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Guest Post: Bitcoin: Money Of The Future Or Old-Fashioned Bubble?

Tyler Durden's picture


Submitted by Patrik Korda via the Ludwig von Mises Institute,

Bitcoin has been all the rage lately. The stuff, or lack thereof, runs on peer-to-peer technology, is fully decentralized, has no patents, and is open source. Currently, there are almost 11 million bitcoin units in existence and the maximum amount of bitcoin units that will ever be created by the logic of its design are 21 million. For more details on how they work, see the recent Mises Daily “The Money-Ness of Bitcoins” by economist Nikolay Gertchev.

The Issue

While bitcoins are designed so that they cannot be hyperinflated in name, they certainly can be hyperinflated in substance. Already, there are numerous knockoffs such as litecoin, namecoin, and freicoin in place. This is a particularly valid point because bitcoin is a starfish, i.e., it is fully decentralized. As stated by Ori Brafman and Rod A. Beckstrom,

The starfish doesn’t have a head. Its central body isn’t even in charge. In fact, the major organs are replicated throughout each and every arm. If you cut the starfish in half, you’ll be in for a surprise: the animal won’t die, and pretty soon you’ll have two starfish to deal with.[1]

After the music-sharing service Napster went under, Niklas Zennström (the creator of Skype) stepped in with his creation called Kazaa, which had no central server that could be shut down. Eventually, such peer-to-peer programs became more numerous, to include Kazaa Lite, eDonkey, eMule, BitTorrent, etc. While this may be good news for people who like to download and share content for free, it certainly is not for people who are under the impression that bitcoin is a hedge against inflation. Those who compare bitcoin to a language neglect the fact that most people do not have an incentive to create a new language out of the blue. On the other hand, a great chunk of human history consists of people searching for the philosopher’s stone to magically produce gold. There can be no doubt that bitcoin has a built-in gold rush mechanism, which has already spilled over to litecoin and will be sure to spill over to subsequent knockoffs as well.[2]


Does bitcoin jibe with the Austrian stand on money? The only way to find out is to read what the great Austrians had to say. Let’s start with Carl Menger. In Principles of Economics, Carl Menger made the point that money, a general medium of exchange, has always tended to be the most “saleable” (i.e., “marketable” or “liquid”) commodity of the time.

What is saleability? It is not simply value. One may have a Picasso at home, which will fetch quite a sum at a Sotheby’s auction during a boom, but a Picasso, like a poem by Friedrich Shiller, a work of Sanskrit, or a decades-old bottle of red wine can never be the most saleable good. As Menger put it, saleability is the

facility with which [a good] can be disposed of at a market at any convenient time at current purchasing prices, or with less or more diminution of the same. (...) Compare only the number of persons to whom bread and meat can be sold with the number to whom astronomical instruments can be sold.

Menger went on to point out that cattle were the most saleable commodity in the ancient world. This is perfectly understandable in a world where bare-bones subsistence is a reality for most people and the structure of production is virtually nonexistent. As society progressed, however, cattle became less and less marketable.

As civilization progressed, Menger states that,

… peoples who were led to adopt a copper standard as a result of the material circumstances under which their economy developed, passed on from the less precious metals to the more precious ones, from copper and iron to silver and gold, with the further development of civilization, and especially with the geographical extension of commerce.

Gold won out due to a variety of reasons, such as being durable, amalgamable, malleable, divisible, homogeneous, and rare. Yet, the ultimate reason that gold won out is because it was the most saleable of commodities. As Menger went on to write,

Gold nuggets extracted from the sands of the Aranyos River by a dirty Transylvanian gypsy are just as saleable in his hands as in the hands of the owner of [the] gold mine, provided the gypsy knows where to find the right market for his commodity. Gold nuggets can pass through any number of hands without any decrease whatsoever in marketability. But articles of clothing, bedding, prepared foods, etc., would be suspect and almost unsaleable, or at any rate of greatly depreciated value, in the hands of the gypsy, even if they had not been used by him, and even if he had, from the beginning, acquired them only with the intention of passing them on in exchange.

This leads us to another criticism of bitcoin: It can never be the most saleable good. The reasoning for this is quite simple. Until the majority of the 7 billion or so people that inhabit this planet have either a smart phone or frequent access to the internet, a digital currency is out of the question.

Gold, on the other hand, is easily recognizable, as opposed to silver that may be mistaken for other metals such as nickel. Moreover, it melts at a relatively low temperature and is a relatively soft metal, which provides superior amalgamation and partly explains why it historically won out over metals such as platinum. If one questions the role of gold in the present monetary system, one only has to walk down the street in a metropolitan area and see a ‘We Buy Gold’ sign. Moreover, central banks hold gold and lots of it. They do not hold cattle, wheat, soybeans, copper, silver, or bitcoins.

Menger also wrote,

I am ready to admit that, under highly developed conditions of trade, money is regarded by many economizing men only as a token. But it is quite certain that this illusion would immediately be dispelled if the character of coins as quantities of industrial raw materials were lost. [3]

While it may very well be true that some early adopters valued bitcoins with what Menger described as imaginary value, the point of the most saleable good bears repeating. Gold is and has been seen as an object of beauty since the dawn of civilization. Thus, the argument that bitcoins are in accord with the regression theorem because a handful of people consume them as they would a Picasso, is like saying paper money has value because John Law or Ben Bernanke really enjoy playing monopoly. In fact, we might as well say that alchemy works, considering that a significant amount of human history and energy was spent in attempting to find the philosopher’s stone. Some people may enjoy work just for the sake of working. Unfortunately, this is not a sufficient justification for slavery nor the labor theory of value.


With the imminent hyperinflation meme fading away and no longer holding much water, the new reason to hold bitcoins is the anonymity, nay, the freedom that it provides. Want to gamble online or buy something illegal? Bitcoins are the solution. It is a way of circumventing the authorities and uplifting free and voluntary trade, or so goes the story. Unfortunately for many of the misinformed, the reality is toto caelo. It would be best to take it from bitcoin developer Jeff Garzik himself. The fun starts at 3:20.

The ironic part about this is that anyone and everyone who has participated in illegal activity using bitcoins, presumably because they thought it was anonymous, now has a permanent record of every single one of their transactions contained on the public ledger. Those who think they are clever by using add-ons such as Tor are just as foolish as those who think prepaid cards or smart phones are anonymous. Imagine if bitcoins existed 50 years ago. Chances are, none of the last three presidents (including Barack Obama) would have run for office.


Bubble Time?

The question left to be answered is whether or not bitcoin is once again taking the shape of a bubble. The answer is yes. There is present a reflexive pattern of people buying because prices are rising, and prices rising because people are buying. The myopic are extrapolating the price trend of the past four months, which they deem is normal, and in so doing they exacerbate it to the upside, thus attracting even greater fools. The inflection point will come when the continuity of bullish thought is broken. One thing is for sure, the amount of suckers left who are willing to jump on the moving and ever-accelerating train is drawing thin, and so are their pockets.

When prices for any asset go parabolic, it does technical damage to a chart. It is sort of like someone deciding to go full speed in the middle of a marathon. Surely, one would look good for a few minutes. However, at a certain point one would inevitably collapse, with the possibilities of finishing the race being greatly diminished, let alone doing as well as they would have otherwise.

Gold went parabolic toward the second half of 2011 to $1,900/oz., which did a lot of technical damage to the charts that gold is just now beginning to shake off. Like Icarus, who had soared too high and melted the wax on his wings, parabolic moves always end in a correction, and if prolonged, a crash. Ironically, the best thing that can happen for bitcoin naysayers is if bitcoin skyrockets to $300/btc within a week.

