightful)
No control? That's an interesting way to look at it. Bitcoin is controlled by the consensus system that underlies it, if you decide you want to violate the rules then you are split off automatically into a parallel universe where whatever you do won't be recognized by your trading partners. That is a much stronger form of control than traditional currencies have. To change the rules requires the economic majority to upgrade (and thus force everyone else to upgrade with them, so trade can continue). It's pretty democratic, in that sense.
Contrast this to, eg, the US dollar, where control has been deliberately passed to a quasi-private branch of government known as the central bank. Its unelected leader pulls the levers of monetary policy in an attempt to plan the economy.
So both types of currency are controlled, just in different ways.
Re:Another idiot buying into the bitcoin scam. (Score:5, Insightful)
And plutonium. (Score:5, Insightful)
Please place sociopolitical ramblings under this. (Score:5, Insightful)
Of course the government has to outlaw gambling. It is dangerous and addictive, encourages crime and exploits the poor. Except the state lotteries, of course - those are somehow none of the above.
Re:Another idiot buying into the bitcoin scam. (Score:4, Insightful)
The US backs its currency with a fleet of nuclear-powered aircraft carriers. That's far better backing than land or gold.
Re:Another idiot buying into the bitcoin scam. (Score:3, Insightful)
Is the US going away tomorrow? No.
Are they going away next year? No.
Are they going away in 5-10 years? No.
Is "A. Random H@X0R" going away tomorrow? Who?
Are they going away next year? Who?
Are they gone in 5-10 years? Who?
Essentially currency is based on trust.
For anyone who's not a complete, gullible rube, Bitcoin fails the "smell test" there.
Re:Another idiot buying into the bitcoin scam. (Score:4, Insightful)
Its not terribly useful in the real world?
I mean honestly, can I buy food with it? Gas? How many merchants within 50 miles of my home (DC area) are currently accepting bitcoins? What about amazon, or ebay / paypal? Newegg?
Sure, I could transfer it to other people, but its also a pretty volatile currency. I have no reason to believe the value sent will reflect anything near the value once I exchange it into dollars, if I can even perform the exchange (since it requires Bitcoin exchanges or a willing purchaser).
Its kind of like trying to transfer money by trading stock: sure, it sort of works, but who really wants that kind of volatility? What supermarket would ever want to do that?
Re:Unrelated, but still (Score:3, Insightful)
> Can anyone remind me as to why gambling is illegal?
To ensure a never-ending supply of new daytraders to supply Wall Street's liquidity needs?
Comment removed (Score:3, Insightful)
Re:Another idiot buying into the bitcoin scam. (Score:2, Insightful)
currency has value because its backed by a human society. real human society is a lot more solid than a voluntary internet standard that can impode at a moment's notice. real society isn't going to implode at a moment's notice. well, it can, if an asteroid or epidemic hits. but then nobody will care about your debts and obligations (and assets). but if a voluntary internet standard implodes there will still be guys expecting you to pay your bills
Re:Another idiot buying into the bitcoin scam. (Score:3, Insightful)
Is the US going away tomorrow? No. Are they going away next year? No. Are they going away in 5-10 years? No.
Is the US going to print 80 billion dollars more next month? Yes.
Is the US going to print 80 billion dollars more the month after that? Yes.
Is the US going to print 80 billion dollars more the month after that? Yes.
Is the US going to print 80 billion dollars more the month after that? Yes.
It's not the 'going away' part that's the concern.
/. readers anti-bitcoin (Score:3, Insightful)
Re:And plutonium. (Score:4, Insightful)
Or the depleted uranium.
Re:Another idiot buying into the bitcoin scam. (Score:4, Insightful)
The value of the dollar is what you can buy with said dollar in the united states which barring a bit of inflation here and there(some inflation is a good thing) is about the same as it was last year or the year before.
If you're talking about the currency exchange rate, that value is set by the currency exchange market and is therefor bound by no sense of reality or sanity whatsoever in much the same way as stocks. The Australian dollar was trading at about 93 cents to the US dollar right before Lehman brothers and two months after it was sitting at 58 cents. Our economy barely had a hiccup and the US one was in the toilet, but the value of the US dollar rose dramatically. The most important factor causing the US dollar to drop has dick all to do with quantitative easing or the trillion dollar coin(which actually won't affect inflation at all since the effect on the money supply is essentially zero), mostly it has to do with the fact that the US economy is in the toilet and US interest rates are near zero, with interest rates being the bigger factor.
Re:I didn't say Inflation led to Depression. (Score:5, Insightful)
Sorry, but your entire post is wrong from top to bottom. Don't take it personally, it isn't like they teach this stuff properly in schools.
