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Metallic Money (Gold/Silver) vs. Credit Money: Know The Difference

Tyler Durden's picture


Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Longtime correspondent Jeff W. succinctly explains the difference between metallic money (gold and silver) and credit money.

You've probably read many articles about money--what it is (store of value and means of exchange) and its many variations (metal, paper, etc.). But perhaps the most important distinction to be made in our era is between metallic money and credit money.

Longtime correspondent Jeff W. succinctly explains the difference between metallic money (gold and silver) and credit money:

We use credit money every day. It’s the only kind of money we have. But because people in Europe and America have historically used metallic money for over 2,500 years, we still have cultural habits that come from the gold money era.

When the U.S. removed gold and silver coins from circulation in the 1930’s and 1960’s and replaced paper gold certificates and silver certificates with Federal Reserve notes, the paper money looked very much the same. But the thing that the paper money represented changed dramatically. The paper money now represents units of credit money that have no guaranteed relationship with the prices of gold or silve r or anything else.

Because the nature of credit money and metallic money are not well understood, and because money is so important in our lives, it is worthwhile to examine and discuss how these two kinds of money are different.

1. Tangible vs. intangible. A gold or silver coin is a physical object that has weight, volume and physical characteristics. Credit money is a record of the existence of a debt. Credit money exists in the intangible world of information and human relationships. Where Mr. A owes Mr. B a specified unit of money, and where that debt is recorded on paper or another recording medium, and where the record of that debt passes from one person’s possession to another as a medium of exchange, you have credit money.

Gold coins are minted; debts are recorded. The two forms of money could hardly be more dissimilar.

2. Old vs. oldest. Metallic money has been used by people for about 2,600 years. It has been used sporadically and in certain places. Credit money has been used for at least 5,000 years, when people first started recording debts on clay tablets, pieces of wood or ivory, etc., and trading those IOU’s as money. Before debts were recorded in writing, they were, in prehistoric times, discussed verbally, remembered, and sometimes traded in verbal transactions. This is how very primitive people still trade using debt today.

3. Persistent vs. ephemeral. Some gold coins more than 2,000 years old are still in existence today. But it would be very rare for any performing loans to be more than 100 years old, and many loans are of very short duration. Much of the U.S. Treasury’s debt issue is very short term, lasting only 90 days or one year. Where gold coins can last for thousands of years, debts are constantly coming into existence and going out of existence.

The U.S. debt holdings of the Federal Reserve are constantly churning and rolling over, whereas gold holdings in vaults can lie stationary and do not need to be replaced or rolled over.

4. Hard to create vs. easy to create. To create a gold coin, someone has to first mine the gold from the earth, refine it, mill it, stamp it into circular shapes and then stamp the governmental pattern on it. To create a piece of credit money, a debt has to be created and then a piece of paper printed or a record created on a computer. Anyone who has no intention of paying back his debt, such as the Federal government, can potentially issue debt in infinite amounts. There is an issue of whether that debt is worth anything, however.

5. Always good vs. sometimes good. A gold coin that is legal tender will always be accepted as money. With credit money, some of it is good and some of it is bad. In recent years Zimbabwe’s credit money went bad. Before that, the Weimar Republic’s credit money became worthless. All circulating debt has a mixture of good and bad. When a lot of it goes bad at the same time, it causes a crisis, where the “toxic debt” must be guaranteed or purchased by government or else banks and other financial institutions will go bankrupt.

6. Non-interest bearing vs. interest bearing. Most debt specifies interest payments as part of the loan agreement. The Federal Reserve notes we use as money are claims on interest-bearing debt owned by the Federal Reserve. Credit money has the quality that there is a continuing flow of interest payments away from the users of money in the general population and toward creditors. There is no such continued flow of wealth from debtors to creditors in a gold money system.

7. Does not need money supply expansion vs. needs expansion. Because interest payments are constantly flowing out from families, businesses and communities to financial centers and wealthy creditors, credit money results in economic sluggishness unless there is a constant expansion of the supply of credit money. Under a gold money system, people can function much better with a constant money supply because there is no leakage of interest payments. Each community can continue to circulate its own holdings of gold money without having to pay any of it out in the form of interest payments.

8. Government does not need to enable creating more debt vs. government must enable debt creation. In order to keep a credit money economy going, more debt must be continually created. Government and financial leaders who do not want to be blamed for a downward spiral of slowing economic activity must see to it that more debt is constantly being created. Under a gold money system, there is no pressure to constantly increase the burden of debt.

9. Not as bubble prone vs. more bubble prone. The fractional reserve method of banking encourages asset bubbles because new money is created as borrowers take out new loans. When people borrow money to buy bubble assets (e.g., houses 1981-2006), it creates enormous amounts of new money to feed the asset bubble. Many asset bubbles were also created during the gold money era due to fractional reserve banking, but where the unit of currency is guaranteed by government to be equal to a fixed weight in gold, the inflation threat is taken out of the picture and that restrains bubble creation somewhat.

To support the value of their currencies under a gold money system, governments must also often raise interest rates in order to encourage investors to sell gold in exchange for bonds paying good interest. Higher interest rates also discourage the formation of asset bubbles.

10. Does not enable ZIRP vs. enables ZIRP. A zero interest rate policy is impossibl e under a gold money system. The demand for gold would soon deplete government’s gold holdings to zero. Under a credit money system a policy of low interest rates and financial repression can be imposed for an indefinite period of time.

11. Does not increase lending activity vs. increases lending activity. Low interest rates and the ease with which credit money is created lead to increased lending activity and higher debt loads. Under a gold money system, debt will necessarily be created at a slower rate. By stepping up the pace of debt creation, a credit money system serves the interests of the banks.

12. Has no problem with debt saturation vs. has serious problems with debt saturation. Continually increasing debt leads ultimately to debt saturation. When a country’s people and businesses are saturated with debt, it makes it much more difficult to continue to increase the debt load. That leads to stagnation and slowing economic activity in a credit money system. A gold money system does not tend to lead to debt saturation and has no similar problems with debt saturation.

13. Increases wealth disparities vs. does not increase wealth disparities. The higher debt load facilitated by a credit money system results in greater flows of wealth from the debtor class to the creditor class. The higher debt load leads to increased disparities in income, more very poor and very rich and fewer of the middle class.

14. Holds its value vs. does not hold its value. Gold-backed currencies have an excellent track record of holding their value. Credit money tends to inflation, the rate of which largely depends on how fast new debt is being created.

15. Government as a guarantor of savings vs. government provides no guarantee. One of the three functions of money is as a store of value. (The others are a medium of exchange and a unit of account.) When the U.S. government guarantees that 35 U.S. dollars will buy an ounce of gold, as it did in the years 1934-67, government aid savers by acting as a guarantor of that store of value.

When the U.S. went off the gold standard in 1971, it changed the relationship between citizens and their government when government no longer provided that guarantee.

16. Defaulters are bad vs. defaulters are only partly bad. In a gold money system, a person who takes out a loan and does not repay it is considered a bad person, almost a thief. He has robbed his creditors of the money they were rightfully owed. In a credit money system, however, the creation of new debt is so important that anyone who goes into debt is a hero of the economy.

