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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fonestar's picture

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

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.

fonestar's picture

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

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...

fonestar's picture

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

ParkAveFlasher's picture

<<Bitcoin is the new SWIFT

<<Bitcoin is the new SWIFT

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.

MillionDollarBogus_'s picture

phonystar,

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

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

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.

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?

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?

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...

fonestar's picture

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

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.

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.

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.

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.

Buckaroo Banzai's picture

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

fonestar's picture

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

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.

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.

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..??

 

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.

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).

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.

fonestar's picture

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

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.

Buckaroo Banzai's picture

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.

fonestar's picture

Because they are thick and proud of it.

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.

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

fonestar's picture

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

Cult_of_Reason's picture

There's a sucker born every minute.

fonestar's picture

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

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).

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.

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.

fonestar's picture

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

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.

 

fonestar's picture

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

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.

Thisson's picture

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

 

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"

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.

Cult_of_Reason's picture

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

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?

fonestar's picture

Satoshi told me,

 

"Bernard von Nauthaus, thou art avenged!"