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Alternative Currency Goes Mainstream As Bitcoin ATMs Emerge

Tyler Durden's picture


Submitted by Michael Krieger of Liberty Blitzkrieg blog,

The Bitcoin ATM has Arrived... Here’s How it Works

The more I learn about Bitcoin, the more I support it.  In fact, the only donations we accept on this site are Bitcoin donations.  As I mentioned in a post late last summer, I think it represents another way to fight back against the current repressive and immoral monetary system that has a strangle hold on the planet.  Ever since (the extremely popular blogging platform and 22nd most popular site on the internet), decided to accept Bitcoin as payment last November the value of Bitcoins versus the U.S. dollar has more than doubled.


The esoteric crypto-currency continues to gain popularity and technologies to make it even more user friendly are popping up all over the place.  The latest is the Bitcoin ATM, which could be a serious game changer for adoption.  From CNET:

NASHUA, N.H. — Zach Harvey has an ambitious plan to accelerate adoption of the Internet’s favorite alternative currency: installing in thousands of bars, restaurants, and grocery stores ATMs that will let you buy Bitcoins anonymously.


It’s the opposite of a traditional automated teller that dispenses currency. Instead, these Bitcoin ATMs will accept dollar bills — using the same validation mechanism as vending machines — and instantly convert the amount to Bitcoins and deposit the result in your account.


Harvey and Matt Whitlock are partners in a New Hampshire-based venture, Lamassu Bitcoin Advisors, that’s hoping to commercialize the ATM by selling to retail businesses, especially ones that also want to accept the decentralized alternative currency from customers.


Unlike modern currency, which can be brought into existence at the whim of politicians or a central bank, leading to each note being devalued, the number of Bitcoins is governed by predictable mathematical algorithms. That’s made Bitcoin popular among libertarians and other activists skeptical of the Federal Reserve; the Free State Project accepts payment for its summer festival in Bitcoins, for instance. (The U.S. dollar has lost 96 percent of its value over the last century because of cumulative year-over-year inflation, according to federal government data.)


To obtain Bitcoins, people use an iPhone app like Blockchain or Android‘s BitcoinSpinner to show the ATM a QR code with their desired address for payments. After they insert a dollar bill (denominations up to $100 are accepted), the ATM automatically credits their Bitcoin account with the proceeds. There’s a 1 percent transaction fee.

Just awesome.  Great work guys!

Full article here.


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Tue, 02/26/2013 - 16:28 | 3278937 Tsunami Wave
Tsunami Wave's picture

As nice as it sounds, no thanks.

Tue, 02/26/2013 - 16:33 | 3278955 McMolotov
McMolotov's picture

I admit I don't fully understand bitcoin, but I'm 100% behind anything that makes the owners of the current system nervous. Competing currencies are probably near the top of that list.

Tue, 02/26/2013 - 16:38 | 3278983 MillionDollarBonus_
MillionDollarBonus_'s picture

Here are some fundamental questions that bitcoinbugs need to answer if they want to retain a semblance of credibility:

  1. How can people be expected to put all their faith in digital entities that they cannot see or touch? 
  2. What if all computers running bitcoin crash at the same time? (sure, it’s not likely .. but it’s still a risk)
  3. What if a group of hackers hack into your bitcoin wallet?
  4. What if the computer code breaks?

These are some of the fundamental objections that people have toward bitcoins. And untill they are addressed, people will continue to view bitcoingbugs as weird nerdy creeps with childish dreams of a digital utopia.

Tue, 02/26/2013 - 21:15 | 3280006 Jack Napier
Jack Napier's picture

Q. How can people be expected to put all their faith in digital entities that they cannot see or touch?
A. They don't have to. There is a predictable algorithm programmed for deflation. Faith is only needed when you don't understand something.

Q. What if all computers running bitcoin crash at the same time? (sure, it’s not likely .. but it’s still a risk)
A. Then nobody would be using BitCoin. It certainly has drawbacks in that you must have Internet access and electricity to make use of the protocol, but your scenario is far less likely than the Internet itself going down.

Q. What if a group of hackers hack into your bitcoin wallet?
A. You should have password protected it and kept it hidden instead of leaving it in a publicly available space or with an online exchange.

Q. What if the computer code breaks?
A. Then a superior version will emerge to replace it with BitCoin 2.0 or ByteCoin or MegaCoin.


BitCoin is not a good store of wealth. It is not a safe haven, but it is immune to monetary policy manipulation since its design was hard coded at its inception. What BitCoin truly is is the ultimate real time global currency that circumvents the establishment. It is also the only free market in existence.

Tue, 02/26/2013 - 22:00 | 3280234 Matt
Matt's picture

1. I think they mean putting your trust in the developers and mining pool operators, who control the development of bitcoin, and control transaction processing.

2. Sweden is going cashless with their normal money, places like that will have the same problems as bitcoin

3. Money that is inaccessible is pretty useless. If you toss your gold into a lake, it is safer, but how can you buy stuff with it? Hopefully secure, portable cards or some other implementation makes bitcoins or a successor cryptocurrency more functional while secure.

As a currency designed to have it's money supply increase at a decreasing speed until no new coins are mined, while other currencies increase in supply at ever accelerating rates, it should be a store of wealth.

Tue, 02/26/2013 - 22:47 | 3280433 malek
malek's picture

Q. What if the computer code breaks?
A. Then a superior version will emerge to replace it with BitCoin 2.0 or ByteCoin or MegaCoin.

That's a good one!
I especially like the comparison with the current US Dollar:

What if the US Dollar breaks?
Then a "superior" version will emerge to replace it!

Nothing to worry about, except for the tiny nuisance that all your old ones will expire worthless.

Tue, 02/26/2013 - 23:49 | 3280668 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture



The difference is that in bitcoin the blockchain is preserved and your bitcoins will be there after the update.

Tue, 02/26/2013 - 23:57 | 3280686 CompassionateFascist
CompassionateFascist's picture

bitcoin depends on the 'net and the Grid. When they go, it goes. 