There is nothing anti-Austrian about acknowledging that there exists in the market place a lot of naïve, irrational, and misinformed players. During the dotcom bubble, for example, a maintenance and building company called Temco Services almost tripled in a matter of minutes in 1998. The reason is because by 1998 every other layperson was involved in the market. Thus, the level of competence significantly dropped. The ticker symbol for Temco is TMCO, which was fairly close to that of Ticketmaster Online, which was TMCS. Ticketmaster Online (then TMCS) just happened to trade publicly for the first time on the day that Temco Services (TMCO) tripled. Rising asset prices create euphoria, and euphoria significantly drops the IQ of the participants.

Another reason why bitcoin is so susceptible to bubble behavior is because it is perceived as being something new. “New era” thinking always attracts lots of attention. The tulip was introduced to Europe by way of Turkey in the middle of the sixteenth century. (In fact, the word tulip came from the Turkish tulipan, which means turban.) The tulip was perceived as something new to Amsterdam, a country which at the time possessed an abundance of newly discovered gold and silver from the New World. Likewise, the Mississippi bubble, which was perpetrated by John Law, promised vast riches to be had from the New World. The manias in railways, the radio, the internet, you name it, most of them involved something new or something perceived to be new.

There is no doubt that bitcoin is a spontaneous answer to the monetary instability that we see all around us today. On one side of the pond people are worried about the glorified currency peg known as the Euro and on the other about the amount of damage that Bernanke is willing to inflict upon the world’s reserve currency. However, let us not become so enamored of an innovative stateless solution that we forget Austrian economics and hitch libertarianism’s wagon to something heading for a crash.


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Tue, 04/09/2013 - 18:10 | 3428640 Seasmoke
Seasmoke's picture

Tip toe thru the tulips ......

Tue, 04/09/2013 - 18:15 | 3428658 Looney
Looney's picture

Slightly off topic. Sorry, ZeroBoyZ and ZeroGirlZ!  ;-)

Lone Star stabbings…

I’m wondering, what will they ban now – box cutters, 10-pack spare blades, scissors?  ;-)


How about universal background checks on all box cutter purchases at Home Depot?




Tue, 04/09/2013 - 18:20 | 3428668 camaro68ss
camaro68ss's picture

Sensible knife control, it for the children. Why do you need an assault style Swiss army knife with more then 7 tools on it? WHY!

Tue, 04/09/2013 - 19:22 | 3428899 Scarlett
Scarlett's picture

Wrap your message under an Austrian label whenever you want, cherry-picked arguments may or may not go against reality.

Yes, the speed with which this is happening is downright scary.  But what's happening is that a tiny fraction of the rich world economy is moving into bitcoin.  A very tiny fraction is moving into something that has only 11,013,225 units, and this year will produce less units than citizens of San Diego.  

Yes, there will be wild rides; yes, some fools will part with their money.  

But bitcoin *will* reach--one day--a valuation of 10 Billion, and it will still be a tiny fraction of the world economy.  That's what? Less than a week of Ben's weekly printer show.


Tue, 04/09/2013 - 19:41 | 3428955 Supernova Born
Supernova Born's picture

What's more fragile than a physical bubble?

A virtual bubble.

Tue, 04/09/2013 - 20:45 | 3429140 serog
serog's picture
Weird.  Mt.Gox just announced withdrawal limits.  Sounds vaguely familiar.
Tue, 04/09/2013 - 21:55 | 3429338 aphlaque_duck
aphlaque_duck's picture

Yes, except the lower withdrawal limits are on BITCOIN, not USD.

Mt.Gox has always had withdrawal limits. You have to get approved by providing increasing levels of ID to move increasing USD/BTC off the exchange.

This is nothing new, and the implication is the exact opposite of what you're implying. This is only for protection of exchange users in case their key/password is stolen. Never keep funds on the exchange for longer than it takes to close your trade.

Tue, 04/09/2013 - 22:35 | 3429428 strannick
strannick's picture

Bitcoin. Its code is uncrackable because someone said so. Stay tuned for Bitcoin1 SonofBitcoin, WallbitcoinMart. I'll take the gold thanks.

Tue, 04/09/2013 - 23:00 | 3429504 aphlaque_duck
aphlaque_duck's picture

Who says so? All we can say is it's open source, it's been scrutininzed, and nobody has broken it yet.

Tue, 04/09/2013 - 23:24 | 3429577 Harlequin001
Harlequin001's picture


Tue, 04/09/2013 - 23:29 | 3429599 Scarlett
Scarlett's picture

None of the three layers of cryptographic security are known to have flaws.  If even one breaks, many incredible things will happen in the web.  To break bitcoin you have to break all three--SHA256, RIPEMD160, and ELLIPTIC CURVES--good luck with that.


The difference between a moron and an inteligent man is that a moron has lots of opinions and no doubt.  


“There are myths and pseudo-science all over the place. I might be quite wrong, maybe they do know all this ... but I don't think I'm wrong, you see I have the advantage of having found out how difficult it is to really know something. How careful you have to be about checking the experiments, how easy it is to make mistakes and fool yourself. I know what it means to know something. And therefore, I see how they get their information and I can't believe that they know it. They haven't done the work necessary, they haven't done the checks necessary, they haven't taken the care necessary. I have a great suspicion that they don't know and that they're intimidating people.”

--- Richard Feynman

Tue, 04/09/2013 - 23:43 | 3429647 Harlequin001
Harlequin001's picture


'The difference between a moron and an inteligent man is that a moron has lots of opinions and no doubt.'

The difference between a moron and an inteligent man is that a moron buys Bitcoin because it thinks its worth something and an intelligent man buys gold.

Fixed it for ya...

Wed, 04/10/2013 - 01:52 | 3429851 fonestar
fonestar's picture

Good luck getting past checkpoint charlie with all your gold bars.  I suggest shoving them far up your sphincter for maximum anonymizing effect.

Wed, 04/10/2013 - 04:05 | 3429903 Harlequin001
Harlequin001's picture


You're not kidding are you, you truly are fucking stupid.

Wed, 04/10/2013 - 07:59 | 3430239 malikai
malikai's picture

Seriously? That's your answer?

I expected more.

Wed, 04/10/2013 - 04:08 | 3429956 Bearwagon
Bearwagon's picture

Well, better luck with checkbook charlie ...

Wed, 04/10/2013 - 06:04 | 3430035 CompassionateFascist
CompassionateFascist's picture

Bitcoin is the purest Ponzi that has ever existed. It'll look great, until it doesn't. Uncle Sugar will see to that. 

Wed, 04/10/2013 - 00:18 | 3429707 Dingleberry
Dingleberry's picture

Scarlett is correct. If someone ever figured out how to break those codes, bitcoin would be the last thing the hackers would steal. It would be nothing compared to what they could steal elsewhere. Bitcoin would be a drop in the bucket.

Wed, 04/10/2013 - 06:46 | 3430077 Urban Redneck
Urban Redneck's picture

One hardly needs to waste the effort required to break Bitcoin's encrytpion in order to break Bitcoin.  

Wed, 04/10/2013 - 07:47 | 3430198 malikai
malikai's picture

Do tell how. PM me. Don't tell the rest of these chumps.

Just me and you buddy. We'll take over the world.