That is why under a debt money system, it is considered more important that new debt be created (e.g., as student loans) than to worry about whether they will ever be paid back or to pin blame and guilt on loan defaulters.

Conclusion: As we see, it is no exaggeration to say that the transition from gold money to credit money changes everything. It changes every individual’s relationship with his own money, with government, and with banks. It changes the power relationships within society. It changes the patterns of ownership and wealth accumulation.

It is very important that citizens and investors understand the credit money system that they are trying to operate within. For people with over 2,500 years of experience with gold money, it is difficult to understand it and get used to it. But anyone who does understand it will be better off because of making better-informed decisions. We might as well get used to it because we shall likely have to live with a credit money system for a very long time.

Thank you, Jeff, for an insightful and extremely important overview of the critical differences between credit money and gold/silver. The key distinction of all these important distinctions is the ephemeral nature of credit-money (and any form of fiat currency). History teaches us that a financial-political crisis of sufficient magnitude reveals the underlying value of credit-money--i.e. zero--in a brief but cataclysmic loss of faith/trust.

As correspondent Harun I. observed in Why Is Debt the Source of Income Inequality and Serfdom? It's the Interest, Baby: "Governments cannot reduce their debt or deficits and central banks cannot taper. Equally, they cannot perpetually borrow exponentially more. This one last bubble cannot end (but it must)."

When the current bubble bursts, the difference between metallic money and credit money will be starkly visible: no one will trade gold or silver for any amount of paper/credit money, and the ephemeral financial instruments ("assets") that dominate today's financial system will be revealed for what they are: phantom promises of value.

Of related interest:

Gold: The Once and Future Money by Nathan Lewis

Could Bitcoin (or equivalent) Become a Global Reserve Currency?
November 7, 2013


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Fri, 11/29/2013 - 19:21 | 4200686 stopcpdotcom
stopcpdotcom's picture

Credit money is not money, it is currency.

Real money - precious metals - is a store of wealth.

Currency is not a store of wealth - it depreciates over time.


Fri, 11/29/2013 - 19:35 | 4200706 fonestar
fonestar's picture

Meanwhile is telling me Bitcoin is $1210 USD?  I thought you said it had "collapsed"?  Please help me I am confused.

Fri, 11/29/2013 - 19:38 | 4200716 dick cheneys ghost
dick cheneys ghost's picture

I heard the Saudi's are considering trading oil for invisible coins......hahahahaha

Fri, 11/29/2013 - 19:47 | 4200728 fonestar
fonestar's picture

So if we were able to shrink ourselves small enough (to the sub-atomic level) would you still say that electrons do not exist?  Face it, even your definition of "tangible" is completely relative.

It's just that most of you are too stupid to understand that.

Fri, 11/29/2013 - 19:49 | 4200731 SimMaker
SimMaker's picture

You are a religious fanatic. And an idiot too.

Fri, 11/29/2013 - 19:50 | 4200736 fonestar
fonestar's picture

If I am an idiot, debunk a single thing I have claimed....






Fri, 11/29/2013 - 19:56 | 4200750 dick cheneys ghost
dick cheneys ghost's picture

your so-called bitcoin wealth exists only in your mind.........

Fri, 11/29/2013 - 20:01 | 4200759 fonestar
fonestar's picture

Perhaps you are right.  You should read on Heisenberg and the uncertainty principle.

What I care about is the fact that others agree.  Vires in numeris.

Fri, 11/29/2013 - 20:25 | 4200815 dryam
dryam's picture

Do you really feel compelled to submit a million posts saying how great bitcoin is?

If someones is truly weathy, they don't talk about how rich they are.

If someone is truly good looking, they don't about how good looking they are.

If someone is truly tough, they don't talk about how tough they are.

Get the point? 

Fri, 11/29/2013 - 20:27 | 4200819 fonestar
fonestar's picture

Again, this is not about being wealthy, content, poor or whatever else.  You can expect the exact same from me when Bitcoin reaches five, six and seven figures.

Fri, 11/29/2013 - 20:33 | 4200834 dryam
dryam's picture

You sound defensive and unsure of yourself.

Fri, 11/29/2013 - 20:44 | 4200856 fonestar
fonestar's picture

I thought Bitcoin had collapsed?  Now please answer the question.

Fri, 11/29/2013 - 21:26 | 4200935 dryam
dryam's picture

Bernie Madoff's investors had incredible returns for many years and some actually cashed out and got rich.

Sat, 11/30/2013 - 08:18 | 4201638 GetZeeGold
GetZeeGold's picture




I still have some BernieCoins......but I just keep them as souvenirs.


Fri, 11/29/2013 - 23:52 | 4201202 disabledvet
disabledvet's picture

you will never see me down arrow you fonestar...ever. I even have a "fonestar theme and scene"...just for you.

Sat, 11/30/2013 - 02:24 | 4201426 StillSilence
StillSilence's picture

Five, six, seven or twelve figures won't matter when those figures are measured in debt notes which will exponentially create or die. At a certain point you are left with whatever you might have attained with those debt notes. House, land, car, food, PMs, bitcoin. Question is what rises when debt fails.

When you see "intrinsic," think three dimensional world tangible accountability of an object. Like any other good or service that is available to exchange in commerce on this planet, it needs to actually be felt by the consumer.

The whole concept of money is based on real world production of these goods and services and way to accuratley represent them. It can incorporate technology and be exchanged using it (just like a check can be mailed, just a bit slower) but it cannot be based soley on that technology.

Im not saying bitcoin is "bad," but it cannot ever become "real money" in terms of what the world uses in majority (remember most people are still operating predominatley in the physical realm and after they lose most everything will not likely trust in a crypto currency.)

SOMETHING will be adopted or accepted as money after debt failure is widely seen. Again the question is what and will you want to be holding it before it happens.

Sat, 11/30/2013 - 15:15 | 4202157 fonestar
fonestar's picture

Bitcoin will function as a transfer of payment system both before and after the dollar.

Sat, 11/30/2013 - 15:47 | 4202217 tarsubil
tarsubil's picture

Will I be able to buy a space ship with bitcoins? I want a space ship.

Sat, 11/30/2013 - 18:53 | 4202537 StillSilence
StillSilence's picture

Perhaps, but it will not replace dollars. The big question to me is what will the need be for a crypto currency if a sound money system is ever restored. Admittedly I am unsure, but far less so about what the world banking system will use if/when real money is brought back into it. 

Sat, 11/30/2013 - 05:49 | 4201576 MeelionDollerBogus
MeelionDollerBogus's picture

you mean 0.0000001 of a dollar? Ya, I can picture that easily. That's 7 decimal places, where they truly belong.

Fri, 11/29/2013 - 21:56 | 4200979 Greenskeeper_Carl
Greenskeeper_Carl's picture

^this^ i really dont have any problem with bitcoin. i wish it, and any alternative to our central banker fiat system, the best, but come on dude, give it a rest. i can picture this guy lurking over this site, and probably others, wearing a dirty bathrobe and a pair of slippers, eatign cereal out of a giant popcorn-type bowl in his moms basement, eagerly awaiting any thread he can jack to talk up bitcoin.

