Rethinking Money With Bitcoin Quadrupling Since Cyprus

Tyler Durden's picture

Since the beginning of the Cyprus debacle (followed by Russia's call for repatriation of all offshore capital and then Japan's willful debasement of their currency), which appears to have awoken many to the fact that banks and politicians can't be trusted , the 'price' of the virtual currency Bitcoin has quadrupled - touching an incredible $162 this morning. While most people believe the only way to 'spend' this currency is on drugs or blogging sites, Liberty Blitzkrieg's Mike Krieger points out there are in fact hundreds of places (growing daily) where this as-yet unregulated store of wealth can be spent. However, what is really driving this surge in demand for a different kind of 'money' is the wholesale loss of faith in the status quo - nowhere is this clearer than in the words and actions of the people of Cyprus and this devastating clip capturing the thoughts and feelings of ordinary Cypriots after their bank accounts were frozen. "Nothing has started yet... everything is going to fall down like dominoes because people don't trust the banks."


and perhaps this last bump is due to Portugal's latest attempt at herding cats...


And the following insightful brief documentary is how real people - not the mouthpieces projected on TV - feel in the streets of Cyprus about the confiscation of their savings...


And Brandon Smith's rather more direct take on the Bitcoin phenomena specifically - "Ignore It..."

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vmromk's picture

It it ain't in your pocket, you don't own it.
Bitcoin = Ponzi

ACP's picture

Well, maybe not a ponzi, but it's odd how people are putting so much faith into something about which they know very little.

Many years ago as a fresh, new investor, I sold shares in a solid company to buy shares in a penny stock that I knew nothing about. It promptly went to zero.

I guess everyone needs to learn that lesson at least once, and some other people will never learn. Let's see how the whole bitcoin thing develops.

Abraxas's picture

I must admit that I'm mightily suspicious about this entire endeavor (bitcoin). I've been wrong before, so can't say that I'm 100% (or even 51%) right, but my gut feeling tells me to stick with what I know (and touch).

Pinto Currency's picture

This virtual currency which is technologically dependent is dangerous in a time of economic and, most likely, periodic communication disruption.

wee-weed up's picture

There's a stuxnet out there with BitCoin's name written all over it...

TPTB are just biding their time...

Pinto Currency's picture


It may well have a roll for day-to-day transactions, but it is not a core real asset.

It is a virtual asset which excludes it, in my view, from a core asset position.

markmotive's picture

If the SHTF you think the power grid will remain intact?

While the masses are distracted by electronic nirvana, the big powers are demanding the return of their gold.

Conman's picture

Sorry buddy if the sHTF gold will be worth shit too. Food, water, bullets will be only worthwhile things.

malikai's picture

Zombies notwithstanding, here's the reality of BTC in the here and now.

From a merchant's point of view:

  1. Slightly more difficult to implement than a standard credit card processor's API.
  2. No chargebacks.
  3. Lower fees.
  4. Wallet security required.

In short, you can charge less for your product. You can (and should) instantly offload your currency exposure while fixing your tax liability using any of the exchanges out there, provided you can tolerate their apalling APIs. But since your fees are much lower than even the cheapest credit card processor, you can charge less and/or have a larger margin. No chargebacks!

For the consumer's perspective:

  1. You can freely speculate on the value in a market generally dominated by strong hands with little margin at play and far fewer predatory algos at work.
  2. You can send currency anywhere in the world for zero cost.
  3. You can chose your own security arrangements and handle your own finances with zero counterparty risk (although with greater market risk).

That's pretty much it. Do the research. Or sling poo. Those who should learn will learn.

Pinto Currency's picture


Should say "It may have a role" in my post above (not roll).

CH1's picture

The amount of arrogance and ignorance in these posts could darken a planet.

In fact, they are darkening this one a bit.

Pinto Currency's picture


There is no easy answer to our current predicament.