Wed, 04/10/2013 - 08:52 | 3430447 Urban Redneck
Urban Redneck's picture

check your request box

Wed, 04/10/2013 - 03:53 | 3429942 Overflow-admin
Overflow-admin's picture

If you have $10M to spend, you might actually break a SHA256 (even 10-pass).


Wonder what the CIA is doing with the Stellar Winds datacenter?

Wed, 04/10/2013 - 06:50 | 3430089 awakening
awakening's picture

If that happens, as already mentioned by others above, then the sharp drop in the price of bitcoin will be the least of our worries.

Wed, 04/10/2013 - 01:44 | 3429836 fonestar
fonestar's picture

You fucking morons cannot see that Bitcoin is the best thing that ever happened to gold and silver!  That's because it is breaking the metric (the dollar) used to manipulate the metals.

But I know that you secretly love Ben, you love government, you love the idea of government and their little worthless pieces of paper.  Your a bunch of statists and socialists posturing as libertarians when it is sunny out.  You love waving your little pieces of paper around and say "I'm American and I love Ben, look at me!".

Wed, 04/10/2013 - 02:53 | 3429905 Harlequin001
Harlequin001's picture

Looks like the fucking morons are not going to be losing their money on this one...

Unlike yourself of course...

Tue, 04/09/2013 - 23:12 | 3429542 walküre
walküre's picture

Bitcoin was hacked last week. Read on Mt.Gox website. Mt.Gox is 80% of BTC transactions and was HACKED. That's the end of that.

The BTC principle is stupid. You put common currency into the BTC concept and hope that at the end of the day enough retailers will accept BTC or hope that BTC will allow you to convert back to common currency.

It's too easy to shear sheep.

Tue, 04/09/2013 - 23:20 | 3429560 Ahmeexnal
Ahmeexnal's picture


Couldn't agree more.

If the sheep piling up on BTC had instead used a working braincell and gone into physical PMs, we would have had bank collapse already and bankers would be hanging from lamp posts from the shores of Tripoli to the halls of Montezuma.  So while on one hand you can blame them for giving banksters one last oxygen tank, you also have to thank them for giving you more time to stack the smack.

Let them keep their FarmVille coins, they'll need them in virtual -and real- hell.

Wed, 04/10/2013 - 00:44 | 3429753 unununium
unununium's picture

It's a good idea to try a little something new once in a while.  You know.  Not to be so convinced on one's own correctness all the time.

Good luck waiting around for gold's exponential move.  And good luck with blaming the lack thereof on bitcoin.

Wed, 04/10/2013 - 02:05 | 3429868 fonestar
fonestar's picture

...and FYI, the cypher punks were all up in this anarcho-libertarian shit years before most of you ever bought a Johnson Matthey bar.

Wed, 04/10/2013 - 02:22 | 3429888 NaN
NaN's picture

Cypherpunks, indeed. Been there, done that.


Tue, 04/09/2013 - 23:37 | 3429628 imbtween
imbtween's picture


Wrong. "Bitcoin" was not "hacked" last week.

A private corporation's SQL database was compromised. The database had client bitcoin wallet data stored in it. The bitcoins were stolen when that data was taken and used.

What you're saying is "the corner store had its safe cracked last night and all the cash in it was taken!!!! THE USD WAS HACKED!!! WHO WOULD BE SO STUPID AS TO KEEP USD IN A SAFE?!?!?!?


Wed, 04/10/2013 - 07:06 | 3430111 Urban Redneck
Urban Redneck's picture

You're analogy doesn't work.  

However, keeping your extra digital Bitcoins in an exchange is just as dumb as keeping your extra digital fiat in a Bank.

The bigger problem is that a large and increasing number of people's Bitcoin Bank o' Mattress tends to be built on an insecure MicroSofty fundation, which is the preferred platform for worldwide digital hijacking.


The convenience of the Microsoft platform makes Bitcoin available to a wider audience (which increases the value of Bitcoins) but it also creates a legal vulnerability for any Bitcoin user (even on a more secure platform) who the .GOVs (or a even a twisted hack) decide to "unfriend" on a personal level... receipt of stolen property is a crime, and cries of "this is bogus, the NSA set me up, man" don't go down well with juries, until they figure out a way to exclude the sheeple.  Fortunately, the threat and interest of .GOV tends to be larger in the mind of the punk then in reality, but there are those isolated cases where the .GOV actually does care, or can use an extra pawn in a larger game... 



Wed, 04/10/2013 - 01:01 | 3429780 Royal Wulff
Royal Wulff's picture

It wasn't hacked. Mt Gox suffered a DDOS attack. Attackers used the DDOS to depress the price so they could buy more bitcoins.

Wed, 04/10/2013 - 01:32 | 3429823 francis_sawyer
francis_sawyer's picture

Well that inspires confidence...

Wed, 04/10/2013 - 01:56 | 3429854 fonestar
fonestar's picture

You need to know what the fuck you are doing if you want to have confidence.  There's nobody to call if your wallet.dat gets hacked.  Good, you deserve it the internet is the wild west and no pussies or lawyers need apply.  Hack or be hacked.

Wed, 04/10/2013 - 07:09 | 3430115 Urban Redneck
Urban Redneck's picture

Well that's about the most fucktarded salesjob one could possibly come up with for a product they are trying to advocate the use of...

Wed, 04/10/2013 - 08:49 | 3430430 sessinpo
sessinpo's picture

Bitcoins are designed to go up regardless.


Look at their own fact. They state because of the limited quantity of bitcoins, they will suffer deflationary effects. The problem that most don't see is that while deflation seems good at the beginning, it becomes a BIG problem like hyperinflation becomes a big problem. Both end in currency destruction.

Wed, 04/10/2013 - 01:52 | 3429848 fonestar
fonestar's picture

Bitcoin was never hacked moron

Wed, 04/10/2013 - 05:10 | 3429992 terryfuckwit
terryfuckwit's picture

just saying ... i would not install btc on a windows machine... linux is the way to go.. moronic zhers do not understand that btc exchanges are differant from btc itself. It is big boys pants stuff and for that reason most of you should stay away until you really understand wallet security and the ulnerabilities of operating systems. Every one can learn all this but diving in will leave you with burnt with a fraction of a btc demonstrate your security by destroyin wallets and resurecting later on a differant machines etc... "dont criticise what you can't understand.. your sons and your daughters are beyond your command.. the times they are a changin"(bob dylan)

Wed, 04/10/2013 - 06:08 | 3430040 CompassionateFascist
CompassionateFascist's picture

"All your children belong to us now" 


                                                                  -  Harris-Perry

Wed, 04/10/2013 - 08:43 | 3430413 sessinpo
sessinpo's picture

This is where you show your lack of underderstanding.


Yes, you are correct that the "actual" bitcoin algorithm was not hacked. But what you miss is that bitcoin relies on anonymous exchanges to work.

After all, that is the benefit and selling point of bitcoins. The ability of a person to conduct transactions anonymously, quickly and circumventing the fiat dollar (until the last end user has to make the conversion back to fiat which is another fallacy of bitcoin left for another discussion).

In order for this bitcoin system to work, these exchanges, which includes the merchants using bitcoins can't be compromised. That was the hack. Not bitcoin itself, but the exchange.


Let me put it to you another way, one could conduct a DOS (Denial of Service Attack) on the exchange, and shut down bitcoin.

