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Bitcoin: Revolutionary Game-Changer Or Trojan Horse?

George Washington's picture




 

Bitcoin Is Going Mainstream

Reddit, Virgin Galactic, and Overstock.com now accept Bitcoin.

So do dating site OKCupid and travel site CheapAir.com. Game giant Zynga is now in the testing phase.

Two big Las Vegas hotels accept Bitcoin.

Congressman Steve Stockman (R-Texas) accepts Bitcoin for 2014 campaign contributions. As does a law firm in Australia.

Reuters notes:

Already, 21,000 merchants are using Coinbase to accept Bitcoin from customers.

Indeed, there are websites listing scores of businesses which now accept bitcoin.

(And you can use Bitcoin at Amazon, Barnes and Noble, Crate & Barrel, Target, Sears, CVS, Hyatt Hotels, Kohl’s, Burger King, Applebees, Victoria’s Secret, Land’s End, Facebook, Groupon, Banana Republic, the Gap, AMC and Fandango movie theaters, Whole Foods, Wine.com, Wine Enthusiast, Papa John’s, Nike, Adidas, Sephora, Sports Authority, Staples, Zales jewelry, Game Stop, FTD flowers, Zappos and hundreds of other stores if you use Bitcoin to buy gift cards at Gyft.)

But is Bitcoin going mainstream a good thing or a bad thing?

People Power … Challenging the Status Quo?

Andy Haldane – Executive Director for Financial Stability at the Bank of England – believes that peer-to-peer internet technology will lead to the break up of the big banks.

Bank of America said “We believe Bitcoin could become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money-transfer providers”

Visa has attacked Bitcoin as being less trustworthy than its well-established payment system.

So it sounds like Bitcoin is shaking up the status quo …

Backed by … the Big Banks?

On the other hand, a lot of major mainstream players are backing Bitcoin and other digital payment systems.

Wells Fargo wants to get into Bitcoin in a big way.

JP Morgan Chase has filed a patent for a Bitcoin-like payment system. And Russia’s largest bank is working on a Bitcoin alternative as well.

Ben Bernanke and the Department of Justice have both cautiously blessed Bitcoin.

François R. Velde, senior economist at the Federal Reserve in Bank of Chicago, labeled it as “an elegant solution to the problem of creating a digital currency.” John Browne theorizes:

While crypto-currencies remain insulated from central bank manipulation, governments have thus far been tolerant, perhaps because their capability to track transactions is more advanced than Bitcoin believers admit.

Indeed, Bitcoin is not really that anonymous, as the NSA can track Bitcoin trades.

The NSA can apparently also hack Bitcoin. And see this. Given that the NSA may be changing the amount in people’s accounts, it would be child’s play for them to change the amount in your Bitcoin wallet.

And Yves Smith argues that Bitcoin actually plays into the hands of the central bankers:

Many [Bitcoin enthusiasts] clearly relish the idea of launching a currency outside the control of central banks (plus this beats Cryptonomicon in geekery).

 

If you believe the hype, you’ve been had. As Izabella Kaminska of the Financial Times tells us, you all are really just doing free/underpaid R&D for central banks, since you are debugging and building legitimacy for one of their fond projects, making currencies digital and getting rid of cash altogether.

 

I had wondered about the complacency of Fed and SEC officials in Senate Banking Committee hearings on Bitcoin last year.

 

***

 

As Kaminska explains (boldface mine):

Central bankers, after all, have had an explicit interest in introducing e-money from the moment the global financial crisis began…

 

Bitcoin has helped to de-stigmatise the concept of a cashless society by generating the perception that digital cash can be as private and anonymous as good old fashioned banknotes. It’s also provided a useful test-run of a digital system that can now be adopted universally by almost any pre-existing value system.

 

This is important because, in the current economic climate, the introduction of a cashless society empowers central banks greatly. A cashless society, after all, not only makes things like negative interest rates possible [background here, here, here and here], it transfers absolute control of the money supply to the central bank, mostly by turning it into a universal banker that competes directly with private banks for public deposits. All digital deposits become base money.

 

Consequently, anyone who believes Bitcoin is a threat to fiat currency misunderstands the economic context. Above all, they fail to understand that had central banks had the means to deploy e-money earlier on, the crisis could have been much more successfully dealt with.

 

Among the key factors that prevented them from doing so were very probable public hostility to any attempt to ban outright cash, the difficulty of implementing and explaining such a transition to the public, the inability to test-run the system before it was deployed.

 

Last and not least, they would have been concerned about displacing conventional banks from their traditional deposit-taking role, and in so doing inadvertently worsening the liquidity crisis and financial panic before improving it…

 

Almost of all of these prohibitive factors have, however, by now been overcome:

 

1) Digital currency now follows in the footsteps of a “disruptive” anti-establishment digital movement perceived to be highly accommodating to the black market and all those who would ordinarily have feared an outright cash ban. This makes it exponentially easier to roll out. Bitcoin has done the bulk of the educating.

 

2) What was once viewed as a potentially oppressive government conspiracy to rid the public of its privacy can be communicated as being progressive and innovative as a result.

 

3) Banks have been given more than five years to prove their economic worth and have failed to do so. If they haven’t done so by now, they probably never will, meaning there’s unlikely to be a huge economic penalty associated with undermining them on the deposit front or in transforming them slowly into fully-funded fund managers.

