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The Argument of Bitcoins v. Gold Laid to Rest, Part II

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Here is Part 2 of my article “The Argument of Bitcoins v. Gold Laid to Rest, originally released at my blog, www.theundergroundinvestor.com on April 9, 2013. Interestingly enough, because both bitcoins and gold were simultaneously raided shortly after I released my two part-series of bitcoins v. gold on my blog, I added the brief two paragraph introduction below to provide some context to reactions to my series BEFORE the bitcoin crashed happened and some context to my beliefs in gold as a far superior monetary alternative to BTCs. In fact I concluded my two paragraph intro with this thought, given BTCs' crash and the banker raid of paper gold (bankers cannot raid the real physical prices of gold and silver for lasting periods of time as proven by Apmex's listing of 2013 bullion American silver eagles yesterday at $29.01 per troy ounce when spot prices in Asia were $22.99 an ounce): Now is the "perfect opportunity to test my thesis that the real intrinsic value of gold and silver provides physical gold and physical silver holders a way to fight back against immoral bank price manipulations of gold and silver executed in fake paper markets" that BTC owners lack. Yes, I understand that gold has pulled back from a high of $1800 six and half months ago to a low of $1335 a few days ago for a 26% pullback (and alternatively from a high of $1900 if you want to go back to 20 months ago), but still this kind of pullback cannot compare to an 80% crash in bitcoin valuation from $260 to $50 in just a few days. Furthermore, because this banker raid on gold prices was one executed in paper markets with fake paper prices selling fake paper contracts of gold that reprsent millions of fake ounces of gold that do not even exist except for in the fraudulent world of futures markets, this raid compels me to desire more physical gold and physical silver right now. However, the crash in BTCs does not compel me to want to buy BTCs at its low valuation now because as I stated in Part I, I have never owned any BTCs because I just do not view them as sound money, though I think that down the road, BTCs could still serve a valuable service as a short-term medium of exchange.

 

The reaction to Part 1 of this article, printed on my online blog on March 28, 2013 interestingly illustrated certain aspects of human nature quite well. Though I outlined both significant strengths and serious flaws of the Bitcoin monetary model in Part I, those that support Bitcoin focused only on trying to discredit the flaws I discussed and stated that I should please stop attacking Bitcoin even though I implicitly stated in Part I that I believe Bitcoins should be able to co-exist as a competitive currency, because in the end, as long as gold and silver are allowed to return as competitive currencies as well, the best currency or currencies will always win the battle for the widest acceptance and use. On the contrary, in reaction to Part 1, those that dislike Bitcoins focused only on trying to discredit the positives of Bitcoins I stated, even though I was very careful to point out the flaws of even the positives, including that Bitcoins were open to significant manipulation in price because of susceptibility to control of its nodes and to the common trait it share with all fiat currencies - being a digital currency backed by air. Again, comments surrounding my Bitcoin article were an interesting exercise in human behavior as we tend to seek out facts that only support our point of view while paying no attention to all other facts that discredit our point of view. This is the essence of the human ego.

 

The truth of the matter is that since I released part 1 on March 28, 2013 both the positives and negatives of Bitcoins that I have discussed have both come true. Since the date I wrote that Bitcoins should be “viewed with skepticism in being able to provide a stable store of value over extended periods of time” due to the fact that they “have no inherent value”, Bitcoins plunged 75% in value in a 96-hour period before the recouping some of those losses in value. Furthermore, during this plunge, the top Bitcoin exchange, MTGox, issued a statement that read, “Trading is halted until 2013-04-12 02:00am UTC to allow the market to cooldown following the drop in price”, also exposing that Bitcoin redemptions are subject to the whims of one decision maker even though BTCs claim to be a “people’s money” mined by the people and for the people. On the other hand, the positives I wrote about Bitcoins on March 28, 2013 also still hold up despite the recent plunge in BTCs valuation. I wrote in “The Argument of Bitcoins v. Gold Laid to Rest, Part I” that “Bitcoins are better than fiat”. Well despite this recent plunge, BTCs have still appreciated much more than any fiat currency since their introduction into the monetary world. Unless you were one of the first adopters of Bitcoins, you probably did not purchase Bitcoins when they were $5 per BTC, but as an early adopter, maybe you purchased BTCs around $30 per BTC. Even with the plunge that brought BTC back down to $100 (remember that I originally released this article on April 9th on my blog so BTCs had not yet plunged to $50), that is still a triple in price appreciation. Given that all fiat currencies have been losing massive amounts of purchasing power over the past 3 years, that still makes BTCs better than fiat currency.

 

And that brings us to Part 2 of my article. With a massive banker raid executed against gold and silver prices in the paper markets only (paper gold and paper silver ounces backed by nothing but air were sold off to engineer this latest coordinated attack of the Western Central Banking cartel and their puppet bullion banks against gold and silver prices), this makes it the perfect opportunity to test my thesis that the real intrinsic value of gold and silver provides physical gold and physical silver holders a way to fight back against immoral bank price manipulations of gold and silver executed in fake paper markets. So without further ado, I present to you Part 2.

 

In part 2 of my Bitcoins v. Gold thesis, I am going to address the curious need of bitcoin fanatics to state that bitcoins are the best currency in the world and their attempts to point out “supposed flaws” of the only true sound money in the world, gold and silver. I wouldn’t have embarked on this exercise were it not for the fact that BTC fanatics shockingly embrace a lot of Central Banking anti-gold propaganda in their defense of BTCs. Again, I’m distinguishing between BTC fanatics and advocates as I label as fanatics those that believe BTCs are the alpha and omega when it comes to real money. Consequently, I want to ensure that the majority of the rational BTC community does not let the propaganda of a few bitcoin fanatics pollute their minds about the true value of a BTC.