Wed, 04/10/2013 - 02:45 | 3429897 Genève Barbegazi
Genève Barbegazi's picture was a DDoS attack on the MT.Gox exchange and not on the bitcoin blockchain learn about hacking before you name drop it like some sort of fuckin Melvin... March 27th, 2013, the blockchain split due to tampering and the open source nature of BTC enabled it to be fixed in one hour.

Whilst I still hold phyzz, lets not forget that there is an opportuntiy cost to holding au/ag and that even thought the end always seems nigh, theres plently on muppets to face rape in the meantime....thats good youre long au (and i presume Ag as well) but what are you short and medium term?

BTC looks like tulips to me at the moment...but are you telling me your not going to BTFD once the next euro bandaid is slapped on this summer and the BTC sell off commences? 

Lets not forget that merkel needs to get re-elected in novemeber, so drahgi and his ECB minions are ahrd at work at the next easing policy that will ease tensions after a long Q2 so that the glorious chnacellor can rule over the fatherland again..........zis is only zee beginning!

jokes aside dude...decentralized currencies......its just another new market to play in....

Wed, 04/10/2013 - 07:35 | 3430178 Urban Redneck
Urban Redneck's picture

The blockchain hardly needs to be attacked in order to split.  That's the "beauty" of a distributed model.  As long as the events are relatively infrequent and only involve small splits then the number of schmucks who gets their digital stash VAPORIZED is manageable from a PR standpoint. 

Wed, 04/10/2013 - 14:46 | 3432687 TMLutas
TMLutas's picture

Everything is ephemeral. Keep an eye on the asteroid miners. They're likely to throw gold for a loop. 

Tue, 04/09/2013 - 21:08 | 3429198 WhiteNight123129
WhiteNight123129's picture

Bitcoin is BOTH the money of the future AND a bubble.

Nothing mutually exclusive. During its acceptance period, it will swing widely.

But eventually it will no be used as a speculative instrument but as a payment and mean of exchange and regular store of value. It volatility will decrease when compared to a broad basket of currency to the point it becomes the money anchor.


Tue, 04/09/2013 - 21:51 | 3429331 lickspitler
lickspitler's picture


Tue, 04/09/2013 - 21:51 | 3429333 jeff montanye
jeff montanye's picture

i don't think i understand this bitcoin stuff fully or even halfly, but it seems bullish for gold.

Tue, 04/09/2013 - 22:13 | 3429378 aphlaque_duck
aphlaque_duck's picture

Yes! Bitcoin complements PMs.

PMs last forever, and work if the power is out. Bitcoin lets you transfer value instantaneously, anywhere. It's perfect synergy - no need for banks/USD any more.

Tue, 04/09/2013 - 23:25 | 3429582 Harlequin001
Harlequin001's picture

No it doesn't. You can't transfer it to me or my local petrol station.

Tue, 04/09/2013 - 20:09 | 3429055 BobPaulson
BobPaulson's picture

Nowhere near the shoeshine boy test. I think it's overbought right now but doesn't qualify as a bubble if almost nobody I know has any idea what it is. 


Tue, 04/09/2013 - 23:20 | 3429572 Ahmeexnal
Ahmeexnal's picture

Selling BTC is the rage on Craigslist. I'd say it's already ready to get pricked.

Wed, 04/10/2013 - 06:08 | 3430044 CompassionateFascist
CompassionateFascist's picture

It's an internet bank with no banker. Just suckers. 

Tue, 04/09/2013 - 20:49 | 3429147 defencev
defencev's picture

It seems to me that one interesting aspect of the article is totally missing: there are already quite a few modifications of bitcoins

available. Bitcoins obviously cannot hold the monopoly on the concept of the virtual currency. It is really a strength of the network

which distinguishes one such currency from another. You can say:what is the problem? Let all of them flourish...We will incorporate the variety of such currencies in our exchanges... Well,the problem is that one "attractive" feature of the concept (limited

supply and hence scarcity) will be lost. It will make the whole system quite complex (merchants dealing with a bunch of digital currencies, exchanges, verification of integrity of each and every network etc). Finally, who is going to limit the variety of such networks? By definition:nobody, cause nobody is in charge...

Another reason why the whole scam is bound to fail...

Wed, 04/10/2013 - 05:42 | 3430014 rich_wicks
rich_wicks's picture

There's not enough gold to give every human being 1 ounce of it on the planet.  It's less than 7 billion ounces.

If every American bought 2 ounces of silver a year, it would consume the entire world's mining output of it per year.

Bitcoin relies on a majority rules to approve a transaction, a single virus which exists on more computers than legitimate computers can, and eventually will wipe it out.

You're dealing with a bunch of people who will do anything to maintain the paradigm.  You just don't freaking understand it yet, they can create 1 trillion dollars to sink bit coin, and all it takes is a virus to become "the network".  If it becomes a threat, they'll destroy it, not to make money, but to destroy the competition.

But whatever - just don't fall in love with any investment.  Hope you do well.

Tue, 04/09/2013 - 18:19 | 3428676 Ahmeexnal
Ahmeexnal's picture

BitchCoin has counterparty risk. And the worst thing is that you don't even know who the counterparty is, besides his fake online-gaming name of Satoshi Nakamoto.
But it ain't hard to figure out that this "Satoshi Nakamoto" is none other than some Rotschild stooge.

Tue, 04/09/2013 - 18:27 | 3428703 DaddyO
DaddyO's picture

Back on topic...I posted this same article link in another thread, here...

Nothing has changed fundamentally speaking in the time since that posting except the price of PM's and Bitcoin.


Tue, 04/09/2013 - 18:30 | 3428724 Ahmeexnal
Ahmeexnal's picture

Back off topic, seems like a hard time sighting a target when your magazine loader is located in the way they are in these autos:

Tue, 04/09/2013 - 19:17 | 3428883 ACP
ACP's picture

Listed in the SF Foreign Weapons handbook as "shit to NOT use"...

Tue, 04/09/2013 - 19:56 | 3429013 macholatte
macholatte's picture



I like their hats.

Tue, 04/09/2013 - 19:20 | 3428894 The Alarmist
The Alarmist's picture

It's those damn semi-automatic, military-style knives ... we need to have a law or something.

Bitcoin ... a wonderful store of value until a massive solar flare takes out your computer or the government severs the interwebs.

Tue, 04/09/2013 - 19:34 | 3428942 nmewn
nmewn's picture

Someone has to DO SOMETHING!!!

If a solar flare or .gov shuts down the whole shabang we'll have formerly rich now impovershed techies running into Circle K's & 7-Elevens trying to unload smart phones with little sticky notes of bitcoin values attached to them and the poor cashier will be completely defenseless having had their assault-knives confiscated!

This could be bedlam!!! 

This is too large an issue for Congress or committiees, we need immediate action...we need to turn this over to Biden!

Tue, 04/09/2013 - 20:14 | 3429064 willwork4food
willwork4food's picture


"Hush now baby, baby. Don't you cry..."

Wed, 04/10/2013 - 05:47 | 3430018 Bearwagon
Bearwagon's picture

Upvote for "The Wall"!

Tue, 04/09/2013 - 21:13 | 3429218 thisandthat
thisandthat's picture

Based on the british WW2 Bren? It keeps you low on the ground and better hidden; obviously either the sight, loader or both are offset sideways.

Wed, 04/10/2013 - 01:59 | 3429859 fonestar
fonestar's picture

Nobody cares what you are posting on ZeroHedge.

Tue, 04/09/2013 - 18:34 | 3428736 DaddyO
DaddyO's picture

Similarly, is this bitcoin mania some psyops to condition the sheeple to believe that digital currencies are the wave of the future?

