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Head Of Fortress Recommends Investing In Bitcoin

Tyler Durden's picture




 

At first glance, when the CIO of Fortress Investment Group says:

"Put a little money in Bitcoin...Come back in a few years and it’s going to be worth a lot."

One might think, the firm that manages $54.6 billion is advocating the end of the USD as we know it... Or is this more muppetry at work?

Via Bloomberg:

“Put a little money in Bitcoin,” Novogratz, principal and co-chief investment officer of macro funds at Fortress, said at a conference held today in New York by UBS AG’s chief investment office. “Come back in a few years and it’s going to be worth a lot.”

 

Novogratz said he sees Bitcoin growing as a payment system, especially in developing nations. Novogratz said he has put his own money in the virtual currency, without specifying how much. He has not invested in Bitcoin on behalf of Fortress, which managed $54.6 billion as of June 30.

 

“I have a nice little Bitcoin position,” Novogratz said. “Enough that I’m smiling that it doubled.”

 

However, color us a little skeptical at his advice...

Given that Bitcoin may ultimately make firms like Fortress - that rely on fiat specie - redundant, then doesn't the endorsement of Bitcoin by one of the world's largest Private Equity firms reek of the ultimate failure of BTC as a monetary construct, and seem much more to be merely an attempt by the firm to herd even more momentum chasers into a trade (ostensibly one for Novogratz P.A.) that will be then unwound with Bitcoins ultimately converted into the same dollar they are supposed to replace?

 

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Thu, 10/24/2013 - 19:55 | 4088503 HedgeAccordingly
HedgeAccordingly's picture

Just like how Greenspan nailed it with housing. ? http://hedge.ly/16453n8

Thu, 10/24/2013 - 20:10 | 4088533 CH1
CH1's picture

Far more important than "investing" in Bitcoin is USING Bitcoin.

Thu, 10/24/2013 - 20:24 | 4088555 ZerOhead
ZerOhead's picture

"Put a little money in Bitcoin...Come back in a few years and it’s going to be worth a lot."


I already have that same strategy working for me with my Bitecoin investments. It's kind of like Bitcoin but it allows the investor to check the quality of the investments by gently biting them between your teeth. On second thought it's nothing like Bitcoin...

Thu, 10/24/2013 - 20:24 | 4088570 swmnguy
swmnguy's picture

I know what you mean.  Except all my bitcoins were lost in that most unfortunate boating accident.

Thu, 10/24/2013 - 20:29 | 4088580 dick cheneys ghost
dick cheneys ghost's picture

bitcoins are InvisIable...........you can leave them on the front porch or in the driveway and no one will steal them

on a side note, Ill bet the author  of this post is buying PM's hand over fist

Thu, 10/24/2013 - 20:50 | 4088644 swmnguy
swmnguy's picture

"on a side note, Ill bet the author  of this post is buying PM's hand over fist"

I have no doubt whatsoever that you are correct.

Thu, 10/24/2013 - 21:06 | 4088693 fonestar
fonestar's picture

The head of Fonestar also advises investing in Bitcoin.

Thu, 10/24/2013 - 21:46 | 4088789 SGS
SGS's picture

muppetry.  LOL and you wonder why I come here 100 times a day.  for everything else, there is faggotry bitches.

Fri, 10/25/2013 - 10:14 | 4089895 auntiesocial
auntiesocial's picture

word of the day: Muppetry. Now go and use it in your everday life. 

Thu, 10/24/2013 - 21:32 | 4088757 CPL
CPL's picture

I had been saving my BitCoins in a jar and tripped.  Glass, 1's and 0's all over the place.

Thu, 10/24/2013 - 22:50 | 4088969 Manipuflation
Manipuflation's picture

How so?  I happen to know about boating accidents all too well and have lost many assets to the bottom of various lakes over the years but I have never figured out how to lose bitcoins due to my boating ineptitude.

Fri, 10/25/2013 - 00:47 | 4089225 BTFDemocracy
BTFDemocracy's picture

Easy. Put Bitcoin wallet on Laptop, bring Laptop on boating trip.

Thu, 10/24/2013 - 20:26 | 4088573 lickspitler
lickspitler's picture

ZH made this up,just to observe the Pavlovian behaviour of the STACKERS. Hang on it turns out it wasn't  a whistle in  Andy Maguire's mouth.

Thu, 10/24/2013 - 21:03 | 4088681 ZerOhead
ZerOhead's picture

Actually it's the NSA that's observing our Pavlovian behaviors... and our STACKING is keeping the global PM miners gainfully employed.

That makes us patriotic JOBMAKERS.

Fri, 10/25/2013 - 01:21 | 4089262 fockewulf190
fockewulf190's picture

Not just the miners, but the dealers as well. FedEx and the like get their small cut of the action also.  The way things are looking, I´ll be using some of my stack to keep my own employees employed.

Fri, 10/25/2013 - 01:23 | 4089261 BenLightYear
BenLightYear's picture

Well which one is it? I haven't logged in for quite awhile. I could no longer take this ridiculous argument. You can not have something as an investment and as a currency. It makes things tricky. Like hoarding. Don't give me the free market crap. Free market theory doesn't work so well when the masses are dumber than shit. The idea that it's an investment because one day it will be a currency is laughable at best. On that note maybe trade in your Iraqi dinars for some btc. For the record I do not dispute the integrity of the BTC system nor the mathematics behind them. It is so clearly a Pyramid scheme. I don't even take issue with it being a pyramid scheme. I take issue with it being treated as something it will never be. An long term investment or a currency.

Fri, 10/25/2013 - 16:12 | 4091240 Exponere Mendaces
Exponere Mendaces's picture

Love the grasping at straws in this "article". They manage billions yet they're fools? Is that the best you can do?

I know its common advice to fade a Goldman reco, but the backbending in this post is a bit ridiculous.

Thu, 10/24/2013 - 20:16 | 4088548 Nothing but the...
Nothing but the truth.'s picture

If the dollar tanks Bitcoin is the first thing the Fed/Treasury will close down.

Thu, 10/24/2013 - 20:19 | 4088554 CH1
CH1's picture

Bitcoin is the first thing the Fed/Treasury will close down

And pray tell... how might they do that?

Thu, 10/24/2013 - 20:49 | 4088639 EscapeKey
EscapeKey's picture

*tumbleweed*

 

On a different note, I notice ZH are now against alternative currencies when it comes to BTC? But Gold is fine?

Thu, 10/24/2013 - 20:57 | 4088663 malikai
malikai's picture

Very pointed.

Very pointed indeed..

