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Bitcoin Or A Bank? Here's How They Stack Up

Tyler Durden's picture




 

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

The following graphic was put together by the folks at Promontory Financial and is extremely telling. It looks at three ways in which a U.S. citizen might choose to go about sending a $1,000 downpayment to Europe for the purpose of renting a vacation home. They put Bitcoin side by with with a traditional bank wire as well as a credit card transaction. The results might surprise you...

 

 

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Fri, 11/22/2013 - 13:34 | 4181343 fonestar
fonestar's picture

....which only means there's tons of industry to grow up around the Bitcoin economy.

Fri, 11/22/2013 - 13:36 | 4181353 ParkAveFlasher
ParkAveFlasher's picture

Shouldn't you be out spending your profits?  Go get a girlfriend and send us pictures.  I want to toast you, not be annoyed constantly by you.

Fri, 11/22/2013 - 13:40 | 4181362 fonestar
fonestar's picture

She owns a few milliBitcoin as well.  And I'm more of a "buy and hold" kind of guy.

Fri, 11/22/2013 - 13:55 | 4181433 SilverIsKing
SilverIsKing's picture

What's her number?  :)

Fri, 11/22/2013 - 13:57 | 4181439 fonestar
fonestar's picture

which one?

Fri, 11/22/2013 - 14:09 | 4181521 Fukushima Sam
Fukushima Sam's picture

Would it be difficult for a big player with unlimited fiat to bid up Bitcoin in preparation for a takedown?  I don't think so...

Fri, 11/22/2013 - 14:17 | 4181560 fonestar
fonestar's picture

Probably not but so what?  It's not for the faint of heart.

Fri, 11/22/2013 - 14:21 | 4181569 ParkAveFlasher
ParkAveFlasher's picture

<<Bitcoin is the new SWIFT

<<Bitcoin is the new SWIFT

Fri, 11/22/2013 - 14:24 | 4181586 fonestar
fonestar's picture

Possibly.  People will need to question the need for any command-and-control contraption like the "SDR" if they already have adopted the BTC.

Fri, 11/22/2013 - 14:52 | 4181719 MillionDollarBogus_
MillionDollarBogus_'s picture

phonystar,

have you put all your eggs in the bitcoin basket..??

bet the farm on this cyber currency...??

Fri, 11/22/2013 - 15:00 | 4181738 fonestar
fonestar's picture

No, but I have allocated a good portion of it towards Bitcoin (and more recently Litecoin).  They have continued to outperform everything else on my sheet by far and I expect that to continue.

Fri, 11/22/2013 - 15:22 | 4181831 Cult_of_Reason
Cult_of_Reason's picture

Re: "I expect that to continue"

How do you when Hunt brothers or Winklevoss brothers get a margin call and Bitcoin cornering scheme fails?

Fri, 11/22/2013 - 15:30 | 4181862 fonestar
fonestar's picture

Well I would expect the Winklevii to become extremely rich oligarchs and dummies will still be dummies.

How is that for expectations?

Fri, 11/22/2013 - 15:48 | 4181920 Cult_of_Reason
Cult_of_Reason's picture

For anyone that hasn't heard about Cryptolocker, it's the latest, nasty twist on ransomware, which uses a blend of RSA and AES encryption to lockdown files on infected machines. Victims find they can no longer access the files on their PCs, and are given three days to pay up and get their machines back, or face demands for larger payments.

The scammers behind the Cryptolocker scam have been asking for around $300 before they supply the victim with a decryption key that will release their files and, as well as Bitcoins, are now even accommodating alternative payment methods: vouchers from MoneyPak, UKash, CashU, or Bitcoins.

http://www.zdnet.com/rising-bitcoin-prices-force-cryptolocker-ransomware...

Fri, 11/22/2013 - 15:51 | 4181936 fonestar
fonestar's picture

Bitcoin has been the currency of choice for both blackhat and whitehat hackers for three years now.

Fri, 11/22/2013 - 16:16 | 4182002 Kirk2NCC1701
Kirk2NCC1701's picture

IMHO, if you expect the Bitcoin story to "have legs" (to borrow from the MSM), then investing 10-15% of portfolio makes sense.  Else, playing with 5% makes sense (far more upside than downside with 5%, if math is your bag). 

Dummies are dummies, and will avoid both PM and BTC.

Aside from doing BTC Arbitrage -- which no one has mentioned, I believe, and certainly no one has written about -- the really shrewd thing (even for Peter Schiff) is to rack up your fiats in BTC and store them in Phyz/PM.  I think that a couple of people here cottoned onto this concept also.

And if you wanted to be REALLY cynical/skeptical, the Gold shills may be doing this very thing:  Talking down BTC, to allow for purchases before price rises too much, while buying it themselves.  Sometimes fact is stranger than fiction, they say.

Fri, 11/22/2013 - 17:00 | 4182204 fonestar
fonestar's picture

Maybe the members on ZH will have a "gestalt moment" in regards to the nature of Bitcoin once the price has doubled and trippled a few more times.  I'm not going to hold my breath though.

Fri, 11/22/2013 - 15:39 | 4181894 Banjo
Banjo's picture

 

What is Litecoin? Litecoin is a peer-to-peer Internet currency that enables instant payments to anyone in the world. It is based on the Bitcoin protocol but differs from Bitcoin in that it can be efficiently mined with consumer-grade hardware.

 

 

People you can have an unlimited amount of virtual crypto currencies. I would certainly not advocate against bitcoin or litecoin or any other cryptocoin that is going to come to market. Just be aware of what you are getting into.

Fri, 11/22/2013 - 15:47 | 4181926 fonestar
fonestar's picture

Litecoin is similar to Bitcoin (the QT client looks the exact same) but it is capped at 88 million coins (opposed to Bitcoin's 21 million).  It is easier to mine on consumer hardware and promises faster transaction times.  It's a good way to diversify your virtual dollars.