Bitcoin is one piece perhaps, but not a solution for numerous reasons - the biggest being it's virtual nature, that it is electronically dependent and hackable with enough focused resources.  These resources will arrive when its value is great enough.  Especially when it becomes threatening to the banking / debt-based fiat money system.

dark pools of soros's picture

are you ignoring all the other risks in living in this world??  someone can rob your gold a lot easier than stealing your bitcoins. They being virtual gives it a lot of benefits as well

There is no one answer for all.. look at silver and gold, it is sitting in the mud and no one here does shit about it

phyuckyiu's picture

So let's see, when I sign up for a bitcoin exchange, they want my social security number and bank accounts. Yeah real anonymous, unlike gold which actually is. So when I use these bitcoin exchanges to receive money, I have to depend on.... drumroll please... Fedex to deliver my fiat money. Yeah real closed loop there.

Scarlett's picture

You are quite an Einstein and you seem to have done very deep research to bring us these most profound insights

Matt's picture

Have you ever had a Forex trading account before? Have you done any research into what is involved in trading currencies or equities?

It seems like you are talking about signing up for an account on Mt Gox, which is a Forex service. Note: not at all required for normal users of bitcoin.

runningman18's picture

The point is, if Bitcoin can't provide any anonimity, then what the hell use is it in combating the control of the central banks and the federal government?  It's not SUPPOSED to be like normal forex trading!  It's not much of an alternative activist currency if the enemy knows exactly who you are and when you use it...

jonytk's picture

easy, you can buy in person to someone that has bitcoins, just tell them to send it to your address.

A bitcoin address can be generated offline and you can save there the coins until you need it.

It's called cold storage.

The other option (more risky) is to buy bitcoin mining computers and create your bitcoins and use it to buy, of course to buy anonymously you really need to know about computers.

Maybe you are just too old.? but i know 12y.o. kids that mine with teh same computer they play with the steam (online gaming platform).

DaddyO's picture

Economic Coup d'etat, never let a crisis go to waste!

Very well put, eh?


ManOfBliss's picture

Sorry, there is much more to it than that.

1. As far as I know, bitcoin shopping carts don't support recurring billing products. This means no subscription services, like magazines, monthly clubs, etc.

2. Far too few consumers use bitcoin to make this profitable for sellers.

3. The IRS will audit any business who they detect uses bitcoin, to prevent against money laundering, and tax evasion.

4. The Feds will find a way to monitor bitcoin exchanges, to catch people coming out of the digital currency and into the fiat currency. And they'll investigate them from there, again, to catch tax cheats, money launderers, etc.

Bitcoin is a MASSIVE political risk.

malikai's picture


To each:

  1. True. You do need to manually initiate payment if you run your own client. However, online wallet providers can autopay for you. And they will.
  2. For some businesses, no. And that gap too will fall.
  3. I'm not speaking solely to US companies. Over there the IRS will audit whoever they want. Frankly, I don't know what to say to US companies. You're doing it to yourselves.
  4. And the exchanges will comply. In the process legitimizing the entire thing.

Someone here posted this a while back, which stood out to me.

dark pools of soros's picture

wow you already gave up..  do you need someone to push the dirt in as you lie in your grave?

phyuckyiu's picture

Hrm my Fedex package didn't arrive with my fiat money. Maybe I should call my bitcoin exchange to see what happened. Oh right, I CAN'T.

One World Mafia's picture

If I were to spend 10,000 on BC and gold, the fees are much higher to buy BC than gold.

CrazyCooter's picture

Step 1: Go down to the "supply" chart, locate 2013, then mentally note how much "growth" in the bitcoin base there is to go over the time frame specified.

Step 2: Understand that all that new supply over a 100+ years assumes traditional computing resources.

Now, those who are "paranoid" might think the 'ol US Government started the whole bit coin crazy, has a quantum computer in a lab somewhere that already solved for all the bit coins, and is simply biding its time to step in and run the show.

For those that don't know how computers compute, think like this. A modern PC does tedious things, but very fast. Example, multiply 8 by 8. Or, in my analogy, add 8 to 8, then add 8 more, then add 8 more, then add 8 more, then add 8 more, then add 8 more, then add 8 more. If it happens really fast and you are just balancing a check book, you don't care that it took 10 milliseconds. Now, engineers are actually smarter than that and employ a lot of shortcuts in designing computers, but it demonstrates that finding a prime number with 1000 numbers it would take a while.

Quantum computing is a little different. Instead of doing a repetitive process, it represents all the possibilities. So, a quantum computer that balances a check book is beyond worthless, but for solving really hard problems it can do so in vastly less time. So, using my lame ass analogy, the quantum computer is a multiplication table. Finding the answer is simply going to the right place and reading the information.