 

4) The open-ledger system which solves the digital double-spending problem has been robustly tested. Flaws, weaknesses and bugs have been understood, accounted for, and resolved.

The balance of the article describes how the central bank digital currency would be launched, and Kazmina finds a plan developed by Miles Kimball of the University of Michigan to be thorough and viable.

 

Oh, and why would Bitcoin, um, central bank digital currency make it viable to implement negative interest rates? Kaminska tells us:

…the greater the negative interest rate, the greater the incentive to hold alternative coins. The greater the incentive to hold alternative coins ,the greater the incentive to produce them. The greater the incentive to produce them, the greater the chances of oversupply and collapse. The more sizeable the collapse, the more desirable the managed official e-money system ultimately becomes in comparison.

 

Either way, the key point with official e-money is that the hoarding incentives which would be generated by a negative interest rate policy can in this way be directed to private asset markets (which are not state guaranteed, and thus not safe for investors) rather than to state-guaranteed banknotes, which are guaranteed and preferable to anything negative yielding or risky (in a way that undermines the stimulative effects of negative interest rate policy).

So all these tales … of how liberating and democratic Bitcoin will be are almost certain to prove to be precisely the reverse. Hang onto your real world wallet.

The head of Signature Bank – Scott Shay – raised these same issues last month on CNBC:

 


Bottom Line: Too Early To Tell

It’s not yet clear whether Bitcoin will be a force for good or a backdoor way for big banks – and central banks – to get people to accept a cashless society.

Tipjar for the Bitcoin-savvy:

13fANEP7h6huhjYw5P7hfognjtgKdD9dUC

 

 

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Thu, 02/06/2014 - 08:56 | 4407302 ghostzapper
ghostzapper's picture

If there is a country ripe for mass adoption of Bitcoin here it is:

 

http://www.coindesk.com/indonesia-central-bank-takes-new-more-neutral-st...

 

So many with mobile internet yet so few with access to banking/financial services.  Fucked up government that has no clue what to do the local telecom provider has created its own "currency".  Nah, it could never happen because guys on ZH said so.  

Thu, 02/06/2014 - 06:03 | 4407156 satoshi911
satoshi911's picture

AIPAC call's SHREM 'political prisoner'

 

 

Hard Times for a Bitcoin Evangelist Arrest of Advocate Charles Shrem Is a Blow to the Currency—but His Enthusiasm Isn't Wavering

 

http://online.wsj.com/news/articles/SB1000142405270230445090457936520180...

Funny now AIPAC ain't shy about BITCOIN being their baby when one of the tribe is put in prison.

Thu, 02/06/2014 - 04:12 | 4407115 TheGoldMyth
TheGoldMyth's picture

Karen Hudes RED ALERT For Collapse of Fiat Currency" February 5th, 2014 http://www.youtube.com/watch?v=Zy-2GaT6RMo

This appears to be level headed so i include it in notes and errata section of my rant about corruption which needs to be addressed first

Included is this recent video that is in my favour with respect to my main claim in the rant about putting the cart before the trojan year of the horse

I maintain vigorously that nit-picking about currencies is as non productive as the updated cart and horse analogy. I got the hhorse and cart around the wrong way myself earlier, so do not think i am expert.

However, in view of the video, any amateur economist like myselfn can to have the necesarry material to prove that it is totally useless to carry on about gold and real money when the enitre financial accounting system and what it is based on is crime of all crimes and needs to be addressed before wiseacring about other issues.

The question of the economy is not about financial advice, it is about legal advice and the best way to prosecute the corrupt system of banking.

Wed, 02/05/2014 - 21:05 | 4406333 blindman
blindman's picture

the entire point of a derivative market is to
exercise the option of the conversion of any underlying
asset, commodity or property into a "trojan horse" to
destroy by murder the recipient of the gift. what was say?
"beware greeks bearing gifts". yea, that was it.

Wed, 02/05/2014 - 20:51 | 4406287 satoshi911
satoshi911's picture

Good article about BITCOIN, too bad the normal pumper's refuse to acknowledge the facts.

They still stick to the orginal belief that BITCOIN was 'freedom', but FREEDOM from what, now that its been proven that BTC is NSA, a ZIONISM tool. They still say "that's ok",

Ignorance is Strength

BITCOIN is a Libertarian "Hotel California"

*

The block chain can be modified by anyone controlling over 51% of the block-chain, don't have a fucking thing to do with 'encryption' the NSA controls the INTERNET, the NSA created BTC, easy for NSA to make your BTC blance zero or infinite.

Easy for NSA to increase BTC's from 21 million to 21 billion to 21 quadrillion.

Easy.

Wed, 02/05/2014 - 19:59 | 4406103 supermaxedout
supermaxedout's picture

The Dollar is dead, long live the new E-US Dollar Bitcoin!!

To be the master of a system you have to be in control.  Control means the participants  are bound by the fixed settings of the technicals and  the rules.  But the master can always circumvent the rules as well as the technicals. This is essential otherwise it would be a system which cant be controlled.  To give up control of the money system means to give up one of the pillars of power. And the US is not going to give up power without being forced to do so!