Fri, 11/22/2013 - 16:59 | 4182194 Buckaroo Banzai
Buckaroo Banzai's picture

It promises faster transaction times, but does it deliver? I am curious to know.

Fri, 11/22/2013 - 17:01 | 4182211 fonestar
fonestar's picture

I honestly have not played with it enough.  The blockchain does seem quicker now for some reason though.

Fri, 11/22/2013 - 17:23 | 4182291 Swarmee
Swarmee's picture

From the research I have done this is because the block mining difficulty is set to average 2.5 minutes per block solution, whereas BTC are adjusted for 10 minute average. The solution difficulty is what is adjusted to maintain the time between blocks and therefore coin creation rate. Lite coin generates at 4x the speed and caps at 4x the coins (84 million, not 88m as you had above FYI.)

BTC uses two SHA256 hashes for block solutions, whereas lite coin uses scrypt, hence the difference in mining capability between the two. Scrypt ASICS have not been mss produced yet so CPU/GPU mining of lite coin a not superseded yet as is the case in BTC. As mining power rises the solution difficulty is evaluated at fixed block intervals and adjusted to maintain average block solution time.

Hope that helps.

Fri, 11/22/2013 - 15:04 | 4181762 Prisoners_dilemna
Prisoners_dilemna's picture

Fonestar...

One doesn't bring a meat dish to a PETA convention.
One doesn't discuss paganism at mass.
One doesn't make kitchen jokes at a battered womans home.

And finally....

One doesnt teach cryptocurrencies to monkeys chasing shiny reflective rocks (which thru cryptocurrency we take said shiny rocks from the monkeys). Its that whole pearls before swine thing.

Stop wasting your time on the dinosaurs. Surely your time is better spent at mxcnow.com
As many have said here, you're only causing anomosity among the less informed and perhaps those completely incapable of reading about or understanding cryptography.

While I agree with every th ing you say, I think you are wasting your time trying to convert this crowd.

Get yours man. Screw the rubes.

Fri, 11/22/2013 - 15:10 | 4181777 MillionDollarBogus_
MillionDollarBogus_'s picture

Disagree.

They have made a good investment and are tooting the horn over it.

I say thanks for sharing your success story.

What other success stories have you got for us..??

 

Fri, 11/22/2013 - 15:22 | 4181801 fonestar
fonestar's picture

Except I have been a big silver proponent for years, advocate owning physical assets, supplies, food stores, self sufficiency and guns&ammo.  Plus I've been on here for years, so I am going nowhere fast.  I have nothing against the uninformed but if you attack something out of ignorance and fear then you are like a rabid dog.

Fri, 11/22/2013 - 14:23 | 4181578 DoChenRollingBearing
DoChenRollingBearing's picture

If we could convince our bearing suppliers in Asia (esp. China) to accept BTC, that would be great.  We would save some 1% or more, we currently pay by wire transfer.

We already do not use Letters of Credit because they cost so much (perhaps 3% total).

Fri, 11/22/2013 - 15:32 | 4181869 Scarlett
Scarlett's picture

if one day Iran perceives bitcoin as the new SWIFT and sells oil for BTC, all bets are off.

 

If I were in that cozy SWIFT office in Belgium, I'd be closing the embargo THIS FUCKING SECOND.

Fri, 11/22/2013 - 15:36 | 4181884 fonestar
fonestar's picture

+100 TPTB always shoot themselves in the foot by acting like a jealous and maniacal spurned lover.

Fri, 11/22/2013 - 15:58 | 4181973 Duke of Earl
Duke of Earl's picture

I've had the same thought.  There are two sides to this for me.  It is likely to happen since once BTC is better understood through its own terms rather than in comparison to other objects of exchange.  However, no sovereign in their right minds would use such a volatile instrument.  It must stabilize.  If any country expressed a true interest in making it official the price would skyrocket...creating the instability they want to avoid.

Fri, 11/22/2013 - 13:43 | 4181386 Buckaroo Banzai
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The graphic misses one important alternative: What if the house owner doesn't want to get paid in Euros, but wants to get paid in BitCoins??

Then the transaction costs are virtually zero.

An entire economy is busy being built around BitCoins.

I am really surprised at how many ZHers are anti-BitCoin. Last week I was finally motivated to do some real digging and research on BitCoin. And frankly, the more I look at it, the more I like it.

Fri, 11/22/2013 - 13:45 | 4181393 fonestar
fonestar's picture

Because they are thick and proud of it.

Fri, 11/22/2013 - 13:51 | 4181414 Herd Redirectio...
Herd Redirection Committee's picture

I am not anti-Bitcoin, I am anti-mania.  I just can't justify getting into Bitcoin AT THIS POINT IN TIME.  If the price stabilizes, then I will consider it on its merits.

But right now, BTC is going up because of hot money flows.

Fri, 11/22/2013 - 14:13 | 4181428 Cult_of_Reason
Cult_of_Reason's picture

When will sheeple realize that BTC is nothing more but yet another virtual currency scam?!?

Remember E-gold?

At its peak in 2008 E-gold was processing more than USD 2 billion worth of precious metals transactions per year, on a monetary base of only USD 20 million worth of gold.

E-gold's market success by 2001 spawned a wave of imitators. These included Goldmoney.com, e-Bullion.com, CrowneGold.com, Pecunix.com, INTgold.com, and several others including a multi-million dollar Ponzi scheme with no gold at all called OSgold.com.

http://en.wikipedia.org/wiki/E-gold

Fri, 11/22/2013 - 14:15 | 4181546 fonestar
fonestar's picture

E-Gold was to Bitcoin what Napster was to Bittorrent.