Fri, 11/29/2013 - 20:25 | 4200813 Professorlocknload
Professorlocknload's picture


Fri, 11/29/2013 - 20:27 | 4200817 dryam
dryam's picture



Fri, 11/29/2013 - 20:47 | 4200860 fonestar
fonestar's picture

It seems that you believe you can reassign terms you do not understand?  You can do that, it's just that people will think you're crazy or have no idea what you are talking about.

Sat, 11/30/2013 - 05:07 | 4201550 MeelionDollerBogus
MeelionDollerBogus's picture

You are the one who is re-assigning to fit your belief system.
The definitions given to you are iron concrete laws of nature & you are pretending it is not so.
That is called Fail(tm).

Fri, 11/29/2013 - 20:28 | 4200824 fonestar
fonestar's picture

If you borrow against Bitcoin you could create credit.  Bitcoin itself is obviously not credit.

Fri, 11/29/2013 - 20:31 | 4200829 nmewn
nmewn's picture

Again, does it need something else to function?

Money never does.

So what is it?

Fri, 11/29/2013 - 20:52 | 4200873 fonestar
fonestar's picture

Money itself is only a biproduct of human conciousness.  Things like gold, silver and copper have properties that make them useful as an ideal money to humans.  Remove the human and they cease to be money.

Fri, 11/29/2013 - 21:12 | 4200910 nmewn
nmewn's picture

"Remove the human and they cease to be money."

Without humans, there is no concept of money.

So, do you have a problem with money or people?

Fri, 11/29/2013 - 22:00 | 4200991 Xibalba
Xibalba's picture

Keceph anah...

Remove the human and money remains money. Humans do not determine what money is. Money is not relative. Money is not what you think it is.

Fri, 11/29/2013 - 22:21 | 4201024 dark pools of soros
dark pools of soros's picture

I think our lizard overlord has spoken

Fri, 11/29/2013 - 22:23 | 4201027 fonestar
fonestar's picture

So are you claiming there is something inside gold and silver itself that is innately valuable?  Perhaps magical?

Or is it perhaps useful within human society?

Sat, 11/30/2013 - 07:19 | 4201606 negative rates
negative rates's picture

Yes. They are the great equalizers and money is a unit of time. So if I could Cher back time, your bitcoin would not be worth 2 bits, because it's time had run it's course. That's not saying it could not come back under a new world order, but we are far from forming a new world order. So you do the math (homework) come back and take the test, and try not to fail my 6th grade education.

Sat, 11/30/2013 - 09:57 | 4201693 Agstacker
Agstacker's picture

I hate to burst your bubble dude, but there is silver inside the computer you are sitting at right now.  It's not some data block with a unique ID number, it is an actual element that was mined out the earth and has the highest electrical conductivity of any element.

Sat, 11/30/2013 - 15:17 | 4202162 fonestar
fonestar's picture

What is inside the silver that makes it valuable if there are no humans to use it?


Wed, 12/04/2013 - 22:04 | 4216089 MeelionDollerBogus
MeelionDollerBogus's picture

For one, other non-humans eventually will evolve & probably will find a use for the silver.
For another, the time when humans are about to be gone is not yet here so your argument has no purpose.

Sat, 11/30/2013 - 21:46 | 4202787 MeelionDollerBogus
MeelionDollerBogus's picture

Idiot. It's called an atomic nucleus. It isn't magic but bitcoin doesn't have one & it's all that counts.

Sat, 11/30/2013 - 02:46 | 4201448 MeelionDollerBogus
MeelionDollerBogus's picture

Incorrect. Our physiology regardless of any thought is what gives physical value to physical money. Silver is antibiotic. Your conscious thoughts do not affect this. Gold resists corrosion. It is malleable & conductive. Your faith or lack of it has no affect on these properties ever.
Bitcoin has NONE of these properties. Estimation, speculation, guessing & fiat-exchange servers are the only connection of btc to the real world & it's a very tenuous connection based on faith, mistakes & guessing.

Fri, 11/29/2013 - 20:53 | 4200877 Professorlocknload
Professorlocknload's picture

So,,,BC is not a promise to pay? It just,,,is?

Fri, 11/29/2013 - 20:58 | 4200880 fonestar
fonestar's picture

Bitcoin is a system, just like the thousands of other systems the dunces here use on a hourly, daily, weekly basis without ever bothering to question.

Fri, 11/29/2013 - 21:15 | 4200915 nmewn
nmewn's picture

BitCoin is a system for money. Not money itself.

Thank you.


Fri, 11/29/2013 - 21:28 | 4200941 fonestar
fonestar's picture

I have never claimed otherwise.

Fri, 11/29/2013 - 22:01 | 4200992 nmewn
nmewn's picture

I believe we have a break through ;-)

Fri, 11/29/2013 - 22:15 | 4201015 fonestar
fonestar's picture

Bitcoin is a currency transmission system.  When you own Bitcoin, you own a portion of that network.

Fri, 11/29/2013 - 22:38 | 4201072 nmewn
nmewn's picture

"Bitcoin is a currency >>>transmission<<< system."

Well, I already know And I really don't care who it gets transmitted to, if done voluntarily, ethically and under no misconceptions.

I would have left all of you alone if you would have just said that, instead of the marketing campaign of it being money.

Fri, 11/29/2013 - 22:51 | 4201104 fonestar
fonestar's picture

Go back and read my damn posts.  I have always said that Bitcoin was a currency!

Fri, 11/29/2013 - 23:18 | 4201150 nmewn
nmewn's picture

A currency based on what, hope or electricty?

And I still expect a rational answer to Mt.Gox being sold by Jed McCaleb for mere "fiat currency" and Satoshi being some sorta gawd ;-)

Sat, 11/30/2013 - 01:09 | 4201332 MeelionDollerBogus
MeelionDollerBogus's picture

Then you are now backtracking: you can't be a network for transmission of money and a currency at the same time.
They are EXCLUSIVE. Currency must be a derivative of money and never the network, just like SWIFT is a money network and not money.

Fri, 11/29/2013 - 22:39 | 4201076 dick cheneys ghost
dick cheneys ghost's picture

In all the bitcoins articles that I have read on ZH, I have never heard it described as this......'a currency tranmission system'.......thanks, I mean that. I admire ur moxy

Fri, 11/29/2013 - 22:53 | 4201108 fonestar
fonestar's picture

Satosh did it a disservice by calling it "Bitcoin" because it makes people think of an object (like a coin) and not a network (like p2p).

Fri, 11/29/2013 - 23:21 | 4201158 nmewn
nmewn's picture

Its called marketing.

Any used car salesman knows the concept ;-)

Sat, 11/30/2013 - 02:19 | 4201422 MeelionDollerBogus
MeelionDollerBogus's picture

no you don't. The cable owners own that part of the network, the physical tangible hardware.
You own nothing. You consume some time on their network & have no future claim to it unless they say so, explicitly or implicitly.
A protocol IS NOT A NETWORK. This protocol is an algorithm to USE a network SOMEONE ELSE built that you may use if you pay the right price (in DOLLARS).

Sat, 11/30/2013 - 21:26 | 4201449 MeelionDollerBogus
MeelionDollerBogus's picture

Show me the network ownership of the true network, the physical cables, based on bitcoin's existence, algorithm, etc. Prove your case.

