Re: new bitcoin discussion.

One more comment below in red. Sorry there's not more econ stuff in here.

A lot of this is over my head.

More generally, I came across two articles that helped me gain a better

understanding of bitcoin. Here' the first

(http://www.technologyreview.com/computing/37619/page1/).

Things I took away from it are 1) there is a provision in place to change

the rules of the system--presumably how BTCs are mined--if more than 50%

of of the network's computing power should come under the control of one

entity. (But it seems like it would be easy to get around this). 2) The

fact that the BTC economy is deflationary is not necessarily problematic

since it is built into people's expectations;

I also came across this article

(http://techland.time.com/2011/04/16/online-cash-bitcoin-could-challenge-governments).

What I took away from this was: 1) Bitcoin is true digital cash. By

resolving the double spending problem (which it seems bitcoin has don

Re: new bitcoin discussion.

One for now.

On 12/8/11 10:20 AM, Tristan Reed wrote:

Sounds great! However, before you start typing away search Stratfor

archives incase there is anything which may have covered currency

systems or other subjects which you think provide the context. It's

better to build upon past analysis than reinvent the wheel (in case S4

writes a piece from this discussion).

Do you have any questions / comments from what it is typed up so far?

----------------------------------------------------------------------

From: "Matt Mawhinney" <matt.mawhinney@stratfor.com>

To: "Tristan Reed" <tristan.reed@stratfor.com>

Sent: Thursday, December 8, 2011 10:00:00 AM

Subject: Re: Fwd: Re: new bitcoin discussion.

Hey, Tristan, I think what this discussion needs, as a broader

discussion of currency systems.

Sort of, what is currency? What are the different types of currency

systems (fiat, valued, and backed). Where does

Re: Fwd: Re: new bitcoin discussion.

Comments in red. Overall, it looks good.

On 12/7/11 1:51 PM, Tristan Reed wrote:

-------- Original Message --------

Subject: Re: new bitcoin discussion.

Date: Tue, 6 Dec 2011 17:13:19 -0600 (CST)

From: Ben West <ben.west@stratfor.com>

To: Tristan Reed <tristan.reed@stratfor.com>

Be sure to get with Matt on this to go over the financial explanations

and analysis.

Also, as we discussed with Morgan, it's important to remember that the

main users of bitcoins are hobbyists, speculators and consumers of

illicit goods. That's still very significant, but it's good to lay out

who is using this now.

----------------------------------------------------------------------

From: "Tristan Reed" <tristan.reed@stratfor.com>

To: "Ben West" <ben.west@stratfor.com>

Sent: Tuesday, December 6, 2011 1:51:33 AM

Subject: new bitcoin discussion.

Ben, I hope th

Re: [CT] DISCUSSION - The Bitcoin currency

Yeah, the math looks good. I'm not sure why 2140 is stated as the end of

generating coins, I'm trying to find out the order of priority with the

meeting some of the limits. If leveling out in 2140 is the number one

priority, then the other values are meaningless because the difficulty in

generating blocks can be automatically changed to meet that goal and this

would affect how many blocks per hour are generated.

----------------------------------------------------------------------

From: "Matt Mawhinney" <matt.mawhinney@stratfor.com>

To: "CT AOR" <ct@stratfor.com>

Sent: Sunday, November 27, 2011 11:59:42 PM

Subject: Re: [CT] DISCUSSION - The Bitcoin currency

One initial observation below. Would like to sit down with you and Kevin

and anyone else interested to talk through some of the monetary challenges

that bitcoin faces.

On 11/23/11 1:03 PM, Tristan Reed wrote:

Theft is a significant vulnerability with bit

Re: [CT] DISCUSSION - The Bitcoin currency

One initial observation below. Would like to sit down with you and Kevin

and anyone else interested to talk through some of the monetary challenges

that bitcoin faces.

On 11/23/11 1:03 PM, Tristan Reed wrote:

Theft is a significant vulnerability with bitcoin. As a typical user

does not have to understand computer security nor care, bitcoins are

easily obtained by theft. Currently, if you start up a bitcoin client

for the first time you automatically have a wallet and a public /

private key and are ready to make transactions. All pertinent

information is stored in your wallet, which by default is unencrypted. A

trojan, unauthorized physical access to the computer, or a cyber

intrusion could snag the information from the wallet.dat file and

immediately send all the victim's bitcoins to the thief's bitcoin

addresses.

Since your private key should not be sent over network communications

nor is i

Re: [CT] DISCUSSION - The Bitcoin currency

Theft is a significant vulnerability with bitcoin. As a typical user does

not have to understand computer security nor care, bitcoins are easily

obtained by theft. Currently, if you start up a bitcoin client for the

first time you automatically have a wallet and a public / private key and

are ready to make transactions. All pertinent information is stored in

your wallet, which by default is unencrypted. A trojan, unauthorized

physical access to the computer, or a cyber intrusion could snag the

information from the wallet.dat file and immediately send all the victim's

bitcoins to the thief's bitcoin addresses.

