[ale] [OT] (but computer and cryptography related) Bitcoin, Litecoin

[Ron Frazier (ALE)]

Alex Carver <agcarver+ale at acarver.net> wrote:

>On 3/30/2013 09:55, Michael B. Trausch wrote:
>> On 03/29/2013 03:18 PM, Ron Frazier (ALE) wrote:
>>> By the way, the treasury department recently issued a ruling that
>>> this is legal.  So that's not an issue.
>>
>> Everything else aside, why would _that_ even matter?
>>
>> The United States does not have the right to regulate any currency
>but
>> its own issue.  BTC is not issued by the United States Government.
>> That'd be like the Treasury Department saying that the Euro is legal.
>> Of course it is.
>>
>> Any currency anyone is willing to use is legal, if they're willing to
>> use it.
>>
>> That'd be like saying "I would love to barter with you, but I'm not
>sure
>> that it's legal for me to trade my 22" monitor for your stack of
>> raspberry pi systems, since my 22" monitor isn't blessed by the
>Treasury
>> Department as currency..."
>>
>> You really are paranoid, aren't you?
>>
>
>The only thing the Treasury did was to clarify the rules of bank 
>regulation with the miners of Bitcoins.  It never said it was or was
>not 
>legal, just that there were rules that needed to be followed if anyone 
>was going to convert Bitcoins to fiat currency (US currency in this
>case).
>
>The clarification stated that using Bitcoins directly to purchase goods
>
>and services (using it as its own currency rather than exchanging and 
>then using that exchanged currency) is not subject to any currency laws
>
>and regulations.  However, mining and then exchanging Bitcoins for US 
>Dollars puts them under the umbrella of the Bank Secrecy Act (the user 
>becomes a "money transmitter" in BSA terms) and the user must register 
>with the Financial Crimes Enforcement Network (FinCEN).
>
>This doesn't happen to people exchanging one fiat currency for another 
>because both currencies are centralized and the exchange itself is 
>regulated and monitors all the activity.  The rules were clarified 
>because Bitcoin is decentralized.  In theory, if a small town decided 
>collectively to perform all activities using pebbles pulled out of the 
>nearby river, every resident that exchanged pebbles for real cash to go
>
>out for a night in the big city would be subject to the same
>regulation. 
>These rules also apply to companies like Western Union.  Technically a 
>Western Union money-order is a form of currency recognized only by 
>Western Union.  A person exchanges fiat currency for  money-order 
>currency and, later, someone exchanges it back.  That puts Western
>Union 
>in the position of money transmitter and it must register with FinCEN.
>
>For the most part, it just seems to clarify a few grey areas and 
>otherwise doesn't really affect the majority of the Bitcoin users.  It 
>will have some effect on miners but only if they exchange for fiat 
>currency.  It amounts to Bitcoin being viewed as similar to Western
>Union.

I got my mining machine running and am mining litecoins.  The current rate of exchange is 1 LTC / .80 USD.  In other words, a litecoin is worth 80 cents.  The easiest way for me to get started was by using a Windows graphical utility called GuiMiner-scrypt.  You can do this on Linux too with command line utilities.  I'm mining on an AMD Radeon 6770 and a 7850 simultaneously.  The AMD cards apparently work much better than nVidia.  CPU's are very inefficient and are not worth mining on for this purpose.

At the current exchange rate, and at my electrical rate of $ .09 / kwh, it costs me 1 LTC / day to run the computer.  I estimate that I'll be mining 5 LTC per day, so I'll have 4 LTC profit / day, or about $ 3.20 / day.  If the LTC appreciates in value, I'll have more.  I won't be getting rich on it, but it could pay for some more trinkets here and there.  I'll pay back the cost of the 7850 in 70 days.

So, how does what was said above affect me when I want to turn these things into USD?

Sincerely,

Ron



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Ron Frazier
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