Wed, 02/27/2013 - 05:03 | 3281036 gold-is-not-dead
gold-is-not-dead's picture

internet will never go away, just like the wheel never went away, or the pipes... some progress in society is irreversible by nature...

Tue, 02/26/2013 - 16:41 | 3279014 Ahmeexnal
Ahmeexnal's picture

BitCoin, brought to you by the same power elite who own the money printing industry.

Tue, 02/26/2013 - 17:04 | 3279143 overqualified
overqualified's picture

It's open source and completely transparent (both code and operations). It would be stupid for the elite to serve such a tool to the unwashed masses.

Yes, You Can! Just printing a Bitcoin wallet (public + private keys).

Tue, 02/26/2013 - 19:21 | 3279665 thisandthat
thisandthat's picture

What gold detractors fail (or pretend not) to understand is that gold requires no social infrastructures to function as a currency, whatsoever. Period. You mine/dig it and from then on it needs nothing more to function as currency than trading partners - no banking system, no regulating powers, no state even; it's a self-sufficient, extra resilient currency in that, and that's the reason why it survived this long.

The thing with bitcoin, otoh, is it's lack of resilience, which is on the opposite side of infrastructure dependency scale: it needs even more layers of infrastructures than paper money - it also needs a functional electronic communications infrastructure; no power and things soon start falling apart, as the only possible way to trade would be credit (assuming people would just trust your hashes to be legit); a more serious event (solar emp burst), and any non hardened electronics could go bust, and everything contained or depending on them with it.

That's the liability with bitcoin (and other dematerialized goods) - when the infrastructure is fine, you're fine; when it goes bust, so may you.

Tue, 02/26/2013 - 19:22 | 3279713 Againstthelie
Againstthelie's picture

I think it's absolutely shocking, that people who support precious metals do not recognize the difference between the PMs as money because of their intrinsic value and the need for an authority in the case of a money that is built on trust! Who are the bigger sheeple?

Wed, 02/27/2013 - 01:28 | 3280854 thisandthat
thisandthat's picture

Such authority only exists while conditions for its exertion exist; once those can't be met, trust based money is toast... and bitcoins go first, for the reasons mentioned. Simple as that.

Tue, 02/26/2013 - 22:08 | 3280266 Matt
Matt's picture

The problem with gold is that it has such a high relative value, that you would need to use grains of gold or milligram units of powder, and then everyone would need tools on hand to verify that the gold is real and pure all of the time.

With something so valuable in a powder or grain state, losing money just from opening and closing your wallet becomes a real issue.

Alternatively, you could have multiple coins, such as nickel, silver and gold, but the face value would need to be the weight of the coin; if you try to have a fixed numerical ratio between coins, people will game the system, taking payment in whichever metal is undervalued.

Further, you would need to never ever go to war, or you would need to run perpetual government surpluses in order to have a stockpile of money on hand in order to go to war.

Wed, 02/27/2013 - 01:38 | 3280879 thisandthat
thisandthat's picture

If none of those conditions were ever impeding factors, in worse times than today's (and when gold was, relatively speaking, as much, if not more valuable than today), then it wouldn't be now that would happen.

Wed, 02/27/2013 - 02:10 | 3280910 Matt
Matt's picture

When was the last time people actually used physical gold as money? I mean not paper backed by gold, not fractionally reserved gold stored at gold banks, not coins that were diluted gold. I supposed San Francisco Gold Rush is the last time people (outside Zimbabwe or other hyperinflations) used gold dust as money. I don't think it has really been done successfully on a large scale.

Wed, 02/27/2013 - 03:52 | 3280982 awakening
awakening's picture

Down here that would have been the last Gold Rush (1850s Australia), it was more convenient at the time given the prevalence of the metal in those days =)

Wed, 02/27/2013 - 14:47 | 3282570 thisandthat
thisandthat's picture

Depending on your timescale that's either too long ago or almost just yesterday. But ever went to Vietnam?

Tue, 02/26/2013 - 17:05 | 3279148 digitalhermit
digitalhermit's picture

Yes, they do come in a physical bearer form:

Tue, 02/26/2013 - 17:06 | 3279155 long-shorty
long-shorty's picture

You can't even eat these Bitcoins!

Tue, 02/26/2013 - 17:20 | 3279229 unrulian
unrulian's picture


Tue, 02/26/2013 - 17:55 | 3279398 espirit
espirit's picture

Friendly algorithms my ass.  They ain't my stinkin' friend.

Tue, 02/26/2013 - 18:24 | 3279529 zaphod
zaphod's picture

I knew it, MDB is totally into BTC too!

Tue, 02/26/2013 - 18:25 | 3279535 NoDebt
NoDebt's picture

I just got a vision of Ben Bernanke stabbing a BitCoin voodoo doll repeatedly with a long needle while screaming over and over "WHY WON'T YOU DIE?!  WHY WON'T YOU DIE?!"

Tue, 02/26/2013 - 20:55 | 3280030 Haole
Haole's picture

People will have a hell of a lot more to worry about than not being able to transact in Bitcoin on the internet if the entire grid goes down, don't you think?

Tue, 02/26/2013 - 21:21 | 3280102 Crash Overide
Crash Overide's picture

Can anyone tell me how I can use bitcoins at the farmers market when there is no power and internet?

Would you rather have an algo in your pocket or silver?

Tue, 02/26/2013 - 21:35 | 3280146 Haole
Haole's picture

You can buy both silver and food (among other tangibles) with bitcoin if you know where to go.

Tue, 02/26/2013 - 21:43 | 3280167 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture




Can you tell me how to cross a border with 10 million USDs with gold or silver?  'Cause I can do that with bitcoin easily.


These are complementary tools.  Bitcoin is a friend of gold/silver.  PMs will never lose value--we all know that.  But to deny that Bitcoin has a place in monetary competition is to put yout head in the sand.  And the best thing about Bitcoin?  Scarcity!  Less than 1400 people can buy 1000 bitcoin created in 2013--in the entire planet!  


If you think it's not going up, fine.  If you think it's not money, fine.  But prepare to be surprised as thousands of people try to buy more than 1000 bitcoin this year. 


The bubble is about to begin (it has only gone from 13 to 31 in the last months).