Since your private key should not be sent over network communications nor

is it typically entered by the user (since the client can just read the

wallet.dat file for the key), keyloggers and packet sniffers would not

play a large role in revealing a victim's private key.

Read: https://en.bitcoin.it/wiki/Weaknesses for

Re: [CT] DISCUSSION - The Bitcoin currency

A bitcoin (BTC) is decentralized digital currency developed by an

individual or groups of individuals with the pseudonym Satoshi

Nakamto [you'll have to explain everything in this sentence later in the

analysis. imagine you are explaining what it is, step by step, to an

idiot (or me).]

BTC is a currency where transactions are solely processed on a computer

network of clients. There is no central authority to regulate monetary

policy. Some determining factors in policy such as the rate of inflation

or placing a ceiling in currency supply are enforced through a set

of algorithmic rules which must be agreed upon by the majority of nodes in

the network.

The author's identity is unknown. Some have speculated that it was a group

of individuals. The name stems from communication such as blogs and white

papers penned with the name Satoshi Nakamato, who claimed to reside in

Japan. There are individuals including private investi

RE: [CT] DISCUSSION - The Bitcoin currency

This is a good discussion but I have zero time to offer input right now.

There are a lot of things we need to determine.



Tactical/financial: such as some indication of actual money growth rate,

the size of the float, etc. This will determine the size of the market it

can provide liquidity to. From what I've heard it is only a few million

USD worth, so not significant.



Economic/theory: this sounds either fairly stable or on the other hand

somewhat deflationary or powerfully deflationary. We need to determine the

relationship of mining to economic output to see what we're talking about.

Too deflationary and people will hoard bit coin. Rather than balancing

this with politico-monetary tools, it sounds like you're playing

mathematic algorithms off Moores law. This sounds like something that

could go wildly deflationary, but who knows maybe they gauged it

perfectly.



Political: What national currencies can

Re: new bitcoin discussion.

Sounds great! However, before you start typing away search Stratfor

archives incase there is anything which may have covered currency systems

or other subjects which you think provide the context. It's better to

build upon past analysis than reinvent the wheel (in case S4 writes a

piece from this discussion).

Do you have any questions / comments from what it is typed up so far?

----------------------------------------------------------------------

From: "Matt Mawhinney" <matt.mawhinney@stratfor.com>

To: "Tristan Reed" <tristan.reed@stratfor.com>

Sent: Thursday, December 8, 2011 10:00:00 AM

Subject: Re: Fwd: Re: new bitcoin discussion.

Hey, Tristan, I think what this discussion needs, as a broader discussion

of currency systems.

Sort of, what is currency? What are the different types of currency

systems (fiat, valued, and backed). Where does bitcoin fit in?

I will have some time this weekend to try and write up this context.



Fwd: Re: new bitcoin discussion.

-------- Original Message --------

Subject: Re: new bitcoin discussion.

Date: Tue, 6 Dec 2011 17:13:19 -0600 (CST)

From: Ben West <ben.west@stratfor.com>

To: Tristan Reed <tristan.reed@stratfor.com>

Be sure to get with Matt on this to go over the financial explanations and

analysis.

Also, as we discussed with Morgan, it's important to remember that the

main users of bitcoins are hobbyists, speculators and consumers of illicit

goods. That's still very significant, but it's good to lay out who is

using this now.

----------------------------------------------------------------------

From: "Tristan Reed" <tristan.reed@stratfor.com>

To: "Ben West" <ben.west@stratfor.com>

Sent: Tuesday, December 6, 2011 1:51:33 AM

Subject: new bitcoin discussion.

Ben, I hope this what you were looking for me to post. I clarified

defining some concepts, answered questions regarding exchanges and



Re: Fwd: Re: new bitcoin discussion.

Comments in red. Overall, it looks good.

On 12/7/11 1:51 PM, Tristan Reed wrote:

-------- Original Message --------

Subject: Re: new bitcoin discussion.

Date: Tue, 6 Dec 2011 17:13:19 -0600 (CST)

From: Ben West <ben.west@stratfor.com>

To: Tristan Reed <tristan.reed@stratfor.com>

Be sure to get with Matt on this to go over the financial explanations

and analysis.

Also, as we discussed with Morgan, it's important to remember that the

main users of bitcoins are hobbyists, speculators and consumers of

illicit goods. That's still very significant, but it's good to lay out

who is using this now.

----------------------------------------------------------------------

From: "Tristan Reed" <tristan.reed@stratfor.com>

To: "Ben West" <ben.west@stratfor.com>

Sent: Tuesday, December 6, 2011 1:51:33 AM

Subject: new bitcoin discussion.

Ben, I hope th

Re: Fwd: Re: new bitcoin discussion.

Hey, Tristan, I think what this discussion needs, as a broader discussion

of currency systems.

Sort of, what is currency? What are the different types of currency

systems (fiat, valued, and backed). Where does bitcoin fit in?

I will have some time this weekend to try and write up this context.

