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Guest Post: Whom Do You Trust - Bitcoin Or Bernanke?
Authored by John Cochran via The Circle Bastiat blog,
For those following Bitcoin, this interview with Gavin Andresen, the 46-year-old lead software developer for the Bitcoin project in today’s Wall Street Journal should be of interest.
“The chief scientist for the digital currency talks about its appeal - and pitfalls - in a world of fiat money.”
WSJ's Primer on Bitcoin:
Highlights:
As for the upside, small online merchants would welcome a global payment standard. For this reason Bitcoin or a similar technology could threaten the power of not just central banks, but banks, period. Unlike online payment services that give people with credit cards easier ways to transact business, Bitcoin works best when avoiding the traditional financial system completely.
And
Politicians and their appointees are entirely cut out of Bitcoin’s monetary loop. This is a significant difference between Bitcoin and government-issued fiat currencies. Federal Reserve Bank of Dallas President Richard Fisher calls the U.S. dollar a “faith-based currency.” In other words, its value rests on the belief that the government will not print so many dollars that each one becomes nearly worthless.
And
This [deflation that is predicted to be a consequence of Bitcoin’s fixed nature ] is portrayed as a recipe for economic disaster by those who like to inflate currencies to relieve the burden on borrowers, including spendthrift governments.
It’s true that deflations have sometimes accompanied economic disaster, but also economic triumphs. For example, in “Money, Markets & Sovereignty,” Benn Steil and Manuel Hinds describe the second phase of the Industrial Revolution in the U.S. between 1870 and 1896. Prices fell by 32% over the period, but real income soared 110% amid robust economic growth, expanded trade and enormous innovation in telecommunications and other industries.
The conclusion:
It’s almost time for Mr. Andresen to get back to work. He shares some useful advice about Bitcoin: “I tell people it’s still an experiment and only invest time or money you could afford to lose.” If only investors could as easily follow that advice with fiat currencies.
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Neither
Amen
Yep. FRNs and BTCs can mean diddly squat tomorrow. I can hold in my hands and even eat food. You'd like a nice handful of granola or almonds when the almighty grocery store is no mo, I'm sure. 2x4s and plywood are useful as well, for building lots of shit. Oh, you need power tools? Too bad, Mr. Hasiteasy, electricity is only for the elites.
Expect mediocrity, prepare for absolute shit.
Keep your gold. But when it's time to buy more ammo, would you rather send BTC or USD to wal-mart? That's all I'm sayin'.
Why is there a photo of a person holding up a BitCOIN? I thought it was virtual money. Is that BitCOIN made out of silver? Even BitCOIN nerds can't get away from PHYSICAL COINS.... RIGHT?
https://www.casascius.com/
http://www.geek.com/news/casascius-gorgeous-physical-bitcoins-that-have-...
https://en.bitcoin.it/wiki/Casascius_physical_bitcoins
..etc.
A. Bernanke
B. Bitcoin
C. Trick question
Meanwhile, CCTV2 runs a 30 minute pro-bitcoin segment.
http://tv.cntv.cn/video/C10329/e5ee4fe9a62b4b24b1080327faaafcb7
Jeez do we have any lovers of free enterprise here, I don't trust or understand bitcoin but i am all for it and any person who values liberty should be all for it as well. In a perfect world we would have private competing currencies, shit I hope every day there is new one popping up (and a shitty one shutting down). Lets have digital currencies, bank notes, letters of credit, coinage, and of course PM's plus whatever the else we can think up.
let free people decide through their actions what is the best currency and the more we have the better!
I like the fact that the 10 BTC 'coin' is made out of silver, and "weighs a little over an ounce".
Here's the question:
10 BTC = 1 ounce of silver *(according to their values), while BTC currently is at $111, and silver is at $24.13.
SO, does that mean silver is undervalued, and should be priced around $1,110?
OR, is bitcoin overvalued, and should be priced around $2.41?
Caveat Emptor.