Thu, 10/24/2013 - 21:01 | 4088674 Spigot
Spigot's picture

[Esc] , it's part of the psychology of the crowd. Most of the people here are still part of the herd mentality regarding BTC. I stated this a number of weeks ago on another thread. We are still in early adoption phase in terms of BTC. But maybe not for very long...

Thu, 10/24/2013 - 21:33 | 4088762 CPL
CPL's picture

It's good to spread it out you know.

Thu, 10/24/2013 - 22:13 | 4088813 Haole
Haole's picture

Many ZHers don't believe in capitalizing from much except PMs and/or doom.  ;)

Thu, 10/24/2013 - 22:14 | 4088869 F-Tipp
F-Tipp's picture

If you want to make money trading bitcoin, that's one thing. However, in a SHTF scenario, which is the most liquid asset that preserves wealth? I have nothing against bitcoin, it's a great idea and I hope it succeeds. However, I find it is dangerous to advocate it as an alternative currency because it simply exists as data. If your internet service, or power, or hard drive, or any number of critical points fail, you're screwed.

Who am I kidding though. It's not like any government has ever shut down the internet...

Fri, 10/25/2013 - 01:35 | 4089280 Hindsight2020
Hindsight2020's picture

It is not a currency.  It's a protocol to facilitate credit transactions over the internet that can be trusted without the need of a third party.

Fri, 10/25/2013 - 06:16 | 4089418 StandardDeviant
StandardDeviant's picture

Well, to address your second point first, the fact that BTC "simply exists as data" is one of its strongest features.  You can (encrypt and) back up your BTC on a laptop, a memory stick, a cloud service, or any number of other storage devices, located in your pocket or on the other side of the world.  Much as I like the shiny stuff, it's not nearly as easy to protect.

As for the SHTF scenario, that depends on which SHTF scenario you're thinking of.  If civilization collapses all over the world, repressive gov'ts shut down all network connections everywhere, mobs chase bankers down the street with pitchforks, fire and brimstone, cats and dogs living together, etc., then no, your stack of BTC probably won't help.

On the other hand, if (as seems likely) TSHTF in a more localized way, a few BTC could be a really good thing.  If you lived in Cyprus, and had your bank account frozen and looted, or in Argentina, and woke up to find yourself subject to capital controls, you'd probably see the attraction.

And if you wanted to move your wealth from one country to another, you wouldn't have to worry about any of this nonsense about declaring currency in the excess of $10,000, or about a luggage X-ray picking up all those dense bits of metal, or about larcenous baggage handlers, or...

Fri, 10/25/2013 - 07:08 | 4089458 Urban Redneck
Urban Redneck's picture

The shiny physical stuff isn't any more difficult to "actually protect".

Even of you backup your bitcoins with pen and paper, they are only safe as long as the NSA can't break into your computer and compromise your wallet and spend your bitcoins before you realize the IRS wanted some "tribute" from you, and the rest of the bitcoin world readily and happily admits you are no longer the proud owner of said stash of bitcoins.

If the government wants to come after "you" they will. They have over two hundred years of experience in developing methods to successfully extract physical and fiat wealth from disgruntled debt serfs

The experience honing their methods at extracting digital wealth is more limited, but if SWIFT, ACHAs, Visa/Mastercard/Amex, Western Union and the MTAs, or even the Equity and Derivative Exchanges are any guide, it's a question of when the benefit of devoting resources exceeds the cost of doing so (in their not-so-humble-opinion).

The long arm of the law isn't handcuffed by the self-identified vulnerabilities of wiki post, or even the boundaries of the "digital" world.

I would grant you that if one was a "little fish" they might be more safe for the time being... but since that has to be qualified by not using Microsoft, Apple, or Android products; not using any backup "service" like Carbonite or Google; disabling a lot of web functionality that many people find important to their online "experience"; not connecting to certain networks with any computer that might house their bitcoin "data"... the list goes on, and on, and on to the point of rendering such a statement meaningless.

Fri, 10/25/2013 - 01:29 | 4089269 fockewulf190
fockewulf190's picture

Gold is money. Bitcoin is essentially backed with the same stuff the rest of the world`s currencies are backed with.  Nichts. 

Fri, 10/25/2013 - 08:55 | 4089649 Nothing but the...
Nothing but the truth.'s picture

CH1 - By federal government order. You have clearly forgotten the confiscation of gold in Americas past.

Thu, 10/24/2013 - 21:09 | 4088706 Kirk2NCC1701
Kirk2NCC1701's picture

Bernanke: "The enemy* of my enemy** is my friend.  I love the divide & conquer routine"

Fuck you, Ben!

 

* Extreme Gold Bugs

** Cyber-currencies

Thu, 10/24/2013 - 19:55 | 4088504 ACP
ACP's picture

Did the Twinklevoss brothers join Fortress?

Thu, 10/24/2013 - 20:57 | 4088661 Spigot
Spigot's picture

Regardless of the Twinkie Bros, this is game on, my friends. Social acceptance of BTC within the main stream Financial community is progressing at warp 9. Damn it all! Couldn't they have waited a few moar months?? Shit.

Thu, 10/24/2013 - 19:55 | 4088505 AldoHux_IV
AldoHux_IV's picture

all fair questions, but also could be more disinfo-- either way, the premise of being decentralized & now being claimed: China now bigger than MT Gox raises more suspicion i.e. how does a limited supply of currency remain "decentralized" & not subject to one big market player?

Thu, 10/24/2013 - 19:59 | 4088511 hmmmstrange
hmmmstrange's picture

Easiest way for China to kill the USD is drive up bitcoin to $100,000 in a month. Ben can't print bitcoin.

Thu, 10/24/2013 - 20:06 | 4088527 AldoHux_IV
AldoHux_IV's picture

pre-supposing that China wants to kill the USD, what's to stop the fed/banking cartel to start buying up BTC-- like an arms race of sorts which then negates the whole concept of BTC or at the very least decentralized currency

Thu, 10/24/2013 - 20:10 | 4088535 CH1
CH1's picture

what's to stop the fed/banking cartel to start buying up BTC

WOW - that would be wealth transfer in the right direction for once!

Thu, 10/24/2013 - 20:22 | 4088564 AldoHux_IV
AldoHux_IV's picture

not sure I follow-- if they can print unlimited dollars to buy BTC, why not just buy up the whole supply or any other country for that matter? How would that be a wealth transfer in the right way?

Thu, 10/24/2013 - 20:49 | 4088642 Freewheelin Franklin
Freewheelin Franklin's picture

But they can't print unlimited dollars. And even if they did buy up all of the bitcoins, then someone could create another digital currency like Litecoin. And the Fed will have to print money to buy up all of them.

 

Hey. That's a great way fto get the Fed to destroy the dollar. 