On 12/7/11 1:51 PM, Tristan Reed wrote:

-------- Original Message --------

Subject: Re: new bitcoin discussion.

Date: Tue, 6 Dec 2011 17:13:19 -0600 (CST)

From: Ben West <ben.west@stratfor.com>

To: Tristan Reed <tristan.reed@stratfor.com>

Be sure to get with Matt on this to go over the financial explanations

and analysis.

Also, as we discussed with Morgan, it's important to remember that the

main users of bitcoins are hobbyists, speculators and consumers of

illicit goods. That's still very significant, but it's good to lay out

who is using this now.

---------

Re: [CT] DISCUSSION - The Bitcoin currency

My instant reaction to things like this is to look at the human element,

to see how easy it is for non-experts to use it (and thus how much it will

be adopted), and for malicious experts to take advantage of loopholes and

gullible people and machines (yay, now we can have cybercrime with cyber

currency).

Digging into the wiki, it seems to be fairly easy to use, although

understanding the mechanics behind it makes my head hurt. All that's

necessary to get started is to download the Bitcoin client software.

Using it to perform a transaction is fairly simple, too, according to the

Wiki:

Suppose Alice wants to send a bitcoin to Bob:

Bob sends his public key to Alice.

Alice adds Bob's public key along with the amount she wants to transfer to

a message: a 'transaction' message.

Alice signs the transaction with her secret private key.

Alice broadcasts the transaction out over the bitcoin network for all to

see.

Th

Re: [CT] DISCUSSION - The Bitcoin currency

This is a good discussion but I have zero time to offer input right now.

There are a lot of things we need to determine.



Tactical/financial: such as some indication of actual money growth rate,

the size of the float, etc. This will determine the size of the market it

can provide liquidity to. From what I've heard it is only a few million

USD worth, so not significant.



Economic/theory: this sounds either fairly stable or on the other hand

somewhat deflationary or powerfully deflationary. We need to determine the

relationship of mining to economic output to see what we're talking about.

Too deflationary and people will hoard bit coin. Rather than balancing

this with politico-monetary tools, it sounds like you're playing

mathematic algorithms off Moores law. This sounds like something that

could go wildly deflationary, but who knows maybe they gauged it

perfectly.



Political: What national currencies can

Re: [CT] DISCUSSION - The Bitcoin currency

very good start. comments in red below.

----------------------------------------------------------------------

From: "Kevin Stech" <kevin.stech@stratfor.com>

To: ct@stratfor.com

Sent: Wednesday, November 23, 2011 11:37:28 AM

Subject: Re: [CT] DISCUSSION - The Bitcoin currency

This is a good discussion but I have zero time to offer input right now.

There are a lot of things we need to determine.



Tactical/financial: such as some indication of actual money growth rate,

the size of the float, etc. This will determine the size of the market it

can provide liquidity to. From what Ia**ve heard it is only a few million

USD worth, so not significant.



Economic/theory: this sounds either fairly stable or on the other hand

somewhat deflationary or powerfully deflationary. We need to determine the

relationship of mining to economic output to see what wea**re talking

about. Too deflationary and people will hoar

Fwd: [CT] DISCUSSION - The Bitcoin currency

I posted a discussion on bitcoins to the CT list. If you have time I would

love to hear your thoughts on the subject.

----------------------------------------------------------------------

From: "Tristan Reed" <tristan.reed@stratfor.com>

To: "CT AOR" <ct@stratfor.com>

Sent: Wednesday, November 23, 2011 9:53:04 AM

Subject: [CT] DISCUSSION - The Bitcoin currency

A bitcoin (BTC) is decentralized digital currency developed by an

individual or groups of individuals with the pseudonym Satoshi Nakamto.

Bitcoins are exchanged through the use of bitcoin client programs and the

network consisting of the interconnected clients. The developers opened

the bitcoin system to the public January 3rd 2009. The term a**bitcoina**

may refer to the client, which operates on the bitcoin network of clients,

the network itself, or the unit of currency.

Two denominations used is the bitcoin and the Satoshi which is

1/100,000,000th of

Re: [CT] DISCUSSION - The Bitcoin currency

Seriously cool however I agree with the explain to the idiot in detailed

explanations comments.



From: ct-bounces@stratfor.com [mailto:ct-bounces@stratfor.com] On Behalf

Of Tristan Reed

Sent: Wednesday, November 23, 2011 9:53 AM

To: CT AOR

Subject: [CT] DISCUSSION - The Bitcoin currency



A bitcoin (BTC) is decentralized digital currency developed by an

individual or groups of individuals with the pseudonym Satoshi Nakamto

[you'll have to explain everything in this sentence later in the

analysis. imagine you are explaining what it is, step by step, to an

idiot (or me).]. Bitcoins are exchanged through the use of bitcoin client

programs[this is 'client' as in software, not 'client' as in customer,

right?] and the network consisting of the interconnected clients. The

developers opened the bitcoin system to the public January 3rd 2009. The

term a**bitcoina** may refer to the client, which operates on the bit

[CT] DISCUSSION - The Bitcoin currency

A bitcoin (BTC) is decentralized digital currency developed by an

individual or groups of individuals with the pseudonym Satoshi Nakamto.