Bitcoin is a US government product in my opinion. This fact is going to be in the open the moment the Fed jumps officially on the Bitcoin train.  Because the Fed is jumping on the train only when they are in complete control.  And they are. And complete control means to be the sole master of the system.  Soon the US is going to be Bitcoin country. Bitcoin is becoming the sole internal currency of the US. Only the US can become a Bitcoin country in the near future. Because the US controls the internet and therefore all electronic money comparable to bitcoin. Electronic money like bitcoin means total US controlled money! No other country on earth is presently capable to do something comparable.

The Dollar may then crumble and collapse. This is then going to harm only the non US holders of the former reserve currency.  My conclusion about Bitcoin is as follows:

The Dollar is dead, long live the new E-US Dollar Bitcoin!! 

Bitcoin is soon becoming the new currency of the US. A currency reform is going to take place. The old currency is becoming completely worthless for all "non privileged" Dollar holders. The term "non privileged" accounts for all Dollar asset holders outside the US. 

Dollar currency reserves of the Central Banks all over the world do then become worthless as well as foreign (non US)  private or corporate  Dollar denominated paper assets.This is what is called in German language a "Waehrungsreform" (currency reform). 

A "Waehrungsreform"was introduced by the US in Germany a few years after WWII. DM replaced the old Reichsmark. The money was printed in the US.

What I want to say is the following: The US has the most experience when it comes to the "currency business".   In my opinion the US want to get rid of the enormous amounts of Dollar circulating worldwide. These Dollars are more and more becoming a danger for the US system. The foreign holders of these giant Dollar reserves are using these funds against the strategic US interests.       So the only solution is to kill the Dollar so that this foreign owned stores of value do become worthless. At the same time a new currency is going to be introduced in the US, thus the local Dollars can be converted by a fixed rate into the new currency.   Cash Bitcoins are introduced at the same time.  Cash is still needed to run economy.

To be the master of a system you have to be in control.  Control means the participants  are bound by the fixed settings of the technicals and  the rules.  But the master can always circumvent the rules as well as the technicals. This is essential otherwise it would be a system which cant be controlled.  To give up control of the money system means to give up one of the pillars of power. Do you really think the US is going to give up power without being forced to do so ?

Bitcoin is a US government product in my opinion. This fact is going to be in the open the moment the Fed jumps officially on the Bitcoin train.  Because the Fed is jumping on the train only when they are in complete control.  And they are. And complete control means to be the sole master of the system.  Soon the US is going to be Bitcoin country. Bitcoin is becoming the sole internal currency of the US. Only the US can become a Bitcoin country in the near future. Because the US controls the internet and therefore all electronic money comparable to bitcoin. Electronic money like bitcoin means total US controlled money! No other country on earth is presently capable to do something comparable.

The Dollar may then crumble and collapse. This is then going to harm only the non US holders of the former reserve currency.  My conclusion about Bitcoin is as follows:

The Dollar is dead, long live the new E-US Dollar Bitcoin!! 

Bitcoin is soon becoming the new currency of the US. A currency reform is going to take place. The old currency is becoming completely worthless for all "non privileged" Dollar holders. The term "non privileged" accounts for all Dollar asset holders outside the US. 

Dollar currency reserves of the Central Banks all over the world do then become worthless as well as foreign (non US)  private or corporate  Dollar denominated paper assets.This is what is called in German language a "Waehrungsreform" (currency reform). 

A "Waehrungsreform"was introduced by the US in Germany a few years after WWII. DM replaced the old Reichsmark. The money was printed in the US.

What I want to say is the following: The US has the most experience when it comes to the "currency business".   In my opinion the US want to get rid of the enormous amounts of Dollar circulating worldwide. These Dollars are more and more becoming a danger for the US system. The foreign holders of these giant Dollar reserves are using these funds against the strategic US interests.       So the only solution is to kill the Dollar so that this foreign owned stores of value do become worthless. At the same time a new currency is going to be introduced in the US, thus the local Dollars can be converted by a fixed rate into the new currency.   Cash Bitcoins are introduced at the same time.  Cash is still needed to run economy.

Wed, 02/05/2014 - 20:28 | 4406207 TheHound73
TheHound73's picture

So... as an individual and seeing the way the winds are blowing, it is in my own self-interest to get into BTC now?

Thu, 02/06/2014 - 04:25 | 4407123 supermaxedout
supermaxedout's picture

This is the question!! I asked it myself but did not think deeper about it.

Now I thought about it for a moment:   My feeling is, that the present Bitcoin Dollar rate is way to high.  I would say a rate  5:1 makes sense.  But, to be concrete  I dont know enough to make a prognosis based on facts. Many facts I just dont know.  But my gut feeling based on knowledge of history wouild say  5 old Dollars for one new Dollar (bitcoin) would make  sense.  If the rate is much lower it does not have the desired effect of bringing the debts down enough. 80% debt foregivness is a good number to start with.

On the other side this means that 20% of the capital is saved. 20% of all US owned bad Dollar do become good Dollars. Combine this with the new strength of the local US energy production and a low external exchange rate for the Bitcoin Dollar then you have a base which is strong enough to carry a new start of the US economy.  Many thinhgs will be different but most important is to have a solid base. This can be achieved by the 5:1 rate Dollar to Bitcoin. 

A much lower or much higher exchange rate would destroy to much of the economy. So in my opinion it must be somewhere in this area. This means that todays Bitcoin price is a moon price.