First, you did appeal to authority, and continue to do so. That you didn't do it in a way that is obvious to you is your problem, and yours alone. I will give you a hint: economics is not a science. There is no proof, there is no truth. If you take physics as your standard for avoiding self-delusion, economics doesn't have theories either. Citing "economics" as a source is automatically an appeal to the prestige of a collection of untested speculation.
Second, you ignore velocity and divisibility. If we assume that the hoarding hypothesis is correct, then you end up in a situation where deflation is forestalled, but acceptance is not. I'm going to skip my angry rant about people not understanding the dynamic equilibrium, but the short version is that virtually everything in your experience is the product of a balance of opposing forces. To the extent that hoarding can raise the exchange rate, the exchange rate tempts people to divest their funds. Acceptance is a product of utility and familiarity. Utility is very high and getting higher every day, while familiarity is very low, but also growing fast.
Third, you appear to have weak grasp on the distinction between money and wealth, and also on the Janus nature of credit and debt. I'm not sure how useful it would be to try explaining how much of your third section is wrong. From your point of view, your analysis appears to be completely correct, but it isn't, because your mind is wrong. In our current system, borrowing money is really damn cheap because most of the cost of your borrowing is paid for by other people (mostly through currency inflation). If you ignore the external costs, then yes, borrowing is the cheapest way to go.
Capital is wealth, you cannot borrow it unless someone has already produced it and is willing to lend it to you. You cannot buy it unless it has already been created and someone is willing to sell it to you. You can, however, create it yourself, but specialization says that your efforts are likely to be better spent doing whatever it is that you do well instead.
Money on the other hand, is merely a system for accounting and exchange. Since it is ruled not by laws of the universe, but by laws of men, it does whatever we say it does. We can create and destroy it at will. And by "we", I mean special people. You and I don't got a vote. Bitcoin is an attempt to more closely approach the platonic ideal of money-ness, and part of that is by deciding up front the answers to the questions "how much money?", "who gets it?" and "when?".
Bitcoin is an agreement among men, made real through software. We agree to follow certain rules, and give up any chance at special privilege, in return, we know that everyone else also has to follow the same rules, and are prevented from ever trying to claim special privileges for themselves (like the ability to shave a bit off of other people's money to make new money for themselves).
I tend to come off a bit harshly, but I hope this post was educational rather than offensive. I hope you (and everyone else) will ponder carefully on what is real, and what is imaginary.
Re:Another idiot buying into the bitcoin scam. (Score:2, Insightful)
I should have said harder to create, but the terminology is different. You create money, and you find or mine bitcoins, but these are essentially the same thing (adding money to the money supply). To create money you just need to have the authority to do it. To create (mine) bitcoins, you need to find the answer to an incredibly hard problem that is guaranteed on average to require a great deal of work (calculations) to be performed to come up with a correct answer. If you have a normal computer you will almost certainly spend more money on electricity to find this answer than how much a bitcoin is worth. The inventor of bitcoin doesn't have a secret way to make them faster. The people running the exchanges can't just edit some files in their own computers to give themselves more money.
How would you even run a shady exchange? I suppose you could pretend to be hacked and say all the bitcoins were stolen and you don't have enough bitcoins or real money to reimburse everyone, then move to a foreign country and spend the money there. But that's no different than what a shady banker could do with digital US dollars. That's not a failing of the bitcoin system.
There are 6 cases of theft and fraud listed in the wikipedia entry for bitcoin. How many times has US dollars been stolen from banks or currency exchanges? I have no idea. It has happened enough times where noting individual instances of theft on the wikipedia article for "US dollar" is ridiculous. People do not regard indiviudal instances of theft of US dollars at banks and exchanges by crooks as valid reasons to abandon the whole financial system.
People are legitimately concerned about bitcoin theft because it is new. The same thing happened when online banking first started and people were worried that it would be possible for criminals to steal all their money over this mysterious internet thing. That actually does happen, it's just not more prevalent than regular theft, so people got over their fears.
Re:Another idiot buying into the bitcoin scam. (Score:4, Insightful)
The value of the dollar is what you can buy with said dollar in the united states which barring a bit of inflation here and there(some inflation is a good thing) is about the same as it was last year or the year before.
Barring a bit of inflation here and there? Seriously, what? Do you know what's happened and how much currency debasement there has been in the last five years? No inflation is ever a good thing. It massages the egos of humans into believing that their investments are going up and paint over that everything else is as well.
Our economy barely had a hiccup and the US one was in the toilet, but the value of the US dollar rose dramatically.
Comparing the price of one currency to another when they are all being debased is a fallacy. Over the last five years it is pretty clear that dollar has declined markedly in value. In case you hadn't noticed there are a lot of dollars around. Everyone has them and that doesn't make it terribly valuable.