 

 

Fri, 10/25/2013 - 00:57 | 4089232 BTFDemocracy
BTFDemocracy's picture

The Fed buying up all Bitcoin implies everyone is willing to sell their coins, but limited amount are willing to sell when the price is going to the moon and beyond.  The price is set at the exchanges, by amt of willing buyers and sellers at said exchanges. Fed buy-up induced appreciation will limit sellers, liquidity will dry up and force price to the moon; Fed can't just go and buy up all Bitcoins.

Even with these flash-crashes in Bitcoin, the 'weak' hands actually believe enough in Bitcoin to hold them- by so understand the philosphy, architecture, etc., and even if they live in the moment for a quick buck, they quickly buy back into bitcoin because they don't want to be left behind when the money train leaves for $300 and beyond. Apart from the mega-bubble during spring 2013, any flash crash has rebound very quickly.

Thu, 10/24/2013 - 21:36 | 4088665 One And Only
One And Only's picture

"if they can print unlimited dollars to buy BTC, why not just buy up the whole supply or any other country for that matter? How would that be a wealth transfer in the right way?"

I have BTC and if Ben wants them he's gona pay me a lot of money for them ----> wealth transfer in the right direction

But Ben isn't going to do this. If anything the government (or FED) will first inflate bitcoin buy buying a shitload of it at high prices and then dumpiing it all burning all investors on the way down and torching their confidence.

Fri, 10/25/2013 - 00:45 | 4089223 AldoHux_IV
AldoHux_IV's picture

but the wealth transfer comes back via circle jerk towards dollars-- thus illusory wealth transfer-- your 2nd point I can see, but not that I'm against BTC-- just doesn't make sense.

Thu, 10/24/2013 - 19:57 | 4088507 lemonobrien
lemonobrien's picture

i only put my money in golds and silvers... cause i'm a programer with 25 years experience (longer that internets).

Thu, 10/24/2013 - 19:58 | 4088510 XenoFrog
XenoFrog's picture

A much wiser investment. Keep stacking and let the fools bet on the get rich quick schemes.

Thu, 10/24/2013 - 20:21 | 4088558 lickspitler
lickspitler's picture

XenoFrog , out from the bushes to pronounce BITCOIN dead for the 7th time. 

Thu, 10/24/2013 - 22:04 | 4088840 XenoFrog
XenoFrog's picture

Never pronounced it dead, even now. There will always be some true believers willing to catch the knife.

Thu, 10/24/2013 - 22:45 | 4088906 Bunga Bunga
Bunga Bunga's picture

Looks more like we had most knife catchers in gold and silver over the last year.

Thu, 10/24/2013 - 23:03 | 4089003 SpykerSpeed
SpykerSpeed's picture

Your hands are bloody from all that gold and silver you've been catching.  ;)

Thu, 10/24/2013 - 23:11 | 4089034 XenoFrog
XenoFrog's picture

What gold and silver? I lost all mine in a boating accident.

Thu, 10/24/2013 - 23:25 | 4089076 SpykerSpeed
SpykerSpeed's picture

LOL

Well let's hope you can find it when it comes time to spend the stuff.  Assuming any businesses choose to accept gold.  Tens of thousands of businesses already accept Bitcoin.

Also, let's hope you can get your gold through the TSA checkpoints.  I hear they have a little technology called "metal detectors" nowadays.

Thu, 10/24/2013 - 23:50 | 4089141 XenoFrog
XenoFrog's picture

HAHAHAHAHAHAHAHA

Thu, 10/24/2013 - 23:55 | 4089151 Scarlett
Scarlett's picture

 

 

Sorry Xenofrog, but you have to learn "Scam", then "Ponzi", then "Pump and dump", then "Junkies", then "safehaven", in Madarin and Cantonese RIGHT NOW!  

 

RUN XENOFROG RUN!!!  

 

You just might lose control of the narrative, Xenofrog, if you don't.

Thu, 10/24/2013 - 20:53 | 4088650 EscapeKey
EscapeKey's picture

I think we all should take investment advice from you, especially seeing how dead-right you were in regards to BTC collapsing in the wake of Silk Road's disappearance.

Thu, 10/24/2013 - 20:59 | 4088671 malikai
malikai's picture

LOL

Thu, 10/24/2013 - 21:04 | 4088685 Spigot
Spigot's picture

parare, thrust, set, match

Thu, 10/24/2013 - 21:41 | 4088779 XenoFrog
XenoFrog's picture

I'll wait right here while you find the quote.

Thu, 10/24/2013 - 22:41 | 4088888 Haole
Haole's picture

How do you even show yourself in Bitcoin threads anymore?  Never missing an opportunity to pad your reputation on the subject as being 100% XenoWrong for quite a long time now. 

 

 

Thu, 10/24/2013 - 23:04 | 4089005 SpykerSpeed
SpykerSpeed's picture

You'd think he would have created a new account by now.

Thu, 10/24/2013 - 23:16 | 4089048 XenoFrog
XenoFrog's picture

I've been around longer than you, and will be around long after you lose your bitcoins when a hard drive crashes or you misplace your flash drive.

Thu, 10/24/2013 - 23:27 | 4089084 SpykerSpeed
SpykerSpeed's picture

I have my Bitcoins stored as a memorized phrase in my head.  With a backup paper wallet at an undisclosed location.

Can you do that with your metal?  Oh, wait.  You lost it in a boating accident.  Hilarious.  Haven't heard that joke before.

Fri, 10/25/2013 - 00:16 | 4089181 Clowns on Acid
Clowns on Acid's picture

Alsenhimers will deprive you of that bitcoin then. Gold is shiny... you'll find it.

Thu, 10/24/2013 - 23:14 | 4089045 XenoFrog
XenoFrog's picture

It's quite enjoyable how you just declare that I was proven wrong about something and expect it to be fact.

What was I wrong about?

Bitcoin is still the scam it was a month ago, a year ago, etc. It'll still be a scam a year from now no matter what the amount you manage to con an idiot out of to purchase one.

Thu, 10/24/2013 - 23:29 | 4089087 SpykerSpeed
SpykerSpeed's picture

The "scam" is doing for free what Western Union charges billions of dollars to do - transmit money to anyone in the world, instantly.

Fri, 10/25/2013 - 01:44 | 4089287 Bay of Pigs
Bay of Pigs's picture

Nice to see you two fucking PM trolls at once here at ZH. Just fantastic.

Thu, 10/24/2013 - 19:59 | 4088513 jomama
jomama's picture

nty.

Thu, 10/24/2013 - 20:05 | 4088524 TeamDepends
TeamDepends's picture

 

"Put a little money in Bitcoin...Come back in a few years and it’s going to be worth a lot."