Thu, 02/06/2014 - 05:54 | 4407153 TheHound73
TheHound73's picture

How many dollars exist?  12 million bitcoins exist, 21 million will exist in 2030.  That's 0.04 BTC per American currently and 0.07 BTC per American after the cap is reached.  ...Ignoring the rest of the 6 billion world population.

Wed, 02/05/2014 - 17:59 | 4405669 Bloodstock
Bloodstock's picture

So how much bitcoin can you access if the power goes off?

Trojan horse, bitcoin is for suckers.

Wed, 02/05/2014 - 17:49 | 4405635 WhyWait
WhyWait's picture

If you are reading this blog, you are no doubt trying to really understand what's going down and why, not just looking for tools to predict the small movements so you can profit from them.  But we are all nevertheless human and therefore vulnerable to being gulled, being recruited as believers in someone's scam, and when we put our money or our reputation on something our impulse is to fight to prove that we were right.  That's when they've got us.

If you find yourself defending Bitcoin, OK, we can agree to disagree.  If you don't agree with GW or anyone else on this list, that's OK. We're all feeling our way through an unprecedented, chaotic and dangeroud moment, trying ideas, probing for facts and information, looking for the best position for the battle ahead.  

But if you find yourself defending Bitcoin in fierce anger and lashing out at its detractors, you might want to  step back and take stock of yourself and what you are doing.  we all are going to need our clarity, which is why you are here reading this.  Agree or disagree, argue away; but let's save our scorn and contempt for the banksters, the crony capitalists and their shills and stooges.

 

 
Wed, 02/05/2014 - 18:39 | 4405696 George Washington
George Washington's picture

Well said ...

Wed, 02/05/2014 - 17:19 | 4405495 atomicwasted
atomicwasted's picture

Jesus H, if any article makes me believe the anonymous, unknown Tyler Durden was a front for Team Themis, it's this one.

We get handed a technology that has the potential to bust the Fed, one that's so dangerous to the federal government that they're jailing people for taking part in it, and you luddites shit all over it.  Well, I say "you luddites," but odds are at least a quarter of you are Team Themis/Endgame Systems/NSA sock puppets.  Look at how opinion has slowly been molded on this site; how it's gone from a fun, dynamic, liberty-oriented forum into a crotchety group of aging antitechnologists who post over and over and over again.  

It's sad, but it's a microcosm of how liberty-oriented groups inevitably seem to get coopted either by the establishment or by the populists.

Wed, 02/05/2014 - 18:14 | 4405717 tip e. canoe
tip e. canoe's picture

call us whatever you wish,
it does not change the fact that technology, by its very nature, is deflationary,
while its very existence is subject to finite resource limits.
design a technology that manages a balance between those two forces in a transparent way,
rather than pretending that neither exist in order to maximize one's own self-interest at the expense of others,
and you might find the luddites aren't as luddicious as you accuse them of being.

Wed, 02/05/2014 - 17:45 | 4405611 InTheLandOfTheBlind
InTheLandOfTheBlind's picture

and the luddites would argue that you are trading one slave master for another and are acting purely on impulse to flee the oppression of cutting board only to end up on the surface of the frying pan.....  you can't be too carefull

Wed, 02/05/2014 - 17:45 | 4405610 A. Magnus
A. Magnus's picture

How the fuck do I know that YOU are not an NSA shill-pogue-motherfucker? Your good word? I've read plenty on the internets about how the NSA proposed the cryptographic standard for Bitcoin back in the early 90s. Nothing about your frantic pom-pom waving and skirt hiking has any tangible facts for someone to make an informed decision. You're all hat and no cattle.

Team Themis? Is that the bitch team you belong to? Or did your welfare paycheck 'cognitive dissident infiltration' instructors tell you that quoting from the Illuminatus book trilogy would give you street cred here?

Try again, stool-pigeon shitbag...

Wed, 02/05/2014 - 18:38 | 4405807 atomicwasted
atomicwasted's picture

Ah.  You read something on "the internets."  But, I guess you couldn't be bothered to Google "Team Themis."  Instead you try to misdirect people into not looking into it.  Well, I fixed that for you.    http://original.antiwar.com/justin/2014/02/04/free-barrett-brown/  

What will your next excuse be for refocusing away from the existence of "Team Themis"?

Wed, 02/05/2014 - 17:55 | 4405655 InTheLandOfTheBlind
InTheLandOfTheBlind's picture

easy on the personal attacks... you are indirectly supporting his claims by acting in such ways

Wed, 02/05/2014 - 17:42 | 4405582 chemystical
chemystical's picture

Your premises are flawed and thusly are your conclusions.

I've yet to use the Beanie Babies analogy, but would you also say that everyone who saw through the hype and saw manufactured scarcity and a distorted market was ipso facto a toy hater or a child hater?

Do you and your ilk seriously believe that there exist and can exist only two camps on this subject: 1) Btc embracers who harbor no questions about it, and 2) NSA sock puppets?  

I doubt you do, so I'll make you this offer:  rethink, rewrite and repost something persuasive and I'll read it without putting you into the clueless douchebag camp.