Bitcoins are exchanged through the use of bitcoin client programs and the

network consisting of the interconnected clients. The developers opened

the bitcoin system to the public January 3rd 2009. The term a**bitcoina**

may refer to the client, which operates on the bitcoin network of clients,

the network itself, or the unit of currency.

Two denominations used is the bitcoin and the Satoshi which is

1/100,000,000th of a BTC and is currently the smallest denomination.

The current exchange value of a BTC is determined by willing buyers,

operating on any one of the more than 50 BTC exchanges available. While

not the only way to exchange BTC for another currency, the exchanges are

often referred to in determining current value for purchasing goods and

services. The current value of a BTC for

Re: quick thought on bitcoin

bitcoin confirmations

I'm keeping this off the list since the subject is really getting into the

weeds technically.

There were a few gaps in what we discussed when it came to processing

transactions. I was going through discussion boards and other documents to

figure out the process of verifying transactions and handling 'what if'

scenarios.

To start off with, I'm going to discuss around preventing double-spending:

Person A has 50 BTCs. Person A send 30 BTCs to Person B (trnx A) then

immediately sends 40 BTCs to Person C (trnx B) before trxn A was

confirmed. Since Person A does not have enough funds for both trnx A and B

a system is needed to ensure Person A can not spend more money than he

has. This is where the block chain (the transaction history) and the

proof-of-work concept comes in.

Proof-of-Work

The bitcoin system utilizes a probability based proof-of-work system,

where the difficulty in solving the puzzle is extreme

[CT] Bitcoin Charts & Transactions

As per the bitcoin discussion today, here are some of the links I

mentioned. For a list of bitcoin exchanges check out bitcoincharts.com.

The site also has a comprehensive tool for charting market history. The

block chain explorer will allow you to see how easy it is to view

transaction history, and what a transaction consists of.

current charts and numbers on bitcoin exchanges:

http://bitcoincharts.com/

block chain explorer (explore bitcoin transaction history):

http://blockexplorer.com/

MtGox (largest bitcoin exchange): https://mtgox.com/

great wiki on bitcoin technical details:

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



Re: quick thought on bitcoin

Yes, I could do it Tuesday. That would give others time to respond to the

discussion.

As for depth, we don't need to go down to coding level, but it needs to be

comprehensive in how it works. I think it'd be helpful to break down the

components:

What is a bitcoin - net value of the bitcoin system and how bitcoins are

produced

What is mining

What is a client - how is it used by customers/sellers

What is a transaction

How is a transaction processed

Who is using it?

What types of products/services is it servicing and what's the value of

those products/services (with caveats for transactions that are broken up)

Modern financial system is mostly electronic - bitcoin is just ONLY

electronic so it doesn't have to have all of the characteristics of a cash

based system

Then we transition to the implications:

Pros and cons of animosity

LImitations due to processing time

LImitations due to the size of the bitcoin market

L

Bitcoin Charts & Transactions

As per the bitcoin discussion today, here are some of the links I

mentioned. For a list of bitcoin exchanges check out bitcoincharts.com.

The site also has a comprehensive tool for charting market history. The

block chain explorer will allow you to see how easy it is to view

transaction history, and what a transaction consists of.

current charts and numbers on bitcoin exchanges:

http://bitcoincharts.com/

block chain explorer (explore bitcoin transaction history):

http://blockexplorer.com/

MtGox (largest bitcoin exchange): https://mtgox.com/

great wiki on bitcoin technical details:

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



Re: bitcoin

You know, if this is something investors have no knowledge of, and

investing is likely something most bitcoin users do not know about, maybe

there is money to be made on this. Not much, but maybe a little.

Matthew Powers

Senior Researcher

STRATFOR

221 W. 6th Street, Suite 400

Austin, TX 78701

T: 512-744-4300 A| M: 817-975-1037

www.STRATFOR.com

----------------------------------------------------------------------

From: "Alfredo Viegas" <alfredo.viegas@stratfor.com>

To: "Kevin Stech" <kevin.stech@stratfor.com>

Cc: friedman@att.blackberry.net, "Invest" <invest@stratfor.com>

Sent: Thursday, December 1, 2011 2:46:57 PM

Subject: Re: bitcoin

never heard of it, looks to be in beta mode

----------------------------------------------------------------------

From: "Kevin Stech" <kevin.stech@stratfor.com>

To: friedman@att.blackberry.net, "Invest" <invest@stratfor.com>

Sent: Thursday, December 1, 2011 3:08:49 PM

Subject: RE: bitco

Re: bitcoin

never heard of it, looks to be in beta mode

----------------------------------------------------------------------

From: "Kevin Stech" <kevin.stech@stratfor.com>

To: friedman@att.blackberry.net, "Invest" <invest@stratfor.com>

Sent: Thursday, December 1, 2011 3:08:49 PM

Subject: RE: bitcoin

Internet currency. Its interesting. Not game changing yet. Just jokingly

suggesting we exploit it.