If you want to implement some sort of one world digital currency, say a digital SDR, wouldn't this make a great image to point to and say look how well this works?

Just sayin...


Tue, 04/09/2013 - 19:39 | 3428938 Ignatius
Ignatius's picture

Got me some today!!

My son has been mining awhile and owed me some money that I'd really just written off (parents do such things).  Well, he made good in Bitcoin, and I'm gonna hold on and ride.  I have been kickin' myself as late for not throwing in some spec capital last year at >$5/coin. 

I remain skeptical, but the price is the price.

Tue, 04/09/2013 - 20:51 | 3429161 nmewn
nmewn's picture

Not giving to conspiracy theories myself...but sayin as well.

Everything that is done with "electronic money" is done with the eye toward control & observation. Whether its selling a car for 10k or building "your nest egg" for retirement.

If I give you 12k (cash or gold) they can't track it, observe it or tax it AGAIN...drives em nuts, statist pukes that they are ;-)

Wed, 04/10/2013 - 02:04 | 3429864 fonestar
fonestar's picture

Right, because all "digital currencies" are created equal and the sheep are too dumb to know the difference between them.  My currency has got to be p2p, mathematically sound and no SDR bullshit from the IMF.


Tue, 04/09/2013 - 18:38 | 3428746 Looney
Looney's picture

True dat! Whether it's a Rothschilds' Moe or a Langley's Curly, there is another concern. A Gold Coin can (theoretically) be protected by a gun, while a Bitcoin can be just confiscated as easily as Cypriots' deposits.

No matter how centralized or de-centralized it is, if the Bitcoin is made as illegal as Coke or Meth within the US, for example, not too many people would want to either buy or sell it. I think? ;-)


Tue, 04/09/2013 - 19:28 | 3428907 AlaricBalth
AlaricBalth's picture

Satochi Nakamoto is obviously a nom de plume.

Satochi is a Japanese boys name meaning clear thinking, quick-witted and wise.

Nakamoto was a fictitious, very secretive and politically connected Japanese corporation in the Michael Crichton novel "Rising Sun".

Whoever it is, he/she/they were having fun choosing an alias. It is also someone who is clearly intellectually arrogant and has no fear of being outed.

Tue, 04/09/2013 - 20:01 | 3429030 nmewn
nmewn's picture

And..."Satochi" whoever they or he a patent for bitcoin.

I've brought this up before and apparently it didn't register with the "bitsters". An American patent is not universally observed (I know). Also, what does it say about the intellectual capabilities of the anarcho-currency inventor(s) relying on a government...any government (using its own competing currency) for a legal intervention in enforcement of said patent?

So many questions.

For can be argued that the EU expressly does not respect the patentability of bitcoin...


The following in particular shall not be regarded as inventions within the meaning of paragraph 1: (a) discoveries, scientific theories and mathematical methods; (b) aesthetic creations; (c) schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers; (d) presentations of information.
Tue, 04/09/2013 - 20:10 | 3429051 SMG
SMG's picture

As pointed out by Blotto on a previous story, Satochi Nakamoto is also an anagram for "A hook to satanism".   Hidden in plain sight.  I hate the people who run the world.

Tue, 04/09/2013 - 21:08 | 3429143 Dane Bramage
Dane Bramage's picture

lol!  There's some good anagrams in there.

Took Maniacs Oath
Amok Actions Oath 
Attain Mooch Soak
Cahoot Saint Amok
A Maniac Shot Took
Shot At A Amok Coin
Took A Asthma Coin
Ask A Math Coin Too
Took Coin At A Sham (think this is my fave so far)
At A Homo Coin Task (not that there's anything wrong with that)
Took To Maniac Ash
Atomic Hooka Ants (I should name my band that!)


Wed, 04/10/2013 - 00:39 | 3429752 Harlequin001
Harlequin001's picture

and let's not forget 'Bitcoin Tosser"...

and my absolute fave, 'hit me I'm daft'...

Tue, 04/09/2013 - 18:29 | 3428711 DaddyO
DaddyO's picture

Where's that bit tool fool, fonestar?


Tue, 04/09/2013 - 18:36 | 3428735 francis_sawyer
francis_sawyer's picture

Trying to cash in a bitcoin or two to have a Ukranian hooker blow a line of coke off his pencil dick...


Alas ~ the 'SERVER' is down...

Tue, 04/09/2013 - 19:26 | 3428918 Scarlett
Scarlett's picture

No it's not, the miners are certifying the honesty of each and every transaction;  Bitcoin is the world's only honest banking system, the new Swiss numbered account, and it's sad to see people here unable to even study the instrument before bashing it.  

The difference between an intelligent person and a moron is that the moron has lots of opinions and zero doubts.

Tue, 04/09/2013 - 19:37 | 3428949 Ahmeexnal
Ahmeexnal's picture

There are a couple of other currencies that have been "studied" for thousands and thousands of years, yet you want people to sell their souls to a four year old Rotschild experiment?
Sorry pal, you ain't finding many sheep on ZH to discharge your BitCoins onto. Why don't you try on FarmVille?
Oh, and as to "honest" Swiss banking, you evidently have never banked with the swiss.

Tue, 04/09/2013 - 19:59 | 3429020 Matt
Matt's picture

Let's see you securely transfer $1 million in gold to the other side of the planet, without filling out any government forms.

Someone please show the flaw in my concept: how to transfer money anonymously with bitcoin. The person I am sending the money to provides me with a one-time address for this transaction. I place 1000 bets at 98.5% odds on Satoshi Dice, and have the results for each bet, win or lose, sent to that one-time address.

Is there anyway for someone else outside of the two of us, to know whether that return address goes to my wallet or the other persons?

Tue, 04/09/2013 - 20:12 | 3429061 XenoFrog
XenoFrog's picture

Every transaction is recorded. Therefore it's not anonymous.

Tue, 04/09/2013 - 22:14 | 3429383 Matt
Matt's picture

But there is no record of who owns which address. You can create a new address to RECIEVE bitcoins at anytime; I am not sure whether you always send FROM the same address or not. The ledger just shows, as I understand it, the source and destination addresses and the amount transferred between them.

Tue, 04/09/2013 - 23:36 | 3429625 Scarlett
Scarlett's picture

Don't you just love the fact that XENOFROG is paid to bash Bitcoin around here?  


Someone is truly scared out there.  Truly freaking scared.

Wed, 04/10/2013 - 01:29 | 3429816 Royal Wulff
Royal Wulff's picture

You can only send from an address (i.e., account) that has bitcoins in it.


Tue, 04/09/2013 - 22:49 | 3429467 imbtween
imbtween's picture

Every transaction in the records consists of little more than a verified  "x.xxxxxBTC from 1JEiV9CiJmhfYhE7MzeSdmH82xRYrbYrtb to 1HceWtheh1yfeCN85GfXG84hYJjDz1JPsQ timestamp" Your name, IP address, location or any other identifying data are not included.

Wallets are free - if you REALLY wanted to obscure activity, get yourself 20 different wallets and start sending money alll over the place, then send it all to one wallet and don't use it for shady transactions.

Good luck tracing that.

As it is, the irony of scaremongers warning us about the amount of DRUG TRAFFICKING IN THE BTC ECONOMY!!!!! is hilarious. Pro tip: it's a lot less than the total drug trafficking in dollars. Just ask HSBC.