Guess we will find out!

Just a conspiracy, carry on.



CH1's picture

Yeah, the guv thugs will pull out the secret Quantum Computer and crush their enemies!

And the Zero Hedge trolls will cheer: Go State! Go State! Kill! Kill! Kill!

CharlieSDT's picture

Well, quantum computing still might be several years off, even for the "geniuses" at the Pentagon, plus there's a hard limit of 21 million of Bitcoins.  With 11 million already mined, the government could only counterfeit half of the Bitcoin supply if they used their alleged quantum computer today.  That's a much lower percentage than they counterfit of fiat money without Kurzweil supercomputers.

ThirdWorldDude's picture

I'm waiting for my man 
Twenty-six dollars in my hand...


Sonovabitch said he doesn't accept twobit-coins

thisandthat's picture

Congratulations on making someone else rich, bitches - just make sure to collect your tips before it's too late:

malikai's picture

That bottom link is absolute comedy gold.

+1 for giving me a good laugh.

thisandthat's picture

you can pay me in bitcoins...

CharlieSDT's picture

"There are no controls, no structure and no systems in place to keep things honest on the Bitcoin exchanges.  No Securities and Exchange Commission.  "

lol, what will we do without the SEC to keep things honest?

thisandthat's picture

Same goes for "what would happen, if there wasn't even an SEC to (not) keep things honest?"

Mr.Bigfoot's picture

Your dollars in the bank are electronically dependent.  all 1's and 0's.

draug's picture

I believe bitcoin as a technology is awesome. Just like bittorrent is a superior technology for data distribution. Any failure of bitcoin will likely be caused by outside resistance, not from the tech itself. They didn't manage to stop bittorrent (and not for lack of trying...) - but then again piracy only p*sses off the entertainment industry. Messing with the financial system might bring some heavier resistance. We'll see.

dick cheneys ghost's picture

Right ....dont fuck with the $..........just ask Col. Kaddafi and Saddam Hussein

malikai's picture


Please point me to the equivalent to Col Kaddaffi or Saddam Hussein. I will let the teleprompter know so he can send in the drones.

dick cheneys ghost's picture

there isnt one .............But if bitcoin ever becomes a threat to the dollar system (which it wont), it will cease to exist

malikai's picture

It won't. But it's got some particularly valuable features.

Urban Roman's picture

There's a drone out there somewhere with Satoshi Nakamoto's name on it. 

WmMcK's picture

They didn't manage to stop bit torrent ...
But they do seem to be able to make some (NOS) sites permanently/currently unavailable.

CH1's picture

Let the reactionaries freak out, and keep using Bitcoin.

phyuckyiu's picture

Hey CH1 can you call Fedex and see where my fiat money went that my bitcoin exhcange was supposed to send me? Oh wait there's no record of anything? Ponder.

Scarlett's picture

you know ZH bitcoin comments are reaching the lowest level of retard when you see "send cash through fedex" (that's after NWO currency, quantum computers, ponzi, scam, and all the other; this is the end of the line). 

seek's picture

People trust that geeks have their interests at heart far more than they believe bankers do.

I'm not saying this belief it justified or valid, but I can completely get where they are coming from. There's a Robin Hood aspect to the "pirate" culture that a significant number of people, particularly younger people, have direct experience with through the sharing of music and movies via bittorrent, the pirate bay, etc. The government and entrenched interests have never done anything to help them, only persecute them -- so when the same open ethos brings them a monetary alternative that's blessed by the new priests -- the geeks -- it's not shocking this crowd supports it, and the faith grows from there. There's no faith in existing institutions that are obviously corrupted to even the mose uninitiated mind, so the faith moves to something new.

draug's picture

Good point. I think the reason is that the geeks are themselves paranoid. Bitcoin is built by and for paranoid people, in a way that means you don't HAVE to trust anyone.

Tinky's picture

The problem with that perspective is that it fails to take into account who is in control of the distribution system – the Internet. Geeks may well be able to cobble together small, reduntant systems, but without any guarantee that the Internet will remain essentially as it is used today, Bitcoin's viability will remain in danger.