From: George Friedman [mailto:friedman@att.blackberry.net]

Sent: Thursday, December 01, 2011 2:06 PM

To: Kevin Stech; Invest

Subject: Re: bitcoin



What in gods name is a bitcoin?

Sent via BlackBerry by AT&T

--------------------------------------------------------------------------

From: "Kevin Stech" <kevin.stech@stratfor.com>

Date: Thu, 1 Dec 2011 13:57:42 -0600 (CST)

To: Invest<invest@stratfor.com>

Subject: bitcoin



Wea**re having a discussion about bitcoin and the tactical analyst looking

into it said he has seen 15% -

RE: bitcoin

Internet currency. Its interesting. Not game changing yet. Just jokingly

suggesting we exploit it.



From: George Friedman [mailto:friedman@att.blackberry.net]

Sent: Thursday, December 01, 2011 2:06 PM

To: Kevin Stech; Invest

Subject: Re: bitcoin



What in gods name is a bitcoin?

Sent via BlackBerry by AT&T

--------------------------------------------------------------------------

From: "Kevin Stech" <kevin.stech@stratfor.com>

Date: Thu, 1 Dec 2011 13:57:42 -0600 (CST)

To: Invest<invest@stratfor.com>

Subject: bitcoin



We're having a discussion about bitcoin and the tactical analyst looking

into it said he has seen 15% - 20% USD/bitcoin exchange rate variation

between different exchanges. Transactions are absolutely tiny, but maybe

we could arbitrage a couple hundred bucks a day and go blow it at Perry's.

; )



Kevin Stech

Director of Research | STRATFOR

kevin.stech@stratfor.com

+1 (512) 744-4086



Re: bitcoin

What in gods name is a bitcoin?

Sent via BlackBerry by AT&T

----------------------------------------------------------------------

From: "Kevin Stech" <kevin.stech@stratfor.com>

Date: Thu, 1 Dec 2011 13:57:42 -0600 (CST)

To: Invest<invest@stratfor.com>

Subject: bitcoin

We're having a discussion about bitcoin and the tactical analyst looking

into it said he has seen 15% - 20% USD/bitcoin exchange rate variation

between different exchanges. Transactions are absolutely tiny, but maybe

we could arbitrage a couple hundred bucks a day and go blow it at Perry's.

; )



Kevin Stech

Director of Research | STRATFOR

kevin.stech@stratfor.com

+1 (512) 744-4086





Re: quick thought on bitcoin

roger dodger. How in depth, technically speaking, would be needed to

explain the bitcoin system before discussing implications and current

uses? Example: Can we state transactions occur anonymously but not go into

why it is anonymous?

I'll have another discussion written up by Monday morning addressing

questions, limitations, and advantages discussed. I'm not sure about you

guys, but due to the complexity of the topic I felt like it was far easier

discussing in person than the CT discussion. Could we have another sit

down next week?

On 12/1/11 2:30 PM, Ben West wrote:

Agreed. I see some cool potential in this.

Tristan is going to work on answering the questions we identified by

Monday. Once we ID those, we need to lay this out in a very well

organized discussion that explains what Bitcoins are and their

advantages and limitations vis-a-vis "traditional currency".

A problem I see is that we're going to need to expla

Re: quick thought on bitcoin

Agreed. I see some cool potential in this.

Tristan is going to work on answering the questions we identified by

Monday. Once we ID those, we need to lay this out in a very well organized

discussion that explains what Bitcoins are and their advantages and

limitations vis-a-vis "traditional currency".

A problem I see is that we're going to need to explain a lot about

monetary theory to put this into context. Kevin, have we written about

that before so that we can link or copy and paste?

Also, we need to pull in Stick to get his input on this before we go too

nuts, what about Peter?

----------------------------------------------------------------------

From: "Kevin Stech" <kevin.stech@stratfor.com>

To: "Ben West" <ben.west@stratfor.com>, "Tristan Reed"

<tristan.reed@stratfor.com>

Sent: Thursday, December 1, 2011 2:02:09 PM

Subject: quick thought on bitcoin

We can rapidly get to the point now where we put together a badass s

bitcoin

We're having a discussion about bitcoin and the tactical analyst looking

into it said he has seen 15% - 20% USD/bitcoin exchange rate variation

between different exchanges. Transactions are absolutely tiny, but maybe

we could arbitrage a couple hundred bucks a day and go blow it at Perry's.

; )



Kevin Stech

Director of Research | STRATFOR

kevin.stech@stratfor.com

+1 (512) 744-4086





Bitcoin

I added a small comment to the bitcoin discussion on CT, but I'd like to

sit down with you and Kevin to talk about this some more. Hopefully we can

find some time this week.

