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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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Wed, 02/05/2014 - 11:19 | 4403914 paint it red ca...
paint it red call it hell's picture

If I were involved with bitcoin you would then be correct about my being a hypocrite.

My faith in honest financial system is complete because I have lived long enough to have experienced how the old, totally corrupted one has failed (in that sense an honest system would be new). Crytocurrencies to my view are not a new system but a logical and totally enslaving extension of the old corruption being sold as a new system..

You are on a Fool's Journey my friend. An encounter with the IRS would be just a inconvenience in comparison to the potential for societal domination here. Big stakes are on the currency table for everyone.

Wed, 02/05/2014 - 11:35 | 4403999 madtechnician
madtechnician's picture

So what is your solution then ? Another gold standard which would be torn apart after 30 years by corrupt politicians and central bankers ? Same old same old ,,,

Wed, 02/05/2014 - 16:18 | 4405145 Tall Tom
Tall Tom's picture

And you opt for Government Servitude as you believe in Government Solutions.

 

I am sorry to inform you that THERE ARE NO POLITICAL SOLUTIONS. There are NO GOVERNMENT SOLUTIONS. GOVERNMENT PROVIDES NO SERVICES EXCEPT THOSE WHERE THEY ACT AS A PARASITE AND SPONGE.

 

GOVERNMENT IS THE PROBLEM.

 

You are somewhat correct in your assertion that a "Another Gold Standard would be torn apart...by corrupt politicians and Central Bankers". But it will begin right after a Gold Standard is introduced. It will not take 30 Years.

 

Some people will game the system in their favor immediately. It is their psychopathic evil nature. 

 

Most of the people look for outside leaders. That is their nature. Humans are Tribal.

The evil narcissistic psychopathic understands this and exploits it for personal gain. Again that is their nature. Greed is deeply embedded into their Human Psyche. It is insatiable. There is never enough.

 

Thus the Architecture of any Government is fundamentally flawed. Like any computer when you feed it Garbage Data, after processing, you will get Garbage as the result.

 

Masses of people wanting to be lead, craving leadership, will follow the psychopaths toward their own enslavement and subsequent destruction.

 

This is hard wired. This runs deep in the Human Psyche.

 

That is an inherent problem with the IDEAL of Libertarianism. It fails to take into account the Tribal Nature of Humans. It depends upon voluntary action. No Libertarian can justify the use of force or coercion, actively or passively, to compel another to adopt Libertarianism. That is antithetical to their philosophical position. Most Humans will seek their own enslavement voluntarily. Thus it is also not a solution. It is just a Dream away.

 

Governments always degenerate to Tyranny. (I rarely use the word, "always".) They are unsustainable. Some may last longer than others. But the outcome is collapse because of the people whom empower those whom are in power.

 

Yet you promote the idea that Tax Evasion is immoral? You place your faith and trust into your Socialist Government? The poor will suffer?

 

The poor suffer because of Government. The poor suffer because of the evil psychopaths. The Government is responsible for the poor's IMPOVERISHMENT in the first place. The Government always takes more than it gives as it must use energy to sustain itself. The wealth which they allocate has been taken from the productive.

 

Then you write about "morality" while supporting the outright theft from the productive? Isn't that hypocrisy?

 

Of course you will counter my assertion with the assertion that the greedy and evil psychopaths will concentrate wealth and exploit the poor...without Government.  Yes I agree. Perhaps that is the case. 

 

But isn't that what has happened today while being ruled by Governments? The Greedy and evil psychopaths change their tactics and adapt. They concentrate wealth and exploit the poor USING GOVERNMENT AS THE TOOL TO DO IT.

 

So it is apparent that having a Government does not prevent the Greedy evil psychopaths from concentrating the wealth and exploiting the poor. In fact having a Government just serves to enable this with the added benefit of having a legal authority and an Police Force Army backing them.

 

Doesn't the HISTORICAL EVIDENCE support my assertion? Can you show me one Government on Earth when and where this has not been the case? Even the United States Government, set up to promote freedom and opportunity, has degenerated into that which I have described. It is a FAILED EXPERIMENT.