Sat, 11/30/2013 - 10:46 | 4201737 TeMpTeK
TeMpTeK's picture

Bitcoin has not been authorized... there is your tip to cash out now.....because when your overlordes regulate its convertability back to cash by making it mandatory that every xyz-coin to cash transaction be documented with names, location, SS#, and subject to jurisdictional tax witholding as well as anti terrorism, laundering, anti drug, anti tax evasion wait and hold times legislation .. there goes your champagne wishes and caviar dreams... its coming fonestar.. its coming Why? Because bitcoin has not been authorized, just like every other govt takedown of an unauthorized medium of exchange...

Fri, 11/29/2013 - 21:28 | 4200937 MeelionDollerBogus
MeelionDollerBogus's picture

we're questioning ALL of them here: every last one of them is a credit, a promise to pay, because they are not tangible goods.

Fri, 11/29/2013 - 21:25 | 4200934 MeelionDollerBogus
MeelionDollerBogus's picture

it obviously is: it has no value but what you can get someone to give to you for it, and that's credit. Rather than being a concrete credit for 10 bushels of wheat or 100 oz of gold it's a variable credit whereby someone wants some amount x of some product p.
Naturally you'll find out all those numbers are zero everywhere but for now they're not. They are with me, however. I would trade not 1 penny for bitcoin. Not one.

Fri, 11/29/2013 - 22:24 | 4201037 dark pools of soros
dark pools of soros's picture

Weights & Measures


Bitcoin is the defacto accepted standard weight & measure for digital money


And if you stackers hate that, why are you on the internet?  Can you hold it?

Sat, 11/30/2013 - 00:16 | 4201245 disabledvet
disabledvet's picture

even with the Constitutional requirement for a "system of weights and measures" AND a gold standard...there was still a problem in the USA with "zee gold." as they used to say "keep your fingers off the scale Pierre" back in the gold rush days. I would argue much the same is true for bitcoin...but we'll see. to be money one need only have "two humans agreeing to a said value of a said object" (i.e "Manhattan was bought for beads")...that's all you need for "money" to come into existence. what is CURRENCY of course is a whole 'nother this article doesn't even begin to scratch the surface of actually. here is an example however: "bonds paying 5% interest backed by gold as a purely private transaction." talk about "faith and credit."

Sat, 11/30/2013 - 00:33 | 4201278 dark pools of soros
dark pools of soros's picture

so you not knowing how bitcoins work makes it seem like someone can push fingers on their miners and get more coins?


believe me, if it was just a simple fad it would of been done a lot earlier, and if it was hackable it would of been cracked years ago

all the fears of bitcoin are the same as anything...  bank robbers, TPTB coming after you!, missing the boat on a golden opportunity... etc


Sat, 11/30/2013 - 20:42 | 4202674 MeelionDollerBogus
MeelionDollerBogus's picture

I know how they work.

They waste computational resources compared to GPG signatures / PGP, and they waste trust on a thing which has no basic value per unit no matter how many or few units there are, and it's got a built-in network-majority algorithmic weakness permitting the entire currency to be threatened at any time by controlling routers, networks, servers, issuing ALTERNATE blockchains using botnets, etc.

I have a computer science degree, do you?

Sat, 11/30/2013 - 21:22 | 4202736 Pseudonymous
Pseudonymous's picture

Please read my reply to your claims of weaknesses:

The majority that matters is the majority of computing power, and more specifically in one particular hash algorithm, for which the Bitcoin community has already created very efficient ASICs, rendering many of TPTB's supercomputers and botnets uncompetitive and unsuitable for mining. TPTB are very far behind right now and they can't catch up unless they start a huge concerted effort directed specifically at Bitcoin mining, which I highly doubt they would anyway.

Sat, 11/30/2013 - 21:54 | 4202801 MeelionDollerBogus
MeelionDollerBogus's picture

I read it. It's wrong.
The network's computing power is represented by SOLVED hashes and by ACTIVE computation CONNECTED to the network.
Both can be subverted with ease.

One single optical VLSI "ASIC" would perform no less than one TERA-hashes per second - probably per SQUARE INCH of chip.

You have no idea what's happening here.

Those things don't slow down for electrons, they are PHOTONIC COMPUTERS.

Just ONE Of them can supercede the ENTIRE bitcoin computing network in a single DAY.

You might think the turtle can outpace the hare but in fact you are a turtle going up against a mach 18 ram-jet. You have NO IDEA.

Sat, 11/30/2013 - 22:13 | 4202830 Pseudonymous
Pseudonymous's picture

OK, show me photonic computer, let us all see.

Mon, 12/02/2013 - 05:36 | 4205924 MeelionDollerBogus
MeelionDollerBogus's picture

You'll see it as soon as all the bitcoin networks are subverted.
For now you can only see some close-ups of the optical wave-guides on a google image search.
The full computer designs can't be shown to the public or you'd all catch up. That's against the rules - you're not allowed to make your own until it's too late.

Mon, 12/02/2013 - 23:36 | 4208888 Pseudonymous
Pseudonymous's picture

We'll see about that.

Wed, 12/04/2013 - 05:00 | 4213045 MeelionDollerBogus
MeelionDollerBogus's picture

yes, we will.

I can just picture you being told in 1991 a vast wide global computer network would become the norm for all global commerce and it was already invented but held only in academia & the military for now.

Your response as above.

And picture the same scene playing out in 1970. Because in 1970 DARPAnet DID exist & DID work and was not in private hands - military only.

And yet here we are.

Thu, 12/05/2013 - 12:45 | 4217835 Pseudonymous
Pseudonymous's picture

Times change...


One minute you're on top
the next you're not, watch it drop
making your heart stop
just before you hit the floor
one minute you're on top
next you're not, missed your shot
making your heart stop
you think you've won
and then it's all gone

Wed, 12/04/2013 - 22:02 | 4202799 MeelionDollerBogus
MeelionDollerBogus's picture

I can't hate what's not true.
I can dislike the assertion of the untruth.
Bitcoin is not any defacto measure or weight of anything at all. Nothing.
It doesn't even have a consistent measure of the resources wasted to produce a hashblock, we simply know that the cost is increased with each additional btc produced. Which is also not good. It would be bad even if it was non-increasing.

The de-facto standard for digital money is the SWIFT system, like it or not

Fri, 11/29/2013 - 20:00 | 4200751 knukles
knukles's picture

Idiocy is a concerted opinion which needs no debunking.
(Not that I care one way or another, but you really do bring the enmity of others down upon yourself with condescending egocentric opinions... aka offensive in common parlance... as in socially oriented graces)

Fri, 11/29/2013 - 20:05 | 4200780 fonestar
fonestar's picture

Idiot?  No.

Fanatic?  Yes.

Fri, 11/29/2013 - 21:21 | 4200929 MeelionDollerBogus
MeelionDollerBogus's picture

By definition one includes the other.

Fri, 11/29/2013 - 19:56 | 4200754 nope-1004
nope-1004's picture

You said the Chinese were buying Bitcoin.  Do you have any data on that?  Because, according to the Ministry of Finance, digital currencies are against the law.