 

I still include myself among those that believe that BTCs should be allowed to persist as an alternative currency as long as the people are allowed to bring back gold and silver as competing currencies, so the people can choose which currency they believe to be best, as should be the case in a free society. If the global banking cartel allows BTCs to persist while at the same time shutting out a return to gold and silver money, this would be a development that would be very worrisome to me if I were a BTC owner. Again, I actually still like BTCs as an alternative competitive currency as long as they are not controlled and under the influence of the same banking cartels that control all fiat digital currencies. I also consider myself a physical gold and silver advocate (not a fanatic), and one that can also see flaws in gold/silver as money as well. I don’t believe that there is any “perfect” form of money. However, gold and silver fit the bill of having the most desirable qualities of sound money, and yes, even more so than BTCs. I quite enjoy speaking to BTC advocates. I only have serious problems with the blind, biased bitcoin fanatics. So let’s take a look at a recent article I encountered titled “Why Bitcoins are Just Like Gold”, by Alec Liu. By analytically dissecting this article, I can explain why BTCs are most definitely NOT just like gold, and expose how the author has co-opted the same false arguments bankers have disseminated for decades to denigrate gold to build his own false case for the equality of BTC and gold as sound money.

 

Let’s start with disinformation piece #1. Mr. Liu states: “The only reason gold has value is because one day, way back when, long before recorded history, society simply decided that this yellowish precious metal should represent ‘money’.” First of all, this sounds exactly like something US Federal Reserve Chairman Ben Bernanke or IMF head Christine Lagarde would say. I can’t tell you how many ways this statement illustrates the ignorance of the author. Gold has about 10 qualities I can think of that make it a better form of money than anything else including homogeneity, durability, rarity and ease of divisibility. These are just a few of the qualities that make gold a far superior form of money than other commodities and qualities that precluded other commodities from serving as money over centuries of time. By the way, BTC’s ease of divisibility into very small units is what makes BTC so appealing as well. However, the fact that gold has been coined as money for nearly 3,000 years was due to gold’s possession of these ideal monetary qualities and not simply an arbitrary decision as Mr. Liu foolishly avers. For example, though diamonds are also beautiful, diamonds’ supposed “rarity” is just another banker lie, (see this article),they are neither homogeneous in clarity or quality, and they are not easily divisible. Consequently, because diamonds lack these ideal monetary characteristics, no civilization has ever adopted diamonds for widespread use as money over long periods of time.

 

The second lie Mr Liu attributes to gold, again copied straight out of the Central Banker propaganda playbook, is the following: gold’s “limited quantities were never able to keep up with demand”. This statement, one that was also erroneously presented as fact in the Goldman Sach’s book of the year, The Lords of Finance, by Liaquat Ahamed, is even more foolish than Mr. Liu’s first statement that gold was simply plucked out of the air like a rabbit out of a hat in a decision to deem it as the best commodity suitable as money. Bitcoin fanatics do not realize that their arguments for bitcoins simultaneously destroy their arguments against gold because of the indefensible contradictory logic they apply when making many of their arguments. For example, I’ve often heard bitcoin fanatics state that that bitcoin’s appreciation upside is unlimited and better than that of gold’s. However, gold is a hard asset and rare while BTCs , while also rare, are backed by the most abundant element in the earth’s crust and third most abundant element in the universe - oxygen. Would it not make more sense for a rare form of money backed by a rare hard asset to have a much better chance to appreciate to a much higher price than a rare form of money backed by the most abundant element in the earth’s crust? Actually if BTCs can survive an inevitable attempt of the Central Bank, Government, Commercial Bank troika’s attempt to shut them down as a legitimate form of money, I don’t really see why BTCs can’t keep rising in value. I just don’t believe that its final price point can rise higher than that of gold due to the important distinction I’ve laid out. And this is why I also continually distinguish between bitcoin fanatics and rational bitcoin advocates. Often the fanatics dominate the online discussion forums and spread harmful disinformation.

 

But let’s return to the Central Bankers’ claim that gold’s “limited quantities were never able to keep up with demand” that some BTC fanatics seem so fond of parroting. Gold’s rarity was never a problem in its use as money in the past. This was just a false myth spread and propagated by bankers that have now been taken up BTC fanatics. Central Bankers and their puppets have always claimed that gold’s rarity limited economic growth in the 1920s and that the bottleneck of gold’s rarity greatly constricted economic growth during this time period and caused the Great Depression. That is as revisionist a retelling of history as a Keynesian economist can possibly conjure up. The Great Depression resulted from bankers at the Bank of England counterfeiting of the Pound Sterling during WWI, their subsequent refusal to revalue their counterfeited Pound at a lesser gold exchange rate after the war, the consequent loss of massive gold reserves due to this fraud, and their lobbying of the US Federal Reserve to start counterfeiting US dollars to stop their gold loss. The consequent massive price distortions, aka stock market bubble, that resulted as a result of these counterfeiting efforts is what caused the crash in the 1920s and consequent global economic crisis. Though every global economic crisis is deliberately “manufactured” by Central Bankers and their Commercial Banker puppets, bankers try to deceive the masses by blaming past historical economic crashes on gold. It is truly unfortunate that some fanatics (again, not the advocates) among the BTC community help Central Bankers propagate these egregious lies.