 

Obviously changing Governments does not work. How long have we been at this game? Ten Thousand Years? We have not got it right yet? (I will not hold my breath.)

 

Thus I must come to the conclusion that THERE ARE NO POLITICAL SOLUTIONS.

 

So how about giving Liberty and Individuality a chance. Nope. That will not work. Because people, by their flawed nature, will seek to form collective Governments which will regress into Tyranny. The Collectives will force their will over that of the individual.

 

That is our dismal fate and that is the unadulterated truth.

 

As for Bitcoin. The wide spread adoption and success will only serve to guarantee its demise as the Blockchain grows exponentialy with every transaction. It cannot survive without a restructuring of the architecture as it, like Governemnts, is fatally flawed.

 

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

Wed, 02/05/2014 - 19:36 | 4405973 madtechnician
madtechnician's picture

First of all 'blockchain bloating' is a Red Herring , data storage capacities will continue to explode in size along with increases in network speed. It was not all that long ago that a 5MB hard drive was the size of a fridge , it will not be long before PetaByte (1000 TerraByte) hard drives will be 'normal' and you will have Terra speed fibre broadband available in the average home. The Bitcoin protocol is quite capable of scaling up to match the transactional speed of VISA / MasterCard / SWIFT systems combined which would produce around 1 Terrabyte of data per week , so a 1 PetaByte hard drive would hold 20 years worth of transaction data.  People were amazed when the CDROM came along , that seems like very old hat now , the same will be true for the amount of storage required for the blockchain , which in technical terms is not that much data at all if you cared to compare that for example to the amount of data required to produce just a single channel of digital High Definition TV which streams around 1 Terrabyte of data PER DAY , that is to say just a single channel of HDTV would require 7 times the amount of data as the bitcoin blockchain running at VISA / MasterCard / SWIFT speeds.

And as for governments:

Bitcoin Part II: Replace government beaurocracy with distributed digital trustless systems
Bitcoin Part III: Replace entire government departments with distributed zero trust voting systems
Bitcoin Part IV: Replace entire governments with distributed zero trust voting systems

"The wide spread adoption and success will only serve to guarantee its demise" Please read that back again ....

I think ultimately governments will be replaced with software.

Wed, 02/05/2014 - 20:42 | 4406249 Tall Tom
Tall Tom's picture

I am certain that Data Transmission Speeds will increase exponentially.

I am also ceratin that the Rate of Bitcoin acceptance will also grow Exponentially.

 

However the two Rates of Growth are not the same.

 

And since the Growth in Bitcoin Blockchains is growing at a faster rate then that of the Growth of Data Transmission Rates then it is a matter of time when the Block Chain becomes too large for utility.

 

Now if I had two accurate Exponential Functions then I can actually predict when that happens.

 

Have you ever heard of l'Hopital's Rule?

 

Well you can deny the Mathematics all that you want. But it will not change the outcome.

 

It is kind of like the Debt Driven Economy. You can deny the Math but you will not escape the consequences.

 

You can even be angry at me for exposing the truth. But it will not change the Reality.

 

I was on Yahoo earlier and this woman won on the Biggest Loser Game Show. The Comments were hideous. They were calling her anorexic. They were actually an expression of spiteful envy.

 

Of course I responded by calling them FAT ASSES. (60% of America is Overweight. It may be more but I am not desiring exactness in this example.)

 

You know that it is somewhat funny. Only in America will someone sit down and watch TeeVee, stuffing their face, and while doing so, vicariously watch SOMEONE ELSE LOSE WEIGHT. Then they criticize the winner, in spiteful envy, for being an anorexic???

 

It may help if they get off of their ass, turn off the TeeVee Set, do some activities and begin eating right.

 

Now they can also be angrier than a Hornet at me for writing what I wrote. But I exposed the truth in order to SAVE THEIR LIVES.

 

I am exposing the truth here in order to save YOUR FINANCIAL ASS.

 

So you can be angry if you want. But it will not change the facts.