Yeah it makes no sense to stamp the "BTC" number into the coin - kind of like how my one ounce government-issued gold coin has "$50" stamped in it. Bitcoin is a free-floating virtual currency. Obviously the makers of these coins don't understand how or even what Bitcoin is - much like the government doesn't understand what gold is.
THE ONLY THING THAT SHOULD BE STAMPED ON A COIN IS THE WEIGHT AND PURITY BECAUSE THAT IS WHAT IT'S VALUE IS.
couldn't agree more,
as long as the fake market created by and for the Banking Class to manipulate perceptions of worth/wealth, then let the metals steer clear of stamped "price" - put a nice bit of art on 'em if you like, but no deliberately confusing notions of "worth"
seeing a "bitcoin" coin, well that's just hilarious. jump'd the shark BC boyz.
No one will steer clear though ... fractional reserve banking has nearly as much tradition behind it as gold as currency and no one had to put a gun to people's head to put their gold into those banks and start using gold certificates rather than gold.
All it ever took and all it will ever take is interest.
Just wait until "money multipliers" become "money dividers". That should put things back into perspective for 99.999999% of the population.
If all it takes is interest, then you've just made the case for pulling everything you have OUT of banks - 'cause they're sure not paying any interst on the funds you've entrusted to them....errrr the funds you've 'lent them' or is it considered an 'investment' now..... in any case, you've also been warned that anythign you have in a bank is now at risk if it fails (TBTF or not), despiute wha the FDIC may promise.....
"Obviously the makers of these coins don't understand how or even what Bitcoin is..."
...the fuck?
A Bitcoin value on a casascius coin is the "weight and purity" of that key on the network blockchain.
It is you who don't have a clue what you're talking about in the first place, not that that's at all unusual in Bitcoin threads on ZH...
The coin is double-backed. You can use it for its BTC value, OR its silver value, whichever is MORE. This provides enhanced stability from the volitility of the BTC, and to a lesser extent, silver markets.
Why would you want your 1 oz gold coin to be ONLY 1 ounce of gold, when it can be a weight of gold, AND a number of dollars?
The complaint should be that you are not free to use gold coins as currency based on either value, rather than lementing the fact that the gold coin has a dollar value stamped on it.
I'd like to see the look on the guy's face behind the counter at a coin shop or bullion dealer when someone takes a gold or silver casascius coin in to redeem metal value in the event Bitcoin goes into the toilet.
Caveat emptor no doubt.
Are they assayed and stamped for purity would be the next question.
Here's a hint to you all if you don't feel like prepping, but still own useful things...
~~~
2X4's [listed above] are the cheapest and most standard of lumber... But their main utility is in framing & struts... Most of you wannabe farmers out there couldn't grow a fucking dandelion if you tried [unless you're blessed with great soil]... So here's the 'starter kit' where you can construct frames for SQ FT gardening [which can be assembled ANYWHERE ~ even on the roof of apartment buildings]... The thing is, you can store these 'materials' in a garage or shed & not bother putting them into play until you really need them...
- 2x12 lumber [or, 2x6]... If you're building frames, at least 12 inches of depth is necessary [a little more is better if you want to create a nice drainage well]... You also want to think about workability... 3x3 [feet] is a nice dimension & fits well with the sizes of other materials... Therefore ~ if you're gonna cut your lumber into 3' pieces, don't do something stupid & buy 8 or 10 foot lengths, get 12 [except if you're DC Fusor & cant put a ski rack on your Chevy Volt]... Simple math is that (2) 12' 2x6's, which will cost you about 5 or 6 bucks, will build one 3x3 frame... How many you build depends on how much space you have & what you want to grow... The 'hillbilly' solution to this is to buy a bunch of plastic 'kiddie pools'... You can punch holes in the bottom for drainage &, well, they work...
- Hammer & nails [in a powerless world]... Deck screws [get the 3"] in a power drill world
- I highly recommend corner struts you can buy [a little pricey ~ but the simplicity in assembly is worth it]... Otherwise ~ you can experiment with corner assemblies...