.....in your mind".

Thu, 10/24/2013 - 20:15 | 4088545 hawks5999
hawks5999's picture

yes. It's called the subjective theory of value. Ever heard of it?

Thu, 10/24/2013 - 23:21 | 4089068 TeamDepends
TeamDepends's picture

Keep dreamin', little dreamer...

Thu, 10/24/2013 - 22:39 | 4088941 BitStorm
BitStorm's picture

2011: 4$/BTC
2013: 200$/BTC

"Put a little money in Bitcoin...Come back in a few years and it’s going to be worth a lot."

Yeah, that statement's about right....

Thu, 10/24/2013 - 23:21 | 4089066 XenoFrog
XenoFrog's picture

2015: 10,000$/BTC

2017: 50,000$/BTC

 

OMG if this trend line continues we'll all be billionaires!  Hurry up and cash out of that worthless gold and silver and get into this investment so that we can get rich quick!

Thu, 10/24/2013 - 23:35 | 4089110 TheHound73
TheHound73's picture

Wow, Xeno's finally found the light!  x_x  But the figure's you've posted are actually possible.  Gold will also probably make some gains.  Has anybody ever told you that it is not an either/or proposal?

Fri, 10/25/2013 - 05:13 | 4089384 BitStorm
BitStorm's picture

Nah, I'd never recommend dumping all of your eggs into one basket. I own BTC, I own PM. I'd never own just one store of value in anything. Each has their pros/cons.

You're trending a bit high. That looks more like what most anti-Bitcoin posters think what will happen to gold when the dollar collapses. I'm looking at a more realistic projection of

2015: $800/BTC
2017: $2500/BTC/1 oz of gold

Thu, 10/24/2013 - 20:17 | 4088544 Zero Point
Zero Point's picture

A lazy couple of grand in there after the next scandal (hacking/political interference/legal issues/can't buy hard drugs with it anymore) probably wouldn't be a bad idea I reckon.

I buy scratchies on my birthday too.

Thu, 10/24/2013 - 20:16 | 4088547 Rehab Willie
Rehab Willie's picture

part of a well balanced portfolio in the new normal

Thu, 10/24/2013 - 20:21 | 4088561 HowardBeale
HowardBeale's picture

Bitcoin, because it is such a pillar supporting the material economy. 

How long is this insanity going to last...

Try to bribe the gunman who wants your food with a Billion-dollar Bitcoin when the power goes out...

Thu, 10/24/2013 - 20:36 | 4088599 bertone
bertone's picture

What if the 'power' does not go out. What if the 'power' stays on?

Not dissin you, just sayin.

What if my real life production gets wiped out due to monetery expansion.

I have to try to protect myself and those who support me.

 

Thu, 10/24/2013 - 22:06 | 4088856 Oldballplayer
Oldballplayer's picture

I have about ten times my bitcoin money in ammo. And bitcoin is about .5% of my portfolio. It was .3% last week. I'll take that any day of the week, and twice on Friday.

Thu, 10/24/2013 - 22:59 | 4088994 BitStorm
BitStorm's picture

...or try to bribe with the 10k or 100k gold piece... that he can't eat. Shit gets that bad, it's back to basics. Beans and bullets.

Thu, 10/24/2013 - 20:21 | 4088562 Randoom Thought
Randoom Thought's picture

Bitcoin ... another pure fiat product brought to you by the fine people who brought you fractional reserve banking. Trust the Gnomes of Zurich ... you have no choice.

Thu, 10/24/2013 - 22:23 | 4088896 Bunga Bunga
Bunga Bunga's picture

Fiat (latin) means "let it be" (in case of legal tender by order of a government). Bitcoin is the opposite of fiat.

Thu, 10/24/2013 - 20:23 | 4088567 Tabarnaque
Tabarnaque's picture

Where can I get a decent analysis and explanation of what bitcoin is? I have a hard time to get around this one. What is a bitcoin backed with? Who controls that? How is it created?

Thu, 10/24/2013 - 20:32 | 4088584 dick cheneys ghost
dick cheneys ghost's picture

here is a picture of my bitcoins

 

 

 

 

 

 

 

 

 

get it?

Thu, 10/24/2013 - 20:57 | 4088659 Mr. Magoo
Mr. Magoo's picture

Got it, especially after a grid take down or when the internet kill switch is enacted

Thu, 10/24/2013 - 22:20 | 4088885 BitStorm
BitStorm's picture

Really? The Internet. Gone? All of it worldwide? Electricity too? I'd better watch mad max again so'z I can brush up on my metal-work skillz.

Putz.

Thu, 10/24/2013 - 22:01 | 4088829 BigDuke6
BigDuke6's picture

'....and when they have killed all the fishy wishy in the rivers....

then they will realise they cannot eat bitcoin...'

Thu, 10/24/2013 - 20:44 | 4088620 Freewheelin Franklin
Freewheelin Franklin's picture

Google. What is it?

 

 

https://github.com/bitcoin/bitcoin

Thu, 10/24/2013 - 21:01 | 4088675 TheHound73
TheHound73's picture

Bitcoin is a peer-to-peer currency.  The technology is based on Bitcoin: A Peer-to-Peer Electronic Cash System. Bitcoin is secured by a decentralized network of "Miners" who are performing computational work in addition to gathering and collating Bitcoin transactions.  Anybody can be a Miner although specialized powerful computer equipment has become standard. That computational work protects the system against malicious. The power that Miners bring to bear is called the hashrate and is currently about 33,000 petaflops.  This is more powerful than 1000 supercomputers and constitutes mankind's single largest computing endeavor.  I guess you can say this is what bitcoin is backed with and that Miners control it. To make changes to the system requires consensus among a majority of the Miners who have a vested interest to not mess with the system.  Miner's are rewarded with freshly created bitcoins for the work they do.  The size of the reward decreases over time until there are 21million bitcoins in existence.  More information available: How does Bitcoin work?

Thu, 10/24/2013 - 21:16 | 4088719 Tabarnaque
Tabarnaque's picture

Thanks for that. But then, what sort of wealth is generated through this "computerized mining" of bitcoins? What are these computers working on? How is wealth created by having super computers mining bitcoins? The whole thing makes no sense to me. Looks like another big scam where powerful players can buy supercomputers and take over the production of bitcoins.

I like the touch of my gold and silver. Like Ron Paul says, I can put gold in my pocket.

Thu, 10/24/2013 - 21:38 | 4088770 TheHound73
TheHound73's picture

No wealth is created.  It would be nice if the Miners were doing some useful work besides securing the network. But that is not the case.  Bitcoin's Value is set on the open market. My ticker for Coinbase is currently displaying $193 for a Bitcoin.  Trust in the Bitcoin system is a big part of this Value. Some other  positive points that help determine value is their scarcity (only 12 million coins currently available) and usefulness (transfer nearly instantly worldwide, divisibility, and protections against confiscation).