 

 

Wed, 02/05/2014 - 17:40 | 4405594 InTheLandOfTheBlind
InTheLandOfTheBlind's picture

it seems all of nature tends to disorder....  makes you wonder how it holds together at all, except for those of us that believe in divine intervention.  but blaming gov't is missing the point of proverbs 29:2 "When the righteous are in authority, the people rejoice: but when the wicked beareth rule, the people mourn.

 

Governments are like people and when they do the right thing, they are good and when they don't they are not...  so at the end of the day the problem is not government... the problem is ourselves....

Wed, 02/05/2014 - 18:21 | 4405740 Tall Tom
Tall Tom's picture

Oh I agree with the Wisdom of Solomon.

 

But Earthly Government is not a sustainable paradigm. Because it ALWAYS ends up that the wicked will bear rule.

 

So I do not place my faith and confidence in the Temporal, the Unsustainable, Earthly Government, where corruption reigns and decay is all but guaranteed.

 

I place my faith into that which is Eternal as it is my ONLY HOPE WHATSOEVER.

Wed, 02/05/2014 - 20:54 | 4406296 donsluck
donsluck's picture

Hope for what? Delayed freedom? Delayed gratification? So you place all your faith in death?

Thu, 02/06/2014 - 03:51 | 4407099 Tall Tom
Tall Tom's picture

To live you only have to die. I have freedom here.

What gratification has been delayed? I know it NOW. I am at peace with it. 

There is absolutely no hope here.

I have already died.

I am a Dead Man Walking.

Death is all I have to look forward to.

That is the reality of this life.

That is what all look forward to as it is the ultimate eventuality.

So I do not fear it.

I embrace it.

I know what happens afterwards.

 

Everyone want to go to Heaven but nobody wants to die?

 

Do you?

Wed, 02/05/2014 - 18:23 | 4405749 InTheLandOfTheBlind
InTheLandOfTheBlind's picture

double post 

Wed, 02/05/2014 - 18:22 | 4405748 InTheLandOfTheBlind
InTheLandOfTheBlind's picture

you sound protestant--- that's a good thing

Wed, 02/05/2014 - 18:39 | 4405800 Tall Tom
Tall Tom's picture

Grace...Charis...Charisma

 

That is the key to Salvation. The Grace of God through Christ Jesus. That is the only hope.

 

There are no solutions here on Earth.

Wed, 02/05/2014 - 17:37 | 4405578 paint it red ca...
paint it red call it hell's picture

You go TT, I was bored with the fucking twit.

Wed, 02/05/2014 - 08:56 | 4403320 satoshi911
satoshi911's picture

Gooooooooooooooooood Morning America, Are you ready for your BIT-TURD breakfast :)

Wed, 02/05/2014 - 05:33 | 4403152 williambanzai7
williambanzai7's picture

Lately I have noticed this phenomena that anyone who has a bitcoin wallet thinks they should be tipped for it.

Wed, 02/05/2014 - 11:16 | 4403902 TheHound73
TheHound73's picture

It is easy to tip this way. Much easier then setting up a credit card gateway on a repost of a blog.

A short string of funky text and boom, anybody anywhere can pay you any amount anytime.

Wed, 02/05/2014 - 16:32 | 4405261 Spanky
Spanky's picture

I'm not arguing against bitcoin's utility and convenience. But rather it's use as a means of surveillance and highly selective social control.

You argue bitcoin crypto is infallable... That it's police state origins do not matter. That eager banker acceptance is a good sign.

What are the Vegas odds on that bet?

Wed, 02/05/2014 - 21:51 | 4406481 TheHound73
TheHound73's picture

I'll take that bet.  Settlement in silver?  What time frame to crack the crypto? How to qualify/quantify possible police state authorship affects going forward? 