 

When the bankers ended the Gold Standard in 1933 due to gold’s so-called “handcuffing” of the economy, the price of gold was only $20.67 per ounce! By simply allowing the price of gold rise to $300 an ounce, bankers could have expanded monetary supply by nearly 15 times. However, bankers were too interested in artificially suppressing the price of gold so that the serfs would not discover that the true intrinsic worth of their fiat currency, as Cypriots are now discovering today, was zero. Why? A rising gold price always reveals the dirty secret that bankers are devaluing fiat currency and stealing purchasing power from the citizens. Rarity is an element to be desired, not feared, in a commodity that backs sound money. If it were not, then BTCs founders would have capped BTCs supply at 1 quadrillion instead of slightly under 21 million (20,999,999.9769 BTCs). Thus, the problem with the global economy during the Great Depression was without a doubt, NOT the gold standard nor a lack of gold.

The problem arose due to:

(1) bankers’ abandonment of the gold standard for the world’s reserve currency (British Pound) due to war;
(2) the bankers’ decision to deliberately counterfeit a second world’s reserve currency (the USD) to aid the problem that resulted from (1); and
(3) an improper valuation of gold by bankers to preserve their global banking system of fraud and fractional reserve banking.

 

It is absolutely feasible today to have not a 20% backed, not a 30% backed, but a 100% gold backed system, whether or not we forgive all criminally- imposed banker debt in this world, as we should. We would need to scrap all fiat currencies in use and form a new currency to replace all fiat currencies, and then revalue gold to a significantly higher price, the exact price which would be determined by whether or not we enact jubilee or not. Again, I explain the mechanisms of how this can be accomplished in my book The Golden Gift, an excerpt of which can be found here at Scribd.

 

Today, the same people that buy diamond engagement rings and have no problem paying the equivalent of several million dollars per troy ounce for a flawless one-carat diamond are the same people with zero logic that say a mere $10,000 per ounce of gold is “too expensive”. Do you know how dumb this sounds from people that just paid between $2.5MM to $6MM dollars per troy ounce for their diamond engagement ring? Yes, the price of flawless one carat diamonds when you convert the price from carats to a single troy ounce is in the millions of dollars per one troy ounce.

 

Finally, the last utterly wrong statement Mr. Liu makes about gold is the following: “[Gold is] backed by no one…Your gold coins [ ] won’t do much good at the grocery store [because it] lack[s] intrinsic value.” Again, another foolish argument taken straight out of the Central Banker propaganda playbook. Ask Zimbabweans and Germans living during the Weimar Republic if they were able to buy food with their gold? In fact, to give you a contemporary example, go to Cyprus, and see if Cypriots that had no access to cash for about two weeks were able to buy food and other services with gold during the time bankers blocked all access to their digital bytes of air known as fiat currency. I guarantee you that Cypriots that had gold reserves and no cash were glad they did. In Zimbabwe and Weimar Germany, gold was universally accepted as money to buy nearly anything, including food. And this is why I am careful to distinguish between BTC fanatics and BTC advocates. BTC advocates that I’ve met are rational people capable of critical independent thought that understand all banker lies about gold and monetary history. On the other hand, many BTC fanatics parrot every single piece of disinformation spread by Central Bankers about gold throughout history and serve, much to the delight of bankers, as conduits to pollinate banker lies about gold and silver among the masses. Central Bankers could not have been happier with articles like “Why Bitcoins Are Just Like Gold”, because articles like these help spread banker-originated disinformation that helps keep humanity in slavery.

 

The characteristics that grant gold great intrinsic value are its beauty and rarity. Thus gold doesn’t need anyone to back it because its rarity AND utility grant it its value. BTC fanatics perpetually discount the fact that gold’s uses as jewelry and money, two of gold’s primary, but not only uses, grant it intrinsic value. If jewelry did not grant a commodity intrinsic value, then diamonds, rubies, emeralds, and sapphires should all be free like air (though perhaps diamonds don't belong in this same category as they have industrial uses as well). However, this obviously is not the case. Secondly, the fact that gold is the best commodity in the world that can serve as a medium of exchange AND as a store of value, gives it great intrinsic value. Thirdly, gold is a great conductor of electricity, and the reason we only find gold used in this capacity in very high-end, expensive electronics, is due to its rarity. If gold were as abundant as copper, gold would be used widespread in the electronics industry as a conductor.

 

So while BTC fanatics seem to not have any knowledge of monetary history, BTC advocates, are on the contrary, very well versed in the value of BTCs today. BTC advocates understand its great value as a medium of exchange but also understand its limitations in that they do not fit sound money’s need to be backed by a commodity that is a stable and consistent store of value. Trust me, if bankers can figure out a way to convince investors to trust in a bitcoin ETF, they will invent a bitcoin ETF to fraudulently manipulate bitcoin valuations in the same manner they have used the GLD and SLV ETFs to fraudulently manipulate gold and silver prices. People can fight back against this fraud in gold and silver by dumping or refusing to buy the GLD and SLV ETFs and buying physical precious metals, as illustrated by the University of Texas Investment Management Company, who bought $1 billion of physical gold bars in 2011 (but who made a huge tactical strategic error by choosing to vault their physical gold in New York vaults owned by the US Federal Reserve). If bankers invented a bitcoin ETF, there would be no way to fight against the price manipulation executed by the banker management of this ETF because buying physical bitcoins that have no intrinsic worth cannot succeed in stopping manipulation. I know that BTC owners will think that this is a ludicrous idea and that anyone that understands how BTC works will never in a million years buy a bitcoin ETF. However, owners of physical gold and physical silver that understand why only physical gold and silver are real and sound money also believe that only a fool would buy the GLD and SLV ETFs as well. But this hasn’t stopped bankers from deceiving people into dumping billions of dollars into the GLD and SLV ETFs. As long as there are people to be fooled, the bankers will use them to manipulate the currency at hand. That is why, in the end, intrinsic value is a vital, necessary trait that all sound money must possess so that the people have a means to effectively fight back against fraud that bankers inevitably will inject into the system.