But the anonymity aspect of BTC, while nice, isn't its real strength. It is that your BTC can not be confiscated and the transaction fees are negligible.

The nonsense of ISP records and such (at 3:20 in the video) is just that - nonsense. A bitcoin transaction is encrypted and does not have a special identity within the exchange protocol that "tags" it as a BTC transaction, or makes it any different than any other BTC traffic. You could simply log in to the BTC client, catch up on blocks and while doing so have sent 50 transactions and your ISP would have no "record". Complete bullshit.

And I agree that it is a conveyance, not "money" in the classical sense, because at this point it represents a speculative bet against our local central bank scrip. That could change if sellers of goods and services adopt it en masse as a means of payment, and spend the btc they receive, rather than convert it to local scrip. Could happen - and that would create serious price stability or a deflation in the BTC economy - neither being bad.

Indeed, people should get to know the concepts behind the system as well as the implementation before they bash it, cause you may regret that someday (soon), particularly if you live in the EU or Japan. The US probably a little later.

Tue, 04/09/2013 - 23:26 | 3429580 Ahmeexnal
Ahmeexnal's picture

Riiiiiight. And your phone conversations are also private.

Tue, 04/09/2013 - 23:45 | 3429659 imbtween
imbtween's picture

If you applied BTC's methodologies to our call, meaning, you and I spoke with modded phones that scrambled our conversations with three nested, and as of this time unbroken, layers of encryption, our conversation would indeed be private. The gov would know I called you and they'd know how long we spoke, but it would be way outside of their capabilities (at this time) to intercept the call data stream and decrypt it to know what we said.

Wed, 04/10/2013 - 02:04 | 3429866 Kirk2NCC1701
Kirk2NCC1701's picture

Anyone who makes that kind of a (flawed) comment, is an intellectual midget or troll. Recording is recording. ID or anonymity is a separate and different matter.

Tue, 04/09/2013 - 20:33 | 3429109 nmewn
nmewn's picture

Matt, my friend (and I do mean that earnestly) you just said it in your post.

Bitcoin is a conveyance OF money. Its not money itself. Real money doesn't rely on or encumbered by...anything.

And again for the umpteenth time, its my desire to see it not shut down because, what is yours IS yours. But its not money. In your example, I could convert my gold money into a diamond and call it bit-diamond, stick it in my pocket and go on a cruise...but it would still need nothing external to it in order to process it back into money because of its value.

The only value of bitcoin is secrecy/privacy...which I respect DEEPLY...but its not money. Its a tool, just like the diamond.

Tue, 04/09/2013 - 20:50 | 3429159 DaddyO
DaddyO's picture

+1 nmewn,

Thanks for putting into words what I instinctively or intuitively know.


Tue, 04/09/2013 - 21:04 | 3429193 nmewn
nmewn's picture

Thanks DaddyO, I just don't want em to get hurt...really its the only reason I bother, there is some good people really into this thing.

I mean right now, on just about every thread, they are saying "how much they are up". Up, compared to what? I've ridden some good stocks before, I've ridden some right into the ground'm over it.

Money is supposed to be stable & a store of wealth all to its own, not parabolic one way or the other.

Tue, 04/09/2013 - 22:18 | 3429340 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

It is parabolic at the moment because the wealth store is in a parallel system. It is bleeding over from one into the other. The more insane the central banks get right now first Europe with the the capital control thing going on and hair cutting deposits to rescue banks the more money will scurry for exits out of the system. Once the bleedover stops the price stabilizes and fluctuations become smaller or it keeps bleeding into somewhere else. The only other factor is trust which will determine if gets that far or drops to nothing.

Tue, 04/09/2013 - 22:23 | 3429396 Matt
Matt's picture

If the price of gold fluctuates too rapidly in USD, does it stop being money?

If so, what is the mathematical rate of change / volitility in which money stops being money? 

Also, how does time factor into it? I mean, if gold goes up 200% and back down 75% in one year, but over the long run it is stable, does that affect its money-ness?

As far as bitcoins go, all I've spent on them is maybe $5 in electricity, plus I (perhaps foolishly, but accepting the possibility of a complete loss) pre-ordered a $150 bitcoin mining machine that may never exist. If I sell one BTC, I'll be back to even / slightly ahead. I fully expect a major pullback, and with it, a drop in interest and major negative press that will put it back off the radar for another 2-3 years.

Wed, 04/10/2013 - 07:05 | 3430109 nmewn
nmewn's picture

"If the price of gold fluctuates too rapidly in USD, does it stop being money?"

I don't look at the fiat price of gold, I value it against what it will purchase. Same with silver. They are both still stable against what they can be exchanged for. A pre-64 quarter for example, buys a gallon of gas and a coke, just like it did a half century ago. No real world inflation in a purchasing sense.

"Also, how does time factor into it? I mean, if gold goes up 200% and back down 75% in one year, but over the long run it is stable, does that affect its money-ness?"

My above example is what money is or what it is supposed to be...stable value relative to its purchasing power. The exchangable values is what counts, not price.

Just realize what it is Matt, its not money. Bitcoins are meant to be spent, not saved in order to create wealth. And again, I appreciate the privacy aspect to it as it now stands...a somewhat hurried response on this end but I hope I made myself clear.

Tue, 04/09/2013 - 22:59 | 3429502 Oldballplayer
Oldballplayer's picture

How did TVXX do today?  Is that still as raging buy?  TVXX is 2012 "speak" for bitcoin.

Tue, 04/09/2013 - 20:54 | 3429149 New World Chaos
New World Chaos's picture

Use the Bitcoin Laundry instead.  A bit more secure, and won't clog BitCoin's arteries as much as Satoshi Dice will.

Speaking of clogging the arteries, that's probably how TPTB will attack it next.  Squeezing the access ramps didn't work (thanks, Coinabul and localbitcoin).  Sending in the clowns seems to have only made things worse (thanks ECB, Krugman and Cramer).  They must know the terrorism excuse will only be a temporary sandbagging.  How about this:  Pass a bunch of BTC back and forth between computers in Langley and Utah, thus turning the entire market into a block of ice.  Nerds are already talking about solutions but this is a tough problem.  No idea what will come of this, so I will sell some and let the others ride.

Wed, 04/10/2013 - 04:41 | 3429974 Overflow-admin
Overflow-admin's picture

The flaws are that the client operating system, the client data, and the communications aren't inherently secure (as much as bitcoin).

One could hack and compromize the client system and check whether or not the wallet was downloaded. Eavesdropping may also succeed, either if there is a security flaw or by statistical analysis. But it's all theory.

In practice, I see no flaw in your concept IF both clients
- Access to the internet anonymously (either by hacking a gateway or using a public one)
- Obfuscate their system profile (you don't want to connect with a MSFT registered OS; use Backtrack or another stealthy distribution)
- Don't communicate information that can be cross-referenced with their personal information (you don't want to connect to your facebook account)
- Erease transaction-related information from the client systems afterwards (move the wallet from the client system, i.e. USB key)

Does that make sense, or did I miss something?

Wed, 04/10/2013 - 07:57 | 3430235 Urban Redneck
Urban Redneck's picture

You do know that backtrack requires you to be logged in as root, right?  It's fun to play with on my antique cellphone, and there are specific times when it serves a specific professional purpose, but if you are trying to communicate with a network to exchange some ebucks for icrap and that network might be targeted by people who know what they are doing- that is a big ass back door to be leaving wide open... unless you are into that sort of thing... 