Wed, 02/05/2014 - 10:08 | 4403541 tip e. canoe
tip e. canoe's picture

well, cryptos do reintroduce the lost economic variable of the gift, which is not necessarily a bad thing -- in fact it may be a good thing as a way to provide an alternative mechanism to compensate artists/writers/etc.

the problem with this is that when a currency rises exponentially in so-called "value", all the so-called writers/artists jump on board saying "TIP ME! TIP ME!" and thus are roped in to producing propaganda pieces in support of their own self-interest.   

this is not much different than the old Soviet propaganda campaign from the 20's/30's that used homegrown talent to produce an artistic style that was highly-aesthetic (influencing much of what we see today), but to an end that was much uglier than how it was protrayed.

something tells me that bitcoin was more stable at let's say $300, there wouldn't be so many TIP MEs, TIP MEs.

Wed, 02/05/2014 - 10:17 | 4403647 williambanzai7
williambanzai7's picture

You are right that there is a vast problem that has to be rectified. All those fine artists and musicians out there who are basically Google serfs.

Wed, 02/05/2014 - 10:19 | 4403654 tip e. canoe
tip e. canoe's picture

same shit that happened with Burning Man (TM) (LLC).

Wed, 02/05/2014 - 09:44 | 4403509 madtechnician
madtechnician's picture

I think if williambanzai7 had a bitcoin wallet on his images williambanzai7 would be shocked how many tips he would get ....

Wed, 02/05/2014 - 10:15 | 4403637 williambanzai7
williambanzai7's picture

Not my style though. 

Wed, 02/05/2014 - 12:02 | 4404127 Amagnonx
Amagnonx's picture

I really wish you would ><  I dont have a bank account or credit card - so I can only transact in physical gold, silver or through BTC - obviously, because you are on another continent physical is not practical.

Wed, 02/05/2014 - 13:30 | 4404389 williambanzai7
williambanzai7's picture

Moneygram, Western Union. When there is a will there is a way.

 

Wed, 02/05/2014 - 14:12 | 4404520 madtechnician
madtechnician's picture

Yeah don't you just love those 85% fees. BTC transfer fees - Zero.

Wed, 02/05/2014 - 12:16 | 4404198 Encroaching Darkness
Encroaching Darkness's picture

Never heard of money orders & the mail? How about gift cards? Don't you get paid in fiat? Most of my Internet purchases are on a gift card - if the numbers are hacked, I'm only out whatever is left on that card, at most.

I don't get the Bitcoin either, though. Bitcoin doesn't seem anonymous enough.

I have here a 1914 Mercury dime. It's 90% silver, back when the USGov still had a conscience. It's value now is far more than the $0.10 engraved on it, but it has that as a minimum value; it's real value floats a bit, but is still much higher. I have no idea, other than when the Mint made it, who had it before me, what it was used to buy, where they were or anything else about them. But if the blockchain is published, anyone can gain quite a lot of information on who used that Bitcoin before me, what it bought and when, etc. How is this in my interest? How does it maintain anonymity?

Oh well, guess I stick to what I know works.

Wed, 02/05/2014 - 14:44 | 4404634 MrPalladium
MrPalladium's picture

"But if the blockchain is published, anyone can gain quite a lot of information on who used that Bitcoin before me, what it bought and when, etc. How is this in my interest? How does it maintain anonymity?"

Aha! This is the existential rub of bitcoin. Any half way competent government can crack and investigate the blockchain, identify all of the owners and their transactions in the chain and/or publish it if that is in their interest.

Thus, the blockchain is just an ecrypted dataset comparable to that of visa or swift, the only difference being it takes more energy and effort to access.

That said, I do not think that .gov will ever accomplish its goal of a cashless society. The "moneyness" of fungible high value physical objects will merely increase.

The utility and price of silver would increase dramatically as it begins to circulate.

Wed, 02/05/2014 - 21:19 | 4406393 TheHound73
TheHound73's picture

Agreed. Dump the dollar, move "cash" transactions back into to bullion and barter... where they belong. 

Wed, 02/05/2014 - 10:30 | 4403703 madtechnician
madtechnician's picture

Nice - Keeping it real man ,

Wed, 02/05/2014 - 09:58 | 4403573 fredquimby
fredquimby's picture

.