Read "The Argument of Bitcoins Laid to Rest, Part I" here.

(Copyright 2013 SmartKnowledge Pte. Ltd. All rights reserved. Please contact us about republishing this article. Republishing without our expressed written consent is strictly prohibited)

 

 


About the author: JS Kim is the Founder & Managing Director of SmartKnowledgeU, a fiercely independent research & consulting firm with a mission of helping Main Street avoid the deceit and chicanery of Wall Street and of triggering a wave of global economic freedom only possible through one pathway - the end of all global fiat currency and a return to sound money. Follow us on Twitter @smartknowledgeu and on our YouTube channel to view our weekly vlog.

 

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Fri, 04/19/2013 - 14:30 | 3473175 PUD
PUD's picture

Bitcoins don't destroy the earth, poison the waters or enslave people in their production. Perhaps this is something you missed.

Fri, 04/19/2013 - 12:41 | 3472542 3x2
3x2's picture

[...] because both bitcoins and gold were simultaneously raided shortly after I released my two part-series of bitcoins v. gold on my blog[...]

Well now we have our answer - you caused the AssBit and Gold crash of 2013! 

ZH must be really desperate for printable words if this shit is a TLP.

 

Fri, 04/19/2013 - 12:27 | 3472469 Augustus
Augustus's picture

The price of Silver Eagles is a poor example to use for the actual trading price of physical silver.  A better measure that eliminates any collector value would be the junk silver US quarters.  Those prices track the paper prices very well.

Fri, 04/19/2013 - 11:17 | 3471974 Mototard at Large
Mototard at Large's picture

Out of gold. Amost out of silver...

I went into ScotiaMocatta this morning to buy some AU and AG. The polite and professional agent tells me that ScotiaBank/Mocatta had no gold for sale. No bullion and no Maple Leaf coins. He believes they may have gold available on 06 May 2013.

When I asked for modest amount of silver bullion (5 0Z bullion Sunshine) he smiled politely and said: "Let me just check inventory before I agree to the sale." He and an associate opened a cabinet, did a quick count and agreed to the sale.

I realize this is anecdotal information, but interesting to see a major national level seller of PMs unable to deliver their main product until 06 May.

Silver was selling for equivilent of USD 26.24 inclusive of all fees etc.

Fri, 04/19/2013 - 10:18 | 3471615 Freewheelin Franklin
Freewheelin Franklin's picture

First of all, nothing has intrinsic value. Nothing. Value is subjective. 

 

Personally, I don't think bitcoins were created to replace fiat or gold or whatever. They were created to undermine the legitimacy of government imposed soft currencies through their use in black and grey markets. 

 

For example, running an "all cash" business undermines the legitimacy of government imposed regulations and taxation. 

 

The theory behind using grey and black markets to undermine the legitimacy of government imposed currencies comes from the former Soviet Union, and how it was the black markets that devalued the Russian Ruble. Of course, in the former Soviet Union, there were so many shortages in "legitimate" outlets, that people were basically forced to buy their needs from the black markets. This theory comes from a type of anarchism called "Agorism", created by the late Samuel E Konkin III (SEK3). 

 

So where does bitcoin fit in? You can't conduct online transactions for cash. Almost every means from credit cards to PayPal is reported to the IRS or the information is available to the IRS. Bitcoins, for all intents and purposes, are untraceable. Especially if you use a "tumbler" service. 

Now, I know what you are thinking. How do you convert bitcoins into usable cash without the government knowing? Simple answer - you don't. Agorism is basically a barter type economy. You create a product, whether it be some illegal substance like drugs, or a "legitimate" good like a chair. You sell it online, either on your own website, or an "ebay" type website for bitcoins. You then trade your bitcoins with another for the things you need or desire. So, why would I want to sell a chair or a table for bitcoins when I can sell it "legitimately"? For the same reason you would run an all cash business. If you can avoid costly regulations and high taxes, you can sell your product for less. This directly undermines the legitimacy of goods sold through "normal" channels. The belief is, that as governments impose more and more regulations, and raise taxes higher and higher, the more people will seek out these alternative means. As more and more people use these alternative means, the more pressure it places on an already distressed economic system. 

 

Whether or not the use of bitcoins will have any dramatic effect on the economy, remains to be seen. It is still relatively early in the game to make that determination yet. However, with the current state of the world fiat system, any little thing may help push it in the "right" direction - down and out. At that point, governments, consumers, traders, investors, whatever, will have little or no choice but to move to hard currencies like gold and silver.

So, you ask, "gold or bitcoins"? I say both. Bitcoin is a possible means for achieving a change to a universal hard currency. It is merely one step in the process. Gold advocates should not look at bitcoin as a competitor, but as a welcome friend. 

For more on the theory of Agorism:  

 

http://www.kopubco.com/pdf/An_Agorist_Primer_by_SEK3.pdf

 

Fri, 04/19/2013 - 09:51 | 3471381 ebworthen
ebworthen's picture

I can tell you that a gold crown is the very best material; outperforms porcelain by 2-1 at the least.