Fri, 11/22/2013 - 14:27 | 4181598 Cult_of_Reason
Cult_of_Reason's picture

There's a sucker born every minute.

Fri, 11/22/2013 - 14:36 | 4181642 fonestar
fonestar's picture

....and I am currently watching them lose by the minute (for over two years now).

Fri, 11/22/2013 - 14:40 | 4181650 Cult_of_Reason
Cult_of_Reason's picture

Did you hear about new virtual currencies called NetflixCoin and BrooklynBridgeCoin?

Each coin represents a limited number of Netflix shares and a limited share of the Brookly Bridge (this is the perfect currency as nobody can print the Broolkyn Bridge), respectively.

I suggest you invest in BBC (BrooklynBridgeCoin).

Fri, 11/22/2013 - 14:42 | 4181678 fonestar
fonestar's picture

There's no comparison between city or corporate tokens and a floating international currency.

Only a complete moron would buy expired FUD like that.

Fri, 11/22/2013 - 14:50 | 4181710 Cult_of_Reason
Cult_of_Reason's picture

I'm not talking about NYC subway tokens. I'm talking about the BrooklynBridgeCoin (BBC).

The future of BrooklynBridgeCoin is in America!

Think of BrooklynBridgeCoin like AOL was in 1996. Or Amazon or Yahoo was in 1997. Or Microsoft in 1986.

Fri, 11/22/2013 - 15:05 | 4181761 fonestar
fonestar's picture

I repeat, "only a complete moron...."

Fri, 11/22/2013 - 18:27 | 4182446 NidStyles
NidStyles's picture

It's a shame that you can't tell when someone is mocking you...

You probably shouldn't throw the word moron around when you completely missed it.

 

Fri, 11/22/2013 - 19:00 | 4182524 fonestar
fonestar's picture

What are your returns like on BTC dipshit?  I'm sitting pretty.

Sat, 11/23/2013 - 03:50 | 4183230 NidStyles
NidStyles's picture

My returns are probably better than yours, as I still "hold" my Bitcoins and have since before they were over a dollar.. That doesn't change the fact that it's not really worth anything.

 

Unlike you, I am not letting the idea of profit taking cloud my judgement.

Fri, 11/22/2013 - 14:49 | 4181708 Thisson
Thisson's picture

E-gold was a legitimate business.  Unfortunately for them, they were so easy to use that they attracted criminal customers.

 

Fri, 11/22/2013 - 14:51 | 4181713 Cult_of_Reason
Cult_of_Reason's picture

A legitimate business?!?

"USD 2 billion worth of precious metals transactions per year, on a monetary base of only USD 20 million worth of gold"

Fri, 11/22/2013 - 15:01 | 4181748 itchy166
itchy166's picture

"USD 2 billion worth of precious metals transactions per year, on a monetary base of only USD 20 million worth of gold"

 

That's a better reserve ratio than USD.

Fri, 11/22/2013 - 15:05 | 4181765 Cult_of_Reason
Cult_of_Reason's picture

Or any other currency (EUR, JPY, GBP, CNY, etc)

Fri, 11/22/2013 - 19:34 | 4182600 Tall Tom
Tall Tom's picture

That is no different than the leverage of CME Group's Paper Contracts on Gold Futures to the amount of Physical Gold which they have in stock.

 

Is the CME Group a legit business?

Fri, 11/22/2013 - 15:07 | 4181771 fonestar
fonestar's picture

Satoshi told me,

 

"Bernard von Nauthaus, thou art avenged!"

Fri, 11/22/2013 - 15:16 | 4181807 Duke of Earl
Duke of Earl's picture

E-Gold was not a scam.  The owner did not swindle people and believed in his product.  You can argue about his use of leverage and may have a good point, but it was not an intentional way to swindle people out of money.

It was shut down by the federal government to "protect" sheeple.  If sheeple need that protection, by all means avoid bitcoin.

Fri, 11/22/2013 - 18:56 | 4182517 thisandthat
thisandthat's picture

So no fuck you, Bernanke/Dimon/Corzine/Obama/etc., any more (sheeple should have no protection)?

Fri, 11/22/2013 - 19:46 | 4182620 Duke of Earl
Duke of Earl's picture

Challenging question.  There is one end of the spectrum with full protection that assumes that people are incapable of any responsible financial decision and must be able to back out of transactions and insure against loss.  The other end is the buyer beware wild west.  Surely somewhere in between would be best. 

I lean toward the wild west and tend to believe that the masses are quite smart and capable of making every financial decision and taking risks.  Particularly if there is greater risk, they would pay more attention.  Every individual has their own financial competence limit and making a single rule that meets all needs is difficult.

Fri, 11/22/2013 - 13:56 | 4181434 fonestar
fonestar's picture

The volume tells the story as well as Bitcoin compared to any other currency on FX.  There's no real mania stage in Bitcoin (yet).

And if you are waiting for stabilization between a decentralized and deflationary currency and inflationary, nationalist currencies you are going to be waiting for some time.

Fri, 11/22/2013 - 14:30 | 4181615 Bunga Bunga
Bunga Bunga's picture

There is no Bitcoin mania, there is only fiat panic.

Fri, 11/22/2013 - 14:34 | 4181638 Buckaroo Banzai
Buckaroo Banzai's picture

There is no Dana, only Zool.

Fri, 11/22/2013 - 14:05 | 4181501 Buckaroo Banzai
Buckaroo Banzai's picture

Think of BitCoin like AOL was in 1996. Or Amazon or Yahoo was in 1997. Or Microsoft in 1986.

Every once in a while, the price of something goes straight up for a reason.

Fri, 11/22/2013 - 14:18 | 4181561 fonestar
fonestar's picture

Rational exuberance.