Wed, 02/05/2014 - 09:40 | 4403484 GMadScientist
GMadScientist's picture

"Just the tip"

Wed, 02/05/2014 - 08:47 | 4403286 satoshi911
satoshi911's picture

The BTC Force is Strong in this Post

Now even Atheists believe in BTC; go to a million my ass, like the 'last supper', I wonder how many of our whores will stand by BTC when it head's to $1

I concur with the school of thought there is no bad -ism, only selfish men.

*

The force is normally strong with GW why have the god's buried this post so deep?

Wed, 02/05/2014 - 10:19 | 4403653 Oracle of Kypseli
Oracle of Kypseli's picture

Once the Chinese and all others from countries with capital controls take their money out, Bitcoin will settled to $5. JMHO

Wed, 02/05/2014 - 14:10 | 4404185 madtechnician
madtechnician's picture

Well in that case it's gonna market cap. well into the fucking Trillions before they pull out.

Wed, 02/05/2014 - 05:15 | 4403138 satoshi911
satoshi911's picture

dup

Wed, 02/05/2014 - 03:51 | 4403080 satoshi911
satoshi911's picture

The attitude here seems to be "I know that BTC is an NSA/CIA/BIS/AIPAC honey-pot, and I would feel bad if it went went to a million and I didn't have any..."

*

Something is either good or bad, but moral relativism here seems to say something can be bad and profitable and I like it.

For months everybody denied that BTC was honey-pot, and now the same people are defending the fact. It's telling how the ZIONIST promoters for virtual-currency, can change their rhetoric with such ease.

*

First we were told that BTC was NOT NSA, now GW all but admits 100% that BTC is NSA/BIS with Goldman-Sachs frosting, yet we still love it, and the best part of all is 13fANEP7h6huhjYw5P7hfognjtgKdD9dUC, he's more than happy for you to send him some.

The reality is we ALL hate the USD, but we love the USD, I guess the same can be said of BTC.

*

Everyone continues to LIE on ZH about FIAT-to-INFINITY, I'm sure the BTC lies will continue too.

Fed-Fiat will go to INFINITY - The NSA did create and run BTC - Enter at your own peril.


Wed, 02/05/2014 - 14:18 | 4404543 TPTB_r_TBTF
TPTB_r_TBTF's picture

Address 13fANEP7h6huhjYw5P7hfognjtgKdD9dUC
Short link: http://blockexplorer.com/a/275nxyZP97

    First seen?: Block 222221 (2013-02-20 19:10:34)
    Received transactions: 10
    Received BTC: 2.538
    Sent transactions: 0

Wed, 02/05/2014 - 04:10 | 4403091 Ghordius
Ghordius's picture

all inflationary ages find themselves in the company of great gambling schemes. when return on capital becomes scarce, a big chunk of capital (not the real thing, the financial means with which capital can be bought or sold) starts to forget about the return of capital

this was true even in Portugal and later Spain when it was a lot of silver being shipped home, or when the Netherlands first perfected financial markets

in short, inflation sows gambling, and gambling biz demands moar inflation

add to this the related phenomenon of hot money, and watch how the Emerging Markets are reacting to the tides of the mighty USD

which then leads to capital controls, and howls of rage from the capital centers of the world (which then leads to retaliation or even proxy wars), and moar demand for capital in a form that can cross closed borders, and there you'll find the real demand for BTC and similar things

Wed, 02/05/2014 - 05:19 | 4403141 satoshi911
satoshi911's picture

Well let's follow RUMSFELD's law of known-knowns

1.) We know that only poor little people are buy BTC, shmucks

2.) We know that most FUNDS went into  EM and that means major losses coming soon to ma&pa kettle

3.) We know that the FED is using all their power to 'save' the USA stock market ...

*

I agree when money is 'free' people do stupid shit, but sadly only the big fat-cats get this 'free money'

The little people who work for their money, are the suckers losing when they put real money into BTC, and I'm not talking about the first-in crowd here at ZH that pump the bitch, cuz they got their BTC for free.

*

I do agree on that the QE found its way to BTC, but mostly in the form of 'marketing' my view is the SPY-Social-Networking money flowed to BTC-exchanges where it was used to legitimize the pump&dump.