Full press release here from 2007:

Forbidden any kind of electronic currency to exchange back to CNY (Chinese Yuan) that law is directed against electronic currency like Q coin (a very famous visual currency issued by tencent)

Fri, 11/29/2013 - 19:58 | 4200755 knukles
knukles's picture

I thought it was anonymous, no?

One of them both ways thingamajigs.

Fri, 11/29/2013 - 20:03 | 4200766 nope-1004
nope-1004's picture

Did you forget the </s>, or is that a legitmate question?

Either way, I'll answer your question with a question:  Governments love anonymous and untraceable wealth, don't they?

Fri, 11/29/2013 - 21:10 | 4200785 knukles
knukles's picture


I figured in the kinda-Socratic method of leaving a blank canvas for the observer to complete as he sees fit.

You got it, my man!!!!

Fri, 11/29/2013 - 20:02 | 4200761 nmewn
nmewn's picture

Hory crap!...BitStain ;-)

Fri, 11/29/2013 - 20:02 | 4200770 fonestar
fonestar's picture

I say a lot of things.

Fri, 11/29/2013 - 20:09 | 4200787 nope-1004
nope-1004's picture

You do tend to talk alot, although I don't personally mind it.  Most people who make money think they're on cloud nine..... I mean, wait.... let me rephrase.  Most YOUNG people who run into money accidentally think they're invincible, even to the point where they will publicly taunt others.

Had you known Bitcoin would do what it would do, you'd be quiet, because that you make you not only someone who could see into the future, but someone who would be in high demand for investment advice.

As it stands, though, your mouth just runs off like teenager.  No offence, just my observation.


Fri, 11/29/2013 - 20:12 | 4200788 fonestar
fonestar's picture

This isn't about being wealthy or becoming rich for me.  This is personal.

Sat, 11/30/2013 - 07:21 | 4201609 negative rates
negative rates's picture

You aint gonna win any elections with that voice.

Fri, 11/29/2013 - 20:18 | 4200784 Papasmurf
Papasmurf's picture


If I am an idiot, debunk a single thing I have claimed....






principia probant non probantur

Fri, 11/29/2013 - 21:05 | 4200900 MeelionDollerBogus
MeelionDollerBogus's picture

been debunked in almost every reply. you just pretend you can't see it.
In actuality it's the bitcoins no one can see.
So Jack, how's those magic beans working out?

Fri, 11/29/2013 - 21:09 | 4200905 Son of Captain Nemo
Son of Captain Nemo's picture

I think someone needs to tell fonestar that his picture is starting to more closely resemble a b&w of "Mugatu" everytime he types...

Fri, 11/29/2013 - 19:57 | 4200744 knukles
knukles's picture

Jump you Fuckers!

Paper Bitcoins coming to you via the Royal Mint.
So, there, assholes.
Counterfeit or Real?
Digital or Tangible?
Taxable or Not?

Under the Aegis of your Friendly Central Bank of Infinite Rehypothceation, The Royal Mint*

* a wholly owned subsidiary of the Rothchilds...

Captured, lock stock and barrel by TPTB...
Couldn't happen to a nicer threat to their very own imperial powers.

"You will be assimilated"

Fri, 11/29/2013 - 20:00 | 4200757 nmewn
nmewn's picture

What about wallets...are they selling wallets too?

Fri, 11/29/2013 - 20:07 | 4200782 knukles
knukles's picture

The kind they can get their fingers into.

Kinda like the dude's unwanted unwanted hand in your jeans trying to play pocket pool with ya'... or somptin' like dat.

Fri, 11/29/2013 - 20:16 | 4200795 yofish
yofish's picture

I agree on both points.  I usually like what Smith has to say but he is prone to invite hyperbole. Agruing the realative worth of ANYTHING is a fools game, especially here @ ZH.

Fri, 11/29/2013 - 20:18 | 4200800 fonestar
fonestar's picture

They should really just stick to things they can touch, it's about as much as they'll ever be able to handle.

Fri, 11/29/2013 - 21:04 | 4200898 MeelionDollerBogus
MeelionDollerBogus's picture

electrons have one use to me: driving wattage. How many watts can I get out of a raw bitcoin?

Fri, 11/29/2013 - 21:26 | 4200933 One World Mafia
One World Mafia's picture

Right. Uncle Ben did not print money out of thin air.  There are electrons backing it.

Fri, 11/29/2013 - 19:46 | 4200727 nmewn
nmewn's picture

If I said BitCoin is just like credit money, would you be offended?

Fri, 11/29/2013 - 19:48 | 4200729 fonestar
fonestar's picture

You can say whatever you like.  It doesn't make any of it correct.

Fri, 11/29/2013 - 19:51 | 4200733 SimMaker
SimMaker's picture

So you handed over your hard earned "Money"...and got given some lines of code in, nothing.......


As they say, there is one born every mintue, Sucker......LOL. Thanks for the cash though...... ;)

Fri, 11/29/2013 - 19:53 | 4200745 fonestar
fonestar's picture

Yes, much of my labour (earned sitting on my ass) is stored as code.

Fri, 11/29/2013 - 21:04 | 4200896 MeelionDollerBogus
MeelionDollerBogus's picture

and it's worth the effort you can produce from that code - nothing.

Fri, 11/29/2013 - 19:51 | 4200743 nmewn
nmewn's picture

Does a BitCoin need something besides itself to work?

Fri, 11/29/2013 - 20:02 | 4200767 knukles
knukles's picture

A guy, a computer and an EBT card....

Fri, 11/29/2013 - 20:08 | 4200783 nmewn
nmewn's picture

I'm firmly convinced, we'll never run out of ponzi'

Fri, 11/29/2013 - 20:12 | 4200790 nope-1004
nope-1004's picture


Knucks, don't leave me hanin', finish the joke:


A guy, a computer and an EBT card walk into a bar.........

Fri, 11/29/2013 - 20:09 | 4200786 fonestar
fonestar's picture

I heard that pisses off a lot of legacy people?  The fact you can make money sitting on your ass in front of a computer screen.

Is this true?

Fri, 11/29/2013 - 20:33 | 4200835 Dadburnitpa
Dadburnitpa's picture

It's all good until the next Carrington event.

Fri, 11/29/2013 - 21:23 | 4200920 Kirk2NCC1701
Kirk2NCC1701's picture

It's accurate to say that BTC is 'created' via the "computer mining" process** and exchanged for fiat currency, PM, goods and services (whether naughty or nice).

So, it is indexed to both the virtual and real economy.

I don't have to 'like' or 'hate' it any more than I may like or dislike the Wave/Particle duality of photons, or things like fiat currency. I just have to make use of it, and accept its limitations. I don't have to "bet the farm" on any one asset either... Only enough to handle the potential downside, in the timeframe of "risk exposure".

** Requires PC and IT resources, and real energy (Watts of electricity).

Fri, 11/29/2013 - 22:14 | 4200972 nmewn
nmewn's picture

Look, I know what it is but gold was already "there". Just like iron or copper or soil or the air we breathe to be made into something. This (BitCoin) came from (for the purist, not the scammer) a concept, an idea, faith in the unprovable, a wisp, that is, nothing. Satoshi is not God and neither is Jed McCaleb or the holders of BitCoins patent. Yes, its anarc-currency protected by the "beast" one professes to hate. Go figger.