P.S. for an excellent read on Luddites I highly recommend Kirkpatrick Sale's  Rebels Against the Future: The Luddites and Their War on the Industrial Revolution: Lessons for the Computer Age, Addison Wesley, 1995

Wed, 02/05/2014 - 18:42 | 4405812 atomicwasted
atomicwasted's picture

The Beanie Baby analogy is flawed.  Ty could produce an infinite number of Beanie Babies.  There was no limit to the number that could enter the market.  In contrast, there are only a finite number of bitcoins, and no more than that number can ever be mined.  

Wed, 02/05/2014 - 23:13 | 4406723 chemystical
chemystical's picture

P.S. you are wrong in your final statement:

"In contrast, there are only a finite number of bitcoins, and no more than that number can ever be mined."

You needed the disclaimer "...we hope.  Because when a majority of the nodes vote to accept the inevitable reprogramming that by nearly all accounts will required very soon to counter the scalability issue...the patch could easily add more Btc than previously programmed, and that ceiling could be raised well before the original estimate of the last Btc being mined in 2140.  Additionally, more Btc might be required for mining reasons tangentally related to scalability and to the data transfer rates required to download the blockchain."

Without looking elsewhere can you tell us whether the current programming establishes 1 vote per IPA or 1 vote per PC or 1 vote per Btc owned?

 

Wed, 02/05/2014 - 22:59 | 4406688 chemystical
chemystical's picture

Beanie Babies was a freaking metaphor for the OP's bullshit premise.  Reading comprehension is your friend, er, it should be.

How about I sub Barney The Purple Dinosaur for Beanie Babies in the "...X therefore hates children" analogy?

Stop with the kneejerk presumptions and read the fucking post objectively. 

 

Wed, 02/05/2014 - 19:57 | 4406097 Tall Tom
Tall Tom's picture

Ty could produce an infinite number of Beanie Babies.

 

Come on. That was weak. Ty could not have produced an "infinite amount of Beanie Babies" for two reasons.

 

First there are limited resources on this Planet.

Finally it would have destroyed their Business Model, and Secondary Market, as the Supply overwhelms the Demand...which...coincidentally is what happened in the Beanie Babies craze, the Hot Wheels craze which followed it, and the Baseball Card craze which preceded it.

 

While there is a finite supply of Bitcoin there will be a point where Supply and Demand meet. While Supply might not ever grow beyond a cretain point the Demand will wane for the following reason. And that will doom Bitcoin.

 

There is an inherent Architechture flaw, and like Baseball Cards, Beanie Babies, and Hot Wheels, Bitcoin will become a victim of its own success.

 

https://www.youtube.com/watch?v=PfeA94BedQI

 

At current Data Transmission Speeds the transfer of Terrabytes is timely and expensive. The growth in Upload and Download Data Transmission Speeds will not keep pace with the Growth in Bitcoin as it becomes widely accepted. Thus is loses its utility and becomes a victim of its own success.

 

Listen to the Video....all of it...then please comment.

Wed, 02/05/2014 - 16:53 | 4405396 MeelionDollerBogus
MeelionDollerBogus's picture

ANOTHER bitcoin article?
Please.
We may as well have a fonestar party and be done with it.
Bitcoin is garbage & I'm tired of seeing anything about it no matter the /sarc, trolling, legitimate concerns, nonsense claims of magical powers bitcoin has, etc.

Thu, 02/06/2014 - 01:09 | 4406954 TheHound73
TheHound73's picture

You just had to click the link, didn't you?

Wed, 02/05/2014 - 16:36 | 4405288 swmnguy
swmnguy's picture

This whole article and thread has been nothing but a troll-baiting for "Fonestar."  Where the hell is he?  Did he get banned?  Did he adopt another username and slightly change his style?  I don't get it.  I'm starting to get worried.  He never writes, he never calls.  He could be dead in a ditch somewhere and how would we know?  I'm worried sick.

Wed, 02/05/2014 - 16:55 | 4405397 Toolshed
Toolshed's picture

Apparently, reading is not a fonestar strong point as he recently left this comment on the garbage article about the winter olympics:

"Tyler, throw me a Bitcoin article!  I'm freaking dying up here man!!"

What a complete bozo. I mean gosh, this article has only been here most of the day.

Wed, 02/05/2014 - 17:05 | 4405437 swmnguy
swmnguy's picture

I just saw that post on the other thread.  I saw this article early this morning and thought, "Well, fonestar claims to be in Western Canada, and LTER says he's a Chinabot, so maybe it's too early."  But as you say, this article has been up for a long time now.

And that other article was crap, too.  I'm seeing plenty of other confirmation that Sochi is a goatfuck, and I'd say the Ukrainians and Russians come by their mutual hatred honestly.  But I don't need to read sloppy propaganda.  There's no shortage of that; don't need to log in to ZH to find it.

Wed, 02/05/2014 - 20:38 | 4406243 satoshi911
satoshi911's picture

BITCOIN is over 70% MINED by ONE UKRAINIAN

THat right there should tell you something.

Israel wants UKRAINE as much as they wanted SYRIA, this time the carrot was 'BITCOIN', ...

If Israel loses Ukraine, like they lost Syria, then Israel will flip the BITCOIN switch off.

Remember that BITCOIN is NSA, and that is all part of team CIA/MOSSAD.