--

Matt Mawhinney

ADP

STRATFOR

221 W. 6th Street, Suite 400

Austin, TX 78701

T: 512.744.4300 | M: 267.972.2609 | F: 512.744.4334

www.STRATFOR.com



quick thought on bitcoin

We can rapidly get to the point now where we put together a badass special

report on this. Obviously the tactical piece is hugely interesting but I

don't think we want to write a crypto-babble geek-out piece. We should

take Tristan's deepening understanding of the technical aspects and lay

those out in a concise and comprehensible manner, and then place it into

its proper politio-economic context. This context covers everything from

monetary policy to organized crime. I think the 3 of us can knock this out

of the motherfucking park.



Kevin Stech

Director of Research | STRATFOR

kevin.stech@stratfor.com

+1 (512) 744-4086





Re: [CT] DISCUSSION - The Bitcoin currency



[CT] Bitcoin Charts & Transactions



[OS] CT/ECON/TECH - WIRED.com article on Bitcoins

http://www.wired.com/magazine/2011/11/mf_bitcoin/all/1

The Rise and Fall of Bitcoin

By Benjamin Wallace Email Author

November 23, 2011 |

2:52 pm |

Wired December 2011

In November 1, 2008, a man named Satoshi Nakamoto posted a research paper

to an obscure cryptography listserv describing his design for a new

digital currency that he called bitcoin. None of the list's veterans had

heard of him, and what little information could be gleaned was murky and

contradictory. In an online profile, he said he lived in Japan. His email

address was from a free German service. Google searches for his name

turned up no relevant information; it was clearly a pseudonym. But while

Nakamoto himself may have been a puzzle, his creation cracked a problem

that had stumped cryptographers for decades. The idea of digital

money-convenient and untraceable, liberated from the oversight of

governments and banks-had

Re: [CT] discussion: 'Silk Road: Not Your Father's Amazon.com'

cash isn't an option in this scenario, and I am not in agreement large

amounts of product can't be moved through the mail. what constitutes

"large amounts?" it does seam to be more viable for personal use, but who

knows. as i said before, bitcoin being purchased directly is one way.

but getting asked to be paid for work in bitcoin could be possible (i

don't know how this differs from other forms of e-currency being used

inside China) and I am sure there are brokers in the currency. they buy

the bitcoin and then sell it to you. all things are possible

On 10/19/11 3:20 PM, Matt Mawhinney wrote:

i don't follow this

Even if there were a way to use Silk Road just as a payment method as

opposed to a shipment method (assuming you could get the drugs to your

customer some other way), drug dealers looking to move any amount would

be better off not creating an electronic record of their cash



Re: [CT] discussion: 'Silk Road: Not Your Father's Amazon.com'

Cash isn't an option with Silk Road, but Silk Road is not the best option

for large quantities (any quantity that would make news if seized). Silk

Road does not address the smuggling of drugs, mail a few grams of weed

through the mail system is easy, moving even a few ounces drastically

increases the risk. There is still a need for trust between buyer /

seller, so I assume networking outside of anonymous peer to peer

interactions would still be necessary if you were purchasing hundreds of

thousands of dollars worth of products / services.

bitcoins / silk road is a matter of convenience, I was stating hard

currency is still the most anonymous form for transactions.

On 10/19/11 3:29 PM, Colby Martin wrote:

cash isn't an option in this scenario, and I am not in agreement large

amounts of product can't be moved through the mail. what constitutes

"large amounts?" it does seam to be more viable for

Re: [CT] discussion: 'Silk Road: Not Your Father's Amazon.com'

Counterfeiting takes on a different meaning with bitcoins. A bitcoin is

not an actual entity. You would counterfeit transactions to yourself. The

only article I read on counterfeiting bitcoins:

http://www.pcworld.com/article/234890/faked_bitcoins_caused_price_crash_exchange_reveals.html#tk.hp_new

, caused a market crash with a database tracking the currency. The exploit

brought the value of the bitcoin down for a 30 minute period, but the

individual "counterfeiting" the bitcoins wasn't creating spendable

bitcoins. The article states the hacker made 2,000 bitcoins from the

attack, but it seems the article skipped a few steps necessary to walk

away with spendable bitcoins.

Actual counterfeiting is possible, but inherent features to the process

make it less profitable than forging hard currencies. Counterfeiting would

come down to computing power, probably only achievable through distributed

computing. But

[OS] TECH/ECON/CT - How to Purchase Guns and Drugs Anonymously

How to Purchase Guns and Drugs Anonymously

Jun. 3 2011 - 3:52 pm

http://blogs.forbes.com/benzingainsights/2011/06/03/how-to-purchase-guns-and-drugs-anonymously/

Want to purchase guns and illegal drugs over the internet but without the

hassle of bank records? A new digital technology is making it possible.

In the past, most internet transactions required a credit card or an

online payment system like PayPal (NASDAQ: EBAY), creating an effective

digital paper trail for people engaging in online transactions.

(To see how Groupon's IPO will be the hottest in years, click here.)