Fri, 11/22/2013 - 14:32 | 4181617 Buckaroo Banzai
Buckaroo Banzai's picture

Can you blame the ZHers from forgetting what that was? It's been 5+ years of either collapse, or irrational exuberance. When you've been marinating in a financial environment that is 100% fraud, and the price of virtually everything has been a farce (in one direction or the other), and bullshit like FailBook or Twitter is getting priced to the moon, well, its easy to just assume that everything is bullshit.

Fri, 11/22/2013 - 14:50 | 4181706 fonestar
fonestar's picture

Well they did claim to understand Gresham's law.  They did claim to understand that inflationists control every single currency on Earth.  They did claim to understand that all markets are rigged.

So yeah, I think I will just go ahead and blame them....

Fri, 11/22/2013 - 18:31 | 4182457 NidStyles
NidStyles's picture

Bitcoins are being priced and weighed in dollars, that means the paper pushers do control it's value.

 

Some day you will actually understand that Gresham's Law only exists in environments with a Fiat currency. In fact that is it's central requirement to being a thing is the existence of a Fiat currency.

I'm not against Bitcoin, I'm against you trolls and idiots pushing it as if it were the savior of mankind. That is how people get duped and eventually enslaved.

Fri, 11/22/2013 - 19:54 | 4182634 fonestar
fonestar's picture

If someone was wanting to make money (and buy more silver with it as an example) they could have shut up and listened to what the Bitcoin community had to say.

Nope, not you idiots.

Sat, 11/23/2013 - 03:51 | 4183232 NidStyles
NidStyles's picture

Oh I listened, I just took it upon myself to not be a theiving rat.

Fri, 11/22/2013 - 16:12 | 4182015 aminorex
aminorex's picture

the price will stabilize around USD 5000, but not for at least a year.

Fri, 11/22/2013 - 14:06 | 4181510 Boondocker
Boondocker's picture

I am pro bitcoin, but isnt the magic everyone hopes it will be on terms of the currency/fiat issue.  I am happy to have some  but am treating it as an investment.

 

I  traded some silver for a rifle a few weeks ago.  I asked the pawnshop if they would take bitcoin....he said "whats that".  The owner came over and said no, the value swings too wildly  although he admitted to owning 4+ bitcoins.  Now silver is down and bitcoin is up...

Fri, 11/22/2013 - 13:50 | 4181410 Cult_of_Reason
Cult_of_Reason's picture

What if the house owner doesn't want to get paid in Euros or BitCoins, but wants to get paid in BrooklynBridgeCoins??

Fri, 11/22/2013 - 15:39 | 4181890 Scarlett
Scarlett's picture

At this juncture you may I address your attention to the enormous number of bitcoin holders, developers, buyers, sellers, and corporations springing up every single day across the entire planet?

Fri, 11/22/2013 - 15:04 | 4181757 One World Mafia
One World Mafia's picture

The worst part of it for me is the NSA invented the hashing functions, which for sure they would not release into the wild without a backdoor that withstands double hashing.

Fri, 11/22/2013 - 15:28 | 4181854 Duke of Earl
Duke of Earl's picture

Interesting concern.  Not sure what value this would give the NSA other than the ability to solve blocks faster and get their owns coins.  Possibly they would validate transaction blocks faster and take over the chain to direct coins where they want.  It would crash the system, what are they waiting for?

They are smart, but I doubt they are that smart to create a public protocol where no peer reviewer can see it.  A larger concern would be someone else discovering that (or another) duplicate hash method.  That being the case, BTC can change it's protocol to another algorithm.

Fri, 11/22/2013 - 16:40 | 4182120 Duke of Earl
Duke of Earl's picture

I stand corrected, I thought it much easier.  Great article, thanks for that.  Going to re-read on the way home.

He (Maxwell) does bring up a good point in that the NSA would only use that exposure in extreme circumstances.  I'd tend to agree since once revealed everyone would run, not walk away from anything the NSA touched.

The reality is that BTC is still a tiny market.  ~$10 billion now at its peak.  Gold is $9 trillion.  I hope the NSA has something better to do with its time until BTC gets to at least $200 billion.

Fri, 11/22/2013 - 17:06 | 4182192 One World Mafia
One World Mafia's picture

How would they get caught exploiting a backdoor to SHA-256?

Fri, 11/22/2013 - 17:17 | 4182269 Duke of Earl
Duke of Earl's picture

Depends on what they did.  Say, for example, you and I found a flaw in SHA-256 and were able to create immediate collisions.  Assuming there is not a more profitable attack than bitcoin, we'll look at it.

We could then give ourselves bitcoins at will by solving blocks before everyone else.  If we solve immediately consistently rather than taking ~10 minutes like usual then people will know the game is rigged (or ASICs miners were born) and sell fast.  So we'd be just a bit faster than everyone else and slowly give bitcoins to not tip our hand. The interesting aside here is that if there is a hole in the system, it is in everyone's best interest to keep it secret.

In any event, this whole exercise would be useless for the NSA since when they need money they simply take it and really have no use for Bitcoin.  Maybe they wouldn't get caught.  I'm still not clear on what they would do.  They don't need a backdoor to shut it down.

Certainly of greater interest is the NSA pervasiveness in the traditional money system.  Far larger rewards there than in the tiny BTC economy that everyone is convinced will implode at any time.

Fri, 11/22/2013 - 19:18 | 4182407 One World Mafia
One World Mafia's picture

Could they slow or block others without them knowing it?  They can steal coins from anywhere so no one knows it's the same people who keep winning? It would be like free tax money to the govt without the govt having to fight to raise taxes, and distribute it wherever in the world they want.

Fri, 11/22/2013 - 19:53 | 4182633 Duke of Earl
Duke of Earl's picture

They could not slow the solution.  Whenever a host solves the problem, it publishes to its peers and the race is on for validation across the network so they can get their coin reward.  The SHA-256 algo would not help them steal. It would be simpler to use their Microsoft zero day exploit knowledge to create a trojan network and steal them all.