If gold is a barbaric relic, why do they guard it so heavily, and not let anyone perform audits of it?

If it is worthless, why not melt down all the bars and send each taxpayer their share of it?

Hmmmm?

(p.s. -Next week on the 25th is the precious metals option expiration on the Comex.  Some thoughts from Jesse's Cafe Americain:  http://jessescrossroadscafe.blogspot.com/)

Fri, 04/19/2013 - 09:11 | 3471139 Peter Pan
Peter Pan's picture

I can understand that there is some animosity between the proponents of bitcoin and gold, however I think that this debate should take place at a later time and that we should not be having it nowwhen it might divide us as well as detract us from the real enemy which is fiat in the hands of unscrupulous people.

Fri, 04/19/2013 - 08:34 | 3470876 orangegeek
orangegeek's picture

Splatcoin is software, not a currency.  If you want to trade this online roulette wheel, that's fine.  People do this all the time in Las Vegas.

Fri, 04/19/2013 - 08:29 | 3470841 Sean7k
Sean7k's picture

I fail to understand the competition between bitcoin and gold. It is similar to the one between currency and gold or silver. All these arguments smack of the sales routine, market share, etc.

We all have our own money, how we use it, invest it, concentrate its' form is a matter of personal liberty (or should be). Why does it matter what we use? 

If you are too ignorant of the qualities of money and exchange, then you will be fooled, but who in life is never fooled? I imagine the buyer of bitcoin at 7$ is just as impressed with their foresight as the buyer of gold at 250$. I imagine the anonymous purchase of goods and services with gold or bitcoin are equally effective. 

All value instruments depend on a level of civilzation to maintain their value. Whether it is the internet or civil society. If your government becomes so draconian it refuse to allow and criminalizes the use or possession of gold, what is its' value then? If your government takes down the internet or restricts its' use and operation, how do you access your bitcoins? As your government debases your currency, how do you retain value? 

Consistent money value is a function of stable liberty. Anyone seen this mythical creature lately? Instead of bemoaning the manipulation of values, perhaps we should focus on the real prize: freedom.

Fri, 04/19/2013 - 12:52 | 3472614 Count de Money
Count de Money's picture

PM vs. BitCoin. This is like having a front row seat in a religious war.

Fri, 04/19/2013 - 11:54 | 3472246 malikai
malikai's picture

Accept this apology in advance for my future shameless theft of your wording.

+1000

Fri, 04/19/2013 - 08:15 | 3470794 Hmm...
Hmm...'s picture

"Even with the plunge that brought BTC back down to $100 (remember that I originally released this article on April 9th on my blog so BTCs had not yet plunged to $50), that is still a triple in price appreciation. Given that all fiat currencies have been losing massive amounts of purchasing power over the past 3 years, that still makes BTCs better than fiat currency."

This is simply not true.  It is far better for an economy to have a non-volatile currency.

BTC valuation is way too unstable to operate as a currency AT THIS TIME.  If they can iron it out in the future, who knows.  But for right now it is really only good as a relatively anonymous way to make a single point rapid transaction.

Thought experiment: 

who here would work for "1 BTC per hour"?  I certainly wouldn't when one day that might be $50/hr and another $275/hr and another day $25/hour. 

the valuation of BTC is simply too great FOR NOW.

eventually my guess is they'll get a handle on it.

There is a second reason why BTC is inferior to fiat.  It's the nature of fiat itself.  The Government supports Fiat, and not BTC.  Who here will be surprised when the Government wages all out war on BTC and Ripple?  when this happens:  can they survive?  Perhaps, but it's a RISK.  (what happened to Saddam again as soon as he decided he'd sell oil in non-denominated markets again?)

BTC would do well to stay under the radar, and allow people to use it to buy porn and gamble and buy drugs and make simple point to point transactions without ruffling King Dollar. 

Gold serves better for a store of wealth, and not so good for point to point transactions.  BTC works better for point to point transaction, and not at all for wealth. 

both are highly speculative at this time.  (not a bad thing, just a truth).

Fri, 04/19/2013 - 11:25 | 3472018 dark pools of soros
dark pools of soros's picture

it was a liquidity crunch..  like that doesn't happen in your stable markets right?  2008?  recent gold slam?

how about this crowd drop their holy mises institute shit for a minute and just look at the mechanics going on

 

Fri, 04/19/2013 - 12:02 | 3472310 malikai
malikai's picture

In addition:

"who here would work for "1 BTC per hour"?  I certainly wouldn't when one day that might be $50/hr and another $275/hr and another day $25/hour. the valuation of BTC is simply too great FOR NOW. eventually my guess is they'll get a handle on it."

1) You're not looking at the problem in a way aplicable to the environment. Consider BTC's use as a medium of exchange and in particular foreign exchange.

2) BTC is highly divisible. $5000/btc can still be divided to produce $50/hr.

3) This "they" you speak of is YOU. You take what you want and improve it yourself. This is fundamental to the open source world. You may not understand it yet, but you will some day.

Fri, 04/19/2013 - 07:49 | 3470667 mendigo
mendigo's picture

Gold : Durable, intrinsic value (more or less).
Fiat (as paper or ledger entry): Legal tender.
Bitcoin: ???

Bitcoin advocates seem to swing between popous condecension and blinding rage (or is it just me).

Fri, 04/19/2013 - 11:22 | 3471999 dark pools of soros
dark pools of soros's picture

fight fire with fire.. we dont have to bow to anyone.. especailly since we are actually doing something about the bullshit going on..