Tue, 02/26/2013 - 22:26 | 3280342 XenoFrog
XenoFrog's picture

How do you easily convert $10 million in bitcoins back into something else? It's easy. First you go to an exchange and crash it when you dump your coins. In the resulting aftermath of the smackdown, you can start drawing out your assets at $10-50 a day. In a few short millenia, BAM, you have your money in your currency type of choice.

"The bubble is about to begin (it has only gone from 13 to 31 in the last months)."

And last year it went from $29 to $5 in a few days. 


Remember, get in early so that you can get rich quick!*


*Absolutely not a get rich quick scheme. Promise.

Wed, 02/27/2013 - 04:32 | 3280997 Bangers
Bangers's picture

Most of the Bitcoins I buy are face to face. I have found sellers via and met them in a coffee shop with cash and exchanged them then and there. Waited a few mins for a blockchain confirmation and walked away with my coins. That's on a relatively small scale but it is likely that there will be broking services that evolve for larger numbers off-exchange - just how it works with physical gold. If larger sums are required then brokers will go straight to the supply and sell on behalf of miners.


Re: the price swings, that bubble in 2011 happened in when there was a much smaller user base and much less Bitcoin infrastructure. Much work has happened since then and the user base has grown although still relatively small. Take a look at a silver chart in 2011 and tell me how much better that was? 50 bucks down to 32 buck in a couple of weeks. And how long has silver been around?

Not sure if you've noticed but markets fluctuate.

I'm sure you may have not realised that a digital protocol that completely freed up the exchange of information would turn out to change the world back in the early 90's. I didn't. Maybe Bitcoin will die an early death but, altenatively, a digital protocol that completely frees up the exchange of value may, in time, prove to be just as revolutionary.

Tue, 02/26/2013 - 22:52 | 3280453 Crash Overide
Crash Overide's picture

Digital currencies be it Bitcoin or a FED computer are just 1's and 0's right?

What am I missing, faith?


PS, I don't even like money.

Tue, 02/26/2013 - 21:24 | 3280109 batz
batz's picture


Not to dump links but there is a game changer for bitcoin, which is using it in casinos. It's a source of infinite liquidity that would make it compete with "fiat."





Tue, 02/26/2013 - 22:15 | 3280299 Matt
Matt's picture

Satoshi Dice has been running for a very long time; the author must not have done any research. The casino has no risk; it has no float. Winnings are paid out from losses. If the House goes bust, you just don't get paid until enough losses occur to pay out the win.

Wed, 02/27/2013 - 00:03 | 3280699 CompassionateFascist
CompassionateFascist's picture

" soon as I hear the word 'liquidity'...I reach for my gun..."

Tue, 02/26/2013 - 17:21 | 3279236 jcaz
jcaz's picture

Awesome- Tulipcoins....  Cause no one ever thought of this before.....

Tue, 02/26/2013 - 19:14 | 3279681 Againstthelie
Againstthelie's picture

YYes, it's embarassing that precious metals supporters fall victim to this trick. As bad as a government can be, at least it is an authority. But this is pure privately organized money. Fascinating how people prefer fiat money from private companies over fiat money from their state with a certain authority. This has all elements of a mania.

Tue, 02/26/2013 - 21:46 | 3280177 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture



Manias and Ponzis dont bounce back.  Now go on crying like a baby, beach -->

Tue, 02/26/2013 - 17:38 | 3279309 Hobbleknee
Hobbleknee's picture

I support anything that competes with government fiat.  But I don't think I'll ever get any bitcoins.

Tue, 02/26/2013 - 17:47 | 3279356 digitalhermit
digitalhermit's picture

It's okay, they are highly risky and consequently not for the risk averse. Since their value could easily return to zero one should not invest more than one is willing to lose when it comes to bitcoins.

But aren't they pretty? :-)


Tue, 02/26/2013 - 17:57 | 3279408 SilverIsKing
SilverIsKing's picture



Tue, 02/26/2013 - 18:40 | 3279469 digitalhermit
digitalhermit's picture

I think the correct term you were looking for is ButtCoin - sorry the domain (and idea) is taken:

Tue, 02/26/2013 - 17:13 | 3279188 CH1
CH1's picture

BitCoin, brought to you by the same power elite who own the money printing industry.

You know, you should really understand a thing before you not only condemn it, but attribute a nefarious origin to it.

Don't be an ignorant dick.

Tue, 02/26/2013 - 18:23 | 3279526 XenoFrog
XenoFrog's picture

Stop trying to recruit people into a ponzi scheme.

Tue, 02/26/2013 - 20:53 | 3280023 Haole
Haole's picture

Ponzi scheme? Bitcoin?

You, like others in here evidently, have absolutely zero idea of what you're talking about.

Tue, 02/26/2013 - 22:30 | 3280362 XenoFrog
XenoFrog's picture

I have some snake oil i'd like to sell you. Buy now before its value skyrockets.

Wed, 02/27/2013 - 01:16 | 3280838 palmereldritch
palmereldritch's picture

I have some snake oil i'd like to sell you.

Let me guess. 9/11 Truth Denier Brand Snake Oil...?

Tue, 02/26/2013 - 22:29 | 3280358 XenoFrog
XenoFrog's picture

There are always more sheep to fleece. That you managed to find more victims for your scam doesn't mean that you're not running a scam. Bitcoin already crashed once, and it'll crash again. I'm sure you will be in here saying you sold right at the peak and made a fortune.

Wed, 02/27/2013 - 01:21 | 3280844 unununium
unununium's picture

Will you be alerting WordPress and Reddit that they are accepting worthless ponzi cash?




Tue, 02/26/2013 - 17:19 | 3279224 freet0pian
freet0pian's picture

Wow just wow.

Yeah a currency which can't be printed into oblivion was brought to you by the same power elite. ROFL, how clueless can you be. And don't flatter them with the word elite. How hard can it be to be "elite" with all these sheeple around.

I got my stash of gold and silver but bitcoin is the perfect currency for the web. And yes you can physically hold them in your hand, ever heard of flash drives? Maybe you're still using floppies but those will work too. Heck you can even print them:


Now where's my boat?