Of course, there is no need.  They wouldn't bother using bitcoin, they can just use the current financial network and have access to a vast amount of wealth.

As a slight tangent to your free tax money, I've often wondered why they collect taxes at all.  It is a proven methodology that they can create money at will and everyone accepts inflation.  They just need to inflate to the amount they needed to cover costs of government.

Sun, 12/01/2013 - 23:42 | 4205494 One World Mafia
One World Mafia's picture

People notice when their incomes can't keep pace with the cost of living.

Still sounds like they can steer more coins to themselves without being detected if they solve every 10 or so seconds.

Fri, 11/22/2013 - 15:41 | 4181902 Scarlett
Scarlett's picture

The NSA invented hashing functions?  

 

Do you know how patently untrue that is?  What the NSA did is to try to skim some bits here and there of some standard hashing functions, and they got caught at it, those modern-day Nazis.

Fri, 11/22/2013 - 16:17 | 4182024 One World Mafia
One World Mafia's picture

No, I said the NSA invented THE hashing functions, ie that bitcoin uses.  That's a lot different than saying they invented hashing functions, but a better choice of words words would be to say they designed the hashing functions.  Anyway it's not backwards compatible...

http://motherboard.vice.com/blog/what-do-the-latest-nsa-leaks-mean-for-b...

Fri, 11/22/2013 - 15:20 | 4181825 cspg
cspg's picture

it also disregards the +/- 50% fluctuation in the underlying bitcoins between the transaction. and income tax.

Fri, 11/22/2013 - 13:43 | 4181392 jcaz
jcaz's picture

Girlfriend?  Try again....

Fri, 11/22/2013 - 13:46 | 4181400 fonestar
fonestar's picture

Do you really believe that people who are making tens of thousands of percent gains against USD are spanking and crying themselves to sleep?  LOL!

Think harder loser.

Fri, 11/22/2013 - 14:28 | 4181599 pods
pods's picture

So beggar thy neighbor is acceptable if it is decentralized?

Thanks.  Your tipoff is your excitement about the meteoric rise in value of bitcoin versus the USD.  If you like bitcoin because of its possible use as an alternative medium of exchange, you would be abhorred by the wild gyrations.

If however, you are are a swing for the fences type of trader, you would love this.

Guess we just figured out which one you were.

pods

 

Fri, 11/22/2013 - 14:47 | 4181696 ParkAveFlasher
ParkAveFlasher's picture

The people who are always accused of pumping gold-as-money - the Sinclairs and Sprotts and so forth - are the same people who warned when it was at $1800, "if you can't stomach a 30% or 40% pullback in the price, don't buy right now."  Pods raises a great question: where are the bitcoin champions who should be preaching modesty right now? 

Fri, 11/22/2013 - 15:44 | 4181914 Scarlett
Scarlett's picture

>>>where are the bitcoin champions who should be preaching modesty right now?   

 

Reporting for duty.  Price has gone super-exponential and so has the grow in the community membership.  It should pop.  

 

Long-term prospects do remain binary.  Either $0 or unthinkable amounts.

Fri, 11/22/2013 - 17:37 | 4182329 ParkAveFlasher
ParkAveFlasher's picture

That's not modestyModesty would be saying, "The outcome is still binary; but, I don't know if you will be able to either purchase nothing with your bitcoin, or have your balance become absolutely irredeemable in any generally useful currency."

Fri, 11/22/2013 - 15:19 | 4181822 fonestar
fonestar's picture

Far from it.  Swing traders could just as easily get creamed and lose everything with BTC.  If you believe in the fundamentals (like I do) of this technology, combined with dollar cost averaging (which I have) you should do fine.

Fri, 11/22/2013 - 15:36 | 4181885 pods
pods's picture

So was this you or was this NOT you?

"No, I dumped at $780.  Didn't get it quite right but close enough and no margin."

http://www.zerohedge.com/news/2013-11-21/peter-schiff-gold-vs-bitcoin#co...

I am starting to get confused here.  Are you a "buy and hold" kind of guy, one who believes in fundamentals, dollar cost averaging or one who dumps at $780 on no margin (kind of trading words eh?)?

Please douchebag, you had a good score with this, but don't piss on my leg and try to tell me it is raining.  

pods

Fri, 11/22/2013 - 16:39 | 4182114 fonestar
fonestar's picture

I'm just this guy who says lots of stuff, some of it more accurate than other stuff.  You shouldn't listen to what kooks online say anyway.

Fri, 11/22/2013 - 17:14 | 4182254 ParkAveFlasher
ParkAveFlasher's picture

That's totally a douche-out if ever I read one.  Fonestar = proven douchelord and it was Pods that called him out.

Fri, 11/22/2013 - 18:36 | 4182462 NidStyles
NidStyles's picture

Then it's about time you did the growing up thing and learned to keep your fucking mouth shut.

Sat, 11/23/2013 - 09:13 | 4183329 donsluck
donsluck's picture

Wow, just wow. Given enough computing power, any cryptography is breakable. There are only two safe investments now, paper cash (not in the bank) and PMs. You can point to any meteoric investment in hindsight and say "I'm so smart", but you could also loose it all.

Fri, 11/22/2013 - 19:27 | 4182584 Exponere Mendaces
Exponere Mendaces's picture

Hey guys, did pods post? I'm not sure since I only see the name twice. Sometimes he does it three times to make it luckier.

Anyway, claiming to be a trader and not liking volatility makes about as much sense as you suddenly understanding bitcoin.

Exponere Mendaces

That's Exponere...

and Mendaces...

hell, one more time Exponere Mendaces

 

Maybe he does it to match the echoes in his head.