But whatever.

Central banks do the same thing, it comes from absolutely nowhere. The central banks don't even have the money they claim to have lent. So, how is their money real? I know, shocker to Bitster's right?

Now don't get me wrong...I DO LIKE THE IDEA OF MOVING MONEY ANONYMOUSLY WHEREVER I WANT...ITS MY MONEY AFTERALL, NOT THEIRS...I think I expressed myself in all caps well

But this is not money Kirk.

No harm no foul, good luck with it but understand what it is.

Fri, 11/29/2013 - 21:16 | 4200781 nmewn
nmewn's picture

"Meanwhile is telling me Bitcoin is $1210 USD?"

Pretty sure Mt.Gox was sold by Jed McCaleb (a surfer dude) to...?

Like...totally, fer sur.


Wait. Like...wut, man? He like totally sold out to the man. Whoa! Like, my Satoshi vibe is like totally blown away now dude.

Or sumpin.



Fri, 11/29/2013 - 21:17 | 4200922 rubiconsolutions
rubiconsolutions's picture

"Meanwhile is telling me Bitcoin is $1210 USD"

The question is - for how long? I read and interesting piece today by Gary North and it opened my eyes to BTC. It may be good for people to read -

Sat, 11/30/2013 - 00:24 | 4201261 J S Bach
J S Bach's picture


You've gotten a lot of negative responses from the gold bugs who inhabit Zero Hedge.  Like them, I too, press the "down" button on your comment.  But, I cannot logically respond in any sane manner as to "why?".   You are right.  Bitcoin has gone through the roof.  And we here look upon it with a slight bit of envy (why didn't we buy in) and doubt (this whole thing is a ruse which will inenviatebly collapse).  I believe I write for most here at ZH that our belief is in the latter.  Yes... there may evolve a virtual "E" currency (bitcoin) which will act as an honest trading medium for the world.  But, even if this becomes the case... "REAL" assets such as real estate and precious metals will still be there as valuable resources which CAN NOT lose their trading value.  This is why we remain stalwart and obstinate.  The truth will out.  

Sat, 11/30/2013 - 15:11 | 4202148 chaartist
chaartist's picture

GOLDBUG VIEW ON BITCOIN BITSWAN. I am impressed, but still have more questions.
Fri, 11/29/2013 - 21:30 | 4200944 rubiconsolutions
rubiconsolutions's picture

Funniest damn thing I've ever read -$9M Bitcoin haul buried in U.K. rubbish tip

Fri, 11/29/2013 - 22:31 | 4201048 StillSilence
StillSilence's picture

Credit is debt. It is not only not money, it is anti-money. The vast majority of the world doesn't use any money at all. Even currency is a debatable term, since it is supposed to represent money, or at least something. Since it represents debt (again the polar opposite) it shouldn't even be referred to as currency, in my mind.

Bitcoin is interesting, but here is what Im starting to think....There wouldn't be any need for it if we weren't operating under a greedy, theft driven system. In free market without oppresive "govt" entites having the ability to steal and convict people for trivial things, there would be no need for a virtual currency to work around the system. Im not saying we are close, but if we were.

In the meantime, if bitcoin really is as it's presented, and is real threat to the fiat system, then certainly it would be fought in full force by those in control of said fiat. Being interet based, it could certainly become very troublesome to conveniently transact IF TPTB really wanted to make life difficult for its users (I would think)....and if its NOT as its presented, then that alone should be enough to cause concern about it's long term legitimacy. 

If humanity is ever able to get to where WE want (which is clearly to be able to keep what we earn and have real ownership, transact with who and how we wish, have no fear of being persecuted or prosecuted for any victimless nonsense....basically get governing entites and banks to do what they are supposed to do and be accountable when they do not), then I just don't see the need for a virtual currency because it always comes back to real world production of goods and services that have the value. Cetainly integrating technology to allow the transfer of things/payment online is acceptable, and that service would be relatively cheap and simple (akin to a bank wire).



Fri, 11/29/2013 - 23:25 | 4201157 dark pools of soros
dark pools of soros's picture

OK, you been here a whole.. 5 months or so??    Way back this site was all about game theory and not about nutter religious metalheads..  but back then, the game was to grab gold/silver and then when joe jackass over at the next cube finally bought in, we all sold like 80% of our stacks..  then moved onto the next thing..  guess what it is


But during this journey, we attracted all the nutters that 'never sell' but somehow always hate the price (too high, damn can't stack more... too low, damn it should be worth more, damn the bankers!!)


I'll sell into the rallies of EVERYTHING..   keep the true ZH spirit alive





Sat, 11/30/2013 - 00:11 | 4201233 StillSilence
StillSilence's picture

Time registered to comment on ZH is essential to understanding my background and position.

So you liquidated 80% of your physical PM and put in into bitcoin? When and at what prices and why keep the 20%? What did you trasnfer out of when you got into PM way back when?

Perhaps too early to tell, but when it's time to move on from bitcoin when joe finally realizes, where you do anticipate putting your (sure to be astounding) profits?

Finally one (off the wall) hypothetical....If you had to choose one means to preserve your wealth over the next several decades, what would you choose?

Sat, 11/30/2013 - 00:38 | 4201291 dark pools of soros
dark pools of soros's picture

you can go back and look at my comments over the past 4 years..  I posted when I sold most of my silver and gold when silver was ~$48 and gold in the mid $1800's

when I start to get plenty of upvotes on this vile site I will know to sell bitcoin

I didn't jump right away from one to the other, but you can see all my posts from earlier this year about getting into mining and that has done very well..  we still live in a debtor's paradise, so I will continue to act like wall street and go after low to no interest funds and grab undervalued items..  and yes, I can easily go back heavily into gold/silver/platinum..   I'm not attached to anything except locking in gains




Sat, 11/30/2013 - 01:29 | 4201351 StillSilence
StillSilence's picture

Well with timing like that, you should have no trouble determining the end point for this debtor' paradise and be able to get positoned right  where you want for the next big thing, whatever it turns out to be... Keep them gain$ coming in.

Sat, 11/30/2013 - 07:24 | 4201612 negative rates
negative rates's picture

Time is not on your side, o troublesome one.

Sun, 12/01/2013 - 06:53 | 4203198 Oracle 911
Oracle 911's picture

2 Notes:

1st to the 2nd point, even it is credit/dept what the so called primitive/prehistoric nations used as "money", it was still represented as some kind of commodity/article/labor and not as some kind of abstract concept.

2nd the real problem is usury, it is fundamentally different if you lend money for a person whom needs house, car or something else and charge him/her with interest and do it for the same person whom want start a business. In 1st case it is for living if institute does it about 1,5% is morally acceptable, if it is done the same thing by a person the it is usury. In 2nd case for both party is acceptable giving a loan with interest rate.

Fri, 11/29/2013 - 19:23 | 4200687 ZH Snob
ZH Snob's picture

anyone with an instinct for value would prefer the heft of gold to the flimsiness of paper.