 

keep your head in the sand

Fri, 04/19/2013 - 13:44 | 3472681 mendigo
mendigo's picture

More like pissing into the wind.

I don't really see anything noble about Bitcoin. If you were wanting to fight the fed I suggest start by doing something that is not rediculus. This only makes the fed look better by comparison.

Separately I suggest the problems do not derive from the medium of excjange and its technical issues instead they derive from issues of liberty and poor governance basically our constitution is an anachronism and so is largely ignored except to add an air of legitamacy to our corrupt government.

Fri, 04/19/2013 - 07:02 | 3470478 q99x2
q99x2's picture

People might think there was a rout with BitCoin but stocks that become popular with 10 million float act exactly the same as BitCoin did. And, MtGox was all screwed up on top of it. So additional exchanges and retailers should normalize the trading pattern soon.

And I consider my memory sticks with Bitcoins as stores of value. I can certainly put an ad on Craigslist and sell them just like gold.

Fri, 04/19/2013 - 09:30 | 3471294 Alpha Monkey
Alpha Monkey's picture

And I consider my memory sticks with Bitcoins as stores of value. I can certainly put an ad on Craigslist and sell them just like gold.

Is that the "cold storage" method?  Do you have a good source for instructions on doing that the most secure way?  Can the bitcoins be coppied off/transfered from mem-sticks to another memory source? 

Thanks

Fri, 04/19/2013 - 09:40 | 3471366 RSBriggs
Fri, 04/19/2013 - 06:01 | 3470251 fredquimby
fredquimby's picture

Why would anyone want to listen to Kims bitcoin opinion when:

 

"I have never owned any BTCs because I just do not view them as sound money"

"I still include myself among those that believe that BTCs should be allowed to persist as an alternative currency" Like you have a say in the matter.

"So while BTC fanatics seem to not have any knowledge of monetary history" A terrible, terrible generalisation.

He is successfully making Tyler look like a c*** just allowing this shite to be posted here.

 

P.S BTC back over $130 this morning.

Fri, 04/19/2013 - 11:13 | 3471837 fredquimby
fredquimby's picture

Been feeling bad about my earlier comment all day. So I came back to post my apologies to Mr. Kim, smartknowledgeu, for my earlier rudeness. It was unnecessary, and I am sorry for lambasting your opinion in such a crass and ill thought out way.

Sincerely, Fred.

 

Fri, 04/19/2013 - 12:07 | 3472342 malikai
malikai's picture

This ain't kindergarden. Say what you think is right.

BTW, I agree with everything you said.

Notably, No skin in the game? STFU.

Fri, 04/19/2013 - 14:16 | 3473088 JOYFUL
JOYFUL's picture

...This ain't kindergarden. Say what you think is right...

apparently he did just that. Takes a man to man up!

...I agree with everything you said...

apparently you do not....

why not just get a sock puppet and cut out the middleman?

Fri, 04/19/2013 - 08:22 | 3470833 Hmm...
Hmm...'s picture

"P.S BTC back over $130 this morning."

That's not necessarily a good thing.  Sure, it is if you are a speculator.  but if you want BTC to survive you really want it to be STABLE.

you won't get the sheeple to buy into BTC if it keeps having issues with Wallets being stolen, largest trader shutting down for 12 hours, and massive volatility (even if it's on the upside).

Fri, 04/19/2013 - 14:28 | 3473164 Global Douche
Global Douche's picture

And for the future of BTC stability, you are very correct! Wallet security is getting better, if the sheeple would only encrypt these with strong passphrases and regular scans of their entire network for any of the increasing malware creeping about. You've clearly nailed it on the chokepoint regarding MtGox. The good news is that many users, including myself have created accounts on at least another exchange to spread out the noise. Its the noise that brings about the volatility, and I totally expect this volatility to continue, yet lessen with time and greater acceptance. As far as some who predict Bitcoin going down to zilch, I seriously doubt this will happen, as it would've likely done so by now.

Fri, 04/19/2013 - 11:20 | 3471988 dark pools of soros
dark pools of soros's picture

so how's the stability in those other financial sectors?   want to keep score?

 

Fri, 04/19/2013 - 07:04 | 3470482 q99x2
q99x2's picture

Agreed dudes lame.

Fri, 04/19/2013 - 06:57 | 3470457 The Abstraction...
The Abstraction of Justice's picture

In England we say he is comparing chalk with cheese. BTC is principally a remote payment system. Gold is for storing wealth. Once you figure that out there is no issue.

Fri, 04/19/2013 - 07:29 | 3470572 Glitterbug
Glitterbug's picture

Comparing chalk and cheese!  Agreed, but for a different reason.

Mining for Gold involves work and there is a tangible outcome for the successful.

Mining for bitcoins is searching for the holy grail in a "computer game" where a computer works away for hours and days, and some arbitrary "win" earns the owner a bitcoin. A prize.

Do any of you responders understand the way a bitcoin is granted to a miner?  Oh, I see, it's too complicated, so it must be genuine. Do you know anybody who has actually generated a bitcoin? I don't.

You are obsessed with the fact that the fed can print money; how come you are happy with some geeks being able to print or generate the "currency" that you are saving.

You tell me that I could print bitcoins if I set my computer to the task. So what would happen if the US CIA set their huge computer system that is tracking all your telephone and email conversation to generate these coins. We are talking massive generating power here.

Do you really know who wrote the programs? Do you know if they have a "backdoor" to the code that allows them to generate bitcoins at will?

I don't!