While paper currency allows for anonymous transactions in the real world,

it's obviously impossible to exchange paper notes over the internet, which

is a problem for those looking to acquire goods and services without

leaving behind a record. Enter Satoshi Nakamoto.

In 2009 Nakamoto created a new technology: the bitcoin. Bitcoin

TECH/ECON/CT - How to Purchase Guns and Drugs Anonymously

How to Purchase Guns and Drugs Anonymously

Jun. 3 2011 - 3:52 pm

http://blogs.forbes.com/benzingainsights/2011/06/03/how-to-purchase-guns-and-drugs-anonymously/

Want to purchase guns and illegal drugs over the internet but without the

hassle of bank records? A new digital technology is making it possible.

In the past, most internet transactions required a credit card or an

online payment system like PayPal (NASDAQ: EBAY), creating an effective

digital paper trail for people engaging in online transactions.

(To see how Groupon's IPO will be the hottest in years, click here.)

While paper currency allows for anonymous transactions in the real world,

it's obviously impossible to exchange paper notes over the internet, which

is a problem for those looking to acquire goods and services without

leaving behind a record. Enter Satoshi Nakamoto.

In 2009 Nakamoto created a new technology: the bitcoin. Bitcoin is a

Re: [CT] discussion: 'Silk Road: Not Your Father's Amazon.com'

i don't follow this

Even if there were a way to use Silk Road just as a payment method as

opposed to a shipment method (assuming you could get the drugs to your

customer some other way), drug dealers looking to move any amount would be

better off not creating an electronic record of their cash transactions.

Well, I think we are in agreement that Silk Road won't be moving large

amounts of product because of the risks of shipping through the mail. If

you just wanted to use bitcoin as a payment system , it still wouldn't be

smart because (at least according to the developer from bitcoin) it's

creates an electronic record. Like Tristan said, cash is best.

On 10/19/11 3:03 PM, Colby Martin wrote:

yes, e-currency is becoming more common in China as a substitute to real

currency. i am sure there are ways to cover your tracks when buying

bitcoins. In China for example, you can ask to get paid for some



Re: [CT] discussion: 'Silk Road: Not Your Father's Amazon.com'

Bitcoin does provide a more discreet form of a transaction. Transactions

can be tracked but bitcoin's transactions do not possess identifying

information without a private key. Better to use cash, but better to use

bitcoin than any common form of electronic transfers.

On 10/19/11 2:45 PM, Matt Mawhinney wrote:

The original article from Gawker on Silk Road:

http://gawker.com/5805928/the-underground-website-where-you-can-buy-any-drug-imaginable

also mentions that the bitcoin site keeps a transaction log that can be

pieced together to figure out the identity of users.

Even if there were a way to use Silk Road just as a payment method as

opposed to a shipment method (assuming you could get the drugs to your

customer some other way), drug dealers looking to move any amount would

be better off not creating an electronic record of their cash

transactions.

I also think the article does

Re: [CT] discussion: 'Silk Road: Not Your Father's Amazon.com'

"Bitcoin could become one alternative among many. "

... and could threaten states' monopoly on money (if it does end up

working) which could result in governments cracking down on it

[http://en.wikipedia.org/wiki/Liberty_Dollar], or at least trying. if the

currency does work and is impervious to government attempts at controlling

it (it being p2p, "anonymous" and what not) it could become an interesting

topic. We are not only talking about drug money here, but tax evasion,

central banks losing some of its ability to create cheap credit through

printing money (producing money/price inflation along the way), etc. on

the other hand, this currency could be subject to wild price

fluctuations... though if it were to work somehow (and maintained a

decently stable price level) it could become an alternate international

store of value. perhaps these outcomes could be unintended consequences of

the greek situatio

Re: [CT] discussion: 'Silk Road: Not Your Father's Amazon.com'

sorry, dude wasn't LE but a member of the development team

On 10/19/11 3:03 PM, Colby Martin wrote:

yes, e-currency is becoming more common in China as a substitute to real

currency. i am sure there are ways to cover your tracks when buying

bitcoins. In China for example, you can ask to get paid for some

services in ecurrency, so how would they track that? I also foresee

cash for bitcoin capabilities etc. what is dumb is the LE guy said it

was traceable and dumb, they are already working on a solution. Also,

how many governments are going to use complicated tech and man hours to

bust someone for 10 tabs of acid? what laws are in place to keep that

from happening? wouldn't they need a warrant?

here was my comment on Greece

Agreed there is an important distinction. The alternative currency I

see most used is e-currencies. I know in China this currency can and is

u

Re: [CT] discussion: 'Silk Road: Not Your Father's Amazon.com'

How long before hackers begin to counterfeit it in a big way?