Wed, 04/10/2013 - 01:48 | 3429844 TraderTimm
TraderTimm's picture


Er, "Rotschild" experiment? Are you ill? Perhaps you should ask francis_sawyer what he takes to keep his race-baiting at bay... it may help you.

And you mention Zynga properties in one foul breath - how 'mainstream' of you. Perhaps update your profile with the description - "Slave to paper tokens"

Tue, 04/09/2013 - 21:20 | 3429242 thisandthat
thisandthat's picture


The difference between an intelligent person and a moron is that the moron has lots of opinions and zero doubts.

Congratulations on your plentiful opinions and zero doubts about bitcoin, then...

Tue, 04/09/2013 - 18:30 | 3428722 zorba THE GREEK
zorba THE GREEK's picture for and silver coins rule.

now bring on the retard down votes. The truth shall set you free.

Tue, 04/09/2013 - 19:03 | 3428824 Kirk2NCC1701
Kirk2NCC1701's picture

Mr. Spock tells me that "A person disagreeing with someone else on ANY topic does NOT make them a retard.  But your flawed logic indicates that you may be one."

Tue, 04/09/2013 - 19:12 | 3428865 BurningFuld
BurningFuld's picture


Wait! Let's try common sense for a change or maybe let's call it rational thought.  What happens when the demand for bitcoins outstrips supply? 21 million is a tiny tiny amount. Oh wait I know the grand bit coin pooh-bah will decree um 42 million more bitcoins will be made..etc. etc.  See why they have zero intrinsic value? I do.

Tue, 04/09/2013 - 19:33 | 3428935 orez65
orez65's picture

Just what happened to the US dollar:
We PROMISE that we won't print more than:
Well it's better if we just print as much as we want.

Tue, 04/09/2013 - 19:41 | 3428963 imbrbing
imbrbing's picture

or just make a bitcoin worth 1 trillion dollars, 22mil * 1T, thats plenty ya think?

no need to make more, just make them worth more, phhht

Tue, 04/09/2013 - 20:02 | 3429028 Matt
Matt's picture

while there are only a maximum of 21 million bitcoins, since the smallest unit, 1 satoshi, is 1 / 100 millionth of a bitcoin, that means the money supply has a maximum of 2.1 quadrillion units. That is more than 1 satohi available for every $1 of assets in the world, including all gross derivatives outstanding.

Tue, 04/09/2013 - 22:17 | 3429390 therover
therover's picture

I am totally new to this Bitcoin deal. Based on your post, let me see if I understand. For simplicty, if a satoshi is worth a dollar, than one Bitcoin is worth 100 million dollars ? 

What happens when they start pricing in satoshi's ( or are they already doing that ) ? 


Clueless in Bitcoin land

Tue, 04/09/2013 - 23:02 | 3429519 Oldballplayer
Oldballplayer's picture

Well then, the new bosses...Dennis and Jude.  They were pot dealers three weeks ago.  Now they bought your house with Bitcoin.

Wed, 04/10/2013 - 01:35 | 3429828 Royal Wulff
Royal Wulff's picture

The minimum divisible unit, 1/100 millionth of a BTC, was named a "satoshi" just as an honorarium. The current debate is whether to move to the milliBTC (mBTC) as a "standard" unit.

But, due to the ease of moving around decimal points, there's no real need to fret over any "standard" unit of measure.

Tue, 04/09/2013 - 20:07 | 3429044 Kirk2NCC1701
Kirk2NCC1701's picture

Sir, do you have A.D.D. or have cognitive difficulties?  He said, and I quote: " for retards..."

I addressed his argument and his flawed logic, (of the same argument) -- not he pros & cons of Bitcoin.   If someone shoots their mouth off in an obnoxious and poorly reasoned manner, they should expect someone to set them straight (to get smacked).  When in the mood, I'm, happy to oblige.

The arguments you raise are different than in his statement.  But, in his case, as in yours, you are simply speculating and voicing fears and concerns.  Insofar you do that, that is legitimate.  To call someone a "retard" because they do not share your world view does not not them a retard.  They betray their emotional immaturity and intolerance, and intellectual limits.  They act, in effect, as "hicks" and "rednecks".  Since you don't mind labels of negative stereotypes.

Your time to adopt Bitcoin will come when all your peers have it, and you don't want them to perceive you as being backward.  Like all "late adopters".

Tue, 04/09/2013 - 23:02 | 3429510 Oldballplayer
Oldballplayer's picture

Nah....the fact that his fingers can type words on a keyboard is pretty much proof that he is not an actual retard.  Metaphorically, perhaps.  But full blown "mittens and helmet" retard?  Nope.

Tue, 04/09/2013 - 23:09 | 3429533 WhiteNight123129
WhiteNight123129's picture

I respect the ones who want to hold anything. Freedom of choice. Multiple forms of money not controlled by hte gov.


Tue, 04/09/2013 - 18:31 | 3428723 TeMpTeK
TeMpTeK's picture

Step one: Criminize All competing digital currencies as an act of domestic terror.. (See Bernard Von NotHaus and Liberty Dollar)

Step two: Ban the banks from converting or transacting in them..

Step three: Bitcoin... POOF!

Just sayin...

Tue, 04/09/2013 - 19:01 | 3428816 toys for tits
toys for tits's picture

Or even simpler than outlawing it, just require self reporting, then go after the cheaters.  It's made offshoring money much less desirable now that it has to be reported annually.

That way those working in the judicial system can still give the appearance of making a difference fighting the crime of money laundering, gun running, and the war on drugs.

That is why peer-to-peer file sharing systems aren't outlawed, they give LE something to do by tracking down the child pornography users, who incidently are given a 10 year enhancement in their prison sentence for distribution because their bittorrent is uploading while downloading.

While not as powerful as the banking cartel, our judicial system is a beast that needs continuous feeding.


Tue, 04/09/2013 - 19:30 | 3428926 Scarlett
Scarlett's picture

Step 3. Go darknet and trade without any possibility of prying eyes.  

Tue, 04/09/2013 - 19:40 | 3428954 Ahmeexnal
Ahmeexnal's picture

I was actually thinking of Jeff Goldblum saying:

Step 3: There is no step three.

Tue, 04/09/2013 - 19:57 | 3429008 McMolotov
McMolotov's picture

Go darknet and trade without any possibility of prying eyes.

Thus illustrating what I keep saying: it will never move beyond black market status because the government simply won't allow it.

I appreciate your enthusiasm, and I share your animosity toward authority of all stripes. But this isn't difficult, people. They'll outlaw it as a competing currency or slap it with the terrorism label. Once Amazon says their refusal to accept it is "for the children," other mainstream businesses will follow suit. Demand would plummet at this point because the average Joe isn't going to transact in "illegal" currency. If you can't buy everyday products with it, it will have limited utility as a medium of exchange.

And just as with illegal drugs, the price of stuff purchased on the black market with bitcoins will necessarily skyrocket because the cost of doing business will immediately go way up due to the threat of jail time.

Tue, 04/09/2013 - 23:17 | 3429557 imbtween
imbtween's picture

While I would have agreed with this statement 6 months ago, I believe it no longer applies, as desperate people in countries with desperate central bankers are buying BTC as a way to put what they have out of reach of those central bankers. I believe they fully expect to convert back to cash to buy like, food and stuff - NOT weed - but one thing is certain, when they go to sell their BTC, they will be there (unless their wallet.dat file gets stolen).

Sure, BTC is risky (because of price fluctuation and the possibility of a pop), but how much riskier is it than keeping your euros in Bankia?