Tue, 02/26/2013 - 17:53 | 3279381 digitalhermit
digitalhermit's picture

Sorry I haven't seen a boat for sale yet, but you could buy this Porsche for Bitcoin:

Wed, 02/27/2013 - 00:53 | 3280804 Long_Xau
Long_Xau's picture

... which reminds me of that nightmare that keeps happening to me. Every time I've received payments in bitcoins, even though I try to convert to precious metals as soon as possible, uncanny and very tragic hard drive failures or unauthorized access accidents happen to me. I'm not even sailing on a boat or anything when this keeps happening!

Wed, 02/27/2013 - 01:35 | 3280871 The Navigator
The Navigator's picture

Here, mines for sale - Ag, Au accepted but no bitcoin

Tue, 02/26/2013 - 20:46 | 3279999 Jorgen
Jorgen's picture

As a matter of fact, the answer is: Yes, you can:

PS: I like the bitcoin idea. What makes me uneasy is its resemblance to a Ponzi scheme.


Tue, 02/26/2013 - 21:15 | 3280086 The_Dude
The_Dude's picture

Bitcoin reinforces the concept in Sheeple that money is ephemeral and can be conjured instead of real.


Effectively it can be manipulated and controled...everyone needs to ask who is getting rich off of this?

Tue, 02/26/2013 - 21:51 | 3280195 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

"everyone needs to ask who is getting rich off of this?"


Everyone who is smart enough to understand that the internet destroys all industries on its way and that the time for banking is now.  Everyone who is buying bitcoins is getting richer Einstein  -->

Wed, 02/27/2013 - 00:25 | 3280756 The_Dude
The_Dude's picture

Creating value by doing nothing other than turning on their computer...instead of building something or creating something of value....nope...souns like a sand foundation to me.

Tue, 02/26/2013 - 22:09 | 3280267 Pascal1967
Pascal1967's picture

very true.  even paper 'crap' dollars are still physical, even if they are pieces of paper.  these electronic bits and bytes floating around on the internet are more scary.   keep stackin'

Tue, 02/26/2013 - 16:44 | 3279026 McMolotov
McMolotov's picture

You can do better than that. Should have said "libertardian doomer bitcoinbugs."

Tue, 02/26/2013 - 16:53 | 3279068 akak
akak's picture

"Radical Bitcoinbug Extremists"

Tue, 02/26/2013 - 17:07 | 3279164 This just in
This just in's picture

Evil Bitcoin Speculators!!

Tue, 02/26/2013 - 20:45 | 3279990 TheFourthStooge-ing
TheFourthStooge-ing's picture

Uncouth Bitcoinbuggery Haranguers

Tue, 02/26/2013 - 17:06 | 3279047 medium giraffe
medium giraffe's picture

"What if all computers running bitcoin crash at the same time? (sure, it’s not likely .. but it’s still a risk)"


Think we're here already with our ElectroFiat. Carrington event might do it. 

Tue, 02/26/2013 - 17:56 | 3279404 digitalhermit
digitalhermit's picture

That is a REAL risk to Bitcoin (as opposed to some of the other nonsense being spouted on here). Wiping out every single copy of the electronic ledger simultaneously would be a death blow to the currency, but that would probably be the least of our problems if it happened...

Tue, 02/26/2013 - 21:54 | 3280206 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture




1. FULL BLOWN Gold confiscation or NDAA to FEMA Cremation camps is a more down-to-earth risk

2. The Blockchain isn't stored only on hard drives.

Tue, 02/26/2013 - 16:50 | 3279056 ratava
ratava's picture

1. People put their faith in other people willing to use the currency as the best alternative. Not in virtual entities ('central banks').

2. They won't

3. Your problem, anyone powerful enough to give you stolen bitcoin back is powerful enough to manipulate the system or print new ones under political pressure. Sounds familiar.

4. It won't

Tue, 02/26/2013 - 16:56 | 3279090 seek
seek's picture

Based on the last bit of that post, I'm sure this is your usual deep /sarc but... being a nerdy creep:


1. Bitcoin is a gigantic 3-entry ledger that anyone can look up. So technically you can see it, more so than you can with your bank/USD.

2. For bitcoin to be stopped, every copy of the ledger would have to be destroyed. THough it's safe to say if every computer running bitcoin has crashed, you're got a mushroom cloud problem, not an accounting problem.

3. Bitcoin transactions depend on wallet's private key. If that key is held offline, it is an impossibility to hack the wallet. A lot of the big bitcoin "hack" stories are actually not about wallets, but about exchanges where the exchange accumulated a large amount of bitcoin and kept it in an unsecure manner. In any case, if one reserves their "online" wallet for small amounts of spending money, and keeps their savings and private keys in an offline wallet, the savings are protected.

4. LOL, I think. Unless you're saying what if the encryption is broken, in which case the bitcoin protocol is designed to protect itself even if the core algoritm is broken by doing the SHA256 hash twice. This threat to bitcoin is insanely remote.


Tue, 02/26/2013 - 17:16 | 3279205 CH1
CH1's picture

Thanks, seek.

Sad to see people criticize something new - merely because it is new - while knowing next to nothing about it.

Tue, 02/26/2013 - 17:54 | 3279387 unununium
unununium's picture

Watching how different ZH'ers react to this has been very interesting.  More than a few surprises.

Tue, 02/26/2013 - 18:01 | 3279423 espirit
espirit's picture

Just wait until some 13yo spotty Phd writes a PacMan Algo... and poof, they gone.

Tue, 02/26/2013 - 21:58 | 3280223 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture



It would be easier for the 13 year old to make elephants fly to the moon, you fucking ignorant hillbilly

Wed, 02/27/2013 - 00:12 | 3280722 CompassionateFascist
CompassionateFascist's picture

duck, you suckers. It's just another B-A-N-K

Tue, 02/26/2013 - 17:30 | 3279275 XenoFrog
XenoFrog's picture

Turn off the power grid. Most bitcoins are rendered useless.