*

I'm sure me&you both share the same game, we don't put our money in BTC or the US Stock Market.

That nobody gives us 'free money'.

*

The thread is BTC, its boring, they're just now finally validating here on ZH that its NSA, ... so what?

In the grand show of what's going on these day's BTC is a boring and irrelevant subject,... about as useful as discussing a particular hair on a dog's ass, if the DOG is the USA MIL/GOV.

In the grand-scale of TODAY BTC ain't shit, @ 10billion capitlization, that just one day for the FED creating FIAT.

*

One point missed here because nobody ever listens is the US-MIL is not restricted to DEBT to fund its MIL the NSA can create FIAT too just like the FED and from the FED all in secret just like the trillions sent to EUROPE. 

*

Most troubling about BTC is like this article say's they (NSA) can reset your BTC account balance to zero anytime they wish, ... go ahead go play there ... sucker

This means that the ZIONISTS can pick&choose winners who play in the BTC world, ... yep go play there, reminds me of playing on the freeway with a paper-sack over your head.

thanks for the comment ghord ... a fellow greek lover .. Kalispeera

Wed, 02/05/2014 - 09:30 | 4403445 madtechnician
madtechnician's picture

Bullish for BTC after reading that rant , it was complete bullshit .

Wed, 02/05/2014 - 09:39 | 4403478 GMadScientist
GMadScientist's picture

Yay for overt contra-indicators!

Wed, 02/05/2014 - 08:20 | 4403072 douglas
douglas's picture

There is no way BTC provides anywhere near the security of AG and AU.  That said, obviously I´m glad I decided to ¨play bitcoin¨ with a small amount of money early last year and that I´ve taken profits along the way (converted to PM´s)...  I´m not sure if BTC will go to Zero or to $1M - but at this point (around $800) it´s quite a bit more expensive to play the game.  I suppose if I was not already in, I´d probably buy just 1 or 2 BTC´s (or whatever $ amount would not hurt my feelings to lose) - because I honestly believe that watching this thing go up to a million bucks a piece from the sidelines would hurt my feelings alot more than losing my $800 of fiat which is definitely heading to zero. 

Wed, 02/05/2014 - 10:55 | 4403828 whatthecurtains
whatthecurtains's picture

Get in early and you'll do well.   Sounds vaguely familiar.

Wed, 02/05/2014 - 09:12 | 4403369 Infinite QE
Infinite QE's picture

I think your thoughts are similar to mine. It's a Vegas-type play. No way is it secure and outside of the clutches of the NSA and all those valuess could go bust with an EMP or a mass NSA lead zero-out campaign.

Wed, 02/05/2014 - 10:52 | 4403813 freedogger
freedogger's picture

I've already got the EMP covered. Block chain with my transactions on a usb in an old microwave in the basement. In the safe, my backed up paper wallet.

Wed, 02/05/2014 - 12:10 | 4404169 madtechnician
madtechnician's picture

I just use my tin foil hat as a Faraday shield , works great especially when the little green guys are in the area it means they cannot steal my BTC.

Wed, 02/05/2014 - 09:39 | 4403481 GMadScientist
GMadScientist's picture

An EMP large enough to make a different to BTC will make Bitcoins the least of your worries.

Wed, 02/05/2014 - 12:18 | 4404195 Toolshed
Toolshed's picture

Unless EMP is an acronym for some new governmental security or tax enforcement agency, it is not a problem that bitcoin fanboys need to worry about. There are a whole bunch of other acronyms that they should be worrying about, however.

Wed, 02/05/2014 - 12:12 | 4404176 Infinite QE
Infinite QE's picture

I generally agree with you on this. Yet if the PTB view Bitcoin as a threat to their ponzi monopoly, they will find an excuse to either outlaw it or claim a technical event wiped it out. I like the idea of Bitcoin yet seeing Max Keiser relentlessy shilling it, as he did silver when it was nearing 50 makes the reptilian part of my aging brain scream TULIPS.

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