 

Wed, 02/05/2014 - 16:22 | 4405197 tekknik
tekknik's picture

This is filled with too much BS and "facts" to be taken seriously. There is currently no known weekness in SHA2, and if the NSA had one they wouldn't use it to destroy BTC, as there are much more important targets. Also just because changing account balances in a centralized system is easy doesn't mean it is easy for them to change your BTC wallet balance, this would require doing an actual transaction. Since transactions are signed by ECSDA it makes it even more difficult if one doesn't reuse address, and the signing mechanism can easily be replaced should the NSA break it. Don't listen to this crap.

Wed, 02/05/2014 - 18:06 | 4405692 chemystical
chemystical's picture

Don't be so naive.  TPTB didn't get to that position by destroying everything in the path.  It's been demonstrably more productive and lucrative to instead co-opt those things.

That's NOT saying that "The Fed" or GS or JPM o some alphabet soup govt agency is behind Btc.  It's simply stating that your argument is weak.

P.S.  If you had a way to spy on everyone who thought they were secure, would you tell them and show them how they are wrong, or would you allow them to go on their merry ways while you carried out the focus of your freaking mission statement: spying?  It's also wishful thinking to say that in 2001 the NSA (who's mission is to spy) would release a foolproof means to evade their spying.

Trace SHA-256's geneology and you'll find multiple generations that had backdoors discovered.  Not all of those were necessarily attacked and exploited, but the discovery of at least the potential to do so is what caused their demise and one of the things that gave impetus to finding a successor.

P.P.S. one of the most hubristic things I've ever witnessed is the Btc'ers who think that the Net belongs to them and that no one could ever take it away from them or from any specific node.  Take a stroll through history:  1) Net = DARPA, 2) tor = Defense Dept, 3) SHA-256 = NSA.  Toss in the co-opted ISP's and hardware and software mfrs, and what do you get....

 

 

Wed, 02/05/2014 - 16:46 | 4405346 Spanky
Spanky's picture

Think about it this way: If you broke SHA-2 (or have a backdoor) why not use bitcoin to see everything folks are doing with their hard earned bits? It's surveillence wed to currency. The NSA releases nothing they can't access. Period. Including the blockchain.

Wed, 02/05/2014 - 18:18 | 4405732 MontgomeryScott
MontgomeryScott's picture

Well, now, WHAT, exactly, IS SHA-2, and WHO actually WROTE it?

Gee, I dunno! After a search that took all of 3 seconds, I ran across THIS:

SHA-2 is a set of cryptographic hash functions (SHA-224, SHA-256, SHA-384, SHA-512, SHA-512/224, SHA-512/256) designed by the U.S. National Security Agency (NSA) and published in 2001 by the NIST as a U.S. Federal Information Processing Standard (FIPS). SHA stands for Secure Hash Algorithm. SHA-2 includes a significant number of changes from its predecessor, SHA-1. SHA-2 currently consists of a set of six hash functions with digests that are 224, 256, 384 or 512 bits.

SHA-256 and SHA-512 are novel hash functions computed with 32 and 64-bit words, respectively. They use different shift amounts and additive constants, but their structures are otherwise virtually identical, differing only in the number of rounds. SHA-224 and SHA-384 are simply truncated versions of the first two, computed with different initial values. SHA-512/224 and SHA-512/256 are also truncated versions of SHA-512, but the initial values are generated using the method described in FIPS PUB 180-4. The SHA-2 family of algorithms are patented in US 6829355 . The United States has released the patent under a royalty-free license.[3]

In 2005, security flaws were identified in SHA-1, namely that a mathematical weakness might exist, indicating that a stronger hash function would be desirable.[4] Although SHA-2 bears some similarity to the SHA-1 algorithm, these attacks have not been successfully extended to SHA-2.

Currently, the best public attacks break preimage resistance 52 rounds of SHA-256 or 57 rounds of SHA-512, and collision resistance for 46 rounds of SHA-256, as shown in the "Cryptanalysis and Validation" section below.[1][2]

 

SO, I think (or am led to believe) that the NSA wrote this script, back in 2001. BITCOIN uses the script that the NSA wrote, I am being told.

NO, nothing wrong here. CRYPTOCURRENCY programs using NSA algorithyms and shared within the full MIC do NOT bother me in the slightest. They are PERFECTLY SECURE in the hands of the global PARENT CABAL.

Is this what you meant by your post, Spanky?

YUP...

Obi Wan Fonestar, help us. YOU are our only hope now...

Wed, 02/05/2014 - 19:38 | 4406020 Tall Tom
Tall Tom's picture

Obi Wan Fonestar, help us. YOU are our only hope now...

 

Here is his YouTube Channel if you really want to manifest him.

 

https://www.youtube.com/user/weihrauchfan1999

 

Check out his videos. He likes Guns a lot. I was impressed.

 

Great Research by the way.

Wed, 02/05/2014 - 16:15 | 4405163 Conax
Conax's picture

<BTC= Game Changer

<BTC= Trojan horse

Cast your votes, inquiring minds wanna know.

Wed, 02/05/2014 - 16:04 | 4405101 Rudini
Rudini's picture

It's both because Bitcoin is still connected to fiat schtuff, unless one thinks of it exclusively in terms of exchanging it for goods & services.

Wed, 02/05/2014 - 14:41 | 4404647 Spanky
Spanky's picture

4/5

Good work GW.

Brought out the usual suspects... miners, speculators, believers and propagandists.

Wed, 02/05/2014 - 14:31 | 4404557 q99x2
q99x2's picture

If there was only one crypto-currency then control may be possible but not with thousands.