The "proper" procedures outlined by bitcoin fanatics to protect their coins are so complicated and filled with opportunities for human error that it renders the whole scheme foolish.  Not to mention there's a huge community actively trying to scam you out of the bitcoins you do keep in multiple flash drives and encrypted on your mom's computer.

Tue, 02/26/2013 - 18:06 | 3279439 SpykerSpeed
SpykerSpeed's picture

Hold on a second.  Turn off the ENTIRE power grid?  Darling, if you think the government would cut off the entire power grid indefinitely just to sabotage a common way of storing and trading capital, you've got another thing coming.

Just banning porn would cause a massive violent uprising against the Federal Government.  And you're seriously talking about cutting off ALL electricity?

This is why knowledgable people don't take the Bitcoin critics seriously.  You guys are fanciful.  If government wanted to confiscate your gold or make it illegal to trade gold, they could do it no problem.  Bitcoins?  All the guns in the world couldn't crack my password.

Tue, 02/26/2013 - 18:10 | 3279471 EscapeKey
EscapeKey's picture

Not forgetting they would need to start by proving that a wallet belongs to you.

Tue, 02/26/2013 - 18:13 | 3279483 digitalhermit
digitalhermit's picture

Bitcoin haters leave no room to be wrong:

Tue, 02/26/2013 - 18:25 | 3279532 XenoFrog
XenoFrog's picture

If only there were some sort of historical precident for governments acting out of desperation and cutting off the electrical/internet grid... hmm...



Tue, 02/26/2013 - 20:01 | 3279771 akak
akak's picture

Not to mention wars or natural disasters doing the same.

I am rather neutral on this whole Bitcoin thing, but I do think that many of its proponents are somewhat stuck in a center-thinking, blinkered dismissal of historically precedented events that can and would render its functionality crippled or dead, at least in local and regional situations, and possibly for extended periods as well.

Another poster above, in discussing gold, used the excellent word "resiliency".  Bitcoin, existing only in digital bits on electronic media, is highly UNresilient, unlike the PMs, whose use as money does not depend on any pre-existing (and highly complex and vulnerable) infrastructure.

I have seen this over and over, in a number of other contexts, with many of the 20 and 30-something technogeeks who, lacking any sense of historical perspective, do not and can not see just how fragile, vulnerable and lacking in redundancy their whole e-gadget world truly is.  When the next Carrington-type solar storm hits (and one will, eventually), I will indulge in a hearty round of schadenfreud watching all of them desperately pecking away at their cell phones and their i-gizmos as their entire social existence (such as it is) collapses around their ears.


(And yes, I am aware of the possible irony of writing the above on my home computer.  The difference between me and the e-obsessed, however, is that I do not carry it with me wherever I go, nor do I neurotically monitor it every minute of my waking existence with a maniacal need to be informed to the second of every iota of the shallow and trivial minutia of my every friends' daily lives. Shit, I don't even own a cell phone, nor need one, nor want one. "iPad"? "IPod"?  What the Hell is that, and what do I truly need with them?)

Tue, 02/26/2013 - 20:38 | 3279972 seek
seek's picture

I would disagree here with respect to resiliency.

I do agree that bitcoin is dependent upon a functioning internet infrastructure. If this is gone, then so is one's ability to trade using bitcoin wherever it is lacking. I think the best metaphor is that bitcoin is a peer-based VISA card network. Any disaster that takes out bitcoin takes out you using a credit card and vice-versa.

That said, bitcoin is highly resilient because the ledger that contains your wallet address and coins is replicated by virtually every peer on the network. Meaning that if New Orleans got whacked, there's still a copy (and thus the ability to spend) of your bitcoins sitting on a computer in Australia. I would argue today that bitcoins are more resilient than the current US banking system is to data loss. This also means that should one have to relocate, if you had a meaningful amount of bitcoin, you could have financial resources awaiting your arrival almost anywhere without being subject to capital controls or search. That's pretty resilient for some people.

Anyone who is arguing that bitcoins are a one-forone replacement for PMs is delusional. As an adjunct, however, bitcoins are a fantastic fit and offer many of the same characteristics of PMs in online form.

There are many forms of disaster, natural, political, financial. Bitcoin provides a way of controlling funds that is more resistant to these than electronic fiat, and has some attributes that are both better and worse than paper fiat or PMs. Really, they're just another tool for the financial toolbox that if used wisely can help fix more problems with than without.

A Carrington-level event likely won't affect any of the devices themselves, but it's safe to say our electrical grid may not fare too well. At that time, I doubt even gold will carry much value for a while, though I suspect batteries and food may.

Tue, 02/26/2013 - 20:46 | 3279996 akak
akak's picture

Good post Seek --- thanks for your perspectives.

I will be the first to admit that I do not understand the whole Bitcoin phenomenon very well.

Wed, 02/27/2013 - 00:18 | 3280737 CompassionateFascist
CompassionateFascist's picture

searchterm: "bank".  Instant enlightenment.

Tue, 02/26/2013 - 20:46 | 3279997 jonjon831983
jonjon831983's picture

Well said:

"(And yes, I am aware of the possible irony of writing the above on my home computer.  The difference between me and the e-obsessed, however, is that I do not carry it with me wherever I go, nor do I neurotically monitor it every minute of my waking existence with a maniacal need to be informed to the second of every iota of the shallow and trivial minutia of my every friends' daily lives. Shit, I don't even own a cell phone, nor need one, nor want one. "iPad"? "IPod"?  What the Hell is that, and what do I truly need with them?)"

Tue, 02/26/2013 - 20:53 | 3280021 akak
akak's picture

Thanks JonJon.

I drew my line in the sand long ago with a home computer (which I need for business purposes) as my one and only e-gadget.  Most especially, I REFUSE to own any form of cell phone, not only for the extra and unnecessary costs involved, which are not insubstantial, but because I have seen how impulsive, neurotic, uncivil, unplanning, and short-sighted their constant use almost invariably makes their users.  I can think of no invention that has so degraded social intercourse over the last few decades as the cell phone.  If I can't make arrangements to meet somebody AHEAD OF TIME, or if they can't wait until I get home to give me a message, then that's their problem, not mine.  I maintain a telephone link for MY convenience, not everyone else's.