- Various lengths of hoses [& a whole shittin' lot of them depending on how much you need to irrigate... The longer term solution is to have 3/4" PVC piping [plus boxfuls of various couplings & valves]... This will help automate your irrigation needs... Some 'soaker' hoses should be in that mix as well as well as faucet Y splitters & manifolds...
- a bunch of 32 gallon trashcans [which are stackable in storage]... Plus, a bunch of 5 gallon plastic paint cans... These are versatile for many things from planting, to composting, to holding water, soil, & even doing weeding...
- A bunch of bags of Perlite, or Vermiculite... [help starter seeds]
- Some basic fertilizers [liquid & pellet], & a couple bags of limestone
- some commercial grade weed block rolls [this is actually to put UNDER your soil beds, whereby you can contain soil but allow drainage]
- a few rolls of burlap [various uses]
- some transparent plastic bins [mini greenhouses for when the weather is changing]
- trays & trays of plastic planting cups of different sizes [you can usually get these for free if you hang around nurseries or the garden dept of HD or Loews]...
~~~
2 is one & one is none
Am currently using Sweet Gum trees out of my woods for raised bed frames. Cost = labor and a few drops of diesel and gas to move and process. I use the tree limbs to make stakes to hold the logs in place if I want to stack them.
This saves me gas for the round trip and the need for d0llars to purchase lumber to create raised beds.
Also - hit-up your local businesses for their trash cardboard (read: free) - makes good sheet mulch and worm food.
I use the cardboard as weed block [but you're right about the worm bed part]... Newspaper works fine too... Just grab all those free press CITY newspapers that they usually have at grocery & liquor stores... With a nice machete & bow saw, you can get all the branches & limbs you want for poles...
Bamboo is best... If you can locate a bamboo forest patch near your home you're golden... Don't forget twine, rope & various string as well... Zip ties are also golden... I'm leaving out a bunch of stuff here... Another freebie I've put to use are those plastic trays that beverage manufacturers use to deliver product [made of hard plastic]... The owner of a liquor store near me just stacks them up behind his store... He told me I could take anything I wanted... They give about 2-3 inches of structure, so I turn them upside down at the base of my raised gardens [which have a H20 container underneath], lay some weed block over top, then put the soil in... Guaranteed drainage & H2O conservation... It works great...
Or just save time and buy two years worth of food and enough PM to procure the rest.
You'll go nuts unless you can add some freshness & zest into any scenario...
Habañero pepper sauce.
You would not believe how many sauces and spices I have stashed.
"Simple math..."
(2) 2x6x12's make a 6x6 raised bed, guy.
And soil should be 1/3 peat, 1/3 vermiculite, and 1/3 perlite.
unununium
+ 1 That's it! CA$H and gold. Spend cash on ammo (food, etc.), keep the gold for your kids.
The major issue is shelf life. Food and lumber has a limited shelf life, as do almost all commodities. Capital accumulation is essential for capitalism, for retirement, for economic advancement. This is the trajedy of our current situation, that the authorities are literally killing the system responsible for the huge improvement in the human condition...capitalism.
I understand the time sensitivity of perishables, but even ants know that you aint making it through winter without that stash of grub.
If you're storing food ~ you'd better think about 'mouse protection'...
^ love cats ^
= )( =
cats work :-)... better add some catnip to your garden space...
Mama barn cat had her 6 kittens out today in the orchard. I walked out an hour ago and there were 2 rabbit heads left on our front door welcome mat. Thank goodness we had no guests come but they are getting used to macabre decorations that occasionally pop up during visits. I walked down to the orchard and saw the remains of the bodies being voraciously fought over. Momma cat trots over to me with an air of pride for her progeny and requests acknowledgement for the gift. Her eyes are just slits as I scratch her chin and I detect a soft guttural purr.
Miffed;-)
Dito.
I'll stick to my PM's untill thhe day they can print those.
Neither is the correct answer. Why ? Both are worthless collections of electrons and atoms, uselessly arranged, in a world that does not need them.
Government and industry have joined to take the fruits of the peoples labor worldwide. Anything that helps to starve the fascist beast is good in my opinion.
Bitcoin is the bankers's worst nightmare. EVIL HAHAHAHAHAHAHAHA.