Fri, 11/29/2013 - 19:29 | 4200696 Cacete de Ouro
Cacete de Ouro's picture

I don't want your money honey, I want your love

Fri, 11/29/2013 - 20:04 | 4200773 knukles
knukles's picture

If you want your Bitcoins you can keep your Bitcoins

Fri, 11/29/2013 - 21:10 | 4200893 sixsigma cygnus...
sixsigma cygnusatratus's picture, except for this guy.  He apparently lost 7500 bitcoins when he thew away his hard drive.

I remember when I accidently threw away 7500 gold coins and I was really...oh, wait that never actually happened.

Fri, 11/29/2013 - 19:46 | 4200725 Sziget
Sziget's picture

I think #7 is false. When the roman mines got empty came a big recesion called dark ages which lasted till huge gold and silver suplyes found in america. When that mines emptyed came a huge recession which called 1873 and lasted till klondike. When the mines emptied there came 1929 and never get back on track till today. Flow matters for gold money too not the stock. Sorry for my english.

Fri, 11/29/2013 - 20:12 | 4200769 AlaricBalth
AlaricBalth's picture

No need to apologize. Your English is better than many of the thundering herd who put on quite a display in stores across the country today. Thank you for contributing to the thread.

How are things in Hungary? Congratulation on the independence of your central bank from the ECB.

Fri, 11/29/2013 - 20:23 | 4200808 DoChenRollingBearing
DoChenRollingBearing's picture

Very decent of you Alaric.  I too like it when foreigners (non-Americans) contribute their thoughts.  And THEIR English is ALWAYS better than my Hungarian..., LOL.

Fri, 11/29/2013 - 20:47 | 4200862 AlaricBalth
AlaricBalth's picture

Thanks DoChen.
Let me know when you get back to Miami.
Perhaps meet up in the Grove for the King Mango Strut.

Fri, 11/29/2013 - 21:38 | 4200958 Sziget
Sziget's picture

Thx guys I read zh a lot but commenting always seemef a bit hectic to me to engage in, I will try more in the future. About Hungary, we have an election comming up at April so not a single politican looking further than that or their pockets. A huge story nowadays a wistleblower from the local irs who sais multinational corporations cheating taxes with import export schemes with active coverup from the authority. It's maybe so last year here but its new for the larger population I think somesthing gets in motion. The worst thing happening here right now is implementation of an American like student loan system with 9% interest and collateral coming from the EIB.

Sat, 11/30/2013 - 01:44 | 4201372 Tim_
Fri, 11/29/2013 - 19:58 | 4200756 Hail Spode
Hail Spode's picture

He makes a lot of good points, but I cannot agree with #15.   Government will repeatedly try to get out of its commitments to uphold the value of the money which it issues.  Any who doubt should let History answer this question.   Money is only safe when it is taken out of the hands of government and serves only to see that contracts are upheld between the issuers of private money and the users of private money.


Fri, 11/29/2013 - 20:38 | 4200841 Professorlocknload
Professorlocknload's picture

"Government will repeatedly try to get out of its commitments to uphold the value of the money which it issues."

  For sure. That's why it was detatched from reality. To be allowed to float down the stream. Hard to "float" PM's.

Fri, 11/29/2013 - 20:02 | 4200760 eddiebe
eddiebe's picture


Fri, 11/29/2013 - 20:03 | 4200771 Yen Cross
Yen Cross's picture

  I think fonestar is missing the crest of his perfect wave. lesson #1 fonestar. Never pump your product if it's jumping off the shelf.

(unless you're the ShamWow Guy®)  You need to save your ammo for the bounce. Man I hope you make millions so I can borrow from you in BTC to make millions more.

Fri, 11/29/2013 - 20:27 | 4200818 DoChenRollingBearing
DoChenRollingBearing's picture

DCRB sitting here with his little pieces of BTC is completely fascinated with how this experiment will turn out.

And speaking of ammo, yeah, I just bought some.  One of my Christmas presents to me.  Wahoo!

Fri, 11/29/2013 - 20:43 | 4200854 Professorlocknload
Professorlocknload's picture

  Yeah, Bearing. Bricks of 22 Longs back on the shelf in my local gun shop. One Brick per store visit, so round and round through the revolving door.

 Just like Christmas.

Fri, 11/29/2013 - 20:51 | 4200866 bigrooster
bigrooster's picture

For most transactions in a human life the barter system makes the most sense.  Then no government can tax you, the IRS thinkst that they can tax barter transactions but FUCK those asssholes.

So if my neighbor's wife would like a dozen of my chicken eggs she can either pay me in some form of money or "service".  Now for me I would LOVE to "trade" eggs for blowjobs, what male would not?  Thank GOD for Zerohedge where I can actually express my opinion.

PS...real bitches I have lots of eggs!  

Sat, 11/30/2013 - 01:34 | 4201355 Lednbrass
Lednbrass's picture

And out in the hinterlands, away from the major cities this is becoming more and more common.  The exchange of goods and services in untrackable and untaxable ways is making a big comback.

Sat, 11/30/2013 - 10:58 | 4201748 FreeNewEnergy
FreeNewEnergy's picture

bigrooster, I like the way you think. I am transitioning from gardener to farmer, and am wondering what will produce the best barter blowjobs, broccoli, corn, lettuce, spinach, tomatoes, squash, cucumbers (they, at least, offer some visual concept), tobacco?

My main goal is to barter vegetables for meat, or eggs, though oral sex is a great idea, but how much? Four cukes and a nice spaghetti squash for good head? What about quality? My vegetables are non-GMO, great stuff, and I wouln't like to be trading for some toothsome mauling.

After the more base functions are taken care of, I'm thinking of trading for gold, silver, cars, bank loans. How about garden bonds? I've already been able to convert silver into bonds (one of the great uses for REAL money), so vegetables can also be worked that way, as in community gardens. Payment up front for goods delivered later, on a periodic basis, like a coupon, but you never get your principle back, so not quite a bond. Needs more work. Vegetables, eggs, meat, as currency though, perfect.

Fri, 11/29/2013 - 20:50 | 4200869 SILVERGEDDON

Fonestar is the Bitcoin Million Dollar Bonus, digitally redux. 

Fucktards are fucktards, no matter what they be pimping.

Even Reggie Middleton can't pimp his shit wearing a loincloth and a spear.

Fonestar looks naked in his Bitcoin jockstrap.



He is naked - digital jockstraps aren't tangible assets ? 

Fri, 11/29/2013 - 21:06 | 4200888 Yen Cross
Yen Cross's picture

@ SILVERGEDDON   Don't give fonestar shit.  He had the balls enough to take a stand and made some fiats from it.

 Personally, I want to see how this thing plays out. Let's leave fonestar alone. If he doesn't pump us we won't bother him.

   He's given me some great links to "short track" my learning curve of BTC... I'm really interested to see how the depth of this crypto currency thing goes. Airline miles deep, double coupons deep? who knows?

  I would suggest that fonestar liquidates between 40 & 60% of his BTC holdings. The second the Fed. says they aren't tapering in December BTC will drop at least $200. He can always average back in.

  fonestar isn't a U.S. Citizen so he doesn't have to deal with short term capital gains taxes...

Fri, 11/29/2013 - 22:34 | 4201058 OneTinSoldier66
OneTinSoldier66's picture

I like fonestar. Like me, he hates TPTB. He's a believer. Sure, he may be fanatical/dogmatic about his belief in Bitcoin. I've been there with regards to Gold and Silver myself.