Tue, 02/26/2013 - 23:18 | 3280543 TraderTimm
TraderTimm's picture

akak - our differences over bitcoin aside, I can totally relate to what you're talking about. I program apps for smartphones, but I see people using them in ways that seem to diminish personal interaction, and I have to wonder where that will all end.

I can respect where you're coming from regarding technology adoption.

Tue, 02/26/2013 - 22:09 | 3280269 SpykerSpeed
SpykerSpeed's picture

I can snatch the gold right out of your hand, or wait for you to go to sleep.  Or threaten you with jail if you don't hand it over.  That's not very resilient.  If gold is so great, how was it so easily coopted by the State?  If gold is so great, how was it so easily replaced with a paper ponzi scheme?

Because gold isn't great.  It's fine as a way to store wealth long term.  But for day to day transactions it sucks.  Bitcoin excels where gold can't.

Tue, 02/26/2013 - 21:33 | 3280137 e_goldstein
e_goldstein's picture

entropy+ idiocracy ='s eventual loss of electricity.

Tue, 02/26/2013 - 21:04 | 3280048 Haole
Haole's picture

Bitcoin held by people on their personal machines, backed-up wallets and/or paper wallets would be just fine even if the entire grid went down. Web-based wallets, different story...

You need to educate yourself before filling ZH with yet more baseless BS.

Tue, 02/26/2013 - 22:33 | 3280379 XenoFrog
XenoFrog's picture

personal machines that can be confiscated, lost, broken, corrupted just like gold can be stolen, confiscated, lost, etc. Your little scam doesn't offer anything that actual investments cannot also bring to the table. The only difference is that you're probably in for a big shock when bitcoin crashes again like it did last year.

Tue, 02/26/2013 - 22:55 | 3280455 Haole
Haole's picture

You're a perfect contrarian indicator, that's why I wouldn't be worried even if I cared if Bitcoin crashed or not. Bitcoin offers qualities that few other investments can bring to the table but you'll kill yourself opposing anything like that apparently.

What's your agenda in spamming your little scam theory in here? Answer that one and try to inject a bit of real truth for a change! I haven't seen anyone "pushing" Bitcoin in here but hypocritically you seem to have an agenda to push your position which goes far beyond rational argument or opinion.

I hope this post gets archived for a long time so we can come in here and confirm you once again as a drooling idiot as everyone beheld during some of the bigger 9/11 discussions of the past.

You have no credibility, you obviously have some kind of agenda and I wouldn't be at all surprised if you weren't paid to expressly litter ZH with your bullshit.

Tue, 02/26/2013 - 23:21 | 3280563 TraderTimm
TraderTimm's picture

What is funny is I'd be totally willing to engage Xeno Frog in a good discussion about bitcoin's potential pitfalls - but she/he is so vocally opposed to the idea I don't think we could have a civil discussion.

There has to be something else going on here - everyone who supports bitcoin knows it isn't perfect, and we're admitting that we can be wrong - but Xeno is so absolutely SURE, without admitting any of his/her statements are possibly incorrect - that it makes me think an agenda is being pushed here.

Wed, 02/27/2013 - 00:24 | 3280732 Haole
Haole's picture

Ever since I witnessed her as a staunch, relentless 9/11 shill, it has been blatantly obvious that there is something going on, and not quite right, with this specimen.

She's doing it all over again with Bitcoin.

Recommending USD in a bank protected by FDIC promises while not even recognizing the very idea of monetary freedom inherent in BTC to any extent whatsoever.

Her comments are largely untrue, mis"informed" and ignorant. The way she tries to ridicule and discredit the concept and those involved are not only ill-conceived but devoid of much knowledge and/or accurate fact. Some of it is right out of the 25 Rules of Disinformation playbook.

XenoWTFrog is one of the most red nosed, rainbow wigged flaming shills I have ever run into on the internet. It matters not why.

Tue, 02/26/2013 - 18:36 | 3279565 Strider52
Strider52's picture

I'll take pieces of eight before I switch to a digital currency.

Wait, my bank account is already digital. I'm doomed.

Tue, 02/26/2013 - 16:57 | 3279098 Sofa King
Sofa King's picture

Rage against the Bitcoins...with dollars?

I have the same question for BitCoin peddlers that I have for the precious metal crowd. If it's so valuable or will be, anyway, why sell it for useless paper dollars.

I guess it's better that paying for imaginary property on FarmVille.

Tue, 02/26/2013 - 17:07 | 3279160 digitalhermit
digitalhermit's picture

Why do gold miners sell any of their precious gold instead of just hoarding it?

Simple: Miners gotta eat too. When you want food more than gold, you will sell your gold.

Same goes for Bitcoins.

Tue, 02/26/2013 - 18:37 | 3279573 Winston Churchill
Winston Churchill's picture

Silver is for food and other essentials.

Gold is for the other side of the Hell rapidly approaching.

Tue, 02/26/2013 - 17:31 | 3279277 Binko
Binko's picture

You can ask all the same questions about your checking account, brokerage account, savings account and pretty much anything else that keeps track of "money" that is yours.

Everything is digital. Bitcoin is no different. 

Tue, 02/26/2013 - 17:38 | 3279307 DeficitAlchemist
DeficitAlchemist's picture

All those risks are as prevalent for electronic existing currency..  Only risk is CIA Ops cyber attacking a lessor resourced financial system based entity, to undermine it.

Wed, 02/27/2013 - 00:22 | 3280748 CompassionateFascist
CompassionateFascist's picture

please don't say that again

Tue, 02/26/2013 - 17:39 | 3279313 DeficitAlchemist
DeficitAlchemist's picture

All those risks are as prevalent for electronic existing currency..  Only risk is CIA Ops cyber attacking a lessor resourced financial system based entity, to undermine it.

Tue, 02/26/2013 - 21:09 | 3280002 Jack Napier
Jack Napier's picture

These are not the coins you are looking for.

