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The Bitcoin Bugle: Upstaged At SXSW (UPDATE)

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Everybody's favorite if embattled digital currency was all set to headline South by Southwest, the two-week-long marketing event that used to be a music festival. But when it arrived, it found it had competition from other fake currencies, notably one represented by a shiba inu. And just as it was set to take center stage, an even greater hero to the anarchist-libertarian-computer programming set beamed his way to Austin from a basement dungeon in the Kremlin, relegating the bitcoiners to a bookstore basement.

A few dozen people, many seemingly in their late 20s and early 30s and some with young children in tow, came together for a full day of panel speeches and discussions celebrating bitcoin and what its use means for their political beliefs. Some wore T-shirts showing cannon barrels and they talked about politics and the shuttered online marketplace Silk Road. The mother of the site’s alleged architect was in attendance.

The headline speaker: Cody Wilson, subject of a page-one Wall Street Journal article who is known for unsettling lawmakers by making a plastic gun with a 3-D printer and founding a startup aimed at covering the tracks of financial transactions made with bitcoin. He described how bitcoin takes human interaction “deep into the black market.”

“That is its great hope if we are anarchists,” he said. “The possibility of bitcoin is that it is uninvestigateable, that there will be 1,000 Silk Roads — and let them bloom.” On Silk Road, people could buy everything from narcotics to forged passports and pay with bitcoins, affording buyers and sellers a greater degree of anonymity.

To add insult to injury, Nouriel Roubini, who has been strangely silent on matter bitcoin while weighing in on everything else, chose this moment to take to Twitter and clear up any confusion about how he feels about it.

Apart from a base 4 criminal activities, Bitcoin is not a currency as it is not a unit of account or a means of payments or store of value

Bitcoin is not a unit of account as no price of goods and services is set in Bitcoin unit nor it ever will.

Also given price volatility it is a lousy store of value

It is btw a Ponzi game and a conduit for criminal/illegal activities. And it isn't safe given hacking of it.

BTCbugs like gold bugs are fanatics who speak of BTC in cult-like religious ways. Like gold bugs they have paranoid conspiracy views on the $

Don't tell that to one member of a semi-autonomous Native American group in South Dakota, who worsened bitcoin's day by creating yet another competitor to it—one that has not yet had a chance to cost "investors" millions.

It’s called mazacoin, and the man who developed it, Payu Harris, wants to make it the official currency of the Lakota Nation, a semi-autonomous North American Indian reservation in South Dakota. Officially launched in February, its market cap of $3.3 million places it 20th among alternative currencies (there are more than 200 “alt-coins,” although most have marginal significance).

Official adoption by the Lakota Nation would be a big development in the world of virtual currencies, because until now, the storyline for bitcoin alternatives has been about a small group of technophiles playing with a shiny new toy. But to Mr. Harris, the idea of a national currency represents something for which he’s been striving for a long time: independence.

“I’ve been studying tribal sovereignty since I was 16,” said Mr. Harris, the Lakota who developed and is promoting mazacoin. “To be a truly independent state you have to have your own issued currency.” Mr. Harris spoke to MoneyBeat from the Bitcoin Center in lower Manhattan. He rang the center’s “opening bell” on the Monday night open-pit trading session….

“When I came across bitcoin,” Mr. Harris said, “I realized, this is our currency. This is what we need.” He quickly sketched out the idea for a different version of it, and got support from developers in the digital-currency community. “Mazaska” is the Lakota word for money, he said, and after tossing around several ideas, they settled on Mazacoin. He brought the idea to the tribe’s leadership, and the economic development office reportedly gave him a letter of support.

“This is for real,” Mr. Harris said in his slight Midwest accent, although acknowledged it won’t supplant dollar, or even bartering, overnight.

Oh yea, and Mt. Gox filed for bankruptcyagain so that you can't sue it for losing those oh-so-real things.

Mt. Gox, once the world's largest bitcoin exchange, filed for U.S. bankruptcy protection in Dallas late Sunday, a move that will temporarily halt U.S. legal action against the Japanese company.

Mt. Gox, which filed for bankruptcy protection in Japan in February, said without U.S. protection it would spend substantial funds defending itself against a U.S. lawsuit seeking class action status that was filed in federal court in Chicago….

The plaintiff leading the Chicago lawsuit was scheduled on Tuesday to ask a federal judge to freeze Mt. Gox's U.S.-based servers and other computer equipment and to set up a trust over Mt. Gox's assets.

And finally, a friend of Dealbreaker writes:

"A bitcoin ATM popped up in Austin just in time for SXSW Interactive. Is the fact that it is a haphazardly parked trailer a nod to Austin's food scene, or just what passes for trust-inspiring architecture (the bitcoin equivalent of a fiat-money bank's vaulted marble pile downtown) in a financial ecosystem whose gilt-edged institution was until recently a Magic: The Gathering card-swapping site?

It would take a brave, or at least foolhardy, punter indeed to put real money into this wheeled thing outside the UT Domino's Pizza in exchange for a string of numbers. (If it doesnt work out, hey, i'm sure when you return to complain, it will be there -- its not like the wheels are made for rolling!) I'll keep an eye out and let you know if such a hero rises."

UPDATE: The travelling bitcoin ATM has apparently been removed.

Snowden at SXSW: Recap of video conference live blog [MarketWatch]
#AltSXSW? Fired Up About Bitcoin in a Bookstore Basement [WSJ Digits blog]
Nouriel Roubini: Bitcoin Is a 'Ponzi Game' [WSJ MoneyBeat blog]
Lakota Indian Promotes New Digital Currency, Mazacoin [WSJ MoneyBeat blog]
Mt. Gox files for U.S. bankruptcy to halt class action [Reuters]