The question should be asked to the open source developers and their opinion should be the only opinion because they are the ones that understand the technology. Can't ask banks or reporters.

Banks are also trying to get their own versions out to the public and they are offering services that mimic bitcoins ease of use.

Wed, 02/05/2014 - 14:19 | 4404555 durablefaith
durablefaith's picture

I think GW has highlighted the risk that Bitcoin is a trial balloon that will ulitmately serve the elite's purposes of gaining even more control over the rest of us.

There are a fair amount of ZH'ers that don't want to co-operate with enslavement and so this is important information.When I shop, I go to the line with people working, avoiding the self-checkout. If we all did this, employment would be higher. If we all ditch FRN's for digital currency, then cash and PM transactions will be considered highly suspect, and eventually will be declared unlawful effort to avoid taxes.

Why would we want to make it easier for the elite to implement a cashless society where every transaction is tracked and taxed?

Good job GW

Wed, 02/05/2014 - 18:34 | 4405789 MontgomeryScott
MontgomeryScott's picture

The people willingly accept their enslavement. It will happen.

The sparks of the tempest are now becoming fanned by the desperation in men's eyes and souls; as the inevitable ultimate loss of life becomes clear. Generations are now at a time of culmination, and the family structure is almost finished. Nuclear pollution approaches every shore; water is now polluted; the air is unfit to breathe; the earth itself yields less and less food; storms rage unchecked; earthquakes and volcanoes ravage continents in unprecedented severity and frequency. Mankind is becoming ever more selfish, and the rich become engorged while those less fortunate are left to bear the ravages of the excess. THESE things are but a foretaste of the events that ARE now happening as we witness them.

GW isn't that bad of a site...

Let the flash of lightning happen...

http://www.youtube.com/watch?v=cnijc9wNpV4

I grew up on this music. I was weaned on the prescient fortelling of events.

Wed, 02/05/2014 - 19:24 | 4405981 Tall Tom
Tall Tom's picture

It is somewhat sad that we did not hear what they were saying, and acting then to prevent what we have now.

 

But it is okay.

 

Did you listen to this one?

https://www.youtube.com/watch?v=uHZkzv2HBYM

 

It is kind of a Theme song...for me.

 

Carry on my wayward son
There'll be peace when you are done
Lay your weary head to rest
Don't you cry no more

Once I rose above the noise and confusion
Just to get a glimpse beyond this illusion
I was soaring ever higher
But I flew too high
Though my eyes could see I still was a blind man
Though my mind could think I still was a madman
I hear the voices when I'm dreaming
I can hear them say

Carry on my wayward son
There'll be peace when you are done
Lay your weary head to rest
Don't you cry no more

Masquerading as a man with a reason
My charade is the event of the season
And if I claim to be a wise man
It surely means that I don't know
On a stormy sea of moving devotion
Tossed about I'm like a ship on the ocean
I set a course for winds of fortune
But I hear the voices say

Carry on, you will always remember
Carry on, nothing equals the splendor
Now your life's no longer empty
Surely heaven waits for you

 

Yeah. I listened to quite a bit of that prescient music as well.

 

I love the Double Entendre.

 

You have great taste.

Who do you think that he found after hearing the voices?

 

Yes I do enjoy the prescient foretelling of events.

 

Thanks for the link.

Wed, 02/05/2014 - 14:48 | 4404440 juicemoney
juicemoney's picture

What about the massive growth of the blockchain and the inability to trim it or that less people will be able to download it? Some have suggested bitcoin "clearing houses", so much for that noncentralized huh?

Supporters of Bitcoin say people are paranoid yet Snowden released a sliver of documents that already show vast capabilities of the NSA and the Five Eyes. What's to say they haven't cracked encryption like Tor? Or Bitcoin wallets?

What about the speculators who are holding Bitcoin as a investment, waiting to sell it to somebody else? Or the fact the US government will auction off almost 30,000 coins imminently? Doesn't this remove stability from the equation?

What happens if SOPA gets passed and internet traffic can be shaped, filtered or shut down at will? Heck, what happens if the power goes out? Even government fiat can be used without electricity if you are smart enough to have cash.

What about the fact that the majority of cryptocurrencies are related to fiat currency? Bitcoin currently scores 1.5/3 on the fiat scoreboard.

Fiat currency is: 

- any money declared by a government to be legal tender

state-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard. (hmm, bitcoin is publicly issued... apparently)

- money without intrinsic value (yep, and I don't think electricity consumed to solve an algorithm has intrinisic value either, that's just another misallocation of resources)

Cyrptocurrencies are a medium of exchange, not a store of value. I like the idea of facilitating transactions in bitcoin, nothing more. Ideally, I would get paid in precious metals and convert a small amount at a time to cryptocurrencies in order to conduct transactions. I hate central banking as much as the next guy but cryptocurrencies aren't the whole solution.

This is a giant distraction from sound money. A red herring. A pixie-dust fairytale full of shit. When fiat currencies start to fail, people will want sound money to be a store of value. Not another fiat "let it be done", "it shall be" or promise essentially from nothing. 

Wed, 02/05/2014 - 13:02 | 4404321 IAM THE BEAST
IAM THE BEAST's picture

Bitcoin has been pumped, and now I'm waiting for it to get dumped.