Fri, 04/19/2013 - 11:16 | 3471966 dark pools of soros
dark pools of soros's picture

I am mining, and am pretty sick of the arrogant ignorance a site like this has come to

 

if gold is fucking holy why does it need bitcoin to wake people up to it?

 

the crowd here is asleep and writers like this are telling bedtime stories to keep you asleep... bitcoin is action.. it might lose but it is fucking giving a damn right now

Fri, 04/19/2013 - 12:14 | 3472369 malikai
malikai's picture

"You can be arrogant if you are competent. You can be incompetent as long as you're not arrogant. If you are arrogant and incompetent, you are food."

Relax, these guys are just telegraphing themselves.

Fri, 04/19/2013 - 07:39 | 3470620 The Abstraction...
The Abstraction of Justice's picture

Do you really know what is on the inside of your gold and silver bars? Do you know which notes will follow the fate of the €500. Can you say which bank accounts will be seized?

 

If I get a sum of money in my paypal account, the first thing I do is transfer it to my bank. Once I get enough to buy a bar of silver, I buy a bar a silver, then I can relax. Bitcoin is like paypal for me. It functions well as a system to make remote payments. Now the underlying logic may be suspect, but as long as I dont put huge amounts of money on it, I have always my silver reserve to fall back upon.

Fri, 04/19/2013 - 09:01 | 3471049 Hobbleknee
Hobbleknee's picture

Good strategy.

Fri, 04/19/2013 - 03:25 | 3470209 Hobbleknee
Hobbleknee's picture

Bitcoin uses the legally allowed encryption limit specified by the US government.  Do you know why there is a legal limit to encryption?  Because that's the level government agencies can crack within a reasonable amount of time using a super computer/cloud network.  Every Bitcoin transaction is recorded and propagated across countless databases in the Bitcoin network, which the government can decrypt and browse at its leisure.

Fri, 04/19/2013 - 07:46 | 3470430 JOYFUL
JOYFUL's picture

Hmmm....four comments on this piece to this point in the day...one of which calls the author a clown, another deems the Tylers a "female anatomical appendage* for allowing this POV to be expressed, and a third which apparently confuses his gender(for purposes unknown)....yours is at least fact-based...whether fact-ual or not...I am not equipped to judge.

What I can judge is that Kim has delivered a piece with a bit of thought and  research behind it...which is a great improvement on some other puff pieces he has submitted here ...and can be commended for it. As can the site owners...the collective commentators, and the community at large which reads here...

because we impose standards of excellence upon ourselves and others, by bothering to sift through the detrius of a civilization on the way out...in order to prepare the way for another, on the way in - an thereby make a difference in an era when almost all affect a studied indifference to discerning the differential between truth and it's simulacra...

I came to this piece a skeptic as to JS Kim's authenticity and motives...after reading it with some care I have returned him to my reading list here...as I believe he has listened and learned from our internal dialogue, and chosen to improve rather than stay the same.Not a great piece by any means of measurement...but on the upswing...and that's enough for me to choose to refute the comments I quoted, and instead salute the author, the site owners, and the community at large. We are 'the authentic voice of the resistance'... and slowly but surely are 'terrorising' the Talmudist Tyranny traumatized by the truth bein testified to!

*"appendange" would be a disputable reference, were it not for the much underappreciated work of peeple like  Luce Irigaray, whose seminal contributions to the modern discussion of gender and identity politics("This Sex Which is Not One" fur example) offended both feminists and their opponents...and therefore...like the post-sionist non-dialectical discussions the ZH site breeds, made her, like ourselves, a threat to the status quo...and therefore terrorist of the truest timbre!

Fri, 04/19/2013 - 08:17 | 3470773 i-dog
i-dog's picture

Interesting that I had the opposite reaction to you, Gleeful One.

I have been a great fan of J.S.Kim's work on here in the past (though I have missed all of his contributions over the past 6 months), but was disturbed in this instance by his seeming advocacy in this contribution for scrapping all fiat currencies and replacing them with one new hard currency, backed by gold. This would seem to me to be the globalist plan!!

Over the past 100 years we have been playing a Monopoly game, trading houses and hotels and whatnot ... but with a cheating banker who has progressively rigged the game until he now holds virtually all the mortgaged properties (and all the gold...certainly as far as the West is concerned). Now, we pass around the board each year, landing on banker-controlled squares at every roll of the dice, coughing up rents or interest, until we pass 'Go' and collect our meagre $200 to spend on the next round of the board!! The banker is now just watching us with bland amusement while each player goes BK in turn!

Therefore, any new system that relies on gold backing of a new currency will play straight into the Khazarian Kleptokrats' krafty hands! Better to look now at other commodities to back competing currencies ... ie. keep the Ruble, the Yuan, the Aussie, etc ... but just get rid of the fractional [non]reserve aspects. Traders and merchants will always determine the true value of each currency, in the light of the perceived value of the backing commodity.

Though Kim also advocates competing currencies, that one statement really caught my eye.

Caveat: I'm putting this out on the spur of the moment, without too much thought going into it.

Fri, 04/19/2013 - 09:52 | 3471466 tip e. canoe
tip e. canoe's picture

always a delight to read the two of you playfully spar...keeping alive the lost art of chivalry & mutual respect amongst duelists.   wish i had the talents to visually bring to life your Monopoly metaphor dog...have a feeling it would act like a McLuhan judo knife of clarity cutting through the complexity in the minds of many not as obsessed with the intricate web of deception that is being weaved around us all.

Fri, 04/19/2013 - 11:56 | 3472255 JOYFUL
JOYFUL's picture

Though your voice be softer, it carries like the wind amongst pines.