Prove to me that banksters are not behind the Bitcoin.
They are shutting down BTC exchanges' bank accounts. How's that? They effectively killed Bitfloor and are affecting Mt Gox.
Not to mention a half-dozen other exchanges in Europe.
I think there is a credible argument a government is behind bitcoin, but an equally credible argument that it was just Satoshi in the beginning. But in both cases, bankers were out of the loop and not wanted in the system, which is why you see so much posturing by mainstream banking in the anti-bitcoin camp.
Why government would create something, which they can't control? Bitcoin is open source and a flaw or back door would have been discovered years ago.
There are certain agencies within the government that have a need to pay for things that may or may not be legal surrepticiously. This used to be done with cash but that requires physical interaction. Also, other agencies may have been worried about the development of a competiting system and felt that issuing their own to prempt this might have made more sense.
While governments like control, they dislike other governments having control even more. It's entirely reasonable they'd make a premptive move.
We'll never know for sure. Bitcoin developers that were close to Satoshi before he disappearred lean towards him being a brilliant, but shy lone individiual with a healthy dose of paranoia, but don't dismiss that it was a government plant out of hand. (If it was the government, I would suspect the NSA.)
My personal belief is Satoshi was a genius lone wolf. But others think otherwise: http://www.nasdaq.com/article/legendary-vc-paul-graham-suspects-bitcoin-...
So it was either created by evil governments or evil governments will destroy it..
you all are fucking fit to be buried.. why even come to this site? You can't order MRE's or Ammo here.. or even gold and silver.. I just bought gold with bitcoins and a lot of other things.. at some point you'll realize you are the sheep that won't walk out of an open gate
a bunch of broken men
In Canada ScotiaBank will no longer deal with Bitcoin. And some banks are closing the accounts of people who move their money into Bitcoin.
I own some. It's more a political statement right now. As is owning PMs. Which I do.
Fool, you cannot prove a negative. Ask Saddam Hussein.
For every negative, X, assume double negation of X, apply Law of Double Negation Elimination, ergo X for any X. QED.
Assume the double negation that it is not, apply Law of Double Negation Elimination. Ergo they are not.
i will do so, as soon as you prove that banksters are not behind the statement that you just posted.
He should have thrown the gold etf in there if he was having a piece of shit contest.
I trust Au and Smith & Wesson.
Don't forget Ag & Springfield
Au, Ag and Remington!
Vlad Tepid,
Slight correction: First I trust Glock and than Ag.
that's what i wanna read
Is this some kind of trick question? Do I trust "fair" or "rigged"?
Kudos to the WSJ for mentioning deflation in a neutral light. Of course deflation is actually an excellent thing; they'll get there someday.
Speaking of voting, vote for Dropbox to support BTC payment
https://www.dropbox.com/votebox/6425/buy-storage-with-bitcoin-e-currency
"I tell people it’s still an experiment and only invest time or money you could afford to lose.” If only investors could as easily follow that advice with fiat currencies."
experiment???? only invest what you can afford to lose?????
with that which has been what it is for 5,000 years there is no experiment and there is no losing....
There r only 2 forms of money....Physical Gold and Silver
Gold and silver are just two very good barter commodities. There are a host of other items common and precious that will also fit the definition of "money". Not trying to argue, but diversification of your barterable goods is not a bad strategy.
" According to Herodotus, the Lydians were the first people to introduce the use of gold and silver coins. It is thought by modern scholars that these first stamped coins were minted around 650–600 BC."
and...............
"The history of Joseph affords evidence of the constant use of money, silver of a fixed weight. This appearsalso in all the subsequent history of the Jewish people, in all theirinternal as well as foreign transactions. There were in common use intrade silver pieces of a definite weight, shekels, half-shekels, andquarter-shekels. But these were not properly coins, which are piecesof metal authoritatively issued, and bearing a stamp. Of the use ofcoined money we have no early notice among the Hebrews. The firstmentioned is of Persian coinage, the daric (Ezra 2:69; Neh. 7:70) andthe 'adarkon (Ezra 8:27). The daric (q.v.) was a gold piece current inPalestine in the time of Cyrus. As long as the Jews, after the Exile,lived under Persian rule, they used Persian coins. These gave placeto Greek coins when Palestine came under the dominion of theGreeks (B.C. 331), the coins consisting of gold, silver, and copperpieces. The usual gold pieces were staters (q.v.), and the silvercoins tetradrachms and drachms."