Thu, 10/24/2013 - 22:03 | 4088836 Tabarnaque
Tabarnaque's picture

If that is the case then it is just another fiat currency. It is hard to see a world economy based on such a currency. It makes no sense. It's a virtual fantaisy.

I'll keep my gold and let the fools invest into bitcoins.

Thu, 10/24/2013 - 22:24 | 4088897 BitStorm
BitStorm's picture

You can own both. It's not like you're buying anti-matter. I've done pretty well exchanging BTC for the shiny.

Thu, 10/24/2013 - 22:37 | 4088929 TheHound73
TheHound73's picture

Perhaps there are some confusion on terms.  Fiat currency to me means State issued currency.  Perhaps you mean currency that does not have intrinsic value?  I am of the camp that says nothing has intrinsic value, value is determined in the exchange or consideration of an exchange.

And what is wealth? Wealth to me is actual goods and services, for instance sandwiches and health checkups.  I, too, cherish and posses PMs but I don't consider them wealth.  I recently read that the industrial demand for gold (i.e., wealth creation demand) would support about $200/oz whereas production cost is running somewhere around $1200/oz.  The rest of gold's value is convention and trust.

Most of the features I cherish in gold I also find in bitcoin.  But bitcoin adds many exciting features that Gold cannot do well.  The main feature Gold has going for it above bitcoin is its track record.  Bitcoin has only been around a few years, so it's hard to argue with that.

Fri, 10/25/2013 - 01:17 | 4089254 JB
JB's picture

the rest of gold's value is the millions of man-hours spent extracting it from the ground and refining it.

say one guy in 50 got a good hit during the Gold Rush. 

say all those guys worked 50 hours a week for 6 months. one guy found 10 ounces.

the gold doesn't just represent that one guy who found the cache's work.

that gold represents the TOTAL 60,000 man-hours that were spent finding those ten ounces.

and we haven't even gotten to the assayers and the refiners yet...

 

make sense now?

Sat, 10/26/2013 - 01:11 | 4092418 TheHound73
TheHound73's picture

Not in the least.  You are asking me to value 49 guys working 50 hour weeks and finding nothing?  I refuse. 

Since you can't eat it or warm your home with it, Gold represents what can be exchanged for it going forward.  The past doesn't matter.

How does this relate to wealth?

Thu, 10/24/2013 - 21:44 | 4088787 dracos_ghost
dracos_ghost's picture

It's not about wealth generation, it's supposed to be about wealth preservation or at least a valuation hedge. The TPTB gambling degenerates are turning it into a Forex animal. Unfortunately it looks like that's BTC soft underbelly.

Thu, 10/24/2013 - 22:37 | 4088930 Bunga Bunga
Bunga Bunga's picture

Think Bitcoin more of a worldwide infrastructure of money, which is fast, extremely cheap and counterfeit proof. It will revolutionize money like the railway revolutionized transportation or the internet telecommunication. You can own a piece of it instantly and you don't have to wait on Wall St for an IPO.

Thu, 10/24/2013 - 23:10 | 4089028 TheHound73
TheHound73's picture


"Looks like another big scam where powerful players can buy supercomputers and take over the production of bitcoins."

Looks like another big scam where powerful players can buy mining companies and take over the production of Gold.

"How is wealth created by having super computers mining bitcoins?"

How is wealth created by having corporations mining gold? Just because gold is mined by large corporations does not mean I can't own and cherish gold, right?  Gold miners sell their gold to recoup operation expenses and make a profit. Ditto Bitcoin miners.

In Bitcoin's earliest days they were mined on ordinary personal computers. Then people found it more profitable to run the mining process on graphics cards.  Now specialized computers are supplied and sold to satisify the demand for stronger mining capability.  This is just market forces at work.  It would not be profitable for me to get into the gold mining business right now (unless I found an untapped vein!) but I sho' like to posess gold, nevertheless.  Why? Because I can exchange my gold for something useful and expect to be able to do so at some time in the future as well.  Ditto BTC.

Fri, 10/25/2013 - 10:32 | 4089960 Drachma
Drachma's picture

1. The NSA and their counterparts around the world have broken many, if not all, of the internet security protocols and the encryption algorithms they are based on (See The Guardian, NY Times, also RSA’s warning to customers). This is the basis of TEMPORA, ECHELON, and their many analogues used by AUSCANNZUKUS (The ‘Five Eyes’ partnership).

2. The argument that AES-256 and other encryption protocols would require a super-computer working longer than the age of the universe to break is a red-herring. It is based on the fatal assumption that the encryption algorithms in use have no inherent or purposefully designed weaknesses that can be exploited as a ‘back-door’. Brute force attack is not the only path to success. An excellent article by Adam Young of the Mitre Corporation, that addresses the whole issue of ‘back-doors’ and ‘trap-doors’ can be found here www.blackhat.com/presentations/bh-usa-05/bh-us-05-young-update.pdf

3. How secure are random number generators. How about exploiting at the compiler level itself, or below?

4. The argument that AES is open-source, and therefore any backdoors would have been discovered by now is another flawed argument (See fate of many other broken open-source algorithms). Also, the open-source may be ‘secure’, but is your implementation secure?

 5. BTW, Bitcoin uses SHA-256 hashing algorithm, developed by the NSA. Incidentally TLS, SSL and SSH also use this hash algorithm, which as stated in #1 have all been compromised by the NSA.

 6. Do you understand the selection process for commercially available encryption ‘standards’?

7. How about the words of the Turing Award recipient, Ken Thompson, warning in 1984…”You can’t trust code that you did not totally create yourself; especially code from companies that employ people like me. No amount of source-level verification or scrutiny will protect you from using untrusted code...I picked on the C compiler. I could have picked on any program-handling program such as an assembler, a loader or even hardware microcode. As the level of program gets lower, these bugs will be harder and harder to detect. A well-installed microcode bug will be almost impossible to detect.”

Fri, 10/25/2013 - 16:38 | 4091316 Exponere Mendaces
Exponere Mendaces's picture

From some of the pros that follow Bitcoin:

SHA-2 is an open algorithm and it uses as its constants the sequential prime cube roots as a form of "nothing up my sleeve numbers".  For someone to find a weakness or backdoor in SHA would be the equivalent of the nobel prize in cryptography.   Everyone who is anyone in the cryptography community has looked at SHA-2.  Not just everyone with a higher degree in mathematics, computer science, or cryptography in the last 20 years but foreign intelligence agencies and major financial institutions.    Nobody has found a flaw, not even an theoretical one (a faster than brute force solution which requires so much energy/time as to be have no real world value).