I think a better alternative is here: http://ianamarchbank.blogspot.com/

It's simply credits and debits, folks, and math from 1202.

No mysterious algorithms and globalization strategies.

Wed, 02/05/2014 - 18:47 | 4405818 MontgomeryScott
MontgomeryScott's picture

I caught what you did here.

'FOLKS'

Ah! The pathetic insult to the intellectual capacity of the individual mind is being assailed at this juncture, by lumping the individual creative abilities with the 'rest of them'; the 'folks', the 'common man'; the MEME of COLLECTIVISM versus the reality of the individual; the denial of individual creativity in deference to the collective power of 'combined humanity'. The STATE versus the ONE. 'JUST US' versus 'JUSTICE'...

I bet you drive a Volkswagen.

Appropriate avatar, I might add. Congratulations on your overseer's selection.

Wed, 02/05/2014 - 17:52 | 4405644 CH1
CH1's picture

Bitcoin has been pumped, and now I'm waiting for it to get dumped.

Enjoy the wait.

Wed, 02/05/2014 - 12:32 | 4404243 squid427
squid427's picture

@paint it red

What the fuck is wrong with you. Not agreeing with someone is fine, but wishing harm on people for beliving in idea that might help break the bonage of the banksters. Who is the sactimonious one here, you condecending piece of shit. I am a bitcoin believer and if you want to do some harm to me I live in Tallahassee Fl. This is a small town and I got a big mouth and I'm easy to find. COME ON DOWN BITCH AND I WILL FUCK YOUR LIFE UP !!!!!

Wed, 02/05/2014 - 19:05 | 4405902 MontgomeryScott
MontgomeryScott's picture

@squid427:

I would much prefer that you travel to me, up here in God's Country. You retired old fucks in Florida are not in a safe place now, and since you seem to be outspoken in your religious beliefs (you 'believe' in Szhitzcoin), and your mouth is so big ('I got a big mouth'), you can come up here and eat a shit-pie, baked and served by ME, BITCH.

YES, you might try to break the BONAGE (BONAGE; what a MAROON!) of the banksters, you silly little twit, as they force-feed their Bitcoin-laden phalluses in to your shit-eating BIG mouth and open orifices, but they still force it in, and you seem to welcome it, twink. It is getting ever-larger, as they approach their climaxes...

HMMM. I wonder how long the brown-bagger has been here. I guess it doesn't matter, though, because he's actually pretty ignorant.

"COME ON DOWN BITCH AND I WILL FUCK YOUR LIFE UP !!!!!" That might be hard to do, after all, squid.

I don't know the poster 'paint it red' from squat, but I suppose I would defend it's right to state it's opinion to you. GO AWAY, now, and play with the RED/BLUE staters down there in Talahassee. Say Hi to JEB for me, BITCH-BOI.

Wed, 02/05/2014 - 18:28 | 4405758 chemystical
chemystical's picture

"I live in Tallahassee Fl. This is a small town and I got a big mouth and I'm easy to find."

Is the OP supposed to driver the corner of Monroe and Tennessee, roll down his window, and yell, "Hey, squid427!  Where are you?  I'm here!"

Be more descriptive of how to find your false and ill-directed bravado.  Like, oh, I don't know...maybe post your name, address, telephone number, time your 8th grade class meets, etc.  You're seriously going to make such a challenge - in caps no less - and then utterly fail on making it easy to meet it.

P.S. What if the OP turned out to be an 85-yr old female quadrapalegic?  Then what? 

P.P.S. Why is the 8th grade off today in Talahassee?  Can't be a snow day.

 

 

Wed, 02/05/2014 - 19:48 | 4406071 MontgomeryScott
MontgomeryScott's picture

The nearest U.S. military installation seems to be Tyndall AFB, Lat. 30.070877, Lon. -85.5762, about 115 miles away. Of course, I might be incorrect.

He (IT) stated that this was a 'small town', and thus INCOSEQUENTIAL. Since it IS the CAPITAL of Florida, IT might be trying to mislead you.

Tallahassee /?tæl??hæsi/ is the capital of the U.S. state of Florida. It is the county seat and only incorporated municipality in Leon County, and is the 128th largest city in the United States.[4] Tallahassee became the capital of Florida, then the Florida Territory, in 1824. In 2010, the population recorded by the U.S. Census Bureau was 181,376,[5] and the Tallahassee metropolitan area is 375,371 as of 2012.[6]

The Talahassee metro area is almost 400,000. FOUR-HUNDRED-THOUSAND. THREE-EIGHTHS of a MILLION INDIVIDUAL PEOPLE. Actually, the NINTH-LARGEST CITY in the swamp state called 'FLORIDA'. YEAH, this is a 'SMALL TOWN' (LIE, OBFUSCATION!).

I just LOVE the whole 'fact-checking' thing, here on ZeroHedge.

 

Wed, 02/05/2014 - 18:55 | 4405873 Tall Tom
Tall Tom's picture

If he is in Tallehasse, Fla. then most likely he is a Bored College Brat sitting in his Dorm Room and Seeding his Sock rather than any of the beautiful coeds.

 

He does not have the imagination to invite his quarry to going on a Hunt.

 

Anyone care to go Hunting with me? I like Dick Cheney's idea of a hunt when he took his Lawyer. And you know how those damned Hunting Accidents are on the increase these days?

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