Fri, 11/22/2013 - 13:56 | 4181437 dark pools of soros
dark pools of soros's picture

exactly..   BTC makes you gay, bald and stuck with cooties

 

that's about what the stackers are left with to attack bitcoin

 

Fri, 11/22/2013 - 14:04 | 4181496 EscapeKey
EscapeKey's picture

What are you, like 13? From your arguments, it would certainly appear so. Perhaps you should buy an XBox and play online, I think you'd fit right in.

Fri, 11/22/2013 - 15:56 | 4181956 CPL
CPL's picture

There's already an industry.  The bunch of them need to smarten up and take what's given and apply it to their bag of tools.  It's built to fix a problem once and for all without wrecking the existing infrastructure and lower overhead processing to keep it simple.  Just takes a boardroom, a couple of two/fours, some delicious take away then lock the retail bank bean counters and managers in a room for a month.  They'll see how it fits and how little it costs.  The Banks have capacity, don't throw that away, reuse it.

Cans and bottles aren't the only things that can be repurposed.

Fri, 11/22/2013 - 21:13 | 4182800 yepyep
yepyep's picture

some people may lose bitcoin through hardware failure but it will be due to their own incompetence not a limitation of bitcoin.

Fri, 11/22/2013 - 13:32 | 4181335 Sudden Debt
Sudden Debt's picture

I'LL DEFRIEND ANYBODY ON FACEBOOK WHO STILL BELIEVES IN THAT BITCOIN CRAP!!!

Fri, 11/22/2013 - 13:35 | 4181346 fonestar
fonestar's picture

Well it won't be me because I don't have a Fakebook.

Fri, 11/22/2013 - 13:36 | 4181350 Sudden Debt
Sudden Debt's picture

COOL! JUST TWEET ME THAN!

Fri, 11/22/2013 - 13:36 | 4181357 fonestar
fonestar's picture

I don't "tweet" either but sometimes you can catch me on IRC.

Fri, 11/22/2013 - 13:41 | 4181379 NaiLib
NaiLib's picture

Well if they are FB friends with you nobody cares, right

Fri, 11/22/2013 - 19:44 | 4182616 Exponere Mendaces
Exponere Mendaces's picture

That Sudden Debt dude was a lot funnier in the old "Grexit" days. Now its all capslock and mainstream references.

Fri, 11/22/2013 - 13:33 | 4181336 chdwlch1
chdwlch1's picture

I prefer Goldcoin...

Fri, 11/22/2013 - 13:35 | 4181349 fonestar
fonestar's picture

Oldcoin?

Fri, 11/22/2013 - 14:26 | 4181591 ThirdWorldDude
ThirdWorldDude's picture

Why don't you go fondle your 2bitcoin collection or something?

Fri, 11/22/2013 - 14:35 | 4181640 Bunga Bunga
Bunga Bunga's picture

How do you transmit your Goldcoin over the internet to rent one of my Villas in Italy?

Fri, 11/22/2013 - 14:52 | 4181715 Running On Bing...
Running On Bingo Fuel's picture

When I show up 'in real life' and your villa looks like this:
http://forgotten-ny.com/wp-content/uploads/2009/03/08.jackson.robin_.jpg

How am I going to get my REAL fucking money back??

Or more accurately, when I discover you have no villa at all...

Over.

Fri, 11/22/2013 - 15:02 | 4181752 Bunga Bunga
Bunga Bunga's picture

Ebay doesn't work or what?

Fri, 11/22/2013 - 19:50 | 4182629 Exponere Mendaces
Exponere Mendaces's picture

Hey, its my old buddy Running-On-Bunghole-Fumes!

With his jocular wit and riposte, how can you not be swayed by his logic! Even better is that meth-fueled trucker vibe he gives off when he puts "Over" on a post. Like he just scored a knobjob from a Lot Lizard off of the I-65 near Indianapolis.

Clutching his CB mike in between greasy arby's stained fingers, hollering "PUTTIN THE HAMMER DOWN - OVER" as he makes the last trip to the Wal*Mart distribution center.

What a card.

Fri, 11/22/2013 - 13:33 | 4181338 WOAR
WOAR's picture

Of course peer-to-peer shaves off the price tag. You are removing the middleman.

My question is who is selling vacation homes for bitcoin? Until it becomes accepted more universally, it is worthless.

Fri, 11/22/2013 - 13:36 | 4181356 NaiLib
NaiLib's picture

:) Coming years there will be moar doing this. Just as there will be moar QE globally.

Fri, 11/22/2013 - 13:57 | 4181443 Herd Redirectio...
Herd Redirection Committee's picture

But why would people universally adopt Bitcoin, when the price is at $600 instead of Litecoin at $8.50?  I mean, are people interested in using the cryptocurrency, and using it to store value, or are they interested in a quick flip for a 200% profit?  I think much of the appeal comes from the latter, not the former.

Fri, 11/22/2013 - 14:32 | 4181618 Urban Redneck
Urban Redneck's picture

It's ALL about speculation. Since one can buy Bitcoins at any time and subsequently use them to execute a transaction, the conversion price to any other currency is actually IRRELEVANT except to those who are speculating.

Fri, 11/22/2013 - 14:53 | 4181722 Prisoners_dilemna
Prisoners_dilemna's picture

I think my ZH account is over two years old now. Read ZH for a year before I bothered with an account.
Anyway back in 2006-2009 at age 24-26 I read about Ron Paul. I learned about gold. I cast off the shackles of statism I was taught in school. I boguth PMs, and I talked and talked and talked to anyone and everyone about liberty, gold, and the corrupt nature of the US govt.
Gold started spinning its wheel. Gold was being manipulated.

I just wanted to be an honest human, enjoy the blessings of liberty, and not have 30% or more of my productivity stolen for the empire and the kids.