There r only 2 forms of real money...
Kaiser Sousa,
No argument here. Egyptian Pharaohs were recognized the value of gold a couple of thousands years before that. Some excavation showed pharaoh buried in silver coffin. The commentator stated at that time silver was worth half of gold. (about 3000 years ago).
Gold, and cat helmets.
I invested heavily in silver, and so far I am losing money. No losing is bullshit from the priviliged who do not recognize that some people are forced to sell in the bad times.
Funny, I've never seen bitcoin in the bible anywhere...
Or ANYTHING modern, for that matter. Damn Christian fundamentalists...
Or ANYTHING modern, for that matter...
Matthew 13:44
“The kingdom of heaven is like a treasure hidden in the field, which a man found and hid again; and from joy over it he goes and sells all that he has and buys that field."
Sounds pretty applicable to todays environment to me.
jmo.
Agree.
Or how about:
Render to bernake that which is bernake's and to God that which is God's
Well there was also no mention of Jesus... in the Old Testament.
It is true that you can stick to what is already known and be just fine, but every once in a while something completely new happens and refuses to go away.
Check again, major and minor prophets. The entire point is that Jesus supposedly fulfilled the prophecies.
Au, Ag, Sustanance, Pb and Long XAU/JPY - XAU/USD - XAU/EUR ad infinitum!
http://www.youtube.com/watch?v=deuC8GPr31A
Thanks. Don't forget the Xau Vietnamese Dong pair!
If somehow there could be an oil-based currency the financial system would take care of itself.
Hi dryam, there is an oil backed currency - the dollar.
That's what we are meant to believe. However, some think more deeply and research accordingly.
Gold is currently the money which buys oil. QUIETLY. (More accurately, a flow of gold into the right hands ensures a good supply of oil denominated in dollars.)
No real proof but from 1954 to 1971 the price of oil and gold was constant.
After 1971 gold and oil track each other resonably well and still do. I expect the recent drop in spot price for gold, if maintained, will result in lower oil prices.
However, I bet you knew this. The US Govt is in a real mess. They need a reasonably high dollar price for oil so the world has a reasonably high demand for dollars. The problem is a reasonably high oil price kills the global economy which only functions well with cheap oil.
No real proof but oil went from 20 to 30 bucks a barrel to 100 which caused much stress in the global economy. In 2007 oil hit 140 bucks a barrel and the global economy died. The increase in oil price corresponds with the increase in gold. Could be a coincidence?
Time will reveal the link between gold and oil. Or I could now.
70 million barels of oil a day (consumed). 7 tonnes of gold a day (mined).
70 million barrels of oil / 7 million grammes of gold = 10 barrels of oil per gramme of gold.
Or 300 barrels an ounce.
All the remaining oil in the ground for all the remaining gold in the ground. Who would deny the oil producers that?
It isn't quite that simple yet but things can change real quick.
For those who only understand the price of things in dollars and not the value of things, let me explain.
One $1500 American gold eagle today could easily have the purchasing power of 400 barrels of oil tomorrow. If you want to price oil at $90 a barrel then 400 * $90 is $36,000
I haven't mentioned silver. I like silver. Oil producers like gold. Get over it.
The global economy is a game for a powerfull few. It is a bit like poker. Perhaps the oil producers will settle for half the mined gold for their oil. The gold eagle then gets you twice the oil. Again for the dollar blind muppets, that's a price of $72,000 per gold eagle.
The problem is, once gold is globally accepted as the 'oil based currency' then the dollar no longer has reserve status. This could cause difficulties. Someone with $72,000 mght well struggle to buy a gold eagle. At that point one million dollars US wouldn't buy any of my Gold Brittanias.
the dollar was backed by oil and now it is backed by bombs
The fight will commence between USD vs. BRICS.