To believe the the NSA has broken SHA-2 would be to believe that the NSA found something the entire rest of the world combined hasn't found for twenty years.  Also NIST still considers SHA-2 secure and prohibits the use of any other hashing algorithm (to include SHA-3 so far) in classified networks.  So that would mean the NSA is keeping a flaw/exploit from NIST compromising US national security. 

 

In addtion, a quote from Bruce Schneier:

Breakthroughs in factoring have occurred regularly over the past several decades, allowing us to break ever-larger public keys. Much of the public-key cryptography we use today involves elliptic curves, something that is even more ripe for mathematical breakthroughs. It is not unreasonable to assume that the NSA has some techniques in this area that we in the academic world do not. Certainly the fact that the NSA is pushing elliptic-curve cryptography is some indication that it can break them more easily.

If we think that's the case, the fix is easy: increase the key lengths.

Assuming the hypothetical NSA breakthroughs don't totally break public-cryptography -- and that's a very reasonable assumption -- it's pretty easy to stay a few steps ahead of the NSA by using ever-longer keys. We're already trying to phase out 1024-bit RSA keys in favor of 2048-bit keys. Perhaps we need to jump even further ahead and consider 3072-bit keys. And maybe we should be even more paranoid about elliptic curves and use key lengths above 500 bits.

 

So, we hard-fork and upgrade our clients and the "problem" doesn't exist. No big deal.

 

Sat, 10/26/2013 - 13:43 | 4093479 Drachma
Drachma's picture

Longer key length does not necessarily improve security, as I'm sure you are aware. Many other factors involved. Thanks for the feedback. Cheers.

Thu, 10/24/2013 - 22:17 | 4088875 BitStorm
Thu, 10/24/2013 - 22:53 | 4088979 adr
adr's picture

Bitcoin is computer code.

There are two ways to obtain Bitcoin. You either "mine" it, or trade other types of money for it.

In the beginning you could use your home computer and download a Bitcoin client that gave your computer a complex equation to solve. Once your computer solved the equation you were awarded a block of Bitcoins. As more computing power is thrown at "mining" Bitcoins and more are mined, the problems get harder to solve. There is also a set limit of Bitcoins and it is supposed to take something like 20,000 years to solve every problem and mine them all.

Most of the easy Bitcoins were used on the Silk Road or sold off when the dollar value went from a few cents to a couple bucks. High end video cards were the best suited to mine Bit coins at that time. Even if you bought a $900 Nvidia Titan video card and a $2000 server class CPU, you would never mine a Bitcoin today. 

When Bitcoins started going crazy in value people started buying dedicated RISC computer systems designed specifically for solving Bitcoin blocks. Last year these systems cost $250. When Bitcoin went above $100 the companies building them raised the price of the cheapest unit to $2500 to cash in on Bitcoin mania.

Most Bitcoin miners are buying the computer systems to mine coins and sell them to momentum chasing investors hoping the data they traded $200 for, will be worth $400 in short order.

Supporters of Bit coin will tell you that there are all kinds of vendors taking Bit coin for payment. The reality is that just about everyone in Bit coin is in it because the value went from $10 USD to $230 USD in a year. 

In reality nothing really backs Bitcoin, other than the belief it is worth something. Which doesn't make it much different than the Dollar or any currency for that matter.

Again Bitcoin supporters will tell you its different because of the limited supply. But that isn't really true since Bitcoins are infinitely divisible. The smallest accepted division of a dollar is one cent, but Bitcoins could go to one trillionth of a Bitcoin.

Bitcoin supporters also believe one Bitcoin should be worth something like $750k dollars to match other currencies. They believe this not because of any real value, but by comparing the total supply of dollars to total available Bitcoins.

 

Fri, 10/25/2013 - 01:18 | 4089256 Tabarnaque
Tabarnaque's picture

Thanks to all of the above. I knew I could count on the ZeroHedge community to help me understand a little more what Bitcoin is. I still have my doubts. When I see Central Banks  around the world increasing their gold reserve it tells me that what ever will replace the fiat dollar will be linked in some form to gold. So I'll stick to the PM's. I find the whole Bitcoin experiment interesting but not convincing enough.

Thu, 10/24/2013 - 20:27 | 4088575 GrinandBearit
GrinandBearit's picture

In my opinion, TPTB created and developed Bitcoin.

Electronic fiat... what a great idea. 

No more paper cash anonymity. 

Think about it.

Thu, 10/24/2013 - 20:40 | 4088614 Freewheelin Franklin
Freewheelin Franklin's picture

lol.

 

For all intents and purposes, BTC is aanonymous. They didn't catch DPR because Silk Road used BTC. And, why would TPTB create somethging that they can not control?

Thu, 10/24/2013 - 21:15 | 4088717 GrinandBearit
GrinandBearit's picture

Bitcoin would be outlawed already if it wasn't true.  Believe what you wish. 

Thu, 10/24/2013 - 22:23 | 4088893 quackprogrammer
quackprogrammer's picture

I almost never post but I would say that Bitcoin's pseudo-anonymity is limited by the fact that new transactions must be announced by some single node on the internet to the broader P2P network.  Of course, this node has an IP number in the general case, and so can be traced to a physical address or city.  This single aspect of the protocol would be the key to any large scale effort intended to understand what the purpose of each transaction is.  By design, transactions do not currently carry any sort of manifest that identifies humans or their purpose; only the use of public key cryptography to establish a provable transfer of value from some earlier public keys that held value that is now being spent.

The whole thing is fascinating in the way that it wastes both bandwidth and electricity. The fact that it is a giant fuck you to all bankster-run-governments is pretty swell.  What we need, of course, is a digital currency that is actually backed by a legitimate and transparent government.  Perhaps there will be competition someday in this regard.

 

 

Thu, 10/24/2013 - 23:45 | 4089130 TheHound73
TheHound73's picture

2 tiny small points here: you can hand off your signed transaction to be broadcast by anybody running a node in any city.  You don't have to broadcast it, you can hand it off to a miner to be inserted into the next block he/she solves (if you are willing to wait until then). The main annonymity risk is the ability to trace back through the transactions based on a known address.

Fri, 10/25/2013 - 01:06 | 4089242 BTFDemocracy
BTFDemocracy's picture

TOR network adds layer of anonomity to Bitcoin.

Thu, 10/24/2013 - 22:39 | 4088938 Bunga Bunga
Bunga Bunga's picture

Why they should create something they can't control?

Thu, 10/24/2013 - 20:28 | 4088577 Big Brother
Big Brother's picture

My 2¢...