Then one day I heard of this bitcoin. I read into it but didnt find much, certainly not enough to make any decisions about buying any. The info just wasnt on the web and im surrounded by statists who certainly couldnt tell me about it. Articles like this one started to pop up around libertarian circles. http://evoorhees.blogspot.com/2012/04/bitcoin-libertarian-introduction.h...
I didnt bother with it before feb 2012 when the price was ~$18/btc.

Now ive got a few coins.

You may be a speculator. Some of us are principles libertarians who hope bitcoin can do for us what gold is supposed to. Not just in the ultra long term as is the case for gold but also today as in the case of bitcoin.

Guess which scarce fungible good this libertarian can sell for a profit today and which this libertarian must hold for another who knows how many years before its "value" is recognized.

Fri, 11/22/2013 - 15:26 | 4181845 Herd Redirectio...
Herd Redirection Committee's picture

You say you learned gold was being manipulated, but it doesn't sound to me like you actually understood what that would mean for the medium-term price of gold.

Gold is still on sale.  That shouldn't upset anyone, except if you earn no income, and have already gone all in.  In which case, you have disregarded Greshams law, that says while a (in your opinion) worthless currency is still accepted in trade, it should be used in trade.  Meaning, while USD are widely accepted, at least some of your savings should be in USD form.

Fri, 11/22/2013 - 15:51 | 4181938 Duke of Earl
Duke of Earl's picture

Agreed.  It has warts, but the principles are and remain sound.

Fri, 11/22/2013 - 14:34 | 4181634 Matt
Matt's picture

Bitcoin has much wider real-world adoption; litecoin is accepted at a few websites, you can donate some LTC to a few people, but there are no litecoin ATMs, and they are not accepted by nearly as many merchants, online or brick and morter. With its smaller, weaker network Litecoin is more susceptible to attack. It is much harder to find good charts and analysis on Litecoin or any of the alt-coins, compared to the amount of data and analytical tools for bitcoin.

There are two seperate things people are looking at with bitcoin; one is the units of account themselves, which are certainly volitile and subject to speculation, and the other is the transaction network, which is where I see the real long-term value.

 

Fri, 11/22/2013 - 15:26 | 4181846 Herd Redirectio...
Herd Redirection Committee's picture

Doesn't that mean that LTC has more room for growth, in terms of its transaction network?

Fri, 11/22/2013 - 16:14 | 4182031 aminorex
aminorex's picture

it does.  but it also means that the growth rate of bitcoin is much higher than that of litecoin.  both derive value from network effects, and those compound.  it's a feedback loop:  growth rate provokes network size.  network size provokes growth rate.  bootstrapping is much harder than growth on the middle of the S curve, until saturation effects dominate.

Fri, 11/22/2013 - 14:59 | 4181737 fiftybagger
fiftybagger's picture

I remember people saying that when Bitcoin was 8 bucks and Litecoin was 8 cents.

The Bitcoin Channel

Fri, 11/22/2013 - 14:44 | 4181683 Bunga Bunga
Bunga Bunga's picture

E.g. 9flats have been acceping Bitcoins for a while:

http://blog.9flats.com/9flats-accepts-payments-with-bitcoins/

Fri, 11/22/2013 - 16:38 | 4182111 JuliaS
JuliaS's picture

Transaction fees would matter, if the BTC didn't fluctuate by more than any banking fee in between transactions.

Also, for BTC to be taken seriously, there needs to be an essential service or product priced exclusively in BTC, like oil is priced in USD.

BTC does pay conveniently for illegal activities and to some it does provide an essential service priced in it exclusively. But that's not the best foot to put forward. So BTC struggles to find its identity, being a game currency without a game. It doesn't have stable purchasing power, because it is not tied to any stable asset. It behaves like money with no backing and no tangible physical quality.

BTC goes through more highs and lows than a heroin junkie. Knowing the kind of commodities priced in BTC, it's of no surprise.

Sun, 11/24/2013 - 13:27 | 4185705 jonytk
jonytk's picture

that's absolutely a non-sense, for anything priced in btc,  the respective usd price will make the zimbabwean $ pale in comparision over time. as demand for btc skyrocket.

The apocalyptic $ inflation nightmare may never happen against gold, but it could happend agains btc if it keeps gaining adopters!

getbitcoins.tk

Sat, 11/23/2013 - 06:02 | 4183276 TheHound73
TheHound73's picture

@WOAR  try Bit Premier luxury market, for discerning Bitcoin shoppers.  Private islands, luxury condos, art, sportscars, etc.

Fri, 11/22/2013 - 13:34 | 4181344 Sudden Debt
Sudden Debt's picture

A picture says a thousand words...

this pictures actually has a thousand words and it still needs a explenation....

FUCK THIS!!

Fri, 11/22/2013 - 13:36 | 4181351 GrinandBearit
GrinandBearit's picture

2 bitcon pieces a day now -lol

Sorry boss, but these bitcon pieces are not creating as much controversy as they used to.  The views and responses are much less than they used to be. 

Fri, 11/22/2013 - 15:05 | 4181763 Running On Bing...
Running On Bingo Fuel's picture

Yea, CNBC is pumping it, the banks now pumping it....

Just come out already Lord Rothschild and do a Public Service Announcement: "BitCoin, use it or else!".

Over.

Fri, 11/22/2013 - 15:27 | 4181856 fonestar
fonestar's picture

They are?  I'm going to call bullshit. 

I just watched Maria Bartiromo bashing, Business Insider refer to it as a "Ponzi" and another Forbes presstitute purposely mispronounce it as "Bitcon".

Fri, 11/22/2013 - 15:40 | 4181892 Running On Bing...
Running On Bingo Fuel's picture

You're really not that stupid, right?

Do I have to explain to you Rick Santelli's role in the grand performance?

Or worse yet, the stupid bag men 'core developers' of bitCon who think it's so cool and neato that they never demanded full disclosure and accountability from Satoshi the invisible man. You're familiar, no?