Mystery solved. IMF, BIS and World Bank will scream like a child whose pacifier fell out of the crib.
E-Trade Baby Loses Everything
/LOL
The most interesting thing that I have read about the bit coin is from small businesses who use it because they can avoid the 3% transaction fee that they have to pay to banks when they use their credit or debit cards. I wonder how much of that 3% fee is net profit for the banks?
How much damage woud the credit card banks take if they could only charge say 0.5%?
The entire credit card system is a massive revenue source for the banks. Not only the 3% fee to the merchants, there's card fees, interest, penalties. They make so much from credit cards that they can afford to absorb the fraud costs because it's cheaper than upgrading the system. Some banks, BofA in particular, actually encourage credit card abuse leading to charge-offs and debt sales, because they've rigged their accounting to be profitable from that, too.
A key to bank profits is creating credit out of thin air, which is what credit cards do. Bitcoin doesn't, the transaction fees are limited, and there's zero risk of chargeback or conventional steal-the-account-number fraud. I know the haters here will dismiss bitcoin as an investment or a store of value, but it's a nearly perfect trasactional currency online, and with a small amount of infrastructure, offline as well.
Why do bankers fear Bitcoin like the third rail? Because Bitcoin flies in the face of Fabian Socialist Keynesianism with its commitment to wipe out Christianity, to wipe out free trade with monopolies, to wipe out the middle class small businessman, and to set up an international socialist One-World-Government.
Bitcoin philosophy is the antithesis of the proposal by reliable Keynesian economist most beloved by the media, Paul Krugman, to have the federal government simply create a platinum coin with a face value of $1 trillion that would immediately be deposited at the Federal Reserve with the sum credited to the government’s account. “And the government could then write checks against that account, continuing normal operations without issuing new debt.”
That’s creating money for nothing, pure and simple, with the emphasis on the latter.
As Ron Paul said, it took Professor Hans-Hermann Hoppe just a few short sentences to point out the obvious: If the governments or central banks really can create wealth simply by creating money, why does poverty exist anywhere on earth? Why haven’t successive rounds of quantitative easing by the US Fed solved our economic recession? And if Fed money creation really works, and doesn’t create inflation, why haven’t Americans gotten richer as the money supply has grown?
Says Paul: “The truth is obvious to everyone. Fiat currency is not wealth, and the creation of more fiat dollars does not mean that more rice, steel, soybeans, Ipads, or Honda Accords suddenly come into existence.“
But it can create a Marxist welfare and surveillance state as intended by the Fabian Society’s founders, Sidney and Beatrice Webb (Beatrice also was co-founder of the London School of Economics and Political Science). And if there is one institution more closely connected to central banking, I don’t what it what it is.
And, it can enable the Fed’s cabal of private owners to dictate the economic and political life of all peoples in America and Europe and to decide who will be the ultimate owners of all those nations’ industrial and commercial undertakings, i.e., mainly themselves.
You know what? It’s all fraud. And as Ron Paul told attendees recently at the Mises Circle Lecture in Houston, “There will be a day when the Fed will be ended.”
http://knowmadiclife.com/blog/2013/4/27/the-battle-against-bit-coin
Neither Bitcoin nor Bernanke: two sides of the same shit.
I will trust bitcoins when they are shiny, silver and fit in my pocket.
False choice - I'm not falling for it. Gold is just fine, thank you.
Neither. What kind of choice is this anyway?
Au and Ag... for the win.
Bitcom will end as the confiscation of Liberty dollars arose.
Feds raid Liberty Dollar offices
Different year, same outcome.
Yup. Same as it always was. Competing currencies are, shall we say, 'frowned on' by the monopoly. Even non-threatening ones. Bitcoin is especially dangerous, because it was designed to be electronic, portable, anonymous and international. Genius, really. I genuinely fear what lengths the monopoly might go to to stop it if it really posed any kind of serious threat. Political risk is not to be taken lightly with this product. Oh, I'm sorry, did I say product? I meant 'currency' (yeah, good luck with that) ;)
How governments wanna confiscate bitcoins? Waterboarding every citizen who might own a brainwallet?