Tue, 04/09/2013 - 21:34 | 3429275 thisandthat
thisandthat's picture

Step 4: man in the middle attack/sabotage.

Tue, 04/09/2013 - 20:07 | 3429047 RebelDevil
RebelDevil's picture

"Step two: Ban the banks from converting or transacting in them."
 ok, I can get around this by getting a moneypak and setting up a paypal account. Simple as that.
They would have to ban the exchanges out of existence/access before any real harm can be done.

Tue, 04/09/2013 - 20:36 | 3429114 phyuckyiu
phyuckyiu's picture

Interesting, so a bitcoin exchange trying to transfer you digital money to paypal (a well known conservative company) is not considered a weak link. Ponder.

Wed, 04/10/2013 - 08:07 | 3430257 Urban Redneck
Urban Redneck's picture

You do realize Paypal got a banking license a while back... Moneypaks are registered to a buyer, and your cotton-linen blend money is just digitized and left sitting in the Bank O'MoneyPak until it is digitally transferred to the PayPal PlayBank...

Tue, 04/09/2013 - 20:23 | 3429068 Kirk2NCC1701
Kirk2NCC1701's picture

TPTB will regulate, tax, attack or take over anything or anyone who threatens them and their fiat-FRB system -- including PM and Bitcoin.  In both cases their "attacks" have geographic limitations (jurisdictional issues).  As long as we don't have a 1-world government, no one can "ban" it on the entire planet, but merely in their jurisdiction.

The FAR more likely scenario will be:  IF YOU CAN'T BEAT 'EM, JOIN 'EM.  TPTB will/are coming out with their own version, which will kill or marginalized all competitors.  For weeks I've been saying that YOU will become the walking, talking Bitcoin.  Now HSBC of all people is posting adds (at select airports) that show the Bitcoin RQ Code on a person's finger, with the caption:  "Your DNA will be your data".

How much clearer do you need it spelled out for you, w/o getting clobbered over your head?  Some people really should get out more. 

Tue, 04/09/2013 - 21:45 | 3429315 thisandthat
thisandthat's picture

On the mystification of public opinion: no amount of money, brainwashing or laws, will ever produce its intended result without an hoard of (often fervent, even fanatical) useful idiots to fall for it.

Tue, 04/09/2013 - 20:29 | 3429093 TraderTimm
TraderTimm's picture

I still maintain that bitcoin has value that isn't dependent on the USD valuation. Markets correct, and they survive - I expect the same with bitcoin at $228, $22.80, or $2.80

The fundamental premise hasn't changed, just the speculative interest.

Wed, 04/10/2013 - 00:20 | 3429715 Dingleberry
Dingleberry's picture

Can I buy hookers or coke with bitcoins?

Wed, 04/10/2013 - 03:58 | 3429946 draug
draug's picture

So many gold bugs with sour grapes. "Why isn't my gold exploding 2000x in value? It's not FAIR!"

Tue, 04/09/2013 - 18:13 | 3428645 Dr Benway
Dr Benway's picture

You had me at 'dirty Transylvanian gypsy'

Tue, 04/09/2013 - 18:34 | 3428730 Fail2Deliver
Fail2Deliver's picture

+1 I logged-in just to give you a plus 1. I was thinking the same thing only in my head I had a picture of dirty Transylvanian gypsy girl wearing a bikini top...I'll stop The rest of the story was lost on me.

Tue, 04/09/2013 - 18:12 | 3428647 swissaustrian
swissaustrian's picture

Does anybody know a reliable instrument to short BTC?

Tue, 04/09/2013 - 18:16 | 3428654 Sid James
Sid James's picture

Car battery?

Tue, 04/09/2013 - 18:26 | 3428695 prains
prains's picture

put the red on black voila, shorted

Tue, 04/09/2013 - 22:18 | 3429388 thisandthat
thisandthat's picture

Neodymium magnets

Tue, 04/09/2013 - 18:32 | 3428698 Yen Cross
Yen Cross's picture

     X-class Solar Flare. ;-) 

Haven't had the chance to read yet, but it's a starting point.

Tue, 04/09/2013 - 18:29 | 3428718 Conman
Conman's picture

Go for it - IGMARKET.

Please post your results, put your money where your mouth is.

Tue, 04/09/2013 - 20:09 | 3429050 RebelDevil
RebelDevil's picture

Tue, 04/09/2013 - 20:31 | 3429105 imbrbing
imbrbing's picture


Wed, 04/10/2013 - 01:39 | 3429832 Royal Wulff
Royal Wulff's picture

You could buy gold. The last $1 billion that would have gone into gold has gone into bitcoin. When it fails everyone will flee to gold.

Tue, 04/09/2013 - 18:16 | 3428650 SheepleLOVEched...
SheepleLOVEcheddarbaybiscuits's picture

It's not even debatable whether or not bitcoin is a bubble. Look at the chart, how much more obvious can it be?

Bitcoin=Beanie Babies

Tue, 04/09/2013 - 18:18 | 3428662 camaro68ss
camaro68ss's picture

but without the plastic tag covers

Tue, 04/09/2013 - 18:23 | 3428686 Seasmoke
Seasmoke's picture


Tue, 04/09/2013 - 18:29 | 3428708 Ahmeexnal
Ahmeexnal's picture

More like, BitCoin == Garbage Pail Kids trading cards.

Tue, 04/09/2013 - 20:38 | 3429122 phyuckyiu
phyuckyiu's picture

I made some decent scrilla selling those on ebay. Same with my MTG collection. Rarity created out of thin air. Like the new IMF currency.

Wed, 04/10/2013 - 04:01 | 3429951 draug
draug's picture

Actually paper money is more like trading cards. Except the boring kind where all the cards look the same.

Tue, 04/09/2013 - 18:19 | 3428671 Cursive
Cursive's picture


There is nothing anti-Austrian about acknowledging that there exists in the market place a lot of naïve, irrational, and misinformed players. 


I've been saying a variant of this for awhile.  That and, hell, Tylers must get a whole bunch of clicks from posts about bitcoin.

Tue, 04/09/2013 - 18:26 | 3428697 The Abstraction...
The Abstraction of Justice's picture

It is always other people that are naive, irrational and misinformed. Anyone who has studied a serious academic subject, such as mathematics or phyiscs knows how ignorant they are. It is the ignorant who thinks he has achieved perfection.

Tue, 04/09/2013 - 18:47 | 3428761 Cursive
Cursive's picture

@The Abstraction


I think the problem is that many bitcoiners think they have achieved the perfection of money with P2P currencies.  Make any rational argument against a digital P2P currency, particularly bitcoin, and these people get very emotional.  That's my point.  Our current monetary system is deeply flawed, mostly in that it is debt-backed and issued by private parties, but these digital P2P currencies are not the answer.

Wed, 04/10/2013 - 06:55 | 3430092 The Abstraction...
The Abstraction of Justice's picture

I speculate wit bitcoin, not because I think I have special knowledge, but because I see the trend of massive deflation in the banking system, and this has the tendency to inflate everything else, unless it is under the thumb of government. That is why I invest now. I accept that as an electronic representation of wealth it has its vulnerabilities, and that I may end up selling for less than I paid. I resent other people telling me that I am naive, or ignorant, when they are not in possession of my mindset and are in no position to judge me.

Tue, 04/09/2013 - 18:19 | 3428675 buzzsaw99
buzzsaw99's picture

everything inter tubez related is in a bubble

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