Wed, 02/27/2013 - 04:41 | 3281019 Bangers
Bangers's picture

  1. How can people be expected to put all their faith in digital entities that they cannot see or touch? 

97% of your dollars or pounds are digital. We have little choice but to put faith in the central issuers of those currencies and are supposed to trust them not to devalue it by printing more of the stuff on a whim. erm, not sure that's working out so well

  1. What if all computers running bitcoin crash at the same time? (sure, it’s not likely .. but it’s still a risk)

Sertiously? See above, 97% of our "money" would be useless too. And anyway, the public ledger (the blockchain) would still exist when our computers rebooted

  1. What if a group of hackers hack into your bitcoin wallet?

Store your wallet offline and they can't. Have a hot wallet with small sums for every day use.

  1. What if the computer code breaks?

Not been hacked in 4 years and with a total market cap of $300m don't you think there's some real incentive for someone with the capability of hacking the code would have done so by now? All the code is open-source so no need to trust a central authority to maintain the code. The whole network can do it and highlight any faults if found. This is how it has worked thus far. Some minor faults have been found and been fixed.

Tue, 02/26/2013 - 16:37 | 3278994 smlbizman
smlbizman's picture

is there counter party risk?

Tue, 02/26/2013 - 16:42 | 3279019 aphlaque_duck
aphlaque_duck's picture

No. Bitcoin is commodity money.

Tue, 02/26/2013 - 16:51 | 3279058 smlbizman
smlbizman's picture

were can i find it on the periodical table?

Tue, 02/26/2013 - 16:55 | 3279085 unununium
unununium's picture

Gold and silver, having been produced in type II supernovas and nowhere else, are based on proof-of-work.

Just like bitcoin.

Wed, 02/27/2013 - 07:29 | 3281129 Pope Clement
Pope Clement's picture

Supernovae theory is an old school paradigm. Seems like new galaxies are being formed as we speak ftom the electrical axial jets of active galaxies.

Electrical transmutation of elements bitchez

Tue, 02/26/2013 - 16:56 | 3279091 hazek
hazek's picture

It's not based on laws of chemistry, it's based on laws of math. So instead of looking for it on the periodical table you should be looking for it in algebra.

Tue, 02/26/2013 - 16:56 | 3279096 ParkAveFlasher
ParkAveFlasher's picture

At your local library.

Tue, 02/26/2013 - 16:58 | 3279105 seek
seek's picture

Every element. Bitcoin is based on inconveniencing a whole 'lotta electrons.

Tue, 02/26/2013 - 16:57 | 3279103 Temporalist
Temporalist's picture

It's pseudo-commodity money because it's supposed to only be "discovered" or "mined" at a certain rate and then it will be "capped" at a specific amount.  How anyone will know when that number is reached or surpassed or if there are people with bitcoins outside the system in excess of that somehow I'm sure someone will try to explain away.

Odd too that supposedly there isn't enough gold to back the fiat system but somehow a couple million bitcoins will be enough. 

Tue, 02/26/2013 - 17:02 | 3279129 akak
akak's picture

Actually, there is within 10% as much gold today, per capita, as there was in 1900 and 1800, and I don't recall EVER reading of any difficulties surrounding the use of gold as a backing for currency during those years or those times.

The "not enough gold" argument is only for gullible and really dumb first-graders, or politicians.

Tue, 02/26/2013 - 17:10 | 3279179 Temporalist
Temporalist's picture

I'd like someone to relate to us their story of trading their gold/silver/platinum/copper for bitcoins.

Tue, 02/26/2013 - 22:08 | 3280265 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

I did that back in the day in

Tue, 02/26/2013 - 17:55 | 3279397 aerojet
aerojet's picture

There's plenty of gold, or whatever, but to re-price the hyper-inflated dollar accordingly would make an awful lot of people very unhappy and would unwind the system in about a week.  Everything would be fucked, including holders of now hyper-valuable gold.  It's as though lucifer thought up the whole thing!

Tue, 02/26/2013 - 22:11 | 3280277 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture



All due respect but FUCK THE DOLLAR HOLDERS.  If they can't see the writing on the wall, sorry, I'm going to have their house for one single fucking ounce.  Maybe two, just because I'm thoughtful like that.

Tue, 02/26/2013 - 17:26 | 3279259 XenoFrog
XenoFrog's picture

Actual Bitcoin fanatic's explanation when I asked a similar question,


"Bitcoins can be broken up into infinitely small pieces, making for easy exchange of goods. So over time, if you get in early (huge red flag), your single bitcoin will be worth a huge amount as the limited number results in deflation as things gradually cost half a coin, then a quarter of a coin, then 1,000,000th of a coin."


I can really see people getting into a system where you pay .0182344 bitcoins for an item at the grocery store. :smileythrowinguprollingeyes:

Tue, 02/26/2013 - 17:32 | 3279284 akak
akak's picture

Maybe goods will just be priced in milliBitcoins?

Then microBitcoins?

Then nanoBitcoins?

Then femtoBitcoins?

Tue, 02/26/2013 - 17:54 | 3279385 XenoFrog
XenoFrog's picture

Sounds so easy that I can't believe everyone isn't jumping in and getting rich quick!

Tue, 02/26/2013 - 22:16 | 3280302 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture




Tue, 02/26/2013 - 22:34 | 3280384 XenoFrog
XenoFrog's picture

So now we're just using capslock and threats of physical violence? This doesn't sound like someone who is confident about his investments.

Tue, 02/26/2013 - 23:27 | 3280581 Matt
Matt's picture

As opposed to paying $1,345,231.31 ZIM for a loaf of bread?

Or paying 0.0123 Oz of gold?

Tue, 02/26/2013 - 18:09 | 3279459 seek
seek's picture

Actually, millibitcoin and microbitcoin are used, but the final destination is Satoshi, which is 0.00000001 BTC.

Also, bitcoins aren't infinitely divisible, just "very" divisible.

Tue, 02/26/2013 - 17:47 | 3279352 EscapeKey
EscapeKey's picture

That already happens on online sites.

ITT lots of people who haven't even spent 5 minutes researching bitcoins spouting their uninformed opinions.