Over.

Fri, 11/22/2013 - 13:36 | 4181352 uncle.bigs
uncle.bigs's picture

What a bunch of BS.  You might lose $500 to $1,000 just on the fluctuating market value of Bitcoins during the time it takes to make the transfer.

Fri, 11/22/2013 - 13:38 | 4181363 NaiLib
NaiLib's picture

lots of new signatures posting uter nonsense regarding Bitcoin, I wonder how that is....

Fri, 11/22/2013 - 13:46 | 4181396 Buckaroo Banzai
Buckaroo Banzai's picture

Yeah. Reminds me of some of the Yahoo silver stock boards in 2002 and 2003. Just a lot of people who were virulently anti-silver, in an irrational, paid-troll kind of way.

Fri, 11/22/2013 - 13:53 | 4181422 Godisanhftbot
Godisanhftbot's picture

 You dont remember any of the internet fad failures that went to zero then. You're doomed to repeat that

Fri, 11/22/2013 - 14:06 | 4181511 Buckaroo Banzai
Buckaroo Banzai's picture

I sure do remember them!

I also remember the handful that went from being worth zero dollars to hundreds of billions of dollars.

Fri, 11/22/2013 - 15:14 | 4181791 dracos_ghost
dracos_ghost's picture

BB, the problem is that there is a rabid zealotry around Bitcoin. Even if you are pro BTC, if you try and have a discussion about concerns even the "Church of Satoshi" groups have voiced it's dismissed out of hand just becuz.

Isn't Kraken.com allowing margin trading in BitCoin and naked crosses a dangerous thing? Nope, can't bring it up because all other humans outside of their World Of Warcraft Guild are evil. These are the same ills everyone is bitching about in the current equity/fx environments but BTC is different somehow?

But I guess we can all take solace that farmville bux are still an option.

 

Fri, 11/22/2013 - 15:29 | 4181861 Herd Redirectio...
Herd Redirection Committee's picture

Margin and BTC.  Thanks.  I suspected it was happening.

Fri, 11/22/2013 - 17:17 | 4182267 Buckaroo Banzai
Buckaroo Banzai's picture

Holy crap, were you alive in 1997-98? Talk about some "rabid zealotry", well, there sure was around certain internet investments! There was Yahoo, and there was Pets.com. The zealots were right about one, and wrong about the other

Today, there is Twitter, and there is BitCoin. One of those seems like a total fraud to me, the other, looks more promising. Will both shit the bed? Maybe.

You pays your nickel, and you takes your chances.

Fri, 11/22/2013 - 13:54 | 4181427 seek
seek's picture

Yeah, I've noticed the same thing, along with restating the same arguments after being proven incorrect. There's a couple other topics that get the same treatment by a different set of people (Obamacare is one, but it has far fewer trolls.)

Fri, 11/22/2013 - 15:13 | 4181787 Running On Bing...
Running On Bingo Fuel's picture

Why not Tyler just tell us, he's a globalist NWO type who wants a One World Currency??

Over.

Fri, 11/22/2013 - 17:19 | 4182278 Buckaroo Banzai
Buckaroo Banzai's picture

Sensible people can agree that Obamacare is a fraud and a disaster. Dopey communist fuckwits are the only ones who even try to make a case for it.

BitCoin is different. Sensible people can disagree about BitCoin. It is very strange, very revolutionary, and obviously, still unproven.

Fri, 11/22/2013 - 14:21 | 4181573 fonestar
fonestar's picture

Bankers running scared.

Fri, 11/22/2013 - 14:41 | 4181667 Urban Redneck
Urban Redneck's picture

The AVERAGE Fedwire transaction size in Q3 was USD $5.34 MILLION, and there were an average of 532,928 transactions processed PER BUSINESS DAY.

http://www.federalreserve.gov/paymentsystems/fedfunds_qtr.htm

What's the size and velocity of this competing currency supply that Bankers are supposedly scared of?

Fri, 11/22/2013 - 15:14 | 4181798 Running On Bing...
Running On Bingo Fuel's picture

Crickets....

Over.

Fri, 11/22/2013 - 15:21 | 4181828 fonestar
fonestar's picture

The superior technology that is going to kill off their business.

Fri, 11/22/2013 - 15:41 | 4181908 Running On Bing...
Running On Bingo Fuel's picture

You're getting weaker by the day bro. LoL.

Over.

Fri, 11/22/2013 - 15:58 | 4181963 Urban Redneck
Urban Redneck's picture

The technology to brainwash hundreds of millions of "educated" people to believe what news readers tell them about "economics" or the what the actual velocity or size of the effective money supply is.

That's some potent technology, I hope it does lose out, but I'm not going to hold my breath that it's going to be undone by the first serious non-state or underlying value backed competition. Unlike politicians, bankers aren't stupid, and they will protect their skim of 2.8e12 in daily flow.

Enjoy the ride, and don't to forget to keep realizing a share of profits.

Fri, 11/22/2013 - 13:43 | 4181390 Swarmee
Swarmee's picture

Weak argument, it's handled the same way as a bullion purchase, or any instrument that fluctuates in price during the day. Buyer and seller agree on a "fix" price and that is what is transferred. Receiving party is responsible for managing risk using traditional methods.

Fri, 11/22/2013 - 13:48 | 4181404 Buckaroo Banzai
Buckaroo Banzai's picture

Exactly. And at some point, BitCoin is going to find a relatively stable price level against the fiat central bank currencies. We are still pretty early in the game here.

Fri, 11/22/2013 - 14:00 | 4181463 Herd Redirectio...
Herd Redirection Committee's picture

And I will consider BTC at that time.  But between here and there, who knows.  I don't want to buy Bitcoin to see it test $250 or lower again.

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