From: Jose Mora <jose.mora@stratfor.com>

Reply-To: CT AOR <ct@stratfor.com>

Date: Wed, 19 Oct 2011 15:59:43 -0500

To: CT AOR <ct@stratfor.com>

Subject: Re: [CT] discussion: 'Silk Road: Not Your Father's Amazon.com'

"Bitcoin could become one alternative among many. "

... and could threaten states' monopoly on money (if it does end up

working) which could result in governments cracking down on it

[http://en.wikipedia.org/wiki/Liberty_Dollar], or at least trying. if the

currency does work and is impervious to government attempts at controlling

it (it being p2p, "anonymous" and what not) it could become an interesting

topic. We are not only talking about drug money here, but tax evasion,

central banks losing some of its ability to create cheap credit through

printing money (producing money/price inflation along the way), etc. on

the other h

Re: [CT] discussion: 'Silk Road: Not Your Father's Amazon.com'

yes, e-currency is becoming more common in China as a substitute to real

currency. i am sure there are ways to cover your tracks when buying

bitcoins. In China for example, you can ask to get paid for some services

in ecurrency, so how would they track that? I also foresee cash for

bitcoin capabilities etc. what is dumb is the LE guy said it was

traceable and dumb, they are already working on a solution. Also, how

many governments are going to use complicated tech and man hours to bust

someone for 10 tabs of acid? what laws are in place to keep that from

happening? wouldn't they need a warrant?

here was my comment on Greece

Agreed there is an important distinction. The alternative currency I see

most used is e-currencies. I know in China this currency can and is used

just like the the RMB to purchase all sorts of goods and services. There

are entire internet farms dedicated to making e-curre

Re: [CT] discussion: 'Silk Road: Not Your Father's Amazon.com'

The original article from Gawker on Silk Road:

http://gawker.com/5805928/the-underground-website-where-you-can-buy-any-drug-imaginable

also mentions that the bitcoin site keeps a transaction log that can be

pieced together to figure out the identity of users.

Even if there were a way to use Silk Road just as a payment method as

opposed to a shipment method (assuming you could get the drugs to your

customer some other way), drug dealers looking to move any amount would be

better off not creating an electronic record of their cash transactions.

I also think the article does a good job of explaning the

anarchist/libertarian roots of the bitcoin movement. I think that this

stuff can and will be used to facilitate a healthy amount of unofficial

economic transactions. This idea sort of came up in a discussion Kevin

started a few weeks back about alternative currencies in Greece. Bitcoin

could become one alte

Re: [alpha] INSIGHT - Mexico - Sophistication of Cartel Opsec Online

- MX001

Yeah, this technology is readily available and is so in large part due to

US government funding. There has been a lot of discussion of OC use of

bitcoin and TOR, as well as other encryption technology, in the

IT/security realm. Though discussion I've seen has been on of the

internet/email scam-type groups, not cartels.

I don't know much about it--but TOR, for exmaple, is made to be very easy

to use and works pretty weell. I wouldn't be surprised if the best SIGINT

agencies in the world have developed ways around it (and maybe they even

asked for encyption keys and such when other agencies were funding it).

It's not crazy and interesting to have confirmation that the cartels are

using it---which I would absolutely expect them to do. The whole idea of

using this bitcoin stuff really blows my mind, but i guess it's just

another invented currency like the paper in my pocket.

Other q

Re: [alpha] INSIGHT - Mexico - Sophistication of Cartel Opsec

Online - MX001

Iran as well.

On 9/27/2011 8:56 AM, Michael Wilson wrote:

TOR is the same thing that a lot of protestors use in places like Syria

http://findarticles.com/p/articles/mi_hb242/is_201109/ai_n58119535/

On 9/27/11 8:24 AM, Benjamin Preisler wrote:

SOURCE: MX1

PUBLICATION: Check with Fred first

ATTRIBUTION: Mexican government official

SOURCE DESCRIPTION: Senior Foreign Ministry Official

SOURCE Reliability : A

ITEM CREDIBILITY: B

SPECIAL HANDLING: None

SOURCE HANDLER: Fred

Chatting with a friend, he mentioned that there is an new

interagency working group that is working on tracking cartel

movements online. What he told me blew my mind, and I don't know

if its because I'm not very tech-savy or because it is actually

pretty nuts. You tell me.

There is this...for lack of a better word, thing/application called

TOR that allows web browsing to be ve

Re: [alpha] INSIGHT - Mexico - Sophistication of Cartel Opsec

Online - MX001

One of the issues discussed at DEA is the cartels co-opting of the MX

police/analysts that would have access to cyber inside the various fusion

centers funded by the US Govt. Meaning, narco sources who could ID

bloggers and such on the inside using govt resources. Moles in place to

ferret out govt sources.

On 9/27/2011 8:24 AM, Benjamin Preisler wrote:

SOURCE: MX1

PUBLICATION: Check with Fred first

ATTRIBUTION: Mexican government official

SOURCE DESCRIPTION: Senior Foreign Ministry Official

SOURCE Reliability : A

ITEM CREDIBILITY: B

SPECIAL HANDLING: None

SOURCE HANDLER: Fred

Chatting with a friend, he mentioned that there is an new

interagency working group that is working on tracking cartel

movements online. What he told me blew my mind, and I don't know

if its because I'm not very tech-savy or because it is actually

pretty nuts. You tell me.

There is this