Tue, 02/26/2013 - 17:53 | 3279380 XenoFrog
XenoFrog's picture

I know more about bitcoins than most of the bitcoin pushers in this thread. Enough not to "invest" anything into them. You guys reek of desperation as you try to recruit more suckers into your pyramid scheme so that you can make back a shred of your initial investment.

Tue, 02/26/2013 - 18:08 | 3279453 EscapeKey
EscapeKey's picture

A self proclaimed expert who dont even know bitcoins can be fractionated. Whatever.
Just to let you know, few of us here had a laugh at your moronic comment about digital scammers. I mean, the whole world is out to rip you off, starting with governments and banks but OMG those digital thieves are out to get you.

Tue, 02/26/2013 - 18:26 | 3279538 XenoFrog
XenoFrog's picture

I did know that they could be fractionated. I actually explained it in a post. I'm sorry that in your bitcoin induced lunacy you cannot read.

Tue, 02/26/2013 - 18:28 | 3279547 XenoFrog
XenoFrog's picture

Oh I understand now. You read my explanation of how stupid it is that bitcoiners expect people to adopt a system where they pay .00000138th of a bitcoin for something as me thinking you couldn't do it.  Boy you really are a moron.

Tue, 02/26/2013 - 22:21 | 3280320 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture




Tue, 02/26/2013 - 22:36 | 3280391 XenoFrog
XenoFrog's picture

With a representative of the bitcoin community like this, how can any of us resist jumping in?

Wed, 02/27/2013 - 11:14 | 3281659 awakening
awakening's picture

Calling that a representative of a currency is akin to ZH being a representative of the USD. Utterly ludicrous, regardless how much I would enjoy the latter.

Tue, 02/26/2013 - 21:07 | 3280066 Haole
Haole's picture

"I know more about bitcoins than most of the bitcoin pushers in this thread."

You also give yourself infinitely far too much credit because it is quite evident you know fuck all about Bitcoin.

Tue, 02/26/2013 - 22:15 | 3280231 Likstane
Likstane's picture

I don't know shit about Bitecoin, but I can tell x-frog doesn't know shit either.  For me, if you can't clack them together and make metallic noises, then it ain't money.   I just ripped the back off my computer and didn't find even a fractional bitecoin.  Did I get ripped off?

edit-after reading the last 34 bitcoin posts from x-frog, I retract the statement about her knowing shit about bitcoin.   

Wed, 02/27/2013 - 04:44 | 3281021 Bangers
Bangers's picture

Yeah, not sure if the people that managed to invent something like Bitcoin could work out how to move a decimal point to make it more user friendly in such a scenario

Tue, 02/26/2013 - 17:17 | 3279212 CH1
CH1's picture

is there counter party risk?

There is not.

Tue, 02/26/2013 - 18:36 | 3279570 Temporalist
Temporalist's picture

That is both true and false.  If your country goes to war for example and restricts access to the internet, shuts down the power grid, you are dependent on a counterparty.  Also if you have your passcode saved in your head and get in an accident or die you can not pass on the bitcoins (will they stay in the system indefinitely?) to heirs (you are your own counterparty risk).  Also, if there is a massive viral attack yet unknown and most computers are corrupted (not likely I know but the future is not known or certain) problems arise.

Not bashing just thought experiments.

Tue, 02/26/2013 - 22:28 | 3280356 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture




>>If your country goes to war for example and restricts access to the internet, shuts down the power grid, you are dependent on a counterparty. 

Wtf, how are you even supposed to fight war without a powergrid?

At any rate, local&temporary.  Your bitcoins are not affected.



>>Also if you have your passcode saved in your head and get in an accident or die you can not pass on the bitcoins (will they stay in the system indefinitely?) to heirs (you are your own counterparty risk).

Very very true, if you want to pass them on, you should divide into N parts and tell 3N people about each part, where these 3N don't know each other.



>>Also, if there is a massive viral attack yet unknown and most computers are corrupted (not likely I know but the future is not known or certain) problems arise.


Nope, zero problem here.  You do have to have a strong password.  If you want to hide the file, name it as .zip or .rar (which seem just as random as a cryptographed filed), and that's all.  No gov't is ever getting it.

Wed, 02/27/2013 - 00:30 | 3280766 CompassionateFascist
CompassionateFascist's picture

When Amerikwa goes to Internal, i.e., Civil War, FreeFor will take down the grid in order to starve out the cities and the collectivists who cluster there. No more bitcoin. 

Tue, 02/26/2013 - 17:01 | 3279121 awaken
awaken's picture

When the great credit contraction happens, I would put Bitcoin between gold/silver and federal reserve notes... any day.  Although it isn't perfect and neither is gold or silver, it is worth looking at and diversifying into.  There is another emerging currency that works out some flaws in bitcoin; it is called ripple.

Tue, 02/26/2013 - 17:13 | 3279187 This just in
This just in's picture

I support Spam-backed currency.

Wed, 02/27/2013 - 02:00 | 3280901 unununium
unununium's picture

ripple is an open-source banking network, while bitcoin is an open-source currency.

Unfortunately, the creators of ripple could not resist creating another effective currency within the network, called XRP.  Unlike bitcoin it is not based on proof of work but rather is getting handed out to those who the creators favor.  Much like Bennie bucks.

Tue, 02/26/2013 - 20:44 | 3279985 Freaking Heck
Freaking Heck's picture

The enemy of my enemy is my friend and the friend of my enemy is my enemy.

Wed, 02/27/2013 - 01:48 | 3280890 Go Tribe
Go Tribe's picture

The more virtual we become, the more physical I want.

Tue, 02/26/2013 - 16:35 | 3278979 Renewable Life
Renewable Life's picture

Cue the politicians.........get your asses to work "outlawing" this threat to the ponzi establishment!!

The only reason they didn't destroy it early, is those arrogant bastards at the central banks, didn't take it seriously, they will now!

Tue, 02/26/2013 - 16:45 | 3279029 lemonobrien
lemonobrien's picture

seems like i can only buy bitcoin; how do i sell bitcoin for dollar? 

Tue, 02/26/2013 - 17:28 | 3279267 smacker
smacker's picture

Indeed. The same thought has crossed my mind. And how to exchange for other currencies if you can send it around the world?

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