I would think it a bit redundant to hold bit coins for the means of capital appreciation, only to at some point in the future, convert it back into the very entity in which I'd be hedging against.  Both PMs and Bitcoins can likely accomplish this. 

I would consider bit coins for its primary intentions, which is to use it in exchange for goods and services.

I would agree that precious metals is a great long-term hedge against inflation (i.e. insurance policy to protects one's labor); and also hedge against a loss of infrastructure that can deliver bitcoins.

(Hedging a hedge?- this is getting deep)

Thu, 10/24/2013 - 20:43 | 4088619 Zero Point
Zero Point's picture

BTC can purchase gold. Seems a nice angle given wild swings generated by amusing news stories.

Thu, 10/24/2013 - 20:54 | 4088656 Big Brother
Big Brother's picture

Hmmm, but can AU purchase BTC?... Just had to sound amorphic.

The advantage BTC has over AU is divisibility and transferability.  It's primary disadvantage is its vunerability to its infrastructure. 

 

Thu, 10/24/2013 - 21:08 | 4088703 Zero Point
Zero Point's picture

Actually yeah. The company I looked at DO accept gold for BTC. Not that I could see any scenario where I'd actually do that.

Thu, 10/24/2013 - 21:58 | 4088821 Idisq
Idisq's picture

i have purchased about several ounces of gold and a bunch of silver from amagimetals.com using my bitcoin. flawless transactions and they have great prices. with the appreciation of bitcoin my $1350 ounces costs me about $800. fiat -> bitcoin -> gold/silver.

Thu, 10/24/2013 - 20:35 | 4088597 JimRogers
JimRogers's picture

ZEROHEDGE, MEHR FERVERITE BITKROIN BWRROG

Thu, 10/24/2013 - 20:38 | 4088606 Freewheelin Franklin
Freewheelin Franklin's picture

I wouldn't recommend anyone invest in bitcoin. It's still way too early. But if you have an opportunity to use bitcoin to make a purchase instead of fiat, and you use fiat, then you are actively "voting" for the fiat system to continue.

Choose wisely.

Thu, 10/24/2013 - 20:44 | 4088628 notadouche
notadouche's picture

Yes a currency that relies wholly on machines and computers.  When the machins fail, the system fails.  Then it's all about survival.  Bitcoin would seem to be the wet dream of the governments, globalist, single currency wonks and most of the "opponents" of bitcoin. Perhaps Bitcoin isn't what they want, but the same thing that is under total control of the IMF, United Nations etc...  A digital currency that replaces all other currencies only it will be "their" idea and completely under government control.  Total record of every monetary move made by every single human.  No shadow economy, no "under the table" work, nor any other "off the record" transactions that governments seem to frown on.  In the next decade all will be revealed.  Or not... 

Fri, 10/25/2013 - 00:28 | 4089200 Kirk2NCC1701
Kirk2NCC1701's picture

Congrats, welcome to the club.
This is the charge I've been leading, when I reported back in April that HSBC was advertising cyber currency (where YOU are the data and currency rolled into one), with their posters at select non-US airports.

Thu, 10/24/2013 - 20:49 | 4088640 q99x2
q99x2's picture

Arrest Loyd Blankfein, End the Fed and buy BitCoin.

Thu, 10/24/2013 - 21:06 | 4088695 Kirk2NCC1701
Kirk2NCC1701's picture

<--- I understand that BTC is an enemy of the Fed*, and even though I love PM, I'm happy to cheer for "the enemy of my enemy"

<--- I understand that BTC is an enemy of the Fed*, but I love PM and therefore refuse to cheer for "the enemy of my enemy"

Point being, you don't have to use or even "like" BTC.  Just be happy that it's doing its part at fighting the Fed and other CBs. There's no need to see it as a "zerosum" game of using either Gold or BTC.  There's nothing to keep a person from having a mix of both -- depending on tactical circumstances and preferences.  I submit that if you can't jump over that "shadow", then it says more about you than BTC.  Just so we're clear on who has what angle on the topic.

* THE most corrupt privately-held cartel of fiat currency in the world.

Thu, 10/24/2013 - 21:22 | 4088712 Prisoners_dilemna
Prisoners_dilemna's picture

http://evoorhees.blogspot.com/2012/04/bitcoin-libertarian-introduction.html

 

"Bitcoin enables you to place your trust in an unregulated cryptographic environment governed by infallible mathematics. 2+2 will always equal 4, no matter how many guns the government points at the equation."

Thu, 10/24/2013 - 21:18 | 4088721 One And Only
One And Only's picture

If anyone wants to know who invented bitcoin I am going to unveil who Satoshi Nakamoto is....

Al Gore. Al Gore invented bitcoin.

Thu, 10/24/2013 - 21:37 | 4088769 dracos_ghost
dracos_ghost's picture

And he's super cereal.

Fri, 10/25/2013 - 08:57 | 4089658 FrankDrakman
FrankDrakman's picture

.. because the intertubes are so high fiber!

Thu, 10/24/2013 - 22:46 | 4088918 RaceToTheBottom
RaceToTheBottom's picture

If you are a republican, things just got more complex.  John McAfee is now the republicans Healthcare computer specialist.......

So Al Gore has competition.

Now all things off if the Democraps extradite McAfee to face his possible charges in murder invistigation in central America...

Fri, 10/25/2013 - 00:02 | 4089163 Clowns on Acid
Clowns on Acid's picture

Is MacAfee the Rep HealthCare specilaist or is he just telling the truth regarding the largest fuck up in US Federal history. Y'know...right behind the Dept of Education and the Dept of Housing and Urban Developemnt.

Fri, 10/25/2013 - 08:56 | 4089653 RaceToTheBottom
RaceToTheBottom's picture

I was just joking, apparently he was called.  I read somewhere that he should MSFt CEO.  Now that would be a shakeup...

Fri, 10/25/2013 - 00:33 | 4089206 Kirk2NCC1701
Kirk2NCC1701's picture

IOW... another Al Gore Rhythm.

Fri, 10/25/2013 - 08:56 | 4089655 FrankDrakman
FrankDrakman's picture

He'll be here all week, ladies and gentlemen. Try the veal!

Thu, 10/24/2013 - 21:19 | 4088726 Godisanhftbot
Godisanhftbot's picture

 in 10,000 years bitkoin will be the dominant currency.

 and you'll be dead.

 

Thu, 10/24/2013 - 22:42 | 4088952 Bunga Bunga
Bunga Bunga's picture

Maybe, but now we have Bitcoin.

Fri, 10/25/2013 - 00:37 | 4089213 Kirk2NCC1701
Kirk2NCC1701's picture

In 10,000 yrs insects and lizards will once again rule the world.