This is one of the main reasons cited that Satoshi remains anonymous.
However, unlike the Liberty dollar, bitcoin can't be confiscated. It's a ledger entry, one duplicated across millions of systems in hundreds of different political jurisdictions. It can be harrassed, and suppressed, via interfering with the interaction with the existing banking system, but it can't be confiscated without shutting down communications globally.
The outcome will be different than LD. It may not be more favorable, but it will certainly be very different by the very nature of how bitcoin is constructed.
I wonder if playstation network will ever start accepting bitcoins. Maybe then I can afford my virtual kitchen set in my virtual gold mansion on my playstation home™ account.
Maybe after Yen collapses, Sony and the rest of the Japanese will rush into BTC.
When I heard Al Gore was a "big fan of BitCoin," a red flag went up for me.
When I heard Al Gore was a "big fan of BitCoin," a red flag went up for me.
Even if it is true , not to the extent that he accepted payments from AlJazeera for his Current network in bitcoins...
To answer the original question: Neither. In Gold I trust.
Neither. I trust PM's and good quality agricultural land with fresh water access.
1. Bitcoins don't scale. i.e. it works ok with small numbers of users but doesn't work with very large numbers of users.
2. There is nothing about Bitcoins that would prevent banks from loaning them out. In exactly the same way you don't touch physical paper when making a transaction, you wouldn't come in contact with the Bitcoins. You would simply using bank credit exactly as you do now, but backed to some fraction with Bitcoins.
i.e. Bitcoins don't change anything and frankly aren't technically good enough anyway.
Your Pt.1 isnt a point, you make an assertion but dont even bother with an example, let alone any evidence. I would say that the more people who use BTC, as with any money - then the more useful it becomes.
As for Pt2. if they lend you something that is not BTC, and people only accept BTC - the value of what you borrowed is zero. In other words, they will need to lend you actual BTC - which means they cannot fractional reserve it. Only if they are able to introduce another currency and convince people it is the same as BTC (as was previously done with dollars and gold) could they begin fractional reserve.
Due to the prior logic being unfounded, your conclusion is also unfounded - your throw away 'arent technically good enough' has no support anywhere in your previous text, and seems purely a subjective opinion.
1. All transactions are stored in the block chain which has to be distributed to all processors. Without the entire chain (an orphan or invalid chain), your transaction is invalid. This doesn't scale. Not even close in a peer to peer environment. You plan to centralise it? Because that is the only way it can be made to work. This turns the block chain into nothing more than a centralised set of accounts. i.e. exactly where we are now.
2. Don't be ridiculous. Of course they lend out real Bitcoins. How the hell do you think they did it with gold? They lend out the real thing, fractionally reserved. 99% of the population will never touch "their" bitcoins and will be happy leaving them with the bank and making do with credit.
Bitcoins don't solve any problem.
Bitcoin is your typical pyramid scheme, where creators and early adopters hope to get rich in expense of those who come in later. A lot of bloggers where given bitcoins for free to get them promote this scam (so they would have a stake in it). Im surprised it has gone as far as it is and many otherwise intelligent people even promote it, because its clear as day that its your old pyramid scam in new dressing.
Bitcoiners are trying to sell you some worthless strings of characters and convince you that you will be able to sell them to a greater fool for a greater price down the road...
Why do you consider those strings are worthless, when it is even accepted as payment for drugs, illegal weapons, ammo etc.? No buyer would use credit cards, debit cards or cheques to pay for illegal stuff.
You are foolish if you use bitcoins to buy illigal stuff. Bitcoin anonymity is a myth, bitcoin transactions are very trackable indeed... You will be way better off using cash if you want anonymity.
By your definition, Gold is a ponzi too. People hoarded tens of thousands of tons of it, then try to get us to buy a few ounces now that it is worth a lot. Those bastards!