Fri, 04/19/2013 - 09:37 | 3471327 JOYFUL
JOYFUL's picture

I am always delighted whenever yu n eye A-peer to dis-agree on an item here...

because it speaks to the ability of brothers-in-arms to spontaneously  (and without any need for overt pre-arrangment) disperse and cover the widest range of the battlefield in total concentration of individual strengths ...a rare and invaluable trait in effective guerrilla warfare!

I came down heavily on Kim a couple of months ago(during your hiatus I presume)for talking gold-buggish bullshit with all lot of poorly researched references to the C19th and onwards...and pretty much dismissed him(in my own mind) as another lightweight panderer to the peanut gallery here.

That's why I parsed his present piece with an eye to what might have developed in the meanswhile...and how I came to laud his effort today. It's a magnitude better than his previous performances here! You are dead on about the gold-buggers dead end alley hypnosis and the KKK implications...but we have to move the message in accordance with the capacity of the members to take aboard new information and process it with the available synaptic resources...which is quite a task for those of our brothers\sisters still caught in the Gulagistani matrix back in the fallen lands!

Rejoinder to yur caveat...at yur level of accession to the really real deal, Dawg, no great deal of fore thought be needed. Carry on sniffin!

Fri, 04/19/2013 - 10:09 | 3471562 Pseudo Anonym
Pseudo Anonym's picture

we all need to encourage contributors to bring new and dissenting ideas.  we at zh are now like one trick pony: gold bitches, silver bitches, ammo bitches, fuck btc and anything else that doesnt fit or confirm our bias.  there's no point in chasing out dissent and becoming isolated in our preconceived ideas.  i think that's what is happening on this blog.

Fri, 04/19/2013 - 11:09 | 3471924 JOYFUL
JOYFUL's picture

Yu n DaddyO have zeroed in on precisely why I felt compelled to string the bow and ride into the developing melee on this thread this morn! \the exact measure of the 'idea basket' which you have dissected is the exact quotient of what I have subjectively felt for some time to be a causal result of attrition in the ranks of our comrades of the 'female persuasion'...who don't seem to be around as much anymore...to our great detriment...

the use of the word cunt...with or without ***in an undisputably pejorative context, is as good a signal as any of what happens when the masks slips, and boystown is revealed in all it's tawdry glory...I personally have no objection to debaters callin each other cocksucker, motherfucker, faggot, dike, nigga, whiteboy or any other endearment...and treasure the absence of pc which has infected just about every other avenue of expression in the western world...

But...there's ways of speakin which inherently downgrade peeple who would otherwise feel they belong...rightly or wrong. We may not even know just all what those signals are!  For every comment passed here, there's roughly a hundred or two readers lookin on. Betcha the quotient of ladies lookin in, without feeling welcome to come aboard and contribute, is waaaaaaaaaaay higher than the equivalent proportion of guys. That's our loss.

It's way time to make a place for other ways of seein here.

Fri, 04/19/2013 - 11:23 | 3472006 Pseudo Anonym
Pseudo Anonym's picture

very good observation

attrition in the ranks of our comrades of the 'female persuasion'...

and it is our/everybody's loss here; indeed.  it appears to me that the culture here in the comments section is to beat up on anybody who does not confirm to the norm here (phyzz, guns, etc.).  i would imagine that females would have entire different strategy re how to protect their own and survive the fin. collapse.  we dont hear that here.

Fri, 04/19/2013 - 11:27 | 3472029 tip e. canoe
tip e. canoe's picture

we dont hear that here.

sometimes we do but you have to listen closely, as it's spoken only in whispers...

Fri, 04/19/2013 - 11:51 | 3472227 JOYFUL
JOYFUL's picture

too true dood...

if yu listen real closely, yu can hear your own heart beating! When that stops...it's over.

Fri, 04/19/2013 - 10:33 | 3471705 DaddyO
DaddyO's picture

+1

It's getting pretty stuffy in here.

That's why I only infrequently peruse Turd's blog...it just got to the point where anyone who raised a dissenting or questioning POV got hammered, then banned.

DaddyO

Fri, 04/19/2013 - 11:11 | 3471880 Pseudo Anonym
Pseudo Anonym's picture

from my experience, the worst blog for this type of censorship is fofoa.  the comment section is like a church.  the moment a commenter stops chanting praises to a/foa, and especially fofoa, and offers any type of dissenting opinion, s/he is labelled as a troll, disparaged and banned.  it's pathetic how the regulars on that blog come together in the comment section to jerk each other off.

Fri, 04/19/2013 - 09:06 | 3471089 nmewn
nmewn's picture

I enjoy his articles as well and he sums up my opinion of bitcoin in one sentence...

"I still include myself among those that believe that BTCs should be allowed to persist as an alternative currency as long as the people are allowed to bring back gold and silver as competing currencies, so the people can choose which currency they believe to be best, as should be the case in a free society."

...with a caveat, its not money. It may be an alternative conduit for moving it around...but its not money.

Fri, 04/19/2013 - 11:10 | 3471934 dark pools of soros
dark pools of soros's picture

perhaps bitcoin is what is needed in 'these times' to free up silver & gold?

 

it seemed to educate more people in the last month about banking, inflation, etc than gold has in the last 5 years.

 

Fri, 04/19/2013 - 14:25 | 3473147 InTheLandOfTheBlind
InTheLandOfTheBlind's picture

glad to see you got out of the foul mood from your earlier posts... appreciate this contribution

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