He's like I was. He's shouting from the rooftops to GetZeeBitcoin!! Hurry!! It will help rid us of our overlords all the sooner! I think I know exactly how he feels. In other words, I don't blame him for trying.

Fri, 11/29/2013 - 21:09 | 4200907 Professorlocknload
Professorlocknload's picture

+ Yen. This is an open forum. Something to learn from everyone. I'd even guess some PTB are interested in the outcome of the eCoins.

Fri, 11/29/2013 - 21:56 | 4200931 Yen Cross
Yen Cross's picture

  @ Professorlocknload   "Every Day Above Ground Is A Good day"...   Everyone told me I was playing in a Casino when I started trading F/X. They said it wasn't a real job, and I should get a part time job.

   They aren't saying that now. You know why? I never quit! I'll die trying! Understanding the F/X business, I suspect BTC will be relagated to upgrade status on rewards cards.

   Fiat currencies exist because governments exist. NOT the other way around. I hope fonestar makes a fortune and sets himself up nicely in a beautiful tropical destination...

    I owned car washes to finance my initial F/X startup. I started those out of my garage!

Fri, 11/29/2013 - 21:28 | 4200939 taketheredpill
taketheredpill's picture


Credit. From the Latin "Credere", meaning "believe". Or not...

Fri, 11/29/2013 - 22:06 | 4201001 discopimp
discopimp's picture

Good point, unfortunately where credit leads is to a mortgage (Mort in Latin means dead)

Fri, 11/29/2013 - 21:33 | 4200946 lasvegaspersona
lasvegaspersona's picture

Once again we see confusion between the functions of money and what you want to call money.

Money has 3 functions , Unit of Account, Medium of Exchange and Store of Value. Those who keep insisting we continue to cram all 3 functions into the same item are missing one of the great lessons of history. When governments insist that their currency can be all 3 they then inevitiably debase the currency, even if the currency is said to be backed by metal. In fact this arrangement causes the metal to be chained to paper which can be printed in endless sums. Thus we see a gold standard which keeps the price of gold debased right along with the currency.

Only when the metal is NOT part of the currency can it float and in doing so protect the holder from the whims of reckless printers. Look at the Euro. It is protected by gold on it's balance sheet but gold is just an asset, it is not tied to the price of the Euro. As gold rises in price the Euro looks better. Contrast this with the Federal Reserve. As gold rises in price it makes the dollar look weak.

It is worth considering these things. I'm betting that this is the future of the monetary system, a sereration of MoE from SoV functions of money. It is much better for all and finally controls the printer.

Fri, 11/29/2013 - 21:57 | 4200985 discopimp
discopimp's picture

Fonestar, look your points are well taken, but only when they educate about the bitcoin protocol.  You don’t need to fight each post that blasts bitcoin.  Please do me, us, a favor, instead of using your energy to trash non-believers keep answering legit questions regarding BTC, you do a good job in this department. 

That way you accomplish several things:  1)If you claim to be in service of bitcoin and hence the bitcoin community, you don’t have to be a some zealot, for god sake, people will just think BTCers are religious dupes waiting for the next fly-by of Hale-Bopp comet  2)The people who believe in this inevitable evolution don’t appreciate the posts, and the ones  who don’t believe will just be put off.  3)Keep mining and show others how to mine/spend/use the protocol. 


Each poster here is part of Fight Club and our war is on the spiritual level.  We all wish/want/hope to see real change, and at the end of the day we wish this change to be more equitable than the system we currently have.  We don’t need to burn anyone at the stake, especially the messengers who reside on this page.  So please, just as other posters have requested, that is keep on point, fight the good fight, but fight for the cause not against those who are steps behind you carrying the heaver portion of the cross. 

Fri, 11/29/2013 - 22:09 | 4201003 fonestar
fonestar's picture

Thank-you and your points are well taken.  However, let's not forget how we have been ruled by ignorance.  Again, I have no problems with people who do not understand Bitcoin.  Perhaps I myself would not have understood it had I not chosen this career and dedicated much time to these issues.  Bitcoin is a remarkable tool that can change the world as we know it.

Fri, 11/29/2013 - 22:46 | 4201093 discopimp
discopimp's picture

Yes and to us believers, you are preaching to the chior.  An empty barrel also rattles loudest when it comes to bashing BTC, so just don't bite, just IGNORance them.  

Fri, 11/29/2013 - 23:38 | 4201176 Manipuflation
Manipuflation's picture

Look guys, Umm, there is a problem with BTC that I can not seem to overcome and it is a glaring one at that.  What happens if the web goes down?  Don't get me wrong, I love the idea of BTC and have used it.  BTC works.  I have a very good friend who was telling of this BTC story two years ago.   You have other problems as well.  BTC is valued in dollars or whatever fiat currency.  Are you not just part of the same problem assuming you have electricity? 

No electricty means no BitCoin, LiteCoin or any of the rest of them.  You are simply fucked.  Do you understand this fact?  What digital currencies are good for is moving wealth digitally across borders but not much else.  Digital currencies depend ENTIRELY on internet connectivity.  That is a real problem.  When I need a few gallons of gasoline to do chores around the house in NW Wisconsin, I go to a country store there is no chance of being connected to the Matrix.  There are so many other regions of the world where this is true as well.

So what are you saying, that we rednecks around the world do not matter because you came up with some computer code and called it money?  You can call me a redneck if you want but you had better stop and think about it.  I am not buying some "smart phone" just to do financal transactions.  It is not only me.  

Another problem is that you think these transactions are anonymous even through TOR.  Are you kidding me?  They are not.  I have proof and I posted it yesterday here.


Take your money IF you can.  Gold and silver does not rely on code or electricity.


I do not hate you so don't hate me.


Sat, 11/30/2013 - 00:26 | 4201264 disabledvet
disabledvet's picture

good to see you back MNPFTN.  Bottom line is the problem with the internet is that it can't be turned off.  Egypt tried...and no, "bitcoin can never be turned off."  basically it's like a new and original sea shell...and of course sea shells have operated as "currency" for trading empires going back a millenia.  not that that's how we do it now of course...although you could argue that is all the Fed is doing with QE..."printing a sea shell economy into existence."  so...sure, "bitcoin might be a better seashell" that's all.

Sat, 11/30/2013 - 00:59 | 4201321 Manipuflation
Manipuflation's picture

Thanks Brother,

I often end up deep in the brush and there is nothing fancy about it.  It is just the way it is out here.  You lose touch with the Internet and phone.  You are on your own.  That is the way it is and that is fine with me.  No city boy here. 

Sat, 11/30/2013 - 01:43 | 4201375 Lednbrass
Lednbrass's picture

Yep, to my mind the Achilles Heel of bitcoins is that its an EMP away from complete irrelevancy whereas at least the metals are tangible.

That said, my personal bet is that when things come unglued neither will matter so my preciouses are different as the posting name would imply.  When the US financial system craters I think my bets on those metals will pay off with a much higher dividend than either a virtual currency or a stack of coins. Out in the sticks I'll always be able to get eggs, meat, milk, or whatever for a box of ammo and I'm not nearly as sure on the other things.

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