Well, unlike bitcoins, gold have been around and has been valued for thousands and thousands of years. Bitcoins on the other hand have been around for what, 2-3 years? Also, bitcoins are not tangible (just some strings of characters in virtual reality) and have zero intrinsic value (you cant do absolutely anything with them except try to sell them to a greater fool). And the creator of bitcoin doesnt even have decency to come forward... why is that?? if he created such a good thing...
Won't the Legisbankture just pass a law making Bitcoin use illegal, and start imprisoning users?
To me, that is almost guranteed - and when that happens you can say that BTC is starting to reach towards its potential.
The question is - if you could get paid in BTC, avoiding tax - and had a ready market to spend it into and it was increasing fast in value - would you obey that law?
Yours is a rhetorical question, I hope.
Only a fool or an idiot would take that bait.
Peer to peer exchanges.
WHile BTC is new - it is unmistakably money - the only real questions are; is it really counterfiet proof, can it survive against the banksters and will we have a technological future where BTC can survive.
I believe in money, and I know what it looks like - I hold gold and silver, and I also hold BTC.
There are people who try and deride BTC for a range of non reasons, but the opening questions seem to be the only valid issues with BTC.
I think BTC has an excellent chance for success, most of its its monetary properties far exceed those of gold and silver - it does however carry some risks that do not effect PM's - however, its extraordinary monetary properties compensate somewhat for its vulnerabilities.
I trust nothing, and I trust no-one - gold can be counterfiet in bars and coins, BTC may have a backdoor, silver could be confiscated.
BTC has the potential to have more impact on human beings than even agriculture - as it may destroy the domination of the banks - which would destroy the nations (as national govts are merely retail outlets for the banks).
An important monetary property is acceptance - try and buy something with a silver coin and get the spot value for it - for BTC this is the hurdle it will have to pass to reach its potential.
Sadly the ZH crew here can be left behind if you want to march on. I stop by less and less.
Here is a breath of fresh air:
http://www.forbes.com/sites/kashmirhill/2013/05/01/living-on-bitcoin-for-a-week-the-journey-begins/
this hole is dark, stale and dead
Great informational article. Thanks for the cite.
I trust neither
What a fuggin stupid title........as if there is no third, fourth or fifth.......option
There is an infinite number of choices, but such a conversation would take an infinite amount of time. The question is, between these two, which do you prefer?
At least Mr. Andresen is more realistic than Max Keiser who screams "PUT YOUR ENTIRE SAVINGS IN BITCOIN IT IS THE CYBERCHRIST."
that is simply a complete misquote......
Thanks for the plug, Max ! Paper Jihad .... Cyber Jihad .... Comedy Jihad World Tour
One other major benefit of bitcoin is its ability to uncover all the scared dipshit sheep that infest this site.
Talk big and walk small
The ones who keep polishing their guns but will probably hand them over pronto when a heavily armed Swat unit turns up at their door and demands them.
Neither.
An interesting article. But the blogs are even more interesting. They're not educational, but they sure are revealing and entertaining. Keep it coming, boys.
ok zh numpties....which country yesterday downloaded the most bitcoin app's from source forge.... that would be china... and the number would be over 14,000...china national tv did a positive documentary on bitcoin.. ie government approval for our volatile baby bitcoin currency...dont ever say you were not told....
I found doubtfull that cctv did a documentary on bitcoin, but anyway this could be related with the launch of CHN chinacoin reciently on bter exchange? only time will say, it will not surprise me a bit Central banks start their own cryptocurrency. What is there to lose anyway? create a crypro is free, what is an idiocity is buy an alt-coin with bitcoins, you can only lose money.
Learn more about bitcoin in 5 min on my website www.getbitcoins.tk
I will suggest putting your money on Namecoins by the way:
read this:http://dot-bit.org/Main_Page they don't even have a wikipedia article yet,
so i advice to get into the NMC train early!
they will skyrocket as soon as the next halving block happens, in january 2015!.
or if they get into mtgox.
We are the Chinese Communist Government .... we're here to help you !
They should be call "BitBits" .... truth in advertising ? (I'm starting to write like a foreigner ?)
I trust Gold.