Mankind... what a flop!

Thu, 10/24/2013 - 21:32 | 4088749 One And Only
One And Only's picture

Michael E. Novogratz is a principal and a member of the board of directors of Fortress Investment Group LLC and Co-Chief Investment Officer of the Fortress Macro Fund and the Drawbridge Global Macro Fund. Mr. Novogratz joined Fortress in 2002 after spending 11 years at Goldman Sachs, where he was elected partner in 1998. Mr. Novogratz serves as a member of the New York Federal Reserve’s Investment Advisory Committee on Financial Markets. Mr. Novogratz founded and serves as the Chairman of the Board for Beat the Streets, a non-profit organization which builds wrestling programs in New York City public schools and is also the Honorary Chairman of USA Wrestling Foundation. Mr. Novogratz is Chairman of The Friends of the Hudson River Park. He also serves on the board of the Acumen Fund, NYU Langone Medical Center, Princeton Varsity Club and The Jazz Foundation of America. Mr. Novogratz received an AB from Princeton University in Economics, and served as a helicopter pilot in the US Army.

http://www.fortress.com/AboutFortress/Leadership/Board.aspx?id=9

Yea. This guy loves bitcoin. uh huh. How The Fed Learned To Stop Worrying And Love The Bitcoin?

Thu, 10/24/2013 - 21:38 | 4088772 Cabreado
Cabreado's picture

A soveriegn nation of any influence needs to be able to control its own currency.

You bitcoiners are playing games, as investments, which is just fine, but don't pretend any more than that.

Thu, 10/24/2013 - 21:54 | 4088810 aminorex
aminorex's picture

I guess that excludes France and Spain from the ranks of sovereign nations.

Thu, 10/24/2013 - 22:07 | 4088857 TheHound73
TheHound73's picture

Sovereign nations are so 19th century.  I'm pretty much over that meme.  I left the country of my birth many years ago and never looked back.  I am just looking out for number one: me.  Bitcoin is a worldwide peer-to-peer currency based on cryptography and a well defined supply.  Maybe it will be the start of a distributed sovereign nation of individuals. Gold could also suffice, I suppose, but don't the Central Banks already posses a large share of it? And I always lose my gold shavings when I go and buy a coffee. Power to the people, y'all.  

Fri, 10/25/2013 - 10:45 | 4090014 Secede Or Die
Secede Or Die's picture

"Maybe it will be the start of a distributed sovereign nation of individuals"

YES! This is foundational to the secessionist movement by individuals, to be independent in every way possible. Too many think of secession on a large scale but it is far better to start off small, I.e you personally, and grow the cause of liberty. For that reason Bitcoin has an appeal to me much like using FRN's.

Thu, 10/24/2013 - 22:40 | 4088944 Godisanhftbot
Godisanhftbot's picture

 Bitcoin just a cover for money laundering and illegal activities.

 The lunatics that think its a decent replacement for the almighty dollar are just a side show.

Thu, 10/24/2013 - 23:29 | 4089073 TheHound73
TheHound73's picture

I disagree with your premise that Bitcoin is just a cover but let's look at that for a minute...

Money laundering to me is a post-crime: The original crime has already been committed.  Why not go after the original crimes rather than build up an expensive system that invades everybody's privacy and dignity, hassles them and produces false positives?  If simple math defeats the gigantic anti-money laundering apparatus, gosh, we might have a problem here?

And then the label Illegal activities, for instance prostitution and drugs? Labelled by whom? Why? Since when? By what right? And what are you going to do to stop it?

Fri, 10/25/2013 - 00:59 | 4089230 Kirk2NCC1701
Kirk2NCC1701's picture

You, sir, are either a shill/troll, or you know shit about Currency creation, central banking and FRB.

Otherwise you'd realize that the original and real crime is the very creation of our Post-1971 USD. And you'd realize that it is a FAR worse crime.

Although it is probably true that "money launderers" (actually "CURRENCY launderers") are not exactly exemplary/model citizens of personal or social virtue, they are no worse than the scumbags with Ivy League degrees who are running the Fed's fiat Ponzi.

Please don't just regurgitate Ponzi punchlines, and get educated on how things (and currency supply) really works. YouTube provides some very informative and eye-popping clips. E.g., Crash Course by Chris Martensen, or Mike Malone. And then let's talk again.

Fri, 10/25/2013 - 10:50 | 4090037 Secede Or Die
Secede Or Die's picture

" Bitcoin just a cover for money laundering and illegal activities"

This is the view of a true Statist. So why are you even here on ZH? I suppose that you condem the Founders of the united States for their anti-government, anti-tax stance? Hmmmm?

Thu, 10/24/2013 - 23:05 | 4089009 mantrid
mantrid's picture

I don't remember Tyler being so suspicious about Private Equity firms (or TBTF banks) endorsing gold :D

Thu, 10/24/2013 - 23:13 | 4089039 All Out Of Bubblegum
All Out Of Bubblegum's picture

Buying bitcoins is making a bet that the internet will be working in the near future. It's a better bet than assuming that the Fed will be working in a couple of years.

Thu, 10/24/2013 - 23:59 | 4089160 SpykerSpeed
SpykerSpeed's picture

It would actually make a ton of sense for ISPs to charge their customers in Bitcoin.  That way the Internet can continue as normal even through a complete currency meltdown.

Fri, 10/25/2013 - 01:09 | 4089247 Kirk2NCC1701
Kirk2NCC1701's picture

Sounds sensible and cool, but let's be realistic and practical: the ISPs are largely large firms. They'd get their corporate nuts cut off by the Fed's henchmen (FCC and IRS), before this came about.

The Fed won't stand for ANY competition from cyber currencies until they come out with their own. This is emotionally hard to digest for most people, but it is true and it is coming.

Fri, 10/25/2013 - 01:44 | 4089289 All Out Of Bubblegum
All Out Of Bubblegum's picture

It's bigger than that. Whoever developed Bitcoin figured out a way to monetize the entire network we all live with - the internet, the electric infrastructure, all of it.

Buying Bitcoin is holding a piece of the monetized network.

Fri, 10/25/2013 - 00:04 | 4089164 unununium
unununium's picture

"firms like Fortress - that rely on fiat specie"

Say what?

Somehow adopting sound money will put investment management firms out of business?

And how about that earlier pair of charts, with the misleading scales making a minor drop from $200 to $175 look comparable to the gain from $1 to $240?

 

Fri, 10/25/2013 - 00:12 | 4089176 jonjon831983
jonjon831983's picture

Key part: "Novogratz said he has put his own money in the virtual currency, without specifying how much."

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