John Stossel: In Bitcoin I trust

[jct74]

In Bitcoin I trust

By John Stossel
January 15, 2014

The big online retailer Overstock.com now accepts payment in Bitcoin. That's good news for lovers of liberty because Bitcoins give us an alternative to government-controlled money. Bitcoins are a currency created by anonymous, private tech nerds, not by government.

Governments don't like competition, and our government sometimes bans competing currencies. But as more of us use Bitcoins, and more businesses accept payment in Bitcoin, it becomes harder for government to dismiss the currency as illegitimate, or ban it.

There are two advantages to Bitcoin.

First, it's harder to trace transactions back to people who make trades. I don't particularly care about that, because at the moment, I don't hide anything from my government. But I do fear government destroying the value of my dollars by printing more of them, the way governments in Germany before World War II and in Zimbabwe in recent decades did, forcing people to make trades using wheelbarrows of nearly worthless bills.

Given how my government spends money, and the way the Fed enables this by buying trillions in government bonds, I fear my dollars may someday be worth pennies. So I bought Bitcoins. Bitcoins are digitally created -- or "mined" -- at a slow, fairly predictable rate. An incomprehensible (incomprehensible to me, anyway) computer algorithm limits their number.

...

read more:
http://www.foxnews.com/opinion/2014/01/15/in-bitcoin-trust/?intcmp=trending

 

[robert68]

But Overstock.com never actually holds the bitcoins. Coinbase does and converts them to USD. Coinbase accepts the arbitrage risk.

 

[dannno]

But Overstock.com never actually holds the bitcoins. Coinbase does and converts them to USD. Coinbase accepts the arbitrage risk.

So?

 

[KCIndy]

But Overstock.com never actually holds the bitcoins. Coinbase does and converts them to USD. Coinbase accepts the arbitrage risk.

I dunno....

The CEO of Overstock, Patrick Byrne, is fairly libertarian leaning. Since he pushed for his own company to take BTC as payment, I would be surprised if he wasn't keeping at least a small percentage back as a hedge.

And speaking of Overstock and Bitcoin... looks like the first day was fairly successful:

http://venturebeat.com/2014/01/10/o...s-within-24-hours-of-accepting-it-as-payment/

Overstock.com took a gamble on Bitcoin that quickly seems to be paying off.

The company made $124,000 through 780 Bitcoin orders within less than 24 hours of accepting Bitcoin as a form of payment.

Overstock announced a partnership with popular Bitcoin wallet Coinbase yesterday, making it the largest merchant to accept Bitcoin to date. It is also one of the first major, mainstream retailers — meaning its reach extends far beyond the tech world — to accept the controversial crypto-currency.

The partnership is not only a validating moment for Bitcoin but also a political statement from Overstock’s libertarian CEO, Patrick Byrne, who told Wired that “it helps us fight the machine” of big banks and big government.

 

[KCIndy]

UPDATE:



Okay, okay.... I stand corrected.

Looks like Overstock isn't holding BTC for the simple reason that their own suppliers aren't taking it.... YET.

http://www.geekwire.com/2014/overstock-ceo-says-amazon-will-start-taking-bitcoin/

At the moment, Byrne says Overstock is selling whatever Bitcoins it gets paid, because it can’t pay its suppliers in the digital currency. But if it’s able to start paying for goods in Bitcoin, the CEO is confident in the currency, and says that it may start holding on to the digital money that it makes.

 

[kpitcher]

9.17 bitcoins were hacked from my account at cex.io. I am seeking an experienced investigator to help me retrieve the lost coins.

johningreece I'd suggest posting to bitcointalk.org for that sort of assistance. Was it a virus on your computer or a very weak password that allowed you to be hacked?

 

[newbitech]

9.17 bitcoins were hacked from my account at cex.io. I am seeking an experienced investigator to help me retrieve the lost coins.

I had something similar occur. I lost 5+. You can trace the coins forever because you should be able to see the new address location in the block chain where the right was transferred to. The big problem that you face is that right transfers are one way. Meaning that once a right has been transferred, it can never be transferred back in it's original state before the theft.

This has some serious implications for investigation. For starters, you have to identify an actual person who controls the right. The bitcoin was designed omit identity information from the record of rights. This means that you will have to hope that the person who stole your right will reveal their identity in some way. Either thru a conversion into a regulated system, like a bank, OR some type of transaction that would require revealing a physical location that may traced back to a human identity, like a purchase of goods that require shipment.

If either of those two identity revelations do not occur, it will be impossible for you to locate the thief.

The next thing you would need to do in order to recover your right, assuming the investigator was able to identify a person thru an identity transaction (bank) or goods delivery (shipment address) is PROVE that the rights used actually belonged to you in the first place.

This is easier said than done. As I mentioned, you may trace the path of your rights inside the block chain. However, if at any point your right was merged with other right, your right technically ceases to exist. This means that all the thief would need to do is combine the arbitrary number assigned to your right (9.17) with the arbitrary number assigned to some other right and then move that right to a new location. At that point, your trail will run cold because now you have a mixed right scenario.

Their are services specifically designed to mix rights in order to prevent the type of tracing that would be required to recover your right. These services are in fact heralded by the users of bitcoin rights as a necessary anonymity tool to prevent authorities from discovering identities of individuals who trade in bitcoin rights.

In short, you are pretty much screwed. I don't believe I have read anywhere that anyone has ever recovered stolen bitcoin rights. I think it's nigh impossible, unless you are dealing with a really stupid thief. BUT, given the nature of bitcoin and all of its severe technicalities combined with the above average level of sophistication required to pull off such a heist, I have to assume the thief has the very small bases of mixing rights covered, and will most likely withdraw the right via a 3rd party that has no incentive to cooperate with your "local" authorities.

I'm sorry for your loss. Your experience has been added to a growing list of experiences that definitely call in to question the security features touted by the creators and pushers of the bitcoin.

I hope that you didn't lose a lot of money in the theft.